Exhibit 10.20
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THE GARLAND CENTER
0000 XXXX XXXXXXX XXXXXX
SUBLEASE
by and between
XXXXX FARGO BANK, N.A.,
a national banking association
("Sublandlord")
and
FOCAL COMMUNICATIONS CORPORATION OF CALIFORNIA,
a Delaware corporation
("Subtenant")
Dated as of
May 19, 1998
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TABLE OF CONTENTS
INDEX OF DEFINED TERMS..................................................... iv
ARTICLE 1 SUMMARY OF BASIC TERMS......................................... 2
ARTICLE 2 DEMISE, TERM AND OCCUPANCY..................................... 3
ARTICLE 3 RENT........................................................... 4
ARTICLE 4 OPERATING EXPENSE ADJUSTMENTS.................................. 5
ARTICLE 5 SECURITY DEPOSIT............................................... 15
ARTICLE 6 USE AND COMPLIANCE WITH LAW.................................... 16
ARTICLE 7 INSURANCE...................................................... 22
ARTICLE 8 ALTERATIONS.................................................... 24
ARTICLE 9 SUBLANDLORD'S AND SUBTENANT'S PROPERTY......................... 27
ARTICLE 10 REPAIRS AND MAINTENANCE........................................ 29
ARTICLE 11 UTILITIES AND SERVICES......................................... 31
ARTICLE 12 RIGHTS OF SUBLANDLORD.......................................... 37
ARTICLE 13 DAMAGE OR DESTRUCTION.......................................... 39
ARTICLE 14 EMINENT DOMAIN................................................. 42
ARTICLE 15 SURRENDER OF PREMISES.......................................... 43
ARTICLE 16 DEFAULT BY SUBTENANT........................................... 44
ARTICLE 17 SUBORDINATION AND ATTORNMENT................................... 47
ARTICLE 18 QUIET ENJOYMENT................................................ 49
ARTICLE 19 ASSIGNMENTS AND SUBLEASES...................................... 49
ARTICLE 20 NOTICES........................................................ 57
i
ARTICLE 21 ESTOPPEL CERTIFICATES.......................................... 58
ARTICLE 22 RELOCATION OF PREMISES......................................... 58
ARTICLE 23 BROKER......................................................... 58
ARTICLE 24 EXCULPATION AND INDEMNIFICATION................................ 59
ARTICLE 25 PARKING........................................................ 61
ARTICLE 26 MISCELLANEOUS.................................................. 61
ARTICLE 27 SIGNAGE........................................................ 65
EXHIBITS
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EXHIBIT A WORK LETTER FOR SUBTENANT IMPROVEMENTS......................... A-1
EXHIBIT B FLOOR PLAN OF THE PREMISES..................................... B-1
EXHIBIT C FORM OF MEMORANDUM OF SUBLEASE COMMENCEMENT.................... C-1
EXHIBIT D THE GARLAND CENTER 0000 XXXX XXXXXXX XXXXXX RULES
AND REGULATIONS................................................ D-1
EXHIBIT E [Intentionally omitted]........................................ E-1
EXHIBIT F [Intentionally omitted]........................................ F-1
EXHIBIT G JANITORIAL SPECIFICATIONS...................................... G-1
EXHIBIT H BUILDING CONSTRUCTION RULES.................................... H-1
EXHIBIT I BUILDING MEASUREMENT GUIDELINES................................ I-1
ii
INDEX OF DEFINED TERMS
TERM PRIMARY REFERENCE
ADA...................................................... Section 4.1(b)(xix)
Additional Charges....................................... Section 3.1
Agreed Rate.............................................. Section 4.1(a)(iv)
Alterations.............................................. Section 8.1
Arbiter.................................................. Section 4.2(e)(ii)
Base Building Work....................................... Exhibit A, Section 2
Base Building Definition................................. Section 11.1
Base Costs of Operation.................................. Section 1.7
Base Taxes............................................... Section 1.7
Base Year................................................ Section 1.7
Basic Rent............................................... Section 1.6
Building................................................. Section 1.2
Building Hours........................................... Section 11.1
Certificate.............................................. Section 7.5
Certifying Party......................................... Section 21
Claims................................................... Section 24.2
Commencement Date........................................ Section 2.2
Common Area.............................................. Section 1.3
Comparable Buildings..................................... Section 6.1
Comparison Year.......................................... Section 4.1(a)
Consent Request.......................................... Section 19.6(a)
Contractor............................................... Exhibit H
Cost Saving Capital Improvements......................... Section 4.1(a)(iv)
Costs of Operation....................................... Section 4.1(a)
Date of the Taking....................................... Section 14.1
Eminent Domain........................................... Section 14.1
Excess Services.......................................... Section 11.2
Expiration Date.......................................... Section 1.5
First Interstate......................................... Introduction
Focal Entities........................................... Section 19.2(b)
Hazardous Substances..................................... Section 6.2
Holiday.................................................. Section 11.1
HVAC..................................................... Section 11.1
Insolvency Proceeding.................................... Section 16.1(e)
Land..................................................... Section 1.2
Lease.................................................... Introduction
Master Lease............................................. Introduction
Memorandum of Sublease Commencement...................... Section 2.2
Official Records......................................... Introduction
Outside Completion Date.................................. Section 2.2
iii
Outside Date............................................. Section 13.4(b)
Parking Garage........................................... Section 1.3
Permitted Use............................................ Section 6.1
Premises................................................. Section 1.4
Providing Parties........................................ Section 19.3
Providing Parties' Equipment............................. Section 19.3
Records.................................................. Section 4.2(e)(i)
Redetermination Event.................................... Section 26.9
Rentable Area............................................ Section 1.4
Rentable Area of the Building............................ Section 26.9
Rentable Area of the Premises............................ Section 1.4
Rents.................................................... Section 3.1
Requesting Party......................................... Section 21
RML...................................................... Introduction
RML Lease................................................ Introduction
Rooftop Equipment........................................ Section 6.8(a)
Rules and Regulations.................................... Section 6.6
Security Deposit......................................... Section 5
Specialty Equipment...................................... Section 11.11
Sublandlord.............................................. Introduction
Sublandlord's Affiliates................................. Section 26.8
Sublandlord's Architect or Contractor.................... Section 13.4(b)
Sublandlord's Broker..................................... Section 1.9
Sublease................................................. Introduction
Sublease Term............................................ Section 1.5
Substantially Complete................................... Exhibit A, Section 3.1
Subtenant................................................ Introduction
Subtenant's Architect.................................... Exhibit A, Section 4.1
Subtenant's Broker....................................... Section 1.9
Subtenant's Parking...................................... Section 1.8
Subtenant's Plans........................................ Exhibit A, Section 4.1
Subtenant's Property..................................... Section 9.2
Subtenant's Representative............................... Section 4.2(e)(i)
Subtenant's Share........................................ Section 1.7
Subtenant's Work......................................... Exhibit A, Section 3.1
Successor Sublandlord.................................... Section 17.4
Superior Lessor.......................................... Section 17.1
Superior Sublease........................................ Section 17.1
Taxes.................................................... Section 4.1(d)(i)
Trigger Event............................................ Section 6.3
Trumbull................................................. Introduction
UCBRC.................................................... Introduction
Untenantability Date..................................... Section 13.4(b)
Useable Area............................................. Section 1.4
iv
Useable Area of the Premises............................. Section 1.4
Work Letter.............................................. Section 2.3
v
THE GARLAND CENTER
0000 XXXX XXXXXXX XXXXXX
SUBLEASE
THIS SUBLEASE (this "Sublease") is entered into as of May 19, 1998, by and
between XXXXX FARGO BANK, N.A., a national banking association ("Sublandlord"),
having an office c/o Corporate Properties Group, 000 Xxxxx Xxxxx Xxxxxx, Xxxxx
000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Negotiations Manager, and FOCAL
COMMUNICATIONS CORPORATION OF CALIFORNIA, a Delaware corporation ("Subtenant"),
having an office at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxx X. Xxxx.
BACKGROUND INFORMATION
X. Xxxxxxxx Associates Limited Partnership, a Massachusetts limited
partnership ("Trumbull") owns an estate for years in and to the Land
(hereinafter defined) and the Building (hereinafter defined) pursuant to that
certain Grant Deed made by United California Bank Realty Corporation ("UCBRC")
in favor of Trumbull and recorded in the Official Records of Los Angeles County,
California (the "Official Records") on February 15, 1984 as Instrument No. 84-
197838.
X. Xxxxxxxx leased the Land and Building to RML Leasing Corp., a Delaware
corporation ("RML") pursuant to that certain Master Lease Agreement dated as of
January 20, 1984 (the "Master Lease") by and between Trumbull and RML, of which
a Memorandum of Master Lease Agreement dated as of January 20, 1984 by and
between Trumbull and RML was recorded in the Official Records on February 15,
1984 as Instrument No. 84-197841.
C. RML subleased the Land and Building to First Interstate Bank of
California ("First Interstate") pursuant to that certain Sublease Agreement
dated as of January 20, 1984 (the "RML Lease") by and between RML and First
Interstate, of which a Memorandum of Sublease Agreement dated as of January 20,
1984 by and between RML and First Interstate was recorded in the Official
Records on February 15, 1984 as Instrument No. 84-197842.
D. Sublandlord succeeded by merger to all of the right, title and
interest of First Interstate in and to the RML Lease.
E. On the terms and conditions set forth herein, Sublandlord desires to
sublease the Premises to Subtenant and Subtenant desires to sublease the
Premises from Sublandlord.
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ARTICLE 1
SUMMARY OF BASIC TERMS
1.1 Purpose. This Article defines certain basic terms used in this
Sublease, subject to qualifications and exceptions set forth herein.
1.2 "Land" means that certain real property in the City of Los Angeles,
County of Los Angeles, State of California, described in that certain Memorandum
of Sublease Agreement dated as of January 20, 1984 by and between RML and First
Interstate recorded in the Official Records on February 15, 1984 as Instrument
No. 84-197842; subject to all easements, covenants, rights of way, exceptions
and other matters of record affecting said property. "Building" means that
certain office building and related improvements located on the Land, commonly
known as The Garland Center, 0000 Xxxx Xxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx,
including all office space and the Common Area.
1.3 "Common Area" means the parking garage for the Building (the "Parking
Garage"), outside plazas, lobbies, landscaping, driveways, sidewalks, the
cafeteria located in the Building and all other areas included within the Land
and used in common by "tenants" (which term for purposes of this Sublease shall
also include subtenants) of the Building and their invitees.
1.4 "Premises" means 19,199 square feet of Rentable Area (the "Rentable
Area of the Premises") located on Lower Level II of the Building and more
particularly described in Exhibit B attached hereto. As used in this Sublease,
the terms "Rentable Area" and "Useable Area" shall have the meaning set forth in
Exhibit I. "Useable Area of the Premises" means 16,694 square feet.
1.5 "Sublease Term" means the term of this Sublease, which will commence
on the Commencement Date (defined in Section 2.2) and will expire on January 31,
2009 (the "Expiration Date").
1.6 "Basic Rent" means, throughout the Sublease Term, a per annum amount
equal to the product of (a) $15.75 times (b) the number of square feet of
Rentable Area included within the Premises from time to time. As of the
Commencement Date, Subtenant's monthly installment of Basic Rent (based on
00,000 xxxxxx xxxx xx Xxxxxxxx Xxxx) will be $25,198.69 ($302,384.25 annually).
1.7 "Base Costs of Operation" means Costs of Operation (defined in
Section 4.1(a)) for calendar year 1998 (the "Base Year") and "Base Taxes" means
the Taxes (defined in Section 4.1(d)) for the Base Year, in each case divided by
the Rentable Area of the Building (defined in Section 26.9). "Subtenant's
Share" means 2.67%.
1.8 "Subtenant's Parking" means the parking rights granted to Subtenant
in accordance with the terms of Article 25.
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1.9 "Sublandlord's Broker" means Xxxxxxx Realty Corporation. "Subtenant's
Broker" means Investment Development Services, Inc. at the following address:
000 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
ARTICLE 2
DEMISE, TERM AND OCCUPANCY
2.1 Demise and Reservations. Sublandlord hereby leases the Premises to
Subtenant, and Subtenant hereby hires the Premises from Sublandlord, subject to
the provisions of this Sublease, reserving to Sublandlord all of its rights,
interests and estates in the Premises, Building and Land not specifically
granted to Subtenant by this Sublease.
2.2 Commencement and Expiration. This Sublease shall constitute a binding
agreement and the obligations of Sublandlord and Subtenant hereunder shall be
effective upon full execution and delivery of this Sublease by both Sublandlord
and Subtenant. However, the Sublease Term shall commence on the Commencement
Date (the "Commencement Date") that is the earlier of: (i) the date that
Subtenant's Work (as defined in the Work Letter referenced below) is
Substantially Complete (as defined in the Work Letter) and (ii) August 1, 1998
(the "Outside Completion Date"). The Sublease Term shall end at noon on the
Expiration Date or on such earlier date on which this Sublease shall terminate
pursuant to any of its provisions or pursuant to law. Within 90 days after the
Commencement Date, upon Sublandlord's request, Sublandlord and Subtenant shall
promptly execute a "Memorandum of Sublease Commencement" in the form attached
hereto as Exhibit C, specifying the calendar dates of the Commencement Date and
the Expiration Date. Failure by Subtenant or Sublandlord to execute a
Memorandum of Sublease Commencement when requested by Sublandlord shall not
affect the occurrence of the Commencement Date or Expiration Date.
2.3 Preparation of Premises. Immediately upon execution of this Sublease,
Subtenant and its architects, engineers, employees, agents and contractors
shall, upon reasonable prior consultation with Sublandlord, have reasonable
access to the Premises for the purpose of designing, constructing and installing
Subtenant's Work pursuant to the terms of Exhibit A (the "Work Letter").
Subtenant agrees that Sublandlord is not required to perform any work or install
any improvements or equipment to make the Premises ready for Subtenant's
occupancy, and agrees to accept the Premises "AS IS" subject to the terms of the
Work Letter and this Sublease. As set forth in Section 11.11, Subtenant has
informed Sublandlord that Subtenant's Work is expected to include: (w)
installation of electrical facilities to provide additional power to the
Premises; (x) installation of an emergency generator facility for the purpose of
providing a backup electrical system for the Premises; (y)
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supplemental HVAC facilities, utilizing chilled water; and (z) telecommunication
system and ancillary fixtures and equipment, some of which shall be made a part
of the Premises. Installation of such facilities shall be in accordance with
Subtenant's Plans, to be submitted and reviewed upon execution hereof and in
accordance with the Work Letter. All of Subtenant's Plans shall be subject to
review and approval by Sublandlord in accordance with the terms of the Work
Letter and Subtenant acknowledges that all proposed improvements and
modifications are subject to engineering review and available building and
system capacity.
2.4 Delay in Completion of Subtenant's Work. Subtenant shall use all
commercially reasonable efforts to complete Subtenant's Work (as defined in the
Work Letter) prior to the Outside Completion Date. It is expressly understood
and agreed that the Outside Completion Date shall be extended only for the
period of any actual delay in the completion of Subtenant's Work (which causes
Subtenant's Work to be Substantially Complete after Outside Completion Date)
which results solely from:
(a) an event of force majeure that is beyond the control of Subtenant,
and that does not result from the negligence or willful misconduct of Subtenant
or its contractors or agents;
(b) any failure by Sublandlord to timely approve or disapprove any
plans and specifications for Subtenant's Work, it being agreed that delay shall
be deemed to have occurred if Sublandlord fails to either approve or disapprove
any plans or specifications submitted by Subtenant within ten (10) business days
after submission in the form and manner required by this Sublease or otherwise
prescribed by Sublandlord (but no delay will be deemed to occur for the period
Sublandlord and Subtenant are meeting to resolve any disagreement over the plans
for Subtenant's Work so long as Sublandlord timely provided its approval or
disapproval to Subtenant as required by the terms of the Work Letter); or
(c) any unreasonable and material interference by Sublandlord or its
agents or contractors which affects Subtenant's ability to achieve substantial
completion of Subtenant's Work by the Outside Completion Date.
Notwithstanding any extension of the Outside Completion Date, in no event will
the Sublease Term expire later than the Expiration Date.
ARTICLE 3
RENT
3.1 Rents. Subtenant shall pay to Sublandlord the following rents for the
Premises during the Sublease Term (collectively, the "Rents"): (a) a Basic Rent
per annum in the amount specified in Section 1.6, which shall be due and payable
in equal monthly installments in advance on the first day of each and every
calendar month during the Sublease Term commencing on the Commencement Date
(subject to the provisions of this Section 3.1), and
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(b) additional charges ("Additional Charges") consisting of all other sums of
money payable by Subtenant under the terms of this Sublease. It is acknowledged
and agreed that Subtenant may use and occupy portions of the Premises for the
operation of its business prior to the Commencement Date. Subtenant's occupancy
of all or any portion of the Premises prior to the Commencement Date shall be
subject to all of terms and conditions of this Sublease.
3.2 Payment. Subtenant shall pay the Rents when due, without notice or
demand, and without any abatement, deduction or setoff, except for abatement
rights specifically set forth in this Sublease. Subtenant's first installment of
monthly Basic Rent hereunder shall be due and payable on the date of full
execution and delivery of this Sublease. Subtenant shall pay the Rents in lawful
money of the United States, to Sublandlord at its office in the Building (0000
Xxxx 0xx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Building Manager) or
to such other person or place as Sublandlord may designate in writing from time
to time. If Subtenant pays Rents by check, the check must clear within five (5)
business days of delivery to the bank for processing. Basic Rent for periods
less than a full calendar month shall be prorated based on the actual number of
days in said partial month and the actual number of days in the entire month.
3.3 Partial Payment. No payment by Subtenant or receipt or acceptance by
Sublandlord of a lesser amount than the correct Basic Rent or Additional Charges
due shall be deemed to be other than a payment on account, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment be deemed an accord and satisfaction, and Sublandlord may accept such
check or payment without prejudice to Sublandlord's right to recover the
balance, treat such partial payment as a default or pursue any other remedy
provided in this Sublease or at law.
3.4 Late Charge. Subtenant acknowledges that the late payment of Rents
will cause Sublandlord to incur damages, including administrative costs, loss of
use of the overdue funds and other costs, the exact amount of which would be
impractical and extremely difficult to ascertain. Accordingly, if Sublandlord
does not receive a payment of Rents within seven (7) days after delivery of
written notice to Subtenant that such payment is overdue, Subtenant shall pay to
Sublandlord on demand, as Additional Charges, a late charge equal to five
percent (5%) of the overdue amount. Acceptance of the late charge by Sublandlord
shall not cure or waive Subtenant's default, nor prevent Sublandlord from
exercising, before or after such acceptance, any of the rights and remedies for
a default provided by this Sublease or at law. Payment of the late charge is not
an alternative means of performance of Subtenant's obligation to pay Rents at
the times specified in this Sublease.
ARTICLE 4
OPERATING EXPENSE ADJUSTMENTS
4.1 Operating Expense Definitions. For the purpose of this Sublease, the
following terms shall have the following meanings:
5
(a) Costs of Operation. "Costs of Operation" means, in the Base Year,
and in each subsequent calendar year (a "Comparison Year"), all expenses, costs
and disbursements of every kind and nature paid or incurred by or on behalf of
Sublandlord with respect to the operation, maintenance, repair, replacement,
security and management of the Building, calculated in accordance with Generally
Accepted Accounting Principles (GAAP) as adjusted pursuant to Section 4.1(c).
Without limiting the generality of the foregoing, Costs of Operation shall
include the following:
(i) Wages, including all fringe benefits and employee-related
expenses of every nature, workers' compensation and payroll taxes of
employees of Sublandlord or Sublandlord's managing agent at the level of
building manager and below engaged in the operation, maintenance and
management of the Building; provided, that if any such employees of
Sublandlord or Sublandlord's managing agent provide services for more than
one building of Sublandlord, then only a prorated portion of their wages,
benefits and taxes shall be included, based on the portion of their working
time devoted to the Building.
(ii) Costs of goods, tools, supplies and services supplied or
used in or with respect to the operation, repair, maintenance and
management of the Building, including the cost of insurance premiums and
insurance consultants; cleaning, decorating, painting, janitorial, trash
removal, security (including uniforms) and other services; legal,
accounting and other consultants' fees; operation of elevators and security
systems; heating, cooling, air-conditioning and ventilating; hot and cold
water, gas, electricity, sewer and other utilities together with any taxes
and surcharges on, and fees paid in connection with the calculation and
billing of such utilities; maintenance of and repairs to the Building and
to any equipment, machinery or apparatus, including elevators; window
cleaning; service agreements on equipment; licenses, permits and
inspections; costs of personal property and moveable equipment used in the
repair, maintenance or operation of the Building or provided by Sublandlord
for the use or benefit of all lessees or occupants, including window
coverings and carpeting in the Common Area; reasonably contesting the
validity or applicability of any law if a successful contest would reduce
Costs of Operation; costs incurred in providing services and amenities for
all tenants and occupants of the Building, including costs incurred in
connection with operating and maintaining the cafeteria located in the
Building and maintenance and repairs of the Parking Garage, landscaping,
signs, plazas, furnishings, water elements, sidewalks, private streets and
walkways in or adjacent to the Building. It is understood and agreed that
so long as Subtenant's electrical usage at the Premises is separately
metered and Subtenant is paying the entire cost of electrical service
provided to the Premises for lighting and outlets, Costs of Operation under
this Sublease shall include charges for electricity only with respect to
the Common Areas, including the cafeteria, Parking Garage, elevators, lobby
and other portions of the Building and the Land used in common with others
and for other electricity provided to Subtenant's Premises which is not
separately metered, including
6
without limitation electricity provided in connection with HVAC services to
the Premises.
(ii) Management fees and expenses paid to Sublandlord's managing
agent; or, if Sublandlord acts as the managing agent, a sum in lieu thereof
which, if in excess of 3% of gross revenues (determined in accordance with
GAAP) from the Building, shall not exceed the then-prevailing rate for
management fees for Comparable Buildings (defined in Section 6.1 below).
(iv) Costs of capital improvements and replacements (and all
tools and equipment related thereto) made after the Base Year which are
intended to reduce Costs of Operation ("Cost Saving Capital Improvements"),
amortized over the useful life of such improvements on a straight line
basis, including imputed interest at the rate announced from time to time
by the Los Angeles Main Office of Xxxxx Fargo Bank, N.A. as its "Reference
Rate" (referred to herein as the "Prime Rate") as of December 31st of the
year in which the expenditure is made, plus 2% per annum (the "Agreed
Rate"). Sublandlord agrees to use its commercially reasonable efforts to
amortize Cost Saving Capital Improvements for purposes of this Article 4 at
an annual rate which does not exceed the annual savings to be realized
thereby, as estimated in good faith by Sublandlord at the time such
improvement is made.
(v) Rentals (including interest charges) paid by Sublandlord with
respect to machinery, equipment, tools, materials, facilities or systems
installed, provided or used, after completion of the Building, for the
normal management, maintenance, repair or operation of the Building.
(vi) Those taxes, duties, charges, levies and assessments (such
as sales, license, use, excise and utility taxes or fees) which are
expensed as a part of the maintenance, management or operation of the
Building, but which are not included in Taxes (as defined in Section
4.1(d)). It is understood and agreed that Taxes are not included in Costs
of Operation under this Lease, as they are treated separately for purposes
of calculating Additional Rent hereunder.
(vii) All charges, taxes, surcharges, or assessments imposed by
any government agency or public utility to conserve or control consumption
of water, gas, electricity, energy sources or products, natural resources,
or other products or services.
(viii) Fees paid to any parking facility operator and
compensation paid to clerks, attendants or other persons in the Parking
Garage.
(b) Costs of Operation - Exclusions. Costs of Operation shall exclude
the following (determined in accordance with GAAP):
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(i) Costs of capital improvements and replacements (and all tools and
equipment relating thereto), except to the extent specifically permitted to
be included in Costs of Operation pursuant to Section 4.1(a)(iv);
(ii) Repair costs to the extent that Sublandlord is reimbursed for
such costs by insurance proceeds or condemnation proceeds;
(iii) Costs arising from Sublandlord's political or charitable
contributions;
(iv) Costs (including "lease takeover" expenses, leasing commissions,
brokerage fees, legal fees, and space planning fees) incurred in connection
with the leasing of space in the Building and the renewal of existing
leases;
(v) Costs (including permit, license and inspection costs) incurred
for installation of tenant improvements made for tenants or other occupants
of the Building or incurred in renovating or otherwise improving,
decorating, painting or redecorating vacant space for tenants or other
occupants of the Building;
(vi) Depreciation (other than on personal property, tools and moveable
equipment described in clause (ii) of Section 4.1(a) above), debt service
on mortgages encumbering the Building (including any interest or other
financing charge, including points and fees), reserves for capital
replacements, bad debts or other purposes, or other similar charges not
involving the payment of money to third parties (except as otherwise
provided herein), and any ground lease rental;
(vii) Costs of purchasing art works (not including graphics, signs and
conventional decoration so long as a reasonable line item amount therefor
is included in the Base Year);
(viii) Costs and expenses otherwise includable in Costs of Operation,
to the extent that Sublandlord is directly reimbursed (or is required to be
reimbursed under the terms of a binding lease or other agreement) for such
costs and expenses by tenants (i.e., other than by paying a share of Costs
of Operation), or other sources,
(ix) Costs incurred by Sublandlord in providing services, utilities,
or other benefits to other tenants or occupants of the Building which are
not offered to Subtenant or for which Subtenant is charged directly but
which are provided to one or more other tenants or occupants of the
Building without charge other than inclusion of the cost thereof in Costs
of Operation including after-hours HVAC services and electricity for
Subtenant's lights and outlets which is to be separately metered and paid
for directly by Subtenant;
(x) Advertising and promotional expenses;
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(xi) Electric power costs or other utility costs for which any tenant
or occupant of the Building directly contracts with the local public
utility or service company and costs associated with excess utility use by
other tenants or occupants of the Building not reimbursed by such tenants
or occupants;
(xii) Fines, penalties and interest and awards incurred solely as a
result of Sublandlord's negligent or intentional failure to make payments
when due or due to violations of law by Sublandlord;
(xiii) The wages and benefits of any employee of Sublandlord who does
not devote substantially all of his or her employed time to the Building,
unless such wages and benefits are prorated to reflect time spent on
matters related to the operation and management of the Building versus time
spent on matters unrelated to the operation and management of the Building;
(xiv) Salaries and benefits of Sublandlord's employees above the grade
of building manager;
(xv) Costs (including in connection therewith all attorneys' fees and
costs of settlement judgments and payments in lieu thereof) arising from
claims, disputes or potential disputes with tenants or occupants of the
Building (other than costs arising from claims or disputes where the
tenants of the Building would benefit if Sublandlord prevails, including
claims in connection with Sublandlord's efforts to enforce the Rules and
Regulations);
(xvi) Costs incurred in removing and storing the property of former
tenants or occupants of the Building;
(xvii) Costs incurred in the original construction of the Building or
in connection with a major change in the Building, such as the addition or
deletion of floors;
(xviii) Rentals attributable to space occupied for the Office of the
Building;
(xix) Costs incurred to cure violations of codes, laws or regulations
(or cure lack of compliance with codes, laws or regulations), including,
without limitation, the Americans with Disabilities Act of 1990, 42 U.S.C.
12101 et. seq., as amended (the "ADA") to the extent such violations or
lack of compliance exists at the Building (outside of Subtenant's Premises)
as of the Commencement Date or existing within Subtenant's Premises as of
the date of delivery of such Premises to Subtenant and, subject to the
terms of Article 6, to the extent existing as of the Commencement Date to
the extent any such violation or lack of compliance does not result from a
Trigger Event (as defined in Section 6.3 below);
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(xx) Costs, fees and compensation paid to Sublandlord or to
affiliates or subsidiaries of Sublandlord for services and materials to the
extent the same exceeds the charges for comparable services and materials
performed or provided by unaffiliated entities of comparable stature and
reputation and on a competitive basis;
(xxi) Overhead and profit increment paid to Sublandlord or to
subsidiaries or affiliates of Sublandlord for goods and/or services in or
to the Building to the extent the same materially exceeds the costs of such
goods and/or services rendered by unaffiliated third parties on a
competitive basis;
(xxii) Costs incurred to provide training in Building
operations or management to employees of Sublandlord or Sublandlord's
managing agent to the extent such costs exceed $10,000 per year (it being
acknowledged that the cost of providing tenant life safety information may
be included within Costs of Operation);
(xxiii) Except for making repairs or keeping permanent systems
in operation while repairs are being made or in connection with the
operation of temporary or backup equipment in lieu of the regular building
systems, rentals and other related expenses incurred in leasing air-
conditioning systems, elevators or other equipment ordinarily considered to
be of a capital nature, except equipment not affixed to the Building which
is used in providing janitorial or similar services;
(xxiv) Any and all costs arising from the presence of Hazardous
Substances in or about the Premises, the Building or the Land including
Hazardous Substances in the ground water or soil, not placed in the
Premises, the Building or the Land by Subtenant or its agents, employees or
contractors.
(xxv) Any bad debt loss, rent loss or reserves for bad debts
or rent loss;
(xxvi) Costs incurred by Sublandlord due to the violation by
Sublandlord or any tenant (other than Subtenant) of the terms and
conditions of any lease of space in the Building;
(xxviii) Subject to Section 4.1(a)(iii), costs for which
Sublandlord has actually been compensated by a management fee; and
(xxviii) Costs of defending any lawsuits with any mortgagee
(except as the actions of Subtenant may be in issue), costs of selling,
syndicating, financing, mortgaging or hypothecating any of Sublandlord's
interest in the Building, costs engaged in Building management, or outside
fees paid in connection with disputes with other tenants; and
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(c) Costs of Operation - Adjustments. Costs of Operation shall be
calculated in accordance with Generally Accepted Accounting Principles (GAAP),
consistently applied. If during any period in the Base Year or a Comparison Year
the Building is not both 95% occupied and fully serviced by Sublandlord, the
Costs of Operation which vary with occupancy for such year shall be adjusted to
what they would have been if 95% of the Building had been occupied and fully
serviced throughout such year, as estimated in good faith by Sublandlord.
Sublandlord further agrees to calculate the management fee for the Building in
the Base Year assuming that the Building is 95% leased, with all tenants paying
rent.
