1
LEASE
BY AND BETWEEN
F.C. PAVILION, L.L.C.
AND
ABOVENET COMMUNICATIONS, INC.
DATED: DECEMBER __, 1998
2
LEASE
THIS LEASE (the "Lease") is made this ____ day of December 1998 by and
between F.C. PAVILION, L.L.C., an Ohio limited liability company ("Landlord")
and ABOVENET COMMUNICATIONS, INC., a California corporation ("Tenant");
WITNESSETH THAT, in consideration of the rents, covenants and agreements
hereinafter set forth, such parties enter into the following agreement:
RECITALS
1. The Redevelopment Agency of the City of San Xxxx (the "Agency") owns
certain property in the City of San Xxxx (the "Retail Pavilion Parcel") which
has been developed as the Retail Pavilion Complex, an element of a mixed use
urban development known as the Silicon Valley Financial Center.
2. Pursuant to an Amended and Restated Ground Lease by and between the
Agency and 00 Xxxx Xxxxxxxx Xxxxxxxxxx ("00 Xxxx") dated April 30, 1990 (the
"Ground Lease") the Agency leased the Retail Pavilion Parcel to 50 West. 50 West
has assigned its interest under the Ground Lease to Landlord. The Agency or any
successor in interest to the Agency under the Ground Lease is referred to in
this Lease as the "Ground Lessor."
3. 50 West has constructed the Retail Pavilion Complex, a mixed use
retail and office complex, on the Retail Pavilion Parcel.
4. Under agreement with the Agency, 50 West has constructed a landscaped
pedestrian mall (the "Paseo Mall") on property owned by the City of San Xxxx
which is adjacent to the Retail Pavilion Parcel. Pursuant to the Ground Lease,
the Landlord, as successor to 50 Xxxx, xxxx maintain and operate a portion of
the Paseo Mall. The Paseo Mall will be available for use by Tenant, Tenant's
employees, Tenant's customers, and the general public as a public right-of-way.
5. Under agreement with the Agency, 50 West has constructed a 284-space
public garage (the "Public Garage") on property owned by the Agency beneath the
Retail Pavilion Parcel. The Public Garage has been leased to Landlord pursuant
to a separate lease (the "Public Garage Lease").
6. Tenant desires to sublease from Landlord and Landlord desires to
sublease to Tenant the Premises (as hereinafter defined) within the Retail
Pavilion Complex pursuant to the terms and provisions of this Lease.
3
ARTICLE I
EXHIBITS
EXHIBIT A Legal description of real estate on which the
Retail Pavilion Complex is situated (hereinafter
called "Retail Pavilion Parcel).
EXHIBIT B Plot Plan of Retail Pavilion Parcel, showing
existing improvements and depicting the retail
space, office space and Common Area as presently
configured. Retail Pavilion Parcel and Public
Garage with existing and future Improvements is
hereinafter called the "Complex." This Exhibit is
provided for reference purposes only, and shall not
be deemed to be a warranty, representation, or
agreement by Landlord that the Complex or buildings
and/or any stores are exactly as indicated on the
Exhibit, or that the other tenants which may be
drawn on the Exhibit will be occupants in the
Complex.
EXHIBIT C Tenant's Preliminary Plans dated December 3,
1998 ("Tenant's Plans"), including plans for the
Temporary Premises.
EXHIBIT D-1 Tenants to be removed or relocated.
EXHIBIT D-2 Tenant's from whom consent is required.
EXHIBIT E Rules and Regulations.
EXHIBIT F Preliminary Title Report
Notwithstanding Exhibits A or B or anything else in this Lease
contained, Landlord reserves the right to change or modify and add to or
subtract from the size and dimensions of the Complex or any part thereof, the
number, location and dimensions of buildings and stores, the size and
configuration of the parking areas, entrances, exits and parking aisle
alignments, dimensions of hallways, malls and corridors, the number of floors in
any building, the location, size and number of tenants' spaces which may be
erected in the Complex or otherwise, the identity, type and location of other
stores and tenants, and the size, shape, location and arrangement of Common
Areas (hereinafter defined), and to design and decorate any portion of the
Complex as it desires, but the general character of the Complex and the
approximate location of the Premises shall not be substantially changed, except
as provided in this Lease. Notwithstanding the foregoing, Landlord, without
Tenant's prior written consent, shall not make any change to the Complex which
does any of the following:
(a) Affects the size or dimensions of, or access to, the Premises
and/or the Ancillary Use Areas (as defined below);
(b) Materially interferes with, or impacts, Tenant's use of the
Premises and/or the Ancillary Use Areas, or materially increases
the costs of Tenant's maintenance
2
4
and repair of those portions of the Premises and/or complex which
Tenant is required to maintain;
(c) Materially interferes with, or impacts, co-location,
telecommunications, and other equipment and components utilized
in Tenant's business (for purposes of the foregoing any
interference with the flow of data or interruption of any
communications signal shall be deemed to be "material");
(d) Materially increases Real Estate Taxes, Operating Expenses
(including, without limitation, Common Area Expenses), or any
other additional rent items payable by Tenant under this Lease;
(e) Would require Tenant to make alterations or other improvements to
the Premises and/or the Ancillary Use Areas, or necessitate the
installation of additional equipment or other fixtures in the
Premises and/or the Ancillary Use Areas;
(f) Reduces or further restricts use or access to the Public Garage
or the parking spaces allowed to Tenant under this Lease.
ARTICLE II
LEASED PREMISES
Section 2.1. Leased Premises.
Landlord hereby leases to Tenant and Tenant hereby rents from Landlord,
the following-described space within the Complex comprising, in the aggregate,
approximately 108,680 square feet (collectively, the "Premises"):
(a) Lower level space, including general office space and space for
co-location equipment, containing approximately 45,550 square
feet;
(b) Street level space containing approximately 4,740 square feet;
(c) Upper level space containing approximately 51,640 square feet;
and
(d) Space in Public Garage containing approximately 6,750 square
feet.
The Premises is more fully described in the Plot Plan attached hereto as Exhibit
B. As the Tenant's Plans are finalized the size of the foregoing areas may be
modified. The area of the Premises shall be measured, after construction in
accordance with this Lease, by the Design Architect (as hereinafter defined),
using the BOMA method of computation. The Premises shall include usable area
only. The decision of the Design Architect shall be final, binding and
conclusive, subject to the provisions of Section 6.6 hereof.
Section 2.2. Roof and Walls.
3
5
Subject to Tenant's rights described in Section 2.3 below, Landlord
shall have the exclusive right to use all or any part of the roof, side and rear
walls of the Premises for any purpose, including but not limited to erecting
signs or other structures on or over all or any part of the same, erecting
scaffolds and other aids to the construction and installation of the same, and
installing, maintaining, using, repairing and replacing pipes, ducts, conduits
and wires leading through, to or from the Premises and serving other parts of
the Complex in locations which do not materially interfere with Tenant's use of
the Premises and the Ancillary Use Areas. Tenant shall have no right whatsoever
in the exterior of exterior walls or the roof of the Premises or any portion of
the Complex outside the Premises, except as provided in Sections 2.3 and 9.2
hereof.
Section 2.3. Ancillary Use Areas.
In addition to Tenant's rights with respect to the Premises, Landlord
hereby grants to Tenant the right to use those other areas of the Complex
described as follows (collectively, the "Ancillary Use Areas"):
A. The "Tenant Penthouse Area" consisting of an enclosed area
designated as the "Mechanical Penthouse" on the Preliminary
Plans;
B. The "Tenant HVAC Area" consisting of those portions of the roof
designated on the Preliminary Plans for the placement of
Tenant's HVAC equipment;
C. The "Tenant Antennae Area" consisting of those portions of the
roof designated on the Preliminary Plans for the placement of
Tenant's antennas and other telecommunication equipment (which
equipment shall be inclusive of the equipment of Tenant's
customers);
D. Tenant's elevator serving the loading dock area and related
areas specified on the Preliminary Plans; and,
E. Elevator No. 1 providing exclusive passenger movement between
the Public Garage and the Premises.
F. Those portions of the Complex, including without limitation,
telecommunication "closets", chases, and switch rooms to be
located in areas which will not materially affect or interfere
with other leasable areas within the Complex, for the purpose of
providing conduits, support, and access points for all of
Tenant's wires, cables, fiber, teleco equipment, and other items
as may be necessary to connect the equipment and fixtures within
the Premises to the "Ancillary Use Areas" and/or to points
outside of the Complex.
Tenant's right to use the Ancillary Uses Areas described in A. through
E. above shall be exclusive and Landlord shall not grant any rights to
any other tenant of the Complex or other party to use such areas.
Tenant's right to use the Ancillary Use Areas described in F. above
shall be upon a non-exclusive basis with respect to those portions of
such areas which have been designed and designated for multiple tenant
use and shall be
4
6
exclusive as to those areas which have been constructed as part of
Tenant's Work and/or Landlord's Work and designated for Tenant's use. No
Fixed Rent or other specific payment shall be charged to Tenant with
respect to the Ancillary Use Areas.
Landlord and Tenant hereby recognize that Tenant's rights with respect
to the Ancillary Use Areas are necessary to Tenant's use and enjoyment
of the Premises and, therefore, such rights shall be coterminous with
and inseparable from Tenant's rights with respect to the Premises.
ARTICLE III
LEASE TERM
Section 3.1 Lease Term.
The term of this Lease (the "Lease Term") shall be for a period of
twenty (20) years beginning upon the Commencement Date (as hereinafter defined)
and ending on the last day of the twelfth (12th) month of the twentieth Lease
Year following the Commencement Date, unless sooner terminated as herein
provided, subject to Tenant's options to renew this Lease pursuant to Article
XXVII hereof.
Section 3.2 Commencement Date.
(a) The "Commencement Date" of this Lease shall mean the earlier of:
(i) the date on which Tenant's Work is Substantially Completed
(as such terms are hereinafter defined); or
(ii) one year following the earlier of the date on which the
construction of Tenant's Work commences or the date on
which Tenant's Work should have commenced if Tenant had
fulfilled its obligations to diligently pursue the
planning and approval process pursuant to Article V;
provided however, the date specified in this subsection
(ii) shall be extended for any Force Majeure event and/or
any Landlord Delays (as such terms are hereinafter
defined).
"Force Majeure Events" shall mean any of the events
described in Section 28.5 below which delay the design,
construction, and permitting of any of Tenant's Work and
any delays in the Agency providing the approvals and the
Non-Disturbance Agreement, as required in Section 5.1
below, unless such delays were caused by Tenant's failure
to meet its obligations to diligently pursue the planning
and approval process pursuant to Article V.
"Landlord's Delay" shall mean any delay in the design,
construction, and permitting of any of Tenant's Work
resulting from (i) Landlord's failure to
5
7
proceed promptly and diligently with the design,
construction, and permitting of Landlord's Work, (ii)
any change orders requested by Landlord with respect to
Landlord's Work, and (iii) any other act or omission of
Landlord and/or its agents, consultants, contractors,
and/or subcontractors.
"Substantially Completed" shall mean any portion of the
Premises is completed to the point at which a temporary
certificate of occupancy is granted, subject to
completion of punchlist items.
(b) When the Commencement Date shall have been determined, Landlord and
Tenant shall execute an appropriate writing memorializing the Commencement Date
and the date that the Lease Term shall expire and confirming the actual square
footage of the Premises as measured by the Architect pursuant to Section 2.1
hereof.
Section 3.3 Lease Year Defined.
The first Lease year shall begin on the Commencement Date and shall end
on the last day of the twelfth (12th) full month following the Commencement
Date. Succeeding Lease Years shall be for a period of twelve (12) months
beginning on the day following the end of the preceding Lease Year.
Section 3.4 Effective Date.
This Lease shall be binding on both Landlord and Tenant commencing upon
the Effective Date (as defined in Section 28.6 hereof), subject to the
satisfaction and/or waiver of the Conditions Precedent (as defined in Section
5.1 hereof).
ARTICLE IV
RENT
Section 4.1. Rental Rate.
Beginning on the Commencement Date, Tenant covenants and agrees to pay
to Landlord, without notice, demand or set-off, at Landlord's address for notice
(Landlord's and Tenant's notice addresses being the addresses specified in
Section 28.7 hereof), as "Fixed Rent" for the Premises:
(a) During the first Lease Year, Two Dollars and 25/100 ($2.25) per
useable square foot of the Premises per month (prorated for any
partial calendar month between the Commencement Date and the end
of the calendar month in which the Commencement Date occurs);
(b) During the second through tenth Lease Years, an amount per month
equal to the Fixed Rent for the preceding Lease Year multiplied
by 103.5% (1.035).
6
8
(c) During the eleventh through fifteenth Lease Years an amount equal
to the Fixed Rent for the tenth Lease Year multiplied by 115%
(1.15);
(d) During the sixteenth through twentieth Lease Years an amount
equal to the Fixed Rent for the fifteenth Lease Year multiplied
by 115% (1.15).
Section 4.2 Fixed Rent Payments.
The Fixed Rent as determined pursuant to Section 4.1 shall be paid by
Tenant to Landlord in advance on the first day of each and every calendar month
during the Lease Term.
Section 4.3. Miscellaneous Rent Provisions.
Any Fixed Rent or other amounts to be paid by Tenant which are not paid
when due shall bear interest at the lesser of four percent (4%) over the prime
rate announced by Citibank, N.A. as of the first day of the month on which any
sum is due and owing or the maximum legal rate permitted in the State of
California. If the Commencement Date is other than the first day of a month,
Tenant shall pay on the Commencement Date a prorated partial Fixed Rent on the
Commencement Date.
Section 4.4. Additional Rent.
All amounts required or provided to be paid by Tenant to Landlord under
this Lease other than Fixed Rent shall be deemed "Additional Rent", and Fixed
Rent and Additional Rent shall in all events be deemed rent and may be collected
by Landlord as provided by law in the case of rent.
Section 4.5. Payments for Tenant.
If Landlord pays any monies or incurs any expense to correct an Event of
Default, as defined in Section 21.1 below, all amounts so paid or incurred
shall, on notice to Tenant, be considered Additional Rent payable by Tenant with
the first Fixed Rent installment thereafter becoming due and payable, and may be
collected as provided by law in the case of rent.
Notwithstanding the foregoing, Additional Rent shall not include any
expenses incurred by Landlord to cure an Event of Default unless Landlord, prior
to incurring an expense, shall have given written notice to Tenant of Landlord's
intent. Any Additional Rent, as described in this Section 4.5, shall include
only the actual out-of-pocket expenses incurred by Landlord in directly curing
the subject Event of Default.
7
9
ARTICLE V
CONDITIONS PRECEDENT
Section 5.1. Conditions Precedent.
Landlord and Tenant acknowledge and agree that their respective
obligations under this Lease, including the obligation to construct Tenant's
Work pursuant to Article VI hereof, is subject to the satisfaction of the
following conditions (the "Conditions Precedent") on or before February 15, 1999
(the "Condition Date"):
(a) The written approval by the Agency of the Tenant, of the terms of
this Lease, of the terms of the Temporary Lease (as hereinafter
defined) and of Tenant's Plans and the issuance by the City
and/or Agency of such building permits as may be necessary to
commence construction as well as approval by the City and/or
Agency of the plans for Landlord's Work (collectively, the "City
Approvals");
(b) The Agency's agreement to execute and deliver to Tenant a written
non-disturbance agreement (the "Non-Disturbance Agreement")
whereby the Agency agrees (i) to recognize this Lease, and
Tenant's rights hereunder, in the event of a termination of the
Ground lease and/or the Public Garage Lease and to not terminate
this Lease provided that Tenant is then in compliance with the
terms hereof, (ii) that this Lease shall become a direct lease
between the Agency and the Tenant pursuant to the terms and
provision hereof, (iii) that Tenant shall have no liability to
the Agency with respect to any obligations of Landlord under the
Ground Lease or the Public Garage lease, (iv) to not amend or
modify, or enter into any agreement with Landlord to amend or
modify, any of the terms or provisions of the Ground Lease and/or
Public Garage Lease which are material to Tenant's quiet
enjoyment of the Premises without the prior written consent of
Tenant, (v) to not enter into any agreement with Landlord which
would materially increase Landlord's Common Area Costs and/or any
other maintenance or operating expenses of the Complex (to the
extent that any such costs are passed on to Tenant), (vi) to not
terminate, or accept a surrender of, the Ground Lease and/or the
Public Garage Lease unless there has been an event of default
under the Ground Lease or the Public Garage Lease which gives the
Agency the right to terminate the same, (vii) to provide, prior
to exercising any right of termination, notice and an opportunity
to cure to Tenant with respect to any default by Landlord under
the Ground Lease or the Public Garage Lease, (viii) to not
approve any financing or further encumbrance of Landlord's
interest in the Ground Lease and/or the Public Garage Lease (to
the extent the Agency has retained such approval rights) without
providing prior written notice to Tenant, and (ix) to such other
matters as may be reasonably requested by Tenant in order to
protect its rights hereunder and its interest in the Tenant
Improvements;
(c) The successful completion of Tenant's initial public offering;
and
8
10
(d) The removal or relocation of those existing tenants in the
complex whose removal or relocation is necessary to permit the
construction of Tenant's Work and the occupancy by Tenant of the
Premises pursuant to this Lease, which tenants are listed on
Exhibit D-1 hereto, and the granting of consent by those existing
tenants in the complex whose consent is necessary to permit the
construction of Tenant's Work and the occupancy by Tenant of the
Premises pursuant to this Lease, which tenants are listed on
Exhibit D-2 hereto (collectively, the "Tenant Actions"); provided
that Tenant acknowledges that Waldenbooks will not be relocated
until after January 1, 1999 (assuming that conditions 5.1(a),
(b), (c) and (e) have been satisfied), and that, in the absence
of a voluntary agreement to vacate, certain month-to-month
tenants may not be vacated under city ordinances until ninety
(90) days following delivery by Landlord of written notices to
vacate, which notices will not be delivered by Landlord until
after conditions 5.1(a), (b), (c) and (e) have been satisfied.
