EXHIBIT 10.37
EARTHLINK CENTRE
STANDARD MODIFIED GROSS OFFICE LEASE
W I T N E S S E T H
This lease ("LEASE") is entered into by and between Limar Realty Corp. #6,
a California corporation ("LANDLORD") and EarthLink Network, Inc., a Delaware
corporation ("TENANT"). For and in consideration of the payment of rents and the
performance of the covenants herein set forth by Tenant, Landlord does lease to
Tenant and Tenant accepts the Premises described below subject to the agreements
herein contained.
1. BASIC LEASE TERMS
a. DATE OF LEASE: October 5, 1999
b. TENANT: EarthLink Network, Inc.
Address (of the Premises): 000 Xxxxx Xxxxxxxx Xxxxxx
(AKA 000 Xxxxxx Xxxxx Xxxxx Xxx.)
Address (for Notices): EarthLink Network, Inc.
0000 Xxx Xxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxxx
with copy to: Hunton & Xxxxxxxx
Bank of America Plaza
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attn: S. Xxxxx Xxxxxxx
c. LANDLORD: Limar Realty Corp. #6
Address (for Notices): 0000 Xx. Xx Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxxxx
d. TENANT'S USE OF PREMISES: General office use including call
center, data center operators
and/or sales.
e. PREMISES AREA: 125,348 Rentable Square Feet ("RSF"),
consisting of the entire second
floor area of the Project.
f. PROJECT AREA: 230,852 RSF, located in a two
(2) story building together with a
partial lower level.
g. TENANT'S SHARE: 54.30% (125,348/230,852)
h. BASE YEAR: Calendar year 2000
i. TERM (inclusive): Commencement Date: November 15, 1999
("COMMENCEMENT DATE")
Expiration Date: September 30, 2007
("EXPIRATION DATE")
Number of Months: approximately 94.5333
j. BASE RENT: See Section 32.
k. BASE RENT ADJUSTMENT:
STEP INCREASE. The step adjustment provisions of Section 4.b. apply
for the periods shown below:
PERIODS (INCLUSIVE) MONTHLY BASE RENT
5/15/02 - 11/14/04 $213,091.60
11/15/04 - 9/30/07 $225,626.40
l. TOTAL TERM BASE RENT (assumes space is taken down according to
Section 32. net of rental abatement): $19,116,064.96.
m. PREPAID BASE RENT: $120,000.00 (THE "PREPAID BASE RENT")
n. TENANT'S NUMBER OF NON-RESERVED PARKING SPACES: 414
o. SECURITY DEPOSIT: $225,626.40
p. BROKER(S): Xxxxxxx Realty Corporation and Insignia/ESG, Inc.
q. GUARANTOR(S): None.
r. EXHIBITS: Exhibits lettered "A" through "F" are attached hereto
and made a part hereof.
2. PREMISES.
a. PREMISES. Landlord leases to Tenant the premises described in Section
1. and in EXHIBIT A (the "PREMISES"). Subject to (1) any additional
work Landlord has agreed herein to do, including, without limitation,
that work which Landlord is required to perform pursuant to the
provisions of Section 29 below, (2) the terms and representations of
this Lease, including, without limitation, those set forth in Sections
8 and 29 below, and (3) Landlord's agreement to cause the Project to
comply with any notice (as defined in subclause (A) and (B) below, a
"GOVERNMENTAL NOTICE") which is (A) issued either before or after the
Date of this Lease by a governmental authority with jurisdiction
requesting work to be performed in the Project (including any
elevators and/or stairwells serving the Premises) and (B) for the
purpose of causing the Project to be in compliance with a zoning,
municipal, federal, county or state law, ordinance or regulation in
effect as of the date of execution and delivery of this Lease
(exclusive of an order to cause such compliance with respect to any
improvements to and/or the use of the interior of the Premises;
provided, however, that if and as long as Tenant utilizes improvements
in the Premises in the condition of such improvements existing as of
the Date of Lease without undertaking any modifications thereto,
Landlord shall cause such existing improvements to comply with any
such Governmental Notice), Tenant hereby accepts the Premises in their
condition existing as of the date of the
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execution hereof, subject to all applicable zoning, municipal, county
and state laws, ordinances and regulations governing and regulating
the use of the Premises, and accepts this Lease subject thereto and to
all matters disclosed thereby and by any exhibits attached hereto. The
rentable square footage of the Premises shall include a portion of the
common area of the Project and the occupied space located within the
Project and dedicated to the service of the Project. Tenant agrees
with the square footage specified for the Premises in Section 1. and
will not hereafter challenge such determination and agreement.
Landlord shall have the right, in Landlord's sole good faith
discretion: (i) to make changes, including, without limitation,
changes in the location, size, shape, number and appearance to the
Project (excluding the Premises to the extent that size, shape, and/or
location is affected) interior and exterior, including but not limited
to the lobbies, windows, stairways, air shafts, elevators, restrooms,
driveways, entrances, parking spaces (provided that Tenant's allotted
parking spaces shall not be reduced and shall otherwise be located in
similar proximity to the Premises), parking areas, loading and
unloading areas, ingress, egress, direction of traffic, decorative
walls, landscaped areas and walkways; (ii) to close temporarily any
part of the Project for maintenance purposes so long as reasonable
access to the Premises remains available; (iii) to designate other
land and improvements outside the boundaries of the Project to be a
part of the Project, provided that such other land and improvements
have a reasonable and functional relationship to the Project; (iv) to
add additional buildings and improvements to the Project; (v) to use
the common areas while engaged in making additional improvements,
repairs or alterations to the Project or any portion thereof; and (vi)
to do and perform such other acts and make such other changes in, to
or with respect to the Project as Landlord may, in the exercise of
sound business judgment deem to be appropriate, provided (x) none of
the above adversely interferes in any specific and significant manner
given Tenant's actual requirement with respect to the utilization of
the affected portion of the Premises for the purpose of conducting
Tenant's business therein, taking into account Landlord's contractual
obligations with respect to the Project, (y) Tenant's obligations
hereunder are not increased, (z) Tenant's rights hereunder are not
decreased, and (aa) Landlord's activities shall not affect "mission
critical" areas of the Premises, as such areas are identified by
Tenant to Landlord promptly following receipt by Tenant of notice from
Landlord of its intended activities.
b. ACCEPTANCE; QUIET ENJOYMENT. Landlord represents that it is the fee
simple owner of the Premises and has full right and authority to make
this Lease. Landlord hereby leases the Premises to Tenant and Tenant
hereby accepts the same from Landlord, in accordance with the
provisions of this Lease. Landlord covenants that Tenant shall have
peaceful and quiet enjoyment of the Premises during the Term (as
defined below) of this Lease. Tenant covenants that it will not
interfere with other tenants' quiet enjoyment of their premises.
3. TERM. The term ("TERM") of this Lease is for the period that commences at
12:01 a.m. on the Commencement Date and expires at 11:59 p.m. on the
Expiration Date.
4. RENT.
a. BASE RENT. Tenant shall pay Landlord in lawful money of the United
States, without notice, demand, offset or deduction, rent in the
amount(s) set forth in Section 1. which shall be payable in advance on
the first day of each and every calendar month ("BASE RENT") provided,
however, the first month's Base Rent is due and payable upon mutual
execution and delivery of this Lease. Unless otherwise specified in
writing by Landlord, all installments of Base Rent shall be payable to
Limar Realty Corp. #6, Department #44294, X.X. Xxx 00000, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000-0000. Base Rent for any partial month at
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the beginning or end of this Lease will be prorated in accordance with
the number of days in the subject month.
For purposes of Section 467 of the Internal Revenue Code, the parties
to this Lease hereby agree to allocate the stated Base Rent provided
herein to the periods which correspond to the actual Base Rent
payments as provided under the terms and conditions of this Agreement.
b. STEP INCREASE. The Base Rent shall be increased periodically to the
amounts and at the times set forth in Section 1.k.
c. RENT WITHOUT OFFSET AND LATE CHARGE. All Rent shall be paid without
prior demand or notice and without any deduction or offset whatsoever.
All Rent shall be paid in lawful currency of the United States of
America. Tenant acknowledges that late payment by Tenant to Landlord
of any Rent will cause Landlord to incur costs not contemplated by
this Lease, the exact amount of such cost being extremely difficult
and impracticable to ascertain. Such costs include, without
limitation, processing and accounting charges and late charges that
may be imposed on Landlord by the terms of any encumbrance or note
secured by the Premises. Therefor, if any Rent is not received by
Landlord within ten (10) days of its due date, Tenant shall pay to
Landlord a late charge equal to ten percent (10%) of such overdue
payment. Landlord and Tenant hereby agree that such late charge
represents a fair and reasonable estimate of the costs that Landlord
will incur by reason of any such late payment and that the late charge
is in addition to any and all remedies available to the Landlord and
that the assessment and/or collection of the late charge shall not be
deemed a waiver of any other default. Additionally, unless a late
charge has been paid by Tenant with respect to such delinquent Rent as
provided above, all such delinquent Rent or other sums, plus this late
charge, shall bear interest from the due date thereof at the lesser of
ten percent (10%) per annum or the maximum legal interest rate
permitted by law. Any payments of any kind returned for insufficient
funds will be subject to an additional handling charge of $25.00.
d. EXPENSES. The purpose of this Section 4.d. is to ensure that Tenant
bears a share of all Expenses (as defined below) related to the use,
operation, maintenance, ownership, repair or replacement, and
insurance of the Project in excess of those incurred during the Base
Year. The term "PROJECT" is defined as all the land and improvements
(including building(s), landscape, parking lot, etc.) as described on
EXHIBIT B. Commencing January 1 of each year ("COMPARISON YEAR")
subsequent to the Base Year (as specified in Section 1.), Tenant shall
pay to Landlord, Tenant's Share (as defined in Section 1.) of any
increases in Expenses related to the Project over and above the
Expenses incurred during the Base Year. Expenses shall be reflective
of a Project at least ninety-five percent (95%) occupied in
determining Base Year and Comparison Year costs.
1) EXPENSES DEFINED. The term "EXPENSES" shall mean all costs and
expenses of the use, operation, maintenance, ownership, repair or
replacement, and insurance of the Project, including, without
limitation, the following costs:
a) All supplies, materials, labor, equipment, and utilities
(except for those utilities which are chargeable to
individual tenants) used in or related to the use, operation
and maintenance of the Project including, without
limitation, window cleaning, security and elevator
maintenance;
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b) All maintenance, management, janitorial, legal, accounting,
insurance and service agreement costs related to the
Project, except for those costs which are chargeable to
individual tenants. Expenses shall include the management
fees of all independent contractors engaged by Landlord or
reasonably charged by Landlord or an affiliate of Landlord
for management services in connection with the Project,
provided that the total management fees charged by Landlord
or an affiliate of Landlord shall not exceed the management
fees normally incurred by owners and operators of properties
similar to the Project which are located in the county in
which the Project is located;
c) All maintenance, replacement and repair costs including
capital expenses that are incurred at the Project after the
Commencement Date of this Lease and which are to be
amortized over the useful life of the asset relating to the
areas within or around the Project, including, without
limitation, air conditioning systems, sidewalks,
landscaping, service areas, driveways, parking areas
(including resurfacing and restriping parking areas),
walkways, building exteriors (including painting), signs and
directories, repairing and replacing roofs, walls, etc.
Capitalization and amortization of expenses (along with
reasonable actual or implicit financing charges) will be on
a straight line basis over the useful life of the
improvement as reasonably determined by Landlord;
d) Amortization of capital improvements that are incurred at
the Project after the Commencement Date of this Lease and
which are required by any government authority or which will
improve the operating efficiency of the Project (provided,
however, that the amount of such amortization for
improvements not mandated by government authority shall not
exceed in any year the amount of costs reasonably determined
by Landlord in its reasonable discretion to have been saved
by the expenditure either through the reduction or
minimization of increases which would have otherwise
occurred). Capitalization and amortization of expenses
(along with reasonable actual or implicit financing charges)
will be on a straight line basis in accordance with GAAP;
and
e) Real Property Taxes including all taxes, assessments
(general and special) and other impositions or charges which
may be taxed, charged, levied, assessed or imposed upon all
or any portion of or in relation to the Project or any
portion thereof, any leasehold estate in the Premises or
measured by Rent from the Premises. "REAL PROPERTY TAXES"
shall also include any form of assessment, levy, penalty,
charge or tax (other than estate, corporation, net profits,
transfer, inheritance, net income or franchise taxes)
imposed by any authority having a direct or indirect power
to tax or charge, including, without limitation, any city,
county, state, federal or any improvement or other district,
whether such tax is (1) determined by the value of the
Project or the Rent or other sums payable under this Lease;
(2) determined by the size of the Project (land acreage or
building square footage); (3) upon or with respect to any
legal or equitable interest of Landlord in the Project or
any part thereof; (4) upon this transaction or any document
to which Tenant is a party creating a transfer in any
interest in the Project; (5) in lieu of or as a direct
substitute in whole or in part of or in addition to any real
property taxes on the Project; (6) based on any parking
spaces or parking facilities provided in the Project; or (7)
in consideration for services, such as police protection,
fire protection, street, sidewalk and roadway maintenance,
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refuse removal or other services that may be provided by any
governmental or quasi-governmental agency from time to time
which were formerly provided without charge or with less
charge to property owners or occupants.