(d) Taxes.
(i) Definition. "Taxes" means, in the Base Year and in any
Comparison Year, all of the following definition: (1) all taxes, general
and special assessments, duties, charges and levies of every kind,
character and description whatsoever, levied, imposed or charged upon or
against the Land and the Building or any part thereof or the various
estates therein or upon Sublandlord with respect thereto, including all
taxes and assessments levied for any public transit system; (2) all taxes
levied, imposed or charged on real and personal property used in the
operation, maintenance or management of the Building or any part thereof;
(3) all taxes levied, imposed or charged against or measured by or based
upon the value of, or the rent payable by lessees and occupants of, the
Building or any part thereof; (4) all other taxes of every kind, character
and description whatsoever, from time to time levied, imposed or charged in
the future in lieu of or as substitute, in whole or in part, for any Taxes
described in clauses (1), (2) or (3) or for which Sublandlord is liable
with respect to the Building; and (5) all costs and expenses (including
legal and other professional fees and interest on deferred payments)
incurred by Sublandlord in contesting the amount, validity or applicability
of any of the foregoing. Taxes shall not include Sublandlord's income,
franchise, gift, estate, inheritance, transfer, excise or excess-profits
taxes except to the extent that any such specified types of taxes are
levied in whole or partial substitution for any Taxes. All Taxes shall be
paid in installments if permitted by the taxing public agency, and such
installments shall be charged to Taxes when paid. If any Taxes of a type
described in clauses (3) or (4) of this Section 4.1(d) are now or hereafter
levied, imposed or charged, for purposes of this Sublease, the amount of
such Taxes shall be based on the assumptions that the Building is the only
commercial building owned and operated by Sublandlord and that the rental
or other income received by Sublandlord from the Building is the only
rental and income received by Sublandlord. If the Taxes for any Comparison
Year are changed as a result of a protest, appeal or other action taken by
a taxing authority, the Taxes as so changed shall be deemed the Taxes for
such Comparison Year, and Sublandlord shall deliver a revised statement of
actual Taxes for the affected calendar year or years to Subtenant. If such
change reduces the Additional Charges payable by Subtenant on account of
Taxes for any Comparison Year to less than the Additional Charges
theretofore actually paid by Subtenant on account of Taxes for such
11
Comparison Year, Sublandlord shall promptly pay the difference to Subtenant
or credit such amount against Rents thereafter coming due hereunder. If
any change increases the Additional Charges payable by Subtenant on account
of Taxes for any Comparison Year to more than the Additional Charges
theretofore actually paid by Subtenant on account of Taxes for such
Comparison Year, Subtenant, upon receipt of Sublandlord's revised statement
showing the amount of such excess, shall promptly pay such excess to
Sublandlord. Nothing herein shall obligate Sublandlord to bring any
application or proceeding seeking a reduction in Taxes or assessed
valuation.
4.2 Adjustment of Rents.
(a) Costs of Operation. If, for any Comparison Year, Subtenant's Share
of Costs of Operation exceeds the product of Base Costs of Operation multiplied
by the Rentable Area of the Premises, Subtenant shall pay the excess to
Sublandlord as Additional Charges. It is understood and agreed that if, as a
result of deregulation in the utilities industry, there occurs during a
Comparison Year a reduction in the cost of electricity below the level of such
costs during the Base Year, it is agreed for purposes of this Sublease (and
notwithstanding anything to the contrary herein) that electricity charges
included within Costs of Operation will in no event be reduced to a level lower
than the level of electricity charges included within Costs of Operation during
Subtenant's Base Year and such reduction below the amount of electricity charges
in the Base Year shall not be applied to other expenses included within Costs of
Operation. For purposes of clarification, if electricity charges for any
subsequent Comparison Year remain at a level below the level of Base Year
electricity charges, electricity charges for such subsequent Comparison Year
shall be deemed to be at the level of Base Year electricity charges.
(b) Taxes. If, for any Comparison Year, Subtenant's Share of Taxes
exceeds the product of Base Taxes multiplied by the Rentable Area of the
Premises, Subtenant shall pay the excess to Sublandlord as Additional Charges.
(c) Manner of Payment; Sublandlord's Estimates. Subtenant shall pay
Additional Charges pursuant to Sections 4.2(a) and (b) in the following manner:
(i) Prior to the commencement of each Comparison Year during the
Sublease Term, or as soon after such commencement as reasonably possible,
Sublandlord shall furnish to Subtenant statements showing Sublandlord's
reasonable estimates of the Costs of Operation and Taxes for such
Comparison Year, and the amount of any Additional Charges payable by
Subtenant based on such estimates.
(ii) On or before the first day of each calendar month of each
Comparison Year, Subtenant shall pay Sublandlord one-twelfth (1/12) of the
amount of the estimated Additional Charges due from Subtenant for such
Comparison Year for the Costs of Operation and Taxes, as shown by the
statement furnished by Sublandlord, provided, however, that (1) the
Additional Charges payable by Subtenant
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for any partial Comparison Year shall be prorated based on a 365-day year
and the actual number of days in such partial Comparison Year, and (2) on
the first day of each calendar month during such partial Comparison Year,
Subtenant shall pay to Sublandlord a sum equal to the total estimated
Additional Charges due from Subtenant for that partial Comparison Year
(prorated as described above) divided by the number of calendar months in
that partial Comparison Year (counting any fractional calendar month as a
whole month).
(iii) If Sublandlord's statement is furnished after January 1 of
a Comparison Year, then until such statement is received, Subtenant shall
continue to pay estimated Additional Charges based on Sublandlord's most
recent statement. On or before the first day of the first calendar month
following Subtenant's receipt of Sublandlord's statement, in addition to
the monthly installment of estimated Additional Charges for the Comparison
Year due on that date, Subtenant shall pay the difference between the
estimated Additional Charges for the period that has already elapsed in
that Comparison Year, as set forth in Sublandlord's statement, and the
estimated Additional Charges already paid by Subtenant for such period.
Notwithstanding the foregoing, if Subtenant receives Sublandlord's
statement less than fifteen (15) days prior to the first day of the next
calendar month thereafter, Subtenant shall pay the differential amount
described above, if any, within fifteen (15) days following receipt of such
statement.
(iv) During the Sublease Term (but not more frequently than
quarterly), Sublandlord may revise its estimate of Costs of Operation if
evidence is received indicating higher or lower Costs of Operation than the
previous estimate, and Sublandlord may revise its estimate of Taxes for
such Year upon receipt of any tax xxxx or notification of assessed value.
The estimated Additional Charges on account of Costs of Operation and
Taxes, and the installment payments made pursuant to clause (ii) shall be
adjusted as necessary so that, as nearly as possible, by the end of the
Comparison Year, Subtenant shall have paid all Additional Charges on
account of Costs of Operation and Taxes, based on such revised estimates.
(d) Final Statement. Following the end of each Comparison Year,
Sublandlord shall furnish to Subtenant a final statement of actual Costs of
Operation and Taxes for that Comparison Year. Within ten (10) days of
presentation of the final statement for any Comparison Year, Subtenant shall pay
Sublandlord, as Additional Charges, any amount due for Subtenant's Share of
Taxes and Costs of Operation. Any credit due Subtenant for overpayment of
Subtenant's Share of Taxes and Costs of Operation shall be credited against the
monthly installments of Basic Rent next coming due (except that Sublandlord
shall refund to Subtenant the amount of any such credit for the final Comparison
Year in the Sublease Term to the extent that no amounts are then owing by
Subtenant hereunder). Subtenant shall have 180 days after presentation of
Sublandlord's statement of actual Taxes and Costs of Operation within which to
object or question in writing to the accuracy of the statement in accordance
with the terms of subsection (e) below; unless
13
Subtenant so objects or questions within said 180-day period, Sublandlord's
statement shall be conclusive and binding on Subtenant. Objection by Subtenant
shall not excuse or xxxxx Subtenant's obligation to make the payments required
by this Section 4.2 pending resolution of Subtenant's objection.
(e) Examination Right.
(i) Within 180 days after presentation of Sublandlord's final
statement of Costs of Operation and Taxes for any Comparison Year,
Subtenant shall have the right to examine, or to have its duly authorized
agent ("Subtenant's Representative") examine, Sublandlord's books, accounts
and records that reasonably relate to the verification of actual Costs of
Operation and Taxes for that Comparison Year ("Records"), in order to
determine the accuracy thereof. In making such examination, Subtenant shall
keep confidential, and shall cause Subtenant's Representative to agree to
keep confidential, any and all information contained in such Records, and
the circumstances and details pertaining to such examination and inspection
and any dispute or settlement between Sublandlord and Subtenant arising
therefrom or relating thereto, except for such disclosure as may be
required by law and for any of Subtenant's legal, financial and ongoing
business purposes and requirements. Subtenant and Subtenant's
Representative shall confirm such agreement in a separate written
reasonable confidentiality agreement, if requested by Sublandlord. Upon
execution of such a confidentiality agreement by Subtenant and Subtenant's
Representative, Sublandlord shall provide Subtenant with copies, at
Subtenant's expense, of such Records as Subtenant or Subtenant's
Representative request.
(ii) If Subtenant commences such an examination within such
period, Subtenant shall have the right to object to the accuracy of
Sublandlord's final statement by submitting a detailed written statement of
such objections to Sublandlord no later than twelve (12) months after
receipt of Sublandlord's final statement. Sublandlord and Subtenant shall
attempt in good faith to resolve any such objection. If the objection
cannot be resolved by mutual agreement within 30 days after the end of such
objection period, then a CPA mutually acceptable to Sublandlord and
Subtenant (the "Arbiter") shall audit the actual Costs of Operation and/or
Taxes for the Comparison Year covered by Sublandlord's statement (which
audit shall be limited to the items in dispute), and the Arbiter's findings
shall be conclusive and binding upon Sublandlord and Subtenant.
(iii) If the figure for Costs of Operation and Taxes in
Sublandlord's final statement exceeds the total amount of Subtenant's Share
of Costs of Operation and Taxes by more than $50,000 for any given year,
then Sublandlord shall pay the Arbiter's fees and costs. Otherwise,
Subtenant shall pay the Arbiter's fees and costs. In either case, if the
Costs of Operation or Taxes, as determined by the Arbiter, differ from the
amount indicated in Sublandlord's statement, Subtenant shall pay
Sublandlord any Additional Charges owing on account of an increase in Costs
of Operation or
14
Taxes, while Subtenant shall receive a credit against Basic Rent (or, for
the final Comparison Year in the Sublease Term, a refund) for any
overpayment of Additional Charges resulting from a reduction of Costs or
Taxes.
(f) Delay. Delay in rendering a statement of actual Costs of Operation
or Taxes shall not prejudice Sublandlord's right to thereafter render such
statement, nor shall the rendering of any statement of actual Costs of Operation
or Taxes prejudice Sublandlord's right to thereafter render a corrected
statement.
ARTICLE 5
SECURITY DEPOSIT
Concurrent with Subtenant's execution of this Sublease, Subtenant shall
deposit with Sublandlord immediately available funds (cashier's check, cash or
wire transfer) the amount of $25,198.69, representing the security deposit
("Security Deposit") under this Sublease. The Security Deposit shall be held by
Sublandlord as security for the faithful performance by Subtenant of all the
terms, covenants, and conditions of this Sublease to be kept and performed by
Subtenant during the Sublease Term. The Security Deposit shall not be mortgaged,
assigned or encumbered in any manner whatsoever by Subtenant without the prior
written consent of Sublandlord. If Subtenant defaults with respect to any
provisions of this Sublease, including, but not limited to, the provisions
relating to the payment of Rents, Sublandlord may, but shall not be required to,
use, apply or retain all or any part of the Security Deposit for the payment of
any Rents or any other sum in default, or for the payment of any amount that
Sublandlord may spend or become obligated to spend by reason of Subtenant's
default, or to compensate Sublandlord for any other loss or damage that
Sublandlord may suffer by reason of Subtenant's default. If any portion of the
Security Deposit is so used or applied, Subtenant shall, within five (5) days
after written demand therefor, deposit cash with Sublandlord in an amount
sufficient to restore the Security Deposit to its original amount, and
Subtenant's failure to do so shall be a default under this Sublease. The use,
application or retention of the Security Deposit, or any portion thereof, by
Sublandlord shall not prevent Sublandlord from exercising any other right or
remedy provided by this Sublease or by law, it being intended that Sublandlord
shall not first be required to proceed against the Security Deposit, nor operate
as a limitation on any recovery to which Sublandlord may otherwise be entitled.
Subtenant acknowledges that Sublandlord has the right to transfer or mortgage
its interest in the Building and in this Sublease and Subtenant agrees that in
the event of any such transfer or mortgage, Sublandlord shall have the right to
transfer or assign the Security Deposit to the transferee or mortgagee. Upon
such transfer or assignment of the Security Deposit, Sublandlord shall thereby
be released by Subtenant from all liability or obligation for the return of such
Security Deposit and Subtenant shall look solely to such transferee or mortgagee
for the return of the Security Deposit. If Subtenant shall fully and faithfully
perform every provision of this Sublease to be performed by it, the Security
Deposit, or any balance thereof, shall be returned to Subtenant, or, at
Sublandlord's option, to the last assignee of Subtenant's interest hereunder,
within sixty (60) days following
15
the expiration of the Sublease Term. Subtenant shall not be entitled to any
interest on the Security Deposit.
ARTICLE 6
USE AND COMPLIANCE WITH LAW
6.1 Permitted Use. Subject to the terms and conditions of this Sublease,
Subtenant shall use and occupy the Premises for the installation, operations and
maintenance of telecommunications systems and related equipment and
transmissions facilities, including, but not limited to, a local and long
distance switch, node, customer collocation subject to the terms of Section 19.3
and related equipment, together with general administrative and executive office
purposes, all as permitted by applicable laws, rules and regulations and with
the class and character of the Building as one of the first class buildings for
ancillary/administrative office operations located in downtown Los Angeles
("Comparable Buildings"). Such permitted uses may be collectively referred to in
this Sublease as the "Permitted Use". Subject to the terms and conditions of
this Sublease, including without limitation the Rules and Regulations and the
Work Letter, Subtenant shall have the right to install, operate, repair and
maintain its telecommunications systems and related equipment in horizontal and
vertical shafts, risers and pathways within the Building and in accordance with
all governmental codes and regulations, for the purpose of providing
telecommunications services to its customers. Sublandlord confirms, to the best
of its actual knowledge, that the Building complies with all codes, laws and
regulations (including, without limitation, handicapped access laws) applicable
to the Building as of the date of this Sublease. Subtenant shall obtain,
maintain and comply with the terms and conditions of all licenses and permits
required by law for the uses permitted hereunder. Subject to Subtenant's
compliance with the terms of this Sublease, Subtenant shall have access to the
Building and the Parking Garage 24 hours per day, 7 days per week, 365 days per
year, subject to temporary, full or partial closures which may be required from
time to time for construction, maintenance, repairs, actual or threatened
emergency or other events or circumstances which make it reasonably necessary to
temporarily restrict or limit access. Except in the case of emergencies,
Sublandlord shall provide Subtenant sufficient prior written notice of such
temporary restricted access and shall exercise commercially reasonable efforts
to minimize any interruption to Subtenant's use, possession and occupancy of the
Premises under the terms of this Sublease. As used herein, the "actual
knowledge" of Sublandlord shall mean the actual current knowledge of Xxxxxxx
Xxxxx-Xxxxxx, in her capacity as an officer of Sublandlord, without any duty of
inquiry or investigation and without having any personal liability therefor.
6.2 Prohibited Uses. Without limiting the generality of Section 6.1,
Subtenant shall not at any time use or occupy or allow any person to use or
occupy the Premises or the Common Area or do or permit anything to be done or
kept in the Premises or the Common Area in any manner which: (a) violates any
certificate of occupancy in force for the Premises, the Building or any part
thereof; (b) causes or is likely to cause damage to the Building or any part
thereof or any equipment, facilities or other systems therein; (c)
16
constitutes a violation of law; (d) violates a requirement or condition of the
standard fire insurance policy issued for office buildings in the City of Los
Angeles; (e) impairs the character, reputation, image or appearance of the
Building as a first- class office building for back office operations; (f)
impairs the proper and economic maintenance, operation or repair of the Building
or any part thereof; (g) constitutes a nuisance, annoyance or inconvenience to
other lessees or occupants of the Building or unreasonably interferes with or
disrupts the use or occupancy of any area of the Building (other than the
Premises) by other lessees or occupants; (h) interferes with the transmission or
reception of microwave, television, radio or other communications signals by
antennae located on the roof or elsewhere in the Building or the operations or
signals of any other tenant, occupant or other user of the Building; (i) results
in repeated demonstrations, bomb threats or other events which require
evacuation of any part of the Building or otherwise disrupt the use, occupancy
or quiet enjoyment thereof by other lessees and occupants. In determining
whether Subtenant has taken any action inconsistent with or in violation of the
foregoing, all relevant facts and circumstances shall be taken into account,
including the actual features of Subtenant's Premises and the effects of
Subtenant's operations on portions of the Building and operations outside the
Premises. Subtenant shall not use or allow the use of any part of the Premises
for: (1) a restaurant or bar; (2) the storage, manufacture or sale of food,
beverages, liquor, tobacco in any form or drugs (except that Subtenant may
maintain vending machines for the use of its officers, employees and invitees
and except that Subtenant's officers and employees may bring food, beverages,
tobacco and medicine onto the Premises for their personal and lawful
consumption); (3) the storage use, treatment, manufacture or sale of Hazardous
Substances (as defined below); (4) the business of photocopying or offset
printing (but Subtenant may use part of the Premises for photocopying or offset
printing for its own business); (5) medical or dental offices or laboratories;
(6) a typing or stenography business; (7) a xxxxxx, beauty or manicure shop; (8)
a school or classroom except for Subtenant's internal training activities; (9)
the manufacture, retail sale or auction of merchandise, goods or property of any
kind; or (10) cooking (except that Subtenant may maintain coffee or lunch rooms
with coffee makers and microwave ovens for the exclusive use of Subtenant's
officers, employees and invitees), lodging or sleeping. No excessive or
unreasonable noise, vibration or odor shall be permitted to escape from the
Premises. For purposes of this Sublease, the term "Hazardous Substances" shall
mean (w) asbestos; (x) urea formaldehyde foam insulation, (y) transformers or
other equipment which contain dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million; or (z) any other
chemical, material, substance, compound or other matter of any kind whatsoever
prohibited, limited or regulated by any Federal, State, County, regional or
local authority or legislation, including the Federal Resource Conservation and
Recovery Act, 42 U.S.C. (S)(S) 6901 et seq. and the Federal Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended, 42
U.S.C. (S)(S) 9601 et seq., the Emergency Planning and Community Right-To-Know
Act, as amended, 42 U.S.C. (S)(S) 11001 et seq., the regulations promulgated
from time to time thereunder, environmental laws administered by the
Environmental Protection Agency and similar laws and regulations of the State of
California, City of Los Angeles or any other governmental organization or agency
having jurisdiction over any portion of the Building. Sublandlord confirms, to
the best of its actual knowledge, that the Building does not contain asbestos or
other Hazardous Substances
17
as of the date of this Sublease, provided, however, a slight soil contamination
condition occurred outside of the Building near Eighth Street a few years ago
and such condition is in the stages of final cleanup.
6.3 Compliance by Subtenant. Subtenant shall promptly forward to
Sublandlord any notice it receives of the violation of any law involving the
Premises or its use and occupancy by Subtenant or any other parties. Subtenant
shall, at Subtenant's expense, comply with all present and future laws and
requirements that impose any obligation, order or duty on Sublandlord or
Subtenant in respect of the Premises or any fixtures, equipment or other
property contained therein, other than any obligation, order or duty requiring
alteration to the structural elements (i.e., roof, slab, beams, skin and load-
bearing walls) of the Building or to the Building systems (i.e., HVAC, plumbing,
electrical, water and fire-life-safety systems) outside the point of connection
to the Premises. Subtenant shall also be responsible for the cost of compliance
with all laws and requirements (including ADA upgrades within the Premises or in
the Common Area of the Building to the extent triggered by Subtenant's Work or
any Alterations within the Premises or Subtenant's business operations but only,
with respect to required ADA work in the Common Area in proportion to
Subtenant's Share or to the extent triggered by work performed by Subtenant
after the completion of Subtenant's Work) that impose any obligation, order or
duty on Sublandlord or Subtenant in respect of the Land or the Building, arising
from or related to: (a) Subtenant's particular use of the Premises (other than
normal office uses); (b) the manner of conduct of Subtenant's business or
operation of its installations, equipment or other property; (c) any cause or
condition created by or at the instance of Subtenant, or (d) breach of any of
Subtenant's obligations hereunder (any of the events in (a), (b), (c) or (d)
being a "Trigger Event"); and Subtenant shall pay all costs, expenses, fines,
penalties and damages imposed upon Sublandlord by reason of or arising out of
Subtenant's failure to fully and promptly comply with and observe the provisions
of this Section. Where Subtenant's compliance as required by this Section
necessitates actions by Subtenant for which this Sublease requires Sublandlord's
consent, Subtenant shall obtain such consent before taking such actions and such
consent shall not be unreasonably withheld, conditioned or delayed.
6.4 [Intentionally omitted]
6.5 [Intentionally omitted]
6.6 Rules and Regulations. Subtenant shall observe and comply with the
Rules and Regulations set forth in Exhibit D and any reasonable, non-
discriminatory amendments and additions thereto that Sublandlord adopts from
time to time, including such reasonable and non-discriminatory rules and
regulations as may be in effect from time to time relating to construction or
other improvement work at the Building (collectively, the "Rules and
Regulations"). Sublandlord shall not be responsible or liable to Subtenant for
violations of the Rules and Regulations by other lessees and occupants but
Sublandlord will use its commercially reasonable efforts to non-discriminatorily
enforce the Rules and Regulations. If any of the Rules and Regulations conflict
with the Sublease, then the Sublease shall prevail.
18
6.7 Nondiscrimination. Subtenant covenants by and for itself, its heirs,
executors, administrators and assigns, and all persons claiming under or through
Subtenant, and this Sublease is made and accepted upon and subject to the
following conditions: that there shall be no discrimination or segregation of
any person or group of persons on account of disability, age, race, color,
creed, sex, religion, sexual orientation, veteran or marital status, ancestry or
national origin in the leasing, subleasing, transferring, use, or enjoyment of
the Premises, nor shall Subtenant itself, or any person claiming under or
through Subtenant, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number,
use or occupancy, of sublessees or vendees in the Premises. Sublandlord agrees
that it will not declare a default under this Sublease based solely upon alleged
discrimination, so long as Subtenant discloses the allegations of discrimination
to Sublandlord, declares in writing to Sublandlord that the alleged
discrimination did not in fact occur and proceeds to diligently and vigorously
defend against the discrimination claim. If it is determined through appropriate
proceedings (which may include administrative hearings, arbitrations or the
like) that Subtenant has violated its obligations under this Section 6.7,
Sublandlord may, at its option, declare a default hereunder.
6.8 Permitted Rooftop Equipment.
(a) Right to Install and Maintain Rooftop Equipment. During the
Sublease Term, Subtenant may install on the roof of the Building one satellite
dish no greater than 12 inches in diameter, as necessary for the operation of
Subtenant's equipment within the Premises, including any cabling or wiring
necessary to connect this satellite dish to the Premises (collectively, the
"Rooftop Equipment"). If Subtenant wishes to install any Rooftop Equipment
(including the initial equipment referenced above), Subtenant shall first notify
Sublandlord in writing, which notice shall fully describe the Rooftop Equipment,
including, without limitation, its purpose, weight, size and desired location on
the roof of the Building and its intended method of connection to the Premises.
If Sublandlord determines in its good faith and non-arbitrary discretion that
the Building can structurally accommodate the Rooftop Equipment and that the
installation, operation and maintenance of the Rooftop Equipment will not
interfere with other equipment or business operations then installed and
operating at the Building (subject to the terms of Section 6.8(d) below) or any
helipad use or emergency access on the roof, Subtenant may, at its sole cost and
expense, install the Rooftop Equipment subject to the terms hereof. Sublandlord
also reserves the right to restrict the number and size of dishes, antennae and
other Rooftop Equipment installed on the roof of the Building. Sublandlord
further confirms that in determining the amount of rooftop space that is
available for installation of Communications Equipment, Sublandlord will
consider all factors relevant to the ownership and operation of the Building,
including, without limitation, structural capacity, fire-life-safety
requirements, applicable laws, rules and regulations and emergency access needs.
(b) Additional Charges for Rooftop Equipment. Subtenant will be solely
responsible, at Subtenant's sole expense, for the installation, maintenance,
repair and removal
19
of the Rooftop Equipment, and Subtenant shall at all times maintain the Rooftop
Equipment in good condition and repair.
(c) Conditions of Installation. Subtenant shall comply with all
applicable laws, rules and regulations relating to the installation, maintenance
and operation of Rooftop Equipment at the Building (including, without
limitation, all construction rules and regulations) and will pay all costs and
expenses relating to such Rooftop Equipment, including the cost of obtaining and
maintaining any necessary permits or approvals for the installation, operation
and maintenance thereof in compliance with applicable laws, rules and
regulations. The installation, operation and maintenance of the Rooftop
Equipment at the Building shall not adversely affect the structure or operating
systems of the Building or the business operations of any other tenant or
occupant at the Building. Subtenant may install cabling and wiring through the
Building interior conduits, risers, and pathways of the Building in order to
connect Rooftop Equipment with the Premises provided that Subtenant obtains
Sublandlord's prior written approval therefor (which may be granted or denied by
Sublandlord in its sole discretion, applied in a good faith, non-arbitrary
manner) and provided, further that without such prior written approval therefor
(which may be granted or denied by Sublandlord in its sole discretion, applied
in a good faith, non-arbitrary manner), Subtenant may not utilize more than 2.4%
of the available riser space for its cabling through the Building or to the
rooftop.
(d) Non-Exclusive Right. Subtenant's right to install and maintain
Rooftop Equipment is non-exclusive and is subject to termination or revocation
as set forth herein, including upon the occurrence of an Event of Default under
this Sublease. Subtenant acknowledges and agrees that its right to install
Rooftop Equipment is subject and subordinate to all existing uses of the rooftop
of the Building, which Subtenant may, at its election, review and investigate.
Subject to the terms set forth below in this subsection (d), Sublandlord at its
election may require the relocation, reconfiguration or removal of the Rooftop
Equipment, if in Sublandlord's reasonable judgment the Rooftop Equipment is
interfering with the use of the rooftop for the helipad or other Building
operations or the business operations of other tenants or occupants of the
Building, causing damage to the Building or if Subtenant otherwise fails to
comply with the terms of this Section 6.8. If relocation or reconfiguration
becomes necessary due to interference difficulties, Sublandlord and Subtenant
will reasonably cooperate in good faith to agree upon an alternative location or
configuration that will permit the operation of the Rooftop Equipment for
Subtenant's business at the Premises without interfering with other operations
at the Building or communications uses of other tenants or occupants. If removal
is required due to any breach or default by Subtenant under the terms of this
Section 6.8, Subtenant shall remove the Rooftop Equipment upon thirty (30) days'
written notice from Sublandlord. Any relocation, removal or reconfiguration of
the Rooftop Equipment as provided above shall be at Subtenant's sole cost and
expense. In addition to the other rights of relocation and removal as set forth
herein, Sublandlord reserves the right to require relocation of Subtenant's
Rooftop Equipment at any time at its election at Sublandlord's cost (but not
more frequently than once per year) so long as Subtenant is able to continue
operating its Rooftop Equipment in substantially the same manner as it was
operated prior to its relocation. In connection with
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any relocation of Subtenant's Rooftop Equipment at the request of or required by
Sublandlord (other than in the case of a default by Subtenant hereunder),
Sublandlord shall provide Subtenant with at least thirty (30) days' prior
written notice of the required relocation and will conduct the relocation in a
commercially reasonable manner and in such a way that will, to the extent
reasonably possible, prevent interference with the normal operation of
Subtenant's Rooftop Equipment. In connection with any relocation, Sublandlord
further agrees to work with Subtenant in good faith to relocate Subtenant's
Rooftop Equipment to a location that will permit its normal operation for
Subtenant's business operations. Sublandlord acknowledges that relocation of
Subtenant's Rooftop Equipment may be disruptive to Subtenant's business and,
without limiting its rights to require such removal, confirms that it will not
exercise its rights hereunder in a bad faith manner or for the purpose of
harassing or causing a hardship to Subtenant.
(e) Costs and Expenses. If Subtenant fails to comply with the terms
of this Section 6.8 within thirty (30) days following written notice by
Sublandlord (or such longer period as may be reasonably required to comply so
long as Subtenant is diligently attempting to comply), Sublandlord may take such
action as may be necessary to comply with these requirements. In such event,
Subtenant agrees to reimburse Sublandlord for all costs incurred by Sublandlord
to effect any such maintenance, removal or other compliance subject to the terms
of this Section 6.8, including interest on all such amounts incurred at the
Agreed Rate, accruing from the date which is thirty (30) days after the date of
Sublandlord's demand until the date paid in full by Subtenant, with all such
amounts being Additional Charges under this Sublease.
(f) Indemnification; Removal. Subtenant agrees to indemnify
Sublandlord, its partners, agents, officers, directors, employees and
representatives from and against any and all liability, expense, loss or damage
of any kind or nature from any suits, claims or demands, including reasonable
attorneys' fees, arising out of Subtenant's installation, operation,
maintenance, repair, relocation or removal of the Rooftop Equipment, except to
the extent any such liability, expense, loss or damage results from the gross
negligence or intentional misconduct of Sublandlord or its agents, partners,
officers, directors, employees, contractors or representatives. At the
expiration or earlier termination of the Sublease, Subtenant may and, upon
request by Sublandlord, shall remove all of the Rooftop Equipment, including any
wiring or cabling relating thereto, at Subtenant's sole cost and expense and
will repair at Subtenant's cost any damage resulting from such removal. If
Sublandlord does not require such removal, any Rooftop Equipment remaining at
the Building after the expiration or earlier termination of this Sublease which
is not removed by Subtenant shall be deemed abandoned and shall become the
property of Sublandlord.
