EXHIBIT 10.24.1
LINCOLN OAKS CORPORATE CENTRE
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OFFICE LEASE
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WHLNF REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership,
as Landlord,
and
REALSELECT, INC.,
a Delaware corporation,
as Tenant
TABLE OF CONTENTS
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PAGE
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SUMMARY OF BASIC LEASE INFORMATION...................................................... iii
OFFICE LEASE
ARTICLE 1 REAL PROPERTY, BUILDING AND PREMISES...................................... 1
ARTICLE 2 LEASE TERM................................................................ 2
ARTICLE 3 BASE RENT................................................................. 3
ARTICLE 4 ADDITIONAL RENT........................................................... 3
ARTICLE 5 USE OF PREMISES........................................................... 8
ARTICLE 6 SERVICES AND UTILITIES.................................................... 9
ARTICLE 7 REPAIRS................................................................... 11
ARTICLE 8 ADDITIONS AND ALTERATIONS................................................. 12
ARTICLE 9 COVENANT AGAINST LIENS.................................................... 13
ARTICLE 10 INDEMNIFICATION AND INSURANCE............................................. 13
ARTICLE 11 DAMAGE AND DESTRUCTION.................................................... 15
ARTICLE 12 CONDEMNATION.............................................................. 16
ARTICLE 13 COVENANT OF QUIET ENJOYMENT............................................... 16
ARTICLE 14 ASSIGNMENT AND SUBLETTING................................................. 16
ARTICLE 15 SURRENDER; OWNERSHIP AND REMOVAL OF TRADE FIXTURES........................ 18
ARTICLE 16 HOLDING OVER.............................................................. 19
ARTICLE 17 ESTOPPEL CERTIFICATES..................................................... 19
ARTICLE 18 SUBORDINATION............................................................. 19
ARTICLE 19 TENANT'S DEFAULTS; LANDLORD'S REMEDIES.................................... 20
ARTICLE 20 SECURITY DEPOSIT.......................................................... 21
ARTICLE 21 COMPLIANCE WITH LAW....................................................... 21
ARTICLE 22 ENTRY BY LANDLORD......................................................... 21
ARTICLE 23 TENANT PARKING............................................................ 22
ARTICLE 24 MISCELLANEOUS PROVISIONS.................................................. 22
EXHIBITS
A OUTLINE OF PREMISES
B TENANT WORK LETTER
C AMENDMENT TO LEASE
D RULES AND REGULATIONS
E CLEANING SPECIFICATIONS
F SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
EXTENSION OPTION RIDER
LETTER OF CREDIT RIDER
GUARANTY OF LEASE
(ii)
SUMMARY OF BASIC LEASE INFORMATION
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This Summary of Basic Lease Information ("SUMMARY") is hereby incorporated
into and made a part of the attached Office Lease. Each reference in the Office
Lease to any term of this Summary shall have the meaning as set forth in this
Summary for such term. In the event of a conflict between the terms of this
Summary and the Office Lease, the terms of the Office Lease shall prevail. Any
capitalized terms used herein and not otherwise defined herein shall have the
meaning as set forth in the Office Lease.
TERMS OF LEASE DESCRIPTION
(References are to
the Office Lease)
1. Date: September 18, 1998.
2. Landlord: WHLNF REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership
3. Address of Landlord WHLNF REAL ESTATE LIMITED PARTNERSHIP
(Section 24.19): c/o LPC MS, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. D. ▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
WHLNF REAL ESTATE LIMITED PARTNERSHIP
c/o Lincoln Property Company
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. Center
4. Tenant: REALSELECT, INC., a Delaware corporation
5. Address of Tenant ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
(Section 24.19): ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
(Prior to Lease Commencement Date)
and
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
(After Lease Commencement Date)
with a copy of any notice of default to
Pillsbury Madison & Sutro LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
6. Premises (Article 1): 34,324 rentable and 32,338 usable square
feet of space, consisting of (i) 18,681
rentable and 17,600 usable square feet
of space located on the east wing of the
ground floor of the Building, and (ii)
15,643 rentable and 14,738 usable square
feet of space located on the east wing
of the second (2nd) floor of the
Building, as set forth in Exhibit A
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attached hereto.
7. Term (Article 2).
7.1 Lease Term: Five (5) years.
7.2 Lease Commencement The earlier of (i) the date Tenant
Date: commences business in the Premises, or
(ii) the date the Premises are Ready for
Occupancy, which Lease Commencement Date
is anticipated to be November 20, 1998.
7.3 Lease Expiration Date: The date which is five (5) years after
Lease Commencement Date.
(iii)
7.4 Amendment to Lease: Landlord and Tenant shall confirm the
Lease Commencement Date and Lease
Expiration Date in an Amendment to
Lease (Exhibit C) to be executed
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pursuant to Article 2 of the Office
Lease.
8. Base Rent (Article 3):
Monthly
Monthly Rental Rate
Months of Annual Installment per Rentable
Lease Term Base Rent of Base Rent Square Foot
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1-11 $701,941.80 $58,495.15 $1.7042
12-30 $761,992.80 $63,499.40 $1.85
31-60 $840,251.52 $70,020.96 $2.04
9. Additional Rent
(Article 4).
9.1 Base Year Calendar year 1999.
9.2 Tenant's Share of
Direct Expenses: 21.8%
10. Security Deposit $70,020.96
(Article 20):
11. Parking (Article 23): Four (4) parking spaces for every
1,000 usable square feet of the
Premises; up to five percent (5%) of
such spaces shall be reserved, while
the remainder shall be unreserved.
12. Brokers (Section 24.25): ▇▇▇▇▇ & ▇▇▇▇▇ Company
(iv)
OFFICE LEASE
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This Office Lease, which includes the preceding Summary attached hereto and
incorporated herein by this reference (the Office Lease and Summary to be known
sometimes collectively hereafter as the "LEASE"), dated as of the date set forth
in Section 1 of the Summary, is made by and between WHLNF REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited liability partnership ("LANDLORD"), and
REALSELECT, INC., a Delaware corporation ("TENANT").
ARTICLE 1
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REAL PROPERTY, BUILDING AND PREMISES
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1.1 Real Property, Building and Premises. Upon and subject to the terms,
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covenants and conditions hereinafter set forth in this Lease, Landlord hereby
leases to Tenant and Tenant hereby leases from Landlord the premises set forth
in Section 6 of the Summary (the "PREMISES"), which Premises are part of the
building (the "BUILDING") located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇. The outline of the floor plan of the Premises is set forth in
Exhibit A attached hereto. The Building, the Building's surface parking
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facility located adjacent to the Building ("BUILDING PARKING FACILITY"), any
outside plaza areas, land and other improvements surrounding the Building which
are designated from time to time by Landlord as common areas appurtenant to or
servicing the Building, and the land upon which any of the foregoing are
situated, are herein sometimes collectively referred to as the "REAL PROPERTY."
Tenant is hereby granted the right to the nonexclusive use of the common
corridors and hallways, stairwells, elevators, restrooms and other public or
common areas located on the Real Property; provided, however, that the use
thereof shall be subject to the Rules and Regulations attached hereto as Exhibit
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D (as the same may be supplemented or modified by Landlord from time to time on
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a reasonable and non-discriminatory basis). Subject to the provisions of
Section 6.5, Landlord reserves the right to (i) make repairs, improvements,
alterations or additions to or to change the location of elements of the Real
Property and the common areas thereof, and/or (ii) use or close temporarily the
common areas and/or other portions of the Real Property while engaged in making
improvements, repairs or alterations to the Real Property or any portion
thereof, provided that Tenant's use and access to the Premises and parking to be
provided to Tenant under this Lease and Tenant's ability to conduct its business
operations in the Premises are not materially and adversely interfered with.
1.2 Condition of Premises. Except as expressly set forth in this Lease
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and in the Tenant Work Letter attached hereto as Exhibit B, Landlord shall not
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be obligated to provide or pay for any improvement, remodeling or refurbishment
work or services related to the improvement, remodeling or refurbishment of the
Premises, and Tenant shall accept the Premises in its "As Is" condition on the
Lease Commencement Date, subject only to (i) any latent defects in the Premises
which could not have been discovered by Tenant with the exercise of reasonable
diligence, and (ii) the completion of any work which is to be performed by
Landlord in the Premises or the Building pursuant to the Tenant Work Letter.
1.3 Rentable and Usable Square Feet. The rentable and usable square feet
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of the Premises are stipulated to be as set forth in Section 6.1 of the Summary,
and are not subject to adjustment or modification by Landlord or Tenant.
1.4 Right of First Offer. During the initial Lease Term, Tenant shall
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have the one-time right (subject, however, to the last sentence of Section 1.4.2
below) of first offer to lease that certain space on the third (3rd) floor of
the Building which is currently leased by Exxon, contains approximately 12,913
rentable square feet (the "FIRST OFFER SPACE") when such space becomes available
for lease as provided hereinbelow; provided, however: (i) if less than two (2)
years remain in the initial Lease Term at the time of Landlord's delivery of the
First Offer Notice (as defined below), Tenant shall not have such right of first
offer unless Tenant has either previously exercised its extension option
pursuant to the Extension Option Rider or exercises such option concurrently
with Tenant's delivery of Tenant's Election Notice (as defined below); and (ii)
if before such First Offer Space becomes available, at least 12,000 rentable
square feet of space on the 4th or 5th floors of the Building which are
currently leased by Exxon becomes available for lease, the First Offer Space
shall be redefined to consist of the entire rentable area of the space on such
floor which becomes so available, but only with respect to one (1) of such
floors (which floor shall be the first floor on which at least 12,000 rentable
square feet becomes available, unless at least 12,000 rentable square feet of
space becomes available on both floors at the same time, in which case, the
First Offer Space shall consist of the space located on the floor which has the
least amount of space available, unless the amount of space available on both
floors are approximately the same size (i.e. within 2,000 rentable square feet
of each other), in which case the First Offer Space shall consist of the entire
rentable area of the space which becomes so available on one (1) of such floors
as shall be selected by Landlord). Tenant's right of first offer shall be upon
the terms and conditions set forth in this Section 1.4. Notwithstanding
anything to the contrary contained in this Section 1.4, Tenant's right of first
offer contained in this Section 1.4 shall be subject and subordinate to (A) any
leases of the First Offer Space which, as of the date of execution of this
Lease, have been fully executed by Landlord and the tenants therein (the
"INITIAL LEASES"), (B) all expansion, first offer and similar rights currently
provided to the tenants in the Initial Leases and (C) renewals of the Initial
Leases, whether or not such renewals are pursuant to an express written
provision in such leases and regardless of whether any such renewals are
consummated pursuant to new leases or lease amendments (collectively, the
"SUPERIOR RIGHTS").
1.4.1 Procedure for Offer. Landlord shall give Tenant written notice
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(the "FIRST OFFER NOTICE") that the First Offer Space shall or has become
available for lease by Tenant pursuant to the terms of Tenant's right of first
offer, as set forth in this Section 1.4, provided that no holder of the Superior
Rights desires to lease all or any portion of such space. Pursuant to such
First Offer Notice, Landlord shall offer to lease to Tenant the then available
First Offer Space for a term coterminous with the Lease Term. The First Offer
Notice shall describe the space so offered to Tenant, including, without
limitation, Landlord's determination of the rentable square footage thereof as
calculated pursuant to Landlord's standard rentable area measurements for the
Building which shall be consistent with the measurement standards used for the
initial Premises, and shall also set forth Landlord's determination of the
"First Offer Rent," as that term is defined in Section 1.4.3 below, and the
other terms upon which Landlord is willing to lease such space to Tenant.
1.4.2 Procedure for Acceptance. If Tenant wishes to exercise
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Tenant's right of first offer with respect to the space described in the First
Offer Notice, then within ten (10) business days of Tenant's receipt of the
First Offer Notice, Tenant shall deliver written notice to Landlord ("TENANT'S
ELECTION NOTICE") pursuant to which Tenant shall elect either to: (i) lease the
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entire First Offer Space described in the First Offer Notice at the First Offer
Rent and upon the terms contained in such notice; or (ii) refuse to lease the
First Offer Space, specifying that Tenant is not interested in exercising its
right of first offer for the First Offer Space, in which event Tenant's right of
first offer contained in this Section 1.4 shall terminate and be of no further
force or effect and Landlord shall be free to lease the First Offer Space or any
portion thereof to anyone to whom Landlord desires on any terms Landlord
desires. If Tenant does not notify Landlord of its election of any of the
options in clauses (i) or (ii) hereinabove, Tenant shall be deemed to have
elected the option in clause (ii). Notwithstanding the foregoing to the
contrary, if pursuant to clause (ii) of Section 1.4 above, the First Offer Space
is redefined to consist of certain space located on the 4th or 5th floors of the
Building as described therein, but Tenant refuses or is deemed to refuse to
lease such First Offer Space when such space becomes available as provided
above, the First Offer Space shall thereupon be redefined again to mean the
approximately 12,913 rentable square foot space on the 3rd floor of the Building
depicted on Exhibit A, and Landlord's first offer right shall be in effect (and
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not terminated) with respect to such space when such space becomes available for
lease as provided in Section 1.4 above.
1.4.3 First Offer Space Rent. The Rent payable by Tenant for the
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First Offer Space (the "FIRST OFFER RENT") shall be equal to the Fair Market
Rental Rate for the First Offer Space, as defined in the Extension Option Rider
attached hereto. Concurrent with Tenant's delivery of Tenant's Election Notice
exercising such right of first offer, Tenant may object in writing to Landlord's
determination of the Fair Market Rental Rate set forth in Landlord First Offer
Notice, in which case the Fair Market Rental Rate shall be determined in
accordance with the appraisal procedures set forth in Section 4 of the Extension
Option Rider. If Tenant does not timely object in writing to Landlord's
determination of the Fair Market Rental Rate, then Tenant shall be deemed to
have rejected such determination and the appraisal procedures in Section 4 of
the Extension Option Rider shall apply.
1.4.4 Construction In First Offer Space. If Tenant leases the First
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Offer Space pursuant to the terms of this Section 1.4. Tenant shall take the
First Offer Space in its "as is" condition as of the date of delivery of such
space by Landlord to Tenant, subject to Landlord's construction of any initial
improvements in the First Offer Space and providing a tenant improvement
allowance to construct such improvements to the extent, if any, included in the
definition of "First Offer Rent", as set forth in Section 1.4.3.
1.4.5 Amendment to Lease. If Tenant timely exercises Tenant's right
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to lease the First Offer Space as set forth herein, Landlord and Tenant shall
within fifteen (15) business days thereafter execute an amendment to the Lease
memorializing Tenant's lease for such First Offer Space upon the terms and
conditions set forth in this Section 1.4. Tenant shall commence payment of Rent
for the First Offer Space, and the term of the First Offer Space shall commence
upon the date of delivery of the First Offer Space to Tenant with the initial
tenant improvements therefor to be constructed by Landlord, if any,
substantially completed and a certificate or temporary certificate of occupancy
(or its equivalent) has been issued permitting occupancy of the First Offer
Space (the "FIRST OFFER COMMENCEMENT DATE") and terminate coterminous with the
termination of the Lease Term, as such may be extended pursuant to this Lease.
1.4.6 Suspension of Right of First Offer. At Landlord's option, in
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addition to its other remedies under this Lease, Tenant shall not have the right
to lease the First Offer Space, as provided in this Section 1.4, if, as of the
date of the attempted exercise of such right of first offer by Tenant, or as of
the scheduled date of delivery of the First Offer Space to Tenant, Tenant is in
default under this Lease beyond any applicable notice and cure periods. In
addition, and notwithstanding anything to the contrary contained in this Section
1.4, the rights to lease the First Offer Space contained in this Section 1.4
shall be personal to the original Tenant executing this Lease and any Affiliate
to which Tenant's entire interest in this Lease has been assigned pursuant to
Section 14.7 below, and may only be exercised by the original Tenant or such
Affiliate assignee, as the case may be (but not by any other assignee, sublessee
or other transferee of Tenant's interest in this Lease or the Premises, or any
part thereof) if, at the time of the attempted exercise of such right of first
offer, the original Tenant or such Affiliate assignee, as the case may be, is in
physical occupancy and possession of at least eighty percent (80%) of the
Premises then leased by Tenant under this Lease.
ARTICLE 2
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LEASE TERM
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The terms and provisions of this Lease shall be effective as of the date of
this Lease except for the provisions of this Lease relating to the payment of
Rent. The term of this Lease (the "LEASE TERM") shall be as set forth in
Section 7.1 of the Summary and shall commence on the date (the "LEASE
COMMENCEMENT DATE") set forth in Section 7.2 of the Summary (subject, however,
to the terms of the Tenant Work Letter), and shall terminate on the date (the
"LEASE EXPIRATION DATE") set forth in Section 7.3 of the Summary, unless this
Lease is sooner terminated as hereinafter provided, or extended pursuant to the
Extension Option Rider attached hereto. For purposes of this Lease, the term
"LEASE YEAR" shall mean each consecutive twelve (12) month period during the
Lease Term, provided that the last Lease Year shall end on the Lease Expiration
Date. At any time during the Lease Term, Landlord may deliver to Tenant an
amendment in the form as set forth in Exhibit C, attached hereto, which
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amendment Tenant shall execute and return to Landlord within ten (10) days of
receipt thereof. If Tenant fails to either execute and return such amendment to
Landlord or object thereto within ten (10) days of receipt thereof from
Landlord, the amendment as sent by Landlord shall be deemed to have correctly
set forth the Lease Commencement Date. Failure of Landlord to send such
amendment shall have no effect on the Lease Commencement Date. In the event
Landlord shall fail to send to Tenant such amendment within sixty (60) days
after the Lease Commencement Date, Tenant may send to Landlord an amendment
setting forth the Lease Commencement Date, in the form of the attached Exhibit
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C, which amendment Landlord shall execute and return to Tenant. If Landlord
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fails to either execute and return such amendment to Tenant or object thereto
within ten (10) days of receipt thereof from Tenant, the amendment as sent by
Tenant shall be deemed to have correctly set forth the Lease Commencement Date.
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ARTICLE 3
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BASE RENT
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Tenant shall pay, without notice or demand, to Landlord or Landlord's agent
at the management office of the Building, or at such other place as Landlord may
from time to time designate in writing, in currency or a check for currency
which, at the time of payment, is legal tender for private or public debts in
the United States of America, base rent ("BASE RENT") as set forth in Section 8
of the Summary, payable in equal monthly installments as set forth in Section 8
of the Summary in advance on or before the first day of each and every month
during the Lease Term, without any setoff or deduction whatsoever (except as
otherwise expressly set forth in this Lease). The Base Rent for the first full
month of the Lease Term shall be paid at the time of Tenant's execution of this
Lease. If any rental payment date (including the Lease Commencement Date) falls
on a day of the month other than the first day of such month or if any rental
payment is for a period which is shorter than one month, then the rental for any
such fractional month shall be a proportionate amount of a full calendar month's
rental based on the proportion that the number of days in such fractional month
bears to the number of days in the calendar month during which such fractional
month occurs. All other payments or adjustments required to be made under the
terms of this Lease that require proration on a time basis shall be prorated on
the same basis.
ARTICLE 4
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ADDITIONAL RENT
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4.1 Additional Rent. In addition to paying the Base Rent specified in
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Article 3 of this Lease, Tenant shall pay as additional rent "Tenant's Share" of
the annual "Direct Expenses," as those terms are defined in Sections 4.2.8 and
4.2.3 of this Lease, respectively, which are in excess of the amount of Direct
Expenses applicable to the "Base Year," as that term is defined in Section 4.2.1
of this Lease. Such additional rent, together with any and all other amounts
payable by Tenant to Landlord pursuant to the terms of this Lease (including,
without limitation, pursuant to Article 6), shall be hereinafter collectively
referred to as the "ADDITIONAL RENT." The Base Rent and Additional Rent are
herein collectively referred to as the "RENT." All amounts due under this
Article 4 as Additional Rent shall be payable for the same periods and in the
same manner, time and place as the Base Rent. Without limitation on other
obligations of Tenant which shall survive the expiration of the Lease Term, the
obligations of Tenant to pay the Additional Rent provided for in this Article 4
shall survive the expiration of the Lease Term.
4.2 Definitions. As used in this Article 4, the following terms shall
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have the meanings hereinafter set forth:
4.2.1 "BASE YEAR" shall mean the year set forth in Section 9.1 of the
Summary.