2) OPERATING EXPENSES SHALL NOT INCLUDE:
a) Costs paid for directly by Tenant or other tenants;
b) Costs incurred in connection with the financing, sale,
transfer taxes or acquisition of the Project or any portion
thereof;
c) Costs incurred in leasing or procuring tenants (including
without limitation, lease commissions, advertising expenses,
attorneys' fees and expenses of renovating space for
tenants);
d) Executive salaries of off-site personnel employed by
Landlord except for the charge (or pro rata share) of the
property manager of the Project;
e) Expenses for structural capital improvements made to the
Project;
f) Subject to the provisions of Section 4.d.1)c) above,
depreciation on the building or other improvements on the
Project;
g) Legal expenses, fines or penalties for disputes with tenants
and any other professional fees of attorneys, auditors or
consultants not incurred in connection with the normal
maintenance and operation of the Project;
h) Expenses which relate to the preparation of rental space for
tenants, including without limitation building permit,
license and inspections costs incurred with respect to the
installation or improvements made for occupants of the
Project or incurred in renovating or otherwise improving,
decorating, painting or decorating vacant tenant space for
the Project or other occupants of the Project;
i) Costs incurred that are reimbursed by tenants of the
Project, including Tenant, or third parties, including
insurers;
j) Expenses for repair or replacement covered by warranties,
and any costs due to casualty that are covered by insurance
carried by Landlord;
k) Rentals and other payments by Landlord under any ground
lease or other lease underlying the Lease, and interest,
principal, points and other fees on debt or amortization of
any debt secured in whole or part by all or any portion of
the Project;
l) Repairs or replacements caused by Landlord's or Tenant's or
their respective employees' or agents' gross negligence or,
to the extent that the costs thereof are in excess of
$10,000 for any one occurrence or $15,000 as an annual
aggregate, the ordinary negligence of Landlord or Tenant or
their respective employees or agents;
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m) Net income, franchise, capital stock, estate or inheritance
taxes or taxes which are the personal obligation of Landlord
or another tenant of the Project;
n) Landlord's charitable or political contributions;
o) Payments to subsidiaries and affiliates of Landlord for
services to the Project for supplies or other materials to
the extent that the cost of such services, supplies or
materials exceed the cost which would have been paid had the
services, supplies or materials been provided by
unaffiliated parties on a competitive basis (provided,
however, any fee for management services paid to an
affiliate of Landlord shall be in the amount set forth in
Section 4.d.1)b);
p) Specific costs for any capital repairs, replacements or
improvements, except as provided above;
q) Payments for rented equipment, the cost of which would
constitute a capital expenditure not permitted pursuant to
the foregoing if the equipment were purchased;
r) Expenses in connection with services or other benefits which
are not offered to Tenant or for which Tenant is charged
directly but which are provided to another tenant or
occupant of the Project;
s) Any and all costs incurred by Landlord in the operation by
Landlord of any health club or any luncheon or other
restaurant, club or commercial facility;
t) Costs incurred in bringing the Building into compliance with
any code, regulation or law in existence and as enforced as
of the Commencement Date; or
u) Expenses attributable to the development of new buildings in
the Project.
In addition, if any particular work or service otherwise included
in Operating Expenses is not furnished to a tenant or occupant of
the Project who is undertaking to perform such work or service
itself, Operating Expenses shall be deemed to be increased by an
amount equal to the additional Operating Expenses which would
have been incurred if Landlord had furnished such work to such
tenant or occupant.
3) ANNUAL ESTIMATE OF EXPENSES. As soon as practicable for each
Comparison Year, Landlord shall estimate Tenant's Share of
Expenses for the Comparison Year, by multiplying the estimated
Expenses for the Comparison Year in excess of the Expenses for
the Base Year by Tenant's Share (such product being the
"ESTIMATED TENANT'S SHARE OF EXPENSES").
4) MONTHLY PAYMENT OF EXPENSES. Tenant shall pay to Landlord,
monthly in advance as additional Rent, one-twelfth (1/12) of the
Estimated Tenant's Share of Expenses beginning on January 1 and
on the first day of each succeeding month of the Comparison Year.
As soon as practical following each calendar year but not later
than July 1 of the following year, Landlord shall prepare an
accounting of actual Expenses incurred during said year in the
form attached hereto as EXHIBIT E and such accounting shall
reflect the actual amount of Tenant's Share of Expenses;
provided, however, in the event that Landlord fails to deliver
such accounting by July 1 of the following year,
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Landlord shall not be deemed to be in default under this Lease
unless Landlord fails to deliver such accounting within thirty
(30) days after receipt of written notice from Tenant requesting
such accounting. If the additional Rent paid by Tenant under this
Section during the preceding calendar year was more than the
actual amount of Tenant's Share of Expenses for such year, the
amount overcharged shall be paid to Tenant within thirty (30)
days of receipt of such notice. If the additional Rent paid by
Tenant under this Section during the preceding calendar year was
less than the actual amount of Tenant's Share of Expenses for
such year, Landlord shall so notify Tenant and Tenant shall pay
such amount to Landlord within 30 days of receipt of such notice.
Such amount shall be deemed to have accrued during the prior
calendar year and shall be due and payable from Tenant even if
the term of this Lease has expired or this Lease has been
terminated prior to Tenant's receipt of this notice.
5) TENANT'S RIGHT TO AUDIT. Within ninety (90) days after receipt of
landlord's statement setting forth actual Operating Expenses (the
"STATEMENT"), commencing with the Statement for the Base Year,
Tenant shall be entitled to a preliminary review of Landlord's
books and records forming the basis of this Statement by
employees of Tenant. If Tenant is not satisfied with the results
of such employee review, then, Tenant shall have the right to
audit at Landlord's local offices, at Tenant's expense,
Landlord's accounts and records relating to Operating Expenses,
so long as (a) Tenant delivers written notice to Landlord
requesting such audit (the "NOTICE OF AUDIT") within one hundred
ten (110) days after receipt of the Statement, and (b) such audit
must be completed with sixty (60) days after Landlord's receipt
of the Notice of Audit. Such audit shall be conducted by a
certified public accountant approved by Landlord, which approval
shall not be unreasonably withheld. If such audit reveals that
Landlord has overcharged Tenant, the amount overcharged shall be
paid to Tenant within thirty (30) days after the audit is
concluded. If such audit reveals that Landlord has undercharged
Tenant, the amount of undercharge shall be paid by Tenant to
Landlord within 30 days after the audit is conducted. In
addition, if the Statement exceeds the actual Operating Expenses
which should have been charged by Tenant by more than five
percent (5%), the cost of the audit shall be paid by Landlord.
e. RENT. The term "RENT" as used in this Lease shall refer to Base Rent,
Tenant's Share of Expenses, Security Deposit(s), late charges and all
other charges payable by Tenant to Landlord.
f. UTILITIES & JANITORIAL SERVICES. Tenant shall pay for all janitorial
services, water, gas, heat, light, power, sewer, electricity
(including the electricity to run the HVAC system), telephone or other
services(s) metered, chargeable or provided to the Premises. Landlord
reserves the right to install separate meters for any such utility;
Landlord has installed in the Project so-called "check meters" for the
purpose of measuring utility usage. To the extent that separate meters
have not been established for all such utilities, Landlord may
reasonably apportion and xxxx Tenant's usage through the use of
prorations. There shall be no abatement of Rent and Landlord shall not
be liable in any respect whatsoever for the inadequacy, stoppage,
interruption or discontinuance of any utility or service due to riot,
strike, labor dispute, breakdown, accident, repair or other cause
beyond Landlord's reasonable control or in cooperation with
governmental request or directions.
g. LIGHT BULB AND BALLAST REPLACEMENT. During the Term, Tenant shall, at
its sole cost and expense, replace light bulbs in all fixtures and
ballasts in all fluorescent fixtures within the
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Premises, and Landlord shall be responsible for light bulbs and
ballasts (where applicable) in all common area fixtures as required.
5. PREPAID RENT. Upon the mutual execution and delivery of this Lease, Tenant
shall pay to Landlord the Prepaid Base Rent set forth in Section 1., and
such Prepaid Base Rent shall be applied toward the Base Rent due for the
first month of the Term for which Rent is due. Landlord shall not be
required to pay Tenant interest on the Prepaid Base Rent. Landlord shall be
entitled to immediately endorse and cash Tenant's Prepaid Base Rent.
6. SECURITY DEPOSIT. Upon execution of this Lease, Tenant shall deposit a
security deposit ("SECURITY DEPOSIT") in the amount set forth in Section
1., with Landlord. If Tenant is in default, Landlord can (but without any
requirement to do so) use the Security Deposit or any portion of it to cure
the default or to compensate Landlord for any damages sustained by Landlord
resulting from Tenant's default. Upon demand, Tenant shall immediately pay
to Landlord a sum equal to the portion of the Security Deposit expended or
applied by Landlord to restore the Security Deposit to its full amount. In
no event will Tenant have the right to apply any part of the Security
Deposit to any Rent due under this Lease. Landlord's obligations with
respect to the Security Deposit are those of a debtor and not a trustee,
and Landlord can commingle the Security Deposit with Landlord's general
funds. Landlord shall not be required to pay Tenant interest on the
Security Deposit. If Tenant is not in default at the expiration or
termination of this Lease and has fully complied with the provisions of
Section 13.d.6) and Section 26., Landlord shall return the Security Deposit
to Tenant.
7. USE OF PREMISES.
a. TENANT'S USE. Tenant shall use the Premises solely for the purposes
stated in Section 1. and for no other purposes without obtaining the
prior written consent of Landlord. Tenant acknowledges that, except as
provided in writing in this Lease, neither Landlord nor any agent of
Landlord has made any representation or warranty with respect to the
Premises or with respect to the suitability of the Premises to the
conduct of Tenant's business, nor has Landlord agreed to undertake any
modification, alteration or improvement to the Premises. Tenant shall
promptly comply with all laws, statutes, ordinances, orders and
governmental regulations now or hereafter existing affecting the
Premises, excluding any requirements in the Lease that may require
alterations to be performed solely by Landlord. Tenant shall not do or
permit anything to be done in or about the Premises or bring or keep
anything in the Premises that will in any way increase the premiums
paid by Landlord on its insurance related to the Premises. In
connection therewith, Landlord acknowledges that as of the Date of
Lease, to Landlord's actual knowledge, Tenant's anticipated use of the
Premises in accordance with Section 1. above will not cause any such
increase in insurance premiums, based upon Landlord's current
insurance coverage. Tenant will not perform any act or carry on any
practices that may injure the Premises. Tenant shall not use the
Premises for sleeping, washing clothes, cooking (except in accordance
with the Rules and Regulations attached hereto as EXHIBIT C) or the
preparation, manufacture or mixing of anything that emits any
objectionable odor, noises, vibrations or lights onto such other
tenants. If, in Landlord's reasonable judgment, sound insulation is
required to muffle noise produced by Tenant on the Premises, Tenant at
its own cost shall provide all necessary insulation. Tenant shall not
do anything on the Premises which will overload any existing parking
or service to the Premises. Non-domesticated pets and/or animals of
any type shall not be kept on the Premises. Tenant covenants that it
will not interfere with other tenants' quiet enjoyment of their
premises.
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b. RULES AND REGULATIONS. Tenant shall comply with and use the Premises
in accordance with the Rules and Regulations attached hereto as
EXHIBIT C and to any reasonable modifications to such Rules and
Regulations as Landlord may adopt from time to time, provided however
that if any rule or regulation is in conflict with any term, covenant
or condition of this Lease, this Lease shall prevail. In addition, no
such rule or regulation, or any subsequent amendment thereto adopted
by Landlord, shall in any material way alter, reduce or adversely
affect any of Tenant's rights or materially enlarge Tenant's
obligations under this Lease. Landlord agrees to apply such Rules and
Regulations in a fair, equitable and non-discriminatory manner, in
Landlord's reasonable discretion.
8. EMISSIONS; STORAGE, USE AND DISPOSAL OF WASTE
a. EMISSIONS. Tenant shall not:
1) Knowingly permit any vehicle on the Premises to emit exhaust
which is in violation of any governmental law, rule, regulation
or requirement;
2) Discharge, emit or permit to be discharged or emitted, any
liquid, solid or gaseous matter, or any combination thereof, into
the atmosphere or on, into or under the Premises, any building or
other improvements of which the Premises are a part, or the
ground or any body of water which matter, as reasonably
determined by any governmental entity, does or may pollute or
contaminate the same, or is, or may become, radioactive or does,
or may, adversely affect the (a) health or safety of persons,
wherever located, whether on the Premises or anywhere else, (b)
condition, use or enjoyment of the Premises or any other real or
personal property, whether on the Premises or anywhere else, or
(c) Premises or any of the improvements thereto including
buildings, foundations, pipes, utility lines, or landscaping;
3) Produce, or permit to be produced, any intense glare, light or
heat;
4) Create, or permit to be created, any sound pressure level which
will interfere with the quiet enjoyment of any real property
outside the Premises, or which will create a nuisance or violate
any governmental law, rule, regulation or requirement;
5) Create, or permit to be created, any vibration that is
discernible outside the Premises; or
6) Transmit, receive or permit to be transmitted or received, any
electromagnetic, microwave or other radiation which is or may be
harmful or hazardous to any person or property in, or about the
Premises, or anywhere else, excluding, however, any "microwaves"
emitted from a microwave oven and any computer transmissions.
b. STORAGE AND USE.
1) STORAGE. Subject to the uses permitted and prohibited to Tenant
under this Lease, Tenant shall store in appropriate leak proof
containers all solid, liquid or gaseous matter, or any
combination thereof, which matter, if discharged or emitted into
the atmosphere, the ground or any body of water, does or may (a)
pollute or contaminate the same, or (b) adversely affect the (i)
health or safety of persons, whether on the Premises or anywhere
else, (ii) condition, use or enjoyment of the Premises or any
real or personal property, whether on the Premises or anywhere
else, or (iii) Premises.
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2) USE. In addition, without Landlord's prior written consent,
Tenant shall not use, store or permit to remain on the Premises
any solid, liquid or gaseous matter which is, or may become
radioactive. If Landlord does give its consent, Tenant shall
store the materials in such a manner that no radioactivity will
be detectable outside a designated storage area and Tenant shall
use the materials in such a manner that (a) no real or personal
property outside the designated storage area shall become
contaminated thereby and (b) there are and shall be no adverse
effects on the (i) health or safety of persons, whether on the
Premises or anywhere else, (ii) condition, use or enjoyment of
the Premises or any real or personal property thereon or therein,
or (iii) Premises or any of the improvements thereto or thereon.
3) HAZARDOUS MATERIALS. Subject to the uses permitted and prohibited
to Tenant under this Lease, Tenant shall store, use, employ,
transport and otherwise deal with all Hazardous Materials (as
defined below) employed on or about the Premises in accordance
with all federal, state, or local law, ordinances, rules or
regulations applicable to Hazardous Materials in connection with
or respect to the Premises.
c. DISPOSAL OF WASTE.
1) REFUSE DISPOSAL. Tenant shall not keep any trash, garbage, waste
or other refuse on the Premises except in sanitary containers and
shall regularly and frequently remove same from the Premises.
Tenant shall keep all containers or other equipment used for
storage or disposal of such materials in a clean and sanitary
condition.
2) SEWAGE DISPOSAL. Tenant shall properly dispose of all sanitary
sewage and shall not use the sewage disposal system (a) for the
disposal of anything except sanitary sewage or (b) for amounts
reasonably contemplated by the uses permitted under this Lease.
Tenant shall keep the sewage disposal system serving the Premises
free of all obstructions and in good operating condition. As of
the date of this Lease, Landlord has not received any notice of
noncompliance with respect to such sanitary sewage disposal
system from any governmental authority or other third party.