(g) Roof Access; Rules and Regulations. Subject to compliance with
the construction rules for the Building and Sublandlord's reasonable and
nondiscriminatory rules and regulations regarding access to the roof and, upon
receipt of Sublandlord's prior written consent to such activity (which shall not
be unreasonably withheld, conditioned or delayed), Subtenant and its
representatives shall have access to and the right to go upon the roof of the
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Building, on a seven (7) day per week, twenty-four (24) hour basis, to exercise
its rights and perform its obligations under this Section 6.8. Subtenant
acknowledges that advance notice is required and a Building engineer must
accompany all persons gaining access to the rooftop, provided, however, in the
case of emergency (such as a failure of Subtenant's equipment to transmit or
receive), Subtenant's obligation shall be to provide verbal notice to the Office
of the Building, and if Subtenant is unable to reach Sublandlord's managing
agent, Subtenant shall immediately notify Building security personnel. Following
the giving of such notice, Subtenant may take action to avert or cure the
emergency situation, provided, however, Subtenant shall be fully responsible for
all costs, expenses and damages resulting from its actions, including, without
limitation, costs of damage to the Building or any equipment therein and damage
to or interference with any other rooftop equipment. Subtenant may install
Rooftop Equipment at the Building only in connection with its business
operations at the Premises, and may not lease or license any rights or equipment
to third parties or allow the use of any rooftop equipment by any party other
than Subtenant, or an assignee or subtenant permitted by the terms of this
Sublease, provided, however, no assignee or subtenant will be entitled to any
rights that differ for those set forth in this Section 6.8. Subtenant
acknowledges that Sublandlord has made no representation or warranty as to
Subtenant's ability to operate Rooftop Equipment at the Building and Subtenant
acknowledges that helicopters, other equipment installations and other
structures and activities at or around the Building may result in interference
with Subtenant's Rooftop Equipment. Except as set forth in this Section 6.8 and
as referenced in Section 12.9, Sublandlord shall have no obligation to prevent,
minimize or in any way limit or control any existing or future interference with
Subtenant's Rooftop Equipment.
ARTICLE 7
INSURANCE
7.1 Use of Premises. Subtenant shall not violate, or permit the violation
of, any condition, standard for use in California, imposed by any insurance
policy relating to the Building and shall not do, or permit anything to be done,
or keep or permit anything to be kept in the Premises which: (a) might subject
Sublandlord to any liability or responsibility for personal injury or death or
property damage, or (b) might increase any insurance rate with respect to the
Building over the rate which would otherwise be in effect (beyond normal
increases for tenancies generally), or (c) might result in insurance companies
of good standing refusing to insure the Building in amounts satisfactory to
Sublandlord, or (d) might result in the cancellation of any policy relating to
the Building or might result in the assertion of any defense by the insurer in
whole or in part to claims under any such policy.
7.2 Property Insurance. During the Sublease Term, Subtenant shall
maintain, at Subtenant's expense, "All Risk" property insurance, insuring
Subtenant's Property (as defined in Section 9.2) and the fixtures and equipment
located within the Premises (excluding Building systems which are the
responsibility of Sublandlord as set forth in Section 6.3), with a replacement
cost endorsement, in the amount of their full replacement cost. If a boiler,
22
pressure object, supplemental air conditioning or other mechanical equipment is
or becomes located within the Premises, Subtenant shall also obtain and maintain
(and will cause co-location customers to obtain and maintain as set forth in
Section 19.3 below), at its expense, property insurance covering such equipment,
with coverage limits of not less than full replacement cost. As used in this
Sublease, the "full replacement cost" of the Building means its replacement cost
excluding (a) footings and foundations and (b) property and fixtures that
tenants are contractually required to insure. Subtenant and its co-location
customers shall also carry business interruption insurance to cover any
interruption of operations at the Premises.
7.3 Liability Insurance. Subtenant, at its expense, shall maintain
throughout the Sublease Term, commercial general liability insurance, including
contractual liability, with respect to the Premises, their use and occupancy by
Subtenant and the conduct or operation of business therein, with combined
single-limit coverage of not less than $3,000,000. Sublandlord may, from time to
time, but not more frequently than once every year, increase the policy amounts
to be maintained by Subtenant under this Section 7.3 as Sublandlord deems
necessary to maintain adequate liability coverage.
7.4 Waiver of Subrogation. Sublandlord and Subtenant each shall secure an
appropriate clause in, or an endorsement upon, each insurance policy required by
Section 7.2 or otherwise carried by such party with respect to the Building,
pursuant to which the insurance company waives subrogation or permits the
insured, prior to any loss, to agree with a third party to waive any claim it
might have against said third party without invalidating the coverage under the
insurance policy. On Subtenant's policies, the waiver of subrogation or
permission for waiver of any claim shall extend to Sublandlord, Sublandlord's
managing agent, if any, Sublandlord's Affiliates (as defined in Section 26.8(b))
and its and their officers and employees. On Sublandlord's policies, the waiver
of subrogation or permission for waiver of any claim shall extend to Subtenant
and its officers and employees. Each party releases the above-named persons with
respect to any claim (including a claim for negligence) which it might otherwise
have against them for injury, loss, damage or destruction occurring before the
end of the Sublease Term and covered by any insurance policy required of such
party under Section 7.2.
7.5 Policy Requirements. Sublandlord, Sublandlord's managing agent, if
any, Sublandlord's Affiliates and its and their officers and employees, each
Superior Lessor and each mortgagee whose name and address shall have been
furnished to Subtenant shall be designated as additional insured parties on each
insurance policy required to be carried by Subtenant under this Article.
Subtenant shall deliver to Sublandlord fully paid-for policies or certificates
of insurance for the insurance coverage required by this Article, in form
satisfactory to Sublandlord, issued by the insurance company or its authorized
agent (each a "Certificate"), at least 20 days before the Commencement Date.
Subtenant shall procure and pay for renewals of such insurance from time to time
before expiration and deliver to Sublandlord a renewal policy or renewal
Certificate at least 30 days before the expiration of any existing policy. At
Sublandlord's request, Subtenant shall also deliver insurance policies
23
or Certificates to additional insured parties other than Sublandlord. All
policies required to be carried by Subtenant hereunder shall be issued by
companies of recognized responsibility, acceptable to Sublandlord, maintaining a
rating of A-VIII or better in Best's Insurance Reports - Property - Casualty (or
an equivalent rating on any successor index adopted by Best's), and licensed to
do business in California. All such policies shall provide that they cannot be
cancelled or materially modified unless Sublandlord, each Superior Lessor and
each mortgagee named as an additional insured party are given at least 30 days'
prior written notice of such cancellation or modification.
7.6 Premium Increase. If, due to any action or omission by Subtenant in
default of any of its obligations under this Sublease, or due to any
improvements installed by or at the direction of Subtenant, the premiums on
Sublandlord's insurance shall be higher than they otherwise would be, Subtenant
shall reimburse Sublandlord, on demand, as Additional Charges, for the part of
the premiums attributable to the default by Subtenant or to such improvements.
For purposes of this Section, a schedule or statement of rates for the Building,
issued by Sublandlord's insurer, or by a fire insurance rating organization or
other similar body making rates for insurance for the Building shall be
conclusive evidence of the facts therein stated and of the several items and
charges in the insurance rate then applicable to the Building.
ARTICLE 8
ALTERATIONS
8.1 Conditions. Subtenant may from time to time, at its expense, make such
alterations ("Alterations") in and to the Premises as Subtenant reasonably
considers necessary for the conduct of its business in the Premises, provided
and upon the following conditions (unless otherwise reasonably approved by
Sublandlord which approval shall not be unreasonably withheld conditioned or
delayed): (a) the Alterations do not affect the outside appearance of the
Building and are not visible from the outside of the Building; (b) the
Alterations are nonstructural and do not impair the strength or structural
integrity of the Building, (c) the Alterations are to the interior of the
Premises and do not affect any part of the Building outside of the Premises; (d)
the Alterations do not affect the proper functioning of the mechanical,
electrical, HVAC or other systems of the Building, or increase the usage of such
systems by Subtenant beyond Subtenant's allocation of such mechanical,
electrical, HVAC or other systems, (e) before proceeding with any Alteration
other than those meeting the conditions set forth in (a), (b), (c) and (d) above
and costing less than $100,000, Subtenant shall submit to Sublandlord, for
Sublandlord's approval, plans and specifications therefor, and Subtenant shall
not proceed with the Alteration unless and until it obtains Sublandlord's
approval, which approval, if such Alteration satisfies the other conditions set
forth in this Section shall not be unreasonably withheld, conditioned or delayed
(taking into account, among other things, any increased demands that such
Alterations may place on the mechanical, electrical, HVAC or other systems of
the Building beyond Subtenant's allocation of such mechanical, electrical, HVAC
or other systems); (f) Subtenant shall pay to
24
Sublandlord upon demand Sublandlord's or its managing agent's reasonable,
direct, out-of-pocket costs and expenses incurred in reviewing Subtenant's plans
and specifications and inspecting the Alterations to determine whether they are
consistent with the guidelines set forth in this Section 8.1, whether they are
being performed in accordance with the approved plans and specifications and in
compliance with law, including the fees of any architect or engineer employed by
Sublandlord for such purpose; (g) before proceeding with any Alteration costing
more than $100,000, as defined in Section 9.2, as estimated by a reputable
contractor approved by Sublandlord, Subtenant shall obtain and deliver to
Sublandlord either: (1) a performance bond and a labor and materials payment
bond for Sublandlord's benefit, issued by a corporate surety licensed to do
business in the State of California, each in an amount equal to 125% of the
estimated cost of the Alterations and in form satisfactory to Sublandlord, or
(2) other security reasonably satisfactory to Sublandlord (which Subtenant, at
its election, may submit for Sublandlord's consideration); (h) not less than 15
days nor more than 20 days before commencement of the Alterations, Subtenant
shall notify Sublandlord of the work commencement date, so that Sublandlord may
post notices of nonresponsibility about the Premises; (i) Subtenant shall fully
and promptly comply with the Rules and Regulations and construction rules and
regulations for the Building then in force with respect to the making of
Alterations; and (j) in no event shall any Alterations or the performance
thereof result in interference or disruption to the business operations of any
other tenant or other occupant of the Building. Any bid obtained by Subtenant,
and the contractor making the bid, shall satisfy the criteria specified in
Section 6.4 and Section 8.2. Subtenant agrees that the review and approval by
Sublandlord of Subtenant's plans and specifications for Alterations are solely
for Sublandlord's benefit. Sublandlord shall have no duty toward Subtenant, nor
shall Sublandlord be deemed to have made any representation or warranty to
Subtenant, as to the safety, adequacy, correctness, efficiency or compliance
with laws of the plans and specifications, the Alterations or their design, or
any other matter regarding the Alterations. Sublandlord agrees to respond in a
commercially reasonable and prompt manner to requests by Subtenant for approval
for Alterations necessary to accommodate Subtenant's ongoing business
operations.
8.2 Performance. Subtenant shall obtain at its sole expense all necessary
governmental permits and certificates for the commencement and performance of
Alterations and for final approval of the Alterations upon completion. Subtenant
shall retain at its sole expense a reputable contractor, acceptable to and
reasonably approved by Sublandlord for specific Alterations, to perform the
Alterations in compliance with the permits and certificates and applicable law.
Alterations shall be diligently performed in a good and workmanlike manner,
using new materials and equipment at least equal in quality to the prevailing
Building standards established by Sublandlord. Any Alterations affecting
mechanical, electrical, HVAC or other systems of the Building shall be performed
only by contractors approved by Sublandlord unless such systems are contained
entirely within the Premises and do not in any way affect Building systems
outside the Premises. Alterations shall be performed in a manner that does not
interfere with, delay or impose additional expense on Sublandlord in the
construction, maintenance, repair or operation of the Building; and if any such
additional expense is so incurred by Sublandlord, Subtenant shall reimburse
Sublandlord for such
25
additional expense, upon demand, as Additional Charges. Throughout the
performance of Alterations, Subtenant, at its sole expense, shall carry, or
cause to be carried, workers' compensation insurance as required by law and
general liability insurance, with completed operations endorsements, for any
occurrence in or about the Building, in such coverage limits as Sublandlord may
reasonably require (taking into account the financial strength of Subtenant and
the nature and extent of the work to be performed), with insurers meeting the
requirements of Section 7.5. Sublandlord and the persons specified in Section
7.5 shall be designated as additional insured parties on such insurance
policies. Subtenant shall furnish Sublandlord with evidence reasonably
satisfactory to Sublandlord that such insurance is in effect before the
commencement of Alterations and, on request of Sublandlord during construction,
Subtenant shall provide evidence reasonably satisfactory to Sublandlord that the
insurance remains in effect. Upon Sublandlord's request following the completion
of any Alterations, Subtenant shall deliver to Sublandlord "as built" drawings
of the Alterations. If any Alterations involve removal of fixtures, equipment or
other property in the Premises which are not Subtenant's Property (as defined in
Section 9.2), the removed fixtures, equipment or other property shall be
promptly replaced at Subtenant's expense with new fixtures, equipment or other
property of like utility and at least equal value, unless Sublandlord otherwise
directs Subtenant in writing.
8.3 Liens and Violations. Subtenant, at its expense, and with diligence
and dispatch, shall procure the cancellation or discharge of all notices of
violation arising from or otherwise connected with Alterations, or any other
work, labor, services or materials done for or supplied to Subtenant, or any
person claiming through or under Subtenant, which shall be issued by the
Building and Safety Department of the City of Los Angeles or any other public
authority. Subtenant shall not utilize materials in Alterations (except with
respect to Subtenant's Property) that are subject to security interests or
liens. Subtenant shall defend, indemnify and hold Sublandlord harmless from and
against any and all mechanics' liens, stop notices and other liens and
encumbrances or claims of liens or encumbrances filed in connection with
Alterations, or any other work, labor, services or materials done for or
supplied to Subtenant, or any person claiming through or under Subtenant,
including security interests in any materials, fixtures or articles installed in
the Premises; and against all costs, expenses and liabilities incurred in
connection with any such lien or encumbrance, or claim of lien or encumbrance,
its removal or any related action or proceeding. Subtenant, at its sole expense,
shall satisfy or discharge of record each lien or encumbrance within 15 days
after it is filed. If Subtenant fails to do so, Sublandlord shall have the right
to satisfy or discharge such lien or encumbrance by payment to the claimant on
whose behalf it was filed, by the posting of a bond, or by other action.
Subtenant shall reimburse Sublandlord on demand for the actual out-of-pocket
costs and expenses so incurred by Sublandlord, as Additional Charges, and
without regard for any defense or offset that Subtenant may have had against the
claimant, but neither Sublandlord's curative action nor the reimbursement of
Sublandlord by Subtenant shall cure Subtenant's default in failing to satisfy or
discharge the lien or encumbrance.
26
ARTICLE 9
SUBLANDLORD'S AND SUBTENANT'S PROPERTY
9.1 Sublandlord's Fixtures and Equipment. All fixtures, equipment,
appurtenances, improvements and other personal property existing at the Building
as of the date of this Sublease, shall be and remain the property of Sublandlord
and shall not be removed by Subtenant and shall, upon expiration or earlier
termination of the Sublease, remain a part of the Premises and the property of
Sublandlord. Upon notice to Subtenant in connection with a termination of the
Sublease, Sublandlord may require Subtenant to remove all or any part of any
non-standard fixtures (e.g., vaults, kitchens, raised floors (excluding raised
floors existing as of the date the Premises are initially delivered to
Subtenant), auditoriums, internal stairways and any other improvements or
alterations which differ from those typically included within normal office use
(excluding any other non-standard improvements which existed as of the date the
Premises are initially delivered to Subtenant), whether or not installed by
Subtenant or existing as of the date of this Sublease, and any other
Alterations, in which event Subtenant shall remove the foregoing from the
Premises before the end of the Sublease Term at Subtenant's expense and shall
repair and restore the Premises to its condition before such installation,
ordinary wear and tear and insured casualty loss excepted, and repair any damage
resulting from such removal. Upon request by Subtenant, Sublandlord agrees to
specify at the time of approval of Alterations within the Premises which may be
considered non-standard whether such improvements or Alterations will be
required to be removed at the end of the Sublease Term.
9.2 Other Property and Equipment. All telecommunications systems and
related equipment and office equipment and other equipment or property, whether
or not attached to or built into the Premises, that is installed in the Premises
by or for the account of Subtenant or its customers, agents, vendees, subtenants
(including Providing Parties) or service providers without expense to
Sublandlord, and which can be removed without any significant damage to the
Premises or the Building, and all furniture, furnishings and other articles of
movable personal property owned by Subtenant (or leased from any person other
than Sublandlord) and located in the Premises (collectively, "Subtenant's
Property") shall remain the property of Subtenant (or such other owner) and may
be removed by Subtenant (or such other owner) at any time during the Sublease
Term. If and to the extent significant damage is expected to result from the
removal of Subtenant's Property, such property and equipment shall not be
removed without the prior written consent of Sublandlord, which consent shall
not be unreasonably withheld so long as Subtenant agrees to repair, at
Subtenant's sole cost and expense, all damage resulting from such removal.
Subtenant shall repair, at its sole expense, any damage to the Premises or to
the Building resulting from the installation or removal of Subtenant's Property,
ordinary wear and tear and insured casualty loss excepted. Equipment or other
property for which Sublandlord shall have granted an allowance or credit to
Subtenant, and any replacement of such equipment or property, shall not be
deemed Subtenant's Property and shall become the property of Sublandlord.
27
9.3 Removal at Termination. Before the expiration of the Sublease Term, or
immediately upon any earlier termination of this Sublease, Subtenant, at its
sole expense, shall remove from the Premises all of Subtenant's Property, except
such items as Sublandlord has expressly permitted, either at the time of
installation or otherwise, to remain. Subtenant shall repair any damage to the
Premises or the Building resulting from the installation or removal of
Subtenant's Property or other fixtures or equipment from the Premises.
9.4 Abandonment. At Sublandlord's option, any items of Subtenant's
Property that remain in the Premises after the expiration of the Sublease Term
or any earlier termination of this Sublease shall be deemed abandoned and may be
retained by Sublandlord (or successor in interest) as its property or disposed
of, without accountability, in such manner as Sublandlord shall determine, and
at Subtenant's expense.
9.5 Taxes on Subtenant's Property and Non-Standard Subtenant Improvements.
(a) Subtenant's Property. At least 10 days before delinquency,
Subtenant shall pay all taxes levied or assessed upon any property, equipment,
fixtures or improvements installed at the Premises after the date of this
Sublease. If the assessed value of the Building, the Premises or property of
Sublandlord is increased by the inclusion of a value placed upon property
installed at the Premises after the date of this Sublease, Subtenant shall pay
to Sublandlord, upon demand, as Additional Charges, the taxes levied against
Sublandlord on account of the included value of such property.
(b) Subtenant Improvements. Subtenant shall pay to Sublandlord, upon
demand, as Additional Charges, the portion of all real estate taxes levied or
assessed against Sublandlord with respect to improvements, property or equipment
installed in the Premises, to the extent such levy or assessment is based upon a
value determined to be in excess of Thirty-Five Dollars ($35.00) per square foot
of Rentable Area of the Premises. For the purposes of calculating the amount
payable by Subtenant pursuant to this Section 9.5(b), the assessed value of
improvements and equipment installed in the Premises shall be deemed to be equal
to the cost of such improvements and equipment, including any fees paid to
Sublandlord in connection therewith, and including the cost of any Alterations
performed pursuant to Section 8.1.
9.6 Sublandlord Liens. Sublandlord recognizes that Subtenant will be
installing Subtenant's Property at the Premises, including telephone switching
equipment, and furniture, fixtures and equipment. Sublandlord further recognizes
that Subtenant may, from time to time, finance and refinance certain items of
Subtenant's Property. Accordingly, Sublandlord hereby (a) consents to the
installation of Subtenant's Property subject to and in accordance with the terms
of this Sublease; (b) waives, in favor of both Subtenant and any party providing
financing to Subtenant for any purpose, any lien, interest, and or right of
Sublandlord in and to Subtenant's Property, whether statutory or possessory,
whether arising by statute or at common law, including but not limited to any
Sublandlord's lien, and any
28
right of execution, attachment, levy or to distraint for rent. Notwithstanding
the foregoing, Sublandlord shall have no obligation or liability to any holder
of a lien with respect to Subtenant's Property or equipment except to the extent
of any written agreement which may be entered into between Sublandlord and such
lienholder. No lienholder shall be permitted access to the Premises or any other
rights with respect to the Building unless set forth in a written agreement.
Further, Subtenant agrees to indemnify, defend and hold harmless Sublandlord
from and against all liens which may be recorded against the Land, the Building
or any portion thereof and the exercise of any remedies by any lienholder of
Subtenant.
ARTICLE 10
REPAIRS AND MAINTENANCE
10.1 Sublandlord's Obligations. Sublandlord shall keep and maintain the
Common Area, the Building's exterior walls, glass, roof and foundation, Building
core, and shall keep in proper working order, condition and repair the Building
systems and facilities serving the Premises and improvements to the extent such
systems, facilities and improvements are included within the Base Building
Definition (but specifically excluding any Specialty Equipment and any other
equipment installed by Subtenant or its agents, employees, vendees, subtenants,
Providing Parties or service providers). However, Sublandlord shall have no
obligation to Subtenant to perform such repairs in or about the Common Area, the
Premises, or with respect to Building systems and facilities serving the
Premises, unless Sublandlord has learned of the need or been notified in writing
of the need for such repairs, describing the problem in reasonable detail, and
except in the case of emergency, in which case Sublandlord shall perform such
repairs with reasonable diligence as quickly as possible upon Subtenant's oral
notification to Sublandlord of the need of such repair.
10.2 Subtenant's Obligations. Except for Sublandlord's obligations
specifically set forth in Sections 10.1 and 13.1, Subtenant shall, at its
expense, throughout the Sublease Term, take good care of the Premises,
Subtenant's Property and all equipment and other property of Subtenant, its
agents, employees, vendees, subtenants (including Providing Parties) or service
providers located within the Premises from time to time. Subtenant shall be
responsible for all repairs, maintenance and replacements in and to the
Premises, including any improvements installed by or for Subtenant or its
agents, employees, vendees, subtenants (including Providing Parties) or service
providers, and for all wall and floor coverings, all water fountains, sinks,
sanitary and electrical fixtures and equipment in the Premises, ordinary and
reasonable wear and tear excepted. Subtenant, at its expense, shall promptly
replace all scratched, damaged or broken doors and interior glass in the
Premises. Subtenant shall be responsible for all maintenance and repairs,
interior and exterior, structural and non-structural, ordinary and
extraordinary, of the Premises, the Building, and its facilities and systems,
made necessary, in whole or in part, by: (a) the performance or existence of
Alterations or other improvements performed by or for Subtenant or its agents,
employees, vendees, subtenants (including Providing Parties) or service
providers; (b) the installation, use or operation of any equipment or property
within the Premises; (c) the moving of any equipment or property in or
29
out of the Building; or (d) any act, omission, misuse or neglect of Subtenant or
its officers, partners, employees, agents, contractors, vendees, customers or
invitees. All repairs in or to the Premises for which Subtenant is responsible
shall be subject to the provisions of Article 8 regarding Alterations.
Sublandlord shall perform or cause to be performed, at Subtenant's expense, any
other repairs of the Building and its facilities and systems for which Subtenant
is responsible. Subtenant shall reimburse Sublandlord, as Additional Charges,
for all reasonable actual, out-of-pocket costs of such repairs.
10.3 Exculpation of Sublandlord for Repairs. Except as otherwise expressly
provided in this Sublease, Sublandlord shall have no liability to Subtenant, and
Subtenant's covenants and obligations under this Sublease shall not be reduced
or abated in any manner whatsoever, by reason of any inconvenience, annoyance,
interruption or injury to business arising from Sublandlord making any
reasonable maintenance, repairs, alterations, additions or improvements in or to
any portion of the Building or the Premises or in or to the fixtures, equipment
or appurtenances of the Building or the Premises, which Sublandlord is required
or permitted to make by this Sublease, or which are required by law, or which
Sublandlord deems appropriate, excepting any actual (but not consequential)
damages occurring during the performance of such maintenance, repair,
alteration, addition or improvement to the extent caused by the negligence or
willful misconduct of Sublandlord or its employees, contractors, agents, or
partners. When practicable, Subtenant shall be given the reasonable opportunity
to perform such work within the Premises in lieu of the Sublandlord undertaking
such work. Sublandlord shall have the right to erect scaffolding and barricades
in the Premises and elsewhere in the Building for purposes of such repairs,
provided that such structures do not unreasonably impair access to and use of
the Premises. Subtenant waives any rights it may have under California Civil
Code Sections 1941 and 1942, and any other provisions of law now or hereafter in
force, regarding the duties of a lessor to repair leased premises or the rights
of lessees to make repairs if the lessor fails to do so. Sublandlord agrees that
it will not (except in the event of an emergency or a force majeure event)
intentionally and knowingly take any action to reduce, interrupt or cease
service of the heating, air conditioning, ventilation, elevator, plumbing,
electrical systems, telephone systems and/or utilities services of the Premises,
or the Building. If Sublandlord becomes aware of the need for work which will
affect services, Sublandlord shall exercise commercially reasonable efforts to
meet with Subtenant in advance to advise Subtenant of the necessary work or
other event so that Subtenant may devise a procedure to minimize the
interruption to Subtenant's use, possession and occupancy of the Premises for
the purpose of conducting its business.
10.4 Notice. Promptly upon becoming aware of any such matter, Subtenant
shall give prompt written notice to Sublandlord of: (a) any occurrence in or
about the Premises for which Sublandlord might be liable; (b) any fire or other
casualty in the Premises; (c) any damage to or defect in the Premises, including
fixtures, for the repair of which Sublandlord might be responsible; and (d) any
damage to or defect in any part or appurtenance of the Building's sanitary,
electrical, HVAC, elevator, fire warning or other systems located in or passing
through the Premises.
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ARTICLE 11
UTILITIES AND SERVICES
11.1 Basic Utilities and Services. Subject to the availability of
utilities and services on a 24-hour basis as described in this Sublease,
Sublandlord shall furnish to the Premises during "Building Hours," which are
from 7:00 a.m. to 7:00 p.m. Monday through Friday and from 9:00 a.m. to 2:00
p.m. Saturday, except New Year's Day, Xxxxxx Xxxxxx Xxxx Day, Presidents' Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving, Christmas and other
holidays generally observed in the City of Los Angeles by the closing of
businesses (each a "Holiday"), and subject to the Rules and Regulations: (a)
heating, air-conditioning and ventilation ("HVAC") in accordance with the Base
Building Definition attached as Schedule 1 to the Work Letter ("Base Building
Definition"); (b) non-exclusive freight and passenger elevator service included
within the Base Building Definition; (c) hot and cold water in amounts required
for normal lavatory, cleaning and drinking purposes (including water for coffee
machines). Subtenant's Premises shall be separately metered or submetered
(including through an e-mon metering system) at Subtenant's cost so that
Subtenant may contract or otherwise arrange for excess electricity in amounts
consistent with or at Subtenant's sole expense, in addition to, Base-Building
Definition, subject to Sublandlord's approval, engineering review, system
compatibility and available capacity. Sublandlord shall provide janitorial
services on business days in accordance with the specifications attached as
Exhibit G. It is acknowledged that certain portions of Subtenant's electricity
usage at the Premises is and will remain separately metered or submetered, and
Subtenant hereby assumes all responsibility for maintenance of the utility
meters (or submeters) for the Premises. If Subtenant wishes to contract with a
utility provider other than the utility provider now servicing the Building or
wishes to contract directly with a utility provider directly rather than
operating under a submetering arrangement, Subtenant shall first obtain
Sublandlord's prior written consent, which shall not be unreasonably withheld,
conditioned or delayed.
11.2 Additional Subtenant Use. Subject to the Rules and Regulations, the
Base Building Definition and the terms of this Sublease, passenger elevator
service, electricity, life-safety system, and water will be available 24 hours a
day, every day of the year, and HVAC and freight elevator service will be
available at other than Building Hours by arrangement with Sublandlord, at
Sublandlord's customary charges for such overtime use (which, for after-hours
HVAC, is currently charged at $54.00 per hour) for Building standard HVAC
services to the office area portions of the Premises. To the extent other
tenants require after-hours HVAC on the Lower Level I, II, or III floors of the
Building and other tenants within the lower levels pay their pro rata share of
such services, Subtenant's after-hours HVAC costs shall be adjusted to reflect
such cost sharing arrangement. Notwithstanding the foregoing Subtenant's use and
access rights as described herein shall be subject to emergency shutdowns and
the annual power shutdown and inspection (conducted in conjunction with the Los
Angeles Fire Department), on one weekend per year (as determined by Sublandlord)
or more frequently if required by applicable laws, rules or regulations, it
being agreed that Sublandlord's managing agent shall use its commercially
reasonable efforts to notify Subtenant prior to any scheduled shutdown of the
31
Building's power which Sublandlord or its managing agent schedules or of which
it receives reasonable advance notice. Without Sublandlord's prior written
consent, Subtenant shall not use any apparatus or device in the Premises
designed to operate on electrical current in excess of the capacity provided in
the Base Building Definition, except as specifically set forth in this Sublease.
Sublandlord may impose a reasonable charge for the use by Subtenant of: (a) HVAC
or freight elevators at any time other than during Building Hours; (b) HVAC or
water in amounts exceeding the amounts Sublandlord has undertaken to provide in
Section 11.1 ("Excess Services"), it being agreed that Sublandlord may audit
(including by consultant, survey, and/or through installation of meters)
Subtenant's consumption of utilities for such purpose, which audits and metering
shall be at Subtenant's expense unless they disclose that Subtenant is not in
fact using Excess Services; and (c) any additional or unusual janitorial or
cleaning services in the Premises made necessary by reason of (i) non-standard
tenant improvements in the Premises (such as a large number of glass partitions
or other glass surfaces in the interior of the Premises), (ii) the carelessness
of Subtenant or its employees, or (iii) the manner in which Subtenant's business
is conducted. Sublandlord shall not be required to provide janitorial services
for any portions of the Premises which differ from normal office uses, including
portions utilized for preparing or consuming food or beverages, storage, offset
printing, equipment rooms or lavatories.