4.2.2 "CALENDAR YEAR" shall mean each calendar year in which any
portion of the Lease Term falls, through and including the calendar year in
which the Lease Term expires.
4.2.3 "DIRECT EXPENSES" shall mean "Operating Expenses" and "Tax
Expenses."
4.2.4 "EXPENSE YEAR" shall mean each Calendar Year, provided that
Landlord, upon notice to Tenant, may change the Expense Year from time to time
to any other twelve (12) consecutive-month period, and, in the event of any such
change, Tenant's Share of Direct Expenses shall be equitably adjusted for any
Expense Year involved in any such change.
4.2.5 "OPERATING EXPENSES" shall mean all expenses, costs and amounts
of every kind and nature which Landlord shall pay during any Expense Year
because of or in connection with the management, maintenance, repair,
replacement, restoration or operation of the Building and Real Property,
including, without limitation, any amounts paid for: (i) the cost of supplying
all utilities, the cost of operating, maintaining, repairing, renovating and
managing the utility systems, mechanical systems, sanitary and storm drainage
systems, any elevator systems and all other "Systems and Equipment" (as defined
in Section 4.2.6 of this Lease), and the cost of supplies and equipment and
maintenance and service contracts in connection therewith (but excluding all
costs for materials, utilities, goods and services furnished by Landlord which
are not required to be furnished by Landlord, and which have been directly paid
for by Tenant or other tenants to Landlord); (ii) the cost of licenses,
certificates, permits and inspections, and the cost of contesting the validity
or applicability of any governmental enactments which may affect Operating
Expenses, and the costs incurred in connection with implementation and operation
of any government mandated transportation system management program or similar
program; (iii) costs of insurance obtained by Landlord, including commercially
reasonable deductibles for fire and extended coverage but in no event to include
any earthquake insurance deductibles; provided, however, that in the event
Landlord shall not carry a type or amount of insurance during the Base Year, but
shall either obtain an additional type of insurance or increase the amount of
coverage of an existing type of insurance in an Expense Year subsequent to the
Base Year, the Operating Expenses for the Base Year shall be increased by an
amount equal to the costs of such additional insurance and/or the increased
amount of such existing type of insurance that Landlord would have incurred had
Landlord obtained such additional or increased amount of such insurance during
the Base Year; (iv) the cost of landscaping, relamping, supplies, tools,
equipment and materials, and all fees, charges and other costs (including
consulting fees, legal fees and accounting fees) incurred in connection with the
management, operation, repair and maintenance of the Building and Real Property;
(v) the cost of parking area repair, restoration, and maintenance; (vi) any
equipment rental agreements or management agreements (including the cost of any
management fee and the fair rental value of any office space provided
thereunder); provided, however, that the management fee charged by Landlord for
the Building and Real Property shall not exceed the management fees being
charged by comparable landlords of Comparable Buildings (as defined in Section
6.1 below) for comparable services, and shall not be duplicative of any other
management fee charged by Landlord for the Building or Real Property; (vii)
wages, salaries and other compensation and benefits of all persons engaged in
the operation, management, maintenance or security of the Building and Real
Property, and employer's Social Security taxes, unemployment taxes or insurance,
and any other taxes which may be levied on such wages, salaries, compensation
and benefits; provided, however, that if any such persons provide services for
more than one (1) building of Landlord, then a prorated portion of their wages,
benefits and taxes shall be included in Operating Expenses based on the portion
of their working time devoted to the Building; (viii) subject to
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the second to last paragraph of this Section 4.2.5, payments under any easement,
license, operating agreement, declaration, restrictive covenant, underlying or
ground lease (excluding rent), or instrument pertaining to the sharing of costs
by the Building or Real Property (collectively, "EASEMENT/SHARING AGREEMENTS");
(ix) the cost of janitorial service, alarm and security service, window
cleaning, trash removal, replacement of wall and floor coverings, ceiling tiles
and fixtures in lobbies, corridors, restrooms and other common or public areas
or facilities, maintenance and replacement of curbs and walkways, repair to
roofs and re-roofing; and (x) amortization on a straight-line basis over the
useful life [together with interest at the Interest Rate, as defined in Section
4.7 below, on the unamortized balance] of all of the following costs (or lease
expenses where the item is leased) of a capital nature (including, without
limitation, capital improvements, capital replacements, capital repairs, capital
equipment and capital tools): (1) reasonably intended to produce a reduction in
operating charges or energy consumption (provided the annual amortized cost does
not exceed the higher of the actual cost savings realized or the cost savings
reasonably anticipated to be available, and such savings do not redound
primarily to the benefit of any particular tenant or group of tenants (which
group does not include Tenant); or (2) required by (xx) any new (or change in)
local, state or federal ordinances, statutes, codes, laws, rules or regulations
issued after the Lease Commencement Date of any governmental or quasi-
governmental authority who shall have the power, authority and jurisdiction over
such local, state or federal ordinances, statutes, codes, laws, rules or
regulations (collectively "LAWS") or (yy) any currently existing Laws, the
enforcement of which does not become legally applicable to the Building until
after the Lease Commencement Date, it being agreed and understood that no cost
incurred by Landlord in connection with (aa) performing the initial Tenant
Improvements pursuant to the Tenant Work Letter, or (bb) the subsequent
performance of any work currently required in the Building pursuant to any
currently applicable and enforceable codes (including without limitation the
Americans with Disabilities Act), as such codes exist as of the date hereof,
shall be included in Operating Expenses for purposes of calculating Tenant's
Proportionate Share thereof; or (3) replacement of exterior perimeter window
coverings and of carpeting and wall coverings provided by Landlord in the common
areas of the Building; or (4) minor capital expenditures or improvements where
each such improvement or acquisition costs less than Twenty Thousand Dollars
($20,000.00) in any twelve-month period in the aggregate, and the cost of
capital tools not in excess of Five Thousand Dollars ($5,000.00) in any twelve
(12) month period in the aggregate. If Landlord is not furnishing any particular
work or service (the cost of which, if performed by Landlord, would be included
in Operating Expenses) to a tenant who has undertaken to perform such work or
service in lieu of the performance thereof by Landlord, Operating Expenses shall
be deemed to be increased by an amount equal to the additional Operating
Expenses which would reasonably have been incurred during such period by
Landlord if it had at its own expense furnished such work or service to such
tenant. If the Building is less than 95% occupied during all or a portion of any
Expense Year (including the Base Year), Landlord shall make an appropriate
adjustment to the variable components of Operating Expenses for such year or
applicable portion thereof, employing sound accounting and management
principles, to determine the amount of Operating Expenses that would have been
paid had the Building been at least 95% occupied; and the amount so determined
shall be deemed to have been the amount of Operating Expenses for such year, or
applicable portion thereof. Landlord shall have the right, from time to time, to
equitably allocate some or all of the Operating Expenses among different tenants
of the Building (the "COST POOLS"). Such Cost Pools may include, without
limitation, the office space tenants and retail space tenants of the Building.
Notwithstanding the foregoing, Operating Expenses shall not, however,
include:
(A) costs, including permit, license and inspection costs,
incurred with respect to the installation of other tenants or occupants
improvements made for other tenants or occupants in the Building or incurred in
renovating or otherwise improving, decorating, painting or redecorating vacant
space for other tenants or occupants of the Building;
(B) costs of a capital nature for the Real Property, except as
specifically set forth in subclause (x) hereinabove;
(C) interest and principal payments, points and fees, on
mortgages or deeds of trust or other debt for borrowed money (except for
interest as described in subclause (x) hereinabove) ;
(D) specific costs or services billed to and paid by specific
tenants other than Tenant;
(E) costs of repairs and maintenance reimbursed by any other
party;
(F) marketing costs including any sale/transfer/leasing
commissions, attorneys' fees in connection with the negotiation and preparation
of letters, deal memos, letters of intent, agreements, leases, subleases and/or
assignments, space planning costs, and other costs and expenses incurred in
connection with sale/transfer/lease, sublease and/or assignment negotiations and
transactions with present or prospective purchasers, tenants or other occupants
of the Building;
(G) attorneys' fees and other costs incurred in attempting to
collect rent or evict tenants for nonpayment of rent;
(H) depreciation, amortization and interest payments, (except as
provided herein and except on materials, tools, supplies and vendor-type
equipment purchased by Landlord to enable Landlord to supply services Landlord
might otherwise contract for with a third party where such depreciation,
amortization and interest payments would otherwise have been included in the
charge for such third party's services, all as determined in accordance with
standard real estate accounting practices, consistently applied, and when
depreciation or amortization is permitted or required, the item shall be
amortized over its reasonably anticipated useful life);
(I) costs including penalties, fines and associated legal
expenses incurred due to the violation by Landlord or any other tenant in the
Building of applicable federal, state or local governmental laws, codes and
similar regulations that would not have been incurred but for any such
violations by Landlord or any tenant in the Building, it being intended that
each party shall be responsible for the costs resulting from its own violation
of such laws, codes and regulations (notwithstanding the immediately foregoing,
interest or penalties incurred in connection with assessments or taxes which are
reasonably contested by Landlord shall be deemed Operating Expenses);
-4-
(J) general overhead and general administrative expenses,
advertising and promotional expenses incurred in leasing the Building;
(K) ground rental payments;
(L) insurance deductibles in excess of commercially reasonable
deductibles for fire and extended coverage, and any earthquake insurance
deductible in any Lease Year irrespective of whether such amount is considered
commercially reasonable;
(M) rentals and other related expenses incurred in leasing
systems, equipment and other items which are ordinarily considered capital items
and which, if purchased rather than rented, would constitute a capital cost
which is specifically excluded in subsection (B) hereinabove, except for (1)
costs of equipment not affixed to the Building which is used in providing
janitorial or similar services, (2) expenses in connection with making repairs
on or keeping the Systems and Equipment in operation while repairs are being
made, and (3) in the event of an emergency;
(N) costs incurred by Landlord for the repair of damage to the
Building, to the extent that Landlord is reimbursed by insurance proceeds;
(O) expenses in connection with services or other benefits which
are not provided to Tenant or for which Tenant is charged for directly but which
are provided to another tenant or occupant of the Building;
(P) costs incurred by Landlord due to the violation by Landlord
of (1) the terms and conditions of any lease or other occupancy of space in the
Building, (2) this Lease, or (3) any covenants, conditions and restrictions
encumbering the real property;
(Q) costs of correcting defects in the construction of the
Building;
(R) costs incurred in connection with upgrading the Building to
comply with disability, fire and life safety and earthquake retrofit codes in
effect (and legally applicable to the Building) prior to the Lease Commencement
Date. and costs incurred in steel frame construction testing required by
applicable laws in effect prior to the Lease Commencement Date;
(S) tax penalties incurred as a result of Landlord's negligence,
inability or unwillingness to make payments when due or to file any income tax
or informational returns when due;
(T) costs arising from Landlord's charitable or political
contributions;
(U) costs for acquisition of sculpture, paintings or other
objects of art except for the cost of acquiring any governmentally mandated art
objects;
(V) payments in connection with overhead or profit to
subsidiaries or affiliates of Landlord as a result of a noncompetitive selection
process for providing management or other services in or to the Building, or for
supplies or other materials to be provided to the Building, to the extent that
the costs of such services, supplies or materials shall exceed the costs that
would have been provided by parties unaffiliated with Landlord on a competitive
basis;
(W) costs arising from the presence of Hazardous Materials in or
about the Building or the Real Property (including, without limitation,
Hazardous Materials in the ground water or soil) to the extent such Hazardous
Materials are (i) in existence as of the Lease Commencement Date and in
violation of applicable Laws, in effect as of the Lease Commencement Date, or
(ii) introduced after the Lease Commencement Date in violation of applicable
Laws in effect as of the date of introduction;
(X) advertising and promotional expenditures, and
the cost of signs in or on the Building identifying the owner of the Building or
other tenants of the Building;
(Y) costs associated with the operation of the
business of the partnership or entity which constitutes Landlord as the same are
distinguished from the costs of operation of the Real Property, including
partnership accounting and legal matters, costs of defending any lawsuits with
any mortgagee (except actions where the default of Tenant may be in issue),
costs of selling, syndicating, financing, mortgaging or hypothecating any of
Landlord's interest in the Real Property, costs of any disputes between Landlord
and its employees (if any) not engaged in the operation of the Real Property,
disputes of Landlord with Real Property or parking management, or outside fees
paid in connection with disputes with other tenants; and
(Z) attorneys' fees and costs in connection with any litigation
between Landlord and Tenant.
Landlord agrees that any costs incurred in any Expense Year after the
Base Year (x) because of added services which were readily available during the
Base Year and customarily provided by landlords of Comparable Buildings during
the Base Year (but not by Landlord) and not included in the Base Year, and/or
(y) under any Easement/Sharing Agreement entered into after the Base Year, shall
be added to and included in the Base Year as if the costs were incurred and/or
paid in the Base Year.
Landlord agrees that since one of the purposes of Operating Expenses
and the 95% gross-up provision described above is to allow Landlord to require
Tenant to pay for the Operating Expenses attributable to the Premises, Landlord
agrees that (a) Landlord will not collect or be entitled to collect Operating
Expenses from all of its tenants in an amount which is in excess of one hundred
percent (100%) of the Operating Expenses actually paid by Landlord in connection
with the operation of the Building and the Real Property, (b) Landlord shall
make no profit from the collection of operating expenses from the tenants of the
Building, and (c) Landlord shall not charge Tenant, for utilities used by Tenant
within the Premises, an amount which shall exceed
-5-
the amount charged Landlord by the provider of such utility, plus Landlord's
other actual costs of reasonable overhead, administration and depreciation
charges, as applicable.
4.2.6 "SYSTEMS AND EQUIPMENT" shall mean any plant, machinery,
transformers, duct work, cable, wires, and other equipment, facilities, and
systems designed to supply heat, ventilation, air conditioning and humidity or
any other services or utilities, or comprising or serving as any component or
portion of the electrical, gas, steam, plumbing, sprinkler, communications,
alarm, security, or fire/life safety systems or equipment, or any other
mechanical, electrical, electronic, computer or other systems or equipment which
serve the Building in whole or in part.
4.2.7 "TAX EXPENSES" shall mean all federal, state, county, or local
governmental or municipal taxes, fees, assessments, charges or other impositions
of every kind and nature, whether general, special, ordinary or extraordinary,
(including, without limitation, real estate taxes, general and special
assessments, transit assessments, fees and taxes, child care subsidies, fees
and/or assessments, job training subsidies, fees and/or assessments, open space
fees and/or assessments, housing subsidies and/or housing fund fees or
assessments, public art fees and/or assessments, leasehold taxes or taxes based
upon the receipt of rent, including gross receipts or sales taxes applicable to
the receipt of rent, personal property taxes imposed upon the fixtures,
machinery, equipment, apparatus, systems and equipment, appurtenances, furniture
and other personal property used in connection with the Real Property), which
Landlord shall pay during any Expense Year because of or in connection with the
ownership, leasing and operation of the Real Property or Landlord's interest
therein. For purposes of this Lease, Tax Expenses shall be calculated as if the
tenant improvements in the Building were fully constructed and the Real
Property, the Building, and all tenant improvements in the Building were fully
assessed for real estate tax purposes and the Building was at least 95% occupied
with tenants paying full rent.
4.2.7.1 Tax Expenses shall include, without limitation:
(i) Any tax on Landlord's rent, right to rent or
other income from the Real Property or as against Landlord's business of leasing
any of the Real Property;
(ii) Any assessment, tax, fee, levy or charge in
addition to, or in substitution, partially or totally, of any assessment, tax,
fee, levy or charge previously included within the definition of real property
tax, it being acknowledged by Tenant and Landlord that Proposition 13 was
adopted by the voters of the State of California in the June 1978 election
("PROPOSITION 13") and that assessments, taxes, fees, levies and charges may be
imposed by governmental agencies for such services as fire protection, street,
sidewalk and road maintenance, refuse removal and for other governmental
services formerly provided without charge to property owners or occupants. It is
the intention of Tenant and Landlord that all such new and increased
assessments, taxes, fees, levies, and charges and all similar assessments,
taxes, fees, levies and charges be included within the definition of Tax
Expenses for purposes of this Lease;
(iii) Any assessment, tax, fee, levy, or charge
allocable to or measured by the area of the Premises or the rent payable
hereunder, including, without limitation, any gross income tax upon or with
respect to the possession, leasing, operating, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises, or any portion
thereof;
(iv) Any assessment, tax, fee, levy or charge, upon
this transaction or any document to which Tenant is a party, creating or
transferring an interest or an estate in the Premises; and
(v) Any reasonable expenses incurred by Landlord in
attempting to protest, reduce or minimize Tax Expenses.
4.2.7.2 If in any Expense Year subsequent to the Base Year
("ADJUSTMENT YEAR"), the amount of Tax Expenses for such applicable Adjustment
Year decreases below the Tax Expenses for the Base Year, then for purposes of
such Adjustment Year and all subsequent Expense Years, the Tax Expenses for the
Base Year shall be decreased by an amount equal to the amount of the decrease in
Tax Expenses for the applicable Adjustment Year below the Tax Expenses for the
Base Year. Conversely, if the Tax Expenses for any Expense Year subsequent to
the Adjustment Year in question (the "READJUSTMENT YEAR") are increased as a
result of the assessor's denial of a Proposition 8 reduction (whether or not
Landlord timely filed for such a reduction) which is greater than or equal to
the Proposition 8 reduction secured during the Adjustment Year in question, then
for purposes of all subsequent Expense Years, including the Readjustment Year in
question, the Tax Expenses deemed attributable to the Base Year shall be
increased by an amount equal to the amount of the increase in Tax Expenses
during such Readjustment Year over the Tax Expenses for the Adjustment Year in
question which resulted from Landlord's failure to secure a Proposition 8
reduction greater than or equal to the Proposition 8 reduction secured during
such Adjustment Year. Landlord and Tenant acknowledge that this provision is
not intended to in any way affect the inclusion in Tax Expenses of the statutory
two percent (2.0%) annual increase in the assessed value of the Real Property or
the improvements thereon for the purpose of determining Tax Expenses for the
Base Year (as such statutory increase may be modified by subsequent legislation)
or the amount of Tax Expenses due to any changes of ownership.
4.2.7.3 Notwithstanding anything to the contrary contained in
this Section 4.2.7, there shall be excluded from Tax Expenses (i) all excess
profits taxes, franchise taxes, gift taxes, capital stock taxes, inheritance and
succession taxes, estate taxes, federal and state net income taxes, and other
taxes to the extent applicable to Landlord's net income (as opposed to rents,
receipts or income attributable to operations at the Building or Real Property),
(ii) any items included as Operating Expenses, (iii) any items paid by Tenant
under Section 4.4 of this Lease, and (iv) taxes attributable to leasehold
improvements of other tenants' premises in the Building in excess of the Cut-Off
Point, as that term is defined in Section 4.4.1 below, but only to the extent
such taxes in excess of the Cut-Off Point are paid directly by other tenants (or
if not required by Landlord to be paid by such other tenants, to the extent
Landlord requires Tenant to pay such taxes attributable to leasehold
improvements in the Premises in excess of the Cut-Off Point).
-6-
4.2.7.4 All assessments for Tax Expenses which are not
specifically charged to Tenant because of what Tenant has done, which can be
paid by Landlord in installments, shall be paid by Landlord in the maximum
number of installments permitted by law and not included as Tax Expenses except
in the year in which the installment is actually paid; provided, however, if the
prevailing practice in Comparable Buildings is to pay such assessments on an
earlier basis, and Landlord pays on such basis, such assessments shall be
included in Tax Expenses as paid by Landlord; provided, however, that in no
event shall Landlord include any accrued interest resulting from such
assessments in its computation of Tax Expenses.
4.2.8 "TENANT'S SHARE" shall mean the percentage set forth in Section
9.2 of the Summary. Tenant's Share was calculated by multiplying the number of
rentable square feet of the Premises by 100 and dividing the product by the
total rentable square feet in the Building. In the event the total rentable
square feet of the Building is changed, Tenant's Share shall be appropriately
adjusted, and, as to the Expense Year in which such change occurs, Tenant's
Share for such year shall be determined on the basis of the number of days
during such Expense Year that each such Tenant's Share was in effect.