3) DISPOSAL OF OTHER WASTE. Tenant shall properly dispose of all
other waste or other matter delivered to, stored upon, located
upon or within, used on, or removed from, the Premises by Tenant,
its employees, agents, contractors, invitees (or other persons or
entities under the control of Tenant) in such a manner that it
does not, and will not, adversely affect the (a) health or safety
of persons, wherever located, whether on the Premises or
elsewhere, (b) condition, use or enjoyment of the Premises or any
other real or personal property, wherever located, whether on the
Premises or anywhere else, or (c) Premises or any of the
improvements thereto or thereon including buildings, foundations,
pipes, utility lines, landscaping or parking areas.
d. INFORMATION. Tenant shall provide Landlord with any and all
information regarding Hazardous Materials in the Premises, including
copies of all filings and reports to governmental entities at the time
they are originated, and any other information requested by Landlord.
In the event of any accident, spill or other incident involving
Hazardous Materials, Tenant shall immediately report the same to
Landlord and supply Landlord with all information and reports with
respect to the same. All information described herein shall be
provided to Landlord regardless of any claim by Tenant that it is
confidential or privileged.
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e. COMPLIANCE WITH LAW. Notwithstanding any other provision in this Lease
to the contrary, to the extent necessary to perform their respective
obligations under this Lease, each party hereto shall comply with all
laws, statutes, ordinances, regulations, rules and other governmental
requirements now or hereafter existing, and in particular, relating to
the storage, use and disposal of Hazardous Materials.
f. INDEMNITY. Tenant hereby agrees to indemnify, defend and hold
Landlord, its agents, employees, lenders, shareholders, directors,
representatives, successors and assigns harmless from and against any
and all actions, causes of action, losses, damages, costs, claims,
expenses, penalties, obligations or liabilities of any kind whatsoever
(including but not limited to reasonable attorneys' fees) arising out
of or relating to any Hazardous Materials employed, used, transported
across, or otherwise brought upon the Premises by Tenant (or invitees,
or persons or entities under the control of Tenant) in connection with
or with respect to the Premises. Notwithstanding any of the provisions
of this Lease, the indemnity obligation of Tenant pursuant to this
Section 8.f. shall survive the termination of this Lease and shall
relate solely to any occurrence as described in this Section 8.
occurring in connection with this Lease. Landlord hereby agrees to
indemnify, defend and hold Tenant harmless from and against any and
all actions, causes of action, losses, damages, costs, claims,
expenses, penalties, obligations or liabilities of any kind whatsoever
(including reasonable attorneys' fees) arising out of or relating to
Hazardous Materials that (i) are now located in, on, under, about or
emanating to or from the Premises or the Project as of the date of
this Lease, or (ii) have been or will be employed, used, transported
to the Project, for which the Premises are a part thereof, by
Landlord, its agents, employees or contractors. For purposes of this
Lease the term "HAZARDOUS MATERIALS" shall mean any hazardous, toxic
or dangerous waste, substance or material, pollutant or contaminant,
as defined for purposes of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. Sections 9601 et
seq.). as amended, or the Resource Conservation and Recovery Act (42
U.S.C. Section 6901 et seq.), as amended, or any other federal, state,
or local law, ordinance, rule or regulation applicable to the
Premises, or any substance which is toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic, or
otherwise hazardous, or any substance which contains gasoline, diesel
fuel or other petroleum hydrocarbons, polychlorinated biphenyls
(PCB's), or radon gas, urea formaldehyde, asbestos or lead. Except as
otherwise disclosed in those certain environmental reports identified
as: (1) Preliminary Environmental Assessment prepared by Dames &
Xxxxx, issued on November 27, 1989; (2) Phase I Report prepared by
Certified Engineering & Testing Company, issued on September 15, 1993;
and (3) Inspection Report prepared by Wagner, Hohns, Inglis, Inc.,
issued on September 15, 1993; each of which has been previously
provided to Tenant, Landlord hereby represents to Tenant that, to its
current, actual knowledge, no Hazardous Materials (except routine
office and janitorial supplies in usual and customary quantities)
presently exists as of the Date of Lease on or under the Project. For
purposes of this Lease, current actual knowledge shall mean the actual
present knowledge of Xxxxxx X. Xxxxxxxxxxx as of the Date of Lease,
without investigation or inquiry of any kind.
9. SIGNAGE.
a. GENERAL. All signage shall meet the criteria described on EXHIBIT F
attached to this Lease, or otherwise comply with Landlord's standard
sign criteria and with rules and regulations set forth by Landlord as
may be reasonably modified from time to time. Landlord shall
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provide building standard tenant identification adjacent to the suite
entrance. Landlord shall have the right to review and approve all
Tenant signage. Tenant shall place no window covering (e.g., shades,
blinds, curtains, drapes, screens, or tinting materials), stickers,
signs, lettering, banners or advertising or display material on or
near exterior or common corridor windows or doors if such materials
are visible from the exterior of the Premises or from the common
corridor, without Landlord's prior written consent, which consent
shall not be unreasonably withheld or delayed. Similarly, Tenant may
not install any alarm boxes, foil protection tape or other security
equipment on the Premises without Landlord's prior written consent,
which shall not be unreasonably withheld, conditioned or delayed. Any
material violating this provision may be destroyed by Landlord without
compensation to Tenant.
b. DIRECTORY BOARD LISTINGS. To the extent there is a central directory
board(s) in the building, then, during the Term, at Tenant's sole cost
and expense (except for Tenant's initial listing strip which shall be
provided at Landlord's sole cost and expense), Tenant shall be
entitled to a proportionate amount of listing strips on the directory
board in the lobby of the building, for the purposes of identifying
Tenant and its employees, as well as any of Tenant's sublessees and/or
assignees and their employees. Any changes made by Tenant during the
Term to the directory board listings to reflect additions and/or
deletions, including for any of Tenant's sublessees and/or assignees
and their employees, shall be performed by Landlord, at Tenant's
request and expense.
c. IDENTITY. As long as Tenant is paying rent for over 80,000 RSF in the
building located in the Project, and has not otherwise sublet,
assigned or transferred its interest in more than 40,000 RSF in the
aggregate in accordance with the terms of this Lease, the name of the
building shall be exclusive to Tenant and shall be referred to as
EarthLink Centre (currently Pasadena Technology Center).
d. EXTERIOR SIGNAGE. During the Term, Tenant, at Tenant's sole and cost
and expense, shall have the exclusive right to place its name and/or
logo on two (2) sides of the building [as selected by Tenant], said
location to be subject to Landlord's reasonable approval. Existing
grade-level monuments adjacent to the building's entrance on Sierra
Madre Villa Boulevard shall be modified at Tenant's expense to include
EarthLink's identity to be displayed on the top slot. The design,
size, lettering, materials, lighting and colors of all such signage
shall be as described on EXHIBIT F attached to this Lease, and subject
to all sign ordinances in the City of Pasadena and Landlord's
reasonable approval. Upon the expiration or termination of the Lease,
Tenant, at Tenant's sole cost and expense, shall remove all such
exterior signage and repair and repaint to match the exterior of the
building.
e. INTERIOR SIGNAGE. Tenant shall be permitted to install appropriate
signage on the walls of its lobbies and on entrance doors to space
under lease by Tenant. All such signage shall be at Tenant's sole cost
and expense, including the costs of installation and subject to
Landlord's reasonable approval. Upon the expiration or termination of
the Lease, Tenant, at Tenant's sole cost and expense, shall remove all
such interior signage and repair and repaint to match the surrounding
area.
10. PERSONAL PROPERTY TAXES. Tenant shall pay at least ten (10) days prior to
delinquency all taxes assessed against and levied upon Tenant owned
leasehold improvements, trade fixtures, furnishings, equipment and all
personal property of Tenant contained in the Premises or elsewhere. When
possible, Tenant shall cause its leasehold improvements, trade fixtures,
furnishings, equipment and all other personal property to be assessed and
billed separately from the real property of Landlord. If any of Tenant's
said personal property shall be assessed with Landlord's real property,
Tenant shall pay Landlord the taxes attributable to Tenant within ten
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(10) days after receipt of a written statement setting forth the taxes
applicable to Tenant's property. Notwithstanding anything to the contrary
contained herein, Tenant shall have the right to dispute such taxes if
Tenant reasonably believes the same to be incorrect.
11. VEHICLE PARKING. At no cost to Tenant for the initial Term, Landlord grants
to Tenant and Tenant's customers, suppliers, employees and invitees, a
nonexclusive license to use the number of parking spaces set forth in
Section 1. to be located in the designated parking areas in the Project for
the use of motor vehicles during the Term of this Lease. Landlord reserves
the right at any time to grant similar non-exclusive use to other tenants,
to promulgate rules and regulations relating to the use of such parking
areas, including reasonable restrictions on parking by tenants and
employees, to designate specific spaces for the use of any tenant, to make
changes in the parking layout from time to time and to establish reasonable
time limits on parking. Notwithstanding the above, during the Term,
Landlord shall guarantee and make available to Tenant, 7 days a week, 24
hours a day, 365 days a year, as requested from time to time by Tenant, up
to 3.3 parking spaces, on an unassigned basis, in the surface parking areas
for each 1,000 RSF contained within the Premises. Tenant shall have up to
five of such parking spaces, at Tenant's option, located at the closest
available location to the entry of the Premises (excluding only handicapped
parking), in a location to be agreed upon by Landlord and Tenant. Such five
(5) spaces shall be clearly designated for Tenant's sole use. There shall
be no charge or assessments to Tenant, its employees, or visitors for the
use of any such parking during the initial Term.
12. SERVICES AND UTILITIES. Provided that the Tenant is not in default
hereunder, Landlord, as part of Operating Expenses, agrees to furnish to
the Premises during standard business hours (excluding the utilities
required to operate same) and to maintain the heating, ventilating and air
conditioning ("HVAC") systems during the term of the Lease to the Premises
consistent with usage for call center and/or data center operations, Monday
through Sunday, 24 hours a day, 7 days a week, 365 days a year. Landlord as
part of Operating Expenses shall also maintain, clean and keep lighted the
common stairs, common entries, and shall be responsible for the repair,
replacement and/or maintenance of the base building plumbing, surface
parking areas of the Project, common area loading dock, wiring (after
installation and warranty period), roof, and restrooms and exterior windows
in the Project. Landlord as part of Operating Expenses shall provide
security personnel, equipment, procedures and systems as Landlord shall
deem appropriate for buildings of comparable age, size, type and quality of
construction in the Pasadena area (the "COMPARABLE BUILDINGS"), including
with respect to the associated surface parking areas. Tenant at Tenant's
sole cost shall have the right to supplement the security relative to its
Premises and surveillance of parking lots. Except as otherwise set forth
herein, Landlord shall not be in default hereunder or be liable for any
damages directly or indirectly resulting from, nor shall the Rent be abated
by reason of (i) the installation, use or interruption of use of any
equipment in connection with the furnishing of any of the foregoing
services, (ii) failure to furnish or delay in furnishing any such services
where such failure or delay is caused by accident or any condition or event
beyond the reasonable control of Landlord, or by the making of necessary
repairs or improvements to the Premises or Project, or (iii) the
limitation, curtailment or rationing of, or restrictions on, use of water,
electricity, gas or any other form of energy serving the Premises or
Project. Except as otherwise provided herein, Landlord shall not be liable
under any circumstances for a loss of or injury to property or business,
however occurring, through or in connection with or incidental to failure
to furnish any such services. Notwithstanding the above, Landlord and
Tenant agree that there are certain building services without which Tenant
cannot occupy the Premises for the intended purposes under the Lease; such
services are heating, ventilation, air conditioning, electrical service,
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elevator service, surface parking for three and 30/100 (3.3) cars per 1,000
RSF contained within the Premises, and water and plumbing. Should Landlord
fail to provide, during the Term, for any reason other than reason(s)
beyond the control of Landlord any one or more of the aforementioned
services for a continuous period of five (5) days following notice to
Landlord of the problem, or more than twelve (12) days in any one calendar
year, then Base Rental plus Tenant's pro-rata share of Operating Expenses
and Taxes shall xxxxx (in proportion to the degree to which occupancy of
the Premises is unfeasible) until such service or services are restored. If
Tenant uses heat generating machines or equipment in the Premises which
affect the temperature otherwise maintained by the HVAC system, Landlord
reserves the right to install supplementary air conditioning units in the
Premises and the cost thereof, including cost of installation, operation
and maintenance thereof, shall be paid by Tenant to Landlord upon demand by
Landlord.
Except as otherwise provided herein, Tenant shall not, without the written
consent of Landlord, use any apparatus or device in the Premises, including
without limitation, electronic data processing machines, punch card
machines or machines using in excess of 120 volts, which consumes more
electricity than is usually furnished or supplied for the use of Premises
as general office space, as determined by Landlord. Tenant shall not
connect any apparatus with electrical current except through existing
electrical outlets in the Premises. Tenant shall not consume water or
electrical current in excess of that usually furnished or supplied for the
use of Premises as general office space (as determined by Landlord),
without first procuring the written consent of Landlord, which Landlord may
refuse, and in the event of consent, Landlord may have installed a water
meter or electrical current meter in the Premises to measure the amount of
water or electrical current consumed. The cost of any such meter and of its
installation, maintenance and repair shall be paid for by the Tenant, and
Tenant agrees to pay to Landlord promptly upon demand for all such water
and electrical current consumed as shown by said meters, at the rates
charged for such services by the local public utility plus any additional
expense incurred in keeping account of the water and electrical current so
consumed. If a separate meter is not installed, the excess cost for such
water and electrical current shall be established by an estimate made by a
utility company or electrical engineer hired by Landlord at Tenant's
expense. Notwithstanding anything to the contrary contained herein, upon
the prior written request of Tenant, Tenant may use additional electricity
in excess of that usually furnished for use of the Premises as general
office space, so long as Tenant's excess usage does not overburden the
existing power supplied to the Project or otherwise adversely affect the
use of other tenants in the Project; provided further, however that Tenant
shall be responsible, at Tenant's sole cost and expense, for the
installation of any additional transformers and/or distribution panels (or
any upgrades to existing transformers and/or distribution panels) necessary
to accommodate such additional electricity requirements.
Landlord shall furnish elevator service, lighting replacement for building
standard lights, restroom supplies, and window washing for the Premises and
the Project in a manner that such services are customarily furnished to
comparable office buildings in the area.
13. REPAIRS AND MAINTENANCE.
a. LANDLORD'S OBLIGATION. Landlord and Tenant have reviewed the heating,
ventilation and air conditioning equipment serving the Premises, and
Landlord shall deliver the Premises to Tenant free of deferred
maintenance on such equipment. Landlord shall maintain, in good order,
condition and repair the Project and the Premises except to the extent
that Tenant (or other tenants of the Project) are otherwise obligated
for such maintenance.