11.3 Temperature Maintenance. Sublandlord makes no representation with
respect to, and shall have no liability in connection with, the adequacy or
fitness of the HVAC systems to operate in a manner which is inconsistent with
the Base Building Definition. If the temperature otherwise maintained in any
portion of the Building by the HVAC systems is affected as a direct or proximate
result (as determined by a qualified building engineer) of any lights, machines,
equipment, occupancy, or electrical load in or with respect to the Premises
other than in accordance with the Base Building Definition, Sublandlord shall
have the right, but not the obligation, to install any machinery and equipment
which Sublandlord reasonably deems necessary to maintain or restore temperature
balance, including modifications to the standard HVAC equipment. The cost of any
such additional machinery or equipment, including the cost of installation and
any additional cost of operation and maintenance incurred thereby, shall be paid
by Subtenant as Additional Charges.
11.4 Exculpation of Sublandlord for Utilities. Except as specifically
provided in this Sublease to the contrary, Sublandlord shall not be liable for
any failure to furnish any services or utilities when such failure is caused by
acts of God, accidents, breakage, repairs, strikes, lockouts, other labor
disputes, alterations or improvements to the Premises or the Building, the
inability to obtain an adequate supply of fuel, water, electricity, labor or
other supplies or for any other condition beyond Sublandlord's reasonable
control (including any governmental energy conservation program), and Subtenant
shall not be entitled to any damages nor shall such failure xxxxx or suspend
Subtenant's obligation to pay the Rents or constitute or be construed as a
constructive or other eviction of Subtenant. If any governmental entity
promulgates or revises any law, or issues guidelines or mandatory controls
relating to the use or conservation of energy, water, gas, light or electricity,
the reduction of automobile or other emissions or the provision of any other
utility or service
32
furnished by Sublandlord in the Building, Sublandlord may, in its sole
discretion, take any appropriate action to comply with such provisions of law,
guidelines or mandatory controls, including the making of alterations to the
Building. Except as specifically provided in this Sublease, neither
Sublandlord's actions nor its failure to act shall entitle Subtenant to any
damages, xxxxx or suspend Subtenant's obligation to pay the Rents or constitute
or be construed as a constructive or other eviction of Subtenant.
11.5 Access. Sublandlord, its cleaning contractor and their employees shall
have access to the Premises after 5:30 p.m. and before 8:00 a.m. and shall have
the right to use, without charge therefor, all light, power and water in the
Premises reasonably required to clean the Premises, except such persons shall
not have access to Subtenant's proprietary assets or technical equipment areas
designated by Subtenant in writing and Sublandlord shall have no liability with
respect thereto. If Subtenant wishes to designate any areas containing equipment
or assets as areas which will not be accessible, Subtenant agrees to provide for
emergency access as requested by Sublandlord.
11.6 Directory Listing. If Sublandlord elects to utilize a directory board
in the lobby of the Building, Sublandlord shall provide to Subtenant up to 5
lines on the Building directory. The reasonable charge of Sublandlord for any
changes in such listings requested by Subtenant shall be paid by Subtenant to
Sublandlord on demand, as Additional Charges. The content and design of the
directory board shall be determined by Sublandlord in its sole and absolute
discretion. Subtenant's signage rights at the Building are set forth in Article
27.
11.7 Building Security. Sublandlord (or its property manager) shall, as
part of the Costs of Operation, provide security services for the Building,
including the Parking Garage, in a manner consistent with the security services
provided in Comparable Buildings. Sublandlord shall be in no event obligated to
provide armed guards at the Building. Subject to the requirements of the Work
Letter and terms of Section 8 (Alterations), if applicable, Subtenant shall be
permitted at its sole expense, to install its own security system (such as a
card key system) and may retain supplemental security services for its Premises
(but in no event such supplemental security services consist of armed guards),
so long as such systems and services are compatible with Sublandlord's security
measures for the Building. If Subtenant elects to employ any of its own security
measures, Sublandlord and Subtenant agree to use reasonable efforts to
coordinate their respective security functions and shall cooperate to develop
procedures to implement their respective procedures in an efficient and
effective manner. Notwithstanding anything to the contrary herein, Subtenant
assumes responsibility for (1) keeping the Premises reasonably secure, and (2)
locking the doors in and to the Premises. Any damage to Subtenant's property or
the Premises resulting from neglect shall be paid for by Subtenant, subject to
Subtenant's right to collect insurance proceeds and proceed against third
parties. All property belonging to Subtenant or any person in the Premises shall
be there at the sole risk of the Subtenant or such other person only, and
Sublandlord and its agents and employees shall not be liable for theft or
misappropriation, except to the extent resulting from the gross negligence or
willful misconduct of Sublandlord or its agents, employees or contractors. It is
further acknowledged and agreed that Sublandlord makes no representation
33
or warranty to Subtenant as to the protection which may be provided by
Sublandlord's security measures to Subtenant's employees or visitors, and
Sublandlord shall not be responsible for any criminal acts which may be
committed within the Common Areas or at or around the Premises or the Building.
11.8 Subtenant's Right to Retain Janitorial Services. Subtenant shall have
the right, at Subtenant's expense, upon not less than 30 days' prior written
notice to Sublandlord, to retain a reputable janitorial service contractor to
perform janitorial services in accordance with the specifications attached
hereto as Exhibit G to the entire Premises or a specifically designated portion
of the Premises. In the event Subtenant shall so notify Sublandlord, Sublandlord
shall have no Further obligation to provide janitorial services to the Premises
after the effective date of commencement of the service retained by Subtenant.
Sublandlord and Subtenant shall coordinate all janitorial services to avoid
duplication of services, improper charges, disagreements between service
contractors and to ensure that the Building and the Premises will be maintained
in accordance with the standards of Comparable Buildings. If Subtenant elects to
provide its own janitorial services, all storage of cleaning supplies and
equipment for such janitorial service shall be within the Premises in compliance
with all applicable laws, rules and regulations.
11.9 Telephone Services. Currently, the following telephone companies
serve the Premises: MCI, AT&T, MFS and PacBell. Subtenant shall have the right
to select and contract with any telecommunications provider of its choice, so
long as (i) such provider is limited to the utilization, within the Premises, of
existing equipment available at the Building or other equipment approved by
Sublandlord in its sole discretion and installed in accordance with the terms of
this Sublease; (ii) such provider is to provide service solely to Subtenant
(unless otherwise approved in writing by Sublandlord); (iii) such provider
enters into an agreement with Sublandlord, in a form reasonably acceptable to
Sublandlord, pertaining to issues such as liability, insurance, indemnity,
removal of equipment, repair of damage and protection against interference with
other tenants of the Building; and (iv) upon the expiration or earlier
termination of the rights of Subtenant under this Sublease, all rights of such
provider to provide services to the Building shall automatically cease except to
the extent of contracts with other tenants or occupants of the Building which
have been approved by Sublandlord in advance. Subtenant acknowledges and agrees
that Sublandlord, except as may be imposed by law, shall have no obligation to
provide access to the Building or any portion thereof to any persons or entities
except upon the terms of written agreements which may be entered into between
Sublandlord and such parties. Sublandlord specifically reserves the right to
deny access to any persons or entities in sole and absolute discretion, except
to the extent and subject to the terms of written agreements. It is acknowledged
and agreed that the foregoing shall not be applicable to Subtenant's Providing
Parties who enter into agreements with Subtenant subject to and in accordance
with the terms of Section.3.
11.10 Uninterrupted Power System (UPS). Subject to the approval of the
Building's engineers with respect to method of connection and confirmation of
capacity needs and subject to availability as determined by Landlord in its good
faith discretion, Subtenant
34
shall have the right to utilize the Building's Uninterrupted Power System (UPS)
for Subtenant's operations in accordance with Subtenant's design documents
approved by Sublandlord and its engineers. Subtenant agrees to pay to
Sublandlord, as part of the Rents payable hereunder (and not as part of
Subtenant's Share of Costs of Operation), (i) costs incurred by Sublandlord to
connect Subtenant's Premises to the UPS, including engineering fees as required,
and (ii) the actual cost of operating and maintaining the UPS to the extent
exceeding the basic annualized cost of operating the UPS prior to the date of
commencement of Subtenant's use and hookup, with such costs being determined by
a licensed and qualified engineer or contractor experienced in the operation of
the UPS and reasonably verified through available operating cost records.
Sublandlord has made no representation or warranty regarding the UPS and has
provided no assurances to Subtenant regarding its operations. Subtenant's use of
the UPS shall be at the sole risk of Subtenant.
11.11 Subtenant's Specialty Equipment. Subject to the terms of this
Section 11.11, Sublandlord acknowledges that Subtenant's use of the Premises may
require some or all of the following (the "Specialty Equipment"), all of which
shall be subject to engineering review and approval:
(a) Subject to engineering review and confirmation of methods of
connection and available capacity, Subtenant shall have limited access to the
Building's back up diesel generators on terms specified by Sublandlord. All work
associated with connections to such generators shall be at Subtenant's sole cost
and expense and Sublandlord makes no representation or warranty regarding the
capability or availability of the generator system at any time. Subtenant shall
pay all costs associated with its use of the generator system. If Subtenant
wishes to install its own backup power system to serve the Premises, it will
comply with all requirements applicable to the performance of Alterations within
the Premises, including, without limitation, necessary engineering review for
compatibility with existing Building systems. Tenant acknowledges that the total
power to the Premises shall not exceed 500 kw aggregate.
(b) To the extent available and subject to engineering review,
Subtenant may access the existing electrical closet intended to serve the
Premises and all necessary connections from such location to Subtenant's
equipment, with capacity of up to 7 VA per square foot. Any costs associated
with such service, including its installation of electrical panels and other
necessary equipment to serve the Premises, shall be paid by Subtenant. If
Subtenant requires more power for the operation of its business at the Premises,
Subtenant may install equipment necessary to deliver such additional power to
the Premises (to bring the level of power available to the Premises up to 800
amps service), subject to Sublandlord's review and approval of Final Plans for
such equipment and engineering review to confirm compatibility with the Building
and all Building systems. Subtenant shall pay all costs associated with the
design, review, installation and operation of any such additional equipment.
35
(c) An independent, Subtenant-controlled fire suppression system of FM
200 or newer technologies, at Subtenant's expense, with Sublandlord's approval
which shall not be unreasonably withheld, conditioned or delayed, which will
include access to Subtenant for exhaust louvers, shafts or risers necessary for
the discharge of exhaust from the Premises from such system as well as
Subtenant's air conditioning system. Subtenant will pay for all changes
necessary to zone off and change the fire suppression system.
(d) Connection of the office space areas within the Premises to
Sublandlord's fire alarm system.
(e) The right to use, store and/or relocate, at Subtenant's sole cost
and expense, the existing raised floor system in the Premises to accommodate
Subtenant's telecommunications equipment.
(f) Subtenant may install, at its sole cost and expense, a 750 MCM
copper insulated ground conductor associated fittings and/or conduit from the
master ground at the lowest point in the Building to the Premises. Subtenant may
ground its telecommunications equipment in accordance best industry practice and
sound electrical engineering principles, subject to Sublandlord's reasonable
approval.
(g) Subtenant shall have the right to utilize the existing pre-action
(i.e., "dry") fire suppression system, or to modify existing wet sprinkler
system components to create a pre-action system in all or selected parts of the
Premises. Such system shall be in compliance with applicable standards and codes
and shall be subject to reasonable Sublandlord and local governmental approvals.
Any sprinklers not converted to a "pre-action" design shall remain of "wet"
design.
(h) Subject to review and approval of Subtenant's Final Plans for such
installation, Subtenant may install fixtures and equipment necessary for the
operation of its telecommunications operations at the Premises.
(i) If necessary for Subtenant's business operations at the Premises
and subject to review of Subtenant's Final Plans for such installation,
Subtenant shall have the right to install within the Premises systems necessary
to provide supplemental HVAC services to the Premises, utilizing chilled water.
Subtenant shall pay all costs and expenses associated with the installation, use
and operation of any supplemental HVAC equipment or system, including, without
limitation, the costs of installing a chilled water loop to the Premises and a
usage charge for the supply of chilled water to the Premises. As of the date of
this Lease, the chilled water charge for the operation of supplemental HVAC
equipment is $32 per hour during other than Building Hours (with no charge
during Building Hours), which amount shall be subject to adjustment to
Subtenant's pro rata share of such cost if other subtenants on the Lower Level
I, II or III floors of the Building also use such service at the same time it is
requested by Subtenant. The charge for providing chilled water shall be subject
to adjustment based upon increases in Sublandlord's actual costs of providing
such service. Subtenant shall
36
pay all costs associated with its use of the Building's systems described above
as a direct charge, provided that if services are provided to many tenants or
occupants together, Subtenant shall pay its proportionate share of such costs.
Notwithstanding anything to the contrary herein, Subtenant acknowledges and
agrees that installation, use and maintenance of the Specialty Equipment is
subject to Sublandlord's engineering review and confirmation of compatibility
with the operation of the Building from time to time and the operations, use and
access rights of other tenants, subtenants and occupants of the Building. In
addition, Subtenant agrees to comply with the terms of Article 8 and the Work
Letter, as applicable to the installation of any Specialty Equipment.
ARTICLE 12
RIGHTS OF SUBLANDLORD
12.1 Reservation from Premises. Except for the space within the inside
surfaces of all walls, hung ceilings, floors, windows and doors bounding the
Premises and areas covered by Subtenant's rights to signage, Sublandlord
reserves from the Premises leased hereunder all of the Building, including,
without limitation, the roof, exterior Building walls, core corridor walls and
doors, any terraces or roofs adjacent to the Premises (but in no event over the
equipment area of the Premises), the space between hung ceilings and the slab
above the office space portion of the Premises used for shafts, stacks, pipes,
conduits, fan rooms, ducts, electric, telephones or other utilities, sinks or
other Building facilities, and their use, as well as access thereto through the
Premises for the purposes of operation, maintenance, decoration and repair of
the Premises or the Building. Sublandlord reserves the right, and Subtenant
shall permit Sublandlord, to install, erect, use and maintain pipes, ducts and
conduits in and through the Premises; provided that Sublandlord shall disguise,
conceal or camouflage the pipes, ducts and conduits.
12.2 Entry by Sublandlord. Sublandlord and its agents shall have the right
to enter or pass through the Premises at reasonable times upon reasonable
advance notice and when accompanied by a representative of Subtenant, except in
the case of emergency: (a) to examine the Premises and to show them to actual
and prospective lenders, purchasers, lessors, and lessees of the Building and
(b) to make repairs, alterations, additions and improvements in the Premises,
the Building or Building facilities and equipment provided that such work will
not interfere with Subtenant's rights under this Sublease unless and to the
extent there is a commercially reasonable justification for such interference.
No advance written notice shall be required in emergency situations if advance
notice is not possible, provided that Sublandlord shall attempt to be
accompanied by Subtenant's personnel in such situations. In exercising its
rights under this Section 12.2, Sublandlord shall take reasonable measures
(without requiring the use of overtime or premium pay labor except at
Subtenant's expense) to avoid interference with Subtenant's use and occupancy of
the Premises. Sublandlord shall have a pass key to the Premises and shall, upon
reasonable advance notice and when accompanied by a representative of Subtenant,
be allowed to bring materials and equipment into the Premises as required in
connection with repairs, alterations, additions and improvements, without any
37
liability to Subtenant and without any reduction of Subtenant's covenants and
obligations. Notwithstanding the foregoing, Subtenant shall have the right to
reschedule, except in times of emergency, any entry by Sublandlord upon
Sublandlord's notice of such entry and Subtenant shall pay any direct costs
incurred by Sublandlord for such rescheduling.
12.3 Temporary Obstructions of Light or View; Closures. Except to the
extent such actions may affect the life-safety system or violate any applicable
codes or other governmental laws, if at any time any windows of the Premises are
temporarily darkened or the light or view therefrom is obstructed by reason of
any repairs, improvements, maintenance or cleaning in or about the Building, or
if any part of the Building other than the Premises is temporarily or
permanently closed or inoperable, the same shall be without liability to
Sublandlord and without any reduction or diminution of Subtenant's obligations
under this Sublease.
12.4 [Intentionally omitted]
12.5 Entry Before End of Term. Unless otherwise notified by Subtenant, if,
during the last two months of the Sublease Term, Subtenant shall have removed
all or substantially all of Subtenant's Property from the Premises, Sublandlord
may, upon reasonable advance notice, immediately enter the Premises and alter,
renovate and decorate the same, without liability or cost to Subtenant and
without reducing or otherwise affecting Subtenant's covenants and obligations
hereunder.
12.6 Building Name and Address. Subject to Subtenant's signage rights under
Article 27, Sublandlord reserves the right at any time, with 30 days' prior
notice to Subtenant, to change the Building's name or address, and Sublandlord
shall have no liability to Subtenant for any cost or inconvenience occasioned
thereby.
12.7 Alterations of Building. Sublandlord reserves the right, at any time
but with 30 days' prior notice to Subtenant, without incurring any liability to
Subtenant therefor and without affecting or reducing any of Subtenant's
covenants and obligations hereunder, to make such changes, alterations,
additions and improvements in or to the Building and its respective systems and
equipment (including street entrances, doors, halls, passages, elevators,
escalators stairways, and other public parts of the Building), as Sublandlord
shall deem necessary or desirable. However, Sublandlord shall not exercise its
rights under this Section 12.7 in a manner that would interfere with Subtenant's
use of or access to the Premises.
12.8 Other Rights. The enumeration of rights of Sublandlord in this Article
12 is not all-inclusive, and shall not be construed to preclude or limit other
rights reserved to Sublandlord by this Sublease or by law.
12.9 Interference. Notwithstanding anything to the contrary herein,
Subtenant acknowledges and agrees that Sublandlord shall have no obligation to
ensure that other parties do not interfere with Subtenant's business operations
or communication services or Federal
38
Communications Commission's rules and Sublandlord shall have no liability for
interference resulting from actions or operations of others. Sublandlord will
non-discriminatorily enforce Building Rules and Regulations and the terms of
Subleases only with respect to normal office building uses and not with respect
to issues of interference with communication uses. Subtenant shall be and remain
responsible for preventing and guarding against interference with other uses and
operations in the Building and agrees to indemnify, defend and hold harmless
Sublandlord from and against any and all claims, losses, liabilities or causes
of action brought against Sublandlord by reason of any actual or claimed
interference arising out of the use of the Premises by Sublandlord or any
Providing Parties. Without limiting the foregoing, Subtenant acknowledges and
agrees that Sublandlord shall have no obligation to become involved in disputes
or disagreements which may arise between or among various rooftop users
regarding interference or other issues. If a dispute arises between Subtenant
and another rooftop user, Subtenant may request that such other user meet with
Subtenant to resolve such dispute in a manner consistent with prevailing
industry standards and customs and all costs of such dispute resolution
proceedings shall be paid by Subtenant (or as otherwise agreed with such other
rooftop user) and Sublandlord shall have no liability or responsibility with
respect thereto.
ARTICLE 13
DAMAGE OR DESTRUCTION
13.1 Restoration. If the Building or the Premises is damaged or destroyed
by fire or other casualty, and if this Sublease is not terminated as provided in
this Article 13, Sublandlord shall repair the damage and restore or rebuild the
Building or the Premises (except for Subtenant's Property but including fixtures
to the extent Sublandlord receives insurance proceeds or funds from Subtenant
sufficient to complete repair, restoration or rebuilding of the fixtures), after
notice to Sublandlord of the damage or destruction and the collection of
substantially all of the insurance proceeds receivable on account of the
casualty, provided that in no event shall Sublandlord be required to expend on
such repair, rebuilding or restoration amounts in excess of the total insurance
proceeds collected on account of the casualty. Notwithstanding the foregoing
Sublandlord shall have no obligation to so repair, restore or rebuild
Subtenant's Property, which shall be the sole responsibility of Subtenant.
Proceeds of insurance policies providing coverage of fixtures shall be paid
directly to Sublandlord. Concurrently with the payment to Sublandlord of such
insurance proceeds attributable to equipment or fixtures within the Premises,
Subtenant shall pay to Sublandlord, as Additional Charges, the amount, if any,
by which the cost of repairing, restoring and/or rebuilding fixtures (as
reasonably estimated by a reputable contractor designated by Sublandlord)
exceeds the insurance proceeds attributable thereto actually received by
Sublandlord. If the amount of insurance proceeds attributable to fixtures plus
any additional sums paid to Sublandlord by Subtenant pursuant to the preceding
sentence exceeds the amount actually paid or incurred by Sublandlord in
repairing, restoring and/or rebuilding fixtures, then, upon completion of the
work, Sublandlord shall return the excess to Subtenant.
39
13.2 Rent Abatement. Subject to Section 13.3, if the Premises shall be
damaged or destroyed or rendered completely or partially untenantable by fire or
other casualty, or if damage to the Building by fire or casualty deprives
Subtenant of reasonable access to or use of the Premises for more than four (4)
consecutive business days, the Basic Rent shall be abated or reduced, as the
case may be, in the proportion that the Rentable Area of the untenantable
portion for the conducting of Subtenant's business operations of the Premises
bears to the total Rentable Area of the Premises, for the period from the date
of the damage or destruction to the date that any damage to the Premises
(exclusive of Subtenant's Property) has been substantially repaired except for
minor incorrect or incomplete details of construction, mechanical adjustment or
decoration which do not materially interfere with Subtenant's use of the
Premises and Subtenant has reasonable access to the Premises; provided, however,
that if such repairs would have been substantially completed at an earlier date
but for Subtenant having failed to cooperate reasonably with Sublandlord in
effecting such repair, or if Subtenant reoccupies all or part of the
untenantable portion of the Premises for the conduct of its business prior to
the date that repairs are substantially completed, then the Premises shall be
deemed to have been substantially repaired on such earlier date and any
reduction or abatement of Basic Rent shall cease as of such earlier date.
13.3 Exception to Abatement. Subtenant shall not receive any abatement or
reduction of Basic Rent if by reason of some act or omission on the part of
Subtenant, its subtenant or assignee, or its or their partners, directors,
officers, servants, employees, agents or contractors, either: (a) Sublandlord
(or any successor in interest to Sublandlord) is unable to collect all of the
insurance proceeds (including, without limitation, rent insurance proceeds) for
damage or destruction of the Premises or the Building by fire or other casualty;
or (b) the Premises or the Building was damaged or destroyed or rendered
completely or partially untenantable due to fire or other casualty and the loss
of Basic Rent is not covered by Sublandlord's rental loss insurance. Collection
of rent by Sublandlord under the circumstances described in Section 13.3 shall
not preclude Sublandlord from seeking damages from Subtenant or exercising other
remedies it may have under this Sublease or under law.
13.4 Election to Terminate.
(a) Sublandlord's Election to Terminate. If: (i) the Building or the
Premises is totally destroyed by fire or other casualty; or (ii) the Building is
so damaged (whether or not the Premises are damaged or destroyed) that its
repair or restoration requires the expenditure (as reasonably estimated by a
reputable independent contractor or architect designated by Sublandlord) of more
than 20% of the full replacement cost of the Building immediately before the
casualty; or (iii) less than two years remains in the Sublease Term at the time
of the fire or other casualty and the time necessary to rebuild or repair the
Building, in the opinion of a reputable contractor, would exceed ninety (90)
days; or (iv) Sublandlord would be required under Section 13.2 to xxxxx or
reduce the Basic Rent for a period in excess of six (6) months if rebuilding or
repairs were undertaken, then, in any of such cases, Sublandlord may terminate
this Sublease by giving Subtenant notice to such effect within
40
sixty (60) days after the date of the casualty. This Sublease shall terminate on
the date specified in Sublandlord's notice.
(b) Subtenant's Election to Terminate. If the Building or the Premises
is destroyed or damaged by fire or other casualty such that Subtenant is
deprived of access to the Premises or the use and occupancy thereof in the same
manner then being used by Subtenant and a reputable independent contractor or
architect designated by Sublandlord ("Sublandlord's Architect or Contractor")
reasonably estimates in a notice provided to Subtenant by Sublandlord within
ninety (90) days after the casualty that the Building or the Premises is damaged
to such an extent that Subtenant will be deprived of access to the Premises or
use and occupancy of the Premises in the same manner then being used by
Subtenant for a period in excess of 180 days, then Subtenant may terminate this
Sublease by giving Sublandlord notice within thirty (30) days after delivery of
such contractor's or architect's estimate, whereupon this Sublease shall
terminate as of the date of the casualty. If the Building or the Premises is
destroyed or damaged by fire or other casualty and Sublandlord's Architect or
Contractor has estimated (in a notice delivered to Subtenant pursuant to the
previous sentence) that Subtenant will be deprived of access to the Premises or
use and occupancy of the Premises for a period of 180 days or less, but the
Premises and access thereto in the same manner then being used by Subtenant and
the use and occupancy thereof are not actually restored within 180 days from the
date (the "Untenantability Date") that Subtenant is first deprived of such
access or use and occupancy due to such casualty (the "Outside Date"), Subtenant
may terminate this Sublease as of the Untenantability Date by giving Sublandlord
notice within thirty (30) days after the Outside Date.
13.5 Business Interruption. Subtenant shall not be entitled to terminate
this Sublease, and no damages, compensation or claim shall be payable by
Sublandlord, for inconvenience, loss of business or annoyance arising from any
repair or restoration of any portion of the Premises or of the Building pursuant
to this Article. Sublandlord shall exert reasonable efforts to make such repair
or restoration promptly and in such manner as not to interfere unreasonably with
Subtenant's use and occupancy of the Premises, but Sublandlord shall have no
obligation to perform such work on an overtime or premium-pay basis except for
any work which affects the life-safety system and keeps the Premises from not
being in compliance with any applicable governmental codes.
13.6 Subtenant's Property. Sublandlord shall not be obligated to repair any
damage to or replace Subtenant's Property and Subtenant shall restore and repair
Subtenant's Property with reasonable dispatch after the repair of the Premises
and shall look solely to its insurance for recovery of any damage to or loss of
Subtenant's Property.
13.7 Waiver. Subtenant waives the application of California Civil Code
Sections 1932 and 1933, and any other law of similar import, now or hereafter in
force, to any case of damage to or destruction of the Building or the Premises
by fire or other casualty, or to a taking of all or part of the Building or the
Premises subject to the provisions of Article 14 below.
41
ARTICLE 14
EMINENT DOMAIN
14.1 Complete Taking. If the whole of the Building or the Premises is taken
by condemnation, sale in lieu of condemnation, or in any other manner for any
public or quasi public use or purpose ("Eminent Domain"), this Sublease and the
term and estate hereby granted shall terminate as of the date of vesting of
title on such taking or the date that the condemning or purchasing authority
takes possession, whichever is earlier ("Date of the Taking"), and the Rents
shall be prorated and adjusted as of such date.
14.2 Partial Taking. If only part of the Building or the Land is taken by
Eminent Domain, this Sublease shall be unaffected by such taking, except that:
(a) if Sublandlord in the exercise of its good faith business judgment
determines that it would be economically impractical to operate the portion of
the Building remaining after the taking, Sublandlord may, at its option,
terminate this Sublease by giving Subtenant notice to that effect within ninety
(90) days after the Date of the Taking (as defined in Section 14.1) provided
that Subtenant can require rescission of such termination decision if, within 10
business days of receipt of Sublandlord's notice of termination, Subtenant
advises Sublandlord that, in Subtenant's judgment, Subtenant has been
discriminated against relative to other tenants in the Building or Subtenant
presents an economically feasible plan for Subtenant's continuous operation in
the Building, and (b) if five percent (5%) or more of the Premises shall be so
taken and the remaining area of the Premises shall not be reasonably adequate
for Subtenant to continue operation of its business as it is then being
conducted, Subtenant may terminate this Sublease by giving Sublandlord notice to
that effect within ninety (90) days after the Date of the Taking. This Sublease
shall terminate as of the date that such termination notice from Sublandlord or
Subtenant is given, and the Rents shall be prorated and adjusted as of such
termination date. Upon a partial taking of the Building, where this Sublease
continues in force as to less than all of the Premises, Subtenant shall be
entitled to an adjustment in the Basic Rent, and in Subtenant's Share, as
provided in Section 26.9.
14.3 Award. Sublandlord shall be entitled to receive the entire award or
payment in connection with any taking of the Premises, without deduction for any
estate vested in Subtenant by this Sublease. Subtenant expressly assigns to
Sublandlord all of its right, title and interest in and to every such award or
payment. Subtenant shall be entitled to claim and receive any award or payment
from the condemning authority expressly granted for the taking of Subtenant's
Property, interruption of its business, moving expenses or any other actual
costs, provided that Subtenant's claim does not adversely affect Sublandlord's
award or interfere with Sublandlord's prosecution of its claim for the taking
except to the extent related to Subtenant's Property. If Subtenant intervenes in
a condemnation proceeding in which Sublandlord is a party, Sublandlord and
Sublandlord's counsel shall manage and control the proceeding for the claimants.
42
14.4 Temporary Taking. If, all or any portion of the Premises is taken by
Eminent Domain for a limited period of time, this Sublease shall remain in full
force and effect and Subtenant shall continue to perform all of the terms,
conditions and covenants of this Sublease, except with abatement of Rents to the
extent Subtenant's business operations are actually prevented. If such temporary
taking which entirely prevents the use of the Premises for Subtenant's business
operation continues for more than ninety (90) days, Subtenant shall have the
right to terminate this Sublease upon notice to Sublandlord. Subtenant shall be
entitled to receive that portion of the award which is made for any such
temporary taking of the Premises attributable to any period within the term of
this Sublease and for any damage to Subtenant's Property. Sublandlord shall be
entitled to receive that portion of the award which is made for any such
temporary taking of the Premises attributable to the period after the expiration
of the term of this Sublease or which is allocable to the Building, other than
the Premises, or to the cost of restoration of the Premises or which is made for
any other purpose. If any such temporary taking terminates before the expiration
of the term of this Sublease, Subtenant shall restore the Premises as nearly as
possible to their condition before the taking, at Subtenant's sole cost and
expense; provided that Subtenant shall receive the portion of the award
attributable to such restoration.