4.3 Calculation and Payment of Additional Rent.
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4.3.1 Calculation of Excess. If for any Expense Year ending or
---------------------
commencing within the Lease Term, Tenant's Share of Direct Expenses for such
Expense Year exceeds Tenant's Share of Direct Expenses for the Base Year, then
Tenant shall pay to Landlord, in the manner set forth in Section 4.3.2, below,
and as Additional Rent, an amount equal to the excess (the "EXCESS").
4.3.2 Statement of Actual Direct Expenses and Payment by Tenant.
---------------------------------------------------------
Landlord shall endeavor to give to Tenant on or before the first day of April
following the end of each Expense Year, a detailed statement (the "STATEMENT")
which shall state the Direct Expenses on a general line item by line item basis
incurred or accrued for such preceding Expense Year, and which shall indicate
the amount, if any, of any Excess. Within thirty (30) days after receipt of the
Statement for each Expense Year ending during the Lease Term, if an Excess is
present, Tenant shall pay to Landlord the full amount of the Excess for such
Expense Year, less the amounts, if any, paid during such Expense Year as
"Estimated Excess," as that term is defined in Section 4.3.3 of this Lease. In
the event the Statement indicates that the Excess for such Expense Year is less
than the total Estimated Excess payments made by Tenant for such Expense Year,
Landlord shall refund such overpayment to Tenant within thirty (30) days after
delivery of such Statement (or at Landlord's option, such overpayment shall be
credited against the Rent next due and payable under this Lease). Even though
the Lease Term has expired and Tenant has vacated the Premises, when the final
determination is made of Tenant's Share of the Direct Expenses for the Expense
Year in which this Lease terminates, Tenant shall pay to Landlord the amount by
which the Excess for such Expense Year exceeds the Estimated Excess payments
made by Tenant for such Expense Year, or Landlord shall reimburse to Tenant any
overpayment of Estimated Excess payments made by Tenant for any such Expense
Year if such payments exceed the amount of Excess for such Expense Year, as the
case may be; such payment by Landlord or Tenant, as applicable, shall be made
within thirty (30) days after the Statement for such final Expense Year is
delivered by Landlord to Tenant. The failure of Landlord to furnish the
Statement for any Expense Year within such 120 day period shall not prejudice
Landlord from enforcing its rights under this Article 4; provided, however,
Landlord's failure to provide Tenant with a Statement for a particular Expense
Year within the earlier of (i) two (2) years after the end of the Expense Year
in question or (ii) one (1) year after the last Expense Year of the Lease Term,
shall constitute a waiver of Landlord's right to collect any increase in Direct
Expenses for the time period in question. Such waiver shall not affect Tenant's
right to a credit for overpayment should it be due under this Lease. The
provisions of this Section 4.3.2 shall survive the expiration or earlier
termination of the Lease Term.
4.3.3 Statement of Estimated Direct Expenses. In addition, Landlord
--------------------------------------
shall endeavor to give Tenant a yearly expense estimate statement (the "ESTIMATE
STATEMENT") which shall set forth Landlord's reasonable detailed estimate (the
"ESTIMATE"), on a general line item by line item basis, of what the total amount
of Direct Expenses for the then-current Expense Year shall be and the estimated
Excess (the "ESTIMATED EXCESS") as calculated by comparing Tenant's Share of
Direct Expenses, which shall be based upon the Estimate, to Tenant's Share of
Direct Expenses for the Base Year. The failure of Landlord to timely furnish
the Estimate Statement for any Expense Year shall not preclude Landlord from
enforcing its rights to collect any Estimated Excess under this Article 4. If
pursuant to the Estimate Statement an Estimated Excess is calculated for the
then-current Expense Year, Tenant shall pay, with its next installment of Base
Rent due, a fraction of the Estimated Excess for the then-current Expense Year
(reduced by any amounts paid pursuant to the last sentence of this Section
4.3.3). Such fraction shall have as its numerator the number of months which
have elapsed in such current Expense Year to the month of such payment, both
months inclusive, and shall have twelve (12) as its denominator. Until a new
Estimate Statement is furnished, Tenant shall pay monthly, with the monthly Base
Rent installments, an amount equal to one-twelfth (1/12) of the total Estimated
Excess set forth in the previous Estimate Statement delivered by Landlord to
Tenant. Landlord agrees that the total amount of Direct Expenses set forth on
any Estimate Statement delivered to Tenant for any current Expense Year after
the Base Year shall not exceed the amount of actual Direct Expenses for the
prior Expense Year by more than ten percent (10%), unless Landlord shall,
concurrently with the delivery by Landlord to Tenant of the Estimate Statement
for such current Expense Year, deliver to Tenant reasonably detailed evidence
that the Direct Expenses are reasonably estimated by Landlord to be higher.
4.4 Taxes and Other Charges for Which Tenant Is Directly Responsible.
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Tenant shall reimburse Landlord upon demand for any and all taxes or assessments
required to be paid by Landlord (except to the extent included in Tax Expenses
by Landlord), excluding state, local and federal personal or corporate income
taxes measured by the net income of Landlord from all sources and estate and
inheritance taxes, whether or not now customary or within the contemplation of
the parties hereto, when:
4.4.1 Said taxes are measured by or reasonably attributable to the
cost or value of Tenant's equipment, furniture, fixtures and other personal
property located in the Premises, or by the cost or value of any leasehold
improvements made in or to the Premises by or for Tenant, to the extent the cost
or value of such leasehold improvements exceeds the amount per usable square
foot which Landlord uses as a base value above which Landlord charges tenants in
the Building for real estate taxes attributable to the cost or value of
leasehold improvements located in such tenants' premises (the "CUT-OFF POINT");
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4.4.2 Said taxes are assessed upon or with respect to the possession,
leasing, operation, management, maintenance, alteration, repair, use or
occupancy by Tenant of the Premises or any portion of the Real Property
(including the Building Parking Facility); or
4.4.3 Said taxes are assessed upon this transaction or any document
to which Tenant is a party creating or transferring an interest or an estate in
the Premises.
4.5 Books and Records. Landlord shall maintain books and records, or make
-----------------
available such books and records, in Los Angeles County in accordance with sound
accounting and management practices, reflecting the Direct Expenses. Landlord
shall maintain such books and records for the Direct Expenses for each Expense
Year for the entirety of the period which ends on the earlier to occur of two
(2) years following Landlord's delivery to Tenant of each such Statement or one
(1) year as to the Statement pertaining to the final Expense Year.
4.6 Audit Rights. In the event Tenant disputes the amount of the Direct
------------
Expenses set forth in the Statement for the particular Expense Year delivered by
Landlord to Tenant pursuant to Section 4.3.2 above, Tenant shall have the right,
at Tenant's cost, after reasonable notice to Landlord, to have Tenant's
authorized employees inspect, at Landlord's office in Los Angeles County during
normal business hours, Landlord's books, records and supporting documents
concerning the Direct Expenses set forth in such Statement; provided, however,
Tenant shall have no right to conduct such inspection, have an audit performed
by the Accountant as described below, or object to or otherwise dispute the
amount of the Direct Expenses set forth in any such Statement, unless Tenant
notifies Landlord of such objection and dispute, completes such inspection, and
has the Accountant commence and complete such audit within two (2) years
immediately following Landlord's delivery of the particular Statement in
question (the "REVIEW PERIOD") (which Review Period shall be reduced to one (1)
year with respect to the Statement applicable to the last Expense Year during
the Lease Term); provided, further, that notwithstanding any such timely
objection, dispute, inspection, and/or audit, and as a condition precedent to
Tenant's exercise of its right of objection, dispute, inspection and/or audit as
set forth in this Section 4.6, Tenant shall not be permitted to withhold payment
of, and Tenant shall timely pay to Landlord, the full amounts as required by the
provisions of this Article 4 in accordance with such Statement. However, such
payment may be made under protest pending the outcome of any audit which may be
performed by the Accountant as described below. In connection with any such
inspection by Tenant, Landlord and Tenant shall reasonably cooperate with each
other so that such inspection can be performed pursuant to a mutually acceptable
schedule, in an expeditious manner and without undue interference with
Landlord's operation and management of the Real Property. If after such
inspection and/or request for documentation, Tenant still disputes the amount of
the Direct Expenses set forth in the Statement, Tenant shall have the right,
within the Review Period, to cause an independent certified public accountant
(which is not paid on a commission or contingency basis) mutually approved by
Landlord and Tenant (the "ACCOUNTANT") to complete an audit of Landlord's books
and records to determine the proper amount of the Direct Expenses incurred and
amounts payable by Tenant for the Expense Year which is the subject of such
Statement. Such audit by the Accountant shall be final and binding upon
Landlord and Tenant. If Landlord and Tenant cannot mutually agree as to the
identity of the Accountant within thirty (30) days after Tenant notifies
Landlord that Tenant desires an audit to be performed, then the Accountant shall
be of the "Big 6" accounting firms (which is not paid on a commission or
contingency basis), as selected by Tenant and reasonably approved by Landlord.
If such audit reveals that Landlord has over-charged Tenant, then within thirty
(30) days after the results of such audit are made available to Landlord,
Landlord shall reimburse to Tenant the amount of such over-charge. If the audit
reveals that the Tenant was under-charged, then within thirty (30) days after
the results of such audit are made available to Tenant, Tenant shall reimburse
to Landlord the amount of such under-charge. Tenant agrees to pay the cost of
such audit unless it is subsequently determined that Landlord's original
Statement which was the subject of such audit was in error to Tenant's
disadvantage by four percent (4%) or more of the total Direct Expenses which was
the subject of such audit. The payment by Tenant of any amounts pursuant to
this Article 4 shall not preclude Tenant from questioning, during the Review
Period, the correctness of the particular Statement in question provided by
Landlord, but the failure of Tenant to object thereto, conduct and complete its
inspection and have the Accountant conduct the audit as described above prior to
the expiration of the Review Period for such Statement shall be conclusively
deemed Tenant's approval of the Statement in question and the amount of Direct
Expenses shown thereon.
4.7 Late Charges. If any installment of Rent or any other sum due from
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Tenant shall not be received by Landlord or Landlord's designee within five (5)
business days after notice that the same is past due then Tenant shall pay to
Landlord a late charge equal to five percent (5%) of the amount due. The late
charge shall be deemed Additional Rent and the right to require it shall be in
addition to all of Landlord's other rights and remedies hereunder, at law and/or
in equity and shall not be construed as liquidated damages or as limiting
Landlord's remedies in any manner. In addition to the late charge described
above, any Rent or other amounts owing hereunder which are not paid within three
(3) business days after the date that they are due shall thereafter bear
interest until paid at a rate (the "INTEREST RATE") equal to the lesser of (i)
the "PRIME RATE" or "REFERENCE RATE" announced from time to time by the Bank of
America (or such reasonable comparable national banking institution as selected
by Landlord in the event Bank of America ceases to exist or publish a Prime Rate
or Reference Rate), plus two percent (2%), or (ii) the highest rate permitted by
applicable law. Landlord's failure to demand payment of any late charge or
interest shall not constitute a forbearance of such amounts and shall not
compromise Landlord's right to deem Tenant's failure to pay such amounts (or any
overdue rent upon which such late charge and interest are chargeable) in a
timely manner as a default by Tenant under this Lease or limit any other rights
given to Landlord under this Lease or by law or equity. Notwithstanding the
foregoing, in the event Landlord shall, at Landlord's sole and absolute
discretion, elect not to ▇▇▇▇ Tenant for any late charge and/or interest due on
the overdue amount within six (6) months of the date payment of such amount was
due, such payment of the late charge and/or interest on the overdue amount shall
be deemed to be waived and Tenant shall have no further obligation with respect
to such late charge or interest.
ARTICLE 5
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USE OF PREMISES
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Tenant shall use the Premises solely for general office and administrative
purposes consistent with the character of the Building as a first-class office
building, and Tenant shall not use or permit the Premises to be used for any
other purpose or
-8-
purposes whatsoever. Tenant further covenants and agrees that it shall not use,
or suffer or permit any person or persons to use, the Premises or any part
thereof for any use or purpose contrary to the provisions of Exhibit D, attached
---------
hereto, or in violation of the laws of the United States of America, the state
in which the Building is located, or the ordinances, regulations or requirements
of the local municipal or county governing body or other lawful authorities
having jurisdiction over the Building. Tenant shall comply with all recorded
covenants, conditions, and restrictions, and the provisions of all ground or
underlying leases, now or hereafter affecting the Real Property. Landlord
represents and warrants to Tenant that general office use in the Premises is
permitted by any existing recorded covenants, conditions or restrictions. Tenant
shall not use or allow another person or entity to use any part of the Premises
for the storage, use, treatment, manufacture or sale of "Hazardous Material," as
that term is defined below, except for ordinary and general office supplies
typically used in the ordinary course of business within office space in first-
class office buildings (such as copier, toner, liquid paper, glue, ink and
common household cleaning supplies) which Tenant must use in compliance with all
applicable Laws. As used herein, the term "HAZARDOUS MATERIAL" means any
hazardous or toxic substance, material or waste which is or becomes regulated by
any local governmental authority, the state in which the Building is located or
the United States Government.
ARTICLE 6
---------
SERVICES AND UTILITIES
----------------------
6.1 Standard Tenant Services. Landlord shall, subject to Tenant's repair
------------------------
obligations set forth in this Lease, operate the Building and Real Property, and
the common areas thereof, in a manner at least comparable to the manner of
operation of other comparable low-rise, suburban office buildings of similar age
and quality as the Building in Conejo Valley ("COMPARABLE BUILDINGS"). In
connection with the foregoing, and consistent with the services provided in the
Comparable Buildings, Landlord agrees to furnish or cause to be furnished to the
Premises the following services and utilities subject to the conditions and in
accordance with standards set forth below:
6.1.1 Landlord shall provide heat, ventilation and air conditioning
("HVAC") services to the Premises when reasonably required for the comfortable
occupancy of the Premises for normal general office use, from Monday through
Friday, during the period from 8:00 a.m. to 6:00 p.m., and on Saturday from 9:00
a.m. to 1:00 p.m., subject to any governmental requirements or standards
relating to, among other things, energy conservation and except for the date of
observation of New Year's Day, Presidents' Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day, Christmas Day and other nationally recognized
holidays as established from time to time (collectively, the "HOLIDAYS"). The
hours set forth in this Section 6.1.1 are sometimes hereinafter referred to as
"BUSINESS HOURS." Notwithstanding the foregoing to the contrary, during
construction of the initial Tenant Improvements, Tenant shall install separate
24-hour supplemental HVAC units for Tenant's data center to be constructed by
Tenant in the Premises as described in the Tenant Work Letter ("DATA CENTER"),
which shall provide 24-hour HVAC to the Data Center and shall be located in the
Premises or, subject to Landlord's approval, on the roof of the Building
(collectively, "SUPPLEMENTAL HVAC UNITS").
Upon request, Landlord shall make available to the remainder of the
Premises which is other than the Data Center HVAC services at times other than
Business Hours at a charge to Tenant equal to Landlord's "actual cost" of such
services (which "actual cost" shall not include any profit to Landlord but may
include reasonable overhead, administration or depreciation charges) which is
currently Fifty Dollars ($50.00) per hour, as the same may increase from time to
time, but in no event shall such rate increase in excess of Landlord's actual
cost of providing such after-hours HVAC services. Upon request, Landlord shall
provide Tenant with documentation to support Landlord's after-hours HVAC charges
to Tenant. The expenses for such after-hours HVAC services shall be billed to
Tenant monthly, as additional rent, and shall be payable by Tenant to Landlord
within thirty (30) days of receipt.
6.1.2 Landlord shall make available to the Premises twenty-four (24)
hours a day, seven (7) days a week, electrical current adequate for normal
general office use in the Premises. Tenant's use of electric current (including
electric current for Tenant's Supplemental HVAC Units) shall not exceed the
capacity of the feeders to or risers of the Building, it being acknowledged by
the parties that the current design specifications for the Supplemental HVAC
Units set forth in the Final Space Plan (as defined in the Tenant Work Letter)
does not exceed the existing capacity of such feeders or risers. Electricity
for the Premises, including for Tenant's Supplemental HVAC Units, shall be
separately metered pursuant to electrical meter(s) installed during construction
of the initial Tenant Improvements pursuant to the Tenant Work Letter.
6.1.3 Upon request, Landlord shall replace lamps, starters and
ballasts for Building standard lighting fixtures within the Premises, the cost
of which shall be included in Operating Expenses. Tenant shall pay for the cost
of replacement of lamps, starters and ballasts for non-Building standard
lighting fixtures within the Premises.
6.1.4 Landlord shall make available to the Premises twenty-four (24)
hours a day, seven (7) days a week, city water from the regular Building outlets
for drinking, lavatory and toilet purposes for general office use.
6.1.5 Landlord shall provide janitorial services five (5) days per
week, except the date of observation of the Holidays, in and about the Premises
and window washing services in accordance with the Specifications attached
hereto as Exhibit E and at least comparable to that provided in Comparable
---------
Buildings.
6.1.6 Landlord shall provide nonexclusive automatic passenger
elevator service at all times.
6.2 Additional Use. Landlord may impose a reasonable charge, not in
--------------
excess of Landlord's actual cost therefor, for any utilities and services
provided to the Premises beyond the levels described in Section 6.1 above (which
the parties agree in the case of electric current is, on a demand load basis for
all equipment and lighting, four (4) ▇▇▇▇▇ per rentable square foot multiplied
by the rentable area of the Premises on a monthly basis for the Business Hours),
but such wattage amount shall not include any electric current attributable to
the operation of the base Building HVAC), or special electrical, cooling or
ventilating needs created
-9-
in certain areas by hybrid telephone equipment, computers and other similar
equipment or uses which require utilities or services in excess of the levels
described in Section 6.1 above.
6.3 Interruption of Use. Tenant agrees that Landlord shall not be liable
-------------------
for damages, by abatement of Rent (except as provided in Section 6.5 below) or
otherwise, for failure to furnish or delay in furnishing any service (including
telephone and telecommunication services), or for any diminution in the quality
or quantity thereof (including any failure or insufficiency of Tenant's
emergency back-up power through the Emergency Generator or ▇▇▇▇▇▇▇ Plug
described in Section 6.7 below), when such failure or delay or diminution is
occasioned, in whole or in part, by repairs, replacements, or improvements, by
any strike, lockout or other labor trouble, by inability to secure electricity,
gas, water, or other fuel at the Building after reasonable effort to do so, by
any accident or casualty whatsoever, by act or default of Tenant or other
parties, or by any other cause beyond Landlord's reasonable control; and such
failures or delays or diminution shall never be deemed to constitute an eviction
or disturbance of Tenant's use and possession of the Premises or relieve Tenant
from paying Rent (except as provided in Section 6.5 below) or performing any of
its obligations under this Lease. In the event of any failure, stoppage or
interruption in utilities or services, Landlord shall use reasonable diligence
to cause such utilities and or services to be promptly resumed. Furthermore,
Landlord shall not be liable under any circumstances for a loss of, or injury
to, property or for injury to, or interference with, Tenant's business,
including, without limitation, loss of profits, however occurring, through or in
connection with or incidental to a failure to furnish any of the services or
utilities as set forth in this Article 6.
6.4 Additional Services. Landlord shall also have the right, but not the
-------------------
obligation, to provide any additional services which may be requested by Tenant,
including, without limitation, locksmithing, non-Building standard lamp
replacement, additional janitorial service, and additional repairs and
maintenance, provided that Tenant shall pay to Landlord within thirty (30) days
after billing, the actual costs to Landlord of providing such additional
services plus a five percent (5%) administration fee. Charges for any utilities
or service for which Tenant is required to pay from time to time hereunder,
shall be deemed Additional Rent hereunder and shall be billed on a monthly
basis.
6.5 Abatement of Rent When Tenant Is Prevented From Using Premises. In
----------------------------------------------- --------------
the event that Tenant is prevented from using, and does not use, the Premises or
any portion thereof, for five (5) consecutive business days (the "ELIGIBILITY
PERIOD") as a result of (i) any repair, maintenance or alteration performed by
Landlord after the Lease Commencement Date and required to be performed by
Landlord under this Lease or permitted pursuant to Section 24.30 below, or (ii)
any failure to provide to the Premises any of the essential utilities and
services required to be provided in Sections 6.1.1 or 6.1.2 above (which failure
is not the result of any defects in, damage to or repairs required to be made to
the Supplemental HVAC Units or other Data Center Work), (iii) any failure to
provide access to the Premises, or (iv) because of the presence of Hazardous
Materials in, on or around the Building, the Premises or the Real Property which
was not caused or introduced by Tenant, which Hazardous Materials could, in
Tenant's business judgment and taking into account the standards, guidances and
recommendations included in applicable Laws pertaining to Hazardous Materials,
pose a material and significant health risk to occupants of the Premises, then
Tenant's obligation to pay Base Rent and Direct Expenses shall be abated or
reduced, as the case may be, from and after the first (1st) day following the
Eligibility Period and continuing until such time that Tenant continues to be so
prevented from using, and does not use, the Premises or a portion thereof, in
the proportion that the rentable square feet of the portion of the Premises that
Tenant is prevented from using, and does not use, bears to the total rentable
square feet of the Premises. To the extent Tenant shall be entitled to
abatement of rent because of a damage or destruction pursuant to Article 11 or a
taking pursuant to Article 12, then the Eligibility Period shall not be
applicable.