Landlord will use commercially reasonable efforts to cause all
Tenant Actions to be met by the Condition Date, provided that
Landlord shall not be obligated to execute any unconditional
vacation notices, relocation agreements or termination agreements
with any of such tenants until such time as conditions 5.1(a),
(b), (c) and (e) have been satisfied. Furthermore, the Condition
Date shall be extended to the extent necessary to permit the
relocation of Waldenbooks and the month-to-month tenants referred
to in the prior sentence, as long as all other Tenant Actions are
completed by the original Condition Date.
(e) Landlord obtains a firm commitment for financing its portion of
the costs associated with this Lease (including both Landlord's
Work and Landlord's Contribution, as such terms are hereinafter
defined), at prevailing market rates and terms reasonably
acceptable to Landlord; Tenant agrees to cooperate reasonably in
any conditions imposed by Landlord's lender under said
commitment; Landlord will use commercially reasonable efforts to
obtain the foregoing financing commitments prior to the Condition
Date.
Section 5.2. City Approvals.
Following the Effective Date of this Lease, Landlord and Tenant agree to
work diligently and cooperatively to obtain the City Approvals. Landlord and
Tenant agree that Tenant's Plans shall be submitted to the appropriate Agency or
City offices not later than five (5) days following the Effective Date of this
Lease (as long as such Plans are completed by Design Architect by such date)
(the "Initial Plan Submission Date"). Landlord and Tenant agree to make such
modifications to Tenant's Plans as may be reasonably requested by City or Agency
officials as a condition for obtaining the City Approvals. In the event that
Tenant's Plans are not submitted to the Agency or City by the Initial Plan
Submission Date, Tenant may elect to extend the Condition Date by one (1) day
for each day by which Tenant's submission of Tenant's Plans is delayed beyond
the Initial Plan Submission Date.
9
11
Section 5.3. Tenant Actions.
Prior to the Effective Date of this Lease, Landlord has commenced
negotiations with the existing tenants in the complex which are subject to
Tenant Actions pursuant to this Lease, and Landlord will use commercially
reasonable efforts in pursuing such Tenant Actions. Notwithstanding the
foregoing, Landlord shall not be obligated to undertake litigation (except
litigation to enforce a tenant's relocation or termination agreement or any
other right Landlord may have to regain possession of a tenant's premises).
Section 5.4. Failure of Conditions Precedent.
In the event that the Conditions Precedent are not successfully obtained
by the Condition Date (as modified by Section 5.1(d)), then Tenant shall have
the right, upon written notice to the Landlord delivered not later than five (5)
days after the Condition Date, either (i) to terminate this Lease or (ii) extend
the Condition Date until a date which is not later than six (6) months after the
Effective Date of this Lease (the "Extended Condition Date"). In the event that
all of the conditions are not successfully obtained by the Extended Condition
Date, then either Tenant or Landlord shall have the right, upon written notice
to the other delivered not later than five (5) days after the Extended Condition
Date, to terminate this Lease; provided, however, that Landlord shall have no
right to terminate this Lease, nor shall Landlord be released from any liability
for damages (if any), if Landlord has not used commercially reasonable efforts
in pursuing the Tenant Actions. Upon the termination of this Lease pursuant to
this Section 5.4, all rights and obligations hereunder shall be discharged and
neither party shall have any claims, or rights of recovery against the other for
costs incurred by such party pursuant to this Lease. Until either party
exercises its right to terminate this Lease pursuant to this Section 5.4, this
Lease shall continue in effect.
10
12
ARTICLE VI
CONSTRUCTION OF PREMISES
Section 6.1. Overview of Construction Scope.
Landlord and Tenant acknowledge that the construction of the Premises
contemplates the conversion of existing Retail Space in the complex to Office
Space and the conversion of portions of Common Area to leased premises and the
reconfiguration of other portions of the Complex to accommodate the construction
of the Premises (the "Base Building Construction") and that the construction of
the Premises will require the concurrent construction and reconfiguration of
other space within the Complex for lease to others, including, without
limitation, new Office Space or Retail Space on the upper level of the Complex
and new retail space along the Paseo Mall (collectively the "New Tenant Space").
Landlord and Tenant further acknowledge that, by virtue of the size and scope of
the construction required to create Tenant's Premises, Landlord may be required
under California law to retrofit the entire Complex to meet current earthquake
protection standards ("Seismic Upgrades"). By virtue of the foregoing, this
Lease must address both responsibility for construction and responsibility for
payment for (a) Tenant's improvements within its Premises, as hereinafter
specified ("Tenant Improvements"), (b) Base Building Construction, (c) Seismic
Upgrades, and (d) the construction of New Tenant Space.
Section 6.2. Preparation of Construction Plans
11
13
Tenant, with Landlord's consent, has heretofore engaged Xxxxxxx
Xxxxxxxxx and Partners (the "Design Architect"), at Tenant's sole cost and
expense (provided that in no event shall Tenant be obligated to the Design
Architect for work related to Landlord's Work), to prepare schematic designs for
the Premises and the related changes to the Complex, including Base Building
Construction and New Tenant Space and Seismic Upgrades (the "Preliminary
Plans"). These Preliminary Plans, dated December 3, 1998, are attached hereto as
Exhibit C. The Tenant has also engaged other mechanical, electrical, structural
and geotechnical engineers to assist the Design Architect in preparing the
Preliminary Plans, as they may be amended. Landlord, with Tenant's consent, has
engaged KA Associates (the "Inspecting Architect"), at Landlord's sole cost and
expense, to review the Preliminary Plans, as they may be amended, and to inspect
the Tenant's Work and the Landlord's Work during the course of construction.
Landlord and Tenant agree that the Premises and the balance of the Complex shall
be constructed or reconstructed, as the case may be, in accordance with the
Preliminary Plans, as the same may be modified or refined in accordance with the
terms of this Lease. Following the Effective Date, Landlord and Tenant agree to
work cooperatively with the Design Architect and the Inspecting Architect to
develop final plans and construction drawings which are satisfactory to both
Landlord and Tenant, in their respective reasonable discretion, which are
sufficient to obtain the City Approvals pursuant to Section 5.2 hereof, and
which are approved by Factory Mutual. Both Landlord and Tenant shall be
permitted ten (10) days to review all architectural plans and fifteen (15) days
to review all structural and mechanical plans. Landlord's or Tenant's approval
of any plans shall not be construed as a warranties that the plans are
consistent with applicable laws or that the Tenant's Work or Landlord's Work, as
the case may be as completed in accordance with such plans will be fit for the
intended purpose. The Design Architect shall enter into separate contracts with
Tenant and Landlord with respect to the preparation of plans for Tenant's Work
and Landlord's Work, respectively. The contract between the Design Architect and
the Tenant shall name Landlord as an additional insured with respect to any
errors and omissions insurance maintained by the Design Architect or by any
other architectural or engineering firm providing design services to the Design
Architect.
Section 6.3. Responsibility for Construction Costs.
Landlord and Tenant agree that Tenant shall be responsible for and shall
pay for the full cost of the following construction items (collectively,
"Tenant's Work") (subject to partial reimbursement by Landlord through
Landlord's Contribution, as hereinafter defined) and shall cause the Tenant's
Work to be completed in accordance with the approved plans in good and
workmanlike condition and in compliance with all applicable laws:
(a) All additional improvements necessary to complete the Premises,
including, without limitation, interior improvements, demising
partitions, exterior facade, all costs of bringing or increasing
electrical service to the Premises, electrical distribution
within the Premises, any roof top facilities (subject to Section
12.4 hereof) such as signage, antennae, dishes or masts, all
other utility distribution such as phone, data, cable television
service, natural gas, and sanitary and water (collectively, the
"Tenant Improvements");
12
14
(b) All Base Building Construction for those areas of the Complex
necessary to complete the Premises (whether located inside or
outside the Premises), but expressly excluding therefrom the
costs of constructing the New Tenant Space;
(c) All Seismic Upgrades to the Complex, provided that Landlord shall
reimburse tenant in an amount equal to 50% of the cost of the
Seismic Upgrades to the First and Second Street retail/office
elements of the Complex, subject to a maximum reimbursement of
Five Hundred Thousand Dollars ($500,000); and
(d) All foundation improvements required to accommodate Tenant's
occupancy and use of the Premises, but excluding any foundation
improvements required to accommodate the use and occupancy of the
New Tenant Space (which shall be part of Landlord's Work).
In connection with the construction of Tenant's Work, Tenant shall also
be responsible for, and shall pay for the full cost of, all permits, City
Approval costs, inspection fees and connection fees (except those directly
associated with Landlord's Work), all life safety elements, including without
limitation sprinklers, annunciation panels and fire alarm connections to
Landlord's system, and all items required by applicable laws.
Landlord shall be responsible for and shall pay for the full cost of
constructing the New Tenant Space (collectively, "Landlord's Work") and shall
cause the same to be completed in accordance with the approved plans in good and
workmanlike condition and in compliance with all applicable laws.
13
15
Landlord also agrees to contribute Seven Million Dollars ($7,000,000)
("Landlord's Contribution") toward the cost of the Base Building Construction,
as follows: One-third of the Landlord's Contribution shall be paid when the Base
Building Construction is one-third completed, one-third shall be paid when the
Base Building Construction is two-thirds completed, and the balance shall be
paid when the Base Building Construction is completed. Each draw request by
Tenant with respect to Landlord's Contribution shall require: (a) a
certification by the Inspecting Architect that the requisite level of completion
has been met; and (b) lien waivers from the Contractor and all major
subcontractors indicating that the work comprising the requisite level of
completion has been fully paid subject to payment of retainage as provided in
Section 6.5.
Section 6.4. Construction Contracts.
Landlord and Tenant have selected Xxxxxxx and Xxxxxxx as construction
manager (the "Contractor") to perform both Tenant's Work and Landlord's Work,
provided that the Tenant's Work shall be performed pursuant to a contract
between Tenant and Contractor ("Tenant's Contract"), and the Landlord's Work
shall be performed pursuant to a separate contract between Landlord and
Contractor ("Landlord's Contract"). Both the Tenant's Contract and the
Landlord's Contract shall be guaranteed maximum price contracts and the
Contractor shall be required to post payment/performance bonds in the full
amount of the contract price with sureties acceptable to Landlord. The Tenant's
Contract and the Landlord's Contract, shall be subject to the reasonable
approval of Landlord or Tenant, as the case may be, shall provide that Landlord
or Tenant, as the case may be, may cure any Tenant or Landlord defaults
thereunder and demand performance by Contractor thereunder, including
performance by the surety under the Contractor's payment/performance bonds, and
shall provide that Landlord or Tenant, as the case may be, shall be an
additional insured with respect to any errors and omissions insurance maintained
by the Contractor. Tenant's Contract shall further provide that no change orders
may be implemented without the express written consent of Landlord (which
consent shall not be unreasonably withheld), and that any such change orders be
covered by the Contractor's payment/performance bonds; provided, however, that
Landlord's consent shall not be required with respect to change orders which
affect only the Tenant Improvements and which do not exceed $50,000 in the
aggregate as long as Landlord receives prior written notice of such change
orders and provided, further, that Landlord will approve any such change order
affecting only the Tenant Improvements which exceeds $50,000 if Tenant
demonstrates that it has the resources to pay the increased costs and will meet
its obligations pursuant to Section 6.5. Tenant's Contract and Landlord's
Contract shall require that the Contractor meet all requirements imposed by the
Ground Lease or applicable law (including without limitation prevailing wage
requirements, if applicable), that the Contractor will maintain builders risk
insurance naming both Tenant and Landlord as additional insureds and that
Contractor will not permit the imposition of any liens on the Premises or the
Complex and will provide lien searches with every draw request demonstrating the
absence of such liens.
14
16
Section 6.5. Tenant's L/C, Tenant's Loan Facility and Tenant's Cash
Account
In order to assure Landlord that Tenant has the financial ability to pay
all amounts required under the Tenant's Contract and thereby to assure Landlord
that Tenant's Work will be completed, Tenant agrees (a) to deliver to Landlord
an irrevocable letter of credit ("Tenant's L/C") issued by a financial
institution reasonably acceptable to Landlord in the full amount of the
estimated cost to complete all of Tenant's Work, other than Tenant's non-real
estate fixtures, equipment and furnishings (the "Non L/C Work") and net of the
amount of Landlord's Contribution and (b) to provide Landlord with evidence that
Tenant has the ability to pay the full cost of the Non L/C Work, which evidence
shall be in the form of either or both of the following: (i) a loan facility
with a bank or underwriter reasonably satisfactory to Lender ("Tenant's Loan
Facility") which Tenant's Loan Facility shall be irrevocably committed by Tenant
and its Lender to be used to pay for the non L/C Work or (ii) a bank account
with a federally-insured financial institution ("Tenant's Cash Account"). The
amount of Tenant's L/C and of Tenant's Loan Facility and/or Tenant's Cash
Account shall be determined jointly by Landlord and Tenant on or before the
Condition Date based upon the Tenant's Contract, in consultation with the Design
Architect, the Inspecting Architect and the Contractor. Landlord agrees to pay
customary issuance costs and/or the annual fee for Tenant's L/C. The Tenant's
L/C shall provide that Landlord may draw thereupon upon delivery of a draw
request together with Landlord's certification as follows:
(a) There exists a payment default by Tenant not related to any
failure of performance by the Contractor or subcontractor or any
Landlord Delay and the Contractor or subcontractor has made a
demand for payment or has filed against the Premises a mechanics'
lien;
(b) As a result of the foregoing default, there has been an actual
cessation of work on the Premises for a continuous period of not
less than two (2) weeks; and
(c) The funds to be drawn are necessary to pay for the portions of
Tenant's Work for which Tenant's L/C was issued.
The outstanding amount of Tenant's L/C may be reduced periodically by an amount
equal to payments made pursuant to the Tenant's Contract for the portions of
Tenant's Work other than the Non-L/C Work, provided that the Tenant's Contract
provides for a retainage in amounts, and subject to conditions, set forth below
and provided further that the Tenant's L/C shall not be reduced by amounts which
are reimbursed out of Landlord's Contribution. In the event that the cost of
Tenant's Work (other than Non-L/C Work) increases as a result of change orders
approved by Landlord pursuant to Section 6.4 (to the extent such approval is
required), Tenant shall cause the amount of Tenant's L/C to be increased by an
amount equal to such change order. In the event that the cost of the Non L/C
Work increases as a result of change orders acceptable to Landlord, Tenant shall
cause either Tenant's Loan Facility or Tenant's Cash Account to be increased by
an amount or amounts equal in the aggregate to the amount of the change order.
Neither Tenant's L/C nor Tenant's Loan Facility shall be secured by a mortgage
on the Premises or Tenant's interest therein, except for any equipment financing
or leasing. Tenant's Contract shall provide for a retainage of ten percent (10%)
of all draw requests until Tenant's work is fifty
15
17
percent (50%) completed, at which point the retainage may be reduced to five
percent (5%). The balance of the retainage may be paid to the Contractor after
all punchlist items are complete, all lien waivers from the Contractor and major
subcontractors are delivered to Landlord and "as-built" drawings are delivered
to Landlord pursuant to Section 6.6.
Section 6.6. Adjustment of Fixed Rent after Construction; As-built
Drawings.
Landlord and Tenant acknowledge that the actual useable square footage
of the Premises may change from that reflected in the Preliminary Plans as the
result of changes in such plans prior to construction or as the result of change
orders implemented during the construction process. Therefore, Landlord and
Tenant agree that, upon completion of the Premises, the Premises shall be
measured by the Design Architect using the BOMA method and the Design Architect
shall determine the actual usable space in each portion of the Premises, which
determination shall be binding on the parties provided, however, that upon
Landlord's request, the Premises shall also be measured by the Inspecting
Architect and, in the event that the actual usable space in the Premises as
determined by the Inspecting Architect shall vary from that determined by the
Design Architect by more than two (2%) percent (after consultation between the
Design Architect and the Inspecting Architect to determine whether each is
performing measurements in accordance with applicable BOMA Standards), the size
of the Premises shall be deemed to be the average between that determined by the
Design Architect and that determined by the Inspecting Architect. Tenant shall
also cause a set of "as-built" drawings of the Premises to be prepared and
delivered to Landlord upon completion of Tenant's Work.