ARTICLE 15
SURRENDER OF PREMISES
15.1 Surrender. On the last day of the Sublease Term, or upon any earlier
termination of this Sublease, or upon any reentry by Sublandlord upon the
Premises, Subtenant shall quit and surrender the Premises to Sublandlord "broom-
clean" and in good order, condition and repair, excepting ordinary wear and tear
and any damage or destruction caused by fire or other casualty that Subtenant is
not obligated by this Sublease to repair. As provided in Section 9.3, Subtenant
shall remove all of Subtenant's Property from the Premises and shall also remove
any non-standard fixtures or equipment installed by Subtenant in accordance with
the terms of Article 9 of this Sublease. Upon expiration of the Sublease Term or
earlier termination of this Sublease, all of Subtenant's right, title and
interest in the Premises or the Building, including any possessory interest,
shall cease.
15.2 Acceptance of Surrender. Before expiration of the Sublease Term, or
earlier termination of this Sublease in accordance with its terms, no act or
thing done by Sublandlord or its agents shall be deemed an acceptance of
surrender of the Premises, and no agreement to accept such surrender shall be
valid unless in writing and signed by Sublandlord.
15.3 No Merger. The surrender of this Sublease by Subtenant or the
termination of this Sublease before expiration of the Sublease Term shall not
constitute a merger, and at the option of Sublandlord shall operate as an
assignment to Sublandlord of any subleases of the Premises.
43
15.4 No Holding Over. There shall be no holding over by Subtenant after
expiration of the Sublease Term and the failure by Subtenant to deliver
possession of the Premises to Sublandlord on or before the Expiration Date shall
be an unlawful detainer. In addition to such amounts, Subtenant shall be
responsible for all other costs, losses, damages and expenses (which need not be
asserted in a summary eviction proceeding or action brought by Sublandlord
against Subtenant but may be asserted in a separate proceeding or action by
Sublandlord) arising from any hold-over or the inability of Sublandlord to lease
or deliver such space to any third party, including, without limitation, any
damages incurred by Sublandlord under the RML Lease by reason of any such
holdover.
ARTICLE 16
DEFAULT BY SUBTENANT
16.1 Default. The occurrence of any of the following shall constitute a
material default and breach of this Sublease by Subtenant:
(a) Any failure by Subtenant to pay Basic Rent or Additional Charges
when due, where such failure continues for five (5) business days after delivery
of written notice of such failure by Sublandlord to Subtenant; provided,
however, that any such notice shall be in lieu of, and not in addition to, any
notice required under Section 1161 et seq. of the California Code of Civil
Procedure or any successor or similar law;
(b) [Intentionally omitted]
(c) [Intentionally omitted]
(d) The failure by Subtenant to observe and perform any provision of
this Sublease to be observed or performed by Subtenant, if such failure is not
expressly described in this Section 16.1 or elsewhere in this Sublease as a
default hereunder and if such failure continues for thirty (30) days after
written notice by Sublandlord to Subtenant; provided, however, that if the
nature of such default is such that it cannot reasonably be cured within such
30-day period, Subtenant shall not be deemed to be in default under this Section
16.1(d) if Subtenant within that period commences to cure the default and
thereafter diligently proceeds to completion within a reasonable time, not to
exceed 90 days after Sublandlord's notice;
(e) The making by Subtenant, or by any guarantor of any of Subtenant's
obligations hereunder, of a general assignment for the benefit of creditors; the
commencement by Subtenant or any such guarantor of any case, proceeding or other
action seeking reorganization, arrangement, adjustment, liquidation, dissolution
or composition of it or its debts under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, or for the appointment of a
receiver for, or the seizure or takeover by any governmental agency of, it or
all or any substantial part of its property (collectively, an "Insolvency
Proceeding");
44
the commencement of any Insolvency Proceeding against Subtenant, unless such
Insolvency Proceeding is contested (and such contest is diligently pursued) and
such Insolvency Proceeding is discharged or dismissed within sixty (60) days
after the date filed or commenced; a trustee or receiver shall be appointed to
take possession of substantially all of Subtenant's assets located at the
Premises or of Subtenant's interest in this Sublease, unless possession is
restored to Subtenant within thirty (30) days; or substantially all of
Subtenant's assets located at the Premises or Subtenant's interest in this
Sublease shall be attached or judicially seized, unless such attachment or
seizure is discharged within 30 days; and
(f) The failure by Subtenant to observe or perform according to the
provisions of the Work Letter or Article 8 (Alterations) or Section 6.2
(Prohibited Uses), if such failure continues for more than twenty-four (24)
hours after notice from Sublandlord.
16.2 Termination of Sublease. In the event of any such default by Subtenant
and beyond any applicable notice and cure periods, then in addition to any other
remedies available to Sublandlord at law or in equity, Sublandlord shall have
the immediate option to terminate this Sublease and all rights of Subtenant
hereunder by giving Subtenant a notice of termination. If Sublandlord elects so
to terminate this Sublease, then Sublandlord may recover from Subtenant: (a) the
worth at the time of award of any unpaid rent which had been earned at the time
of such termination; plus (b) the worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss Subtenant proves could have
been reasonably avoided, plus (c) the worth at the time of award of the amount
by which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that Subtenant proves could be reasonably
avoided; plus (d) any other amount necessary to compensate Sublandlord for all
of the detriment proximately caused by Subtenant's failure to perform its
obligations under this Sublease or which in the ordinary course of things would
be likely to result therefrom; plus (e) such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by applicable
California law. As used in clauses (a) and (b) above, the "worth at the time of
award" is computed by allowing interest from the date of termination until the
time of award at the maximum rate allowable under applicable law, or, if no such
maximum rate applies, at the rate of 10% per annum. As used in clause (c) 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 1%. In addition, Sublandlord shall also have the option to maintain
Subtenant's right to possession, in which case this Sublease will continue in
effect whether or not Subtenant has vacated or abandoned the Premises.
Sublandlord shall be entitled to enforce all Sublandlord's rights and remedies
under this Sublease, including, without limitation, the right to recover Rent as
it becomes due. Sublandlord has the remedy set forth in California Civil Code
Section 1951.4 (Sublandlord may continue this Sublease in effect after
Subtenant's breach and abandonment and recover rent as it becomes due, if
Subtenant has the right to sublet or assign, subject only to reasonable
limitations). Further, in addition to and independent of any of Sublandlord's
other rights and remedies upon a default by Subtenant hereunder, if Sublandlord
elects to terminate this Sublease by reason of a default by Subtenant hereunder,
45
Subtenant shall also be obligated to pay to Sublandlord a fee equal to the
unamortized portion of Sublandlord's Sublease Costs (as defined in Exhibit E),
calculated as of the effective date of termination of the Sublease.
16.3 Reentry by SubLandlord. In the event of any such default by Subtenant
beyond any applicable notice and cure periods, Sublandlord shall also have the
right, with or without terminating this Sublease, to reenter the Premises and
remove all persons and property; the removed property may be stored in a public
warehouse or elsewhere at the cost of and for the account of Subtenant. No
reentry or taking possession of the Premises by Sublandlord pursuant to this
Section shall be construed as an election to terminate this Sublease unless a
written notice of such intention is given to Subtenant or unless such
termination shall have been decreed by a court of competent jurisdiction.
Subtenant shall not interpose any counterclaim of any kind in any action or
proceeding commenced by Sublandlord to recover possession of the Premises.
16.4 Redemption Rights. Subtenant, on behalf of itself and any and all
persons claiming through or under Subtenant, waives and surrenders all rights
and privileges which it might have, under California Code of Civil Procedure
Section 1179 or any similar or successor statute, to redeem the Premises or to
have a continuance of this Sublease after being dispossessed or ejected from the
Premises by process of law or under the terms of this Sublease or after the
termination of this Sublease.
16.5 Application of Rent Payments. Subtenant waives any right it may have
under present or future law to designate the items to which any payments made by
Subtenant are to be credited. Sublandlord may apply any payments made by
Subtenant to such items as Sublandlord sees fit, irrespective of any designation
or request by Subtenant as to the items to which such payments should be
credited.
16.6 Performance by Sublandlord. If Subtenant shall default in the
performance of any of Subtenant's obligations under this Sublease, Sublandlord,
without thereby waiving or curing such default, may (but shall not be obligated
to) perform the defaulted obligation for the account and at the expense of
Subtenant, provided that, except in case of an emergency, Sublandlord shall have
given Subtenant notice of such default and such default shall have continued for
at least fifteen (15) days after such notice is given.
16.7 Payment of Sublandlord's Expenses. If Subtenant is determined to be
in default under this Sublease beyond any applicable notice and cure periods,
all costs and expenses, including reasonable attorneys' fees (whether or not
legal proceedings are instituted), involved in collecting Rents or enforcing the
obligations of Subtenant under this Sublease, including the cost and expense of
instituting and prosecuting legal proceedings or recovering possession of the
Premises after default by Subtenant and beyond any applicable notice and cure
periods, and any expenses incurred by Sublandlord in connection with any
performance by it for the account of Subtenant under Section 16.6, shall be due
and payable by Subtenant, on demand, as Additional Charges.
46
16.8 Interest. The amount of any judgment obtained by Sublandlord against
Subtenant in any legal proceeding arising out of a default by Subtenant under
this Sublease shall bear interest until paid at the maximum rate allowed by law,
or, if no such maximum rate prevails, at the rate of 10% per annum.
Notwithstanding anything to the contrary contained under California Civil Code
Section 3287, in the case of any damages that were certain or ascertainable by
calculation, such interest shall accrue from the day that the right to such
damages vested in Sublandlord and in the case of any unliquidated claim, such
interest shall accrue from the day such claim arose.
16.9 No Waivers. The failure of Sublandlord to insist, in any one or more
instances, upon the strict performance by Subtenant of any of Subtenant's
obligations under this Sublease, or to exercise any right or remedy given
Sublandlord upon a default by Subtenant, shall not be construed as a waiver or
relinquishment for the future, and the obligation of Subtenant and Sublandlord's
rights and remedies upon a default shall continue in full force and effect with
respect to any subsequent breach, act or omission. Receipt by Sublandlord of
Rents with knowledge of a breach by Subtenant of any obligation of this Sublease
shall not be deemed a waiver of such breach.
16.10 Remedies Not Exclusive. The rights and remedies of Sublandlord
provided in this Article 16 for a default by Subtenant are not exclusive, and
Sublandlord may exercise any other right or remedy it may have pursuant to this
Sublease, at law or in equity.
ARTICLE 17
SUBORDINATION AND ATTORNMENT
17.1 Subordination. Subject to Section 17.6 below, this Sublease, (and all
rights of Subtenant hereunder) is and shall be subordinate to all present and
future leases of all or any part of the Building or the Land (except for leases
of office or commercial space by other occupants of the Building); all existing
and future mortgages and deeds of trust (each referred to herein as a
"mortgage", and the mortgagee or beneficiary thereof being referred to herein as
a "mortgagee") encumbering the Building, the Land or any of such leases,
including mortgages also covering other real property; all past and future
advances made under such mortgages, all renewals, modifications, consolidations,
replacements and extensions of such leases and mortgages; unless the lessor
under any such lease or the mortgagee or beneficiary under any such mortgage, or
any of their respective successors in interest, elects that this Sublease shall
be superior to its lease or mortgage pursuant to Section 17.2; provided,
however, that Subtenant's subordination to any future leases or mortgages shall
be conditional on Subtenant receiving a non-disturbance agreement with respect
to any such future lease or mortgage. This Section shall be self-operative; no
further instrument of subordination shall be required. However, in confirmation
of subordination, Subtenant shall promptly execute, acknowledge and deliver any
instrument that Sublandlord, the lessor under any such lease or any mortgagee
may reasonably request to evidence such subordination. If Subtenant fails to
execute, acknowledge or deliver any such instrument within ten (10) days after
request
47
therefor, such failure shall constitute a material default and breach of this
Sublease by Subtenant. Any lease to which this Sublease, at the time referred
to, is subordinate is herein called a "Superior Sublease" and the lessor of a
Superior Sublease or its successor in interest at the time referred to is herein
called a "Superior Lessor".
17.2 Election to Subordinate. By written notice to Subtenant, any Superior
Lessor or mortgagee may elect to subordinate its Superior Sublease or mortgage
to this Sublease.
17.3 Notice and Cure of Sublandlord's Default. If any act or omission of
Sublandlord would give Subtenant the right, immediately or after lapse of a
period of time, to cancel or terminate this Sublease, or to claim a partial or
total eviction, Subtenant shall not exercise such right: (a) until it has given
written notice of the act or omission to Sublandlord and to each mortgagee and
each Superior Lessor whose name and address shall previously have been furnished
to Subtenant, which notice shall specifically refer to this Section 17.3 and
shall describe Sublandlord's default with reasonable specificity and detail,
specifying the section of this Sublease as to which Sublandlord is in default,
and (b) until a reasonable period not to exceed thirty (30) days for remedying
the act or omission shall have elapsed following the giving of such notice and
following the time during which each such mortgagee or Superior Lessor would be
entitled under its mortgage or Superior Sublease to remedy the act or omission
(which reasonable period shall in no event be longer than the period during
which Sublandlord would be entitled under this Sublease or otherwise, after
similar notice, to effect such remedy). If, within said reasonable period, such
a mortgagee or Superior Lessor gives Subtenant notice of its intention to remedy
the act or omission, and thereafter diligently commences the required remedial
action and pursues it to completion, Subtenant shall have no right to cancel or
terminate this Sublease or to claim a partial or total eviction on account of
the act or omission.
17.4 Attornment. Any Superior Lessor, mortgagee or foreclosure sale
purchaser who succeeds to the rights of Sublandlord under this Sublease or to
Sublandlord's interest in the Building, whether as a result of the exercise of
remedies in a Superior Sublease or mortgage or by operation of law, is sometimes
referred to herein as a "Successor Sublandlord." If the Successor Sublandlord
does not elect to treat this Sublease as extinguished, upon the Successor
Sublandlord's request, Subtenant shall attorn to and recognize the Successor
Sublandlord as Subtenant's landlord under this Sublease and shall promptly
execute and deliver any instrument that such Successor Sublandlord may
reasonably request to evidence the attornment (although no writing shall be
required in order to effect or confirm such attornment). Subtenant hereby waives
any and all rights to terminate this Sublease, or to treat this Sublease as
terminated, as a result of the exercise of remedies or other occurrence that
resulted in any transfer to a Successor Sublandlord. If a Successor Sublandlord
requests Subtenant's attornment, this Sublease shall continue in full force and
effect and as a direct lease between the Successor Sublandlord and Subtenant,
upon all of the terms, conditions and covenants set forth in this Sublease,
subject to the provisions of Section 24.4.
48
17.5 Requirements of Superior Lessor or Mortgagee. If any Superior Lessor
or mortgagee requires modification of this Sublease, Subtenant shall, at
Sublandlord's request, promptly execute and deliver to Sublandlord instruments
effecting the modification that the Superior Lessor or mortgagee requires,
provided that such modifications do not adversely affect in a material respect
any of Subtenant's rights hereunder.
17.6 Delivery of Non-Disturbance Agreements. Sublandlord shall use its
best efforts, at its sole cost and expense, to promptly provide Subtenant with
commercially reasonable non-disturbance agreements in favor of Subtenant from
(i) all present Superior Leases and (ii) all future lessors, mortgagees and lien
holders, with respect to all or any part of the Land or the Building which
require Subtenant to subordinate its interest under this lease to such leases,
liens or mortgages. Sublandlord confirms to the best of its knowledge that the
Non-Disturbance and Attornment Agreement dated January 20, 1984, by and among
UCBRC, Trumbull, RML and First Interstate, Sublandlord's predecessor in
interest, recorded February 15, 1994, as Instrument No. 84-197842 in the
Official Records of Los Angeles County, California (the "Master Non-Disturbance
Agreement") is unmodified and remains in full force and effect. Sublandlord
agrees to exercise commercially reasonable efforts to enforce its rights under
the Master Non-Disturbance Agreement at its sole cost and expense.
ARTICLE 18
QUIET ENJOYMENT
So long as Subtenant timely pays all the Rents and performs all of
Subtenant's other obligations hereunder within the time periods permitted under
this Sublease, Subtenant shall peaceably and quietly have, hold and enjoy the
Premises during the Sublease Term without hindrance by Sublandlord or any person
lawfully claiming through or under Sublandlord, subject, nevertheless, to the
provisions of this Sublease and to Superior Subleases and mortgages. This
covenant is a covenant running with the land, and is not a personal covenant of
Sublandlord, except to the extent of Sublandlord's interest in this Sublease and
for only so long as such interest shall continue.
ARTICLE 19
ASSIGNMENTS AND SUBLEASES
19.1 Prohibition. Subtenant shall not mortgage, pledge, encumber or
otherwise hypothecate this Sublease or the Premises or any part thereof in any
manner whatsoever, and any attempt to do so shall be void and a material breach
of and default under this Sublease. Except as provided in Section 19.2 and 19.3
below, Subtenant shall not, whether voluntarily, involuntarily, by operation of
law or otherwise, sublet all or any part of the Premises, or assign or otherwise
transfer this Sublease (or its term and estate), without in each instance
obtaining the prior written consent of Sublandlord, which shall not be
unreasonably withheld, conditioned or delayed, in accordance with this Article.
Without limiting the effect of any
49
other provision, Subtenant expressly agrees that it shall not assign, or
otherwise transfer this Sublease (or its term or estate) or sublease any portion
of the Premises to any person that would conduct any activity in the Premises
prohibited by Article 6. Any attempt by Subtenant to sublet all or any part of
the Premises or to assign or transfer this Sublease (or its term or estate) or
to offer or advertise to do so, without strictly complying with the requirements
of this Article, shall be void and a material breach of and default under this
Sublease. Except as permitted by Section 19.3 below, use or occupancy of the
Premises by a licensee, concessionaire, or any other person other than Subtenant
shall be deemed a sublease subject to the provisions of this Article. Subtenant
shall submit to Sublandlord, in advance, for Sublandlord's reasonable approval
(which shall be granted or denied within ten business days), any advertising or
offering materials that Subtenant intends to use in connection with any efforts
to sublease, assign or transfer.
19.2 Corporate and Partnership Transactions.
(a) Mergers and Stock Transfers. If Subtenant is a corporation, a
dissolution of the corporation or a transfer of a majority of Subtenant's voting
stock (by one or more transactions, other than the sale of publicly traded
stock) shall be deemed an assignment of this Sublease subject to the provisions
of this Article; but such provisions (with the exception of Section 19.7) shall
not apply to an assignment or deemed assignment of this Sublease on account of
the transfer to, or a merger transaction with, a corporation into or with which
Subtenant is merged or consolidated or to which substantially all of Subtenant's
assets are transferred, provided that (i) a principal purpose of such merger or
transfer is not the assignment of this Sublease and (ii) in any of such events
proof reasonably satisfactory to Sublandlord of the net worth of Subtenant
immediately prior to such transaction and the prospective net worth of
Subtenant's successor immediately following such transaction is delivered to
Sublandlord at least fifteen (15) days before the effective date of such
transaction, and Subtenant's successor shall have a net worth following
consummation of such transaction, as reasonably determined by Sublandlord in
accordance with generally accepted accounting principles, that is at least equal
to the net worth which Sublandlord deems would be reasonably necessary to
perform Subtenant's obligations under this Sublease, which in no event shall be
less than the net worth of Subtenant as of the date of this Sublease. A
duplicate original instrument of assignment and assumption (in which the
transferee assumes all obligations of Subtenant under this Sublease) shall have
been delivered to Sublandlord on or prior to the effective date of such
transaction. Notwithstanding the foregoing, any transfer of Subtenant's voting
stock to Focal Entities (defined below) shall not be deemed an assignment of
this Sublease so long as Subtenant remains controlled by the same person or
persons that control Subtenant prior to such stock transfer. Any change in
control of Subtenant following any such stock transfer shall be deemed an
assignment by Subtenant hereunder and subject to all of the terms and provisions
of this Article.
(b) Transfer to Affiliates. Sublandlord's approval shall not be
required for any assignment or subletting to Focal Entities, provided that (i)
such party is a reputable entity of good character and agrees in writing for the
benefit of Sublandlord to perform the
50
obligations of Subtenant under this Sublease, (ii) the use of the Premises or
the applicable portion thereof shall comply with the "Permitted Use" and with
all other terms of this Sublease, (iii) a duplicate original instrument of the
assignment or sublease, as the case may be, in form reasonably satisfactory to
Sublandlord, and in compliance with the applicable provisions of this Sublease,
duly executed by Subtenant and such party, shall have been delivered to
Sublandlord within ten (10) days following the effective date of any such
assignment or sublease and (iv) the net worth of the Focal Entities bound to
perform the obligations of Subtenant under this Sublease is at least equal to
the net worth of Subtenant as of the date of this Sublease, it being agreed that
no entity shall be deemed released by reason of any transfer to or among the
Focal Entities. Such right to assign or sublet to Focal Entities shall be
effective only for so long as such assignee or subtenant remains as one of the
Focal Entities. Any change of control that results in the assignee or subtenant
no longer being one of the Focal Entities shall be deemed an assignment or
subletting by Subtenant hereunder and subject to all of the terms and provisions
of this Article 19. As used in this Sublease, "Focal Entities" means, Focal
Communications Corporation of California, its successors by merger or
consolidation, and any corporation or other entity which controls, is controlled
by or is under common control with Focal Communications Corporation of
California or its successors by merger or consolidation. As used herein
"control" of a person means the possession, directly or indirectly, of the power
to direct that person's management and policies, whether through the ownership
of voting securities or otherwise, as such concepts are commonly interpreted and
understood under Federal securities laws.
19.3 Co-Location of Subtenant Customers. Subtenant shall have the right to
allow certain of its customers, consistent with the custom and practice of the
telecommunications business, to "co-locate" such customers' ("Providing
Parties") telecommunications equipment ("Providing Parties' Equipment") within
the Premises to allow such Providing Parties to avail themselves of Subtenant's
services consistent with the Permitted Use by Subtenant of the Premises. Such
co-location shall not be considered an assignment or sublease by Subtenant,
shall not grant any such Providing Parties any possessory interest in the
Premises, and, as between Sublandlord and Subtenant, any rights and liabilities
with respect to the Providing Parties or Providing Parties' Equipment shall be
the sole responsibility of Subtenant, including without limitation the movement
thereof in and out of the Premises and the security therefor, in the same manner
and to the same extent as if the Providing Parties were Subtenant and Providing
Parties' Equipment belonged to Subtenant. With respect to any Providing Parties
or Providing Parties' Equipment, the following shall apply:
(a) Upon Sublandlord's reasonable request, but not more frequently
than four (4) times per year, Subtenant shall provide Sublandlord with the names
of all Providing Parties at the Premises and reasonable evidence of compliance
with the terms of this Section 19.3.
(b) All agreements with Providing Parties shall be entered into
using a form agreement approved by Sublandlord, which agreement shall contain,
among other things, that
51
the Providing Party shall have no possessory interest in the Premises or the
Building, including an indemnification in favor of Sublandlord and requiring
that each of the Providing Parties carry adequate insurance coverage for its
equipment and operations at the Premises, which policies shall name Sublandlord
as additional insured.
(c) Sublandlord's liabilities and obligations with respect to the
Providing Parties and Providing Parties' Equipment shall only be those of
Sublandlord to Subtenant pursuant to and accordance with this Sublease, and
Sublandlord shall not have any direct liabilities or obligations, nor shall the
Providing Parties have any direct rights or claims against Sublandlord, with
respect to the locating, presence or removal of the Providing Parties or
Providing Parties' Equipment on or with respect to the Premises.
(d) Subtenant shall not have the right to permit any Providing
Parties or Providing Parties' Equipment to use, possess or in any way be located
on or have any involvement with the Premises or any other portions of the
Building except to the extent expressly permitted by this Sublease for
Subtenant. This Section 19.3 shall not create any additional rights of Subtenant
or Providing Parties, or liabilities of Sublandlord, under or with respect to
Providing Parties or Providing Parties' Equipment which would not otherwise
apply if the Providing Party were Subtenant or the Providing Parties' Equipment
belonged to Subtenant.
(e) Any use and occupancy of the Premises by the Providing Parties,
or location of any Providing Parties' Equipment on the Premises, shall be
subject to the same provisions, as to termination of possession, removal of
property or otherwise, as apply to Subtenant under and in accordance with the
provisions of this Sublease. All equipment placed upon the Premises by a third
party customer shall remain the personal property of the third party customer,
the third party customer shall release Sublandlord from any and all claims
arising from the presence of the equipment in, on or about the Premises, and if
the Subtenant's rights to possession have been terminated, the third party
customer shall agree to remove the equipment within five (5) business days of
receipt of notice from Sublandlord, and repair any damage caused by said
removal.
(f) The access rights of the Providing Parties shall be subject to
security measures in place at the Building from time to time and all Providing
Parties shall comply with the Building's Rules and Regulations and construction
rules for the Building.
(g) All costs and expenses (including reasonable attorneys' fees and
costs) incurred by Sublandlord in connection with the installation, maintenance
and operation of Providing Parties' Equipment at the Premises shall be borne by
Subtenant and shall be payable upon demand as Additional Rent hereunder,
including, without limitation, freight elevator, loading dock and security
service charges.
19.4 [Intentionally omitted]
52
19.5 [Intentionally omitted]
19.6 Consent by Sublandlord.
(a) Sublandlord shall not be required to consider a request for
consent to a proposed sublease or assignment unless and until Sublandlord shall
have received from Subtenant a written request for Sublandlord's consent to such
proposed transfer in accordance with this Section (a "Consent Request"),
specifying the conditions for the proposed transfer. Each Consent Request shall
include (i) a conformed or photostatic copy of the proposed assignment or
sublease, (ii) a statement setting forth in reasonable detail the identity of
the proposed assignee or subtenant and the nature of its business, (iii) current
financial information with respect to the proposed assignee or subtenant,
including, without limitation, its most recent financial report, and (iv)
Subtenant's calculation of the annualized rental equivalent or effective
assignment price, as the case may be, for the proposed transfer. Provided that
all of the foregoing conditions are satisfied and Subtenant is not then in
default hereunder beyond any applicable notice and cure period, Sublandlord
agrees to act reasonably (subject to the terms of Section 19.6(b)) in
considering any such Consent Request. In all other cases, Sublandlord may permit
or prohibit any proposed transfer in its absolute and unfettered judgment. If
Sublandlord consents to a proposed transfer and it is not actually consummated
within 60 days after such consent is given, then such consent shall be of no
further force or effect, and Subtenant must submit a new Consent Request to
Sublandlord.
(b) Subtenant acknowledges and agrees that a decision by Sublandlord
to disapprove a proposed transfer shall be deemed to have been made in a
reasonable manner if any of the following conditions is not satisfied (which
conditions, however, shall not be construed as the sole grounds on which
Sublandlord may withhold its consent to a proposed transfer):
(i) The business of the proposed assignee or subtenant and its
use of the Premises shall be consistent with the Permitted Use and Section
6.2, shall, in Sublandlord's good faith judgment, be in keeping with the
standards of the Building, and will not violate any "exclusive use" right
granted to any other tenant or occupant of the Building;
(ii) The proposed assignee or subtenant shall be a reputable
person of good character, with sufficient assets and income, in
Sublandlord's reasonable judgment, to bear the financial responsibilities
in respect of its sublease (or in the case of an assignment, the Sublease),
and Sublandlord shall have been furnished with reasonable proof thereof;
(iii) Neither the proposed assignee or subtenant, nor any person
who directly or indirectly, controls, is controlled by, or is under common
control with, the proposed assignee or subtenant or any person who controls
the proposed assignee or subtenant, shall be (A) a government entity (or
subdivision or agency thereof) unless,
53
and only to the extent, Sublandlord has voluntarily and directly leased
space in the Building to a government entity, provided that such government
entity proposed by Subtenant is of comparable prestige, character and
reputation, and comparable or smaller in size (based on the aggregate
amount of rentable square feet voluntarily and directly leased by
Sublandlord to such governmental entity), or (B) an occupant of the
Building on the date the Consent Request is delivered, or (C) someone with
whom Sublandlord has been engaged in discussions regarding the leasing of
space in the Building within the six (6)-month period immediately preceding
delivery of the Consent Request;
(iv) The form of the proposed sublease shall be reasonably
satisfactory to Sublandlord and shall comply with the applicable provisions
of this Article 19;
(v) The proposed sublease shall not result in there being more
than two sublessees within the Premises (including Sublandlord or
Sublandlord's designee);
(vi) The Proposed Sublease Space shall be regular in shape and
suitable for normal leasing purposes as a separately demised premises.
19.7 Miscellaneous.
(a) Any sublease consented to by Sublandlord shall be expressly
subject and subordinate to all of the covenants, agreements, terms, provisions
and conditions contained in this Sublease. Any proposed sub-sublease or proposed
assignment of a sublease shall be subject to the provisions of this Article.
Subtenant shall reimburse Sublandlord on demand, as Additional Charges, for any
out-of-pocket costs (including reasonable attorneys' fees and expenses up to but
not more than $2,500) reasonably incurred by Sublandlord in connection with any
actual or proposed assignment or sublease, whether or not consummated, including
the costs of making investigations as to the acceptability of the proposed
assignee or subtenant. Any assignment of this Sublease to which Sublandlord
gives its consent shall not be valid or binding on Sublandlord unless and until
the assignee executes an agreement in form and substance satisfactory to
Sublandlord, expressly enforceable by Sublandlord, whereby the assignee assumes
and agrees to be bound by all of the provisions of this Sublease and to perform
all of the obligations of Subtenant hereunder.
(b) Notwithstanding any sublease to any person or any assignment to
any person other than Sublandlord (or Sublandlord's designee), or any amendments
or modifications subsequent thereto, Subtenant will remain fully liable for the
payment of Rents and for the performance of all other obligations of Subtenant
contained in this Sublease. Any act or omission of any assignee or subtenant, or
of anyone claiming under or through any assignee or subtenant, that violates any
of the obligations of this Sublease shall be deemed a violation of this Sublease
by Subtenant, unless, in the case of a sublease to Sublandlord or an assignment
to Sublandlord or Sublandlord's designee, such act or omission is an act or
54
omission of Sublandlord or Sublandlord's designee or of anyone claiming under or
through any Sublandlord or Sublandlord's designee.
(c) The consent by Sublandlord to any assignment or sublease shall
not relieve Subtenant or any person claiming through or under Subtenant of the
obligation to obtain the consent of Sublandlord, pursuant to the provisions of
this Article, to any subsequent assignment or sublease.