6.6 Tenant's Right to Install Security System. If Tenant wishes to
-----------------------------------------
establish or install any automated and/or nonautomated security system in, on or
about the Premises, Tenant shall first notify Landlord of Tenant's plan for any
such system, and Landlord shall have the right to review and approve or
disapprove said plan in Landlord's discretion. If Landlord approves any such
plan and Tenant establishes or installs any automated and/or nonautomated
security system in, on or about the Premises, and should such system adversely
or materially affect the Premises or the Building or the desirability of the
Premises or the Building as office space, or as an office building, or have an
adverse or material effect on other tenants respectively, Landlord shall
subsequently have the right to review Tenant's security system from time to time
and request Tenant to make changes in the security services and/or equipment.
Tenant shall make such requested changes immediately thereafter. Landlord shall
have no obligation to maintain, service or respond to Tenant's security system.
Tenant hereby indemnifies, defends, protects and holds Landlord harmless from
and against any and all claims, losses and damages (including, but not limited
to actual and consequential damages) by or on behalf of Tenant, or any other
person, including but not limited to its employees, visitors, invitees,
licensees or customers, arising directly or indirectly from Landlord's not
maintaining, servicing or responding to Tenant's security system.
6.7 Back-Up Power. Tenant desires back-up emergency power for the
-------------
operation of Tenant's business in the Premises in the event of a power failure
in the Premises, which emergency back-up power shall be provided through one of
the following methods as mutually determined by Landlord and Tenant during the
preparation of the Working Drawings for the Tenant Improvements pursuant to the
Tenant Work Letter: (i) from a new emergency generator to be installed by
Landlord on the Real Property, which generator includes the generator itself, an
automatic transfer switch, distribution boards, conduit and wire directly
attributable to emergency power distribution, and fuel tank (collectively , the
"EMERGENCY GENERATOR"), with connections to the Premises via electrical cabling
to be installed by Landlord pursuant to the Tenant Work Letter during the
construction of the initial Tenant Improvements; or (ii) Tenant's own portable
emergency generator to be brought onto the Real Property during such power
failure and connected to the Premises via a "▇▇▇▇▇▇▇ PLUG" and with connections
to the Premises via electrical cabling to be installed by Landlord pursuant to
the Tenant Work Letter during the construction of the initial Tenant
Improvements. The cost of acquisition and installation of the Emergency
Generator (or ▇▇▇▇▇▇▇ Plug) and related electrical cabling shall be paid for by
Landlord, while the cost of Tenant's own emergency generator in the event the
▇▇▇▇▇▇▇ Plug is installed shall be paid for by Tenant; provided, however, Tenant
shall reimburse Landlord on a monthly basis, as Additional Rent, for Tenant's
pro rata share of the actual cost of acquisition and installation (amortized on
a monthly basis over the period which is the earlier of (A) the portion of the
Lease Term remaining following installation of the Emergency Generator or (B)
the useful life of the Emergency Generator, as reasonably determined by
Landlord), use, operation, repair and, if necessary, replacement of the
Emergency Generator if installed pursuant to (i) hereinabove. Such pro rata
share shall be determined based upon the ratio of the amperage capacity reserved
or required for Tenant's emergency power use to the total amperage capacity of
the Emergency Generator. Landlord
-10-
makes no representations or warranties whatsoever that the Emergency Generator
and/or ▇▇▇▇▇▇▇ Plug (and related cabling and connections) will provide
sufficient back-up power for the Premises or are suitable for their intended
purposes.
ARTICLE 7
---------
REPAIRS
-------
7.1 Tenant's Repairs. Subject to Landlord's construction obligations in
----------------
the Tenant Work Letter and Landlord's repair obligations in Section 7.2 below,
Tenant shall, at Tenant's own expense, keep the Data Center and all non-
structural portions of the Premises, including all improvements, fixtures and
furnishings therein (but excluding the Base Building Systems, as defined in
Section 7.2 below), in good order, repair and condition at all times during the
Lease Term, except for damage by ordinary wear and tear, and except for any and
damage by casualty which is Landlord's obligation to repair in Section 11.1
below. Such repair obligations shall include, without limitation, (i) the
obligation to promptly and adequately repair all damaged or broken fixtures and
appurtenances, and (ii) maintaining, repairing and replacing, as necessary, at
Tenant's sole cost and expense, the Data Center and Data Center Work (including,
without limitation, the Supplemental HVAC Units, whether installed in the
Premises or on the roof of the Building), which repairs shall include ordinary
wear and tear and casualty damage and shall be performed by a third-party
maintenance contractor selected by Tenant and approved by Landlord pursuant to a
maintenance contract approved by Landlord; provided, however, Landlord may elect
to perform such maintenance, repairs and/or replacements, and Tenant shall pay
to Landlord, as Additional Rent, the actual, documented and reasonable cost
thereof (including the cost of the maintenance contract), without profit to
Landlord, within thirty (30) days after invoice from Landlord. If Tenant fails
to maintain the Premises in good order, condition and repair, Landlord shall
give Tenant written notice that Tenant must do such acts and expend such funds
at the expense of Tenant as are reasonably required to perform such work.
Should Tenant refuse or neglect to repair the Premises at any time within ten
(10) days from the date on which Landlord makes such written demand on Tenant to
effect such repair (or if such repair shall require more than ten (10) days to
complete and Tenant shall fail to commence such repair within such ten (10) day
period and to thereafter pursue such repair diligently to completion), Landlord
may enter the Premises and make such repairs, and upon completion thereof,
Tenant agrees to pay to Landlord, as additional rent, Landlord's reasonable
costs of completing such repairs plus an amount not to exceed five percent (5%)
of such costs for Landlord's overhead, within thirty (30) days of receipt from
Landlord of a written itemized ▇▇▇▇ therefor. Prior to commencing any item of
repair or maintenance work which is connected to or may potentially adversely
affect any structural portion of the Building or any of the Base Building
Systems, Tenant shall notify Landlord and Landlord may elect to perform the
required work at Tenant's cost, which shall in no event exceed the cost for
which Tenant could have had the work performed.
7.2 Landlord's Repairs. Anything contained in Section 7.1 above to the
------------------
contrary notwithstanding, and subject to Articles 11 and 12 of this Lease,
Landlord shall repair and maintain the structural portions of the Building, the
common areas of the Building and Real Property, the basic plumbing, heating,
ventilating, air conditioning and electrical systems serving the Building and
not located in the Premises (collectively, "BASE BUILDING SYSTEMS") and the
public restrooms on each floor of the Building in good order, repair and
condition and in a manner at least comparable to the Comparable Buildings;
provided, however, if such maintenance and repairs are caused in part or in
whole by the act, neglect, fault of or omission of any duty by Tenant, its
agents, servants, employees or invitees, Tenant shall, subject to Article 10,
pay to Landlord as additional rent, the reasonable cost of such maintenance and
repairs. The Base Building Systems shall not include Tenant's Supplemental HVAC
Units or any other Data Center Work, but shall include the Emergency Generator
or ▇▇▇▇▇▇▇ Plug (as defined in Section 6.7 above) and related electrical cabling
to the Premises. In addition to the foregoing, such portions of the Building
and the Real Property (including, without limitation, the common areas and Base
Building Systems) shall be maintained by Landlord in a condition and a state of
repair at least comparable to the condition and state of repair in which the
Comparable Buildings are being maintained. Furthermore, Landlord shall comply
with all laws which are applicable to the common areas of the Building and Real
Property, the structural portions of the Building and the Base Building Systems,
the cost of which compliance shall be included in Operating Expenses except to
the extent specifically excluded therefrom in Article 4; provided however that
(i) to the extent any such costs are incurred to rectify any such non-compliance
of any such portion of the Real Property in existence as of the Lease
Commencement Date and not resulting from Tenant's Data Center Work, Landlord
shall pay for such costs from its own funds and not as part of Operating
Expenses, and (ii) to the extent any such compliance is necessitated by any
Tenant-Caused Events (as defined below), Tenant shall be liable for such
compliance at Tenant's sole cost and expense. As used herein, "TENANT-CAUSED
EVENTS" shall mean any such compliance necessitated by (A) any Alterations
performed by or for Tenant which is not otherwise included in Landlord's
obligation in clause (i) hereinabove, (B) the Data Center Work, (C) any specific
act or negligence of Tenant or Tenant's agents, employees, licensees or
invitees, and/or (D) by Tenant's specific manner of use of the Premises.
Landlord shall not be liable for any failure to make any such repairs, or to
perform any maintenance unless such failure shall persist for an unreasonable
time after written notice of the need of such repairs or maintenance is given to
Landlord by Tenant, and such repairs by Landlord shall be diligently prosecuted
to completion during non-Business Hours, to the extent practicable. There shall
be no abatement of rent (except as expressly provided in Section 6.5 and
Articles 11 and 12) and no liability of Landlord by reason of any injury to or
interference with Tenant's business arising from the making of any repairs,
alterations or improvements in or to any portion of the Building or the Premises
or in or to fixtures, appurtenances and equipment therein. Subject to Section
7.3 below, Tenant hereby waives and releases its right to make repairs at
Landlord's expense under Sections 1941 and 1942 of the California Civil Code; or
under any similar law, statute, or ordinance now or hereafter in effect.
7.3 Tenant's Right to Make Repairs. If Tenant provides written notice (or
------------------------------
oral notice in the event of an emergency, such as damage or destruction to or of
a structural component, or any electrical, plumbing, mechanical or
telecommunications system of or in the Building or the Premises (including but
not limited to damage to the roof, or exterior window or door)) to Landlord of
an event or circumstance which requires the action of Landlord with respect to
repair and/or maintenance pursuant to Section 7.2 above, and Landlord fails to
provide such action within a reasonable period of time, given the circumstances,
after the receipt of such notice, but in any event not later than thirty (30)
days after receipt of such notice (or such longer period as reasonably necessary
if more than 30 days are reasonably required to complete such repairs and
Landlord commences such repairs within such 30-day period and thereafter
diligently attempts to complete same), then Tenant may proceed to take the
required action upon delivery of an additional ten (10) business days' notice to
Landlord specifying that Tenant is taking such required action (provided,
however, that such additional notice shall not be required in the event of an
emergency), and if such action was
-11-
required under the terms of this Lease to be taken by Landlord and was not taken
by Landlord within such ten (10) day period, then Tenant shall be entitled to
prompt reimbursement by Landlord of Tenant's reasonable costs and expenses in
taking such action plus interest thereon at the Interest Rate. In the event
Tenant takes such action, and such work will affect the Base Building Systems
(including, without limitation, any riser cabling) or the structural integrity
of the Building, Tenant shall use only those contractors used by Landlord in the
Building for work on such systems unless such contractors are unwilling or
unable to perform, or timely perform, such work, in which event Tenant may
utilize the services of any other qualified contractor which normally and
regularly performs similar work in Comparable Buildings. Further, if Landlord
does not deliver a detailed written objection to Tenant within thirty (30) days
after receipt of an invoice by Tenant of its costs of taking action which Tenant
claims should have been taken by Landlord, and if such invoice from Tenant sets
forth a reasonably particularized breakdown of its costs and expenses in
connection with taking such action on behalf of Landlord, then Tenant shall be
entitled to deduct from Rent payable by Tenant under this Lease, the amount set
forth in such invoice. If, however, Landlord delivers to Tenant within thirty
(30) days after receipt of Tenant's invoice, a written objection to the payment
of such invoice, setting forth with reasonable particularity Landlord's reasons
for its claim that such action did not have to be taken by Landlord pursuant to
the terms of this Lease or that the charges are excessive (in which case
Landlord shall pay the amount it contends would not have been excessive), then
Tenant shall not be entitled to such deduction from Rent, but as Tenant's sole
remedy, Tenant may proceed to claim a default by Landlord and file an action in
a court of competent jurisdiction in connection therewith.
ARTICLE 8
---------
ADDITIONS AND ALTERATIONS
-------------------------
8.1 Landlord's Consent to Alterations. Tenant may not make any
---------------------------------
improvements, alterations, additions or changes to the Premises (collectively,
the "ALTERATIONS") without first procuring the prior written consent of Landlord
to such Alterations, which consent shall be requested by Tenant not less than
ten (10) days prior to the commencement thereof, and which consent shall not be
unreasonably withheld by Landlord; provided, however, Landlord may withhold its
consent in its sole and absolute discretion with respect to any Alterations
which may adversely affect the structural components of the Building or the
Systems and Equipment or which can be seen from (or may affect any area) outside
the Premises (the "PROHIBITED ALTERATIONS"). Notwithstanding the foregoing to
the contrary, Landlord's prior consent shall not be required with respect to any
interior Alterations to the Premises which (i) are not the Prohibited
Alterations, (ii) cost less than $25,000.00 for any one (1) job, and (iii) do
not require a permit of any kind, as long as (A) Tenant delivers to Landlord
notice and a copy of any final plans, specifications and working drawings for
any such Alterations at least ten (10) days prior to commencement of the work
thereof, and (B) the other conditions of this Article 8 are satisfied,
including, without limitation, conforming to Landlord's rules, regulations and
insurance requirements which govern contractors. Tenant shall pay directly for
all overhead, general conditions, fees and other costs and expenses of the
Alterations, and shall also pay to Landlord, within thirty (30) days after
invoice; (1) the actual and reasonable out-of-pocket costs incurred by Landlord
for professional services and for the general conditions of Landlord's third
party consultants if utilized by Landlord (but not Landlord's "in-house"
personnel) for review of all plans, specifications and working drawings for any
Alterations (provided, however, that such Landlord costs shall not exceed the
costs charged by comparable landlords of Comparable Buildings to so review and
approve such plans and specifications as set forth herein); plus (2) a Landlord
supervision fee of four percent (4%) of the cost of the Alterations. The
construction of the initial improvements to the Premises shall be governed by
the terms of the Tenant Work Letter and not the terms of this Article 8.
8.2 Manner of Construction. Landlord may impose, as a condition of its
----------------------
consent to all Alterations or repairs of the Premises or about the Premises,
such requirements as Landlord in its reasonable discretion may deem desirable,
including, but not limited to, the requirement that Tenant utilize for such
purposes only contractors, materials, mechanics and materialmen reasonably
approved by Landlord; provided, however, Landlord may impose such requirements
as Landlord may determine, in its sole and absolute discretion, with respect to
any work affecting the structural components of the Building or Systems and
Equipment (including designating specific contractors to perform such work as
long as such contractors are cost competitive). Tenant shall construct such
Alterations and perform such repairs in conformance with any and all applicable
rules and regulations of any federal, state, county or municipal code or
ordinance and pursuant to a valid building permit, issued by the city in which
the Building is located, and in conformance with Landlord's construction rules
and regulations. Landlord's approval of the plans, specifications and working
drawings for Tenant's Alterations shall create no responsibility or liability on
the part of Landlord for their completeness, design sufficiency, or compliance
with all laws, rules and regulations of governmental agencies or authorities.
All work with respect to any Alterations must be done in a good and workmanlike
manner and diligently prosecuted to completion to the end that the Premises
shall at all times be a complete unit except during the period of work. In
performing the work of any such Alterations, Tenant shall have the work
performed in such manner as not to obstruct access to the Building or the common
areas for any other tenant of the Building, and as not to obstruct the business
of Landlord or other tenants in the Building, or interfere with the labor force
working in the Building. If Tenant makes any Alterations, Tenant agrees to
carry "Builder's All Risk" insurance in an amount reasonably approved by
Landlord covering the construction of such Alterations, and such other insurance
as Landlord may reasonably require, it being understood and agreed that all of
such Alterations shall be insured by Tenant pursuant to Article 10 of this Lease
immediately upon completion thereof. In addition, with respect to any
Alterations which costs in excess of $25,000.00, Landlord may, in its
discretion, require Tenant to obtain a lien and completion bond or some
alternate form of security satisfactory to Landlord in an amount sufficient to
ensure the lien-free completion of such Alterations and naming Landlord as a co-
obligee. Upon completion of any Alterations, Tenant shall (i) cause a Notice of
Completion to be recorded in the office of the Recorder of the county in which
the Building is located in accordance with Section 3093 of the Civil Code of the
State of California or any successor statute, (ii) deliver to the Building
management office a reproducible copy of the "as built" drawings of the
Alterations, and (iii) deliver to Landlord evidence of payment, contractors'
affidavits and full and final waivers of all liens for labor, services or
materials.
8.3 Landlord's Property. All Alterations, improvements, fixtures and/or
-------------------
equipment which may be installed or placed in or about the Premises, and all
signs installed in, on or about the Premises, from time to time, shall be at the
sole cost of Tenant and shall be and become the property of Landlord and will
remain upon and be surrendered with the Premises at the end of the Lease Term;
provided, however, Landlord may, by written notice delivered to Tenant
concurrently with Landlord's approval of the final working drawings for any
Alterations, identify those Alterations which Landlord will require Tenant to
remove at the
-12-
expiration or earlier termination of this Lease; provided further, however, that
Tenant shall in no event be required to remove any of the initial Tenant
Improvements installed pursuant to the Tenant Work Letter or any Alteration
which is a typical office alteration (it being agreed by Tenant that internal
stairwells and raised floors are not typical office alterations). Landlord may
also require Tenant to remove Alterations which Landlord did not have the
opportunity to approve as provided in Section 8.1 above; provided, however, that
Tenant shall in no event be required to remove any Alteration which is a typical
office alteration. If Landlord requires Tenant to remove any such Alterations,
Tenant, at its sole cost and expense, agrees to remove the identified
Alterations on or before the expiration or earlier termination of this Lease and
repair any damage to the Premises caused by such removal. If Tenant fails to
complete such removal and/or to repair any damage caused by the removal of any
Alterations, Landlord may do so and may charge the cost thereof to Tenant.
ARTICLE 9
---------
COVENANT AGAINST LIENS
----------------------
Tenant has no authority or power to cause or permit any lien or encumbrance
of any kind whatsoever, whether created by act of Tenant, operation of law or
otherwise, to attach to or be placed upon the Real Property, Building or
Premises, and any and all liens and encumbrances created by Tenant shall attach
to Tenant's interest only. Landlord shall have the right at all times to post
and keep posted on the Premises any notice which it deems necessary for
protection from such liens. Tenant covenants and agrees not to suffer or permit
any lien of mechanics or materialmen or others to be placed against the Real
Property, the Building or the Premises with respect to work or services claimed
to have been performed for or materials claimed to have been furnished to Tenant
or the Premises, and, in case of any such lien attaching or notice of any lien,
Tenant covenants and agrees to cause it to be released and removed of record,
within twenty (20) days after the date of filing, by payment of the lien amount
or by posting a bond in the amount of such lien or otherwise. Should Tenant
fail to cause such liens to be released of record within such twenty (20) day
period, Landlord, at its sole option, may immediately take all action necessary
to release and remove such lien, without any duty to investigate the validity
thereof, and all sums, costs and expenses, including reasonable attorneys' fees
and costs, incurred by Landlord in connection with such lien shall be deemed
Additional Rent under this Lease and shall be due and payable by Tenant within
fifteen (15) days after receipt of invoice therefor from Landlord.
ARTICLE 10
----------
INDEMNIFICATION AND INSURANCE
-----------------------------
10.1 Indemnification and Waiver. Tenant hereby assumes all risk of
--------------------------
damage to property and injury to persons, in or on the Premises from any cause
whatsoever and agrees that Landlord, and its partners and subpartners, and their
respective officers, agents, property managers, servants, employees, and
independent contractors (collectively, "LANDLORD PARTIES") shall not be liable
for, and are hereby released from any responsibility for, any damage to property
or injury to persons or resulting from the loss of use thereof, which damage or
injury is sustained by Tenant or by other persons claiming through Tenant.