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b. TENANT'S OBLIGATIONS.
1) Tenant at Tenant's sole expense shall, except for services
furnished by Landlord pursuant to Section 13.a. hereof, maintain
the Premises in good order, condition and repair, including the
interior surfaces of the ceilings, walls and floors, all doors,
all interior windows, and building standard fixtures, building
standard furnishings and special items and equipment installed by
or at the expense of Tenant.
2) Except as otherwise set forth herein, Tenant shall be responsible
for all repairs in and to the Premises and Project, the need for
which arises out of (i) the installation, removal, use or
operation of Tenant's property in the Premises, (ii) the moving
of Tenant's property into or out of the Project, or (iii) the
act, omission, misuse or negligence of Tenant, its agents,
contractors, employees or invitees.
3) If Tenant fails to maintain the Premises in good order, condition
and repair, Landlord shall give Tenant notice to do such acts as
are reasonably required to so maintain the Premises. If Tenant
fails to promptly commence such work and diligently prosecute it
to completion, then Landlord shall have the right to do such acts
and expend such funds at the expense of Tenant as are reasonably
required to perform such work. Any amount so expended by Landlord
shall be paid by Tenant promptly after demand with interest at
the prime commercial rate then being charged by Xxxxx Fargo Bank
plus two percent (2%) per annum, from the date of such work, but
not to exceed the maximum rate then allowed by law. Landlord
shall have no liability to Tenant for any damage, inconvenience
or interference with the use of the Premises by Tenant as a
result of performing any such work; provided, however, in
connection therewith, Landlord shall use reasonable efforts to
minimize interference with Tenant's business operations in the
Premises.
4) AS-IN CONDITION. The parties affirm that Landlord, its
subsidiaries, officers, shareholders, directors, agents and/or
employees have made no representations to Tenant respecting the
condition of the Premises except as specifically stated herein.
5) AMERICANS WITH DISABILITIES ACT. Tenant acknowledges that as of
the Commencement Date, the Premises may not comply with the
Americans with Disabilities Act of 1990 ("ADA"), and that
Landlord shall have no obligation with respect to any such
failure of the Premises to so comply. Notwithstanding the
foregoing, Landlord shall cause the Project (outside of the
perimeters of the Premises as outlined on the rendering attached
as EXHIBIT A and including all Common Areas within the Premises)
to comply with the ADA as of the Commencement Date of this Lease
at no cost and expense to Tenant unless such compliance is
required as a result of a unique or special use of the Premises
by Tenant in comparison with the typical use of similar space for
office purposes in the vicinity of the building; provided,
however, that in no event shall Tenant be required to pay for any
changes to the restroom facilities for the Project as a result of
the permitting and construction of the Tenant Improvements other
than those restrooms existing within the Premises or any
elevators or stairwells. Tenant shall, at its cost, at any time
during the Term as required by any applicable governmental agency
having jurisdiction over the Premises, make such modifications
and alterations to the Premises as may be required after the Date
of Lease in order to fully comply with the provisions of the ADA,
as from time to time amended, and any and all regulations issued
pursuant to or in connection with the ADA in such a manner as to
satisfy the applicable governmental agency or agencies requiring
remediation. Tenant shall at least thirty
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(30) days prior to the commencement of any construction in
connection with satisfaction of the ADA, give written notice to
Landlord of its intended commencement of construction together
with sufficient details so as to reasonably disclose to Landlord
the nature of the proposed construction, copies of any notices
received by Tenant from applicable governmental agencies in
connection with the ADA and such other documents or information
as Landlord may reasonably request. In any event, notwithstanding
anything to the contrary contained in this Lease, prior to the
termination of the Term, Tenant shall, at its cost, make such
modifications and alterations to the Premises as may be required
to comply fully with the ADA as from time to time amended and any
and all regulations issued thereunder; provided, however, that if
Tenant is made aware that such modifications and alterations will
be required to be constructed within the Premises during the last
twenty-four (24) months of the term of this Lease, then Tenant's
financial obligation with respect to such construction shall be
limited ("ADA COST LIMITATION") to a maximum of $120,000, if
twenty-four (24) months remain in the Term, $115,000 if
twenty-three (23) months remain in the Term, and so forth
thereafter, continuing to be calculated on a sliding scale,
reduced monthly by $5,000, through the end of the Term of this
Lease; provided, however, if the Term of this Lease is extended
pursuant to Section 33 below or otherwise, then the ADA Cost
Limitation shall be rescinded and any prior subsidy by Landlord
with respect thereto shall be refunded by Tenant to Landlord
within thirty (30) days of Tenant's exercise of such option to
extend or the execution of such other agreement by Tenant to
extend the Term of this Lease. By way of illustration, if twelve
(12) months remain in the Term, such maximum financial obligation
shall be $60,000. Landlord shall be responsible for the cost of
the balance of such work. Tenant shall give the Landlord thirty
(30) days prior written notice as described above in connection
with any such construction. Any and all construction required to
so comply with the ADA shall be completed by Tenant prior to the
expiration of the Term.
c. COMPLIANCE WITH GOVERNMENTAL REGULATIONS. Except as otherwise
provided herein, Tenant shall, at its own cost and expense,
promptly and properly observe and comply with all present and
future orders, regulations, directions, rules, laws, ordinances,
and requirements of all governmental authorities (including but
not limited to state, municipal, county and federal governments
and their departments, bureaus, boards and officials) arising
from the use or occupancy of, or applicable to, the Premises or
privileges appurtenant to or in connection with the enjoyment of
the Premises. Except as otherwise provided herein, Tenant shall
also comply with all such rules, laws, ordinances and
requirements at the time Tenant makes any alteration, addition or
change to the Premises. To the extent necessary to perform its
obligations under this Lease, including the obligations
specifically referenced in Section 2.a. above, Landlord shall
comply with all present and future orders, regulations,
directions, rules, laws, ordinances, and requirements of all
governmental authorities (including but not limited to state,
municipal, county and federal governments and their departments,
bureaus, boards and officials) arising from the use or occupancy
of, or applicable to, the Project.
d. MISCELLANEOUS.
1) Landlord and Tenant shall each do all acts required to
comply with all applicable laws, ordinances and rules of any
public authority relating to their respective maintenance
obligations as set forth herein.
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2) To the extent that it is inconsistent with any provisions of
this Lease, Tenant expressly waives the benefits of any
statute now or hereafter in effect which would otherwise
afford the Tenant the right to make repairs at Landlord's
expense or to terminate this Lease because of Landlord's
failure to keep the Premises in good order, condition and
repair.
3) Tenant shall not place a load upon any floor of the Premises
which exceeds the load per square foot which such floor was
designed to carry, as reasonably determined by Landlord or
Landlord's structural engineer. The cost of any such
determination made by Landlord's structural engineer shall
be paid for by Tenant upon demand. Tenant shall not install
business machines or mechanical equipment which cause noise
or vibration to such a degree as to be reasonably
objectionable to Landlord or other Project tenants.
4) Except as otherwise expressly provided in this Lease,
Landlord shall have no liability to Tenant nor shall
Tenant's obligations under this Lease be reduced or abated
in any manner whatsoever by reason of any inconvenience,
annoyance, interruption or injury to business arising from
Landlord making any repairs or changes which Landlord is
required to make or is permitted to make by this Lease or by
any tenant's lease or is required by law to make in or to
any portion of the Project or the Premises. Landlord shall
nevertheless use reasonable efforts to minimize any
interference with Tenant's business in the Premises.
5) Tenant shall give Landlord prompt notice of any damage to or
defective condition in any part or appurtenance of the
Project's mechanical, electrical, plumbing, HVAC or other
systems serving, located in or passing through the Premises.
6) Upon the expiration or early termination of this Lease,
Tenant shall return the Premises to Landlord clean and in
the same condition as on the date of completion of the
initial tenant improvements to the Premises, except for
normal wear and tear. Any damage to the Premises, including
any structural damage, resulting from Tenant's use or from
the removal of Tenant's fixtures, furnishings and equipment
shall be repaired by Tenant prior to the end of the Term of
Tenant's expense.
14. ALTERATIONS. Tenant shall not make any alterations to the Premises,
including any changes to the existing landscaping, without Landlord's prior
written consent. Tenant may make non-structural alterations costing less
than $50,000 per event without Landlord's consent. Regardless of whether
Landlord's consent for alteration is required, Tenant must provide Landlord
at least fifteen (15) business days prior to the commencement of any
alteration with a complete description of each such alteration including
any building permit drawing(s) and specifications. Landlord may post
notices regarding non-responsibility in accordance with the laws of the
state in which the Premises are located. All alterations made by Tenant,
whether or not subject to the approval of Landlord, shall be performed by
Tenant and its contractors in a first class workmanlike manner and permits
and inspections shall be obtained from all required governmental entities.
Any alterations made shall remain on and be surrendered with the Premises
upon expiration or termination of this Lease, except that Landlord may, in
connection with Tenant's request for Landlord's approval of any such
alteration, elect to require Tenant to remove some or all of the
alterations which Tenant may have made to the Premises ("REQUIRED
REMOVABLES"). If Landlord so elects, Tenant shall at its own cost restore
the Premises to the condition designated by Landlord in its election or
pursuant to any prior approval, before the last day of the Term. Should
Landlord consent in writing to Tenant's alteration of the Premises,
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Tenant shall contract with a contractor approved by Landlord for the
construction of such alterations, shall secure all appropriate governmental
approvals and permits, and shall complete such alterations with due
diligence in compliance with plans and specifications approved by Landlord
(if required). Tenant shall pay all costs for such construction and shall
keep the Premises free and clear of all mechanics' liens which may result
from construction by Tenant. Tenant's property shall include, without
limitation, Tenant's furniture, furnishings, business machines and
equipment, computer conduits, communications equipment and such other
property as may be required in the conduct of Tenant's business. Tenant
shall have the right, but not the obligation (except at the expiration or
prior termination of the Term), to remove the same at any time, to finance
the purchase thereof, to grant security interests therein and to otherwise
encumber same.
15. RELEASE AND INDEMNITY. As material consideration to Landlord, Tenant agrees
that, except as otherwise provided herein, Landlord shall not be liable to
Tenant for any damage to Tenant or Tenant's property from any cause, except
for damages resulting from Landlord's gross negligence or willful
misconduct or resulting from Landlord's ordinary negligence to the extent
that (i) Landlord and/or its property manager for the Project has received
prior notice specifically describing the activity or condition allegedly
constituting ordinary negligence by Landlord, and Landlord thereafter
continues to engage in such activity or otherwise fails to commence and
diligently pursue to completion the cure of such activity or condition
within a reasonable period of time, and (ii) the results of such ordinary
negligence are not covered by insurance required to be carried by Landlord
or Tenant under the terms of this Lease, and, except as otherwise provided
herein, Tenant waives all claims against Landlord for damage to persons or
property arising for any reason, except for damage resulting directly from
Landlord's gross negligence or willful misconduct (or resulting from
Landlord's ordinary negligence to the extent that (i) Landlord and/or its
property manager for the Project has received prior notice specifically
describing the activity or condition allegedly constituting ordinary
negligence by Landlord, and Landlord thereafter continues to engage in such
activity or otherwise fails to commence and diligently pursue to completion
the cure of such activity or condition within a reasonable period of time,
and (ii) the results of such ordinary negligence are not covered by
insurance required to be carried by Landlord or Tenant under the terms of
this Lease) or Landlord's breach of this Lease. Except to the extent
otherwise provided herein, Tenant shall indemnify and hold Landlord, its
subsidiaries, officers, shareholders, directors, agents and employees
harmless from all damages including attorneys' fees and costs arising out
of any damage to any person or property occurring in, on or about the
Premises or Tenant's use of the Premises or Tenant's breach of any term of
this Lease. Furthermore, Landlord shall indemnify, defend, and hold
harmless Tenant and its affiliates from liability for any and all claims,
liabilities and costs (including attorneys' fees and disbursements) arising
from the gross negligence and willful misconduct of Landlord, its agents,
employees, contractors, invitees and licensees or arising from Landlord's
ordinary negligence to the extent that (i) Landlord and/or its property
manager for the Project has received prior notice specifically describing
the activity or condition allegedly constituting ordinary negligence by
Landlord, and Landlord thereafter continues to engage in such activity or
otherwise fails to commence and diligently pursue to completion the cure of
such activity or condition within a reasonable period of time, and (ii) the
results of such ordinary negligence are not covered by insurance required
to be carried by Landlord or Tenant under the terms of this Lease. This
indemnification is in addition to that indemnification by Landlord provided
in Section 8.f. of this Lease.
16. INSURANCE. Tenant, at its cost, shall maintain public liability and
property damage insurance and products liability insurance with a single
combined liability limit of at least $5,000,000,
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insuring against all liability of Tenant and its representatives,
employees, invitees and agents arising out of or in connection with
Tenant's use or occupancy of the Premises. Public liability insurance,
products liability insurance and property damage insurance shall insure
performance by Tenant of the indemnity provisions of Section 15. Landlord,
Landlord's lender(s) and ground lessor, if any, shall be named as
additional insureds on all required policies, and the policies shall
contain cross liability endorsements. On all its personal property, at its
cost, Tenant shall maintain a policy of standard fire and extended coverage
insurance with boiler and machinery, vandalism and malicious mischief
endorsements and "all risk" coverage on all of Tenant's improvements and
alterations, including without limitation, all items of Tenant
responsibility described in Section 13. in or about the Premises, to the
extent of at least ninety percent (90%) of their full replacement value.