(d) [Intentionally omitted]
(e) With respect to each and every sublease authorized by Sublandlord
under the provisions of this Article, it is further agreed that (i) the term of
the sublease must end no later than one day before the last day of the Sublease
Term; (ii) no sublease shall be valid, and no subtenant shall take possession of
all or any part of the Premises until a fully executed counterpart of such
sublease has been delivered to Sublandlord; (iii) each sublease shall provide
that it is subject and subordinate to this Sublease and to all mortgages and
Superior Subleases; (iv) Sublandlord may enforce the provisions of the sublease,
including collection of rents; (v) in the event of termination of this Sublease
or reentry or repossession of the Premises by Sublandlord, Sublandlord may, at
its option, take over all of the right, title and interest of Subtenant, as
sublessor, under such sublease, and such subtenant shall, at Sublandlord's
option, attorn to Sublandlord but nevertheless Sublandlord shall not (A) be
liable for any previous act or omission of Subtenant under such sublease; (B) be
subject to any defense or offset previously accrued in favor of the subtenant
against Subtenant; or (C) be bound by any previous modification of such sublease
made without Sublandlord's written consent or by any previous prepayment of more
than one month's rent.
(f) Any material modification or amendment to a sublease shall be
deemed a new proposed sublease subject to the terms of this Article, requiring a
new Consent Request.
19.8 Lapse. If Sublandlord gives its consent to a proposed sublease or
assignment, and Subtenant fails to deliver to Sublandlord a fully-executed and
effective duplicate original of the assignment or sublease to which Sublandlord
has consented within 45 days after the giving of such consent, then
Sublandlord's consent shall be null and void, and Subtenant shall again comply
with all of the provisions and conditions of this Article before assigning this
Sublease or subletting all or any part of the Premises.
19.9 Additional Charges. If Sublandlord shall grant its consent to any
proposed sublease or assignment, then Subtenant, in consideration therefor,
shall pay to Sublandlord, as Additional Charges, a sum equal to 50% of the
aggregate of all sums and other consideration received by Subtenant for or by
reason of such proposed transfer (including all rents, charges and other
consideration payable to Subtenant under the terms of the sublease or assignment
and any collateral agreements, and also sums paid for the purchase or rental of
any of Subtenant's Property), as and when such sums and other consideration are
received by
55
Subtenant; provided, however, that such Additional Charges shall be reduced (but
not to less than zero) by the following amounts, to the extent that Subtenant
shall have furnished to Sublandlord reasonably satisfactory documentation
therefor: (a) in the case of a sublease, all Rents theretofore actually paid to
Sublandlord by Subtenant hereunder for the subleased portion of the Premises
during the term of such sublease (determined based on the ratio of the Rentable
Area of the subleased portion of the Premises to the Rentable Area of the
Premises, except to the extent that different Basic Rents are specified herein
for different portions of the Premises); (b) any reasonable and customary
brokerage commissions theretofore actually paid by Subtenant on account of such
sublease or assignment; (c) any Additional Charges theretofore actually paid to
Sublandlord pursuant to Section 19.7(a) in connection with such assignment or
sublease; (d) any reasonable advertising costs theretofore actually paid by
Subtenant in connection with such assignment or sublease; (e) any out-of-pocket
costs theretofore actually paid by Subtenant in providing concessions to the
assignee or subtenant in connection with such transaction (such as the cost of
any tenant improvement allowance or other payment provided by Subtenant to such
assignee or subtenant); (f) any reasonable fees and charges theretofore actually
paid by Subtenant to attorneys, architects and space planners reasonably
necessary to effect such assignment or sublease; and (g) the net unamortized or
undepreciated cost of any of Subtenant's Property that was paid for by Subtenant
(without contribution by Sublandlord) and that is sold to the assignee or
subtenant in connection with such assignment or sublease, determined on the
basis of Subtenant's federal income tax returns.
19.10 Acceptance of Rent. If this Sublease is assigned, whether or not in
violation of the provisions of this Sublease, Sublandlord may collect rent from
the assignee. If all or any part of the Premises are sublet, whether or not in
violation of this Sublease, Sublandlord may, after default by Subtenant and
expiration of Subtenant's time to cure such default, collect rent from the
subtenant. In either event, Sublandlord may apply the net amount collected to
payment of Rents, but no such assignment, subletting, or collection shall be
deemed a waiver of any of the provisions of this Article, an acceptance of the
assignee or subtenant as a lessee, or a release of Subtenant from the
performance by Subtenant of Subtenant's obligations under this Sublease.
19.11 Actions. If Sublandlord withholds or conditions its consent to a
proposed sublease, sub-sublease or assignment and Subtenant believes that
Sublandlord did so improperly, Subtenant, as its sole remedy, may prosecute an
action for declaratory relief to determine if Sublandlord properly withheld or
conditioned its consent, and Subtenant hereby waives and discharges (i) any
claims it may have against Sublandlord or Sublandlord's Affiliates for damages
arising from Sublandlord's withholding or conditioning its consent and (ii) any
right that it may have to terminate this Sublease on account thereof pursuant to
Section 1995.310 of the California Civil Code or otherwise.
56
ARTICLE 20
NOTICES
Whenever either of the parties hereto desires to give or serve any notice,
demand, request or other communication with respect to this Agreement, each such
notice, demand, request or communication shall be given in writing (at the
addresses as set forth below) by any of the following means: (i) personal
service (including service by overnight courier service); (ii) electronic
communication, whether by telex, telegram or telecopying (if confirmed in
writing sent by personal service or United States registered or certified mail,
first class postage prepaid, return receipt requested); or (iii) United States
registered or certified mail, first class postage prepaid, return receipt
requested), and addressed as below. Any notice, demand, request or other
communication sent pursuant to items (i) and (ii) of this Article 20 shall be
deemed received upon such personal service or upon dispatch by electronic means,
and, if sent pursuant to item (iii) of this Article 20, shall be deemed received
3 days following the date identified by the United States Post Office as of the
date of deposit in the United States mail. No notice, demand, request or other
communication given by any party to the other through electronic mail ("e-
mail"), by way of the Internet (whether on a website created for or maintained
by a party or otherwise) shall be deemed effective for purposes of this
Sublease. Either party may change such address upon written notice to the other
party.
If to Subtenant: Focal Communications Corporation of California
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx
with a copy to: Xxxxxxxx, Xxxxxx & Xxxxxxx
0000 Xxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
If to Sublandlord: Xxxxx Fargo Bank
Corporate Properties Group
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Lease Administration
with a copy to: Xxxxx Fargo Bank
Corporate Properties Group
000 Xx. Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Negotiations Manager
57
ARTICLE 21
ESTOPPEL CERTIFICATES
Within 10 business days after a request by Sublandlord or Subtenant (the
"Requesting Party"), the other party hereto (the "Certifying Party") shall
execute an estoppel certificate, in form satisfactory to the Requesting Party,
which: (a) certifies that this Sublease is unmodified and in full force and
effect (or if there have been modifications, that the same is in full force and
effect as modified, and stating the modifications); (b) states the expiration
date of the Sublease Term and any agreements to extend or renew the Sublease
Term or to permit any holding over (and specifies the terms of any such
agreements or confirms that none exist); (c) certifies the dates through which
Rents have been paid; (d) states whether or not, to the knowledge and belief of
the Certifying Party, there exist any defaults by either party hereto in the
performance of any of their respective obligations under this Sublease (and
specifies any such default); (e) states whether or not, to the knowledge and
belief of the certifying party, any event has occurred which, with the giving of
notice or passage of time, or both, would constitute a default hereunder and, if
such an event has occurred, specifies each such event; and (f) states whether
Subtenant is entitled to any credits, offsets, defenses or deductions against
payment of Rents, or has any other claims against Sublandlord for abatement or
rent, damages, or other liability, and, if so, describes them. Such estoppel
certificate shall be addressed and delivered as the Requesting Party may
reasonably direct. Any estoppel certificate issued pursuant to this Section may
be relied upon by the Requesting Party, by the addressee, and by others with
whom the Requesting Party may be dealing, regardless of independent
investigation. The Certifying Party shall also include in any estoppel
certificate such other information concerning this Sublease as the Requesting
Party may reasonably request.
ARTICLE 22
RELOCATION OF PREMISES
[intentionally omitted]
ARTICLE 23
BROKER
Each of Sublandlord and Subtenant warrants and represents that (a) no
brokers except Sublandlord's Broker and Subtenant's Broker (as those terms are
defined in Section 1.9) were instrumental in bringing about or consummating this
Sublease and (b) it had no conversations or negotiations with any broker except
Sublandlord's Broker and Subtenant's Broker concerning the leasing of the
Premises by Subtenant. Each of Subtenant's Broker and Sublandlord's Broker shall
be compensated by Sublandlord in accordance with the terms of separate written
agreements which they have entered into with Sublandlord, as applicable. Each of
Sublandlord and Subtenant agrees to indemnify, defend and hold the other
harmless
58
from and against any claims for any brokerage commissions, finder's fees or
other damages or liabilities relating to such claims by persons other than
Sublandlord's Broker and Subtenant's Broker, and all costs, expenses and
liabilities incurred in connection with such claims, including reasonable
attorneys' fees and expenses, to the extent any of such claims result from a
breach of the foregoing warranties and representations made by the indemnifying
party.
ARTICLE 24
EXCULPATION AND INDEMNIFICATION
24.1 Exculpation. Neither Sublandlord, nor Sublandlord's Affiliates, nor
any partner, director, officer, agent or employee of Sublandlord or
Sublandlord's Affiliates shall be liable to Subtenant or its partners,
directors, officers, contractors, agents, employees, invitees, sublessees or
licensees, for any loss, injury or damage to Subtenant or to any other person,
or to its or their property, irrespective of the cause of such injury, damage or
loss, except that Sublandlord shall be liable for any such injury, damage or
loss to Subtenant to the extent caused by or resulting from the negligence or
willful misconduct of Sublandlord or its employees in the operation or
maintenance of the Building. Under no circumstances shall Sublandlord,
Sublandlord's Affiliates, or any partner, director, officer, agent or employee
of Sublandlord or Sublandlord's Affiliates be liable: (a) for any damage caused
by other lessees or persons in or about the Building, or caused by operations in
construction of any private, public or quasipublic work; or (b) for
consequential damages (including, without limitation, lost profits), including
as a result of any loss of the use of the Premises or any equipment or
facilities therein.
24.2 Indemnity. Subtenant shall indemnify, hold harmless and defend
(utilizing counsel reasonably satisfactory to Sublandlord and the indemnified
person) Sublandlord, Sublandlord's Affiliates, all Superior Lessors and
mortgagees, and its and their respective partners, directors, officers, agents
and employees from and against any and all claims, demands, causes of action,
liability, loss, damage, costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) arising from or in connection with: (a)
the conduct or management of the Premises or of any business therein, or any
work or act whatsoever done, or any condition created by Subtenant, its
subtenants (including any co-location customers), licensees or its or their
partners, directors, officers, agents, employees, contractors or invitees in or
about the Premises or the Building during the Sublease Term or during the period
of time, if any, before the Commencement Date that Subtenant is given access to
the Premises; (b) any act, omission or negligence of Subtenant or any of its
subtenants or licensees (including any co-location customers) or its or their
partners, directors, officers, agents, employees, contractors or invitees; (c)
any accident, injury or damage whatsoever (except to the extent caused by
Sublandlord's negligence or willful misconduct) occurring in or about the
Premises; or (d) any breach or default by Subtenant in the full and prompt
payment and performance of Subtenant's obligations under this Sublease; provided
that Subtenant shall not be required to indemnify and hold Sublandlord harmless
from any loss, cost, liability, damage or expense, including, but not limited
to, penalties, fines,
59
attorneys' fees or costs (collectively, "Claims"), to any person, property or
entity resulting from the gross negligence or willful misconduct or breach of
this Sublease by Sublandlord or its agents, contractors, servants, employees or
licensees, in connection with Sublandlord's activities in the Building (except
for damage to Subtenant's Work and Subtenant's Property, fixtures, furniture and
equipment in the Premises, to the extent Subtenant is required to obtain the
requisite insurance coverage pursuant to this Sublease and to the extent
insurance proceeds are available). Further, since Sublandlord is required to
maintain insurance on the Building and Subtenant compensates Sublandlord for
such insurance as part of Subtenant's Share of Costs of Operation and because of
the existence of waivers of subrogation set forth in Section 7.4 of this
Sublease, Sublandlord hereby indemnifies and holds Subtenant harmless from any
Claim to any property outside of the Premises but only if and to the extent such
Claim is covered by such insurance, even if resulting from the negligent acts,
omissions, or willful misconduct of Subtenant or those of its agents,
contractors, servants, employees or licensees.
24.3 Satisfaction of Remedies. Neither Sublandlord, Sublandlord's
Affiliates, nor any successor to Sublandlord's interest, including any Successor
Sublandlord (as defined in Section 17.4), shall be personally liable for the
performance of Sublandlord's obligations under this Sublease. Subtenant shall
look only to Sublandlord's estate and property in the Land and the Building, and
to no other property or assets of Sublandlord or Sublandlord's Affiliates, for
the satisfaction of Subtenant's remedies under this Sublease, or for the
collection of any judgment (or other judicial process) requiring the payment of
money by Sublandlord or Sublandlord's Affiliates. The covenants and agreements
contained in this Article shall be enforceable by Sublandlord, Sublandlord's
Affiliates, and its and their respective successors and assigns.
24.4 Transfers of Sublandlord's Interest. The covenants and agreements of
Sublandlord under this Sublease shall not be binding on any person at any time
holding the interest of Sublandlord (including the original named Sublandlord)
subsequent to the transfer of that person's interest in the Building. In the
event of such a transfer, the covenants and agreements of Sublandlord thereafter
shall be binding upon the transferee of Sublandlord's interest. If Sublandlord's
interest in the Building or the Land shall be sold, assigned or otherwise
transferred to any person, including any transfer upon the exercise of any
remedy provided in a Superior Sublease or a mortgage or at law or equity, that
person, and each person thereafter succeeding to its interest in the Building or
the Land, shall not be: (a) liable for any act or omission of Sublandlord under
this Sublease occurring before such sale, assignment or other transfer; (b)
subject to any offset, defense or counterclaim accruing before such sale,
assignment or other transfer; or (c) bound by any payment, made before such
sale, assignment or other transfer, of Basic Rent or Additional Charges more
than one month in advance.
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ARTICLE 25
PARKING
Subtenant shall have the non-exclusive right to use nineteen (19) parking
privileges in the Parking Garage at no charge to Subtenant for the initial term
of this Sublease. All of Subtenant's parking privileges hereunder shall be on a
non-exclusive, unreserved basis and shall be subject to such reserved areas for
visitor or other tenant parking as Sublandlord may designate. All parking
privileges under this Sublease shall be personal to Subtenant (including its
employees and visitors) and non-transferable to any other party except for a
Subtenant's assignees or subtenants permitted under this Sublease. Subtenant
shall comply with the rules, regulations, terms and conditions as Sublandlord or
its parking operator may reasonably establish from time to time. Sublandlord
agrees to maintain existing lighting levels within the Parking Garage and
further agrees that the Parking Garage shall be open and accessible 24 hours per
day, 7 days per week, subject to closures due to emergency and necessary
closures for scheduled repair and maintenance and work necessary to comply with
applicable laws, rules or regulations, it being agreed that Sublandlord shall
use commercially reasonable efforts to avoid closures and will conduct necessary
closures in a manner that will minimize interference with Subtenant's use of the
Parking Garage, including, if reasonably possible, conducting necessary work
during other than Building Hours.
ARTICLE 26
MISCELLANEOUS
26.1 Memorandum of Sublease. Subtenant and Sublandlord shall not record
this Sublease. However, at the request of Sublandlord, Subtenant shall promptly
execute, acknowledge and deliver to Sublandlord a memorandum of lease with
respect to this Sublease sufficient for recording. Such memorandum shall not
change or otherwise affect any of the obligations or provisions of this
Sublease.
26.2 Entire Agreement. This Sublease contains all of the agreements and
understandings related to the leasing of the Premises and the respective
obligations of Sublandlord and Subtenant in connection therewith. Sublandlord
has not made and is not making, and Subtenant, in executing and delivering this
Sublease, is not relying upon, any warranties, representations, promises or
statements, except those that are expressly set forth in this Sublease,
including any riders and all exhibits hereto. All prior agreements and
understandings between the parties have merged into this Sublease, which alone
fully and completely expresses the agreement of the parties.
26.3 Amendments. No agreement shall be effective to amend, change, modify,
waive, release, discharge, terminate or effect an abandonment of this Sublease,
in whole or in part, unless such agreement is in writing, refers expressly to
this Sublease and is signed by Sublandlord and Subtenant.
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26.4 Successors. Except as otherwise expressly provided herein, the
obligations of this Sublease shall bind and benefit the successors and assigns
of the parties hereto; provided, however, that no assignment, sublease or other
transfer in violation of the provisions of Article 19 shall operate to vest any
rights in any putative assignee, subtenant or transferee of Subtenant.
26.5 Force Majeure. Sublandlord or Subtenant shall have no liability
hereunder, except with respect to any monetary obligations under this Sublease,
on account of: (a) the inability of either party to fulfill, or delay in
fulfilling, any of its obligations under this Sublease by reason of strike,
other labor trouble, governmental preemption of priorities or other controls in
connection with a national or other public emergency, or shortages of fuel,
supplies or labor resulting therefrom, or any other cause, whether similar or
dissimilar to the above, beyond that party's reasonable control; or (b) any
shutdown, failure or defect in the supply, quantity or character of electricity
or water furnished to the Premises, by reason of any requirement, act or
omission of the public utility or others furnishing the Building with
electricity or water or of any governmental agency, or for any other reason,
whether similar or dissimilar to the above, beyond Sublandlord's or Subtenant's
reasonable control. If this Sublease specifies a time period for performance of
an obligation of Sublandlord or Subtenant, that time period shall be extended by
the period of any delay in Sublandlord's performance caused by any of the events
of force majeure described above.
26.6 Post-Termination Obligations. Upon the expiration of the Sublease
Term or earlier termination of this Sublease, neither party shall have any
further obligation or liability to the other except as otherwise expressly
provided in this Sublease, and except for such obligations as by their nature or
under the circumstances can only be, or by the provisions of this Sublease, may
be, performed after such expiration or earlier termination. However, any
liability for a payment of Rents or indemnity shall survive the expiration of
the Sublease Term or earlier termination of this Sublease.
26.7 Excavations. If an excavation is made upon land adjacent to or under
the Building, or is authorized to be made, then at the request of Sublandlord,
Subtenant shall afford persons performing the excavation and shoring license to
enter the Premises for the purpose of doing such work as those persons may deem
necessary or desirable to preserve and protect the Building from injury or
damage and to support the Building. If the excavation work could reasonably be
expected to affect any operation of Subtenant, Sublandlord shall notify
Subtenant and, to the extent practical and commercially reasonable, shall notify
Subtenant of the work needed and shall give Subtenant the reasonable opportunity
to take the necessary steps to minimize or avoid interference with Subtenant's
business operations. Subtenant shall have no claim for damages or liability
against Sublandlord or such persons, and Subtenant's obligations under this
Sublease shall not be reduced or otherwise affected. Sublandlord shall have no
liability or responsibility with respect to any equipment of Subtenant located
outside the Premises, except to the extent Sublandlord approved the work or
installation and is provided with plans showing the exact location of such
equipment (in
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which case, Sublandlord's obligation to be limited to the obligation to perform
as set forth herein.)
26.8 Certain Definitions. For the purposes of this Sublease: (a)
"Sublandlord" means the Sublandlord herein named or any successor in interest,
but only for the time that any such person owns the Building or a lease of the
Building in accordance with and subject to the provisions of Section 24.4; (b)
"Sublandlord's Affiliates" means Xxxxx Fargo Bank, N.A., and each of its
subsidiaries or any parent entity, and any successor-in interest to any of the
foregoing, and their respective shareholders, affiliates and related entities;
(c) "laws," "provisions of law" and words of similar import mean laws, statutes,
ordinances, building and fire codes, rules, regulations, judgments, rulings,
decrees, orders and directives of any or all of the federal, state, county and
city governments and all departments, subdivisions, bureaus, courts, agencies or
offices thereof, and of any other governmental, public or quasi public
authorities having jurisdiction over the Building or the Premises, and the
direction of any public officer pursuant to law, whether now or hereafter in
force. References to specific statutes include successor statutes of similar
purpose and import; (d) "person" means any natural person or persons, a
partnership, a corporation, and any other form of business or legal association
or entity; and (e) "business day" means Monday through Friday, except for
Holidays described in the first sentence of Section 11.1.
26.9 Rentable Area. The "Rentable Area of the Building" shall mean 719,000
square feet, and the number of rentable square feet and useable square feet in
the Premises, respectively, shall be deemed to be the square footages
respectively set forth as the "Rentable Area of the Premises" and the "Useable
Area of the Premises" in Section 1.4, which have been calculated in accordance
with the method of measurement set forth in Exhibit I. If the Rentable Area of
the Premises or the Building is reduced as a result of a partial taking in
eminent domain or other circumstance (each a "Redetermination Event") then the
Rentable Area of the Premises, the Useable Area of the Premises and the Rentable
Area of the Building, to the extent each is affected by such Redetermination
Event, shall be reasonably redetermined by Sublandlord's space planner or
architect for purposes of this Sublease, in a manner consistent with the
measurement standards set forth in Exhibit I. In such event, the Basic Rent
shall be adjusted by multiplying it by a fraction, the numerator of which is the
adjusted number of square feet of Rentable Area of the Premises, as so
redetermined by Sublandlord's space planner or architect, and the denominator of
which is the Rentable Area of the Premises prior to such redetermination, and
"Subtenant's Share" shall be adjusted to the percentage that the Rentable Area
of the Premises bears to the Rentable Area of the Building following such
redetermination. Whenever any provision of this Sublease calls for any
calculation based upon the Rentable Area of any portion of the Building
(including, without limitation, any such calculations required pursuant to
Articles 6, 13, 14 or 19), such calculations shall be made based upon the
Rentable Area as reasonably determined by Sublandlord's space planner or
architect in a manner consistent with the method of measurement set forth in
Exhibit I (and excluding the Parking Garage in the case of any such calculation
of the Rentable Area of the Building).
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26.10 Light and Air. No diminution or shutting off of light, air or view
by any structure that may be erected on lands in the vicinity of the Building
shall in any manner affect this Sublease or the obligations of Subtenant
hereunder, or impose any liability on Sublandlord.
26.11 Joint and Several Liability. If Subtenant at any time comprises more
than one person, all such persons shall be jointly and severally liable for
payment of Rents and for performance of every obligation of Subtenant under this
Sublease.
26.12 Sublease Interpretation. This Sublease shall be governed by and
construed in accordance with the laws of the State of California, without regard
to choice of law rules. If any provision of this Sublease or its application to
any person or circumstance shall be invalid or unenforceable, for any reason and
to any extent, the remainder of this Sublease and the application of that
provision to other persons or circumstances shall not be affected but rather
shall be enforced to the extent permitted by law. The Table of Contents, Index
of Defined Terms, captions, headings and titles of this Sublease are solely for
convenience of reference and shall not affect its interpretation. This Sublease
shall be construed without regard to any presumption or other rule requiring
construction against the party drafting a document. It shall be construed
neither for nor against Sublandlord or Subtenant, but shall be given a
reasonable interpretation in accordance with the plain meaning of its terms and
the intent of the parties. Each covenant, agreement, obligation or other
provision of this Sublease on Subtenant's part to be performed shall be deemed
and construed as a separate and independent covenant of Subtenant, not dependent
on any other provision of this Sublease. Unless otherwise required by the
context (or otherwise provided in this Sublease), the words "herein", "hereof"
and "hereunder" and similar words refer to this Sublease generally and not
merely to the provision in which such term is used. All terms and words used in
this Sublease, regardless of the number or gender in which they are used, shall
be deemed to include any other number and any other gender as the context may
require. Time is of the essence of this Sublease and of each provision hereof in
which a time of performance is established. All exhibits and any riders appended
to this Sublease are hereby incorporated herein and by this reference made a
part hereof. The words "including" and "include" shall be interpreted as though
followed by the words "without limitation" except where the context otherwise
requires.
26.13 Submission of Sublease. The submission of this Sublease to Subtenant
or its broker, agent or attorney for review or signature does not constitute an
offer to Subtenant to lease the Premises or the grant of an option to do so.
This instrument shall have no binding force or effect until its execution and
delivery by both Sublandlord and Subtenant.
26.14 WAIVER OF TRIAL BY JURY. THE RESPECTIVE PARTIES HERETO SHALL AND
THEY HEREBY DO WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER ON ANY MATTER
WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS SUBLEASE, THE
64
RELATIONSHIP OF SUBLANDLORD AND SUBTENANT, SUBTENANT'S USE OR OCCUPANCY OF THE
PREMISES, OR ANY CLAIM OF INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY
UNDER ANY STATUTE, EMERGENCY OR OTHERWISE.
26.15 Consent to Jurisdiction. Subtenant hereby (a) irrevocably consents
and submits to the jurisdiction of the federal courts of the United States of
America located in the Central District of California and of any state, county
or municipal court sitting in the State of California, County of Los Angeles in
respect of any action or proceeding brought therein by Sublandlord against
Subtenant concerning any matters arising out of or in any way relating to this
Sublease; (b) expressly waives any rights of Subtenant pursuant to the laws any
other jurisdictions by virtue of which exclusive jurisdiction of the courts of
any other jurisdiction might be claimed; and (c) agrees that the laws of the
State of California shall govern in any such action or proceeding and waives any
defenses under the laws of any other country or jurisdiction unless such defense
is also allowed by the laws of the State of California. Nothing herein shall
affect the right of Sublandlord to commence legal proceedings or otherwise
proceed against Subtenant in any other country or jurisdiction in which assets
of Subtenant are located or to serve process in any manner permitted by
applicable law.
26.16 Authority. Each individual executing this Sublease on behalf of
Subtenant hereby represents and warrants that Subtenant is a duly formed and
existing entity qualified to transact intrastate business in California, with
full corporate power and authority to execute and deliver this Sublease, and
that each person signing on behalf of Subtenant is authorized to do so.
ARTICLE 27
SIGNAGE
Subtenant shall be permitted to install appropriate Building standard
signage on the entrance doors to the Premises. Such signage will be installed by
Sublandlord at Subtenant's sole cost and expense at locations approved by
Sublandlord.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, Sublandlord and Subtenant have caused their duly
authorized representatives to execute this Sublease as of tine date first above
written.
SUBTENANT: SUBLANDLORD:
FOCAL COMMUNICATIONS XXXXX FARGO BANK, N.A.,
CORPORATION OF CALIFORNIA, a national banking association
a Delaware corporation
By: By:
------------------------- -------------------------
Name: Name:
----------------------- -----------------------
Title: Title:
---------------------- ----------------------
By: By:
------------------------- -------------------------
Name: Name:
----------------------- -----------------------
Title: Title:
---------------------- ----------------------
66
EXHIBIT A
WORK LETTER FOR SUBTENANT IMPROVEMENTS
This Work Letter for Subtenant Improvements, including any schedules and
exhibits attached hereto (this "Work Letter"), is attached to and forms a part
of that certain Sublease dated as of May 19, 1998, by and between XXXXX FARGO
BANK, N.A., as Sublandlord, and FOCAL COMMUNICATIONS OF CALIFORNIA, a Delaware
corporation, as Subtenant (the "Sublease"). Unless otherwise specified,
"Article" and "Section" references herein are to Articles and Sections of the
body of the Sublease and "Paragraph" references are to paragraphs of this Work
Letter.
1. Definitions. All capitalized terms used herein and not defined shall
have the meanings set forth in the body of the Sublease. As used in the body of
the Sublease and in this Work Letter:
1.1 Code. The term "code" means all applicable electrical, building,
architectural barrier, zoning, health, safety, seismic, fire, energy and other
codes, ordinances, regulations, rulings, interpretations, requirements and
relevant provisions of law issued or adopted by the City of Los Angeles, County
of Los Angeles, State of California, the United States Government or any other
governmental authority.
2. Base Building Work. The following is in place at the Building as of the
date of this Sublease: (1) Building shell; (2) Building core areas, including
mechanical, electrical, plumbing, heating, ventilation, air-conditioning, and
fire and life-safety systems; (3) core toilet rooms on the office floors of the
Building; (4) public stairs; (5) elevators; and (6) main lobby. The work
referenced above and the work described in the Base Building Definition attached
as Schedule 1 to this Work Letter will be collectively referred to herein as the
"Base Building Work". Subtenant acknowledges that it has inspected the Premises
and the Base Building Work, is familiar with the condition thereof, and subject
to the terms of this Work Letter, accepts the Base Building Work, the Premises,
and any existing equipment and improvements located in the Premises absolutely
"AS IS," and agrees that, except as otherwise specifically set forth in this
Work Letter and the Sublease to which this is an Exhibit, Sublandlord shall not
be required to perform any work, install (or remove) any improvements or
equipment, or render any services to make the Building or the Premises ready for
Subtenant's occupancy. Subtenant acknowledges that some portions of the Premises
may have been previously occupied by other tenants and may contain fixtures and
improvements, which may be used or removed at Subtenant's option and at
Subtenant's sole cost, subject to the terms of the Sublease.
3. Subtenant's Work.
3.1 Definition. Except for the Base Building Work provided by
Sublandlord, all tenant improvements in the Premises (including, without
limitation, removal
A-1
or modification of any existing improvements and construction of any necessary
demising walls), to prepare the Premises for occupancy by Subtenant, will be
performed by Subtenant at Subtenant's sole expense. The improvements to be
constructed by Subtenant are referred to in this Work Letter as "Subtenant's
Work." Subtenant's Work shall be deemed "Substantially Complete" for purposes of
this Sublease as of the date that Subtenant's Work, as described in Subtenant's
Plans approved by Sublandlord is complete, subject to reasonable punch list
items, including minor details of mechanical adjustment or decoration which do
not materially interfere with Subtenant's use of the Premises for business
purposes and the City of Los Angeles has issued a temporary Certificate of
Occupancy (or reasonable equivalent) for Subtenant's intended use for the
Premises.