Tenant shall indemnify, defend, protect, and hold harmless the Landlord Parties
from any and all loss, cost, damage, expense and liability, including without
limitation court costs and reasonable attorneys' fees (collectively, "CLAIMS")
incurred in connection with or arising from any cause in or on the Premises
(including, without limitation, Tenant's installation, placement and removal of
Alterations, improvements, fixtures and/or equipment in or on the Premises), and
any acts, omissions or negligence of Tenant or of any person claiming by,
through or under Tenant, or of the contractors, agents, servants, employees,
licensees or invitees of Tenant or any such person, in, on or about the
Premises, Building and Real Property. Notwithstanding anything in this Section
10.1 to the contrary, the foregoing assumption of risk, release and indemnity
shall not apply to any Claims to the extent (i) resulting from the negligence or
willful misconduct of Landlord or its agents, contractors or employees, (ii) not
covered by Tenant's insurance (and which would not have been covered by Tenant's
insurance had Tenant carried the insurance required pursuant to the terms of
this Lease), and (iii) not self-insured by Tenant pursuant to the terms of this
Lease (collectively, the "EXCLUDED CLAIMS"), and Landlord shall indemnify,
protect, defend and hold harmless Tenant and its affiliates and their respective
partners, sub-partners, officers, agents and employees (collectively, "TENANT
PARTIES") from and against any such Excluded Claims, but only to the extent
Landlord's liability is not waived and released by Tenant pursuant to the terms
of Section 10.4 of this Lease (provided, however, that Landlord's indemnity
shall, in no event, extend to loss of profits, loss of business and other
consequential damages incurred by Tenant or any Tenant Parties). The provisions
of this Section 10.1 shall survive the expiration or sooner termination of this
Lease.
10.2 Landlord's Insurance. Landlord shall carry commercial general
--------------------
liability insurance with respect to the Building and Real Property during the
Lease Term, and shall further insure the Building (except, at Landlord's option,
with respect to items required to be insured by Tenant pursuant to Section
10.3.2 of this Lease) during the Lease Term against loss or damage due to fire
and other casualties covered within the classification of fire and extended
coverage, vandalism coverage and malicious mischief, sprinkler leakage, water
damage and special extended coverage. Such coverage shall be in such amounts,
from such companies, and on such other terms and conditions, as Landlord may
from time to time reasonably determine. Additionally, at the option of Landlord,
such insurance coverage may include the risks of earthquakes and/or flood damage
and additional hazards, a rental loss endorsement and one or more loss payee
endorsements in favor of the holders of any mortgages or deeds of trust
encumbering the interest of Landlord in the Building or the ground or underlying
lessors of the Building, or any portion thereof. Notwithstanding the foregoing
provisions of this Section 10.2, the coverage and amounts of insurance carried
by Landlord in connection with the Building shall, at a minimum, be comparable
to the coverage and amounts of insurance which are carried by reasonably prudent
landlords of Comparable Buildings (with at least full replacement cost coverage
with respect to casualty damage), provided that in no event shall Landlord be
required to carry earthquake or flood insurance. Tenant shall, at Tenant's
expense, comply as to the Premises with all insurance company requirements
pertaining to the use of the Premises. If Tenant's conduct or use of the
Premises causes any increase in the premium for such insurance policies, then
Tenant shall reimburse Landlord for any such increase. Tenant, at Tenant's
expense, shall comply with all rules, orders, regulations or requirements of the
American Insurance Association (formerly the National Board of Fire
Underwriters) and with any similar body.
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10.3 Tenant's Insurance. Tenant shall maintain the following coverages
------------------
in the following amounts from and after the date (the "INSURANCE START DATE")
which is the earlier of (i) the date Tenant performs any work in, or takes
occupancy of, all or any portion of the Premises, or (ii) the Lease Commencement
Date, and continuing throughout the Lease Term:
10.3.1 Commercial General Liability Insurance covering the
insured against claims of bodily injury, personal injury and property damage
arising out of Tenant's operations, assumed liabilities or use of the Premises,
including a Broad Form Commercial General Liability endorsement covering the
insuring provisions of this Lease and the performance by Tenant of the indemnity
agreements set forth in Section 10.1 of this Lease, for limits of liability not
less than:
Bodily Injury and $3,000,000 each occurrence
Property Damage Liability $3,000,000 annual aggregate
Personal Injury Liability $3,000,000 each occurrence
$3,000,000 annual aggregate
0% Insured's participation
10.3.2 Physical Damage Insurance covering (i) all office
furniture, trade fixtures, office equipment, merchandise and all other items of
Tenant's property on the Premises installed by, for, or at the expense of
Tenant, (ii) the Tenant Improvements, including any Tenant Improvements which
Landlord permits to be installed above the ceiling of the Premises or below the
floor of the Premises, and (iii) the Tenant's Data Center Work and all other
improvements, alterations and additions to the Premises, including any
improvements, alterations or additions installed at Tenant's request above the
ceiling of the Premises or below the floor of the Premises. Such insurance shall
be written on an "all risks" of physical loss or damage basis, for the full
replacement cost value new without deduction for depreciation of the covered
items and in amounts that meet any co-insurance clauses of the policies of
insurance and shall include a vandalism and malicious mischief endorsement,
sprinkler leakage coverage and earthquake sprinkler leakage coverage.
10.3.3 Business Interruption Insurance in such amounts as will
reimburse Tenant for direct and indirect loss of earnings and incurred costs
attributable to the perils covered by Tenant's property insurance described in
Section 10.3.2 above; provided, however, Tenant may self-insure for the
insurance set forth in this Section 10.3.3, but any such self-insurance shall be
deemed to contain all of the terms and conditions applicable to such insurance
as required in this Article 10.
10.3.4 Form of Policies. The minimum limits of policies of
----------------
insurance required of Tenant under this Lease shall in no event limit the
liability of Tenant under this Lease. Such insurance shall: (i) name Landlord,
and any other party it so specifies that has an interest in the Real Property,
Building or Premises, as an additional insured (but Tenant shall not be required
to name Landlord as an additional insured with respect to Tenant's property
damage insurance described in Section 10.3.2 (i) above) ; (ii) specifically
cover the liability maintained by Tenant under this Lease, including, but not
limited to, Tenant's obligations under Section 10.1 of this Lease; (iii) be
issued by an insurance company having a rating of not less than A-X in Best's
Insurance Guide or which is otherwise acceptable to Landlord and licensed to do
business in the state in which the Building is located; (iv) be primary
insurance as to all claims thereunder and provide that any insurance carried by
Landlord is excess and is non-contributing with any insurance requirement of
Tenant; (v) provide that said insurance shall not be canceled or coverage
changed unless thirty (30) days' prior written notice shall have been given to
Landlord and any mortgagee or ground or underlying lessor of Landlord; (vi)
contain a cross-liability endorsement or severability of interest clause
acceptable to Landlord; and (vii) contain deductibles reasonably approved by
Landlord (which deductibles with respect to the insurance described in Section
10.3.2 shall in no event exceed $10,000.00). Tenant shall deliver certificates
of such insurance policies to Landlord at least five (5) days before the
Insurance Start Date and at least fifteen (15) days before the expiration dates
of such policies. If Tenant shall fail to procure such insurance, or to deliver
such certificates, within such time periods, Landlord may, at its option, in
addition to all of its other rights and remedies under this Lease, and without
regard to any notice and cure periods set forth in Section 19.1, procure such
policies for the account of Tenant, and the cost thereof shall be paid to
Landlord as Additional Rent within ten (10) days after delivery of bills
therefor.
10.4 Subrogation. Landlord and Tenant agree to have their respective
-----------
insurance companies issuing property damage insurance waive any rights of
subrogation that such companies may have against Landlord or Tenant, as the case
may be, so long as the insurance carried by Landlord and Tenant, respectively,
is not invalidated thereby. Anything in this Lease to the contrary
notwithstanding (including the provisions of Section 10.1 above), to the fullest
extent permitted by law, Landlord and Tenant hereby waive and release each other
of and from any and all rights of recovery, claims, actions or causes of action,
against each other, their partners, agents, officers and employees, for any loss
or damage that may occur to the Premises, Building or Real Property, or personal
property within the Building, regardless of cause or origin, including the
negligence of Landlord or Tenant and their partners, agents, representatives,
officers and employees, but only to the extent such loss or damage is covered
by, and proceeds are collectible under, insurance in effect at the time of such
loss or damage or would be covered by the casualty insurance required to be
carried under Sections 10.2 and 10.3 above if such insurance is self-insured or
is otherwise not being carried in breach of said obligations. Landlord and
Tenant agree to give immediately to their respective insurance companies, which
have issued policies of insurance covering any risk of direct physical loss,
written notice of the terms of the mutual waivers contained in this Section
10.4, and to have the insurance policies properly endorsed, if necessary.
Landlord and Tenant acknowledge that the waivers and releases set forth in this
Section 10.4 are intended to result in any loss or damage which is covered by
casualty insurance being borne by the insurance carrier of Landlord or Tenant,
as the case may be, or by the party having the insurable interest if such loss
is not covered by such insurance or is being self-insured and this Lease
required such party to maintain insurance to cover such loss. Landlord and
Tenant agree that such waivers and releases were freely bargained for and
willingly and voluntarily agreed to by Landlord and Tenant and do not constitute
a violation of public policy.
10.5 Additional Insurance Obligations. Upon demand but not more
--------------------------------
frequently than once each year, Tenant shall provide Landlord, at Tenant's
expense, with such increased amounts of existing insurance, and such other
insurance in such limits, as Landlord may reasonably require and such other
hazard insurance as the nature and condition of the Premises may require in the
reasonable good faith judgment of Landlord, to afford Landlord adequate
protection for said risks to the extent such additional
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insurance coverage shall be available on a commercially reasonable basis;
provided however, that in no event shall any such insurance coverage be
increased in excess of that which is from time to time being required by
comparable landlords of comparable tenants leasing comparable amounts of space
in Comparable Buildings.
ARTICLE 11
----------
DAMAGE AND DESTRUCTION
----------------------
11.1 Repair of Damage to Premises by Landlord. Tenant shall promptly
----------------------------------------
notify Landlord of any damage to the Premises resulting from fire or any other
casualty. If the Premises or any common areas of the Building serving or
providing access to the Premises shall be damaged by fire or other casualty,
Landlord shall promptly and diligently, subject to reasonable delays for
insurance adjustment or other matters beyond Landlord's reasonable control, and
subject to all other terms of this Article 11, restore the base, shell, and core
of the Premises and such common areas. Such restoration shall be to
substantially the same condition of the base, shell, and core of the Premises
and common areas prior to the casualty, except for modifications required by
zoning and building codes and other laws, or any other modifications to the
common areas deemed desirable by Landlord, in its reasonable discretion,
provided use of and access to the Premises and any common restrooms serving the
Premises shall not be materially impaired. Notwithstanding any other provision
of this Lease, upon the occurrence of any damage to the Premises, Tenant shall
assign to Landlord (or to any party designated by Landlord) all insurance
proceeds payable to Tenant under Tenant's insurance required under Sections
10.3.2(ii) and (iii) of this Lease, and Landlord shall repair any injury or
damage to the tenant improvements and alterations installed in the Premises
(using first proceeds available to the Landlord under Tenant's casualty
insurance policy and secondly using the proceeds available under Landlord's
casualty insurance policy) and shall return such tenant improvements and
alterations to their original condition; provided that if the cost of such
repair by Landlord exceeds the amount of insurance proceeds received by Landlord
from Tenant's insurance carrier, as assigned by Tenant and Landlord's insurance
carrier, the cost of such repairs shall be paid by Tenant to Landlord prior to
Landlord's repair of the damage. In connection with such repairs and
replacements, Tenant shall, prior to the commencement of construction, submit to
Landlord, for Landlord's review and approval (which approval shall not be
unreasonably withheld or delayed), all plans, specifications and working
drawings relating thereto, and Landlord shall, in its reasonable discretion,
select the contractors to perform such improvement work. Landlord shall not be
liable for any inconvenience or annoyance to Tenant or its visitors, or injury
to Tenant's business resulting in any way from such damage or the repair
thereof; provided however, that if such fire or other casualty shall have
damaged the Premises or common areas necessary to Tenant's occupancy, Landlord
shall allow Tenant a proportionate abatement of Base Rent and Tenant's Share of
Direct Expenses during the time and to the extent the Premises are unfit for
occupancy for the purposes permitted under this Lease, and not occupied by
Tenant for the purpose of conducting its business in the ordinary course as a
result thereof.
11.2 Termination Rights. Within sixty (60) days after Landlord becomes
------------------
aware of such damage, Landlord shall notify Tenant in writing ("LANDLORD'S
DAMAGE NOTICE") of the estimated time, in Landlord's reasonable judgment,
required to substantially complete the repairs of such damage (the "ESTIMATED
REPAIR PERIOD"). Notwithstanding the terms of Section 11.1 of this Lease,
Landlord may elect not to rebuild and/or restore the Premises and/or Building
and instead terminate this Lease by notifying Tenant in writing of such
termination within sixty (60) days after the date of damage, such notice to
include a termination date giving Tenant ninety (90) days to vacate the
Premises, but Landlord may so elect only if the Building shall be damaged by
fire or other casualty or cause, whether or not the Premises are affected, and
one or more of the following conditions is present: (i) repairs cannot, in
Landlord's opinion, as set forth in Landlord's Damage Notice, reasonably be
completed within two hundred seventy (270) days of the date of damage (when such
repairs are made without the payment of overtime or other premiums); or (ii) the
damage is not fully covered, except for deductible amounts, by Landlord's
insurance policies obtained or required to be obtained pursuant to Section 10.2
above; provided, however, that (A) if Landlord does not elect to terminate this
Lease pursuant to Landlord's termination right as provided above, (B) the damage
constitutes a Tenant Damage Event (as defined below), and (C) the repair of such
damage cannot, in the reasonable opinion of Landlord, as set forth in Landlord's
Damage Notice, be completed within two hundred seventy (270) days after the date
of the damage, then Tenant may elect to terminate this Lease by delivering
written notice thereof to Landlord within fifteen (15) days after Tenant's
receipt of Landlord's Damage Notice, which termination shall be effective as of
the date of such termination notice thereof to Landlord. As used herein, a
"TENANT DAMAGE EVENT" shall mean damage to all or any part of the Premises or
any common areas of the Building providing access to the Premises by fire or
other casualty, which damage is not the result of the gross negligence or
willful misconduct of Tenant or any of Tenant's employees, agents, contractors
or licensees, and which damage substantially interferes with Tenant's use of or
access to the Premises and would entitle Tenant to an abatement of Rent pursuant
to Section 11.1 above. In addition, in the event of a Tenant Damage Event, and
if neither Landlord nor Tenant has elected to terminate this Lease as provided
hereinabove, but Landlord fails to substantially complete the repair and
restoration of such Tenant Damage Event within the Estimated Repair Period plus
sixty (60) days, plus the number of days of delay, if any, attributable to
events of "Force Majeure," as that term is defined in Section 24.17 hereof
(provided that the total number of days of delay attributable to an event of
Force Majeure may not exceed thirty (30)), plus the number of days of delay, if
any, as are attributable to the acts or omissions of Tenant, then Tenant shall
have an additional right to terminate this Lease by delivering written
termination notice to Landlord within fifteen (15) days after the expiration of
such period, which termination shall be effective as of the date of such
termination notice. Further, in the event that the Premises or the Building is
destroyed or damaged to any substantial extent during the last twelve (12)
months of the Lease Term, then notwithstanding anything contained in this
Article 12, Landlord shall have the option to terminate this Lease, and to the
extent such destruction or damage constitutes a Tenant Damage Event and the
repair of same is reasonably expected by Landlord to require more than sixty
(60) days to complete, Tenant shall have the option to terminate this Lease, by
giving written termination notice to the other party of the exercise of such
option within thirty (30) days after the date of such damage or destruction. If
either Landlord or Tenant exercises any of its options to terminate this Lease
as provided hereinabove, (1) this Lease shall cease and terminate as of the date
of such termination notice, (2) Tenant shall pay the Base Rent and Additional
Rent, properly apportioned up to such date of termination, and (3) both parties
hereto shall thereafter be freed and discharged of all further obligations
hereunder, except as provided for in provisions of this Lease which by their
terms survive the expiration or earlier termination of the Lease Term.
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11.3 Waiver of Statutory Provisions. The provisions of this Lease,
------------------------------
including this Article 11, constitute an express agreement between Landlord and
Tenant with respect to any and all damage to, or destruction of, all or any part
of the Premises, the Building or any other portion of the Real Property, and any
statute or regulation of the state in which the Building is located, including,
without limitation, Sections 1932(2) and 1933(4) of the California Civil Code,
with respect to any rights or obligations concerning damage or destruction in
the absence of an express agreement between the parties, and any other statute
or regulation, now or hereafter in effect, shall have no application to this
Lease or any damage or destruction to all or any part of the Premises, the
Building or any other portion of the Real Property.
ARTICLE 12
----------
CONDEMNATION
------------
12.1 Permanent Taking. If the whole or any part of the Premises or
----------------
Building shall be taken by power of eminent domain or condemned by any competent
authority for any public or quasi-public use or purpose, or if any adjacent
property or street shall be so taken or condemned, or reconfigured or vacated by
such authority in such manner as to require the use, reconstruction or
remodeling of any part of the Premises or Building, or if Landlord shall grant a
deed or other instrument in lieu of such taking by eminent domain or
condemnation, Landlord shall have the option to terminate this Lease upon ninety
(90) days' notice, provided such notice is given no later than one hundred
eighty (180) days after the date of such taking, condemnation, reconfiguration,
vacation, deed or other instrument. If more than twenty-five percent (25%) of
the rentable square feet of the Premises is taken, or if access to the Premises
is substantially impaired, Tenant shall have the option to terminate this Lease
upon ninety (90) days' notice, provided such notice is given no later than one
hundred eighty (180) days after the date of such taking. Landlord shall be
entitled to receive the entire award or payment in connection therewith, except
that (i) Tenant shall have the right to file any separate claim available to
Tenant for (A) any taking of Tenant's personal property and fixtures belonging
to Tenant and removable by Tenant upon expiration of the Lease Term pursuant to
the terms of this Lease, (B) Tenant's moving expenses, and (C) interruption to
or damage to Tenant's business, and (ii) Landlord and Tenant shall each be
entitled to received fifty percent (50%) of the "bonus value" of the leasehold
estate in connection therewith, which bonus value shall be equal to the
difference between the Rent payable under this Lease and the sum established by
the condemning authority as the award for compensation for the leasehold estate.
Landlord shall reasonably cooperate with Tenant in connection with Tenant's
efforts to obtain such award to the extent the cooperation of Landlord shall be
necessary for Tenant to obtain its award. All Rent shall be apportioned as of
the date of such termination, or the date of such taking, whichever shall first
occur. If any part of the Premises shall be taken, and this Lease shall not be
so terminated, the Rent shall be proportionately abated. Tenant hereby waives
any and all rights it might otherwise have pursuant to Section 1265.130 of The
California Code of Civil Procedure.
12.2 Temporary Taking. Notwithstanding anything to the contrary
----------------
contained this Article 12, in the event of a temporary taking of all or any
portion of the Premises for a period of one hundred and eighty (180) days or
less, then this Lease shall not terminate but the Base Rent and the Additional
Rent shall be abated for the period of such taking in proportion to the ratio
that the amount of rentable square feet of the Premises taken bears to the
total rentable square feet of the Premises. Landlord shall be entitled to
receive the entire award made in connection with any such temporary taking.
CARTICLE 13
----------
COVENANT OF QUIET ENJOYMENT
---------------------------
Landlord covenants that Tenant, on paying the Rent, charges for services
and other payments herein reserved and on keeping, observing and performing all
the other terms, covenants, conditions, provisions and agreements herein
contained on the part of Tenant to be kept, observed and performed, shall,
during the Lease Term, peaceably and quietly have, hold and enjoy the Premises
subject to the terms, covenants, conditions, provisions and agreements hereof
without interference by any persons lawfully claiming by or through Landlord.
The foregoing covenant is in lieu of any other covenant express or implied.