The proceeds from any such policy shall be used by Tenant for the
replacement of personal property and the restoration of Tenant's
improvements or alterations. All insurance required to be provided by
Tenant under this Lease shall release Landlord from any claims for damage
to any person or the Premises and the Project, and to Tenant's fixtures,
personal property, improvements and alterations in or on the Premises or
the Project, caused by or resulting from risks insured against under any
insurance policy carried by Tenant in force at the time of such damage. All
insurance required to be provided by Tenant under this Lease: (a) shall be
issued by insurance companies authorized to do business in the state in
which the Premises are located with a financial rating of at least an A+X
status as rated in the most recent edition of Best's Insurance Reports; (b)
shall be issued as a primary policy; and (c) shall contain an endorsement
requiring at least 30 days prior written notice of cancellation to
Landlord, before cancellation or change in coverage, scope or amount of any
policy. Tenant shall deliver a certificate or copy of such policy together
with evidence of payment of all current premiums to Landlord within 30 days
of execution of this Lease. Tenant's failure to provide evidence of such
coverage to Landlord may, in Landlord's sole good faith discretion,
constitute a default under this Lease. Notwithstanding anything to the
contrary contained in this Lease, to the extent that this release and
waiver does not invalidate or impair their respective insurance policies,
the parties hereto release each other and their respective agents,
employees, officers, directors, shareholders, successors, assignees and
subtenants from all liability for injury to any person or damage to any
property that is caused by or results from a risk which is actually insured
against pursuant to the provisions of this Lease without regard to the
negligence or willful misconduct of the parties so released. Each party
shall use its best efforts to cause each insurance policy it obtains to
provide that the insurer thereunder waives all right of recovery by way of
subrogation as required herein in connection with any injury or damage
covered by the policy. If such insurance policy cannot be obtained with
such waiver of subrogation, or if such waiver of subrogation is only
available at additional cost and the party for whose benefit the waiver is
not obtained does not pay such additional costs after reasonable notice,
then the party obtaining such insurance shall promptly notify the other
party of the inability to obtain insurance coverage with the waiver of
subrogation. During the Term, Landlord shall carry casualty and all-risk
insurance for the full replacement value of the building on such terms as
those contained in policies typically maintained by owners of the
Comparable Buildings (and containing waivers of subrogation). At no cost to
Tenant, Tenant and its designated affiliates shall be named as additional
insureds on any and all policies of liability insurance obtained with
respect to the building and Tenant's occupancy of the Premises, with the
limits and deductibles of such policies to be reasonably determined by
Landlord. Landlord shall obtain and maintain a commercially reasonable
public liability insurance policy.
17. DESTRUCTION. In the event the Premises and/or Project are damaged during
the term of this Lease then Landlord's general contractor in charge of
construction shall certify to Landlord and Tenant within thirty (30) days
following Landlord's receipt of notification of such damage
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whether or not the Premises and Project can be restored within one hundred
eighty (180) days following the occurrence of such destruction. If such
certificate states that the Premises and Project cannot be restored within
said one hundred eighty (180) day period, then either Landlord or Tenant
may terminate this Lease by delivery of notice to the other party. If
neither Landlord nor Tenant elects to terminate this Lease within ten (10)
days following receipt of such certificate, or if such certificate states
that the Premises and Project can be restored within one hundred eighty
(180) days following the occurrence of such destruction, then Landlord
shall promptly commence to restore the Premises in compliance with then
existing laws and shall complete such restoration with due diligence;
provided, however, Landlord shall not be required to restore alterations
made by Tenant which were not approved by Landlord in accordance with the
terms of this Lease or Tenant's trade fixtures and Tenant's personal
property, such excluded items being the sole responsibility of Tenant to
restore provided, however, that Landlord shall, to the extent of available
insurance proceeds, restore tenant improvements to the Premises made by
Tenant such as interior offices, lab and production improvements and other
like improvements. If at any time during the course of the work of repair
and restoration to the Premises and Project Tenant requests that the
general contractor in charge of such work of construction certify to Tenant
as to the date that such work of construction will be substantially
completed and if such certificate states that the date of such substantial
completion will extend beyond that date which is two hundred seventy (270)
days following the date of such destruction (the "OUTSIDE DATE"), then
Tenant shall have the right, within ten (10) days following receipt of such
certificate, to either agree to extend the Outside Date to the date of
substantial completion projected by the general contractor, or to notify
Landlord that Tenant has elected to terminate this Lease. If Landlord,
within ten (10) days following receipt of Tenant's notice of its election
to terminate, agrees to accelerate through overtime or multiple shifts the
date of substantial completion such that the general contractor certifies
to Tenant that, given Landlord's commitment to overtime and/or multiple
shifts, the substantial completion date will occur prior to the Outside
Date, as such date may have been previously extended by Tenant either
directly or through delays caused by Tenant, Tenant's notice of termination
shall be automatically rescinded. Tenant shall have the right following
such rescission to request update certificates from such general contractor
and the procedure described above shall repeat. Tenant hereby waives the
provisions of Civil Codess.1932(2) and Civil Codess.1933(4) with respect to
any destruction of the Premises. In such event, this Lease shall remain in
full force and effect, but there shall be an abatement of Rent between the
date of destruction and the date of completion of restoration, based on the
extent to which destruction interferes with Tenant's use of the Premises.
If the date of the destruction described above occurs within the last
eighteen months of the term of this Lease, and as a result of such
destruction, Tenant is required in Tenant's reasonable business judgment to
relocate, and, in fact, within thirty (30) days of such destruction Tenant
physically causes, or is substantially under way with, such relocation, of
either (a) substantially all of Tenant's switching equipment or
substantially all of Tenant's other primary "heavy" equipment which
constitutes a fundamental element of Tenant's business operations from the
Premises to temporary premises in order to properly conduct its business or
(b) substantially all elements of Tenant's operations in the Premises to
temporary premises in order to properly conduct its business (provided,
however, that alternative "(b)" shall only be available to Tenant if
Landlord's contractor in charge of repair of such destruction certifies to
the parties, after consultation with Tenant's contractor, that Tenant would
be able, in such Landlord's contractor's judgment, to relocate
substantially all elements of Tenant's operations to temporary premises and
commence operations therein prior to the date by which such destruction
could be repaired by Landlord's contractor), Tenant shall have the right to
terminate this Lease as of the date of such destruction by delivery of
written notice to Landlord within thirty (30) days following such date of
destruction.
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18. CONDEMNATION.
a. DEFINITIONS. The following definitions shall apply: (1) "CONDEMNATION"
means (a) the exercise of any governmental power of eminent domain,
whether by legal proceedings or otherwise by condemnor, and (b) the
voluntary sale or transfer by Landlord to any condemnor either under
threat of condemnation or while legal proceedings for condemnation are
proceeding; (2) "DATE OF TAKING" means the date the condemnor has
right to possession of the property being condemned; (3) "AWARD" means
all compensation, sums or anything of value awarded, paid or received
on a total or partial condemnation; and (4) "CONDEMNOR" means any
public or quasi-public authority, or private corporation or
individual, having power of condemnation.
b. OBLIGATIONS TO BE GOVERNED BY LEASE. If during the Term of the Lease
there is any taking of all or any part of the Premises or the Project,
the rights and obligations of the parties shall be determined strictly
pursuant to this Lease. Each party waives the provisions of Code of
Civil Procedure ss.1265.130 allowing either party to petition the
Superior Court to terminate this Lease in the event of a partial
condemnation of the Premises to the extent such statute is
inconsistent with the provisions of this Section 18.
c. TOTAL OR PARTIAL TAKING. If the Premises are totally taken by
Condemnation, this Lease shall terminate on the Date of Taking. If any
portion of the Premises is taken by Condemnation, this Lease shall
remain in effect, except that Tenant can elect to terminate this Lease
if in Tenant's reasonable judgment the remaining portion of the
Premises is rendered unsuitable for Tenant's continued use of the
Premises. If Tenant elects to terminate this Lease, Tenant must
exercise its right to terminate by giving notice to Landlord within 30
days after the nature and extent of the taking have been finally
determined. If Tenant elects to terminate this Lease, Tenant shall
also notify Landlord of the date of termination, which date shall not
be earlier than 30 days nor later than 90 days after Tenant has
notified Landlord of its election to terminate; except that this Lease
shall terminate on the Date of Taking if the Date of Taking falls on a
date before the date of termination as designated by Tenant. If any
portion of the Premises is taken by Condemnation and this Lease
remains in full force and effect, on the Date of Taking the Rent shall
be reduced by an amount in the same ratio as the total number of
square feet in the Premises taken bears to the total number of square
feet in the Premises immediately before the Date of Taking. Any award
for the taking of all or any part of the Premises under the power of
eminent domain or any payment made under threat of the exercise of
such power shall be the property of Landlord, whether such Award shall
be made as compensation for diminution in value of the leasehold or
for the taking of the fee, or as severance damages; provided, however,
that Tenant shall be entitled to any compensation separately awarded
to Tenant for Tenant's relocation expenses and/or loss of Tenant's
trade fixtures.
19. ASSIGNMENT OR SUBLEASE
a. Tenant shall not assign or encumber its interest in this Lease or the
Premises or sublease all or any part of the Premises or allow any
other person or entity (except Tenant's authorized representatives,
employees, invitees or guests) to occupy or use all or any part of the
Premises without first obtaining Landlord's consent, which consent
shall not be unreasonably withheld. Any assignment, encumbrance or
sublease without Landlord's prior written consent shall be voidable
and at Landlord's election, shall constitute a default. If Tenant is a
partnership, a withdrawal or change, voluntary, involuntary or by
operation of law of any partner, or the dissolution of the
partnership, shall be deemed a voluntary assignment. If Tenant
consists of more than one person, a purported assignment, voluntary or
involuntary or by operation of
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law from one person to the other shall be deemed a voluntary
assignment. Subject to the last sentence of this Section 19.a, if
Tenant is a corporation, any dissolution, merger, consolidation or
other reorganization of Tenant, or sale or other transfer of a
controlling percentage of the capital stock of Tenant, or the sale of
at least fifty percent (50%) of the value of the assets of Tenant
shall be deemed a voluntary assignment. Notwithstanding the sentence
immediately above, if the Tenant is a corporation, the Tenant shall be
entitled to assign this Lease without Landlord's prior written consent
to: (i) a successor corporation related to Tenant by merger,
consolidation or non-bankruptcy reorganization, provided that the
surviving corporation in connection with any such assignment shall
have a minimum net worth as of the date of the assignment at least
equal to that of Tenant immediately prior to completion of the subject
merger, consolidation or reorganization, or (ii) a purchaser of
substantially all of Tenant's assets, provided that immediately
following such purchase, such purchaser shall have a net worth at
least equal to that of Tenant immediately prior to the completion of
the subject purchase (a transferee described in (i) or (ii) shall be
referred to as a "PERMITTED TRANSFEREE"). Notwithstanding the
foregoing, in the event that any assignment as described in the
sentence immediately above results in the transferee having a net
worth below the minimum requirements specified in (i) and (ii) above,
respectively, Tenant shall not be required to obtain the prior written
consent of Landlord to such transfer to a Permitted Transferee;
provided that (a) Tenant shall provide written notice to Landlord of
such transfer within thirty (30) days after the effective date of the
transfer, and in connection with such transfer shall provide to
Landlord copies of any documents or other information as Landlord may
reasonably request; (b) for a period of sixty (60) days after the
effective date of such transfer, Landlord and Tenant shall confer in
good faith to attempt to agree on terms and conditions, including
without limitation, modifications of the Lease and/or the requirement
of an increase in the Security Deposit to the extent that such
increase should be commercially reasonable in Landlord's discretion
given the financial condition of Tenant and the assignee following
such event; and (c) if for any reason, Landlord and Tenant do not
agree upon such terms and conditions within such sixty (60) day
period, such transfer to a Permitted Transferee shall constitute an
uncurable event of default under this Lease. Unless otherwise
expressly agreed in writing by Landlord, no assignment shall relieve
Tenant of any of its obligations pursuant to this Lease. All Rent
received by Tenant from its subtenants in excess of the Rent payable
by Tenant to Landlord under this Lease applicable to the portion of
the Premises subleased, after deducting therefrom the commercially
reasonable brokerage commissions, moving allowance to subtenants,
tenant improvements made at the request of subtenants and attorneys'
fees incurred by Tenant in negotiating and documenting the sublease
and any other reasonable subleasing costs, shall be deemed "BONUS
RENT" and fifty percent (50%) of the Bonus Rent shall be promptly paid
to Landlord, or, as the case may be, fifty percent (50%) of all sums
(determined in the same manner as Bonus Rent) to be paid by an
assignee to Tenant in consideration of the assignment of this Lease
shall be promptly paid to Landlord. There shall be no deemed Bonus
Rent in the case of a sublease or assignment to a Permitted
Transferee. If Tenant requests Landlord to consent to a proposed
assignment or subletting, Tenant shall pay to Landlord, whether or not
consent is ultimately given, an amount equal to Landlord's reasonable
attorneys' fees and costs incurred in connection with such request up
to a maximum amount of $2,000.00 per request. Each request for consent
to an assignment or subletting shall be in writing, and shall be
accompanied by information as may be relevant to Landlord's
determination as to the financial and operational responsibility and
stability of
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the proposed assignee or sublessee and the appropriateness of the
proposed use by such assignee or sublessee. Such information shall
include a summary of the proposed use of, and any proposed
modifications to, the Premises. Tenant shall provide Landlord with
such other or additional information and/or documentation as may
reasonably be requested by Landlord. Tenant shall, upon completion of
any assignment or subletting of all or any portion of the Premises,
immediately and irrevocably assign to Landlord as security for
Tenant's obligations under the Lease, all Rent from any such
subletting or assignment. Landlord, as assignee and attorney in fact
for Tenant, shall have the right to collect all rent and other
revenues collectable pursuant to any such sublet or assignment and
apply such rent and other revenues towards Tenant's obligations under
the Lease. Notwithstanding the foregoing provisions of this Section
19, transfers of shares of Tenant which trade in the over-the-counter
market or any recognized national securities exchange shall not
constitute an assignment for purposes of this Lease, provided that the
principal purpose of such transfer or transfers is not to avoid the
restrictions on assignment otherwise applicable under this Section 19.
b. No interest of Tenant in this Lease shall be assignable by involuntary
assignment (as hereinafter defined) through operation of law
(including without limitation the transfer of this Lease by testacy or
intestacy). Each of the following acts shall be considered an
involuntary assignment: (a) if Tenant is or becomes bankrupt or
insolvent, makes an assignment for the benefit of creditors, or
institutes proceedings under the Bankruptcy Act in which Tenant is the
bankrupt; or if Tenant is a partnership or consists of more than one
person or entity, if any partner of the partnership or other person or
entity is or becomes bankrupt or insolvent, or makes an assignment for
the benefit of creditors; or (b) if a writ of attachment or execution
is levied on this Lease; or (c) if any proceeding or action to which
Tenant is a party, a receiver is appointed with authority to take
possession of the Premises. An involuntary assignment shall constitute
a default by Tenant and Landlord shall have the right to elect to
terminate this Lease, in which case this Lease shall not be treated as
an asset of Tenant.