3.2 Requirements. All Subtenant's Work is subject to the approval of
Sublandlord and must meet the Building construction standards. Subtenant shall
be responsible for the design, function and maintenance of all Subtenant's Work.
Subtenant shall not specify uses or materials that are subject to an insurance
hazard rate different from the rate assigned to the Building as a whole.
3.3 Heating, Ventilation and Air-Conditioning. Subtenant shall be
required to furnish and install as Subtenant's Work all HVAC and related
apparatus not included as part of the Base Building Work, including all
additional duct, pipe, electrical and mechanical work.
3.4 Sprinkler System. Subject to Subtenant's right to install and/or
convert to a "pre-action" design as permitted in Section 11.11(j) of this
Sublease, Subtenant shall install as part of Subtenant's Work all portions of
the sprinkler system for the Premises not included as part of the Base Building
Work, including, any raising, lowering, moving or adding of sprinkler heads.
3.5 Life-Safety System. All emergency lighting, exit signs, branch
wiring, alarms, smoke detectors, speakers and other devices required by code or
desired by Subtenant for the life-safety system in the Premises but not included
as part of the Base Building Work, shall be installed as Subtenant's Work.
3.6 Window, Wall and Floor Coverings. All window, wall and floor
coverings shall be installed as Subtenant's Work. Subtenant may utilize any
existing mini blinds which are in place in all perimeter windows of Subtenant's
Premises in "AS IS" condition, and will not install any other types of window
coverings without Sublandlord's prior consent, which shall not be unreasonably
withheld, conditioned, or delayed.
3.7 Floor Loading. Specific sections of the Premises may require
loading to a maximum of 200 lbs. per square foot. If Subtenant wishes to design
and install structural and/or non-structural modifications to the Premises to
accommodate floor loads greater than the existing capacity of 100 pounds per
square foot as shown in the Base Building Definition, all of such work shall be
considered to be an Alteration which, consistent with the terms of
A-2
Article 8, shall be, subject to Sublandlord's approval and subject to all
applicable code and engineering design standards. If reinforcing is required,
Subtenant, at Subtenant's sole cost and expense, shall reinforce the floors in
the areas as specified and designed by Subtenant's structural engineer.
Subtenant shall be granted, with reasonable notice, floor access to the space
below the Premises for reinforcement of Subtenant's Premises during construction
of Subtenant's Work, if required. All charges for additional security and other
services needed to accommodate such entry shall be at the sole cost and expense
of Subtenant.
3.8 Ceiling and Floor Tiles. Sublandlord will provide to Subtenant,
at Sublandlord's cost and expense, ceiling and floor tiles to the extent such
tiles are available in Sublandlord's current inventory. Otherwise, ceiling and
floor tiles shall be provided at Subtenant's cost and expense.
4. Subtenant's Plans.
4.1 Description. Subtenant shall have an architect licensed by the
State of California ("Subtenant's Architect") prepare architectural plans and
specifications for the layout and improvements of the Premises and Subtenant's
Work ("Subtenant's Plans"), all in such form and detail as reasonably required
by Sublandlord. Subtenant's Plans shall be in form and content sufficient to
secure all required governmental approvals. Subtenant shall pay all of the fees
and charges of Subtenant's Architect for all of the work required by this Work
Letter. Subtenant's Architect shall coordinate with the architect of
Sublandlord ("Sublandlord's Architect") and Sublandlord's engineers to assure
the consistency of Subtenant's Plans with the plans and specifications for the
Base Building Work. Subtenant's Plans shall include the following:
(a) Space Plan: The "Space Plan" shall be a schematic space plan
for the Premises, including a full and accurate description of the size and
location of all partitions, doors, furniture and equipment line ups. Before
submission to Sublandlord, the Space Plan shall have been reviewed and approved
by the Los Angeles Building and Fire Departments, and shall be on file with the
Building Department, registered with a preliminary plan check number.
(b) Final Plans: The "Final Plans" shall consist of all plans and
specifications necessary to construct Subtenant's Work, including mechanical and
electrical working drawings.
4.2 Mechanical and Electrical. Subtenant's Plans shall contain all
mechanical and electrical working drawings. Mechanical and electrical working
drawings shall be prepared at Subtenant's expense by engineers reasonably
approved by Sublandlord. Subtenant's Architect shall be responsible for
coordination of all engineering work with Subtenant's Plans.
A-3
4.3 Approval by Sublandlord. Subtenant's Plans shall be subject to
Sublandlord's reasonable approval. Sublandlord shall have ten (10) business days
following receipt of Subtenant's Plans to approve or disapprove the submissions
by Subtenant. If Sublandlord fails to approve or disapprove Subtenant's Plans
within such 10-business day period, then Subtenant shall have the option to
terminate this Sublease by delivering written notice to Sublandlord within five
(5) days following the expiration of such 10-business day period, or extend the
Commencement Date for the number of days Sublandlord's approval or disapproval
is delinquent, pursuant to the terms of Section 2.4 of the Sublease. The rights
described in the foregoing sentence shall be Subtenant's sole remedy for such
failure to approve Subtenant's Plans within the time specified. If Sublandlord
reasonably disapproves of any of Subtenant's Plans, Sublandlord shall advise
Subtenant of the required revisions concurrently with such disapproval. After
being so advised by Sublandlord, Subtenant shall promptly submit a redesign,
addressing the revisions required by Sublandlord, for Sublandlord's reasonable
approval. Sublandlord shall then have five (5) business days to approve or
disapprove any resubmittal of Subtenant's plans, and failure to respond within
such 5-business day period shall be deemed Sublandlord's approval of such re-
submitted plans and specifications. If Sublandlord disapproves Subtenant's
redesign within such 5-business day period, then, Subtenant shall have the right
to terminate this Sublease within five (5) days following receipt of such
disapproval and such termination shall be Subtenant's sole remedy for such
disapproval. Notwithstanding the right of Subtenant as set forth herein to
terminate this Sublease if Subtenant's Plans are disapproved, if Subtenant's
Plans have not been approved within sixty (60) days from the date of this
Sublease, the parties agree to promptly meet in good faith to attempt to reach
agreement regarding Subtenant's Plans. If Subtenant's Plans are not fully
approved within seventy-five (75) days from the date of this Sublease despite
the exercise of good faith efforts, either Sublandlord or Subtenant may, as its
sole remedy, terminate this Sublease by written notice delivered within ten (10)
days following the expiration of such 75-day period. The period for resolving a
dispute regarding Subtenant's Plans shall not constitute a delay for purposes of
extending the Outside Completion Date pursuant to Section 2.4 of the Sublease.
Approval by Sublandlord shall not be deemed to be a representation or warranty
by Sublandlord with respect to the safety, adequacy, correctness, efficiency or
compliance with law of Subtenant's Plans.
4.4 Permits. Subtenant's Architect shall be responsible for
submission of Subtenant's Plans for plan check by the City of Los Angeles. Any
changes required by the City of Los Angeles shall be submitted to Sublandlord
for Sublandlord's review and reasonable approval. Subtenant's contractor shall
apply for the building permit for Subtenant's Work and Subtenant shall be
responsible for and shall pay all fees and expenses for securing the building
permit and all other permits necessary for construction of the tenant
improvements.
4.5 "As-Built" Plans. A set of "as-built" plans of the Premises, in
such form and detail as reasonably required by Sublandlord, shall be delivered
to Sublandlord within sixty (60) days after Subtenant's occupancy.
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5. Construction of Subtenant's Work.
5.1 Subtenant's Contractor. Subtenant will enter into a construction
contract with a contractor approved by Sublandlord for construction of
Subtenant's Work ("Subtenant's Contractor"). Sublandlord agrees to approve or
disapprove in writing Subtenant's proposal for Subtenant's Contractor within 4
business days of receiving Subtenant's written proposal. If Sublandlord fails
to respond within such 4-business day period, Subtenant's proposal for
Subtenant's Contractor shall be deemed approved. Subtenant will inform
Sublandlord of the amount of the contract price.
5.2 Performance. Subtenant shall perform, through Subtenant's
Contractor, all work shown on the approved Subtenant's Plans, in accordance with
such plans, and in a professional and workmanlike manner and in strict
accordance with code. Subtenant shall comply, and will cause its agents,
contractors and employees to comply, with all construction rules and regulations
of the Building as set forth in Exhibit H to the Sublease (which rules shall be
subject to change from time to time upon reasonable advance notice to Subtenant
and its contractors).
5.3 Services During Construction. Sublandlord shall provide to
Subtenant's Contractor free of charge all necessary utilities (including water
and electricity but not including temporary power), hoisting (but not including
an operating engineer), general security and access to the Building and the
Premises. Subtenant and Subtenant's Contractors shall also have the right to use
the Building's freight elevators and loading dock at no charge during Building
Hours, and may use the freight elevators and loading dock outside of Building
Hours, subject to a reasonable charge therefor to reimburse Sublandlord for its
actual costs, if incurred, of providing such use and such access. Subtenant
shall have the non-exclusive use of at least one loading dock and freight
elevator during construction. For the services of Sublandlord's engineering
personnel in connection with Subtenant's Work (including the cost of
accompanying Subtenant or its agents or contractors during the performance or
planning of Subtenant's Work outside of the Premises and the performance of
Subtenant's Work within the Premises that may affect Building systems, and
during the inspection of Building facilities outside of the Premises in
connection with the planning of Subtenant's Work, whether prior to or subsequent
to the execution of this Sublease), Subtenant shall compensate Sublandlord at
the normal hourly rates for such personnel. Sublandlord shall use its
commercially reasonable best efforts to provide space for a 40-yard rubbish
container within close proximity of the freight elevator or loading dock of the
Building throughout the period of constructing Subtenant's Work.
5.4 Subtenant's Move Into the Premises. Sublandlord shall also
provide all necessary utilities, general security and access to the Building and
the Premises at no charge to Subtenant during Subtenant's move into the
Premises. Subtenant shall have the non-exclusive use of at least one loading
dock and one freight elevator during Subtenant's move into the Premises, and
shall also have the right to utilize passenger elevators during its move into
the Premises. If Subtenant wishes to use the passenger elevators for its move
into
A-5
the Premises, Subtenant shall provide reasonable advance notice to Sublandlord
and Sublandlord will provide pads to protect the elevator cab interiors.
5.5 Labor Harmony. Subtenant acknowledges and understands that the
Building is a "union building" and organized labor has a strong presence at the
Building. Subtenant agrees to utilize union labor as necessary to maintain labor
harmony at the Building. Sublandlord will permit Subtenant's Contractor and
subcontractors access to the Premises to perform their work in the proper
sequence, provided that the workers and mechanics of Subtenant's Contractor and
subcontractors work in harmony with and do not interfere with the labor employed
by Sublandlord, Sublandlord's mechanics or contractors or by any other tenant or
its contractors. If at any time such entry shall cause disharmony or
interference, Sublandlord shall not be liable in any way for any injury, loss or
damage which may occur to any of Subtenant's decorations or installations so
made before commencement of the term of the Sublease, the same being solely at
Subtenant's risk, and Subtenant shall hold Sublandlord harmless from any claim,
demand or action arising from activities of Subtenant's Contractor,
subcontractors, workers or mechanics. Sublandlord and Subtenant agree to
cooperate in good faith in connection with Subtenant's Contractor's entry into
the Building and the Premises and the installation of Subtenant's Work. Subject
to the provisions of Sections 2.5(b) and (c) of the Sublease, under no
circumstances shall Sublandlord be held responsible or liable for any delay
whatsoever in the construction of Subtenant's Work.
5.6 Deliveries. Subtenant's Contractor shall coordinate the
scheduling of deliveries of materials with Sublandlord, and the timing of such
deliveries shall be subject to Sublandlord's reasonable approval. Sublandlord
may require that delivery of construction materials be made at a time other than
during Building Hours.
5.7 Insurance. Throughout the performance of Subtenant's Work,
Subtenant, at its expense, shall carry, or cause to be carried, workers'
compensation insurance as required by law and general liability insurance, with
completed operations endorsements, for any occurrence in or about the Building,
in such coverage limits and with insurers in each case meeting the requirements
of Article 7 of the Sublease. Sublandlord and the persons specified in Section
7.5 of the Sublease shall be designated as additional insured parties on the
insurance policies. Subtenant shall furnish Sublandlord with evidence
satisfactory to Sublandlord that such insurance is in effect before the
commencement of Subtenant's Work, and, on request of Sublandlord during
construction, Subtenant shall provide evidence satisfactory to Sublandlord that
the insurance remains in effect.
5.8 Liens and Violations. Subtenant, at its expense, and with
diligence and dispatch, shall procure the cancellation or discharge of all
notices of violation arising from or otherwise connected with Subtenant's Work,
or any other work, labor, services or materials done for or supplied to
Subtenant, or any person claiming through or under Subtenant, which shall be
issued by the Building and Safety Department of the City of Los Angeles or any
other public authority. Subtenant shall not utilize materials in Subtenant's
Work (except with respect to Subtenant's Property) that are subject to security
interests or liens. Subtenant shall
A-6
defend, indemnify and hold Sublandlord harmless from and against any and all
mechanics' liens, stop notices and other liens and encumbrances or claims of
liens or encumbrances filed in connection with Subtenant's Work, Alterations, or
any other work, labor, services or materials done for or supplied to Subtenant,
or any person claiming through or under Subtenant, including, without
limitation, security interests in any materials, fixtures or articles installed
in the Premises; and against all costs, expenses and liabilities incurred in
connection with any such lien or encumbrance, or claim of lien or encumbrance,
its removal or any related action or proceeding. Subtenant, at its expense,
shall satisfy or discharge of record each stop notice, lien or encumbrance
within 15 days after it is filed. If Subtenant fails to do so, Sublandlord shall
have the right to satisfy or discharge the stop notice, lien or encumbrance by
payment to the claimant on whose behalf it was filed, by the posting of a bond,
or by other action. Subtenant shall reimburse Sublandlord on demand for the
costs and expenses so incurred by Sublandlord, as Additional Charges, and
without regard for any defense or offset that Subtenant may have had against the
claimant, but neither Sublandlord's curative action nor the reimbursement of
Sublandlord by Subtenant shall cure Subtenant's default in failing to satisfy or
discharge the lien or encumbrance.
5.9 Indemnity. Subtenant will be directly responsible to Sublandlord
for the performance of Subtenant's Contractor, and will indemnify, defend and
hold harmless Sublandlord, Sublandlord's Affiliates and Sublandlord's managing
agent from any cost, expense, claim, lien, loss, damage or liability in
connection with the construction contract with Subtenant's Contractor or with
the performance of Subtenant's Work.
5.10 Inspection by Sublandlord. Sublandlord shall have the right to
inspect Subtenant's Work at any reasonable time, and may reasonably reject work
that does not conform with applicable laws or Subtenant's Plans. In the event of
such rejection, the parties shall promptly meet to agree upon a resolution to
bring such work into conformity.
5.11 Code Requirements. Subtenant shall bear all costs and expenses of
constructing Subtenant's Work in compliance with code and shall be responsible,
at its expense, for obtaining, and, if requested by Sublandlord, furnishing
copies to Sublandlord of, all governmental permits, certificates, and approvals
necessary for the commencement and prosecution of Subtenant's Work and for final
approval thereof upon completion.
5.12 Construction Supervision Fee. Sublandlord may, at its option,
retain a construction supervisor to oversee the construction and performance of
Subtenant's Work and Subtenant agrees to pay the costs of any construction
supervisory fee not to exceed $4,000.00.
A-7
SCHEDULE 1 TO WORK LETTER
BASE BUILDING DEFINITION
[ALL SUBJECT TO REVIEW AND REVISION TO REFLECT LOWER LEVEL II]
FLOORS
Floor Leveling The concrete floors of the Building will have a
floor level variance of no more than 1/4 inch per
10 feet, non-cumulative
Floor Loading The floor loading capacity in the Building is as
follows:
Live Load: 100 lbs. per SF
Partition Load: 125 lbs. per SF
--------------------------------------------------------------------------------
DROPPED CEILING AND Dropped ceilings and lights shall be provided
LIGHTS "as-is".
-------------------------------------------------------------------------------
ELEVATORS . The Building has 4 passenger elevators serving
Lower Level II.
. The Building has 2 service/freight elevators
serving Lower Level II.
-------------------------------------------------------------------------------
HVAC
System Description . The Building's HVAC system specifications
for Lower Level II are as follows:
A single VAV duct system serviced by 3 fanrooms;
heating is supplied by return air across light
fixtures.
Temperature Specifications The HVAC on Lower Level II meets the
following temperature specifications:
Schedule 1 to Exhibit A - Page 1
. Design population: 160 RSF per person
. Average air circulation: 1.0 cfm/rsf
. Indoor air temperature:
. Summer: 68-74 degrees Fahrenheit and 50%
relative humidity
. Winter: 68-74 degrees Fahrenheit (plus or
minus 2 degrees)
. Outdoor air temperature:
. Summer: 95 degrees Fahrenheit dry bulb, 74
degrees Fahrenheit wet bulb
. Winter: 30 degrees Fahrenheit dry bulb
. Fresh outdoor air ventilation to be provided at a
minimum of 0.15 cfm per rentable square foot.
--------------------------------------------------------------------------------
ELECTRICAL CAPACITY . The Building will provide 8 xxxxx per RSF for
Subtenant's lights and outlets. Total power in
the building is 4 2,500 KVA; 5,600 amp services.
--------------------------------------------------------------------------------
FIRE & LIFE-SAFETY . The Building is fully sprinklered.
. The Building is equipped with a Honeywell Fire &
Life-Safety system throughout the entire structure.
Schedule 1 to Exhibit A - Page 2
EXHIBIT B
FLOOR PLAN OF THE PREMISES
[Diagram]
B-1
EXHIBIT C
FORM OF
MEMORANDUM OF SUBLEASE COMMENCEMENT
This Memorandum of Sublease Commencement is made as of ______________, by
XXXXX FARGO BANK, N.A., a national banking association ("Sublandlord"), having
an office c/o Corporate Properties Group, 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, Attention: Negotiations Manager, and FOCAL
COMMUNICATIONS OF CALIFORNIA, a Delaware corporation ("Subtenant") having an
office at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx X.
Xxxx. Sublandlord and Subtenant agree to and acknowledge the following matters:
1. Sublandlord and Subtenant have entered into that certain Office Sublease
dated May 19, 1998, (the "Sublease"), covering office space containing square
feet of Rentable Area in The Garland Center Building, located at 0000 Xxxx
Xxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, as more particularly described in the
Sublease.
2. All terms defined in the Sublease shall have the same meaning when used
in this Memorandum of Sublease Commencement.
3. The Commencement Date of the Sublease is ___________________, and the
Expiration Date of the Sublease is the January 31, 2009.
IN WITNESS WHEREOF, Sublandlord and Subtenant have caused their duly
authorized representatives to execute this Memorandum of Sublease Commencement
as of the date first above written.
SUBTENANT: SUBLANDLORD:
FOCAL COMMUNICATIONS XXXXX FARGO BANK, N.A.,
CORPORATION OF CALIFORNIA, a national banking association
a Delaware corporation
By: By:
------------------------------ --------------------------------
Name: Name:
---------------------------- ------------------------------
Title: Title:
--------------------------- -----------------------------
By: By:
------------------------------ --------------------------------
Name: Name:
---------------------------- ------------------------------
Title: Title:
--------------------------- -----------------------------
C-1
EXHIBIT D
THE GARLAND CENTER
0000 XXXX XXXXXXX XXXXXX
RULES AND REGULATIONS
These Rules and Regulations are attached to and form a part of that certain
Sublease (the "Sublease") dated as of May 19, 1998, by and between XXXXX FARGO
BANK, N.A., a national banking association ("Sublandlord") and FOCAL
COMMUNICATIONS CORPORATION OF CALIFORNIA, a Delaware corporation ("Subtenant").
In the event of any conflict between the terms of the Sublease and these Rules
and Regulations, the terms of the Sublease shall prevail.
1. The rights of each tenant in the Common Area and entrances, corridors,
elevators and other public areas servicing the Building are limited to ingress
to and egress from such tenant's premises for the tenant and its employees,
licensees and invitees, and no tenant shall use, or permit the use of, the
entrances, corridors or elevators for any other purpose. Neither Sublandlord nor
any tenant shall invite to the tenant's premises, or permit the visit of,
persons in such numbers or under such conditions as to interfere with the use
and enjoyment of any of the entrances, corridors, elevators, plazas, and other
facilities of the Building or the Common Area by any other tenants except as may
be incident to Subtenant's Permitted Use. Fire exits and stairways are for
emergency use only, and they shall not be used for any other purpose by the
Sublandlord, tenants, their employees, licensees or invitees. Neither the
Sublandlord nor any tenant shall encumber or obstruct, or permit the encumbrance
or obstruction of any of the sidewalks, plazas, entrances, corridors, doorways,
elevators, fire exits or stairways of the Building or the Common Area.
Sublandlord reserves the right to control and operate the public portions of the
Building and the Common Area, in such manner as it, in its reasonable judgment,
deems best for the benefit of the tenants generally. No tenant and no invitees
or employees of any tenant shall be allowed on the roof of the Building, except
as otherwise allowed in the Sublease.
2. Sublandlord may refuse admission to the Building during the days and
hours specified in Rule 35 to any person not known to the watchman in charge or
not having a pass issued by Sublandlord or the tenant whose premises are to be
entered or not otherwise properly identified, and Sublandlord may require all
persons admitted to or leaving the Building outside of Building Hours to provide
appropriate identification and to register. Sublandlord shall not be held
responsible or liable for damages for any error with regard to the admission to
or exclusion from the Building of any person unless properly identified.
Subtenant shall be responsible for all persons for whom it issues any such pass
and shall be liable to Sublandlord for all acts or omissions of such persons.
Any person whose presence in the Building or the Common Area at any time shall,
in the reasonable judgment of Sublandlord, or its representatives, be
prejudicial to the safety, character or reputation of the Building, the Common
Area or of its tenants may be denied access to the Building or the Common Area
or may be ejected therefrom. During any invasion, riot, public excitement or
other commotion, Sublandlord may prevent all access to the Building or the
Common Area by
D-1
closing the doors or otherwise for the safety of the tenants and protection of
property in the Building or the Common Area.
3. Subtenants shall obtain ice, drinking water, food, beverage, linen,
barbering, shoe-polishing, floor-polishing, cleaning, janitorial, plant-care or
other similar services only from vendors who have registered with the Building
office and who have been reasonably approved by Sublandlord for provision of
such services in the Building.
4. The cost of repairing any damage to the public portions of the Building
or to the Common Area, caused by a tenant or its employees, agents, contractors,
licensees or invitees, shall be paid by the tenant.
5. [Intentionally omitted]
6. No lettering, sign, advertisement, notice or object shall be displayed
in or on the exterior windows or doors, or on the outside of any tenant's
premises, or at any point inside any tenant's premises where the same might be
visible outside of such premises, without the prior written consent of
Sublandlord, which consent may be withheld in the sole and absolute discretion
of Sublandlord. In the event of the violation of the foregoing by any tenant,
Sublandlord may remove the same without any liability, and may charge the
expense incurred in such removal to the tenant violating this rule. Interior
signs, elevator cab designations and lettering on doors or the Building
directory shall, if and when approved by Sublandlord, be inscribed, painted of
affixed for each tenant by Sublandlord at the expense of such tenant, and shall
be of size, color and style acceptable to Sublandlord.
7. [Intentionally omitted]
8. No showcases or other articles shall be put in front of or affixed to
any part of the exterior of the Building, nor placed in the halls, corridors or
vestibules except by a newsstand licensed by Sublandlord.
9. No bicycles, vehicles or animals (except any which are providing
handicap assistance) of any kind shall be brought into or kept in or about the
premises of any tenant of the Building or the Common Area.
10. Subtenants shall permit no noise, vibration or odor to escape from
their premises. Nothing shall be done or permitted in the premises of any tenant
which would impair or interfere with the use or enjoyment by any other tenant of
any other space in the Building or the Common Area.
11. Subtenants and their contractors, employees, agents, visitors and
licensees shall not at any time bring into or keep upon any tenant's premises or
in the Building any foul or noxious gas or substance or any inflammable,
explosive or otherwise Hazardous Substance
D-2
12. No locks or bolts of any kind which are not operable by the grand
master key for the Building shall be placed upon any of the doors by any tenant,
nor shall any changes be made in locks or the mechanism thereof which would make
such locks inoperable by the grand master key. Additional keys for a tenant's
premises and toilet rooms shall be procured only from Sublandlord, who may make
a reasonable charge therefor. Each tenant shall, upon the termination of its
tenancy, turn over to Sublandlord all keys of stores, offices and toilet rooms,
either furnished to or otherwise procured by such tenant, and in the event of
the loss of any keys furnished by Sublandlord, such tenant shall pay to
Sublandlord the cost thereof.
13. All equipment removals, or the carrying in or out of any safes,
freight, furniture, packages, boxes, crates or any other sizeable object or
matter of any description, must take place during such hours, in such elevators
and in such manner as Sublandlord or its agent may reasonably determine from
time to time. Persons employed to move safes and other heavy objects shall be
reasonably acceptable to Sublandlord. Before moving large quantities of
furniture and equipment into or out of the Building, tenants shall notify
Sublandlord and shall comply with Sublandlord's reasonable requirements
concerning the time and manner in which the work shall be performed. All labor
and engineering costs incurred by Sublandlord in connection with any moving,
including a reasonable charge for overhead and profit, shall be paid by tenant
to Sublandlord, on demand. Sublandlord shall not be responsible for loss or
damage to any such safe or property from any cause, and all damage done to the
Building by moving or maintaining any such safe or other property shall be
repaired at the expense of tenant.
14. Sublandlord reserves the right to inspect all objects and matter to be
brought into the Building and to exclude from the Building any objects or matter
which violate any of these Rules and Regulations or the lease of which this
Exhibit is a part. Sublandlord may require any person leaving the Building with
any package or other object or matter to submit a pass issued by the tenant from
whose premises the item is being removed, listing the item. This rule shall not
be deemed to impose any responsibility or liability on Sublandlord for the
protection of any tenant against the removal of property from the premises of
such tenant. Sublandlord shall in no way be liable to any tenant for damages or
loss arising from the reasonable admission, exclusion or ejection of any person
to or from the premises or the Building under the provisions of this rule or of
other of these Rules and Regulations.
15. No tenant shall occupy or permit any portion of its premises to be
occupied as an office for a public stenographer or public typist, or for the
storage, manufacture, or sale of food, liquor, drugs or tobacco in any form, or
as a xxxxxx, beauty or manicure shop, or as a school or classroom except for
internal training by the Subtenant, unless such use has been specifically
approved by Sublandlord. No tenant shall use or permit its premises or any part
thereof to be used for manufacturing or the sale at retail or auction of
merchandise, goods or property of any kind. These prohibitions supplement the
prohibited uses specified in the lease of which this Exhibit is a part.
D-3
16. Sublandlord shall have the right to prohibit any advertising or
identifying sign by any tenant which, in Sublandlord's sole and absolute
judgment, tends to impair the reputation of the Building or its desirability as
a building for others, and upon written notice from Sublandlord, such tenant
shall refrain from and discontinue such advertising or identifying sign.
17. Sublandlord shall have the right to reasonably prescribe the weight,
size and position of safes and other objects of excessive weight unless such
activity is consistent with the design specifications of the Premises approved
by the Sublandlord and is required by Subtenant's Permitted Use, and no safe or
other object whose weight exceeds the lawful load for the area upon which it
would stand shall be brought into or kept upon any tenant's premises. If, in the
reasonable judgment of Sublandlord, the concentrated weight of any heavy
equipment will exceed the structural capacity of the Building and it will be
necessary to distribute the concentrated weight of any heavy object, the work
involved in such distribution shall be done at the expense of the tenant and in
compliance with plans reasonably approved by Sublandlord.
18. Except as may be required by Subtenant's Permitted Use of the Premises
and approved by Sublandlord, no machinery or mechanical equipment other than
ordinary portable business machines may be installed or operated in any tenant's
premises without Sublandlord's prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed. Machines and mechanical equipment
that Sublandlord permits a tenant to install and use shall be so equipped,
installed or maintained by the tenant as to prevent any noise, vibration or
electrical or other interference from being transmitted from the tenant's
premises to any other area of the Building.
19. Sublandlord, its contractors, and their respective employees shall have
the right to reasonably use, without charge therefor, all light, power and water
in the premises of any tenant while cleaning or making repairs or alterations in
the premises of such tenant.
20. No premises of any tenant shall be used for lodging or sleeping or for
any immoral or illegal purpose.
21. The requirements of tenants will be attended to only upon application
at the office of the Building. Employees of Sublandlord shall not perform any
work or do anything outside of their regular duties, unless under special
instructions from Sublandlord.
22. Canvassing, soliciting and peddling in the Building are prohibited and
each tenant shall cooperate to prevent the same.
23. No tenant or other occupant shall cause or permit any unusual or
objectionable odors to emanate from its premises which would annoy other tenants
or create a public or private nuisance. No cooking shall be done in the premises
of any tenant except as is expressly permitted in such tenant's lease.
D-4
24. Nothing shall be done or permitted in any tenant's premises, and
nothing shall be brought into or kept in any tenant's premises, which would
impair or interfere with any of the Building's services or the proper and
economic heating, ventilating, air conditioning, cleaning or other servicing of
the Building or the premises, or the use or the enjoyment by any other tenant of
any other premises, nor shall there be installed by any tenant any ventilating,
air conditioning, electrical or other equipment of any kind which, in the
reasonable judgment of Sublandlord, might cause any such impairment or
interference.
25. No acids, vapors or other materials shall be discharged or permitted to
be discharged into the waste lines, vents or flues of the Building which may
damage them. The sinks and toilets and other plumbing fixtures in or serving any
tenant's premises shall not be used for any purpose other than the purposes for
which they were designed or constructed, and no sweepings, rubbish, rags, acids
or other foreign substances shall be deposited therein. A tenant shall be liable
to Sublandlord for all damages resulting from any misuse of the fixtures by the
tenant or the tenant's servants, employees, agents, visitors or licensees. All
garbage receptacles used in the premises of any tenant shall be emptied, cared
for and cleaned by and at the expense of the tenant.