ARTICLE 14
----------
ASSIGNMENT AND SUBLETTING
-------------------------
14.1 Transfers. Tenant shall not, without the prior written consent of
---------
Landlord, which consent shall not be unreasonably withheld, conditioned or
delayed, assign, mortgage, pledge, hypothecate, encumber, or permit any lien to
attach to, or otherwise transfer, this Lease or any interest hereunder, permit
any assignment or other such foregoing transfer of this Lease or any interest
hereunder by operation of law, sublet the Premises or any part thereof, or
permit the use of the Premises by any persons other than Tenant and its
employees (all of the foregoing are hereinafter sometimes referred to
collectively as "TRANSFERS" and any person to whom any Transfer is made or
sought to be made is hereinafter sometimes referred to as a "TRANSFEREE"). If
Tenant shall desire Landlord's consent to any Transfer, Tenant shall notify
Landlord in writing, which notice (the "TRANSFER NOTICE") shall include (i) the
proposed effective date of the Transfer, which shall not be less than twenty
(20) days nor more than one hundred eighty (180) days after the date of delivery
of the Transfer Notice, (ii) a description of the portion of the Premises to be
transferred (the "SUBJECT SPACE"), (iii) all of the terms of the proposed
Transfer, the name and address of the proposed Transferee, and a copy of all
existing and/or proposed documentation pertaining to the proposed Transfer,
including all existing operative documents to be executed to evidence such
Transfer or the agreements incidental or related to such Transfer, (iv) current
financial statements of the proposed Transferee certified by an officer, partner
or owner thereof, and (v) such other information as Landlord may reasonably
require. Any Transfer made without Landlord's prior written consent shall, at
Landlord's option, be null, void and of no effect, and shall, at Landlord's
option, constitute a default by Tenant under this Lease if not cured within the
applicable cure period. Whether or not Landlord shall grant consent, Tenant
shall pay Landlord's reasonable legal fees incurred by Landlord (which shall not
exceed $1,500.00 in each instance), within thirty (30) days after written
request by Landlord.
14.2 Landlord's Consent. Landlord shall not unreasonably withhold its
------------------
consent to any proposed Transfer of the Subject Space to the Transferee on the
terms specified in the Transfer Notice, and shall notify Tenant of Landlord's
consent or
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disapproval within ten (10) business days after Landlord's receipt of
the Transfer Notice and the other information described in Section 14.1 above.
The parties hereby agree that it shall be reasonable under this Lease and under
any applicable law for Landlord to withhold consent to any proposed Transfer
where one or more of the following apply, without limitation as to other
reasonable grounds for withholding consent:
14.2.1 The Transferee is of a character or reputation or engaged
in a business which is not consistent with the quality of the Building;
14.2.2 The Transferee intends to use the Subject Space for
purposes which are not permitted under this Lease;
14.2.3 The Transferee is either a governmental agency or
instrumentality thereof, other than a governmental entity comparable to a
governmental entity already leasing space in the Building directly from
Landlord;
14.2.4 The Transfer will result in more than a reasonable and safe
number of occupants per floor within the Subject Space;
14.2.5 The Transferee is not a party of reasonable financial worth
and/or financial stability in light of the responsibilities involved under the
Lease on the date consent is requested;
14.2.6 The proposed assignee or subtenant is engaged in a
business, and the Premises, or the relevant part thereof, will be used in a
manner that will violate any restrictive or exclusive covenant as to use
contained in any other lease of space in the Building or the Real Property;
14.2.7 Either the proposed Transferee, or any person or entity
which directly or indirectly, controls, is controlled by, or is under common
control with, the proposed Transferee, (i) occupies space in the Building at the
time of the request for consent and Landlord has space in the Building available
for lease to such party of comparable size as the proposed Subject Space, or
(ii) is in active negotiations with Landlord to lease space in the Building at
such time and Landlord has space in the Building available for lease to such
party of comparable size as the proposed Subject Space.
If Landlord consents to any Transfer pursuant to the terms of this Section
14.2 (and does not exercise any recapture rights Landlord may have under Section
14.4 of this Lease), Tenant may within six (6) months after Landlord's consent,
but not later than the expiration of said six-month period, enter into such
Transfer of the Premises or portion thereof, upon substantially the same terms
and conditions as are set forth in the Transfer Notice furnished by Tenant to
Landlord pursuant to Section 14.1 of this Lease, provided that if there are any
changes in the terms and conditions from those specified in the Transfer Notice
(i) such that Landlord would initially have been entitled to refuse its consent
to such Transfer under this Section 14.2, or (ii) which would cause the proposed
Transfer to be substantially more favorable to the Transferee than the terms set
forth in Tenant's original Transfer Notice, Tenant shall again submit the
Transfer to Landlord for its approval and other action under this Article 14
(including Landlord's right of recapture, if any, under Section 14.4 of this
Lease).
14.3 Transfer Premium. If Landlord consents to a Transfer, as a condition
----------------
thereto which the parties hereby agree is reasonable, Tenant shall pay to
Landlord fifty percent (50%) of any "Transfer Premium," as that term is defined
in this Section 14.3, received by Tenant from such Transferee. "TRANSFER
PREMIUM" shall mean all rent, additional rent or other consideration payable by
such Transferee in excess of the Rent and Additional Rent payable by Tenant
under this Lease on a per rentable square foot basis if less than all of the
Premises is transferred, after deducting the actual, documented and reasonable
expenses incurred by Tenant for (i) any changes, alterations and improvements
made to the Premises in connection with the Transfer (and any planning and
improvement allowances provided by Tenant to the Transferee in connection
therewith), and (ii) attorneys' fees, brokerage commissions and advertising
expenses in connection with the Transfer (collectively, the "SUBLEASING COSTS").
14.4 Landlord's Option as to Subject Space. Notwithstanding anything to
-------------------------------------
the contrary contained in this Article 14, in the event Tenant contemplates an
assignment or subletting of all or a portion of the Premises (or in the event of
any other assignment or subletting entered into by Tenant as a subterfuge in
order to avoid the terms of this Section 14.4), Tenant shall give Landlord
notice (the "INTENTION TO TRANSFER NOTICE") of such contemplated assignment or
subletting (whether or not the terms of the contemplated assignment or
subletting have been determined). The Intention to Transfer Notice shall
specify the portion of and amount of square feet of the Premises which Tenant
intends to assign or sublet (the "CONTEMPLATED TRANSFER SPACE"), the
contemplated date of commencement of the contemplated assignment or subletting
(the "CONTEMPLATED EFFECTIVE DATE"), and the contemplated length of the term of
such contemplated subletting or assignment, and shall specify that such
Intention to Transfer Notice is delivered to Landlord pursuant to this Section
14.4 in order to allow Landlord to elect to recapture the Contemplated Transfer
Space for the term set forth in the Intention to Transfer Notice. Thereafter,
Landlord shall have the option, by giving written notice to Tenant within thirty
(30) days after receipt of any Intention to Transfer Notice, to recapture the
Contemplated Transfer Space. Such recapture shall cancel and terminate this
Lease with respect to such Contemplated Transfer Space as of the Contemplated
Effective Date until the last day of the term of the contemplated assignment or
subletting as set forth in the Intention to Transfer Notice. In the event of a
recapture by Landlord, if this Lease shall be canceled with respect to less than
the entire Premises, the Rent reserved herein shall be prorated on the basis of
the number of square feet retained by Tenant in proportion to the number of
square feet contained in the Premises, and this Lease as so amended shall
continue thereafter in full force and effect, and upon request of either party,
the parties shall execute written confirmation of the same. If Landlord
declines, or fails to elect in a timely manner, to recapture such Contemplated
Transfer
-17-
Space under this Section 14.4, then, subject to the other terms of this
Article 14, for a period of six (6) months (the "SIX MONTH PERIOD") commencing
on the last day of such thirty (30) day period, Landlord shall not have any
right to recapture the Contemplated Transfer Space with respect to any
assignment or subletting made during the Six Month Period, provided that any
such assignment or subletting is substantially on the terms set forth in the
Intention to Transfer Notice, and provided further that any such assignment or
subletting shall be subject to the remaining terms of this Article 14. If such
an assignment or subletting is not so consummated within the Six Month Period
(or if an assignment or subletting is so consummated, then upon the expiration
of the term of any assignment or subletting of such Contemplated Transfer Space
consummated within such Six Month Period), Tenant shall again be required to
submit a new Intention to Transfer Notice to Landlord with respect any
contemplated assignment or subletting, as provided above in this Section 14.4.
14.5 Effect of Transfer. If Landlord consents to a Transfer, (i) the
------------------
terms and conditions of this Lease shall in no way be deemed to have been waived
or modified, (ii) such consent shall not be deemed consent to any further
Transfer by either Tenant or a Transferee, (iii) Tenant shall deliver to
Landlord, promptly after execution, an original executed copy of all
documentation pertaining to the Transfer in form reasonably acceptable to
Landlord, and (iv) no Transfer relating to this Lease or agreement entered into
with respect thereto, whether with or without Landlord's consent, shall relieve
Tenant or any guarantor of the Lease from liability under this Lease. Landlord
or its authorized representatives shall have the right at all reasonable times
to audit the books, records and papers of Tenant relating to any Transfer, and
shall have the right to make copies thereof. If the Transfer Premium respecting
any Transfer shall be found understated, Tenant shall, within thirty (30) days
after demand, pay the deficiency and Landlord's costs of such audit.
14.6 Additional Transfers. Except as expressly provided in Section 14.7
--------------------
below, for purposes of this Lease, the term "Transfer" shall also include (i) if
Tenant is a partnership, the withdrawal or change, voluntary, involuntary or by
operation of law, of fifty percent (50%) or more of the partners, or transfer of
twenty-five percent or more of partnership interests, within a twelve (12)-month
period, or the dissolution of the partnership without immediate reconstitution
thereof, and (ii) if Tenant is a closely held corporation (i.e., whose stock is
not publicly held and not traded through an exchange or over the counter), (A)
the dissolution, merger, consolidation or other reorganization of Tenant, (B)
the sale or other transfer, within a twelve (12)-month period, of more than an
aggregate of fifty percent (50%) of the voting shares of Tenant (other than by
reason of an initial public offering and/or to immediate family members by
reason of gift or death), or (C) the sale, mortgage, hypothecation or pledge of
more than an aggregate of fifty percent (50%) of the value of the unencumbered
assets of Tenant within a twelve (12) month period.
14.7 Affiliated Companies/Restructuring of Business Organization. The
-----------------------------------------------------------
assignment or subletting by Tenant of all or any portion of this Lease or the
Premises to (i) a parent or subsidiary of Tenant, or (ii) any person or entity
which controls, is controlled by or under common control with Tenant, or (iii)
any entity which purchases all or substantially all of the assets of Tenant, or
(iv) any entity into which Tenant is merged or consolidated (all such persons or
entities described in (i), (ii), (iii) and (iv) being sometimes hereinafter
referred to as "AFFILIATES") shall not be deemed a Transfer under this Article
14, provided that:
14.7.1 Any such Affiliate was not formed as a subterfuge to avoid
the obligations of this Article 14;
14.7.2 Tenant gives Landlord prior notice of any such assignment or
sublease to an Affiliate;
14.7.3 The successor of Tenant and Tenant have as of the effective
date of any such assignment or sublease a tangible net worth, in the aggregate,
computed in accordance with generally accepted accounting principles (but
excluding goodwill as an asset), which is sufficient to meet the obligations of
Tenant under this Lease;
14.7.4 Any such assignment or sublease shall be subject to all of
the terms and provisions of this Lease, and such assignee or sublessee shall
assume, in a written document reasonably satisfactory to Landlord and delivered
to Landlord upon or prior to the effective date of such assignment or sublease,
all the obligations of Tenant under this Lease; and
14.7.5 Tenant and any guarantor shall remain fully liable for all
obligations to be performed by Tenant under this Lease.
ARTICLE 15
----------
SURRENDER; OWNERSHIP
--------------------
AND REMOVAL OF TRADE FIXTURES
-----------------------------
15.1 Surrender of Premises. No act or thing done by Landlord or any
---------------------
agent or employee of Landlord during the Lease Term shall be deemed to
constitute an acceptance by Landlord of a surrender of the Premises unless such
intent is specifically acknowledged in a writing signed by Landlord. The
delivery of keys to the Premises to Landlord or any agent or employee of
Landlord shall not constitute a surrender of the Premises or effect a
termination of this Lease, whether or not the keys are thereafter retained by
Landlord, and notwithstanding such delivery Tenant shall be entitled to the
return of such keys at any reasonable time upon request until this Lease shall
have been properly terminated. The voluntary or other surrender of this Lease by
Tenant, whether accepted by Landlord or not, or a mutual termination hereof,
shall not work a merger, and at the option of Landlord shall operate as an
assignment to Landlord of all subleases or subtenancies affecting the Premises.
15.2 Removal of Tenant Property by Tenant. Upon the expiration of the
------------------------------------
Lease Term, or upon any earlier termination of this Lease, Tenant shall, subject
to the provisions of this Article 15, quit and surrender possession of the
Premises to Landlord in as good order and condition as when Tenant took
possession and as thereafter improved by Landlord and/or Tenant, reasonable wear
and tear and repairs and casualty damage which are specifically made the
responsibility of Landlord hereunder excepted. Upon such expiration or
termination, Tenant shall, without expense to Landlord, remove or cause to be
removed from the Premises all debris and rubbish, and such items of furniture,
equipment, free-standing cabinet work, and other articles of personal property
owned by Tenant or installed or placed by Tenant at its expense in the Premises,
and such similar articles of any other persons claiming under Tenant, as
Landlord may, in its sole discretion, require to be removed, and Tenant shall
repair at its own expense all damage to the Premises and Building resulting from
such removal.
-18-
ARTICLE 16
----------
HOLDING OVER
------------
If Tenant holds over after the expiration of the Lease Term hereof, with or
without the express or implied consent of Landlord, such tenancy shall be from
month-to-month only, and shall not constitute a renewal hereof or an extension
for any further term, and in such case Base Rent shall be payable at a monthly
rate equal to one hundred fifty percent (150%) of the of Base Rent applicable
during the last rental period of the Lease Term under this Lease. Such month-
to-month tenancy shall be subject to every other term, covenant and agreement
contained herein. Landlord hereby expressly reserves the right to require
Tenant to surrender possession of the Premises to Landlord as provided in this
Lease upon the expiration or other termination of this Lease. The provisions of
this Article 16 shall not be deemed to limit or constitute a waiver of any other
rights or remedies of Landlord provided herein or at law. If Tenant fails to
surrender the Premises upon the termination or expiration of this Lease, in
addition to any other liabilities to Landlord accruing therefrom, Tenant shall
protect, defend, indemnify and hold Landlord harmless from all loss, costs
(including reasonable attorneys' fees) and liability resulting from such
failure, including, without limiting the generality of the foregoing, any claims
made by any succeeding tenant founded upon such failure to surrender, and any
lost profits to Landlord resulting therefrom.
ARTICLE 17
----------
ESTOPPEL CERTIFICATES
---------------------
Either party shall at any time and from time to time (but not more often
than three (3) times in any twelve (12) month period) upon not less than fifteen
(15) business day's prior notice from the other party, execute, acknowledge and
deliver to the other party a statement in writing (i) certifying that this Lease
is unmodified and in full force and effect (or, if modified, stating the nature
of such modification and certifying that this Lease as so modified, is in full
force and effect), and the date to which the rental and other charges are paid
in advance, if any, (ii) acknowledging that there are not, to the actual
knowledge of the certifying party, any uncured defaults, or if there are any
uncured defaults, a description of such defaults, and (iii) certifying such
other reasonable matters as the requesting party may request. Any such
statement may be relied upon by any prospective purchaser or encumbrancer of all
or any portion of the Real Property or by any prospective assignee or subtenant
of Tenant. If one party does not provide the other party with such statement as
required in this Article 17 within such fifteen (15) business day period, the
non-complying party shall be deemed to have acknowledged, as true and correct,
all of the matters set forth in such statement.
ARTICLE 18
----------
SUBORDINATION
-------------
18.1 Subordination. This Lease is subject and subordinate to all present
-------------
and future ground or underlying leases of the Real Property and to the lien of
any mortgages or trust deeds, now or hereafter in force against the Real
Property and the Building, if any, and to all renewals, extensions,
modifications, consolidations and replacements thereof, and to all advances made
or hereafter to be made upon the security of such mortgages or trust deeds,
unless the holders of such mortgages or trust deeds, or the lessors under such
ground lease or underlying leases, require in writing that this Lease be
superior thereto. A condition precedent to the subordination of this Lease to
any future ground or underlying lease or to the lien of any future mortgage or
deed of trust is that Landlord shall obtain for the benefit of Tenant a
commercially reasonable subordination, non-disturbance and attornment agreement
from the lessor or lender of such future instrument. Tenant covenants and
agrees in the event any proceedings are brought for the foreclosure of any such
mortgage, or if any ground or underlying lease is terminated, to attorn to the
purchaser upon any such foreclosure sale, or to the lessor of such ground or
underlying lease, as the case may be, if required to do so pursuant to any
subordination, non-disturbance and attornment agreement executed pursuant to
this Section 18.1 or Section 18.2 below, and to recognize such purchaser or
lessor as the lessor under this Lease. Tenant shall, within fifteen (15) days
of request by Landlord, execute such further instruments or assurances as
Landlord may reasonably deem necessary to evidence or confirm the subordination
or superiority of this Lease to any such mortgages, trust deeds, ground leases
or underlying leases. Tenant waives the provisions of any current or future
statute, rule or law which may give or purport to give Tenant any right or
election to terminate or otherwise adversely affect this Lease and the
obligations of the Tenant hereunder in the event of any foreclosure proceeding
or sale.
18.2 Existing Agreement. Landlord represents and warrants to Tenant that
------------------
as of the date on which Landlord and Tenant execute this Lease there is only one
(1) deed of trust and/or ground lease encumbering, and in force against, the
Real Property in favor of General Electric Capital Corporation, a New York
corporation (the "CURRENT LENDER"). Simultaneously with Tenant's execution of
this Lease, Tenant shall sign, notarize and deliver to Landlord a subordination,
non-disturbance and attornment agreement substantially in the form of Exhibit F
---------
attached hereto ("SNDA"). Landlord shall cause the Current Lender to execute
such SNDA and deliver such executed SNDA to Tenant within sixty (60) days after
the date of execution of this Lease. If Landlord fails to deliver the SNDA
executed by Landlord and the Current Lender within such sixty (60) day period,
and such failure shall continue for an additional thirty (30) days after notice
thereof from Tenant, then Tenant shall have the right to terminate this Lease by
notice delivered to Landlord within ten (10) business days after the expiration
of such additional thirty (30) day period, but such termination shall be
ineffective if the SNDA has been delivered to Tenant prior to the date such
termination n otice is delivered to Landlord.
-19-
ARTICLE 19
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TENANT'S DEFAULTS; LANDLORD'S REMEDIES
--------------------------------------
19.1 Events of Default by Tenant. All covenants and agreements to be
---------------------------
kept or performed by Tenant under this Lease shall be performed by Tenant at
Tenant's sole cost and expense and without any reduction of Rent. The occurrence
of any of the following shall constitute a default of this Lease by Tenant:
19.1.1 Any failure by Tenant to pay any Rent or any other charge
required to be paid under this Lease, or any part thereof, when due, where such
failure continues for five (5) business days after written notice thereof by
Landlord to Tenant; provided, however, that any such notice shall be in lieu of,
and not in addition to, any notice required under Section 1161 et seq., of the
-------
California Code of Civil Procedure; or
19.1.2 Any failure by Tenant to observe or perform any other
provision, covenant or condition of this Lease to be observed or performed by
Tenant where such failure continues for thirty (30) days after written notice
thereof from Landlord to Tenant; provided however, that any such notice shall be
in lieu of, and not in addition to, any notice required under California Code of
Civil Procedure Section 1161 or any similar or successor law; and provided
further that if the nature of such default is such that the same cannot
reasonably be cured within such thirty (30)-day period, Tenant shall not be
deemed to be in default if it diligently commences such cure within such period
and thereafter diligently proceeds to rectify and cure said default as soon as
possible.
19.2 Landlord's Remedies Upon Default. Upon the occurrence of any such
--------------------------------
default by Tenant, Landlord shall have, in addition to any other remedies
available to Landlord at law or in equity, the option to pursue any one or more
of the following remedies, each and all of which shall be cumulative and
nonexclusive, without any notice or demand whatsoever.