Section 6.7. Ownership of Improvements.
Upon completion of construction and during the entire Lease Term, the
Tenant Improvements and those portions of the Base Building Construction which
are necessary to comprise the Premises, together with all of Tenant's installed
fixtures, equipment, and components, shall be the property of Tenant. Upon a
termination of this Lease, the Tenant Improvements and those portions of the
Base Building Construction which are necessary to comprise the Premises shall
become the property of Landlord, provided that Tenant shall have the right to
remove certain portions of the Tenant Improvements and its fixtures, equipment,
and components as provided in Section 13.3 below.
16
18
ARTICLE VII
NET LEASE
This Lease is a "triple net" lease and Tenant shall be responsible for
all operating expenses, utilities, Real Estate Taxes (as defined in Article
VIII), insurance and other expenses associated with its occupancy of the
Premises and Tenant's Proportionate Share (as hereinafter defined) of the
expenses of operating and maintaining the Common Area, all as more specifically
described in this Lease. To the extent possible, all of the foregoing expenses
shall be separately billed to Tenant and paid directly by Tenant to the taxing
authority, utility company or service provider, as the case may be. In the event
any such expenses cannot be separately and directly billed to Tenant, Landlord
shall xxxx Tenant for such expenses and Tenant shall pay Landlord the billed
amount within fifteen (15) days of receipt, as Additional Rent. Tenant's
"Proportionate Share" of expenses shall be a fraction, the numerator of which
shall be the usable square footage of the Premises (as determined pursuant to
Section 6.6 hereof) and the denominator of which shall be of all space within
the Complex, including the Premises.
Notwithstanding the foregoing and any other provisions of this Lease to
the contrary, in no event shall Tenant be required to pay directly or to
Landlord, whether as an "operating expense, "Real Estate Taxes", "Landlord's
Common Area Costs," Additional Rent, or otherwise, any amounts with respect to
the following:
(a) Ground rent or other payments owing by Landlord to the Agency
under the Ground Lease and/or the Public Garage Lease, or other
costs or expenses which are necessary for Landlord to comply with
the terms and provisions of the Ground Lease and/or the Public
Garage Lease.
(b) Any costs which are not part of the Landlord's Common Area Costs
and which relate to the leasing, ownership, maintenance and
operation of the retail and office portions of the Complex,
including, without limitations, costs relating to HVAC,
electrical and other utilities, provided that any such costs for
HVAC, electrical or other utilities actually used by Tenant but
which cannot be separately metered or separately billed to Tenant
and the other tenants, shall be prorated between them by
Landlord.
(c) Any capital expenditures as determined under generally accepted
accounting principals, provided that any capital expenditures
which reduce an expense item may be billed to Tenant to the
extent of the savings, and provided, further, that Tenant shall
be responsible for any capital expenditures relating to the
replacement of any portion of Tenant's Work, whether or not such
replacement results from defective materials or ordinary wear and
tear.
(d) Any costs for which the Landlord has the right to a refund or
reimbursement, whether from insurance or otherwise.
(e) Any costs or expenses incurred by Landlord by reason of the
grossly negligent act or omission, or willful misconduct, of (i)
Landlord, its agents, employees, consultants, and/or contractors,
or (ii) any other tenants of the Complex.
17
19
(f) Any costs or expenses incurred by Landlord by reason of
Landlord's failure to comply with the terms of (i) of this Lease
and (ii) any other agreement to which Landlord may be bound.
(g) Any costs or expenses relative to the maintenance and operation
of the Public Garage.
(h) Any costs or expenses incurred by Landlord to contest Real Estate
Taxes or other assessments or impositions against the Complex,
unless such contest, after deducting such costs or expenses,
result in a net reduction of such Taxes, assessments, or other
impositions.
(i) Any late charges or penalties imposed on Landlord in connection
with any late payment of Real Estate Taxes or other assessments
or impositions against the Complex, unless caused by Tenant's
failure to pay its portion of Real Estate Taxes.
(j) Any costs or expenses associated with the maintenance, repair, or
operation of elevators, utility and switching equipment and
related areas, HVAC equipment, and other equipment and components
within the Complex which serve the other tenants of the Complex
and do not serve the Tenant and are not otherwise included within
the Ancillary Use Areas.
(k) Any administrative or "overhead" fee or charge in connection with
the maintenance, repair, or operation of the Complex, provided
that Landlord may include within Landlord's Common Area Costs an
administrative fee equal to three (3%) of the total of such costs
(as limited pursuant to this Article VII).
(l) Any roof repair costs incurred by Landlord pursuant to Section
12.4 below.
ARTICLE VIII
TAXES
Section 8.1. Definition of Real Estate Taxes.
18
20
Landlord shall, pay or cause to be paid all Real Estate Taxes (as
hereinafter defined) assessed or imposed upon the Complex which become due or
payable during the Lease Term. As used in this Section 8.1, the term Real Estate
Taxes shall mean and include all taxes (including, without limitation,
possessory interest taxes associated with the Retail Pavilion Parcel, the Ground
Lease, the Garage Lease, and any so-called value added tax), assessments
(including, without limitation, all assessments for public improvements or
benefits, whether or not commenced or completed prior to the date hereof and
whether or not to be completed within the term of this Lease), fees, levies,
water and sewer rents, rates and charges, vault license fees or rentals, license
and permit fees and other governmental charges of any kind or nature whatsoever,
general and special, ordinary and extraordinary, foreseen and unforeseen, or
hereinafter levied or assessed in lieu of or in substitution of any of the
foregoing which are or may be at any time or from time to time during the term
of the Ground Lease levied, charged, assessed or imposed upon or against Retail
Pavilion Parcel or any buildings or improvements which are now or hereafter
located thereon, or against any of Landlord's personal property now or hereafter
located thereon, or which may be levied, charged, assessed or imposed upon or
against the leasehold estate created by the Ground Lease and the Garage Lease or
which may be imposed upon any taxable interest of Landlord acquired pursuant to
the Ground Lease and the Garage Lease on account of any taxable possessory right
which Landlord may have acquired pursuant to the Ground Lease and the Garage
Lease (including any amounts due pursuant to California Health and Safety Code
Section 33673), any ad valorem taxes, privilege taxes, or other taxes or
assessments payable by Landlord pursuant to the Ground Lease (including any
amounts payable to the Agency pursuant to Section 404 of the Ground Lease) and
the Garage Lease, and including any fines, penalties, interest or costs which
may be added by the collecting authority for the late payment or nonpayment of
any taxes required to be paid by Landlord under the Ground Lease and the Garage
Lease, and all costs, expenses and attorneys' fees incurred by Landlord in
contenting or negotiating with public authorities (Landlord having the sole
authority to conduct such a contest or enter into such negotiations) as to any
of the same, but shall not include taxes on Tenant's business in the Premises,
machinery, equipment, inventory or other personal property or assets of Tenant,
Tenant agreeing to pay, before delinquency, all taxes upon or attributable to
such excluded items without apportionment. Tenant, at its sole cost and expense
(including, without limitation, the payment of any resulting late charges and/or
penalties) may initiate and process any and all appropriate legal actions and
appeals to contest or seek a reduction of any Real Estate Taxes, provided that
Tenant has, prior thereto, given thirty days written notice to Landlord and
Landlord has failed to pursue such contest itself.
Section 8.2. Tenant's Share of Real Estate Taxes.
Tenant shall pay to Landlord, as Additional Rent, its Proportionate
Share of all Real Estate Taxes upon the Complex which become due or payable
during the Lease Term, such Proportionate Share to be prorated for periods at
the beginning and end of the Lease Term which do not constitute full calendar
months or years.
19
21
Section 8.3. Payment by Tenant.
Tenant's proportionate share of Real Estate Taxes shall be paid in
monthly installments commencing with the Commencement Date, in amounts initially
estimated by Landlord, one (1) such installment being due on the first day of
each full or partial month of each full or partial calendar year during the
Lease Term. Such monthly installments shall increase or decrease upon notice
from Landlord given after the actual or anticipated amounts of Real Estate Taxes
due or payable in a particular calendar year are determined. Following the close
of each full or partial calendar year during the Lease Term, the actual amount
of Real Estate Taxes due or payable shall be computed by Landlord and any excess
paid by Tenant during each calendar year over the actual amount Tenant is
obligated to pay hereunder shall be credited to Tenant, and within 30 days after
written notice from Landlord, any deficiency owed shall be paid by Tenant.
Section 8.4. Other Taxes.
Tenant's proportionate share of any governmental tax or charge (other
than income tax) levied, assessed, or imposed on account of the payment by
Tenant or receipt by Landlord, or based in whole or in part upon, the rents in
this Lease reserved or upon the Complex or Retail Pavilion Parcel or the value
thereof shall be paid by Tenant.
Section 8.5. Separate Tax Xxxx.
Notwithstanding the foregoing, Landlord will attempt to cause the
relevant taxing authorities to treat the Premises as a separate tax parcel or
otherwise to issue a separate tax xxxx with respect to the Premises. If such
efforts are successful, Tenant shall be obligated to pay such separate tax xxxx
with respect to the Premises prior to delinquency, and Tenant shall not be
obligated to pay its Proportionate Share of Landlord's tax xxxx with respect to
the Complex, except that Tenant shall continue to be responsible for its
Proportionate Share of any Real Estate Taxes with respect to the Common Areas.
Tenant's failure to pay its separate Real Estate Tax xxxx shall be a default by
Tenant under this Lease, and Tenant shall give Landlord prompt notice of such
failure and Landlord shall thereafter have the right to pay such Real Estate Tax
xxxx on behalf of Tenant and Tenant shall be obligated to reimburse Landlord for
such payment as Additional Rent.
20
22
ARTICLE IX
PARKING, COMMON AREAS AND FACILITIES
Section 9.1. Common Areas.
All parking areas, access roads and facilities furnished, made available
or maintained by Landlord in or near the Complex, whether or not leased or
controlled by Landlord, including but not limited to truck ways, driveways,
loading docks and areas, delivery areas, the Public Garage, other multi-story
parking facilities (if any), package pickup stations, elevators, escalators,
pedestrian sidewalks, courts and ramps, plazas, the Paseo Mall, other malls,
sidewalks, landscaped areas, retaining walls, stairways, bus stops, first-aid
and comfort stations, lighting facilities, sanitary systems, utility lines, and
other areas and improvements provided by Landlord for the general use in common
of tenants of the Complex, and their customers (all herein called "Common
Areas") (but excluding any such areas which are beyond the scope of Landlord's
responsibility pursuant to either the Ground Lease or the Public Garage Lease)
shall at all times be subject to the exclusive control and management of
Landlord, and Landlord shall have the right, from time to time, to establish,
modify and enforce reasonable rules and regulations with respect to all Common
Areas. Tenant agrees to comply with all rules and regulations set forth in
Exhibit E attached hereto and all reasonable amendments thereto, provided that
Landlord enforces such rules and regulations against all tenants of the Complex
in a consistent and nondiscriminatory manner.
Subject to the restrictions set forth in Article I above and in the
Non-Disturbance Agreement, Landlord and the Agency, shall have the right from
time to time to: change or modify and add to or subtract from the sizes,
locations, shapes and arrangements of parking areas, entrances, exits, parking
aisle alignments and other Common Areas; restrict parking by Tenant's employees
to designated areas, construct surface, subsurface or elevated parking areas and
facilities; establish and from time to time change the level of parking
surfaces; enforce parking or otherwise) with, appropriate provisions for ticket
validating; add to or subtract from the buildings in the Complex; and do and
perform such other acts in and to said Common Areas as Landlord in its sole
discretion, reasonably applied, deems advisable for the use thereof by tenants
and their customers.
Section 9.2. Use of Common Areas.
21
23
Tenant and its business invitees, employees and customers shall have the
nonexclusive right, in common with Landlord and those who own or control
portions of the Common Areas not owned, leased or controlled by Landlord and all
others to whom Landlord and those who own or control portions of the Common
Areas not owned, leased or controlled by Landlord have granted or may hereafter
grant rights, to use the Common Areas subject to such reasonable regulations as
Landlord and those who own or control portions of the Common Areas not owned,
leased or controlled by Landlord may from time to time impose and the rights of
Landlord set forth above. Tenant shall abide by all rules and regulations and
cause its concessionaires, officers, employees, agents, customers and invitees
to abide thereby. Subject to the restrictions set forth in Article I above and
in the Non-Disturbance Agreement, Landlord and the Agency may at any time close
temporarily any Common Areas to make repairs or changes, prevent the acquisition
of public rights therein, discourage noncustomer parking, or for other
reasonable purposes. Tenant shall not interfere with Landlord's or those who own
or control portions of the Common Areas not owned, leased or controlled by
Landlord or other tenants' rights to use any part of the Common Areas.
Section 9.3. Public Garage.
The Public Garage is for the general use of the public on a fee basis in
connection with the Complex and shall be operated on a continuous basis by
Landlord as a public parking facility. To the extent that parking in the Public
Garage is made available for the non-exclusive use of the Complex and their
respective employees and customers, the Public Garage shall be considered a part
of the Common Areas. In addition to that portion of the Public Garage which is
included within the Premises (as set forth in Section 2.1(a) above), Tenant
shall be allocated 109 spaces within the Public Garage which shall be reserved,
at Tenant's option, for Tenant's employees and customers. Tenant shall be
charged at market rates for any spaces which it elects to use. Landlord reserves
the right to shift up to 23 of such spaces reserved for Tenant's employees and
customers to an off-site location near the complex to be designated by Landlord
ARTICLE X
COST AND MAINTENANCE OF COMMON AREAS
Section 10.1. Expense of Operating and Maintaining the Complex.
In accordance with the standards set forth in the Ground Lease and the
Public Garage Lease, Landlord shall operate, manage, maintain and repair or
cause to be operated, managed, maintained or repaired, the Common Areas.
"Landlord's Common Area Costs" shall mean all costs of operating and maintaining
the Common Areas in a manner deemed by Landlord appropriate for the best
interests of tenants and other occupants in the Complex, less contributions, if
any, to Landlord's Common Area Costs received by Landlord from the owners or
ground lessees of adjacent and nearby properties. Included among the costs and
expenses which constitute Landlord's Common Area Costs, but subject to the
limitations set forth in Article VII above, but not limited thereto, shall be,
at the option of Landlord, all Landlord's costs and expenses of protecting,
operating, managing, repairing, repaving, lighting, cleaning, painting,
striping, insuring (including but not limited to fire, earthquake and extended
coverage insurance on the Common Areas, insurance protecting Landlord against
liability for personal injury, death and property damage, workers compensation
insurance, and any other insurance which may be
22
24
required by the Ground Lessor), removing of snow, ice and debris, police
protection, security and security patrol, fire protection, regulating traffic,
inspecting, repairing and maintaining of machinery and equipment used in the
operation of the Common Areas, depreciation of machinery and equipment, cost and
expense of inspecting, maintaining, repairing and replacing storm and sanitary
drainage systems, sprinkler and other fire protection systems, electrical, gas,
water, telephone and irrigation system, and expense of installing, maintaining
and repairing burglar and fire alarm systems on Retail Pavilion Parcel, if
installed, cost and expense of landscaping and shrubbery, expenses of utilities
and other services, sums paid by Landlord to other persons or entities a
reimbursement towards the cost of operating, maintaining and repairing those
portions, if any, of the Complex not owned or controlled by Landlord.
Section 10.2. Tenant to Bear Proportionate Share of Expenses.
Subject to the limitations set forth in Article VII above, Tenant will
pay Landlord, in addition to all other amounts in this Lease provided, as
Additional Rent, its Proportionate Share of Landlord's Common Area Costs for
each calendar year during the Lease Term.
Tenant's share of Landlord's Common Area Costs shall be paid in monthly
installments in amounts as reasonably estimated from time to time by Landlord,
one (1) such installment being due on the first day of each month of each
calendar year. After the end of each calendar year, the total Landlord's Common
Area Costs for such year (and at the and of the Lease Term, the total Landlord's
Common Area Costs for the period since the end of the immediately next preceding
calendar year) shall be determined by Landlord and Tenant's share paid for such
period shall immediately, upon such determination, be adjusted by credit of any
excess or payment of any deficiency.
23
25
ARTICLE XI
UTILITIES AND SERVICES
Section 11.1. Utilities.
Landlord and Tenant acknowledge that Tenant's business requires unusual
demands with respect to the magnitude and reliability of the utility facilities
serving the Premises and, for that reason, Tenant's Work includes substantial
upgrades and redundancies in the utility facilities and systems which are
presently in the Complex. Landlord shall have no responsibility for and shall
make no warranty concerning the sufficiency or reliability of the utility
facilities and systems which are planned and installed as part of Tenant's Work
and Landlord makes no warranty that the utility services and utility lines which
enter the Complex are adequate for Tenant's purposes. Furthermore, Landlord
shall have no liability for any interruption or failure of any utility
facilities, whether such failure occurs within or outside of the Complex, unless
such failure is a result of (a) grossly negligent or willful act or omission of
Landlord, its agents, employees, consultants, and/or contractors, or (b)
Landlord's breach of its obligations under this Lease. Tenant shall be solely
responsible for and shall promptly pay when due all charges for use or
consumption of water, gas, electricity, sewer, air-conditioning, telephone and
all other public or private services and utilities of whatever kind furnished or
supplied to or used by Tenant or any party in connection with the use,
occupancy, maintenance, or operation of the Premises, and shall comply with all
contracts relating to such services and shall do all other things necessary and
required for the maintenance and continuance of such services.