20. DEFAULT. The occurrence of any of the following shall constitute a
default by Tenant: (a) a failure of Tenant to pay Rent within five (5)
days following receipt by Tenant of written notice from Landlord that
such rent was not paid on its due date; (b) abandonment pursuant to
applicable law (California Civil Codess. 1951.3) or vacation of the
Premises without providing security such that vandalism of the
Premises will be minimized in Landlord's reasonable judgment and such
that the cost of insurance will not be increased as a result of such
vacation; or (c) failure to timely perform any other provision of this
Lease which Tenant fails to cure within thirty (30) days after
Tenant's receipt of written notice of default; provided that, if the
default cannot reasonably be cured within thirty (30) days, Tenant
shall not be in default of this Lease if Tenant commences to cure the
default within the thirty (30) day period and diligently and in good
faith proceeds to cure the default. Tenant shall give written notice
to Landlord of any default by Landlord of its obligations pursuant to
this Lease asserted by Tenant (with a copy of such notice to any
lender ("LENDER") against the Premises). Landlord and Landlord's
Lender shall be afforded a reasonable opportunity to cure any claimed
default by Landlord and Landlord shall not be considered in default so
long as Landlord (or Landlord's Lender) commences such cure within a
reasonable period of time and thereafter, continues to attempt to
complete such cure. Landlord, from time to time, shall provide Tenant
with the name and address of its Lender.
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21. LANDLORD'S REMEDIES. Landlord shall have the following remedies if Tenant
is in default. (These remedies are not exclusive; they are cumulative and
in addition to any remedies now or later allowed by law):
a. Landlord may continue this Lease in full force and effect, and this
Lease will continue in effect so long as Landlord does not terminate
Tenant's right to possession, and Landlord shall have the right to
collect Rent when due. During the period Tenant is in default,
Landlord can enter the Premises and relet the Premises, or any part of
the Premises, to third parties for Tenant's account. Tenant shall be
liable immediately to Landlord for all costs Landlord incurs in
reletting the Premises, including without limitation, brokers'
commissions, expenses of remodeling the Premises required by the
reletting, and like costs. Reletting can be for a period shorter or
longer than the remaining Term of this Lease. Tenant shall pay to
Landlord the Rent due under this Lease on the dates the Rent is due,
less the Rent Landlord receives from any reletting. No act by Landlord
allowed by this Section 21.a. shall terminate this Lease unless
Landlord notifies Tenant in writing that Landlord elects to terminate
this Lease. After Tenant's default and for so long as Landlord does
not terminate Tenant's right to possession of the Premises, if Tenant
obtains Landlord's consent, Tenant shall have the right to assign or
sublet its interest in this Lease, but Tenant shall not be released
from liability. Landlord's consent to such a proposed assignment or
subletting shall not be unreasonably withheld. If Landlord elects to
relet the Premises as provided in this Section 21.a., Rent that
Landlord receives from reletting shall be applied to the payment of,
first, any indebtedness from Tenant to Landlord other than Rent due
from Tenant; second, all costs, including for maintenance incurred by
Landlord in reletting; and third, Rent due and unpaid under this
Lease. After deducting the payments referred to in this Section 21.a.,
any sum remaining from the Rent Landlord receives from reletting shall
be held by Landlord and applied in payment of future Rent as Rent
becomes due under this Lease. In no event shall Tenant be entitled to
any excess Rent received by Landlord. If, on the date Rent is due
under this Lease, the Rent received from the reletting is less than
the Rent due on that date, Tenant shall pay to Landlord, in addition
to the remaining Rent due, all costs including for maintenance
Landlord incurred in reletting that remain after applying the Rent
received from the reletting as provided in this Section 21.a.; and
b. Landlord may terminate Tenant's right to possession of the Premises at
any time. No act by Landlord other than giving express written notice
thereof to Tenant shall terminate this Lease. Acts of maintenance,
efforts to relet the Premises, or the appointment of a receiver on
Landlord's initiative to protect Landlord's interest under this Lease
shall not constitute a termination of Tenant's right to possession.
Upon termination of Tenant's right to possession, Landlord has the
right to recover from Tenant: (1) the Worth of the unpaid Rent that
had been earned at the time of termination of Tenant's right to
possession; (2) the Worth of the amount by which the unpaid Rent that
would have been earned after the date of termination until the time of
award exceeds the amount of the loss of Rent that Tenant proves could
have been reasonably avoided; (3) subject to Section 1951.2(c) of the
California Code the Worth of the amount of the unpaid Rent that would
have been earned after the award throughout the remaining Term of the
Lease to the extent such unpaid Rent exceeds the amount of the loss of
Rent that Tenant proves could have been reasonably avoided; and (4)
any other amount, including but not limited to, expenses incurred to
relet the Premises, court costs, attorneys' fees and collection costs
necessary to compensate Landlord for all detriment caused by Tenant's
default. The "Worth", as used above in (1) and (2) in this Section
21.b. is to be computed by allowing interest at the lesser of 12
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percent per annum or the maximum legal interest rate permitted by law.
The "Worth", as used above in (3) in this Section 21.b. is to be
computed by discounting the amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of the award, plus one
percent (1%).
22. ENTRY OF PREMISES. Landlord and/or its authorized representatives shall
have the right after reasonable notice except for emergencies to enter the
Premises at all reasonable times for any of the following purposes: (a) to
determine whether the Premises are in good condition and whether Tenant is
complying with its obligations under this Lease; (b) to do any necessary
maintenance and to make any restoration to the Premises or the Project that
Landlord has the right or obligation to perform; (c) to post "for sale"
signs at any time during the term, to post "for rent" or "for lease" signs
during the last one hundred eighty (180) days of the Term or during any
period while Tenant is in default; (d) to show the Premises to prospective
brokers, agents, lenders, buyers, tenants or persons interested in leasing
or purchasing the Premises, at any time during the Term; or (e) to repair,
maintain or improve the Project and to erect scaffolding and protective
barricades outside the Premises but not so as to prevent entry to the
Premises and to do any other act or thing necessary for the safety or
preservation of the Premises or the Project. Except as otherwise provided
herein, Landlord shall not be liable in any manner for any inconvenience,
disturbance, loss of business, nuisance or other damage arising out of
Landlord's entry onto the Premises as provided in this Section 22. Tenant
shall not be entitled to an abatement or reduction of Rent if Landlord
exercises any rights reserved in this Section 22. Landlord shall conduct
its activities on the Premises as provided herein in a commercially
reasonable manner that will lessen the inconvenience, annoyance or
disturbance to Tenant. For each of these purposes, Landlord shall at all
times have and retain a key with which to unlock all the doors in, upon and
about the Premises, excluding Tenant's vaults, computer data rooms and
safes. Tenant shall not alter any lock or install a new or additional lock
or bolt on any door of the Premises without prior written consent of
Landlord. If Landlord gives its consent, Tenant shall promptly furnish
Landlord with a key for any such lock or bolt.
23. SUBORDINATION.
a. AUTOMATIC SUBORDINATION. Without the necessity of any additional
document being executed by Tenant for the purpose of effecting a
subordination, and at the election of Landlord or Landlord's Lender,
this Lease shall be subject and subordinate at all times to (i) all
ground leases or underlying leases which may now exist or hereafter be
executed affecting the Premises, (ii) the lien of any mortgage or deed
of trust which may now exist or hereafter be executed affecting the
Premises, and (iii) the lien of any mortgage or deed of trust which
may hereafter be executed in any amount for which the Premises, ground
leases or underlying leases, or Landlord's interest or estate in any
of said items is specified as security. In the event that any ground
lease or underlying lease terminates for any reason or any mortgage or
deed of trust is foreclosed or a conveyance in lieu of foreclosure is
made for any reason, Tenant shall, notwithstanding any subordination,
attorn to and become the Tenant of the successor in interest
(including without limitation to Lender) to Landlord ("SUCCESSOR") and
in connection therewith, Tenant shall execute an attornment agreement.
In connection with any such termination of a ground lease or
underlying lease or any foreclosure or conveyance in lieu of
foreclosure made in connection with any mortgage or deed of trust,
then so long as Tenant is not in default after all applicable notice
and cure periods pursuant to this Lease, Tenant shall not be disturbed
in its possession of the Premises or in the enjoyment of its rights
pursuant to this Lease during the Term of this Lease or any extension
or renewal thereof. Notwithstanding any subordination of this Lease
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to the lien of any mortgage or deed of trust, the Lender, at any time,
shall be entitled to subordinate the lien of its mortgage or deed of
trust to this Lease by filing a notice of subordination in the County
in which the Premises are located, and Lender shall agree in
connection with any such filing, that Tenant shall not be disturbed in
its possession of the Premises so long as Tenant is not in default
beyond all applicable notice and cure periods pursuant to this Lease.
In connection with any such filing, Tenant shall be obligated to
attorn to and to become a Tenant of any Successor.
b. ADDITIONAL SUBORDINATION. From time to time at the request of
Landlord, Tenant covenants and agrees to execute and deliver within
ten (10) days following the date of written request from Landlord,
documents evidencing the priority or subordination of this Lease with
respect to any ground lease or underlying lease or the lien of any
mortgage or deed of trust in connection with the Premises. Any and all
such documents shall be in such form as is reasonably acceptable to
the Lender(s). Any subordination agreement so requested by Landlord
shall provide for Tenant to attorn to the Successor and shall further
provide that Tenant shall not be disturbed in its possession of the
Premises or in the enjoyment of its rights pursuant to this Lease so
long as Tenant is not in default after all applicable notice and cure
periods with respect to its obligations pursuant to the Lease. Any
such Subordination, Non-disturbance and Attornment Agreement shall be
recorded in the official records of the office of the County Recorder
in the County in which the Premises is located. Upon full execution of
this Lease, Landlord shall make a commercially reasonable effort to
secure and deliver to Tenant a non disturbance agreement from
Landlord's Lender according to the terms of this Section 23.b.
c. NOTICE FROM LENDER. Tenant shall be entitled to rely upon any notice
given by a Lender in connection with the Premises requesting that
Tenant make all future Rent payments to such Lender, and Tenant shall
not be liable to Landlord for any payment made to such Lender in
accordance with such notice. Notwithstanding any provision to the
contrary of this Lease, a Successor shall not be (i) obligated to
recognize the payment of Rent for a period of more than one month in
advance; (ii) responsible for liabilities accrued pursuant to this
Lease prior to the date ("SUCCESSION DATE") upon which the Successor
becomes the "Landlord" hereunder; (iii) responsible to cure defaults
of the Landlord pursuant to this Lease existing as of the Succession
Date, except for defaults of a continuing nature of which Successor
received notice (as provided in Paragraph 20) and in respect of which
Tenant afforded Successor a reasonable cure period following such
notice; (iv) responsible for any Security Deposit delivered by Tenant
pursuant to this Lease not actually received by the Successor; or (v)
bound by any execution, modification, termination or extension of this
Lease or any grant of a purchase option or right of first negotiation
or any other action taken by the Landlord pursuant to this Lease.
24. ESTOPPEL CERTIFICATE/TENANT FINANCIAL STATEMENTS. Tenant, at any time and
from time to time, upon not less than ten (10) business days written notice
from Landlord, will execute, acknowledge and deliver to Landlord and, at
Landlord's request, to any existing or prospective purchaser, ground lessor
or mortgagee of any part of the Premises, a certificate of Tenant stating:
(a) that Tenant has accepted the Premises (or, if Tenant has not done so,
Tenant has not accepted the Premises and specifying the reasons therefor);
(b) the Commencement and Expiration Dates of this Lease; (c) that this
Lease is unmodified and in full force and effect (or, if there have been
modifications, that same is in full force and effect as modified and
stating the modifications); (d) whether or not to the best of Tenant's
knowledge there are then existing any defenses against the enforcement of
any of the obligations of Tenant under this Lease (and, if so, specifying
same); (e) whether or not to the best of Tenant's knowledge there are then
existing any defaults by Landlord in the performance of its obligations
under this Lease (and, if so,
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specifying same); (f) the dates, if any, to which the Rent and other
charges under this Lease have been paid; (g) whether or not there are
Rent increases during the Lease Term and if so the amount of same; (h)
whether or not the Lease contains any options or rights of first offer
or first refusal; (i) the amount of any Security Deposit or other sums
due Tenant; (j) the current notice address for Tenant; and (k) any
other information that may reasonably be required by any of such
persons. It is intended that any such certificate of Tenant delivered
pursuant to this Section 24. may be relied upon by Landlord and any
existing or prospective purchaser, ground lessor or mortgagee of the
Premises. Tenant agrees, at any time upon request by Landlord, to
deliver to Landlord the current financial statements of Tenant with an
opinion of a certified public accountant, if available, including a
balance sheet and profit and loss statement for the most recent prior
three years all prepared in accordance with generally accepted
accounting principles consistently applied.
25. WAIVER. No delay or omission in the exercise of any right or remedy by
Landlord or Tenant shall impair such right or remedy or be construed as a
waiver. No act or conduct of Landlord, including without limitation,
acceptance of the keys to the Premises, shall constitute an acceptance of
the surrender of the Premises by Tenant before the expiration of the Term.
Only written notice from Landlord to Tenant shall constitute acceptance of
the surrender of the Premises and accomplish termination of the Lease.
Landlord's consent to or approval of any act by Tenant requiring Landlord's
consent or approval shall not be deemed to waive or render unnecessary
Landlord's consent to or approval of any subsequent act by Tenant. Any
waiver by Landlord of any Default must be in writing and shall not be a
waiver of any other Default concerning the same or any other provision of
the Lease.
26. SURRENDER OF PREMISES. Upon expiration of the Term, Tenant shall surrender
to Landlord the Premises and all tenant improvements and alterations in the
same condition as existed at the time of completion of the initial tenant
improvements to the Premises, except for ordinary wear and tear and
alterations which Tenant has the right or is obligated to remove under the
provisions of Section 14. herein. Tenant shall remove all personal property
including, without limitation, decorative improvements or fixtures and
shall perform all restoration made necessary by the removal of any
alterations or Tenant's personal property before the expiration of the
Term. Landlord can elect to retain or dispose of in any manner Tenant's
personal property not removed from the Premises by Tenant prior to the
expiration of the Term. Tenant waives all claims against Landlord for any
damage to Tenant resulting from Landlord's retention or disposition of
Tenant's personal property. Tenant shall be liable to Landlord for
Landlord's cost for storage, removal and disposal of Tenant's personal
property.
27. HOLDOVER. If Tenant with Landlord's consent remains in possession of the
Premises after expiration of the Term or after the date in any notice given
by Landlord to Tenant terminating this Lease, such possession by Tenant
shall be deemed to be a month to month tenancy cancelable by either party
on thirty (30) days written notice given at any time by either party and
all provisions of this Lease, except those pertaining to Term, renewal
options and Base Rent, shall apply and Tenant shall thereafter pay monthly
Base Rent, computed on a per-month basis, for each month or part thereof
(without reduction for any partial month) that Tenant remains in
possession, in an amount equal to one hundred fifty percent (150%) of the
Base Rent that was in effect for the last full calendar month immediately
preceding expiration of the Term.