19.2.1 Terminate this Lease, in which event Tenant shall
immediately surrender the Premises to Landlord, and if Tenant fails to do so,
Landlord may, without prejudice to any other remedy which it may have for
possession or arrearages in rent, enter upon and take possession of the Premises
and expel or remove Tenant and any other person who may be occupying the
Premises or any part thereof, without being liable for prosecution or any claim
or damages therefor; and Landlord may recover from Tenant the following:
(i) The worth at the time of award of any unpaid rent
which has been earned at the time of such termination; plus
(ii) The worth at the time of award of the amount by which
the unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(iii) The worth at the time of award of the amount by which
the unpaid rent for the balance of the Lease Term after the time of award
exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(iv) Any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom; and
(v) At Landlord's election, such other amounts in addition
to or in lieu of the foregoing as may be permitted from time to time by
applicable law.
The term "rent" as used in this Section 19.2 shall be deemed to be and to mean
all sums of every nature required to be paid by Tenant pursuant to the terms of
this Lease, whether to Landlord or to others. As used in Paragraphs 19.2.1(i)
and (ii), above, the "worth at the time of award" shall be computed by allowing
interest at the Interest Rate set forth in Section 4.7 of this Lease. As used
in Paragraph 19.2.1(iii) above, the "worth at the time of award" shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%).
19.2.2 Landlord shall have the remedy described in California Civil
Code Section 1951.4 (lessor may continue lease in effect after lessee's breach
and abandonment and recover rent as it becomes due, if lessee has the right to
sublet or assign, subject only to reasonable limitations). Accordingly, if
Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all rent as it becomes due.
19.2.3 Landlord may, but shall not be obligated to, make any such
payment or perform or otherwise cure any such obligation, provision, covenant or
condition on Tenant's part to be observed or performed (and may enter the
Premises for such purposes). In the event of Tenant's failure to perform any of
its obligations or covenants under this Lease, and such failure to perform poses
a material risk of injury or harm to persons or damage to or loss of property,
then Landlord shall have the right to cure or otherwise perform such covenant or
obligation at any time after such failure to perform by Tenant, whether or not
any such notice or cure period set forth in Section 19.1 above has expired. Any
such actions undertaken by Landlord pursuant to the foregoing provisions of this
Section 19.2.3 shall not be deemed a waiver of Landlord's rights and remedies as
a result of Tenant's failure to perform and shall not release Tenant from any of
its obligations under this Lease. Tenant shall pay to Landlord, within fifteen
(15) days after delivery by Landlord to Tenant of statements therefor, sums
equal to expenditures reasonably made and obligations incurred by Landlord in
connection with Landlord's performance or cure of any of Tenant's obligations
pursuant to the foregoing provisions of this Section 19.2.3.
-20-
19.3 Sublessees of Tenant. If Landlord elects to terminate this Lease on
--------------------
account of any default by Tenant, as set forth in this Article 19, Landlord
shall have the right to terminate any and all subleases, licenses, concessions
or other consensual arrangements for possession entered into by Tenant and
affecting the Premises or may, in Landlord's sole discretion, succeed to
Tenant's interest in such subleases, licenses, concessions or arrangements. In
the event of Landlord's election to succeed to Tenant's interest in any such
subleases, licenses, concessions or arrangements, Tenant shall, as of the date
of notice by Landlord of such election, have no further right to or interest in
the rent or other consideration receivable thereunder.
19.4 Waiver of Default. No waiver by Landlord of any violation or breach
-----------------
by Tenant of any of the terms, provisions and covenants herein contained shall
be deemed or construed to constitute a waiver of any other or later violation or
breach by Tenant of the same or any other of the terms, provisions, and
covenants herein contained. Forbearance by Landlord in enforcement of one or
more of the remedies herein provided upon a default by Tenant shall not be
deemed or construed to constitute a waiver of such default. The acceptance of
any Rent hereunder by Landlord following the occurrence of any default, whether
or not known to Landlord, shall not be deemed a waiver of any such default,
except only a default in the payment of the Rent so accepted.
19.5 Efforts to Relet. For the purposes of this Article 19, Tenant's right
----------------
to possession shall not be deemed to have been terminated by efforts of Landlord
to relet the Premises, by its acts of maintenance or preservation with respect
to the Premises, or by appointment of a receiver to protect Landlord's interests
hereunder. The foregoing enumeration is not exhaustive, but merely illustrative
of acts which may be performed by Landlord without terminating Tenant's right to
possession
ARTICLE 20
----------
SECURITY DEPOSIT
----------------
Concurrent with Tenant's execution of this Lease, Tenant shall deposit with
Landlord a security deposit (the "SECURITY DEPOSIT") in the amount set forth in
Section 10 of the Summary. The Security Deposit shall be held by Landlord as
security for the faithful performance by Tenant of all the terms, covenants, and
conditions of this Lease to be kept and performed by Tenant during the Lease
Term. If Tenant defaults with respect to any provisions of this Lease,
including, but not limited to, the provisions relating to the payment of Rent,
Landlord may, but shall not be required to, use, apply or retain all or any part
of the Security Deposit for the payment of any Rent or any other sum in default,
or for the payment of any amount that Landlord may spend or become obligated to
spend by reason of Tenant's default, or to compensate Landlord for any other
loss or damage that Landlord may suffer by reason of Tenant's default. If any
portion of the Security Deposit is so used or applied, Tenant shall, within five
(5) days after written demand therefor, deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to its original amount, and Tenant's
failure to do so shall be a default under this Lease. If Tenant shall fully and
faithfully perform every provision of this Lease to be performed by it, the
Security Deposit, or any balance thereof, shall be returned to Tenant, or, at
Landlord's option, to the last assignee of Tenant's interest hereunder, within
thirty (30) days following the expiration of the Lease Term. Tenant shall not be
entitled to any interest on the Security Deposit. Tenant hereby waives the
provisions of Section 1950.7 of the California Civil Code, and all other
provisions of law, now or hereafter in force, which provide that Landlord may
claim from a security deposit only those sums reasonably necessary to remedy
defaults in the payment of rent, to repair damage caused by Tenant or to clean
the Premises, it being agreed that Landlord may, in addition, claim those sums
reasonably necessary to compensate Landlord for any other loss or damage,
foreseeable or unforeseeable, caused by the act or omission of Tenant or any
officer, employee, agent or invitee of Tenant.
ARTICLE 21
----------
COMPLIANCE WITH LAW
-------------------
Tenant shall not do anything or suffer anything to be done in or about the
Premises which will in any way conflict with any law, statute, ordinance or
other governmental rule, regulation or requirement now in force or which may
hereafter be enacted or promulgated. At its sole cost and expense, Tenant shall
promptly comply and cause the Premises to comply with all such governmental
measures, including, without limitation, the making of any improvements and
alterations to the Premises (including those considered to be capital
improvements); provided, however, that the making of structural changes, changes
to the Base Building Systems or changes to the common areas of the Building or
Real Property which are not necessitated by any Alterations to the Premises
installed by or on behalf of Tenant, by any specific act or negligence of Tenant
or Tenant's agents, employees, licensees or invitees, and/or by Tenant's
specific manner of use of the Premises, shall be performed by Landlord and the
cost thereof shall be included in Operating Expenses except to the extent
specifically excluded in Section 4.2.5. In addition, Tenant shall fully comply
with all present or future government mandated programs intended to manage
parking, transportation or traffic in and around the Building. The judgment of
any court of competent jurisdiction or the admission of Tenant in any judicial
action, regardless of whether Landlord is a party thereto, that Tenant has
violated any of said governmental measures, shall be conclusive of that fact as
between Landlord and Tenant.
ARTICLE 22
----------
ENTRY BY LANDLORD
-----------------
Landlord reserves the right at all reasonable times and upon reasonable
notice under the circumstances (which in the case of non-emergency repairs shall
be at least twenty-four (24) hours' prior notice) to Tenant to enter the
Premises to (i) inspect them; (ii) show the Premises to prospective purchasers
or mortgagees, or during the last nine (9) months of the Lease Term, to
prospective tenants; (iii) to post notices of nonresponsibility; or (iv) alter,
improve or repair the Premises or the Building if necessary to comply with
current building codes or other applicable laws, or for structural alterations,
repairs or improvements to the Building, or as Landlord may otherwise reasonably
desire or deem necessary. Notwithstanding anything to the contrary contained in
this Article 22, Landlord may enter the Premises at any time, without notice to
Tenant, to perform janitorial or other services required of Landlord pursuant to
this Lease. Any such entries shall be without the abatement of Rent and shall
include
-21-
the right to take such reasonable steps as required to accomplish the stated
purposes. Tenant hereby waives any claims for damages or for any injuries or
inconvenience to or interference with Tenant's business, lost profits, any loss
of occupancy or quiet enjoyment of the Premises, and any other loss occasioned
thereby. For each of the above purposes, Landlord shall at all times have a key
with which to unlock all the doors in the Premises, excluding Tenant's vaults,
safes and special security areas designated in advance by Tenant. In an
emergency, Landlord shall have the right to use any means that Landlord may deem
proper to open the doors in and to the Premises. Any entry into the Premises in
the manner hereinbefore described shall not be deemed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or an actual or
constructive eviction of Tenant from any portion of the Premises.
Tenant may reasonably designate a certain reasonable number of areas within
the Premises as "SECURED AREAS" should Tenant require such areas for the purpose
of securing certain valuable property or confidential information. Landlord may
not enter such Secured Areas except in the case of an emergency or in the event
of a Landlord inspection, in which case Landlord shall provide Tenant with
forty-eight (48) hours prior written notice. Landlord shall not show the
Secured Area to a prospective lender, purchaser or tenant without forty-eight
(48) hours prior written notice and without Tenant being present.
ARTICLE 23
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TENANT PARKING
--------------
Tenant shall have the right to use up to the number and type of parking
spaces set forth in Section 11 of the Summary for parking in the Building
Parking Facility. Tenant shall not be required to pay any parking charges for
the use of such spaces during the initial Lease Term, but during the Option Term
if exercised pursuant to the Extension Option Rider, Tenant shall pay to
Landlord for the use of such spaces the prevailing monthly parking charges, if
any, charged by Landlord or Landlord's parking operator for reserved and
unreserved parking, as applicable, in the Building Parking Facility. Tenant
shall abide, and cause its employees and visitors who utilize the Building
Parking Facility to abide, by all reasonable, non-discriminatory parking rules
and regulations for parking in the Building Parking Facility, as may be adopted
and/or modified by Landlord and/or Landlord's parking operator from time to
time. Landlord specifically reserves the right to change the location, size,
configuration, design, layout and all other aspects of the Building Parking
Facility at any time (so long as Landlord makes available to Tenant in the
Building Parking Facility or in a parking facility within a reasonable distance
from the Premises, the full number of parking spaces set forth in Section 11 of
the Summary) and Tenant acknowledges and agrees that Landlord may, without
incurring any liability to Tenant and without any abatement of Rent under this
Lease, from time to time, temporarily close-off or restrict access to the
Building Parking Facility for purposes of permitting or facilitating any such
construction, alteration or improvements. The parking passes provided to Tenant
pursuant to this Article 23 are provided solely for use by Tenant's own
personnel and, except in connection with an assignment or sublease expressly
permitted under the terms of Article 14 of this Lease, such passes may not be
transferred, assigned, subleased or otherwise alienated by Tenant.
ARTICLE 24
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MISCELLANEOUS PROVISIONS
------------------------
24.1 Terms; Captions. The necessary grammatical changes required to make
---------------
the provisions hereof apply either to corporations or partnerships or
individuals, men or women, as the case may require, shall in all cases be
assumed as though in each case fully expressed. The captions of Articles and
Sections are for convenience only and shall not be deemed to limit, construe,
affect or alter the meaning of such Articles and Sections.
24.2 Binding Effect. Each of the provisions of this Lease shall extend to
--------------
and shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective successors or assigns,
provided this clause shall not permit any assignment by Tenant contrary to the
provisions of Article 14 of this Lease.
24.3 No Waiver. No waiver of any provision of this Lease shall be implied
---------
by any failure of a party to enforce any remedy on account of the violation of
such provision, even if such violation shall continue or be repeated
subsequently, any waiver by a party of any provision of this Lease may only be
in writing, and no express waiver shall affect any provision other than the one
specified in such waiver and that one only for the time and in the manner
specifically stated. No receipt of monies by Landlord from Tenant after the
termination of this Lease shall in any way alter the length of the Lease Term or
of Tenant's right of possession hereunder or after the giving of any notice
shall reinstate, continue or extend the Lease Term or affect any notice given
Tenant prior to the receipt of such monies, it being agreed that after the
service of notice or the commencement of a suit or after final judgment for
possession of the Premises, Landlord may receive and collect any Rent due, and
the payment of said Rent shall not waive or affect said notice, suit or
judgment.
24.4 Intentionally Deleted.
---------------------
24.5 Transfer of Landlord's Interest. Tenant acknowledges that Landlord
-------------------------------
has the right to transfer all or any portion of its interest in the Real
Property and Building and in this Lease, and Tenant agrees that in the event of
any such transfer, Landlord shall automatically be released from all liability
under this Lease arising after the effective date of such transfer, and Tenant
agrees to look solely to such transferee for the performance of Landlord's
obligations hereunder arising after the date of transfer. The liability of any
transferee of Landlord shall be limited to the interest of such transferee in
the Real Property and Building and such transferee shall be without personal
liability under this Lease, and Tenant hereby expressly waives and releases such
personal liability on behalf of itself and all persons claiming by, through or
under Tenant. Tenant further acknowledges that Landlord may assign its interest
in this Lease to a mortgage lender as additional security and agrees that such
an assignment shall not release Landlord from its obligations hereunder and that
Tenant shall continue to look to Landlord for the performance of its obligations
hereunder.
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24.6 Prohibition Against Recording. Neither this Lease, nor any
-----------------------------
memorandum, affidavit or other writing with respect thereto, shall be recorded
by Tenant or by anyone acting through, under or on behalf of Tenant, and the
recording thereof in violation of this provision shall make this Lease null and
void at Landlord's election.
24.7 Landlord's Title; Air Rights. Landlord's title is and always shall be
----------------------------
paramount to the title of Tenant. Nothing herein contained shall empower Tenant
to do any act which can, shall or may encumber the title of Landlord. No rights
to any view or to light or air over any property, whether belonging to Landlord
or any other person, are granted to Tenant by this Lease.
24.8 Tenant's Signs.
---------------
24.8.1 Entry Door Sign. As part of the initial Tenant
Improvements, Tenant shall be entitled to one (1) identification sign outside of
the Premises on the floor on which the Premises are located. The location,
quality, design, style, lighting and size of such sign shall be consistent with
the Landlord's Building standard signage program and shall be subject to
Landlord's prior written approval, in its reasonable discretion. Upon the
expiration or earlier termination of this Lease, Tenant shall be responsible, at
its sole cost and expense, for the removal of such signage and the repair of all
damage to the Building caused by such removal. Except for such identification
sign and except for Tenant's name sign on the Monument Sign described in Section
24.8.2 below, Tenant may not install any signs on the exterior or roof of the
Building or the common areas of the Building or the Real Property. Any signs,
window coverings, or blinds (even if the same are located behind the Landlord
approved window coverings for the Building), or other items visible from the
exterior of the Premises or Building are subject to the prior approval of
Landlord, in its sole and absolute discretion.
24.8.2 Monument Sign. Subject to the approval of all applicable
-------------
governmental entities, and subject to all applicable governmental laws, rules,
regulations and codes, Landlord hereby grants Tenant the non-exclusive right to
have the name "RealSelect" (but no other markings) displayed on the existing
monument sign located at the main entrance to the Building (the "MONUMENT
SIGN"). The design, size, specifications, graphics, materials, colors, lighting
(if applicable) and exact location with respect to Tenant's name on the Monument
Sign shall be (i) consistent with the other signs (if any) to be placed on the
Monument Sign and the quality and appearance of the Real Property and (ii)
designated by Landlord, subject to the approval of all applicable governmental
authorities. Landlord shall install Tenant's name on the Monument Sign at
Tenant's cost (which shall be price competitive). In addition, Tenant shall pay
to Landlord, within ten (10) days after demand, from time to time, all other
costs (which shall be price competitive) attributable to the fabrication,
installation, insurance, lighting (if applicable), maintenance and repair of
Tenant's name on the Monument Sign. Landlord shall have the right to relocate,
redesign and/or reconstruct the Monument Sign from time to time. The signage
rights granted to Tenant under this Section 24.8.2 are personal to the original
Tenant executing this Lease and any assignee (including an Affiliate) to which
Tenant's entire interest in this Lease has been assigned pursuant to Article 14
of this Lease (but any name change on the Monument Sign to reflect such assignee
shall be subject to Landlord's reasonable approval), and may not be exercised or
used by or assigned to any other person or entity. Upon termination or
expiration of this Lease, or upon the earlier termination of Tenant's signage
rights under this Section 24.8.2, Landlord shall have the right to permanently
remove Tenant's name from the Monument Sign and to restore and repair all damage
to the Monument Sign resulting from such removal, and Tenant shall pay to
Landlord, within ten (10) days after demand, all costs incurred in connection
with such removal, restoration and repair.
24.9 Relationship of Parties. Nothing contained in this Lease shall be
-----------------------
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant, it being expressly understood and
agreed that neither the method of computation of Rent nor any act of the parties
hereto shall be deemed to create any relationship between Landlord and Tenant
other than the relationship of landlord and tenant.
24.10 Application of Payments. Landlord shall have the right to apply
-----------------------
payments received from Tenant pursuant to this Lease, regardless of Tenant's
designation of such payments, to satisfy any obligations of Tenant hereunder, in
such order and amounts as Landlord, in its sole discretion, may elect.
24.11 Time of Essence. Time is of the essence of this Lease and each of
---------------
its provisions.
24.12 Partial Invalidity. If any term, provision or condition contained
------------------
in this Lease shall, to any extent, be invalid or unenforceable, the remainder
of this Lease, or the application of such term, provision or condition to
persons or circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.
24.13 No Warranty. In executing and delivering this Lease, Tenant has not
-----------
relied on any representation, including, but not limited to, any representation
whatsoever as to the amount of any item comprising Additional Rent or the amount
of the Additional Rent in the aggregate or that Landlord is furnishing the same
services to other tenants, at all, on the same level or on the same basis, or
any warranty or any statement of Landlord which is not set forth herein or in
one or more of the Exhibits attached hereto.
24.14 Landlord Exculpation. It is expressly understood and agreed that
--------------------
notwithstanding anything in this Lease to the contrary, and notwithstanding any
applicable law to the contrary, the liability of Landlord and the Landlord
Parties hereunder (including any successor landlord) and any recourse by Tenant
against Landlord or the Landlord Parties shall be limited solely and exclusively
to an amount which is equal to the interest of Landlord in the Building, and
neither Landlord, nor any of the Landlord Parties shall have any personal
liability therefor, and Tenant hereby expressly waives and releases such
personal liability on behalf of itself and all persons claiming by, through or
under Tenant.
24.15 Entire Agreement. It is understood and acknowledged that there are
----------------
no oral agreements between the parties hereto affecting this Lease and this
Lease supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between the parties hereto or
displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Lease. This Lease and
any side letter or separate
-23-
agreement executed by Landlord and Tenant in connection with this Lease and
dated of even date herewith contain all of the terms, covenants, conditions,
warranties and agreements of the parties relating in any manner to the rental,
use and occupancy of the Premises, shall be considered to be the only agreement
between the parties hereto and their representatives and agents, and none of the
terms, covenants, conditions or provisions of this Lease can be modified,
deleted or added to except in writing signed by the parties hereto. All
negotiations and oral agreements acceptable to both parties have been merged
into and are included herein. There are no other representations or warranties
between the parties, and all reliance with respect to representations is based
totally upon the representations and agreements contained in this Lease.
24.16 Right to Lease. Landlord reserves the absolute right to effect such
--------------
other tenancies in the Building as Landlord in the exercise of its sole business
judgment shall determine to best promote the interests of the Building. Tenant
does not rely on the fact, nor does Landlord represent, that any specific tenant
or type or number of tenants shall, during the Lease Term, occupy any space in
the Building.
24.17 Force Majeure. Any prevention, delay or stoppage due to strikes,
-------------
lockouts, labor disputes, acts of God, inability to obtain services, labor, or
materials or reasonable substitutes therefor, governmental actions, civil
commotions, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent and other charges to be paid by Tenant
pursuant to this Lease (collectively, the "FORCE MAJEURE"), notwithstanding
anything to the contrary contained in this Lease, shall excuse the performance
of such party for a period equal to any such prevention, delay or stoppage and,
therefore, if this Lease specifies a time period for performance of an
obligation of either party, that time period shall be extended by the period of
any delay in such party's performance caused by a Force Majeure.