Section 11.2. HVAC Systems Serving Premises.
Tenant, as part of Tenant's Work, shall install heating, ventilating and
air conditioning ("HVAC") systems serving the Premises. Landlord shall have no
responsibility for and shall make no warranty concerning the sufficiency or
reliability of such HVAC systems, and Landlord shall have no liability for any
interruption or failure of such HVAC systems unless such failure is a result of
(a) the grossly negligent or willful act or omission of Landlord, its agents,
employees, consultants, and/or contractors, or (b) Landlord's breach of its
obligations under this Lease.
ARTICLE XII
CONDUCT OF BUSINESS BY TENANT
Section 12.1. Use of Premises.
The Premises shall be occupied and used by Tenant solely for the purpose
of conducting therein the business of internet communications and/or for any
other purpose permitted by zoning codes and by the Agency pursuant to the Ground
Lease, provided that in no event shall the Premises be used for industrial or
residential purposes.
Section 12.2. Operation by Tenant.
Without limitation, Tenant covenants and agrees to the following:
24
26
A. Tenant will not place or maintain any vending machines in any entry
of the Premises, outside the Premises or in the Common Area;
B. Tenant will not permit undue accumulations of garbage, trash,
rubbish, or other refuse and will store garbage, trash, rubbish and other refuse
in rat-proof and insect-proof containers inside the Premises, and remove the
same frequently and regularly and, if directed by Landlord, by such means and
methods and at such times and intervals as are designated by Landlord, all at
Tenant's cost;
C. Tenant will not permit any sound system which is audible outside the
Premises, nor use or permit the use of any objectionable advertising medium such
as, without limitation, loudspeakers, phonographs, public address systems, sound
amplifiers, radio or broadcast within the improvements in such manner that any
sounds reproduced, transmitted or produced shall be directed primarily beyond
the interior of the Premises, and will keep all mechanical apparatus free of
objectionable vibration and noise which may be transmitted beyond the interior
of the Premises;
D. Tenant will keep all mechanical equipment in good working order and
condition;
E. Tenant will not commit or suffer waste in, on or about the Premises,
the Complex or the Common Areas;
F. Tenant will not permit or cause odors to emanate or be dispelled from
the Premises;
G. Tenant will not create, cause, maintain or permit any nuisance in, or
about the Premises, the Complex, or the Common Areas;
H. Tenant will not solicit business in the Common Areas nor distribute
advertising matter to, in or upon any Common Areas;
I. Tenant will not permit the loading or unloading or the parking or
standing of delivery vehicles outside any area designated therefor, nor permit
any use of vehicles which will interfere with the use of any Common Areas;
J. Subject to the limitations set forth in Section 12.5 below, Tenant
will comply with all laws, recommendations, ordinances, rules and regulations of
governmental, public, private and other authorities and agencies, including
those with authority over insurance rates, with respect to the use or occupancy
of the Premises;
K. Tenant will not permit any noxious, toxic or corrosive fuel (other
than diesel fuel for Tenant's generators) or gas, dust, dirt or fly ash in the
Premises;
L. Tenant will not place a load on any floor in the Complex which
exceeds the floor load per square foot which such floor was designed to carry;
M. Tenant will not operate any fast food business open to the public on
the Premises;
25
27
Section 12.3. Painting, Decorating, Displays, Alterations.
Tenant will not paint, decorate or change the architectural treatment of
any part of the exterior of the Premises nor any part of the interior of the
Premises visible from the exterior nor make any structural alterations,
additions or changes in the Premises which cost in excess of Fifty Thousand
Dollars ($50,000) without Landlord's written approval thereto, and will promptly
remove any paint, decoration, alteration, addition or changes, including
graffiti, applied or installed without Landlord's approval and restore the
Premises to an acceptable condition or take such other action with respect
thereto as Landlord directs.
Section 12.4 Telecommunications Rights and Rooftop Equipment.
Tenant shall have the right to install and maintain, at its expense,
telecommunication and other communications antenna, equipment and fixtures,
HVAC, mechanical, electrical, and other equipment on the roof of the Complex
subject to Landlord and Agency approval. The aforesaid items shall be located
within the Tenant Penthouse Area, the Tenant HVAC Area, and the Tenant Antennae
Area as appropriate (collectively the "Tenant Roof Areas"). Tenant shall, at its
expense, maintain that portion of the roof upon which the Tenant Roof Areas are
located as well as an equitably allocated portion of those areas of the roof
providing access to those areas. The cost of any replacement of the roof
membrane shall be allocated among Tenant and the other tenants in the Complex
based on the ratio between the Tenant Roof Areas (which shall be Tenant's
responsibility) and the other areas of the roof (which shall be the collective
responsibility of the other Tenants of the Complex) Landlord shall be obligated
to maintain all other portions of the roof of the Complex. All equipment located
within the Tenant Roof Area shall be subject to noise limits and visual
screening requirements to be imposed by the City and/or Agency in connection
with the City Approvals, and Tenant shall bear the full cost of compliance with
such requirements. As long as telecommunications equipment on the roof of the
Complex is used within the course of Tenant's normal business, there shall be no
rental charge for such placement on the roof, but Tenant shall have the
obligation to maintain that portion of the roof located within the Tenant Roof
Area. Tenant shall also have the right to distribute telecommunications services
within the Complex at Tenant's expense, so long as this distribution does not
interfere with the normal course of the business of the other tenants of the
Complex and does not affect any leaseable space.
Section 12.5. Compliance with Laws.
Tenant shall, at its sole costs and expense, comply with and shall cause
any operators licensees, co-locators and concessionaires to comply with:
(a) All federal, state, county, municipal and other governmental
statutes, laws, rules, orders, regulations and ordinances (herein sometimes
collectively referred to as "Law") affecting the Complex or any part thereof, or
the use thereof, including those which require the making of any structural,
unforeseen or extraordinary changes, whether or not any such statutes, laws,
rules, orders, regulations or ordinances which may be hereafter enacted were
within the
26
28
contemplation of the parties at the time of execution of this Lease, or involve
a change of policy on the part of the governmental body enacting the same; and
(b) All rules, orders and regulations of the National Board of
Fire Underwriters or other bodies exercising similar functions in connection
with the prevention of fire or the correction of hazardous conditions which
apply to the Complex; and
(c) Each and every standard requirement of all policies of public
liability, fire and other insurance which at any time may be in force with
respect to the Complex, provided that such requirements do not materially
interfere with Tenant's use of the Premises.
Section 12.6. Non-Discrimination.
The Tenant herein covenants by and for itself, its heirs, executors,
administrators and assigns, and all persons claiming under or through it, and
this Lease is made and accepted upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any person or
group of persons on account of race, color, creed, religion, sex, sexual
orientation, age, handicap, marital status, ancestry or national origin in the
leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the
Premises herein leased, nor shall Tenant itself, or any person claiming under or
through it, establish or permit any such practice or practices of discrimination
or segregation with reference to the selection, location, number, use or
occupancy of tenants, lessees, subtenants, sublessees or vendees in the Premises
herein leased.
ARTICLE XIII
MAINTENANCE OF LEASED PREMISES
Section 13.l. Maintenance by Landlord.
27
29
Landlord shall keep or cause to be kept the foundations (except for
foundation upgrades which are constructed by Tenant as part of Tenant's Work
which shall be Tenant's obligation to maintain), roof (except for the Tenant
Roof Areas which shall be maintained by Tenant pursuant to Section 12.4 hereof)
and structural portions of the walls of the Premises (except such structural
portions which are constructed by Tenant as part of Tenant's Work which shall be
Tenant's obligation to maintain) in good order, repair and condition and neat,
clean, orderly, sanitary and safe (including but not limited to doing such
things as are necessary to cause the Complex to comply with applicable laws,
ordinances, rules, regulations and orders of governmental and public bodies and
agencies) to ensure that the Complex is maintained in a first class manner as is
appropriate in a first-class pedestrian-oriented retail shopping and office
environment. If replacement of equipment, fixtures and appurtenances thereto is
necessary (other than replacement of equipment or systems which are originally
installed as part of Tenant's work, which shall be Tenant's Responsibility),
Landlord shall replace the same with new or completely reconditioned equipment,
fixtures and appurtenances, and repair all damage done in or by such
replacement. Landlord shall carry out its required maintenance and repair at
such times as are necessary and prudent in order to maintain the Complex in a
first class condition and otherwise in accordance with the requirements and
standards of the Ground Lease and the Public Garage Lease. Landlord's obligation
to maintain and repair is not conditioned upon receiving any notice from Tenant;
provided, however, in the event an item of maintenance or repair is required,
Tenant may (but is not obligated) to provide notice to Landlord of the same and,
except in the case of any emergency, Landlord shall carry out the item of
maintenance or repair within ten (10) days of Tenant's notice. This Section 13.1
shall not apply in case of damage or destruction by fire or other casualty or
condemnation or eminent domain, in which events the obligations of Landlord
shall be controlled by Article XIX and XX. Except as provided in this Section
13.1, Landlord shall not be obligated to make repairs, replacements or
improvements of any kind upon the Premises, or to any equipment, merchandise,
stock in trade, facilities or fixtures therein, all of which shall be Tenant's
responsibility, but Tenant shall give Landlord prompt written notice of any
accident, casualty, damage or other similar occurrence in or to the Premises or
the Common Areas of which Tenant has knowledge. As a part of the consideration
for the rental of the Premises, Tenant hereby waives any provisions of law,
including but not limited to California Civil Code Sections 1941 and 1942, which
permit the Tenant to make repairs at the Landlord's expense.
28
30
Section 13.2. Maintenance by Tenant.
Tenant shall at all times keep the Premises (including all entrances and
vestibules) and all partitions, window and window frames and moldings, glass,
store fronts, doors, door openers, fixtures, equipment and appurtenances thereof
(including lighting, heating, electrical, plumbing, ventilating and air
conditioning fixtures and systems and other mechanical equipment and
appurtenances) and all parts of the Premises, and parts of Tenant's Work not on
the Premises including the Tenant Roof Area and the loading dock reserved for
Tenant's exclusive use, not required herein to be maintained by Landlord, in
good order, condition and repair and neat, clean, orderly, sanitary and safe
(including but not limited to doing such things as are necessary to cause the
Premises to comply with applicable laws, ordinances, rules, regulations and
orders of governmental and public bodies and agencies) to ensure that the
Premises is maintained in a first class manner as is appropriate in a
first-class pedestrian-oriented retail shopping and office environment. If
replacement of equipment, fixtures and appurtenances thereto is necessary,
Tenant shall replace the same with new or completely reconditioned equipment,
fixtures and appurtenances, and repair all damages done in or by such
replacement. Subject to the limitations set forth in Section 4.5 above, if
Tenant fails to perform its obligations hereunder, Landlord without notice may,
but shall not be obligated to, perform Tenant's obligations or perform work
resulting from Tenant's acts, actions or omissions and the cost of the same
shall be deemed additional rent at the time of the next installment of Fixed
Rent due hereunder; provided, however, in no event shall Landlord be entitled to
perform work on the Tenant's equipment, components or fixtures.
Section 13.3. Surrender of Premises.
At the expiration of the Lease Term, or earlier termination of the
Lease, Tenant shall surrender the Premises in good condition, reasonable wear
and tear and damage by unavoidable casualty excepted, and deliver all keys for,
and all combinations on locks, safes and vaults in, the Premises to Landlord's
notice address as specified in Section 28.7 or, at Landlord's option, to the
office of the Complex's general manager. At the expiration of the Lease Term or
upon any other termination of this Lease, Tenant shall be entitled to remove
from the Premises and the Complex all or any portion of Tenant's equipment,
fixtures and components utilized in Tenant's co-location and telecommunications
business, provided that Tenant restores any damage to the Premises caused by
such removal. Unless Landlord consents thereto in its sole and absolute
discretion, Tenant shall not be permitted to remove any other portions of the
Tenant's Improvements or Basic Building Construction, including, without
limitation, HVAC systems, generators, and electrical distribution systems.
29
31
ARTICLE XIV
ALTERATIONS
Section 14.1. Removal and Restoration by Tenant.
The following paragraph shall apply only following the initial
completion of Tenant's Work, which is governed by Article VI. Tenant shall give
Landlord at least fifteen (15) days written notice before commencing
construction of any alterations, changes, or additions to the Premises. Without
Landlord's prior written consent (which consent shall not be unreasonably
withheld), Tenant shall not make any alterations, changes or additions which (a)
are structural or affect any Complex utilities or systems (whether or not
affecting other tenants), (b) affect the exterior of the Complex, (c) require
the approval of the Agency pursuant to the Ground Lease and/or Public Garage
Lease, or (d) which are not in categories (a), (b), or (c) above but which cost,
in the aggregate, more than $500,000 at any one time. All alterations, changes
and additions and all improvements, including leasehold improvements, made by
Tenant, or made by Landlord on Tenant's behalf, whether part of Tenant's Work or
not and whether or not paid for wholly or in part by Landlord, shall remain
Tenant's property for the Lease Term. Any alterations, changes, additions and
improvements shall immediately upon the termination of this Lease become
Landlord's property, be considered part of the Premises. If Tenant fails to
remove any shelving, decorations, equipment, trade fixtures or personal property
from the Premises prior to the end of the Lease Term, they shall, at Landlord's
option, become Landlord's property. Tenant shall pay for the removal of such
property from the Premises and Tenant shall repair or pay for the repair of any
damage done to the Premises resulting from removing same.
Section 14.2. Tenant's Liens.
30
32
A. Tenant shall not create or permit or suffer to be created or to
remain, and will discharge, any lien (including, but not limited to, the liens
of mechanics, laborers, materialmen, suppliers or vendors for work or materials
alleged to be done or furnished in connection with the Complex), encumbrance or
other charge upon the Complex, or any part thereof, or upon Tenant's leasehold
interest therein. If any such lien shall at any time be filed as aforesaid,
Tenant may contest the same in good faith, but, notwithstanding such contest,
Tenant shall, within thirty (30) days after the filing thereof, cause such lien
to be released of record by payment, bond, order of a court of competent
jurisdiction, or otherwise and shall indemnify and hold Landlord and the Ground
Lessor harmless from any adverse effects resulting from such lien. In the event
of Tenant's failure to release of record any such lien within the aforesaid
period, Landlord may remove said lien by paying the full amount thereof or by
bonding or in any other manner Landlord deems appropriate, without investigating
the validity thereof, and irrespective of the fact that Tenant may contest the
propriety or the amount thereof, and Tenant, upon demand, shall pay Landlord the
amount so paid out by Landlord in connection with the discharge of said lien,
together with reasonable expenses incurred in connection therewith, including
reasonable attorneys' fees. Nothing contained in this Lease shall be construed
as a consent on the part of Landlord to subject Landlord's estate in the Retail
Pavilion Parcel to any lien or liability under the lien laws of the State of
California. Tenant shall provide to Landlord at least ten (10) days written
notice prior to the start of any construction, which notice is to provide
Landlord the opportunity to enter upon the Premises to post a "Notice of
Nonresponsibility" pursuant to California Civil Code Section 3094.
B. Except as expressly provided in Article VI hereof, nothing in this
Lease shall be construed as constituting the consent of Landlord (to the extent
otherwise required pursuant to Section 14.1 above), expressed or implied, to the
performance of any labor or the furnishings of any materials or any specific
improvements, alterations of or repairs to the Premises, the Complex, or any
part thereof, by any contractor, subcontractor, laborer or materialman, nor as
giving Tenant or any other person any right, power or authority to act as agent
of or to contract for, or permit the rendering of, any services or the
furnishing of any materials in such manner as would give rise to the filing of
mechanics' liens or other claims against the Complex. Landlord and the Ground
Lessor shall have the right at all reasonable times to post, and keep posted, on
the Premises any notices which Landlord or the Ground Lessor may deem necessary
for the protection of Landlord or the Ground Lessor and of the Complex from
mechanics' liens or other claims. In addition, Tenant shall make, or cause to be
made, prompt payment of all monies due and legally owing to all persons doing
any work or furnishing any materials or supplies to Tenant or any of its
contractors or subcontractors in connection with the Complex.
C. Except as expressly provided in Section 16.5 hereof, Tenant shall not
create or suffer to be created a mortgage, security interest or other lien
against the Premises, Tenant's interest in the Premises, any improvements,
additions or other construction made by Tenant in or to the Premises or against
any equipment or fixtures installed by Tenant therein (other than Tenant's
property), and should any security interest be created in breach of the
foregoing, Landlord shall be entitled to discharge the same by exercising the
rights and remedies afforded it under the penultimate sentence of paragraph A of
this Section.
31
33
Section 14.3. Signs, Awnings and Canopies.