If Tenant holds over after the expiration or earlier termination of the
Term hereof, without the consent of Landlord, Tenant shall become a Tenant
at sufferance only with a continuing
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obligation to pay Rent provided that, as liquidated damages (which shall be
Landlord's sole damages) for such holding over, the Base Rent shall be one
hundred fifty percent (150%) of the Base Rent that was in effect for the
last full calendar month immediately preceding expiration of the Term for
the first thirty (30) days of such holdover, and two hundred percent (200%)
of such Base Rent thereafter during the pendency of such holdover.
Acceptance by Landlord of Rent after expiration or earlier termination of
the Term shall not constitute a consent to a holdover hereunder or result
in a renewal. The foregoing provisions of this Section 27 are in addition
to and do not affect Landlord's right of re-entry or any rights of Landlord
hereunder or as otherwise provided by law except for Landlord's damages
which are liquidated at the amounts set forth above. No provision of this
Section 27 shall be construed as implied consent by Landlord to any holding
over by Tenant. Landlord expressly reserves the right to require Tenant to
surrender possession of the Premises to Landlord as provided in this Lease
upon expiration or other termination of this Lease.
28. NOTICES. All notices, demands, or other communications required or
contemplated under this Lease, including any notice delivered to Tenant by
the Lender, shall be in writing and shall be deemed to have been duly given
48 hours from the time of mailing if mailed by registered or certified
mail, return receipt requested, postage prepaid, or 24 hours from the time
of shipping by overnight carrier, or the actual time of delivery if
delivered by personal service to the parties at the addresses specified in
Section 1. Either Tenant or Landlord may change the address to which
notices are to be given to such party hereunder by giving written notice of
such change of address to the other in accordance with the notice
provisions hereof.
29. TENANT IMPROVEMENTS. Except as otherwise provided herein, Landlord shall
deliver the Premises to Tenant in its "as is" condition, excluding latent
defects, which Landlord shall promptly repair upon receipt of written
notice from Tenant, the cost of which repair shall not be passed through to
Tenant as an Operating Expense or otherwise, and in a vacuumed and broom
clean condition with all of the prior tenant's personal property removed.
If by October 15, 2000 Tenant retains an environmental consultant to test
the Premises for the existence of asbestos or lead-based paint, and if such
environmental consultant issues a report stating that (1) asbestos or
lead-based paint has been found to exist within the Premises, and (2) such
asbestos or lead-based paint needs to be encapsulated, removed, repaired,
or otherwise abated in order to allow Tenant to use, occupy and renovate,
at Tenant's sole discretion, the Premises in compliance with applicable
law, then Landlord shall have thirty (30) days of receipt of such report to
retain an independent environmental consultant to confirm the results set
forth in such report. If Landlord's consultant agrees with the findings in
the report, Landlord shall reimburse Tenant for certain costs incurred
thereafter to encapsulate, remove, repair or xxxxx such asbestos or
lead-based paint in order to cause the Premises to be in compliance with
law; provided, however, Landlord's reimbursement obligation shall be
limited to the most cost effective method of remediating such asbestos or
lead-based paint, as determined by Landlord's consultant, after
consultation with Tenant's consultant; provided, further, however, that if
the lead-based paint may be "painted over" rather than removed under
applicable law, and provided the Tenant intends to paint the affected
portion of the Premises, then Tenant shall undertake such painting at
Tenant's sole cost and expense. Landlord hereby grants Tenant a one-time
Construction Allowance of $3,133,700 ("LANDLORD'S CONSTRUCTION ALLOWANCE")
for the cost of tenant improvements to be installed by Tenant, including
demising walls, lighting, electrical systems, wall covering, floor
covering, telephone and cabling installation costs, the cost of any
required demolition, and costs of facilities for computer rooms, lunchrooms
(including kitchens in support thereof), training rooms, telephone
equipment rooms, fiber optics, and high-ceiling areas. Tenant shall submit
its plans for such tenant improvements for Landlord's written approval (the
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"APPROVED WORK") prior to Tenant's commencement of construction of the
Approved Work, and Landlord shall respond within five (5) business days of
the date Tenant provides Landlord any specific set of complete preliminary
or complete final plans required for Landlord's approval. Tenant, at its
sole cost and expense, shall be responsible for the filing of such plans,
construction and engineering drawings and specifications, and the securing
of all permits and licenses required therefore, including all fees and
related costs. All work performed by Tenant shall be performed in strict
compliance with the plans submitted for the Approved Work and no
modification shall be made in such plans without the prior written approval
of Landlord. Landlord shall pay Tenant's outside vendors or contractors for
materials and services constituting the Approved Work, up to the maximum
Landlord's Construction Allowance set forth in this Section 29., within
thirty (30) days following Landlord's receipt of Tenant's submittal to
Landlord of approved invoices and conditional lien releases for payment.
Subject to the total amount available within Landlord's Construction
Allowance, Tenant shall also be reimbursed from Landlord's Construction
Allowance for the reasonable cost of all preliminary and final plans and
specifications and all permits relating to the installation of the Approved
Work. All of the work to be done by Tenant under this Section 29. shall be
done in accordance with the provisions of Section 14. hereof, and Tenant
shall be required to follow Landlord's reasonable rules and regulations
relating to contractors working in the Project. Landlord shall have the
right to reasonably approve all of Tenant's proposed contractors and
subcontractors related to the installation of the Approved Work. Tenant's
contractors and vendors shall comply with the building's Rules and
Regulations for Construction Work attached as Exhibit D. Landlord shall not
charge an administrative fee relating to the installation of the Approved
Work unless and to the extent that Landlord incurs actual third party cost
for the review or approval of said plans. Tenant shall have the right to
incorporate special improvements into the building and the Premises,
including, but not limited to, separate, self-contained air conditioning
systems (including rooftop equipment for same), backup generators and
switching, telecommunication and electrical power redundancy, and other
special facilities incidental to Tenant's operations, provided same shall
be compatible with Landlord's base building systems, and subject to
Landlord's consent, which consent shall not be unreasonably withheld,
conditioned or delayed. Such special improvements, to the extent that same
are for Tenant's sole use, shall be furnished and installed at Tenant's
sole cost and expense. Tenant as part of the Approved Work is responsible
for modifying the building electrical system to deliver electrical service
to the Premises as designed by Tenant's architects, engineers and
contractors. Once installed, Landlord will maintain the electrical system
delivering power to the Premises as an Operating Expense of the building.
The cost of said electrical consumption in the Premises (but not in the
Common Areas of the building) shall be Tenant's sole cost and expense with
no overhead or supervision included.
30. COMMENCEMENT DATE. The Term of the Lease shall commence in sections on the
earliest to occur of commencement of occupancy of each Section of the
Premises by Tenant's personnel or the Delivery Date specified for each
Section in Section 32.
31. EARLY POSSESSION. Notwithstanding the provisions of Section 3 hereof, prior
to the Commencement Date, Tenant shall have the right to enter the Premises
after full execution and delivery of this Lease, delivery to Landlord of
payment of the Security Deposit and Prepaid Base Rent, and delivery to
Landlord of a certificate of insurance in form and content reasonably
satisfactory to Landlord, so that Tenant can install the Approved Work
pursuant to Section 29 above (the "CONSTRUCTION PERIOD"). During the
Construction Period, Tenant may also install its fixtures, equipment and
other personal property in the Premises. All of the terms and conditions of
the Lease, except for Tenant's obligations to pay Rent, shall be in effect
during the
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Construction Period provided, such right of prior access shall also include
access to and use of the delivery area and surface parking, and elevator as
well as access to and use of appropriate electrical and other systems and
related facilities, provided such entry and work shall be in harmony with
Landlord's contractors and their subcontractors, and shall not unreasonably
interfere with or delay completion of any work to be performed by Landlord
in the Premises or elsewhere in the building or with other tenant's quiet
enjoyment of their premises. During normal business hours there shall be no
charge to Tenant, its vendors, or its contractors or their subcontractors
for parking, HVAC, security, insurance (except as relates to work which
Tenant and/or its contractors or their subcontractors may undertake in the
Premises, including general liability coverage) and/or taxes during the
Construction Period, or for the use of the loading/delivery area,
elevators, or the personnel required for the operation thereof, during the
Construction Period or otherwise prior to the Commencement Date of the
Lease for the Premises or any additional space leased by Tenant in the
building during the Term, as applicable
32. INITIAL BASE RENT AND DELIVERY OF PREMISES. The Premises shall consist of
125,348 RSF (Section 1.e.) which shall be delivered to Tenant according to
the following schedule:
---------------------------------------------------------------------------
SECTION DELIVERY DATE RSF DELIVERED CUMULATIVE RSF
---------------------------------------------------------------------------
A Commencement Date 50,000 50,000
(Estimated to be 11/15/99)
---------------------------------------------------------------------------
B 2/15/00 25,000 75,000
---------------------------------------------------------------------------
C 5/15/00 25,000 100,000
---------------------------------------------------------------------------
D 8/15/00 25,348 125,348
---------------------------------------------------------------------------
Tenant may accelerate this delivery time schedule and/or increase the RSF
delivered by giving Landlord 10 days advance written notice. Tenant may not
delay or reduce RSF for any delivered date.
Base Rent shall for the period from the Commencement Date through 5/14/02
shall be as given below. After 5/14/02 Base Rent shall step increase
according to Section 1.k.
-------------------------------------------------------------------
PERIODS (INCLUSIVE) MONTHLY BASE RENT
-------------------------------------------------------------------
Commencement date to 2/14/00 $ 80,000.00
-------------------------------------------------------------------
2/15/00 to 5/14/00 120,000.00
-------------------------------------------------------------------
5/15/00 to 8/14/00 160,000.00
-------------------------------------------------------------------
8/15/00 to 5/14/02 200,556.80
-------------------------------------------------------------------
Should Tenant decide to accelerate the delivery schedule or increase the
RSF taken down, the Base Rent Schedule above shall be adjusted using the
rate of $1.60 per RSF per month.
Notwithstanding the above rent schedule, no Base Rent shall be due through
March 14, 2000 on any space taken through March 14, 2000.
33. OPTION(S) TO EXTEND.
x. XXXXX OF OPTION(S). Tenant shall have the right, at its option, to
extend the Lease for two (2) period(s) of five (5) years each
("EXTENDED TERM(S)") on an "as is" basis commencing at the expiration
of the previous Term, provided that at the time of exercise and at the
time of commencement of each Extended Term, Tenant is not in default
beyond any applicable
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cure period under this Lease. Upon commencement of each renewal option
term, Landlord shall extend to Tenant a refurbishment allowance in the
amount of five dollars ($5.00) per rentable square foot, which
allowance shall be reflected in the determination of the Fair Market
Rental Value.
b. EXERCISE OPTION(S). If Tenant decides to extend the Lease for an
Extended Term, Tenant shall give written notice to Landlord of its
election to extend not less than twelve (12) months prior to the
expiration of the previous Term. Tenant's failure to give timely
notice to Landlord of Tenant's election to extend shall be deemed a
waiver of Tenant's right to extend. The terms and conditions
applicable to each Extended Term shall be the same terms and
conditions contained in this Lease except that Tenant shall not be
entitled to any further option to extend beyond the second Extended
Term. The Base Rent for each Extended Term shall be as determined in
accordance with Section 33.c.
c. DETERMINATION OF BASE RENT DURING THE EXTENDED TERM(S).
1) AGREEMENT ON INITIAL BASE RENT. Upon written request from Tenant
within eighteen (18) months prior to the expiration of the
previous Term, Landlord shall advise Tenant of Landlord's
non-binding expectation of the general level of such Fair Market
Rental Value. Further, upon written request from Tenant within
fourteen (14) months prior to the expiration of the previous
Term, Landlord shall deliver to Tenant Landlord's good faith
estimate of the Fair Market Rental Value of the Premises.
Landlord and Tenant shall have thirty (30) days after Landlord
provides to Tenant Landlord's good faith estimate in order to
reach agreement as to the Fair Market Value for the Premises. If
agreement is not reached by that date which is thirteen months
prior to the expiration of the previous Term, then upon written
request from Tenant, Landlord shall deliver to Tenant Landlord's
"binding estimate" of the Fair Market Rental Value for the
Premises, which request from Tenant shall be accompanied by
Tenant's "binding estimate" as to the Fair Market Rental Value
for the Premises. As used above, "binding estimate" shall mean
the estimate which if accepted by the other party shall become
the Fair Market Rental Value for the applicable Extended Term,
and if not so accepted shall be the estimate submitted to the
arbitrator pursuant to Section 33.c.3) and 4) below. If by the
date which is twelve (12) months prior to the expiration of the
previous Term (the "OUTSIDE AGREEMENT DATE") the parties have
failed to reach agreement on the Fair Market Rental Value, then
Tenant may nonetheless elect to exercise its option to extend the
Term of this Lease and the parties shall proceed to negotiate in
good faith to agree on the Base Rent during the applicable
Extended Term, which shall be 100% of the Fair Market Rental
Value of the Premises during said Extended Term. If Landlord and
Tenant agree on the Base Rent for each Extended Term by the
Outside Agreement Date, they shall immediately execute an
amendment to this Lease stating the new Base Rate.
[PAGE 26 MISSING]
first-class office buildings in the Project area. The
determination of the arbitrators shall be limited solely to the
issue of whether Landlord's or Tenant's submitted Fair Market
Rental Value is the closest to the actual Fair Market Rental
Value as determined by the arbitrators, taking into account the
requirements of Section 33.c.2). Each such arbitrator shall be
appointed within thirty (30) days after the Outside Agreement
Date. The two (2) arbitrators so appointed shall within ten (10)
business
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days of the date of the appointment of the last appointed
arbitrator agree upon and appoint a third arbitrator who shall be
qualified under the same criteria as set forth hereinabove for
qualification of the initial two (2) arbitrators.