26. All entrance doors in a tenant's premises shall be left locked by the
tenant when the tenant's premises are not in use. Entrance doors shall not be
left open at any time. Each tenant, before closing and leaving its premises at
any time, shall turn out all lights and entirely shut off all water faucets.
27. Hand trucks shall not be used in the Building unless they are equipped
with rubber tires and side guards.
28. Subtenant shall not obstruct, alter or in any way impair the efficient
operation of the Building heating, ventilating and air conditioning systems and
shall not place furniture, equipment or other objects where they would interfere
with air flow. Subtenant shall not tamper with or change the setting of any
thermostats or temperature control valves in the office area portions of the
Premises.
29. [Intentionally omitted]
30. [Intentionally omitted]
31. [Intentionally omitted]
32. Sublandlord shall have the right, exercisable with 30 days' prior
notice and without liability to tenant, to change the name and street address of
the Building of which the premises are a part. The name of the Building, as
reflected in the Building's signage from time to time, may not be used for any
purpose without the prior written consent of the party or entity that is the
legal owner of such name and/or logo.
D-5
33. The bulletin board or directory of the Building shall be provided
exclusively for the display of the name and location of tenants only and
Sublandlord reserves the right to exclude any other names therefrom and
otherwise limit the number of listings thereon.
34. [Intentionally omitted]
35. Sublandlord reserves the right to close and keep locked all entrance
and exit doors and otherwise regulate access of all persons to the halls,
corridors, elevators and stairways in the Building on Sundays and legal holidays
and on other days between the hours of 7:00 P.M. and 7:00 A.M., and at such
other times as Sublandlord may deem advisable for the adequate protection and
safety of the Building, its tenants and property in the Building, so long as 24-
hour, 365-day access is available to the Premises. Sublandlord shall not be
responsible or liable for damages for any error with regard to the admission to
or exclusion from the Building of any person; provided that Sublandlord allow
such person a reasonable opportunity to adequately identify himself/herself.
36. Subject to Subtenant's rights under the Sublease as specifically set
forth therein, Sublandlord reserves the right to rescind, alter or waive any
rule or regulation at any time prescribed for the Building when, in its
reasonable judgment, it deems it necessary, desirable or proper for its best
interest and for the best interests of the tenants generally, and no alteration
or waiver of any rule or regulation in favor of one tenant shall operate as an
alteration or waiver in favor of any other tenant or give rise to any liability
on the part of Sublandlord. Sublandlord shall not be responsible or liable to
any tenant for the non-observance or violation by any other tenant of any of the
rules and regulations at any time prescribed for the Building.
37. Subtenant shall neither contract for, nor employ any labor in
connection with, the maintenance, cleaning or other servicing of the Premises
without the prior consent of Sublandlord, which consent shall not be
unreasonably withheld or delayed. Subtenant shall not use (and upon notice from
Sublandlord shall cease using) contractors, services, workmen, labor, materials
or equipment that, in Sublandlord's reasonable judgment, would disturb labor
harmony with the workforce or trades engaged in performing other work, labor or
services in or about the Building or the Common Area.
The following Rules and Regulations pertain to the loading dock of the
Building (the "Loading Dock") and the freight elevator(s) and apply during
periods of construction as well as during the Lease Term:
38. The Loading Dock hours are 6:00 a.m. to 6:00 p.m., Monday through
Friday. The dock is closed on Saturday, Sunday and Legal Holidays.
39. All deliveries of furniture, equipment supplies, fixtures, merchandise,
and other materials to or from the Building and the Premises must be made
through the Loading Dock by means of the freight elevators.
D-6
40. Any deliveries totaling more than two (2) elevator loads must be
coordinated through the Office of the Building at (000) 000-0000.
41. Reservation of freight elevators after hours with an operator is a
billable service. Arrangements for this service must be coordinated through the
Office of the Building.
42. Vehicles for any freight reservation may arrive 15 minutes before the
scheduled time.
43. The Loading Dock speed limit is 5 MPH.
44. The maximum height for trucks using the Loading Dock is 13'6". The
maximum length is 54'.
45. The parking limit in a dock lane is 30 minutes. After the freight has
been delivered or dropped off, vehicles must leave the dock as soon as possible.
46. Drivers who leave their vehicles must check their keys in with Building
Security. All unattended vehicles must be locked and all items secured.
47. Trucks will not be allowed to leave their motors running.
48. Drivers are to remain with their vehicles unless making a delivery in
the building.
49. Parking of vehicles for other than the purpose of loading and unloading
goods is prohibited. No private vehicles are allowed to park in the Loading Dock
at any time.
50. All accidents must be reported to the Office of the Building
immediately. An Incident Report must be filed in all cases.
51. Tenants receiving deliveries must have their address (including suite
or location number) clearly indicated on all packages and/or shipping documents.
52. Large deliveries must be delivered between the hours of 06:00 a.m. and
08:00 a.m., after 03:00 p.m. or on weekends. Contractors will be responsible for
cleaning the service area used following the delivery of construction material.
53. Unless previously approved by building management, use of the pallet
xxxx is prohibited.
54. Hard hats must be worn at all times in construction areas and safety
policies are strictly enforced.
D-7
55. No material or equipment shall be left on the Loading Dock.
56. Unless previously approved, there will be no entering or exiting by
contractors through the lobby levels. No equipment, tools, materials etc. shall
be transported through the building lobby at any time.
57. No person will be allowed to remove property through the Loading Dock
without an authorized property removal pass from the removing floor.
58. Foremen and superintendents should make contact with the Office of the
Building and provide a phone number for their location.
59. Any delivery person found placing graffiti on any part of the property
will be charged for its clean up and will be banned from the use of the Loading
Dock.
60. Neither Building Management nor ownership shall be responsible for the
loss of items left in the dock area.
61. If for some reason a vehicle must be left unattended by the driver, the
driver must leave the vehicle keys with Building Security. Due to the size and
activity of the dock area, it is necessary for Building Security to keep the
keys of any unattended vehicles so that they may be moved in order to
accommodate other delivery vehicles. The turning in of keys is not required if
the driver remains with the vehicle.
62. Delivery personnel are responsible for the clean up of any fallen
debris or spills resulting from or occurring during pickup or delivery.
D-8
EXHIBIT E
[Intentionally omitted]
E-1
EXHIBIT F
[Intentionally omitted]
F-1
EXHIBIT G
JANITORIAL SPECIFICATIONS
A. GENERALLY
The intent of this Exhibit G is to clarify the parties' expectations of the
character of cleaning services to be provided at the Building. It is agreed
that cleaning services shall be consistent with those that provided in
Comparable Buildings (as defined in the Sublease).
B. JANITORIAL SPECIFICATIONS FOR SUBTENANT'S PREMISES
The following services will be provided in Subtenant's office space only.
No services will be provided to switching or equipment rooms except upon
specific written agreement.
1. Nightly Services - five nights per week (Monday through Friday),
between the hours of 6:00 p.m. and 5:00 a.m., or another schedule to
be reviewed and approved by Sublandlord and Subtenant, excluding
Holidays.
a. Vacuum all carpets.
b. Dust mop all stone, ceramic tile, marble and other unwaxed or
untreated flooring with treated dust mops. Damp mop to remove
spills and water stains as required. Clean waxed or treated
flooring as necessary.
c. Dust all desks, office furniture and files and counters with
treated dust cloths.
d. Dust all telephones as necessary.
e. Empty all waste paper baskets and other trash containers. Install
or replace trashcan liners as required.
f. Remove all trash from floors to the designated trash areas.
g. Return chairs and waste baskets to proper positions.
h. Clean all water fountains.
i. Sweep and clean as necessary all service stairwells.
G-1
j. Wipe clean smudged bright work.
k. Spot clean carpets, as required.
l. Clean lunchroom furniture, vending areas and exterior surfaces of
appliances.
m. Janitorial staff will have no obligation (a) to wash or otherwise
clean dishes, glasses and other utensils used for preparing food
or beverages or (b) to remove or store such dishes, glasses and
other utensils in order to clean any area, fixture or surface of
the Subtenant Premises.
2. Weekly Services
a. Dust all low reach areas, including chair rungs, structural and
furniture ledges, base boards, wood paneling, molding, handrails
and railings, etc.
b. Wipe clean and polish all bright work.
c. Sweep all stairways throughout Building.
d. Dust window frames and xxxxx.
e. Remove all fingermarks and smudges from doors, partitions, walls,
woodwork, window frames, mullions and ledges, wall switches and
outlet plugs on floors and walls.
3. Quarterly Services
a. Dust all high reach areas, window xxxxx, including tops of door
frames, structural and furniture ledges, air conditioning
diffusers and return grills, tops of partitions, picture frames,
etc.
b. Dust building standard Venetian blinds.
c. Wash all stone, ceramic tile, marble and other unwaxed or
untreated flooring.
d. Wash floors in public stairwells.
4. Annual Services
a. Interior glass shall be cleaned once per year.
G-2
Note: The cleaning of partition glass within the Premises shall be
done at the sole cost of Subtenant, and not as a part of regular
janitorial services.
5. Specialty for Raised Flooring
The following will be provided only upon request by Subtenant and at
an additional charge therefor.
Underfloor cleaning to include:
a. Remove all floor tiles.
b. Remove dust, dirt and debris
c. Clean all tile rests.
d. Wipe and clean all power cables.
e. Vacuum and clean the underfloor.
f. Vacuum and clean channels and supports.
g. Re-align all tiles.
All work to be performed under the supervision of janitorial project
manager. Notification of security and engineering is required to
prevent initiation of false fire alarms.
C. RESTROOM SPECIFICATIONS
1. Nightly Services - five nights per week (Monday through Friday),
excluding Holidays.
a. Restock all restrooms with supplies including paper towels,
toilet tissue, seat covers and hand soap, as required.
b. Restock all sanitary napkin dispensers as required.
c. Wash and polish all mirrors, dispensers, faucets and bright work
with disinfectant cleaners.
d. Wash and sanitize all toilet bowls, toilet seats, urinals and
sinks with disinfectant cleaner.
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e. Mop all restroom floors with disinfectant solution.
f. Empty all waste and sanitary napkin receptacles.
g. Remove all restroom trash to the designated trash areas.
h. Spot clean fingerprints, marks and graffiti from walls,
partitions and wall switches as required.
2. Monthly Services
a. Wash and polish all wall tile and stall surfaces.
b. Machine scrub restroom floors with disinfectant solution.
c. Wash waste cans and receptacles.
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EXHIBIT H
BUILDING CONSTRUCTION RULES
The following are general rules and regulations governing all work in the
Building, including Subtenant's Work and any Alterations (collectively,
"Subtenant's work"). The manager for the Building ("Building Manager") will be
Sublandlord's representative in coordinating and supervising Subtenant's work.
Nothing contained in these Construction Rules shall (i) create any contractual
obligations for Sublandlord or Building Manager in connection with Subtenant's
work or (ii) in any way affect, modify or supersede any of the terms set forth
in this Sublease. The Construction Rules may be modified and supplemented from
time to time as Sublandlord may reasonably require for the proper monitoring and
control of construction at the Building.
1. Neither Building Manager nor Sublandlord will be responsible for any
material, equipment, tools or other property belonging to Subtenant's general
contractor for Subtenant's work, or any subcontractors, employees, agents or
others associated in any way with Subtenant's work.
2. The Building is equipped with a freight elevator serving all floors. The
contractor and all construction personnel must use only the freight elevator for
transportation of workers, materials and equipment. No contractor or any
construction personnel, nor any materials or equipment, are permitted in, nor
shall any of the foregoing be transported in, the passenger elevators. If the
contractor or any construction personnel are found in the passenger elevators,
the contractor or subcontractor may be removed from the job and the elevators
will be immediately inspected for damage. All damage resulting from such use
shall be corrected by Building Manager at Subtenant's expense.
3. The contractor shall furnish Building Manager with a list of
subcontractors prior to commencement of Subtenant's work. This list will include
phone numbers and contacts for the contractor and each subcontractor, including
home and emergency telephone numbers. Any persons not on the approved contractor
list will be denied access to the Premises. NO EXCEPTIONS. Access badges,
authorizing access to the Premises, will be issued by Building Manager to all
personnel designated by the contractor on such list. The contractor and all
construction personnel working over the weekend and after the normal hours shall
provide Building Manager with a list of workers 24 hours prior to the worker
being on site or they will be denied access. The list should also include an
estimated time the contractor and all construction personnel will be working,
the location of the work to be done, the number of employees and the working
supervisor who will be present in the Building during the performance of the
work. Any deviation will require Building Manager's approval.
4. Unless Building Manager requires otherwise, all contractors and other
construction personnel shall enter and exit through the loading dock or main
lobby at all times. Additionally, all contractors and subcontractors shall sign
in and sign out at the security
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desk. Building security personnel have the right to inspect all tool boxes of
any and all construction personnel upon departure from the Building. Loading
dock and freight elevator procedures and hours will be provided by Building
Manager.
5. When working on a tenant-occupied floor, all deliveries are to be
accepted, moved and delivered to the contracted suite by 7:30 a.m. All equipment
and material deliveries shall be made at the loading dock or service entry
between the hours of 6:00 p.m. and 6:00 a.m. Monday through Friday or all day
Saturday and Sunday via a freight reservation. If deliveries are to be made at
other times, prior approval must be obtained from Building Manager. At no other
time will material be transported through the Building lobby or public areas
unless specifically authorized in writing. When making deliveries, reinforced,
nonstaining masonite board acceptable to Building Manager must be installed by
the contractor (in a manner approved by Building Manager) to protect all wall
and floor finishes, including the freight elevator. The contractor and
subcontractors shall consult with Building Manager for complete rules and
procedures relating to corridor, elevator and public area protection. All
contractors and other construction personnel shall leave the Building lobby and
other public areas in a neat and clean condition consistent with other
Comparable Buildings (including, without limitation, sweeping and mopping the
lobby floors, dusting all furniture in the lobby and otherwise removing all
debris and dust) and otherwise in a condition satisfactory to Building Manager
and Sublandlord. Subtenant shall be responsible for all costs incurred by
Building Manager if this clean-up work is not performed satisfactorily.
6. The contractor must notify Building Manager prior to conducting any of
Subtenant's work that will require ceiling access, specifying the areas that
will be worked on and the length of time needed to complete or perform work in
the space.
7. No drilling, hammering, loud noise, vibrations or disturbances of any
nature will be allowed during the business day (i.e., from 7:00 a.m. to 7:00
p.m., Monday through Friday, and from 9:00 a.m. to 2:00 p.m. on Saturday).
8. The contractor shall keep all spaces affected by Subtenant's work clean
at all times, including all public areas such as corridors, restrooms, janitor's
closets, etc. The contractor shall erect and maintain dust barriers at all exit
areas of construction and proper dust covers (including walk-off mats) on the
floors at exit areas of construction and at the doors to the freight elevator.
The contractor is responsible for taking all extra precautions to safeguard the
floors, walls and/or elevators from damage which may be caused by the movement
of materials, equipment or debris.
9. Sprinkler shut down and construction procedures:
a. The contractor or the subcontractor requiring the shutdown and
draining of the fire sprinkler system on any floor must follow
the Building's procedures for this process.
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b. All work performed on fire sprinklers and/or fire standpipes must
be scheduled with The Building Chief Engineer at least 24 hours
in advance.
c. Isolation and draining of the sprinkler system must be done by
the Building Engineering Department.
d. Prior to start of work, the contractor must report to Building
Manager on the loading dock, and the contractor will be given
instructions and assistance. Building supplied shut-off tags are
to be placed on all closed valves.
10. Construction personnel shall at all times maintain the highest level of
project cleanliness. All construction waste and debris shall be removed via the
freight elevator or stairs to the loading dock on a daily basis and shall not be
allowed to accumulate or produce a fire hazard. No construction waste or debris
may be placed in the Building dumpster/compactor. The contractor and all
construction personnel shall provide for removal of waste and debris from the
Building at their own expense, and shall dispose of all waste and debris in an
environmentally safe manner and in full compliance with all laws and ordinances.
If a dumpster is required (space allowing), the location must be approved by
Building Manager. If the contractor fails or refuses to keep such spaces free of
accumulated waste, debris, dust, etc., Building Manager reserves the right to
enter such spaces (including the Premises) and to clean and remove the debris,
dust, etc. at Subtenant's expense. In addition, all public areas, i.e.,
corridors, restrooms, janitor's closets, etc. shall be maintained and kept free
of construction debris, dust, etc.
11. Removal of combustible objects such as cardboard, empty paint cans,
paint rags and other combustible materials shall occur on a daily basis; such
objects shall be disposed of in an approved receptacle and in an environmentally
safe manner in full compliance with all laws and ordinances. The storage of all
flammable liquids (paint, lacquer thinners, paint thinners, etc.) shall be in UL
approved fire rated (for flammable liquids) storage cabinets or the liquids are
to be removed from the Building daily. If such liquids are to be stored in the
proper storage cabinets, Building Manager shall be notified of their existence,
location and quantity. Upon completion of Subtenant's work, all remaining
flammable liquids shall be removed from the Building and disposed of in an
environmentally safe manner in full compliance with all laws and ordinances. Any
flammable or hazardous materials (i.e. paint) may only be stored on the Premises
with permission of Building Manager who shall designate an area for such
storage. No gasoline operated devices (e.g., concrete saws, coring machines,
welding machines, etc.) shall be permitted within the Building. All work
requiring such devices shall be performed by means of electrically operated
substitutes. All approved gas and oxygen canisters shall be properly chained and
supported to eliminate all potential hazards. At the completion of use, said
containers shall be promptly removed from the Building.
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12. All electrical and telephone rooms on construction floors are to be
kept clean and orderly at all times and must be locked at the end of each
workday. These rooms cannot be used as storage for tools or supplies. At the end
of each day, all garbage and wire remnants are to be removed and a clear pathway
maintained to all panels. Initial access to electrical and telephone equipment
rooms must be arranged through Building Manager. Keys will be issued by Building
security. Doors to electrical and telephone equipment rooms may not be propped
or blocked open in any way. Subtenant equipment may not be installed in
electrical rooms. All panels are to be replaced and properly labeled upon
completion of work. All penetrations through floors, walls and ceilings shall be
properly fire rated upon completion.
13. Upon completion and termination of all electrical circuits, and before
energizing, the contractor must notify the Building's engineer so that a neutral
to ground bonding test can be performed.
14. Specific restrooms will be designated for use by construction
personnel. The contractor is responsible for maintenance while using such
designated restrooms. Upon completion of Subtenant's work, the contractor will
be responsible for restoring all designated restrooms to their original state.
Anyone found using restrooms other than those specified, or anyone using the
janitorial closets, will be subject to dismissal. No one is permitted to use the
janitorial closets without Building Manager permission. Janitors' slop sinks
cannot be used for disposal of flammable material, hazardous waste or drywall.
15. Any use of telephone room chase way must be approved in advance by the
Building's engineer.
16. Construction personnel are not permitted to block open stairway doors
and electrical room doors. These doors provide the fire protection required by
code. Continued violation of this provision shall be subject to a $300 fine.
Janitorial doors shall be kept closed at all times on occupied tenant floors.
During construction of Subtenant's work, stairwells and fire doors leading to
stairwells may not be blocked with materials, equipment, trash or debris of any
kind. Fire doors may not be propped or blocked open in any fashion or in any
way. Keys will be issued by Building security. Stairwells may not be used for
the storage of any equipment, materials, trash or debris of any kind and are to
be kept clear at all times. During construction of Subtenant's work, air
conditioning smoke dampers may not be propped open.
17. All smoke detectors in the construction areas are to be protected
during construction, demolition, sweeping, clean-up or other operations that may
cause considerable dust or smoke. At the end of each work day, after the dust
has settled, each smoke detector that has been protected during the day is to be
uncovered to ensure proper operation.
18. Each contractor and all construction personnel are to take adequate
precautions to prevent the accidental tripping of the fire alarm system. False
alarms shall be fined at
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$400 per offense. All management and other costs connected with resetting false
alarms initiated by the contractor or any construction personnel will be charged
to the Subtenant's account. At completion of every work day, the fire-life-
safety system shall be left trouble and alarm free. The contractor must notify
the Building's engineer of said status before leaving the job site.
19. The contractor must provide and keep available at least four currently
certified 10 pound ABC fire extinguishers on each floor during construction.
They are to be placed inside the controlled area, and all workers are to be
informed as to their location and proper use. In addition, construction
personnel shall be informed by their supervisors of the means of egress from the
floor in case of an emergency, location of fire pull stations and locations of
wet stand pipes.
20. All "J" boxes and fire-life-safety conduits that are installed during
the construction of Subtenant's work must be marked with red spray paint. All
fire-life-safety wiring must be done strictly in accordance with Building
specifications (contact the Building's engineer for such wire specifications).
Failure to adhere to the required color code may result in costly, time-
consuming rewiring. Only life-safety contractors designated or approved by
Building Manager will be allowed to install and/or connect life-safety devices
(i.e., speakers, pull stations and smoke detectors).
21. Prior to core drilling, the contractor must inform Building Manager of
the locations of the core drill for the review and approval of the Building's
engineer. All core drills are to be located from the underside to prevent damage
to any of the exposed fire-life safety conduits on the underside of the decking.
If cores are to be wet-drilled, slurry run-off shall be contained and must not
be allowed to reach tenant areas below the construction. Any slurry that does
migrate to the floor below shall be cleaned by the contractor at its expense.
Coring hours will be 8:00 p.m. to 7:00 a.m. Any penetrations made in steel
structural beams are to be approved in advance by the Building's engineer and
permitted by government authorities, if applicable.
22. Any damage sustained during construction of Subtenant's work to
electrical rooms, telephone rooms, storage closets, janitor closets, restrooms,
or freight lobbies is the responsibility of the Subtenant. A list of pre-
existing damage to these areas should be submitted to Building Manager, and
should be acknowledged by Building Manager, prior to commencement of Subtenant's
work.
23. The contractor must notify Building Manager at least 24 hours prior to
commencing any painting or varnishing. Any spray painting with solvent based
paints must be preapproved by the Los Angeles Fire Department. Painting of
elevator doors is to be supervised by the elevator maintenance company
appropriate to the Building.
24. Building Manager shall at all time have access to the areas in which
Subtenant's work is ongoing regardless of its state, preparation and progress.
Building
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Manager reserves the right to inspect work, stop work and/or have a worker
removed from the job at any time during Subtenant's work if these Rules and
Regulations are not being followed.
25. The Building shall provide electrical service consisting of 120V
outlets with 15A/20A capacity. Any power requirements in excess of that listed
per the Sublease shall be the responsibility of the contractor. The contractor
shall provide temporary electrical devices within the Premises for its
subcontractors' use. The contractor will not be permitted to run extension cords
through public space. The contractor shall use reasonable measures to minimize
energy consumption in the construction area when possible. The Building shall
pay for normal electrical consumption during the construction process. All
lights and equipment must be turned off at the end of the contractor's business
day. If the contractor or any construction personnel leave lights or equipment
on during off hours, Building Manager reserves the right to receive from
Subtenant just compensation for excessive electrical consumption.
26. The contractor and each subcontractor shall implement and maintain an
accident prevention program and an employee safety training program. Proof of
compliance with CALOSHA Rule SB198 must be submitted to Building Manager. All
persons on the job, regardless of whose direct payroll they are on, are required
to respond to safety instructions from the contractor's supervisor. Persons who
do not respond shall be removed from the job.
27. The contractor shall cover all return air transfers when working next
to a tenant-occupied space to control the transmission of dust and dirt.
Covering must be removed at the completion of daily construction. The contractor
shall keep all tenant entrance and exit doors closed to restrict the movement of
dust or dirt and shall close-off temporary openings with polyurethane approved
by the Los Angeles Fire Department. Due to local fire codes, no openings may be
made on a tenant-occupied floor to the corridor unless materials are being
delivered. All HVAC filters in fan rooms shall also be delivered in operable
condition at time of completion (thus temporary filter should be added to the
existing filter). Pre-filters should be installed over all return air openings
until finished floors are installed. If Building filters or equipment require
replacement or cleaning due to construction dust, the contractor will be
charged. The contractor shall verify with the Building's engineer prior to
installation of pre filters.
28. Upon completion of Subtenant's work, the contractor shall submit
complete sets of marked-up as-built drawings and record documents to the
architect (or space planner) for approval. Upon approval, these shall be
forwarded to Building Manager. In addition, Building Manager shall be allowed to
obtain, at no cost to Subtenant or the contractor, copies of manuals for each
item of equipment and apparatus furnished in connection with the Subtenant's
work.
29. At the completion of Subtenant's work, the contractor and each
subcontractor, along with Building Manager's Building maintenance personnel,
shall direct the checkout of
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utilities, operation systems and equipment for readiness, shall assist in their
initial start-up and testing by subcontractors and shall provide general
familiarization training for Building Manager personnel during the checkout and
startup period.
30. No tobacco smoking or chewing will be permitted in occupied or public
areas. Smoking is allowed only in designated areas approved by Building Manager.
It is understood that Building Manager, in its sole discretion, may choose not
to designate any approved areas in the Building for smoking.
31. No radios or other non-functional sound producing equipment will be
permitted on any floor (unless required by code).
32. Respect must be shown to the Building tenants at all times. Rude and
obscene behavior, including foul and abusive language, will be not be tolerated.
Offenders will be asked to remove themselves from the Premises and shall not be
permitted to return.
33. All work performed within the Building's conduits, risers and pathways
(including, without limitation, cabling or wiring to the rooftop of the
Building), work on the rooftop and work which affects or may reasonably be
expected to affect Building systems (such as plumbing, electrical, HVAC, fire-
life-safety, emergency power or the like) must be performed by bonded
contractors or subcontractors specifically approved in advance by Sublandlord.
Upon request, the Building Manager will provide Subtenant with a list of
approved contractors or subcontractors for certain types of projects. Access to
the rooftop shall be scheduled in advance with the Building Manager. A Building
engineer shall accompany all persons performing work or inspecting equipment on
the rooftop, including in the case of emergency, except as otherwise agreed in
Subtenant's Sublease. If rooftop access is required during other than Building
Hours, Subtenant shall pay the cost of the Building's engineer for the time
spent accompanying Subtenant's contractor or other agent to the rooftop.
34. No one shall be allowed to endanger the Building, its premises or its
occupants in any manner whatsoever. If such a situation occurs, the contractor,
any subcontractor, supplier, etc., shall immediately take steps to correct and
eliminate the hazardous condition. In the event that the contractor's personnel
fail to perform in a satisfactory manner, the Building Manager reserves the
right to immediately take steps to remedy the hazard at the contractor's
expense.
35. All corrective work or work performed in occupied spaces at any time
must be scheduled and approved by Building Manager and must be immediately
cleaned up by the workmen prior to their leaving the job or at the end of the
business day if the project is on going. The contractor shall be responsible for
all costs incurred by Building Manager if this clean-up work is not performed
satisfactorily.
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36. All traffic control, flagmen, barricades, etc., as may be necessary or
required by any agency having jurisdiction shall be the sole responsibility of
and at the expense of the contractor.
37. Subtenant shall contact the Building Manager to schedule work on the
following Building systems: (Any disruption of services will be scheduled at
Building Manager's discretion.)
A. Domestic water.
B. Fire alarm or speaker.
C. Electrical tie-ins to Base Building or the addition of equipment
to any suite other than the subtenant suite except subpanels
located within the subtenant premises.
D. Sprinkler system.
E. Any work that will take place outside the demised subtenant
premises.
F. Any tie-ins that may affect other subtenant spaces.
If a Building alarm is turned off for the contractor's work, the contractor must
notify Building Manager upon completion so the system can be tuned back on as
soon as possible.
38. No graffiti or vandalism will be tolerated. Any individual caught in
the act shall be immediately removed from the Premises and will not be allowed
to return. In addition, all repairs will be at the contractor's expense.
39. Wet paint signs must be posted in all public areas when appropriate.
40. The contractor/subcontractors may park in designated spaces only. Any
vehicles found in unauthorized spaces will be subject to towing.
41. No contractor shall be allowed to start any work in the Building
without having a current certificate of insurance on file with Building Manager.
The contractor must keep current insurance certificates on all subcontractors.
Any contractor or subcontractor performing work found not to have current
insurance will be immediately ordered off the Premises. General contractors
shall list the following as additionally insured:
Xxxxx Fargo Bank. N.A.
----------------------
Xxxxx Lang Wootton
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42. The contractor/subcontractors shall obtain and pay for a City of Los
Angeles business license.
43. The contractor/subcontractors shall obtain at their expense, all
permits and licenses necessary to perform the work and shall obtain at their
expense, all permits and licenses necessary to perform the work and shall comply
will all laws, ordinances, State and
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Federal government regulations, and all rules or regulations of any board or
commission or other duly qualified body.
44. All work shall be performed in accordance with all applicable laws and
the rules and regulations of all City, State and Federal agencies having
jurisdiction over the work.
45. No work is to be performed, nor materials stored in public areas. No
staging of trucks or materials will be allowed in areas which may affect traffic
flow to the surrounding properties or ingress and egress to Building entrances,
fire lanes, reserved parking areas, etc.
46. Rubber wheels are required on all vehicles transporting materials in
the Building.
47. All equipment and material will be designed and attached for seismic
loading in accordance with governmental agencies having jurisdiction over the
work.
48. Material storage shall be limited to the following area of the tenant
floor: intended construction area.
49. The contractor, or its agent, shall provide safety barricades or cables
at floor penetrations.
50. Subtenant shall take such action as is necessary to confirm that all
contractors, subcontractors and other construction personnel are aware of these
construction rules, including, if necessary, requiring each to sign a copy
hereof.
The Loading Dock and freight elevator rules and regulations contained in
Exhibit D (Rules and Regulations) shall also apply to periods of construction.
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EXHIBIT I
BUILDING MEASUREMENT GUIDELINES
THE GARLAND CENTER, 0000 XXXX XXXXXXX XXXXXX, XXX XXXXXXX
"Useable Area" shall mean the useable square footage of space to be
measured, calculated pursuant to the standards set forth in ANSI Z65.1-1996,
promulgated by the Building Owners and Managers Association.
"Rentable Area" shall mean the product of (a) the Useable Area of the
space to be measured, calculated as described above, times (b) 1.15.
The Useable Area of the Premises, Rentable Area of the Premises and
Subtenant's Share will be calculated and agreed upon prior to execution and
delivery of this Sublease.
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