Tenant will not place or permit on any exterior door or window or any
wall of the Premises or as otherwise may be visible from outside the Premises,
any sign, awning, canopy, advertising matter, decoration, lettering or other
thing of any kind without Landlord's written consent which shall not be
unreasonably withheld. All signs must additionally comply with applicable City
of San Xxxx ordinances and codes and must conform to the Sign Guidelines
contained within Exhibit C attached hereto and incorporated herein, and any
future amendments thereto.
ARTICLE XV
INSURANCE
Section 15.1. By Landlord.
A. Landlord shall carry public liability insurance on those portions of
the Common Areas included in and around the Complex, including coverage for any
accident resulting in personal injury, bodily injury or death of any person and
consequential damages arising therefrom, including comprehensive property damage
insurance, in an amount of not less than three million dollars ($3,000,000)
combined single-limit coverage with respect to personal or bodily injury or
death to any one or more persons and with respect to damage to property, or such
other amount an may be agreed by Landlord and Ground Lessor pursuant to the
Ground Lease or as may be required by the holder of any mortgage on the Complex.
Tenant shall be named as an additional insured on Landlord's public liability
policy with respect to the Common Areas only.
B. Landlord shall also carry insurance for fire, extended coverage,
vandalism, malicious mischief and other endorsements required by Ground Lessor
and/or deemed advisable by Landlord, insuring all improvements comprising the
Complex, including the Premises and all leasehold improvements thereon and
appurtenances thereto (excluding Tenant's merchandise, trade fixtures,
furnishings, equipment, personal property and excluding plate glass) for the
full insurable value thereof but in no event less than the full replacement cost
thereof, with such deductibles as are allowed by the Ground Lease, such
insurance coverage to include improvements provided by Tenant as set forth in
Exhibit C as Tenant's Work (excluding wall coverings, floor covering, carpeting
and drapes) and Landlord's Work as defined in Exhibit C. Tenant shall be named
as a loss payee with respect to such insurance coverage as respects those
portions of Tenant's Work set forth in the preceding sentence.
C. Landlord shall carry Business Interruption Insurance as required by
Ground Lessor and all other insurance now or in the future required by Ground
Lessor.
D. Tenant agrees to pay Landlord, as Additional Rent, its Proportionate
Share of the cost of the premiums for such insurance described above in this
Section 15.1.
Section 15.2. By Tenant.
32
34
A. Tenant agrees to carry public liability insurance on the Premises
during the Lease Term, covering the Tenant and naming the Landlord, the Ground
Lessor, the Agency, and the City of San Xxxx as additional named insureds with
terms and companies satisfactory to Landlord, for limits of not less than Five
Million Dollars ($5,000,000.00) per occurrence combined single limit. Tenant's
insurance will include contractual liability coverage recognizing this Lease,
products and/or completed operations liability and providing that Landlord and
Tenant shall be given a minimum of thirty (30) days written notice by the
insurance company prior to cancellation, termination or change in such
insurance. Tenant also agrees to carry insurance against fire and such other
risks as are from time to time included in standard Fire and Extended Coverage
insurance, for the full insurable value, covering all of Tenant's merchandise,
trade fixtures, furnishing, wall covering, floor covering, carpeting, drapes,
equipment and all items of personal property of Tenant located on or within the
Premises. Tenant shall provide Landlord with certificates or, at Landlord's
request, copies of the policies, evidencing that such insurance is in full force
and effect and stating the terms thereof. Subject to Section 15.3 below, the
minimum limits of the comprehensive general liability policy of insurance shall
in no way limit or diminish Tenant's liability under Section 15.6 hereof. Within
thirty (30) days after demand therefore by Landlord, Tenant shall furnish
Landlord with evidence that it has complied with such demand.
B. If Tenant uses, stores, handles, processes or disposes of hazardous
materials, then Tenant shall maintain in full force and effect through the Term
of this Lease and or any renewal thereof, environmental impairment liability
insurance with limits of not less than $1,000,000, providing coverage for bodily
injury, property damage or injury or damage of actual, alleged or threatened
emission, hazardous materials, discharge, dispersal, seepage, release or escape
of including any loss, cost or expense incurred as a result of any cleanup of
hazardous materials or in the investigation, settlement or defense of any claim,
suit, or proceedings against the property owner or management company arising
from the Tenant's use, storage, handling, processing or disposal of hazardous
materials.
C. Before any alterations, additions, improvements or construction may
be undertaken by or on behalf of Tenant, Tenant shall require any contractor
performing work on the Premises to obtain, carry and maintain, at no expense to
Landlord: (i) worker's compensation insurance and employer's liability as
required by the jurisdiction in which the Complex is located; (ii) builder's
risk insurance with a deductible no greater than Ten Thousand Dollars ($10,000),
in the amount of the full replacement cost of the Tenant's Work and (iii)
Commercial General Liability Insurance providing on an occurrence basis a
minimum combined single limit of One Million Dollars ($1,000,000) per occurrence
(and Two Million Dollars ($2,000,000) general aggregate, if applicable). If the
contractor fails or is unable to acquire the above-mentioned insurance, Tenant
shall provide such insurance (except worker's compensation insurance and
employer's liability) at its sole cost and expense.
33
35
Section 15.3. Mutual Waiver of Subrogation Rights.
Landlord and Tenant and all parties claiming under them mutually release
and discharge each other from all claims and liabilities arising from or caused
by any casualty or hazard covered or required hereunder to be covered in whole
or in part by insurance in the Complex or in connection with property on or
activities conducted on the Premises, and waive any right of subrogation which
might otherwise exist in or accrue to any person on account thereof, provided
that such release shall not operate in any case where the effect is to
invalidate or increase the cost of such insurance coverage (provided, that in
the case of increased cost, the other party shall have the right, within (30)
days following written notice, to pay such increased cost, thereby keeping such
release and waiver in full force and affect).
Section 15.4. Waiver.
Landlord, its agents and employees, shall not be liable for, and Tenant
waives all claims for, damage, including but not limited to consequential
damages, to person, property or otherwise, sustained by Tenant or any person
claiming through Tenant resulting from any accident or occurrence in or upon any
part of the Complex including, but not limited to, claims for damage resulting
from: (a) any equipment or appurtenances which become out of repair; (b)
Landlord's failure to keep any part of the Complex or Common Areas outside of
the Complex in repair; (c) injury done or caused by wind, water, or other
natural elements (d) any defect in or failure of plumbing, heating or air
conditioning equipment, electrical wiring or installation thereof, gas, water,
and steam pipes, stairs, porches, railings or walks; (e) broken glass; (f) the
backing up of any sewer pipe or downspout; (g) the bursting, leaking or running
of any tank, tub, washstand, water closet, waste pipe, drain or any other pipe
or tank in, upon or about the Premises; (h) the escape of steam or hot water;
(i) water, snow or ice upon the Premises; (j) the falling of any fixture,
plaster or stuccos (k) damage to or loss by theft or otherwise of property of
Tenant or others; (1) acts or omissions of persons in the Premises, other
tenants in the Complex, occupants of nearby properties, or any other persons;
and (m) any act or omission of owners of adjacent or contiguous property, or of
Landlord, its agents or employees. All property of Tenant kept in the Premises
shall be so kept at Tenant's risk only and Tenant shall save Landlord harmless
from claims arising out of damage to the same, including subrogation claims by
Tenant's insurance carrier. Notwithstanding anything to the contrary in this
Lease, but subject to Section 15.3, nothing in this Lease shall be construed as
a waiver or release of any claims which Tenant may have against Landlord as a
result of the negligent or willful act or omission of Landlord, its agents,
employees, consultants, and/or contractors.
34
36
Section 15.5. Insurance - Tenant's Operation.
Tenant will not do or suffer to be done anything which will contravene
Landlord's insurance policies or prevent Landlord from procuring such policies
in amount and companies selected by Landlord. If anything done, omitted to be
done or suffered to be done by Tenant in, upon or about the Premises shall cause
the rates of any insurance effected or carried by Landlord on the Premises or
other property to be increased beyond the regular rate from time to time
applicable to the Premises for use for the purpose permitted under this Lease,
or such other property for the use or uses made thereof, Tenant will pay the
amount of such increase promptly upon Landlord's demand and Landlord shall have
the right to correct any such condition at Tenant's expense. In the event that
this Lease so permits and Tenant engages in the preparation of food or packaged
foods or engages in the use, sale or storage of inflammable or combustible
material, Tenant shall install chemical extinguishing devices (such as ansul)
approved by Underwriters Laboratories and Factory Mutual Insurance Company and
the installation thereof must be approved by the appropriate local authority.
Tenant shall keep such devices under service as required by such organizations.
If gas is used in the Premises, Tenant shall install gas cut-off devices (manual
and automatic).
Section 15.6. Hold Harmless and Indemnification.
Tenant shall indemnify and hold Landlord, the Ground Lessor, the Agency
and the City of San Xxxx and their respective officers, agents and employees
harmless from and against all liabilities, obligations, damages, penalties,
claims, costs, charges and expenses, including reasonable architects' and
attorneys' fees (collectively referred to in this Section 15.6 as "claim") which
may be imposed upon or incurred by or asserted against the Agency, Landlord, the
Ground Lessor or the City of San Xxxx or their respective officers, agents and
employees by reason of any of the following occurrences during the term of this
Lease arising out of Tenant's operations; provided, however, that Tenant shall
have no obligation to indemnify and hold Landlord, the Agency, the Ground Lessor
or the City of San Xxxx, respectively, and their respective officers, agents and
employees, harmless from and against any matter to the extent it arises from the
gross negligence or willful act of Landlord, the Agency, the Ground Lessor or
the City of San Xxxx, respectively, or their respective officers, agents or
employees or from Landlord's breach of this Lease or from conduct resulting in
an award of punitive damages against Landlord, the Agency, the Ground Lessor or
City of San Xxxx, respectively:
(a) Any work or thing done in, on or about the Premises and the
improvements thereon or construction of any improvements by or at the direction
of Tenant; or
(b) Any use, non-use, possession, occupation, condition
operation, maintenance or management of the Premises or any part thereof by or
at the direction of Tenant; or
(c) Subject to Section 15.3, any negligence on the part of Tenant
or any of its agents, contractors, servants, employees, subtenants, operators,
licensees or invitees; or
35
37
(d) Subject to Section 15.3, any accident, injury or damage to
any person or property occurring in, on or about the Promises or any part
thereof; or
(e) Any failure on the part of Tenant to perform or comply with
any of the terms, provisions, covenants and conditions contained in this Lease
on its part to be performed or complied with on its part.
In case any action or proceeding is brought against Landlord, the
Agency, the Ground Lessor or the City of San Xxxx or their respective officers,
agents and employees by reason of any such claim, Tenant, upon written notice
from Landlord, shall, at Tenant's expense, resist or defend such action or
proceeding by counsel selected by Tenant or Tenant's insurance carrier and
reasonably approved by Landlord, the Agency, the Ground Lessor, and/or the City
of San Xxxx, whichever such entities are named as parties to such action or
proceeding.
15.7 Landlord's Indemnity.
Landlord shall indemnify, defend and hold Tenant and its officers,
agents, and employees ("Indemnified Tenant Parties") harmless from and against
all liabilities, obligations, damages, penalties, claims, costs, charges, and
expenses including reasonable attorneys' fees (collectively, "Indemnity Claims")
which may be imposed upon or incurred by or asserted against any of the
Indemnified Tenant Parties by reason of the following occurrences:
(a) Any work or thing done in, on, or about the Complex by or at the
direction of Landlord;
(b) Any negligence on the part of Landlord or any of its agents,
contractors, employees, or consultants;
(c) Any failure on the part of Landlord to perform or comply with
any of the terms, provisions, covenants and conditions contained
in this Lease; and
(d) Any failure on the part of Landlord to perform or comply with
any of the terms, provisions, covenants and conditions contained
in the Ground Lease.
Notwithstanding the foregoing, Landlord shall have no obligation to
indemnify any of the Tenant Indemnified parties with respect to any matter to
the extent it arises from the negligence or willful act of any of the Tenant
Indemnified Parties or is the subject of Tenant's indemnity of Landlord pursuant
to Section 15.6 above.
In the case any Indemnity Claims are brought against any of the
Indemnified Tenant Parties, Landlord, upon written notice from Tenant, shall, at
Landlord's expense, resist or defend such Indemnity Claims by counsel selected
by Landlord and reasonably approved by Tenant.
36
38
ARTICLE XVI
ESTOPPEL CERTIFICATE ATTORNMENT, SUBORDINATION
Section 16.1. Estoppel Certificate.
Within ten (10) days after the written request of either party, the
other party shall deliver, executed in recordable form, a declaration to any
person designated by the requesting party (a) ratifying this Lease; (b) stating
the commencement and termination dates; and (c) certifying (i) that this Lease
is in full force and effect and has not been assigned, modified, supplements or
amended (except by such writings as shall be stated), (ii) that all conditions
under this Lease to be performed by the other party have been satisfied (stating
exceptions, if any), (iii) that no defenses or offsets against the enforcement
of this Lease by the other party exist (or stating those claimed), (iv) as to
advance rent, if any, paid by Tenant, (v) the date to which Fixed Rent has been
paid, and (vi) such other information as the requesting party reasonably
requires. Persons receiving such statements shall be entitled to rely upon them.
Section 16.2. Attornment.
A. Except as is provided in subsection 16.2 (B) below, Tenant shall, in
the event of a sale or assignment of Landlord's interest in the Premises or the
building in which the Premises is located or this Lease or the Complex or the
Retail Pavilion Parcel, or if the Premises or such building comes into the hands
of a purchaser, mortgage, Ground Lessor or any other person thereinafter
referred to as "New Landlord") whether because of a mortgage foreclosure,
exercise of a power of sale under a mortgage, termination of the Ground Lease,
or otherwise, attorn to the New Landlord or other person and recognize the same
as Landlord hereunder and pay rent to such New Landlord from the date of such
attornment. Tenant shall execute, at Landlord's request, any attornment
agreement required to be executed by any New Landlord containing such provisions
as such New Landlord requires, provided that such attornment agreement does not
expand Tenant's obligations or diminish Tenant's rights under this Lease and
does not diminish the obligations of "Landlord" under this Lease, and the New
Landlord agrees to assume the obligations of the Landlord under this Lease. The
New Landlord shall only be responsible to Tenant for obligations arising
subsequent to the date of such attornment.
B. In the event the Ground Lease is terminated for any reason the terms
of the Non-Disturbance Agreement between the Agency and Tenant (as required
pursuant to Section 5.1 hereof) shall govern.
Section 16.3. Release of Landlord.
In the event of termination of the Ground Lease or sale, assignment,
transfer or conveyance by Landlord of Retail Pavilion Parcel or its rights
hereunder, the same shall operate to release Landlord from any future liability
upon any of the covenants or conditions of this Lease, expressed or implied, in
favor of Tenant arising from events occurring following the date of such
termination, sale, assignment, transfer, or conveyance, and in such event Tenant
agrees to look solely to the responsibility of the successor in interest of
Landlord in and to the Complex or this Lease.
37
39
Section 16.4. Landlord's Option to Purchase.
Pursuant to the Ground Lease, Landlord holds an option to purchase the
complex from the Ground Lessor. In the event Landlord exercises such option and
becomes the fee owner of the Complex, this Lease shall remain in full force and
effect.
Section 16.5. Subordination.
A. Landlord Financing. Landlord represents that Landlord's interest in
the Complex, as on the Effective Date, is not encumbered by any financing and is
subject only to the exceptions set forth in the preliminary title report
attached hereto as Exhibit G.
Landlord shall have the right to secure future financing with
Landlord's interest in the Complex and, with respect to any such future
financing, Tenant agrees to execute an agreement in favor of such lender
(provided such lender has been approved by the Agency to the extent the Agency
has retained such approval right) subordinating Tenant's interest in the Complex
and providing for Tenant's attornment to such lender upon a foreclosure if, in
turn, such lender (a) agrees to not terminate this Lease provided Tenant is not
then in material default of its obligations hereunder and (b) the lender, or its
successors or assigns, assumes all obligations of Landlord under this Lease to
the extent the same arise on or after the date of foreclosure.
B. Tenant Financing. Tenant shall have the right from time to time
during the Lease Term to secure any financing or other obligations of Tenant
with all or any part of Tenant's interest in the Tenant Improvements and in
Tenant's equipment, fixtures and components, provided that such security
interest shall not be created by any mortgage or other real estate lien on the
Premises, but only by a security interest in personalty secured with a security
agreement and perfected through the filing of financing statements. Landlord
shall, within ten (10) days following written request, execute and deliver such
lien releases, waivers, estoppels, or other instruments as may be required by
any lender or other obligor of Tenant to (a) confirm Tenant's rights under this
Lease and with respect to the Tenant Improvements and Tenant's equipment,
fixtures and components, (b) confirm Landlord's approval of such financing and
the subordination of any rights of Landlord with respect to the Tenant
Improvements and/or Tenant's equipment, fixtures and components to the rights of
such lender or obligor, and (c) grant to any lender or obligor, or their
successors or assigns, rights to enter the Premises as may be necessary to
exercise their rights with respect to the Tenant Improvements and/or Tenant's
equipment, fixtures and components.