2) VALUE DETERMINED BY THREE (3) ARBITRATORS. The three (3)
arbitrators shall within thirty (30) days after the appointment
of the third arbitrator reach a decision as to whether Landlord's
or Tenant's submitted Fair Market Rental Value is the closest to
the actual Fair Market Rental Value, and shall use the closest of
Landlord's or Tenant's submitted Fair Market Rental Value as the
Fair Market Rental Value for purposes of calculating the Base
Rent for the applicable Extended Term, and shall notify Landlord
and Tenant thereof. The decision of the majority of the three (3)
arbitrators shall be binding upon Landlord and Tenant. If either
Landlord or Tenant fails to appoint an arbitrator within thirty
(30) days after the Outside Agreement Date, the arbitrator
appointed by one of them shall reach a decision, notify Landlord
and Tenant thereof, and such arbitrator's decision shall be
binding upon Landlord and Tenant. If the two (2) arbitrators fail
to agree upon and appoint a third arbitrator within the time
period provided in Section 33.c.3) above, then the parties shall
mutually select the third arbitrator, who shall be qualified
under the same criteria as set forth above. If Landlord and
Tenant are unable to agree upon the third arbitrator within ten
(10) days, then either party may, upon at least five (5) days'
prior written notice to the other party, request the Presiding
Judge of the Los Angeles County Superior Court, acting in his or
her private and nonjudicial capacity, to appoint the third
arbitrator who shall be qualified under the same criteria as set
forth above. Following the appointment of the third arbitrator,
the panel of arbitrators shall within thirty (30) days thereafter
reach a decision as to whether Landlord's or Tenant's submitted
Fair Market Rental Value shall be used and shall notify Landlord
and Tenant thereof. The cost of the arbitrators and the
arbitration proceeding shall be paid by the non-prevailing party.
34. RIGHT OF FIRST NEGOTIATION AND PREFERENTIAL RIGHT TO LEASE. During the
Term, Tenant shall have a continuing and recurring right of first
negotiation and preferential right to lease with respect to any space in
the Project, which from time to time may be or become vacant and available
for direct lease, at the Fair Market Rental Value determined as of when
such right of first negotiation or preferential right to lease is exercised
by Tenant, subject to the then existing rights of the then current tenants
of the Project. Upon written request by Tenant delivered to Landlord from
time to time during the Term, Landlord will provide Tenant with the
scheduled expiration dates of the leases of space in the Project.
If (i) Tenant wishes to lease additional space in the Project, (ii)
Landlord wishes to make an offer to a bona fide third-party with respect to
any available space in the Project; or (iii) Landlord receives an offer
from a bona fide third-party tenant for any space in the Project, Landlord
shall notify Tenant in writing of the availability of such additional space
prior to leasing such space to a third-party tenant, said notice to include
an existing-condition floor plan(s), the relevant business terms, and
Landlord's good faith determination of the Fair Market Rental Value
therefore, and Tenant shall notify Landlord in writing of its intentions
within (a) ten (10) business days after receipt of said availability notice
absent an offer to or from a bona fide third-party tenant for such space or
(b) three (3) business days if there is an offer to or from a bona fide
third-party tenant for such space.
If Landlord and Tenant are unable to agree within ten (10) business days of
receipt of the availability notice on the Fair Market Rental Value and/or
other terms and conditions other than Fair Market Rental Value for such
additional space, then Landlord shall have the right to lease
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all or any portion of subject space to another tenant or tenants, provided
that same shall be on terms and conditions no more favorable (to such other
tenant or tenants) than those offered to Tenant. If a lease to another
tenant(s) is not consummated within six (6) months next following the end
of the above-referenced ten (10) or three (3) business day notice period,
as applicable, then Tenant's right of first negotiation and preferential
right to lease as to such space shall be reinstated.
Except as otherwise agreed by Landlord in this Lease, specifically
including Landlord's agreements in Paragraph 2.a. above, such additional
space shall be leased on an "as is" basis, excluding latent defects, which
Landlord shall promptly repair upon receipt of written notice from Tenant,
the cost of which repair shall not be passed through to Tenant as an
Operating Expense or otherwise, and in a vacuumed and broom-cleaned
condition with all of the prior tenants' personal property removed
therefrom.
The failure of Tenant to exercise its right of first negotiation or
preferential right to lease in any given instance shall not prejudice
Tenant's right to exercise its right of first negotiation or preferential
right to lease with respect to any other space or the same space, should
all or any part of such space again become available.
No such provisions covering Tenant's right of first negotiation or
preferential right to lease shall preclude Landlord from leasing to tenants
of its own choosing, and in sizes, locations and for lease terms, including
renewals thereof, as Landlord shall deem appropriate except as set forth
elsewhere in this document.
35. ROOFTOP COMMUNICATIONS EQUIPMENT. Without obligation for rental or any
other charges therefore, except as expressly stated hereunder, Tenant shall
be permitted, at its sole cost and expense, during the Term, to use the
roof of the building to install and operate thereon up to two (2) microwave
dishes/earth satellite disks and up to two (2) whip antennae (collectively
the "ROOFTOP COMMUNICATIONS EQUIPMENT") for the exclusive use of Tenant, in
locations as selected by Tenant and approved by Landlord which approval
shall not be unreasonably withheld, conditioned or delayed, provided the
same complies with all applicable governmental rules, regulations,
ordinances and codes and is approved by Landlord as to plans,
specifications, location, weight and size. During the Term, Landlord shall
not install, and shall prohibit the installation and/or operation by any
other party of, any additional microwave dishes/earth satellite disks, whip
antennae, towers and/or other structures on the roof of the building which
shall be reasonably deemed by Landlord (after reasonable consultation with
Tenant) to interfere with the existing Rooftop Communications Equipment.
During the Term, Tenant shall be permitted to select a contractor of its
choice to undertake the installation of the Rooftop Communications
Equipment, subject to Landlord's approval, which approval shall not be
unreasonably withheld, conditioned or delayed. In addition, Tenant shall be
permitted to construct equipment enclosures, if required, in locations,
design and materials to be mutually agreed upon, between Landlord and
Tenant, for accommodation of the Rooftop Communications Equipment. Tenant
shall also have the right to install necessary conduit and sleeving from
the roof to the points of connection within the Premises. Tenant shall be
responsible for all costs of installation (including structural
reinforcing), repair and maintenance and removal with respect to the
Rooftop Communications Equipment.
36. OTHER APPURTENANCES. During the Term, Tenant shall have the right to use
building shafts or conduits between the Premises and other parts of the
building (including the roof) if available for the installation and
maintenance of conduits, cables, ducts, flues, pipes and other devices,
supplementary HVAC and other facilities consistent with Tenant's intended
use of the
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Premises and other portions of the building. During the Term, Tenant shall
have the right to use, in common with other tenants, the lobbies and other
public areas of the building, elevator, the mail room and other building
facilities.
37. MISCELLANEOUS PROVISIONS.
a. TIME OF ESSENCE. Time is of the essence of each provision of this
Lease.
b. SUCCESSOR. This Lease shall be binding on and inure to the benefit of
the parties and their successors, except as provided in Section 19.
c. CONSENT. Any consent or approval required by either Landlord or Tenant
under this Lease shall be granted in writing and shall not be
unreasonably withheld, conditioned or delayed by the consenting party
unless the Lease specifically allows such party to grant such consent
in such party's sole discretion.
d. PERSONAL RIGHTS. Notwithstanding any other provision(s) of this Lease
to the contrary, any provisions of this Lease providing for the
renewal, extension or early termination of the Lease and/or for the
expansion of the Premises (to include without limitation rights to
negotiate, rights of first refusal, etc.) shall be (i) personal to the
original Tenant and shall not be assignable or otherwise transferable
other than to a Permitted Transferee (either voluntarily or
involuntarily) to any third party for any reason whatsoever, and (ii)
conditioned upon Tenant not then being in default under this Lease.
e. YEAR 2000. Landlord is in the process of performing a readiness audit
with respect to Year 2000 Performance. As used herein, the term "YEAR
2000 PERFORMANCE" means that building-related systems and equipment
under Landlord's control which are material to proper building
operations can reasonably be expected to perform without material
adverse effect despite the change of century from 1999 to 2000 and the
leap year. The parties acknowledge that the process of auditing,
assessing and implementing Year 2000 Performance solutions is time
consuming and uncertain, and dependent in part on the performance of
third parties not under Landlord's control. Thus Landlord makes no
representations or warranties with respect to Year 2000 Performance of
building-related systems and equipment, and interruptions of services
as a result of Year 2000 Performance problems will be deemed to be
interruptions out of Landlord's reasonable control. Landlord will
inform Tenant promptly after Landlord gains actual knowledge of any
significant Year 2000 Performance problem which Landlord reasonably
believes may adversely impact building operations, and will use
commercially reasonable efforts to audit, assess and implement
programs to meet the goal of Year 2000 Performance. The cost of such
efforts shall be included as an Operating Expense in the year
incurred, provided, however, that capital replacement costs, if any,
shall be amortized over the useful life of the replacement. Some
information may be obtained from third parties, and may not have been
independently verified. Any information which Landlord provides will
be subject to and made in reliance on the Year 2000 Information
Readiness and Disclosure Act.
f. COMMISSIONS. Each party represents that it has not had dealings with
any real estate broker, finder or other person with respect to this
Lease in any manner, except for the Broker(s) identified in Section
1., who shall be compensated by Landlord in accordance with the
separate agreement between Landlord and the Broker(s).
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g. OTHER CHARGES; LEGAL FEES. If Landlord becomes a party to any
litigation concerning this Lease or the Premises by reason of any act
or omission of Tenant or Tenant's authorized representatives, Tenant
shall be liable to Landlord for reasonable attorneys' fees and court
costs incurred by Landlord in the litigation. Should the court render
a decision which is thereafter appealed by any party thereto, Tenant
shall be liable to Landlord for reasonable attorneys' fees and court
costs incurred by Landlord in connection with such appeal.
If Tenant becomes a party to any litigation concerning this Lease or
the Premises by reason of any act or omission of Landlord or
Landlord's authorized representatives, Landlord shall be liable to
Tenant for reasonable attorneys' fees and court costs incurred by
Tenant in the litigation. Should the court render a decision which is
thereafter appealed by any party thereto, Landlord shall be liable to
Tenant for reasonable attorneys' fees and court costs incurred by
Tenant in connection with such appeal.
If either party commences any litigation against the other party or
files an appeal of a decision arising out of or in connection with the
Lease, the prevailing party shall be entitled to recover from the
other party reasonable attorneys' fees and costs of suit. If Landlord
employs a collection agency to recover delinquent charges, Tenant
agrees to pay all collection agency and attorneys' fees charged to
Landlord in addition to Rent, late charges, interest and other sums
payable under this Lease.
h. LANDLORD'S SUCCESSORS. In the event of a sale or conveyance by
Landlord of the Premises, the same shall operate to release Landlord
from any liability under this Lease arising subsequent to said
transfer or as assumed by any such transferee, including as to any
Security Deposit to the extent transferred to Landlord's
successor-in-interest, and in such event Landlord's successor in
interest shall be solely responsible for all obligations of Landlord
under this Lease.
i. INTERPRETATION. This Lease shall be construed and interpreted in
accordance with the laws of the state in which the Premises are
located. The Lease constitutes the entire agreement between the
parties with respect to the Premises, except for such guarantees or
modifications as may be executed in writing by the parties from time
to time. When required by the context of this Lease, the singular
shall include the plural, and the masculine shall include the feminine
and/or neuter. "PARTY" shall mean Landlord or Tenant. If more than one
person or entity constitutes Landlord or Tenant, the obligations
imposed upon that party shall be joint and several. The
enforceability, invalidity or illegality of any provision shall not
render the other provisions unenforceable, invalid or illegal.
j. AUCTIONS. Tenant shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without
first having obtained Landlord's prior written consent.
Notwithstanding anything to the contrary in this Lease, Landlord shall
not be obligated to exercise any standard of reasonableness in
determining whether to grant such consent.
k. CONFLICT. Any conflict between the printed provisions of this Lease
and the typewritten or handwritten provisions shall be controlled by
the typewritten or handwritten provisions.
l. OFFER. Preparation of this Lease by Landlord or Landlord's agent and
submission of same to Tenant shall not be deemed an offer to lease to
Tenant. This Lease is not intended to be binding until executed by all
parties hereto.
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m. AMENDMENTS. This Lease may be modified only in writing, signed by the
Parties in interest at the time of the modification. The parties shall
amend this Lease from time to time to reflect any adjustments that are
made to the Base Rent or other Rent payable under this Lease. As long
as they do not materially change Tenant's obligations hereunder,
Tenant agrees to make reasonable non-monetary modifications to this
Lease as may be reasonably required by Lender(s) in connection with
the obtaining of normal financing or refinancing of the property of
which the Premises are a part.
n. CONSTRUCTION. The Landlord and Tenant acknowledge that each has had
its counsel review this Lease, and hereby agree that the normal rule
of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation
of this Lease or in any amendments or exhibits hereto.
o. MEMORANDUM OF LEASE. Upon request of either party, Landlord and Tenant
shall join in executing a recordable, short-form instrument setting
forth the appropriate terms and conditions of the Lease, including
those with respect to any renewal rights exercisable by Tenant during
the Term, and further including the non-disturbance provisions.
p. [Intentionally Omitted].
q. CAPTIONS. Article, section and paragraph captions are not a part
hereof.
r. TERMINATION OPTION. Notwithstanding anything to the contrary contained
in this Lease, Tenant shall have a one-time right to terminate the
Lease (the "TERMINATION RIGHT"), such termination to be effective as
of November 15, 2004 (the "TERMINATION DATE"), provided that all of
the following conditions precedent to such termination are satisfied:
(a) Tenant shall exercise the Termination Right, if at all, by
providing Landlord with written notice ("TENANT TERMINATION NOTICE")
of Tenant's election to exercise its Termination Right on or before
the date that is twelve (12) months prior to the Termination Date; (b)
on or before the date of Tenant's Termination Notice, Tenant shall
remit to Landlord, in immediately available funds, an amount equal to
the sum of all unamoritized Rent abatement (defined below), plus
unamoritized costs (including without limitation leasing commissions
and costs of tenant improvements), plus an amount equal to twelve (12)
months Rent (calculated based upon then current Rent), as
consideration for the early termination of the Lease (collectively,
the "TERMINATION FEE"); and (c) no default (past the expiration of any
applicable grace or cure period) exists as of the date of Tenant's
Termination Notice or at any time between the date of Tenant's
Termination Notice and the Termination Date, and no default or event
that, with the giving of notice or the passage of time, or both, would
constitute a default exists as of the Termination Date. Provided that
all of the foregoing conditions are satisfied, the Lease shall
terminate on the Termination Date with the same force and effect as if
scheduled to expire by its terms as of the Termination Date. For
purposes hereof, "RENT ABATEMENT" shall mean the Base Rent that would
otherwise have been due pursuant to Section 32 from the Commencement
Date through March 14, 2000. For example, if the Lease commences on
November 15, 1999, the abatement of Rent would equal $360,000.00 (3
months multiplied by $80,000.00 + 1 month multiplied by $120,000.00 =
$360,000.00).
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