Section 16.6. Failure to Execute Instruments.
Tenant's failure to execute instruments or certificates provided for in
this Article XVI within 15 days after the mailing by Landlord of a written
request shall be a default under this Lease.
38
40
ARTICLE XVII
ASSIGNMENT AND SUBLETTING
Section 17.1. Consent Required.
Except as otherwise provided herein, Tenant shall not sell, assign,
mortgage, pledge or in any manner transfer this Lease or any interest therein,
nor sublet all or any part of the Premises, without Landlord's prior written
consent in each instance, which consent shall not be withhold unreasonably by
Landlord, provided, however, if the Ground Lease currently requires the consent
of the Agency then such sale, assignment, etc., shall be subject to such consent
and Landlord shall utilize diligent efforts to obtain same if Landlord is
prepared to grant its own consent to same. Consent by Landlord to any assignment
or subletting shall not waive the necessity for consent to any subsequent
assignment or subletting. This prohibition shall include a prohibition against
any subletting or assignment by operation of law. If this Lease is assigned or
the Premises or any part sublet or occupied by anybody other than Tenant,
Landlord may collect rent from the assignee, subtenant or occupant and apply the
same to the rent herein reserved, but no such assignment, subletting, occupancy
or collection of rent shall be deemed a waiver of any restrictive covenant
contained in this Section 17.1 or the acceptance of the assignee, subtenant or
occupant as tenant, or a release of Tenant from the performance by Tenant of any
covenants on the part of Tenant herein contained. Any assignment (a) as to which
Landlord has consented; or (b) which is required by reason of a final
nonappealable order of a court of competent jurisdiction; or (c) which is made
by reason of and in accordance with the provisions of any law or statute,
including, without limitation, the laws governing bankruptcy, insolvency or
receivership shall be subject to all terms and conditions of this Lease, and
shall not be effective or deemed valid unless, at the time of such assignment:
1. Each assignee or sublessee shall agree, in a written
agreement satisfactory to Landlord, to assume and abide by
all of the terms and provisions of this Lease, including
those which govern the permitted uses of the Premises
described in Article XII herein; and
2. Each assignee or sublessee has submitted a current
financial statement, audited by a certified public
accountant, showing a net worth and working capital in
amounts determined by Landlord to be sufficient to assure
the future performance by such assignee or sublessee of
Tenant's obligations hereunder; and
3. The business reputation of each assignee and sublessee
shall meet or exceed generally acceptable commercial
standards; and
4. The use of the Premises by each assignee or sublessee
shall not violate, or create any potential violation of
applicable laws, codes or ordinances, nor violate the
Ground Lease or any other agreements affecting the
Premises, Landlord or other tenants in the Complex.
39
41
Landlord shall provide its consent to any proposed assignee or sublessee which
meets the requirements of 1. through 4. above. With respect to any proposed
sublease of less than the entire Premises or for less than the remaining balance
of the Lease Term, the requirements in 1. and 2. above shall not require (i) an
assumption of obligations greater than those imposed by the proposed sublease or
(ii) a showing of financial ability to beyond that which is necessary to perform
obligations under the proposed sublease.
Section 17.2 Excess Rent Upon Assignment or Subletting.
In the event of any assignment or subletting as provided above, there
shall be paid to Landlord, in addition to the Fixed Rent and other charges due
Landlord pursuant to this Lease, an amount equal to fifty percent (50%) of the
Excess Rent (as hereinafter defined), if any. "Excess Rent" shall mean the
amount of rent to be paid by the assignee or sublessee to Tenant in excess of
the sum of (a) the amount of Fixed Rent required to be paid by Tenant to
Landlord under this Lease, and (b) an amount equal to ten percent (10%) per
annum of the actual cost of Tenant's Work pursuant to Article VI hereof,
provided, however, that in no event shall the Excess Rent (when added to the sum
of (a) and (b) above) exceed the then prevailing market rent for premises of the
type being assigned or sublet; any amount in excess of the foregoing amounts
shall be deemed compensation for other assets of Tenant and Landlord shall not
participate therein. Such Excess Rent shall be paid to Landlord concurrently
with the payments of Fixed Rent required under this Lease, and Tenant shall
remain primarily liable for such payments. Notwithstanding any assignment or
subletting, Tenant shall remain fully liable on this Lease and for the
performance of all terms, covenants and provisions of this Lease.
Section 17.3. Change in Ownership.
If Tenant or the guarantor of this Lease, if any, is a corporation the
stock of which is not traded on any national securities exchange (as defined in
the Securities Exchange Act of 1934, as amended), then the following shall
constitute an assignment of this Lease for all purposes of this Article XVII:
(i) the merger, consolidation or reorganization of such corporation; and/or (ii)
the sale, issuance, or transfer, cumulatively or in one transaction, of any
voting stock, by Tenant or the guarantor of this Lease, if any, or the
stockholders of record of either as of the date of this Lease, which results in
a change in the voting control of Tenant or the guarantor of this Lease, except
any such transfer by inheritance or testamentary disposition. If Tenant or the
guarantor of this Lease is a corporation the stock of which is traded on any
securities exchange, then the events described in items (i) and (ii) of the
preceding sentence and any other activities relating to the sale or transfer of
stock of Tenant or the sale or transfer of substantially all of the assets of
Tenant, shall not comprise a transfer requiring Landlord's consent. If Tenant or
the guarantor of this Lease, if any, is a joint venture, partnership or other
association, then for all purposes of this Article XVII, the sale, issuance or
transfer, cumulatively or in one transaction, of either voting control or of a
twenty-five percent (25%) interest, or the termination of any joint venture,
partnership or other association, shall constitute an assignment, except any
such transfer by inheritance or testamentary disposition.
40
42
Section 17.4. Co-Location Agreements.
Notwithstanding anything to the contrary set forth in this Lease,
co-location agreements entered into by Tenant in the ordinary course of its
business shall not be deemed to be an assignment or subletting for purposes of
this Lease and shall not require the consent of Landlord, provided that such
agreements shall under all circumstances be subordinate and subject to this
Lease and shall not diminish Tenant's liability hereunder. For the purposes of
this Section 17.4, the term "co-location agreement(s)" shall mean any agreement
entered into by Tenant with another party whereby Tenant is providing (whether
by cable, fiber or other form of physical transmission, wireless transmission,
or any other mode of transmission) co-location, access, or any other form of
connection to (a) the Internet, (b) any Internet successor or affiliated
networking system, and/or (c) any other existing or future telecommunications,
networking, or communication systems.
ARTICLE XVIII
TEMPORARY LEASE
In order to permit Tenant to expand its business operations pending
completion of the Premises, Landlord hereby agrees to lease to Tenant (the
"Temporary Lease") currently vacant space comprising approximately eight
thousand nine hundred seventy square feet (8,970 s.f.) on the second floor of
the existing Second Street wing of the Complex, as depicted on the Tenant's
Plans (the "Temporary Premises"). The foregoing agreement to lease the Temporary
Premises to Tenant shall be subject to Agency approval. Possession of the
Temporary Premises shall be delivered to Tenant within three (3) days following
receipt of Agency approval. Tenant shall pay rent for the Temporary Premises at
the rate of $1.81 per square foot per month (the "Temporary Rent") payable on
the first day of each month. Temporary Rent shall commence on the date on which
Tenant's improvements in the Temporary Premises are Substantially Completed, and
shall be prorated for any partial month between the date of Substantial
Completion and the first day of the month thereafter. Tenant shall be
responsible for completing, at its expense, all improvements to the Temporary
Premises which it deems necessary or desirable for its effective occupancy and
use of the Temporary Premises. Landlord does not warrant to Tenant the adequacy
of any utilities or systems in the Complex or the structural capacity of the
Complex for Tenant's intended use in the Temporary Premises and Landlord shall
not be liable to Tenant for any interruption of utility services or HVAC service
to the Temporary Premises. Tenant shall be responsible for maintaining all
building systems or equipment used in connection with Tenant's occupancy of the
Temporary Premises. The Temporary Lease shall terminate upon the earlier of the
following events: (a) the date on which Tenant removes its equipment and
employees or (b) December 31, 1999 (irrespective of whether or not the Tenant
has taken occupancy of the Premises and irrespective of whether or not the Lease
has been terminated as a result of the failure to satisfy or waive the
Conditions Precedent pursuant to Article V). During the Temporary Lease period,
Tenant shall be allocated nine (9) parking spaces in the Public Garage.
Utilities shall be separately metered to the Temporary Premises and paid by
Tenant, provided that chilled water shall be provided by Landlord and Tenant
shall pay its proportionate share thereof. To the extent applicable, all of the
terms and conditions of this Lease shall govern the Temporary Lease.
41
43
ARTICLE XIX
DAMAGE AND DESTRUCTION
Section 19.1 Repair and Lease Termination.
If the Premises are hereafter damaged or destroyed or rendered partially
untenantable for their accustomed use by fire or other casualty insured under
the coverage which Landlord is obligated to carry pursuant to Section 15.1
hereof or Landlord is otherwise required to repair or restore pursuant to the
Ground Lease, Landlord shall promptly repair the same to substantially the
condition which they were in immediately prior to the happening of such casualty
(excluding stock in trade, fixtures, furniture, furnishings, carpeting, floor
covering, wall covering, drapes and equipment), and from the date of such
casualty until the Premises are so repaired and restored, the Fixed Rent
payments payable hereunder shall xxxxx in such proportion as the part of said
Premises thus destroyed or rendered untenantable bears to the total Premises;
provided, however, that Landlord shall not be obligated to repair and restore if
such casualty is not covered by the insurance which Landlord is obligated to
carry pursuant to Section 15.1 hereof, or if insufficient insurance proceeds are
available to cover the full cost of repair and restoration of the Complex
following a claim on such proceeds by the Ground Lessor or by any lender of
Landlord (due to such claims by Ground Lessor or a lender or otherwise), and
provided, further, that Landlord shall not be obligated to expend for any repair
or restoration an amount in excess of the insurance proceeds available to
Landlord therefor following any claims on such proceeds by the Ground Lessor or
any lender of Landlord, and provided, further, that if, during the last three
(3) years of the Lease Term, the Premises be damaged, destroyed or rendered
untenantable for their accustomed uses by fire or other casualty to the extent
that the cost of restoration thereof would exceed fifty percent (50%) of the
amount it would cost to replace the Premises in their entirety at the time such
damage or destruction occurred, then Landlord shall have the right to terminate
this Lease effective as of the date of such casualty by giving to Tenant, within
sixty (60) days after the happening of such casualty, written notice of such
termination unless Tenant exercises its right, if any, to extend the term of
this Lease pursuant to Article XXVII hereof. If such notice be given, this Lease
shall terminate and Landlord shall promptly repay to Tenant any rent theretofore
paid in advance which was not earned at the date of such casualty. If Landlord
is required to repair or restore, then Landlord shall promptly commence the same
as soon as possible following the occurrence of the casualty. In connection with
such repair and restoration, Landlord shall rebuild the Premises and/or Complex
to substantially the same design and condition as are set forth in Tenant's Work
and Landlord's Work, and as otherwise required pursuant to the Ground Lease
and/or the Public Garage Lease. Any time that Landlord repairs or restores the
Premises after damage or destruction, then Tenant shall promptly repair or
replace its stock in trade, fixtures, furnishings, furniture, carpeting, wall
covering, floor covering, drapes and equipment to substantially the same
condition as they were in immediately prior to the casualty, and if Tenant has
closed its business, Tenant shall promptly reopen for business upon the
completion of such repairs.
42
44
ARTICLE XX
EMINENT DOMAIN
Section 20.1. Condemnation.
If twenty-five percent (25%) or more of the Premises or of the Complex
shall be acquired or condemned by right of eminent domain for any public or
quasi public use or purpose, or if the Ground Lease or an Operating Agreement is
terminated as a result of such an acquisition or condemnation, then Landlord at
its election may terminate this Lease by giving notice to Tenant of its
election, and in such event rentals shall be apportioned and adjusted as of the
date of termination. If the Lease shall not be terminated as aforesaid, then it
shall continue in full force and effect, and Landlord shall within a reasonable
time after possession is physically taken (subject to delays due to shortage of
labor, materials or equipment, labor difficulties, breakdown of equipment,
government restrictions, fires, other casualties or other causes beyond the
reasonable control of Landlord) repair or rebuild what remains of the Premises
for Tenant's occupancy; and a just proportion of the Fixed Rent shall be abated,
according to the nature and extent of the injury to the Premises until such
repairs and rebuilding are completed, and thereafter for the balance of the
Lease Term.
Section 20.2. Damages.
Landlord reserves, and Tenant assigns to Landlord, all rights to damages
on account of any taking or condemnation or any act of any public or quasi
public authority for which damages are payable; provided, however, in connection
with any taking, or the threatened taking, Tenant shall have the right to seek
and retain compensation for the following:
(a) Damages for the unamortized value of the Tenant's Work and any
and all other alterations or improvements constructed or
installed by Tenant following the Commencement Date;
(b) Leasehold severance damages;
(c) As to any subleases or assignments then in effect, that portion
of Excess Rents which Tenant would have otherwise been able to
retain pursuant to Section 17.2 above following the termination
of this Lease as to all or any portion of the Premises;
(d) Damages for moving and related out-of-pocket expenses;
(e) Relocation assistance or compensation as may be available
pursuant to applicable law.
Tenant shall execute such instruments of assignment as Landlord requires, join
with Landlord in any action for the recovery of damages, if requested by
Landlord, and turn over to Landlord any damages recovered in any proceeding. If
Tenant fails to execute instruments required by Landlord, or undertake such
other steps an requested, Landlord shall be deemed the duly
43
45
authorized irrevocable agent and attorney-in-fact of Tenant, coupled with an
interest, to execute such instruments and undertake such steps an behalf of
Tenant.
ARTICLE XXI
DEFAULT BY TENANT
Section 21.1. Event of Default.
The following shall be considered for all purposes to be defaults under
and breaches of this Lease: (a) any failure of Tenant to pay any Fixed Rent,
Additional Rent or other amount when due hereunder five (5) days after receipt
of written notice from Landlord of such failure to pay; (b) subject to Section
28.5 below, any failure by Tenant to perform or observe any other of the terms,
provisions, conditions and covenants of this Lease, including, without
limitation, Tenant's obligation to complete Tenant's Work in accordance with
Article V hereof, for more than thirty (30) days after receipt of written notice
from Landlord of such failure (or if such default is not amenable to cure within
such thirty (30) day period then for such longer period as may be reasonably
required provided Tenant acts diligently); (c) the bankruptcy or insolvency of
Tenant or the filing by or against Tenant of a petition in bankruptcy or for
reorganization or arrangement or for the appointment of a receiver or trustee of
all or a portion of Tenant's property, or Tenant's assignment for the benefit of
creditors; (d) this Lease or Tenant's interest herein or in the Premises or any
improvements thereon or any property of Tenant are executed upon or attached; or
(e) the Premises come into the hands of any person other than expressly
permitted under this Lease.
Section 21.2. Landlord's Remedies.
Upon occurrence of any Event of Default, Landlord may, at its option
without any further demand or notice, in addition to any other remedy or right
given hereunder or by law, do any of the following:
(a) Re-enter the Premises, take possession thereof, eject all
persons therefrom, using all necessary force to do so, and with or without
re-entry, declare this Lease at an end, in which event Tenant shall be liable to
Landlord for the costs and damages set forth in Sections 21.2(d) and (e) below.
(b) Re-enter the Premises, take possession thereof, eject all
persons therefrom, using all necessary force to do so, and without terminating
this Lease, relet the Premises or any part of the Premises, as the agent and for
the account of Tenant upon such terms and conditions as Landlord may deem
advisable, in which event the rents received on such reletting shall be applied
first to the expenses of such reletting and collection, including necessary
renovation and alterations of the Premises, any real estate commissions paid,
and thereafter to payment of all sums due or to be come due Landlord under the
Lease, and if a sufficient sum shall not be thus realized to pay such sums and
other charges, Tenant shall pay Landlord any deficiency monthly, notwithstanding
Landlord may have received rental in excess of the rental stipulated in this
Lease in previous or subsequent months, and Landlord may bring an action
therefor as such monthly deficiency shall arise.
44
46
(c) Collect, by action or otherwise, each installment of rent or
other sum as the same becomes due and payable or enforce, by action or
otherwise, any other term or covenant of this Lease.
(d) After terminating this Lease or after the abandonment of the
Premises by Tenant, re-enter the Premises, take possession thereof, eject all
persons therefrom, using all necessary force to do so, make any alterations or
changes on the leased Premises, remove any and all property whatsoever found
there and place such property in a public warehouse or elsewhere for the account
and at the expense of Tenant. In the event that Tenant shall not pay the cost of
storing any such property, after the property has been stored for a period of
ninety (90) days or more Landlord may sell any or all of such property at public
or private sale in such manner and at such times and places as Landlord in its
sole discretion may deem proper, without notice to Tenant or any demand upon
Tenant for the payment of any part of such charges or the removal of any such
property, and shall apply the proceeds of such sale first to the cost and
expenses of such sale; second, to the payment of the cost of or charges for
storing any such property; third, to the payment of any other sums of money
which may then or thereafter be due to Landlord from Tenant under any of the
terms hereof; and fourth, the balance, if any, to Tenant. Tenant hereby waives
all claims for damages that may be caused by Landlord's re-entering and taking
possession of the Premises or removing and storing furniture and property as
herein provided, and will save Landlord harmless from loss, costs or damages
occasioned Landlord thereby.
(e) If Tenant breaches this Lease and abandons the Premises
before the end of the Lease Term, or if Tenant's right to possession is
terminated by Landlord because of a breach of the Lease, then in either such
case, Landlord may recover from Tenant:
(i) The worth at the time of award of the unpaid Rents which
had been earned at the time of termination;
(ii) The worth at the time of award of the amount by which the
Rents which would have been earned after termination until
the time of the award exceeds the amount of such rental
loss that Tenant proves could have been reasonably
avoided;
(iii) The worth at the time of award (computed by discounting at
the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent) of the
amount by which the Rents for the balance of the Lease
Term after the time of award exceed the amount of such
rental loss that Tenant proves could be reasonably
avoided; and
(iv) Any other amounts necessary to compensate Landlord for all
detriment proximately caused by the default by Tenant or
which in the ordinary course of events would likely
result.
The "worth at the time of award" of the amount referred to above is computed by
allowing interest at an annual rate equal to the greater of: ten percent (10%);
or five percent (5%) plus the
45
47
rate established by the Federal Reserve Bank of San Francisco, as of the
twenty-fifth (25th) day of the month immediately preceding the default by
Tenant, on advances to member banks under Sections 13 and 13(a) of the Federal
Reserve Act, as now in effect or hereafter from time to time amended, not to
exceed the maximum rate allowable by law. The computation of the damages
pursuant to the foregoing shall include a credit for the unamortized value of
the Tenant's Work assuming a useful life of not less than twenty (20) years.
(f) All rights and remedies of Landlord hereunder shall not be
exclusive but shall be cumulative.
(g) To the extent permitted by applicable law, any such re-entry
or taking of possession of the Premises or property thereon shall be allowed by
Tenant without hindrance, and Landlord shall not be liable in damages for any
such re-entry, or such taking of possession or be guilty of trespass for
forcible entry. Such re-entry or taking of possession shall not be construed as
an election on Landlord's part to terminate this Lease unless a notice of such
intention is given to Tenant.
Section 21.3. Counterclaim.
If Landlord commences any proceedings for non-payment of rent (Fixed
Rent or Additional Rent), Tenant will not interpose any counterclaim of any
nature or description in such proceedings. This shall not, however, be construed
as a waiver of Tenant's right to assert such claims in a separate action brought
by Tenant. The covenants to pay Fixed Rent and other amounts hereunder are
independent covenants and Tenant shall have no right to hold back, offset or
fail to pay any such amounts for default by Landlord or any other reason
whatsoever.
Section 21.4. Waiver of Rights of Redemption.
To the extent permitted by law, Tenant waives any and all rights of
redemption or rights to relief from forfeiture granted by or under any present
or future laws if Tenant is evicted or dispossessed for any cause, or if
Landlord obtains possession of the Premises due to Tenant's default hereunder or
otherwise.
Section 21.5. Right to Cure Defaults by Tenant; Attorneys' Fees.
In the event of Tenant's breach or default of any covenant in this
Lease, Landlord may at any time, after notice if it is required by Section 19.1,
cure such breach or default for the account and at the expense of Tenant subject
to the provisions of Section 4.5 hereof. If Landlord at any time, by reason of
such breach, is compelled to pay, or elects to pay, any sum of money or to do
any act that will require the payment of any sum of money, or is compelled to
incur any expense, including reasonable attorneys' fees, in instituting,
prosecuting, or defending any actions or proceedings to enforce Landlord's
rights under this Lease or otherwise, the sum or sums so paid by Landlord, with
all interest, costs, and damages, shall be deemed to be Additional Rent under
this Lease and shall be due from Tenant to Landlord on the first day of the
month following the incurring of such expenses.
46
48
Section 21.6. Waiver.
A waiver of any breach or default shall not be a waiver of any other
breach or default. 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 similar act by
Tenant.
Section 21.7. Bankruptcy.
A. In the event Tenant shall become a Debtor under Chapter 7 of the
Bankruptcy Code ("Code") or a petition for reorganization or adjustment of debts
is filed concerning Tenant under Chapters 11 or 13 of the Code, or a proceeding
is filed under Chapter 7 and is transferred to Chapters 11 or 13, the Trustee or
Tenant, as Debtor-In-Possession, may not elect to assume this Lease unless, at
the time of such assumption, the Trustee or Debtor-In-Possession has:
(i) Cured or provided Landlord "Adequate Assurance" (as defined
below) that:
(a) The Trustee or the Debtor-In-Possession has cured, or has
provided Landlord Adequate Assurance that:
(1) Within ninety (90) days from the date of such
assumption the Trustee or Debtor-In-Possession will
cure all monetary defaults under this Lease; and
(2) Within ninety (90) days from the date of such
assumption the Trustee will cure all nonmonetary
defaults under this Lease.
(ii) For purposes of this Section 21.7, Landlord and Tenant
acknowledge that, in the context of a bankruptcy proceeding of
Tenant, at a minimum "Adequate Assurance" shall mean the Trustee
or the Debtor-In-Possession has and will continue to have
sufficient resources to fulfill the obligations of Tenant under
this Lease as the same become due.
B. If the Trustee or Debtor-In-Possession has assumed the Lease pursuant
to the provisions of this Section 21.7 for the purpose of assigning Tenant's
interest hereunder to any other person or entity, such interest may be assigned
only after the Trustee, Debtor-In-Possession or the proposed assignee have
complied with all of the terms, covenants and conditions of Section 17.1 herein,
Landlord and Tenant acknowledging that such terms, covenants and conditions are
commercially reasonable in the consent of a bankruptcy proceeding of Tenant. The
terms of Section 17.1 applicable to any such assignment shall include, without
limitation, those with respect to Additional Rent and the use of the Premises
only as permitted in Article XII herein.
C. Unless otherwise allowed by the Court and until such time as the
Lease is assumed or rejected, the Trustee or Debtor-In-Possession shall timely
perform all the monetary and non-monetary obligations under this Lease which
arise after the bankruptcy filing, including,
47
49
without limitation, the payment of Fixed Rent and such other Additional Rent
charges payable hereunder.
D. The rights, remedies and liabilities of Landlord and Tenant set forth
in this Section 21.8 shall be in addition to those which may now or hereafter be
accorded, or imposed upon, Landlord and Tenant by the Code.
ARTICLE XXII
DEFAULT BY LANDLORD
Section 22.1. Default Defined, Notice.
Landlord shall in no event be charged with default in any of its
obligations hereunder unless and until Landlord shall have failed to perform
such obligations within 30 days (or such shorter time in the event of an
emergency or such additional time as is reasonably required to correct any such
default) after written notice to Landlord by Tenant, specifically describing
such failure.
Section 22.2. Notice to Mortgagees and Ground Lessor.
Tenant shall give written notice of any default of Landlord to the
Ground Lessor and to any holders of mortgages covering the Complex who have
given written notice to Tenant of the address to which notices to such holders
are to be sent, simultaneously with any such notice of Landlord's default given
to Landlord, and if Landlord fails to cure any default asserted in said notice
within the time provided above, Tenant shall notify the Ground Lessor and such
holders of mortgages in writing of the failure to cure, and the Ground Lessor
and said holders shall each have the right but not the obligation, within 30
days after receipt of such second notice, to cure such default before Tenant may
take any action by reason of such default.
48
50
ARTICLE XXIII
TENANT'S PROPERTY
Section 23.1. Taxes on Leasehold.
Tenant acknowledges and agrees that this Lease may create possessory
interest subject to property taxation. Subject to Section 8.2 (with respect to
Real Property Taxes) Tenant agrees to pay and discharge, as Additional Rent for
the Premises during the term of this Lease, before delinquency, all taxes
(including, without limitation, possessory interest taxes associated with the
Premises, this Lease, and any so called value added tax), assessments
(including, without limitation, all assessments for public improvements or
benefits, whether or not commenced or completed prior to the date hereof and
whether or not to be completed within the term of this Lease), fees, levies,
water and sewer rents, rates and charges, vault license fees or rentals, license
and permit fees and other governmental charges of any kind or nature whatsoever,
general and special, ordinary and extraordinary, foreseen and unforeseen, or
hereinafter levied or assessed in lieu of or in substitution of any of the
foregoing (all of the foregoing collectively called "taxes") which are or may be
at any time or from time to time during the term of this Lease levied, charged,
assessed or imposed upon or against the Premises or improvements which are now
or hereafter located thereon, or against any of Tenant's personal property now
or hereafter located thereon, or which may be levied, charged, assessed or
imposed upon or against the leasehold estate created hereby or which may be
imposed upon any taxable interest of Tenant acquired pursuant to this Lease on
account of any taxable possessory right which Tenant may have acquired pursuant
to this Lease. Tenant shall pay or reimburse Landlord, an the case may be, for
any fines, penalties, interest or costs which may be added by the collecting
authority for the late payment or nonpayment of any taxes required to be paid by
Tenant hereunder.
49
51
ARTICLE XXIV
ACCESS BY LANDLORD
Section 24.1 Right of Entry.
Provided that Landlord complies with Tenant's security procedures and
provides at least twenty-four (24) hours notice, Landlord, its agents (including
Ground Lessor) and employees shall have the right to enter the Premises from
time to time at reasonable times to examine the same, to show them to
prospective purchasers, mortgagees and other persons, to ascertain compliance
with the terms of this Lease, to make such repairs, alterations, improvements or
additions as Landlord deems desirable, and to post notices. Rent shall not xxxxx
while any such entry, repairs, alterations, improvements, or additions are being
made. During the last six (6) months of the Lease Term, Landlord may exhibit the
Premises to prospective tenants and maintain upon the Premises notices deemed
advisable by Landlord. In addition, during any apparent emergency, Landlord or
its agents may enter the Premises forcibly without liability therefor and
without in any manner affecting Tenant's obligations under this Lease, and no
such entry shall be construed or deemed to be forcible or lawful entry into, or
detainer of, the Premises or an eviction, actual or constructive, of Tenant from
the Premises. Nothing herein contained shall be deemed to impose upon Landlord
any obligation, responsibility or liability whatsoever, for any care,
maintenance or repair except as otherwise herein expressly provided, and Tenant
hereby waives any claim for damages for any injury or inconvenience to or
interference with Tenant's business, any loss of occupancy or quiet enjoyment of
the Premises, and any other loss of whatever kind or nature occasioned by the
Landlord's or its agents' entry for such purposes; provided, however, Landlord
shall not be relieved of any liability arising as a result of (a) the grossly
negligent or wilful act or omission of Landlord, its agents, employees,
consultants, and/or contractors, or (b) Landlord's breach of its obligations
under this Lease.
ARTICLE XXV
HOLDING OVER, SUCCESSORS
Section 25.1 Holding Over.
If Tenant holds over or occupies the Premises beyond the Lease Term (it
being agreed there shall be no such holding over or occupancy without Landlord's
written consent), Tenant shall pay Landlord for each day of such holding over a
sum equal to 1.5 times the Fixed Rent prorated for the number of days of such
holding over plus a prorata portion of all other amounts which Tenant would have
been required to pay hereunder had this Lease been in effect. If Tenant holds
over with or without Landlord's written consent Tenant shall occupy the Premises
on a tenancy from month to month and all other terms and provisions of this
Lease shall be applicable to such period.
Section 25.2. Successors.
50
52
All rights and liabilities herein given to or imposed upon the
respective parties hereto shall bind and inure to the several respective heirs,
successors, administrators, executors and assigns of the parties and if Tenant
is more than one (1) person, they shall be bound jointly and severally by this
Lease except that no rights shall inure to the benefit of any assignee or
subtenant of Tenant unless the assignment or sublease was approved by Landlord
in writing as provided in Section 17.1 hereof. Landlord, at any time and from
time to time, may make an assignment of its interest in this Lease and, in the
event of such assignment, Landlord and its successors and assigns (other than
the assignee of Landlord's interest in this Lease) shall be released from any
and all liability thereafter accruing hereunder; provided that the successor has
been consented to by the Agency and has signed in favor of Tenant an assumption
agreement.
ARTICLE XXVI
QUIET ENJOYMENT
Section 26.1. Landlord's Covenant.
If Tenant pays the Fixed Rents, Additional Rents and other amounts
herein provided, and observes and performs all the covenants, terms and
conditions hereof, Tenant shall peaceably and quietly hold and enjoy the
Premises for the Lease Term without interruption by Landlord or any person or
persons claiming by, through or under Landlord, subject, nevertheless, to the
terms and conditions of this Lease.
ARTICLE XXVII
RENEWAL OPTIONS
A. Provided that this Lease is in full force and effect and there is no
Event of Default which has not been cured at the time Tenant elects to extend
the Term pursuant to Section B below, and at the commencement of such Extended
Term (as hereinafter defined), Tenant shall have the option to extend the term
of this Lease for two (2) successive terms of ten (10) years each ("Extended
Term") upon the same terms and provisions set forth in this Lease except that
the Fixed Rent payable by Tenant shall be the greater of (i) the Fixed Rent
payable during the initial lease Term or first Extended Term, as the case may
be, or (ii) the "Fair Market Rental Value" of the Premises determined as
follows:
(i) Upon receipt of notice from Tenant pursuant to Section B
below, that it elects to extend the term of this Lease,
the parties will attempt, during the first thirty (30)
day period thereafter to mutually agree upon the Fair
Market Rental Value of the Premises for the Extended
Term. "Fair Market Rental Value" shall mean the value
based on Tenant's current use, shall exclude the value
of Tenant's Work and any Alterations made by Tenant
following the Commencement Date, and shall assume that
no commissions are to be paid by Landlord. If the
parties are unable to agree upon the Fair Market Rental
Value, each party will notify the other within fifteen
(15) days following the end of said thirty (30) day
period of the
51
53
name of a licensed, independent, local real estate
appraiser, who is an individual of substantial
experience with respect to office buildings in the San
Jose, California area and is an MAI (or its successor)
appraiser (a "Qualified Appraiser"). If both Qualified
Appraisers shall have been appointed within said fifteen
day period, then the two Qualified Appraisers so
appointed shall determine the Fair Market Rental Value
of the Premises. If only one Qualified Appraiser shall
have been appointed within said fifteen (15) day period,
then such Qualified Appraiser shall determine the Fair
Market Rental Value of the Premises.
(ii) The two Qualified Appraisers shall determine the Fair
Market Rental Value of the Premises independently of
each other and shall meet within thirty (30) days
following their appointment and shall exchange
appraisals. If the difference in the appraisals of the
Fair Market Rental Value of the two Qualified Appraisers
is not greater than fifteen percent (15%), then the
average of the two will be used to determine the Fair
Market Rental Value of the Premises.
(iii) If they are greater than fifteen percent (15%), then the
two Qualified Appraisers shall select a third Qualified
Appraiser within ten (10) days from the end of said
thirty (30) day period who shall determine which of the
two appraisals of the Qualified Appraisers is closest to
the Fair Market Rental Value, and that number will stand
as the Fair Market Rental Value for the Extended Term.
If the two Qualified Appraisers shall not appoint a
third Qualified Appraiser within said ten (10) day
period, then such third Qualified Appraiser shall be
appointed by the American Arbitration Association.
(iv) Each party shall be responsible for the costs, charges
and/or fees of its respective appointee, and the parties
shall share equally in the costs, charges and/or fees of
the third Qualified Appraiser. The decision of the
Qualified Appraiser(s) shall be final and binding on
each party and may be entered in any court having
jurisdiction hereof.
(v) The Fixed Rent as determined above shall be paid by
Tenant to Landlord in advance on the first day of each
and every calendar month during the Extended Term.
(vi) Because of the Tenant's construction of, and payment
for, the Tenant's Work pursuant to this Lease, the Fixed
Rent during an Extended Term shall not include an
allowance from Landlord to Tenant for the refurbishment
of the Premises.
B. Each option for an Extended Term to be effective must be exercised by
Tenant by written notice which must be received by Landlord at least one (1)
year prior to the beginning of each such Extended Term. Tenant's failure to
deliver such notice within the required time period
52
54
shall be deemed an election by Tenant not to extend the term of this Lease.
Tenant shall have no further option to extend the term of this Lease at the
expiration of said second Extended Term.
ARTICLE XXVIII
MISCELLANEOUS
Section 28.1. Waiver.
No waiver by Landlord or Tenant of any breach of any term, covenant or
condition hereof shall be deemed a waiver of the same or any subsequent breach
of the same or any other term, covenant or condition. The acceptance of rent by
Landlord shall not be deemed a waiver of any earlier breach by Tenant of any
term, covenant or condition hereof, regardless of Landlord's knowledge of such
breach when such rent is accepted. No covenant, term or condition of this Lease
shall be deemed waived by Landlord or Tenant unless waived in writing.
Section 28.2. Accord and Satisfaction.
Landlord is entitled to accept, receive and cash or deposit any payment
made by Tenant for any reason or purpose or in any amount whatsoever, and apply
the same at Landlord's option to any obligation of Tenant and the same shall not
constitute payment of any amount owed except that to which Landlord has applied
the same. No endorsement or statement on any check or letter of Tenant shall be
deemed an accord and satisfaction or otherwise recognized for any purpose
whatsoever. The acceptance of any such check or payment shall be without
prejudice to Landlord's right to recover any and all amounts owed by Tenant
hereunder and Landlord's right to pursue any other available remedy.
Section 28.3. Entire Agreement.
There are no representations, covenants, warranties, promises,
agreements, conditions or undertakings, oral or written, between Landlord and
Tenant other than herein met forth. Except as herein otherwise provided, no
subsequent alteration, amendment, change or addition to this Lease shall be
binding upon Landlord or Tenant unless in writing and signed by both Landlord
and Tenant.
Section 28.4. No Partnership.
Landlord does not, in any way or for any purpose, become a partner,
employer, principal, master, agent or joint venturer of or with Tenant.
53
55
Section 28.5. Force Majeure.
If either party hereto shall be delayed or hindered in or prevented from
the performance of any act required hereunder by reason of strikes, lockouts,
labor troubles, inability to procure material, failure of power, restrictive
governmental laws or regulations, riots, insurrection, war or other reason of a
like nature not the fault of the party delayed in performing work or doing acts
required under this Lease, the period for the performance of any such act shall
be extended for a period equivalent to the period of such delay. Notwithstanding
the foregoing, the provisions of this Section 28.5 shall at no time operate to
excuse Tenant from the obligations for payment of Fixed Rent, Additional Rent or
any other payments required by the terms of this Lease when the same are due,
and all such amounts shall be paid when due.
Section 28.6. Submission of Lease.
The effective date of this Lease (the "Effective Date") shall be the
date filled in on Page 1 hereof by Landlord, which shall be the date of
execution by the last of the parties to execute this Lease.
Section 28.7. Notices.
All notices from Tenant to Landlord-required or permitted by any
provision of this Lease shall be directed to Landlord as follows:
F.C. Pavilion, L.L.C.
c/o Forest City Enterprises, Inc.
0000 Xxxxxxxx Xxxxx
00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xx. Xxxxx X. Xxxxxx
with copies to:
Forest City Enterprises, Inc.
0000 Xxxxxxxx Xxxxx
00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: General Counsel
All notices from Landlord to Tenant required or permitted hereunder
shall be directed as follows:
AboveNet Communications, Inc.
00 Xxxx Xxx Xxxxxxxx Xx.
Xxxxx 0000
Xxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
54
56
All notices to the Ground Lessor required or permitted by any provision
of this Lease shall be directed to Ground Lessor as follows:
Executive Director
Redevelopment Agency of the City of San Xxxx
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
All notices to be given hereunder by either party shall be written and
sent by certified mail, return receipt requested, postage pre-paid, addressed to
the party intended to be notified at the address set forth above. Either party
may, at any time, or from time to time, notify the other in writing of a
substitute address for that above set forth, and thereafter notices shall be
directed to such substitute address. Notice given as aforesaid shall be
sufficient service thereof and shall be deemed given as of the date received, as
evidenced by the return receipt of the registered or certified mail. A duplicate
copy of all notices from Tenant shall be sent to the Ground Lessor and mortgagee
as provided for in Section 22.2.
Section 28.8. Captions and Section Numbers.
This Lease shall be construed without reference to titles of Articles
and Sections, which are inserted only for convenience of reference.
Section 28.9. Number and Gender.
The use herein of a singular term shall include the plural and use of
the masculine, feminine or neuter gender shall include all others.
Section 28.10. Joint and Several Liability.
If Tenant is a partnership or other business organization the members of
which are subject to personal liability, the liability of each such member shall
be deemed to be joint and several.
Section 28.11. Objection to Statements.
Tenant's failure to object to any statement, invoice or billing rendered
by Landlord within a period of thirty (30) days after receipt thereof shall
constitute Tenant's acquiescence with respect thereto and shall render such
statement, invoice or billing an account stated between Landlord and Tenant.
55
57
Section 28.12. Representation by Corporate Tenant.
If Tenant is or will be a corporation, the persons executing this Lease
on behalf of Tenant hereby covenant and warrant that Tenant is a duly qualified
corporation authorized to do business in the State of California, that all
franchise and corporate taxes have been paid to date and all future forms,
reports, fees and other documents necessary to comply with applicable laws will
be filed when due, and the person signing this Lease on behalf of the
corporation is an officer of Tenant and is duly authorized to sign and execute
this Lease.
Section 28.13. Limitation of Liability.
Anything to the contrary herein contained notwithstanding, there shall
be absolutely no personal liability of persons, firms or entities who constitute
Landlord with respect to any of the terms, covenants, conditions and provisions
of this Lease, and Tenant shall, subject to the rights of the Ground Lessor and
any mortgagee, look solely to the interest of Landlord, its successors and
assigns, in the Complex for the satisfaction of each and every remedy of Tenant
in the event of default by Landlord hereunder; such exculpation of personal
liability is absolute and without any exception whatsoever. In order to proceed
against the Complex and the revenues therefrom or to recover under any insurance
policy, Tenant shall be entitled to initiate a lawsuit against Landlord.
Section 28.14. Broker's Commission.
Each party represents and warrants that it has caused or incurred no
claims for brokerage commissions or finder's fees in connection with the
execution of this Lease, and each party shall indemnify and hold the other
harmless against and from all liabilities arising from any such claims caused or
incurred by it (including without limitation, the cost of attorneys' fees in
connection therewith).
Section 28.15. Partial Invalidity.
If any provision of this Lease or the application thereof to any person
or circumstance shall to any extent be invalid or unenforceable, the remainder
of this Lease, or the application of such provision to persons or circumstances
other than those as to which it is invalid or unenforceable shall not be
affected thereby and each provision of this Lease shall be valid and enforceable
to the fullest extent permit by law.
56
58
Section 28.16. Recording.
The parties agree not to place this Lease of record but at any time
after the Conditions Precedent are satisfied and/or waived, each party shall, at
the request of the other, execute and acknowledge so that the same may be
recorded a Short Form Lease or Memorandum of Lease, indicating the Lease Term,
but omitting rent and other terms, and an Agreement specifying date of
commencement and termination of the Lease Term; provided, however, that the
failure to record said Short Form Lease, Memorandum of Lease or Agreement shall
not affect or impair the validity and effectiveness of this Lease. Tenant shall
pay all costs, taxes, fees and other expenses in connection with or prerequisite
to recording.
Section 28.17. Applicable Law.
This Lease shall be construed under the laws of the State of California.
Section 28.18. Ground Lease.
This Lease is subject and subordinate to the Ground Lease. Tenant agrees
to comply with all applicable provisions of the Ground Lease. In the event any
of the provisions of this Lease conflict with the provisions of the Ground
Lease, the provisions of the Ground Lease shall prevail. With respect to the
Ground Lease and the Public Garage Lease, Landlord covenants as follows:
(a) During the entire Lease Term, Landlord shall fully and completely
comply with all of the terms and provisions of the Ground Lease
and the Public Garage Lease.
(b) Landlord shall take all actions as may be required or necessary
in order to keep the Ground Lease and the Public Garage Lease in
full force and effect provided that nothing in this Lease shall
prevent Landlord from acquiring fee title to the Complex,
including the Public Garage, from the Agency, in which event this
Lease shall continue in full force and effect.
(c) Landlord shall not amend or modify, or enter into any agreement
with the Agency to amend or modify, any of the terms or
provisions of the Ground Lease and/or the Public Garage Lease
which have a material impact on Tenant or the Premises, without
the prior written consent of Tenant.
(d) Landlord shall not enter into any agreement with Ground Lessor to
which would materially increase Landlord's Common Area Costs,
and/or any other maintenance or operating expenses of the Complex
(to the extent that any such costs are passed on to Tenant).
(e) Landlord shall not terminate or surrender the Ground Lease and/or
the Public Garage Lease.
57
59
(f) Landlord shall provide to Tenant any notices from the Agency
relating to any default or breach by Landlord under the Ground
Lease or the Public Garage Lease.
Section 28.19. Notice of Lease to Ground Lessor.
Immediately upon execution of this Lease, Tenant shall provide written
notice to the Ground Lessor that the Lease has been executed and shall inform
the Ground Lessor of Tenant's name and mailing address for the purpose of
receipt of notice from the Ground Lessor.
Section 28.20. Landlord's Expenses.
If Landlord incurs any expense in exercising Landlord's rights
hereunder, excluding attorney's fees and court costs, arising from Tenant's
failure to perform any of Tenant's obligations hereunder, Tenant shall pay or
reimburse Landlord for such expenses.
IN WITNESS WHEREOF, Landlord and Tenant have signed and sealed this
Lease as of the day and year first above written.
F.C. PAVILION, L.L.C.,
an Ohio limited liability company
By:
---------------------------------
ABOVENET COMMUNICATIONS, INC.
By:
---------------------------------
Attest:
-----------------------------
58
60
EXHIBIT A
Legal Description of Retail Pavilion Parcel
(to be inserted)
61
EXHIBIT B
Plot Plan of Retail Pavilion Parcel
(to be inserted)
62
EXHIBIT C
Tenant's Plans
(to be inserted)
63
EXHIBIT D-1
Tenants To Be Removed or Relocated
(to be inserted)
64
EXHIBIT D-2
Tenants From Which Consent Is Required
(to be inserted)
65
EXHIBIT E
Rules and Regulations
(to be inserted)
66
EXHIBIT F
Preliminary Title Report
(to be inserted)
67
TABLE OF CONTENTS
Page
----
ARTICLE I -- EXHIBITS........................................................................2
ARTICLE II -- LEASED PREMISES................................................................3
Section 2.1. Leased Premises........................................................3
Section 2.2. Roof and Walls.........................................................4
Section 2.3. Ancillary Use .........................................................4
ARTICLE III -- LEASE TERM....................................................................5
Section 3.1 Lease Term.............................................................5
Section 3.2 Commencement Date......................................................5
Section 3.3 Lease Year Defined.....................................................6
Section 3.4 Effective Date.........................................................6
ARTICLE IV -- RENT...........................................................................6
Section 4.1. Rental Rate............................................................6
Section 4.2 Fixed Rent Payments....................................................7
Section 4.3. Miscellaneous Rent Provisions..........................................7
Section 4.4. Additional Rent........................................................7
Section 4.5. Payments for Tenant....................................................7
ARTICLE V -- CONDITIONS PRECEDENT............................................................8
Section 5.1. Conditions Precedent...................................................8
Section 5.2. City Approvals.........................................................9
Section 5.3. Tenant Actions........................................................10
Section 5.4. Failure of Conditions Precedent.......................................10
ARTICLE VI -- CONSTRUCTION OF PREMISES......................................................10
Section 6.1. Overview of Construction Scope........................................10
Section 6.2. Preparation of Construction Plans.....................................11
Section 6.3. Responsibility for Construction Costs.................................11
Section 6.4. Construction Contracts................................................12
Section 6.5. Tenant's L/C, Tenant's Loan Facility and Tenant's Cash Account........13
Section 6.6. Adjustment of Fixed Rent after Construction...........................14
ARTICLE VII -- NET LEASE....................................................................15
ARTICLE VIII -- TAXES.......................................................................17
Section 8.1. Definition of Real Estate Taxes.......................................17
Section 8.2. Tenant's Share of Real Estate Taxes...................................17
Section 8.3. Payment by Tenant.....................................................18
Section 8.4. Other Taxes...........................................................18
Section 8.5. Separate Tax Xxxx.....................................................18
i
68
ARTICLE IX -- PARKING, COMMON AREAS AND FACILITIES..........................................18
Section 9.1. Common Areas..........................................................18
Section 9.2. Use of Common Areas...................................................19
Section 9.3. Public Garage.........................................................19
ARTICLE X -- COST AND MAINTENANCE OF COMMON AREAS...........................................20
Section 10.1. Expense of Operating and Maintaining the Complex......................20
Section 10.2. Tenant to Bear Proportionate Share of Expenses........................20
ARTICLE XI -- UTILITIES AND SERVICES........................................................21
Section 11.1. Utilities.............................................................21
Section 11.2. HVAC Systems Serving Premises.........................................21
ARTICLE XII -- CONDUCT OF BUSINESS BY TENANT................................................21
Section 12.1. Use of Premises.......................................................21
Section 12.2. Operation by Tenant...................................................22
Section 12.3. Painting, Decorating, Displays, Alterations...........................23
Section 12.4 Telecommunications Rights and Rooftop Equipment.......................23
Section 12.5. Compliance with Laws..................................................23
Section 12.6. Non-Discrimination...................................................24
ARTICLE XIII -- MAINTENANCE OF LEASED PREMISES..............................................24
Section 13.l. Maintenance by Landlord...............................................24
Section 13.2. Maintenance by Tenant.................................................25
Section 13.3. Surrender of Premises.................................................26
ARTICLE XIV -- ALTERATIONS..................................................................26
Section 14.1. Removal and Restoration by Tenant.....................................26
Section 14.2. Tenant's Liens........................................................26
Section 14.3. Signs, Awnings and Canopies...........................................27
ARTICLE XV -- INSURANCE.....................................................................28
Section 15.1. By Landlord...........................................................28
Section 15.2. By Tenant.............................................................28
Section 15.3. Mutual Waiver of Subrogation Rights...................................29
Section 15.4. Waiver................................................................30
Section 15.5. Insurance - Tenant's Operation.......................................30
Section 15.6. Hold Harmless and Indemnification....................................31
ARTICLE XVI -- ESTOPPEL CERTIFICATE ATTORNMENT, SUBORDINATION...............................32
Section 16.1. Estoppel Certificate..................................................32
Section 16.2. Attornment............................................................32
Section 16.3. Release of Landlord...................................................33
Section 16.4. Landlord's Option to Purchase.........................................33
Section 16.5. Subordination.........................................................33
Section 16.6. Failure to Execute Instruments........................................34
ii
69
ARTICLE XVII -- ASSIGNMENT AND SUBLETTING...................................................34
Section 17.1. Consent Required......................................................34
Section 17.2 Excess Rent Upon Assignment or Subletting.............................35
Section 17.3. Change in Ownership...................................................36
Section 17.4. Co-Location Agreements................................................36
ARTICLE XVIII -- TEMPORARY LEASE............................................................36
ARTICLE XIX -- DAMAGE AND DESTRUCTION.......................................................37
Section 19.1 Repair and Lease Termination..........................................37
ARTICLE XX -- EMINENT DOMAIN................................................................38
Section 20.1. Condemnation..........................................................38
Section 20.2. Damages...............................................................38
ARTICLE XXI -- DEFAULT BY TENANT............................................................39
Section 21.1. Event of Default......................................................39
Section 21.2. Landlord's Remedies...................................................39
Section 21.3. Counterclaim..........................................................41
Section 21.4. Waiver of Rights of Redemption........................................42
Section 21.5. Right to Cure Defaults by Tenant; Attorneys' Fees.....................42
Section 21.6. Waiver................................................................42
Section 21.7. Bankruptcy............................................................42
ARTICLE XXII -- DEFAULT BY LANDLORD.........................................................43
Section 22.1. Default Defined, Notice...............................................43
Section 22.2. Notice to Mortgagees and Ground Lessor................................43
ARTICLE XXIII -- TENANT'S PROPERTY..........................................................44
Section 23.1. Taxes on Leasehold....................................................44
ARTICLE XXIV -- ACCESS BY LANDLORD..........................................................44
Section 24.1 Right of Entry........................................................44
ARTICLE XXV -- HOLDING OVER, SUCCESSORS.....................................................45
Section 25.1 Holding Over..........................................................45
Section 25.2. Successors............................................................45
ARTICLE XXVI -- QUIET ENJOYMENT.............................................................45
Section 26.1. Landlord's Covenant...................................................45
ARTICLE XXVII -- RENEWAL OPTIONS............................................................46
ARTICLE XXVIII -- MISCELLANEOUS.............................................................47
Section 28.1. Waiver................................................................47
Section 28.2. Accord and Satisfaction...............................................47
iii
70
Section 28.3. Entire Agreement......................................................48
Section 28.4. No Partnership........................................................48
Section 28.5. Force Majeure.........................................................48
Section 28.6. Submission of Lease...................................................48
Section 28.7. Notices...............................................................48
Section 28.8. Captions and Section Numbers..........................................49
Section 28.9. Number and Gender.....................................................50
Section 28.10. Joint and Several Liability.........................................50
Section 28.11. Objection to Statements.............................................50
Section 28.12. Representation by Corporate Tenant..................................50
Section 28.13. Limitation of Liability.............................................50
Section 28.14. Broker's Commission.................................................50
Section 28.15. Partial Invalidity..................................................51
Section 28.16. Recording...........................................................51
Section 28.17. Applicable Law......................................................51
Section 28.18. Ground Lease........................................................51
Section 28.19. Notice of Lease to Ground Lessor....................................52
Section 28.20. Landlord's Expenses.................................................52
iv