24.18 Consent and Approvals. Except (i) for matters for which there is a
---------------------
standard of consent or discretion specifically set forth in this Lease, (ii)
matters which could have an adverse effect on the Building's structure or the
Systems and Equipment, or which could affect the exterior appearance of the
Building, or (iii) matters covered by Article 19 of this Lease (collectively,
the "EXCEPTED MATTERS"), any time the consent of Landlord or Tenant is required
under this Lease, such consent shall not be unreasonably withheld or delayed,
and, except with regard to the Excepted Matters, whenever this Lease grants
Landlord or Tenant the right to take action, exercise discretion, establish
rules and regulations or make an allocation or their determination, Landlord and
Tenant shall act reasonably and in good faith. With respect to the Excepted
Matters, Landlord shall be entitled to grant its consent or exercise its
discretion in its sole and absolute discretion, but shall act in good faith.
24.19 Notices. All notices, demands, statements or communications
-------
(collectively, "NOTICES") given or required to be given by either party to the
other hereunder shall be in writing, shall be sent by United States certified or
registered mail, postage prepaid, return receipt requested, or delivered
personally (i) to Tenant at the appropriate address set forth in Section 5 of
the Summary, or to such other place as Tenant may from time to time designate in
a Notice to Landlord; or (ii) to Landlord at the addresses set forth in Section
3 of the Summary, or to such other firm or to such other place as Landlord may
from time to time designate in a Notice to Tenant. Any Notice will be deemed
given on the date which is two (2) business days after it is mailed as provided
in this Section 24.19 or upon the date personal delivery is made. If Tenant is
notified of the identity and address of Landlord's mortgagee or ground or
underlying lessor, Tenant shall give to such mortgagee or ground or underlying
lessor written notice of any default by Landlord under the terms of this Lease
by registered or certified mail, and such mortgagee or ground or underlying
lessor shall be given a reasonable opportunity to cure such default prior to
Tenant's exercising any remedy available to Tenant.
24.20 Joint and Several. If there is more than one Tenant, the
-----------------
obligations imposed upon Tenant under this Lease shall be joint and several.
24.21 Authority. If Tenant is a corporation or partnership, each
---------
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in the state in which the Building is located and that Tenant has full
right and authority to execute and deliver this Lease and that each person
signing on behalf of Tenant is authorized to do so.
24.22 Jury Trial; Attorneys' Fees. IF EITHER PARTY COMMENCES LITIGATION
---------------------------
AGAINST THE OTHER FOR THE SPECIFIC PERFORMANCE OF THIS LEASE, FOR DAMAGES FOR
THE BREACH HEREOF OR OTHERWISE FOR ENFORCEMENT OF ANY REMEDY HEREUNDER, THE
PARTIES HERETO AGREE TO AND HEREBY DO WAIVE ANY RIGHT TO A TRIAL BY JURY. In
the event of any such commencement of litigation, the prevailing party shall be
entitled to recover from the other party such costs and reasonable attorneys'
fees as may have been incurred, including any and all costs incurred in
enforcing, perfecting and executing such judgment.
24.23 Governing Law. This Lease shall be construed and enforced in
-------------
accordance with the laws of the state in which the Building is located.
24.24 Submission of Lease. Submission of this instrument for examination
-------------------
or signature by Tenant does not constitute a reservation of or an option for
lease, and it is not effective as a lease or otherwise until execution and
delivery by both Landlord and Tenant.
24.25 Brokers. Landlord and Tenant hereby warrant to each other that they
-------
have had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the real estate brokers or agents
specified in Section 12 of the Summary (the "BROKERS"), and that they know of no
other real estate broker or agent who is entitled to a commission in connection
with this Lease. Each party agrees to indemnify and defend the other party
against and hold the other party harmless from any and all claims, demands,
losses, liabilities, lawsuits, judgments, and costs and expenses (including
without limitation reasonable attorneys' fees) with respect to any leasing
commission or equivalent compensation alleged to be owing on account of the
indemnifying party's dealings with any real estate broker or agent other than
the Brokers. Landlord shall pay the brokers listed in Section 12 of the Summary
a commission in connection with this Lease pursuant to the terms of a separate
agreement among Landlord and the Brokers.
-24-
24.26 Independent Covenants. This Lease shall be construed as though the
---------------------
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary.
24.27 Building Name and Signage. Landlord shall have the right at any
-------------------------
time to change the name of the Building and to install, affix and maintain any
and all signs on the exterior and on the interior of the Building as Landlord
may, in Landlord's sole discretion, desire. Tenant shall not use the name of
the Building or use pictures or illustrations of the Building in advertising or
other publicity, without the prior written consent of Landlord.
24.28 Building Directory. Tenant shall be entitled to one (1) line on the
------------------
Building directory to display Tenant's name and location in the Building.
24.29. Landlord's Default. Landlord shall not be in default under this
------------------
Lease unless Landlord fails to perform the obligations required of Landlord
hereunder within the time period set forth in this Lease, or if no time period
is provided, then within thirty (30) days after written notice by Tenant to
Landlord in writing specifying wherein Landlord has failed to perform such
obligation; provided, however, that if the nature of Landlord's obligation is
such that more than thirty (30) days are required for performance, then Landlord
shall not be in default if Landlord commences performance within such thirty
(30) day period and thereafter diligently prosecutes the same to completion.
Tenant shall have no rights as a result of any default by Landlord until Tenant
gives thirty (30) days' notice to any person who has a recorded interest
pertaining to the Building, specifying the nature of the default. Such person
shall then have the right to cure such default, and Landlord shall not be deemed
in default if such person cures such default within thirty (30) days after
receipt of notice of the default, or within such longer period of time as may
reasonably be necessary to cure the default. If Landlord or such person does
not cure the default, Tenant may exercise such rights or remedies as shall be
provided or permitted by law to recover any damages proximately caused by such
default.
Each of the parties agrees that, in the event that it becomes entitled to
receive damages from the other party, it shall not be allowed to recover from
the other party consequential damages except as otherwise expressly provided (i)
with respect to any holdover by Tenant in Article 16, and (ii) in connection
with any termination of this Lease by Landlord following Tenant's default
pursuant to Section 19.2.1.
24.30 Landlord Renovations. It is specifically understood and agreed that
--------------------
Landlord has no obligation and has made no promises to alter, remodel, improve,
renovate, repair or decorate the Premises, Building, Real Property, or any part
thereof and that no representations or warranties respecting the condition of
the Premises, the Building or the Real Property have been made by Landlord to
Tenant, except as specifically set forth in this Lease. However, Tenant
acknowledges that Landlord may from time to time, at Landlord's sole option,
renovate, improve, alter, or modify (collectively, the "RENOVATIONS") the
Building, and/or Real Property, including without limitation the Building
Parking Facility, common areas, Systems and Equipment, roof, and structural
portions of the same, which Renovations may include, without limitation, (i)
modifying the common areas and tenant spaces to comply with applicable laws and
regulations, including regulations relating to the physically disabled, seismic
conditions, and building safety and security, and (ii) installing new carpeting,
lighting, and wall coverings in the Building common areas, and in connection
with such Renovations, Landlord may, among other things, erect scaffolding or
other necessary structures in the Building, limit or eliminate access to
portions of the Real Property, including portions of the common areas, or
perform work in the Building, which work may create noise, dust or leave debris
in the Building. Tenant hereby agrees that such Renovations and Landlord's
actions in connection with such Renovations shall in no way constitute a
constructive eviction of Tenant nor entitle Tenant to any abatement of Rent,
except as expressly provided in Section 6.5. Landlord shall have no
responsibility or for any reason be liable to Tenant for any direct or indirect
injury to or interference with Tenant's business arising from the Renovations,
nor shall Tenant be entitled to any compensation or damages from Landlord for
loss of the use of the whole or any part of the Premises or of Tenant's personal
property or improvements resulting from the Renovations or Landlord's actions in
connection with such Renovations, or for any inconvenience or annoyance
occasioned by such Renovations or Landlord's actions in connection with such
Renovations; however, Landlord agrees to use commercially reasonable efforts to
minimize interference with Tenant's use of and access to the Premises as a
result of such Renovations.
24.31 Satellite Dish.
--------------
24.31.1 Landlord hereby agrees that Tenant shall have the
nonexclusive right at Tenant's sole cost and expense (but without any additional
rent payable to Landlord) and subject to the provisions of this Section 24.31,
to install one (1) satellite dish which shall not exceed eighteen (18) inches in
diameter ("SATELLITE DISH") on the roof of the Building in a location designated
by Landlord. In addition, Tenant shall have the right, subject to available
capacity of the Building, to install such connection equipment, such as
conduits, cables, risers, feeders and materials (collectively, the "CONNECTING
EQUIPMENT") in the shafts, ducts, conduits, chases, utility closets and other
facilities of the Building as is reasonably necessary to connect the Satellite
Dish to Tenant's other machinery and equipment in the Premises, subject however,
to the provisions of Section 24.31.2, below, and subject to the availability of
vertical riser and feeder excess capacity, as reasonably determined by Landlord.
Tenant shall also have the right of access, consistent with Section 24.31.4,
below, to the areas where any such Connecting Equipment is located for the
purposes of maintaining, repairing, testing and replacing the same. 24.31
24.31.2 The installation of the Satellite Dish and related Connecting
Equipment (hereby referred to together and/or separately as the "SATELLITE
EQUIPMENT") shall be performed in accordance with and subject to the provisions
of Article 8 of this Lease, and the Satellite Equipment shall be treated for all
purposes of this Lease as if the same were Tenant's property. For the purposes
of determining Tenant's obligations with respect to its use of the roof of the
Building herein provided, the portion of the roof of the Building affected by
the Satellite Equipment shall be deemed to be a portion of Tenant's Premises;
consequently, all of the provisions of this Lease with respect to Tenant's
obligations hereunder shall apply to the installation, use and maintenance of
the Satellite Equipment, including without limitation, provisions relating to
compliance with requirements as to insurance, indemnity, repairs and
maintenance, and compliance with laws. Landlord shall have no obligation with
regard to the affected portion of the roof or the Satellite Equipment except as
provided in this Section 24.31.
-25-
24.31.3 It is expressly understood that Landlord retains the right to
grant third parties the right to utilize any portion of the roof not utilized by
Tenant and to use the portion of the roof on which the Satellite Equipment is
located for any purpose whatsoever, provided in each event that Tenant shall
have reasonable access to, and Landlord shall not unduly interfere with the use
of, the Satellite Equipment.
24.31.4 Tenant shall install, use, maintain and repair the Satellite
Equipment so as not to damage or interfere with the operation of the Building or
the Systems and Equipment or any other communications or similar equipment
located on the roof of the Building; and Tenant hereby agrees to indemnify,
defend and hold Landlord harmless from and against any and all claims, costs,
damages, expenses and liabilities (including attorney's fees) arising out of
Tenant's failure to comply with the provisions of this Section 24.31.4.
24.31.5 Landlord shall not have any obligations with respect to the
Satellite Equipment or compliance with any requirements relating thereto nor
shall Landlord be responsible for any damage that may be caused to the Satellite
Equipment except to the extent (i) caused by the negligence or willful
misconduct of Landlord or Landlord's agents, employees or contractors, and (ii)
not insured or required to be insured by Tenant under this Lease. Landlord
makes no representation that the Satellite Equipment will be able to receive or
transmit communication signals without interference or disturbance and Tenant
agrees that Landlord shall not be liable to Tenant therefor.
24.31.6 Tenant, at Tenant's sole cost and expense, shall paint the
Satellite Equipment in such color(s) as Landlord shall reasonably determine and
shall maintain such equipment and install such fencing and other protective
equipment on or about the Satellite Equipment as Landlord may reasonably
determine.
24.31.7 Tenant shall (i) be solely responsible for any damage caused
as a result of the Satellite Equipment, (ii) promptly pay any tax, license or
permit fees charged pursuant to any requirements in connection with the
installation, maintenance or use of the Satellite Equipment and comply with all
precautions and safeguards recommended by all governmental authorities, and
(iii) make necessary repairs, replacements to or maintenance of the Satellite
Equipment.
24.31.8 If any of the conditions set forth in this Section 24.31 are
not complied with by Tenant, then without limiting Landlord's rights and
remedies it may otherwise have under this Lease, Tenant shall, upon written
notice from Landlord, have the option either to (i) reposition the Satellite
Equipment to a location designated by Landlord if Landlord elects to permit such
repositioning, and make such repairs and restorations as required under Section
24.31.9 below, or (ii) correct such noncompliance within thirty (30) days after
receipt of notice (or such longer period as may be reasonably required as long
as Tenant commences such correction within such 30-day period and diligently
prosecutes same to completion). If Tenant fails to correct noncompliance within
such thirty (30) day period (as may be extended), then Tenant shall immediately
discontinue its use of the Satellite Equipment and remove the same.
24.31.9 Upon the expiration of the Lease Term or upon any earlier
termination of this Lease, Tenant shall, subject to the control of and direction
from Landlord, remove the Satellite Equipment, repair any damage caused thereby,
and restore the roof and other facilities of the Building to their condition
existing prior to the installation of the Satellite Equipment.
24.31.10 Tenant's rights under this Section 24.31 shall be personal
to the original Tenant executing this Lease and any assignee (including any
Affiliate) to which Tenant's entire interest in this Lease has been assigned
pursuant to Article 14, and may only be utilized by the such entities (and may
not be exercised or utilized by any sublessee or other transferee of the
original Tenant's interest in this Lease or the Premises).
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
executed the day and date first above written.
"Landlord":
WHLNF REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: LPC MS, Inc.,
as agent and manager for Landlord
By: /s/ D. ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: D. ▇▇▇▇▇ ▇▇▇▇▇▇
Its: Senior Vice President
"Tenant":
REALSELECT, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Its: V.P. Finance & Corporate Secretary
-----------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Its: President
-----------------------------------
-26-
EXHIBIT A
---------
OUTLINE OF FLOOR PLAN OF PREMISES
---------------------------------
-1-
EXHIBIT B
---------
TENANT WORK LETTER
------------------
Tenant acknowledges and agrees that the Premises have previously been
constructed including interior tenant improvements therein, and is satisfactory
and shall be accepted by Tenant in its "AS IS" condition as of the date of
execution of this Lease and on the Lease Commencement Date; provided, however,
that Landlord shall construct certain modifications to the interior of the
Premises pursuant to the Approved Working Drawings in accordance with the
following provisions of this Tenant Work Letter.
SECTION 1
---------
CONSTRUCTION DRAWINGS FOR THE PREMISES
--------------------------------------
1.1 Construction Drawings; Tenant Improvements. Prior to the execution
of this Lease, Landlord and Tenant have approved a detailed space plan for the
construction of certain improvements in the Premises, which space plan has been
prepared by ▇▇▇▇ & ▇▇▇▇▇▇▇ Architects, Inc., dated August 17, 1998 Job. No. 983-
631.02 (the "FINAL SPACE PLAN"). Based upon and in conformity with the Final
Space Plan, Landlord shall cause an architect and engineers selected by Landlord
to prepare and deliver to Tenant, for Tenant's approval, detailed specifications
and engineered working drawings for the tenant improvements shown on the Final
Space Plan (the "WORKING DRAWINGS"). The Working Drawings shall incorporate
modifications to the Final Space Plan as necessary to comply with the floor load
and other structural and system requirements of the Building. To the extent
that the finishes and specifications are not completely set forth in the Final
Space Plan for any portion of the tenant improvements depicted thereon, the
actual specifications and finish work shall be in accordance with the
specifications for the Building's standard improvement package items, as
determined by Landlord. Within five (5) business days after Tenant's receipt of
the Working Drawings, Tenant shall approve or disapprove the same, which
approval shall not be unreasonably withheld; provided, however, that Tenant may
only disapprove the Working Drawings to the extent such Working Drawings are
inconsistent with the Final Space Plan and only if Tenant delivers to Landlord,
within such five (5) business days period, specific changes proposed by Tenant
which are consistent with the Final Space Plan and do not constitute changes
which would result in any of the circumstances described in items (i) through
(iv) below. If any such revisions are timely and properly proposed by Tenant,
Landlord shall cause its architect and engineers to revise the Working Drawings
to incorporate such revisions and submit the same for Tenant's approval in
accordance with the foregoing provisions, and the parties shall follow the
foregoing procedures for approving the Working Drawings until the same are
finally approved by Landlord and Tenant. Upon Landlord's and Tenant's approval
of the Working Drawings, the same shall be known as the "APPROVED WORKING
DRAWINGS." Once the Approved Working Drawings have been approved by Landlord
and Tenant, Tenant shall make no changes, change orders or modifications thereto
without the prior written consent of Landlord, which consent may be withheld in
Landlord's sole discretion if such change or modification would: (i) directly or
indirectly delay the Substantial Completion of the Premises; (ii) increase the
cost of designing or constructing the Tenant Improvements above the cost of the
tenant improvements depicted in the Final Space Plan, unless Tenant agrees in
writing to pay for such increased costs; (iii) be of a quality lower than the
quality of the standard improvement package items for the Building; and/or (iv)
require any changes to the base, shell and core work or structural improvements
or systems of the Building. The Final Space Plan, Working Drawings and Approved
Working Drawings shall be collectively referred to herein as, the "CONSTRUCTION
DRAWINGS." The tenant improvements shown on the Approved Working Drawings shall
be referred to herein as the "TENANT IMPROVEMENTS"; provided, however, that
notwithstanding anything in this Tenant Work Letter to the contrary, the "Tenant
Improvements" for the portion of the Premises depicted on the Final Space Plan
as the Data Center to be constructed by Landlord shall include only the
----
following items (using Building standard materials), and Tenant shall be
responsible, at its sole cost and expense, which shall not be paid for by
Landlord, for the construction of all other improvements, and all fixtures,
equipment and electrical and other systems, shown on the Construction Drawings
or otherwise required for the Data Center (including, without limitation, the
Supplemental HVAC Units described in Section 6.1.1 of the Lease, all structural
platforms therefor and electrical and other cabling and connections from the
Supplemental HVAC Units to the Premises, and all floor and wall coverings for
the Data Center): (A) slab-to-slab walls of standard construction (including R-
19 insulation); (B) Building standard ceiling and lighting; and (C) relocation
and installation of raised flooring, including handicap ramp. The improvements,
fixtures, equipment and systems for the Data Center which are Tenant's
responsibility to construct and install as described hereinabove shall not be
included in the definition of Tenant Improvements for purposes of this Tenant
Work Letter and shall sometimes be referred to herein collectively as the
"TENANT'S DATA CENTER WORK." Notwithstanding that any portion of the
Construction Drawings are reviewed or approved by Landlord or prepared by
architects or engineers selected by Landlord, and notwithstanding any advice or
assistance which may be rendered to Tenant by Landlord or Landlord's architects,
engineers or consultants in connection with the Construction Drawings or the
Data Center Work, Landlord shall not be responsible for any errors or omissions
contained in the Construction Drawings and shall have no liability whatsoever
with respect to the design, quality, Code compliance or other matters pertaining
to the Data Center Work.
1.2 Landlord's Work. In addition to the Tenant Improvements, Landlord
---------------
shall (i) install the Emergency Generator or ▇▇▇▇▇▇▇ Plug, together with related
electrical cabling and connections therefrom to the Premises as described in
Section 6.7 of the Lease, (ii) supply to the main point of entry of the
Building, fiber optics for use by Tenant with a DS3 rating, and (iii) separate
electrical meter(s) to determine usage of electricity for the Premises and the
Supplemental HVAC Units (collectively, "LANDLORD'S WORK").
SECTION 2
---------
COST OF IMPROVEMENTS/CONSTRUCTION OF DATA CENTER WORK
-----------------------------------------------------
2.1 Cost of Tenant Improvements. Landlord and Tenant hereby agree that
---------------------------
Landlord shall, at Landlord's expense (except as provided in this Section 2)
cause a contractor designated by Landlord (the "CONTRACTOR") to (i) obtain all
applicable building permits for construction of the Tenant Improvements and
Landlord's Work, and (ii) construct the Tenant Improvements
EXHIBIT B
-1-
and Landlord's Work as depicted on the Approved Working Drawings, in compliance
with such building permits and all applicable laws in effect at the time of
construction, including, without limitation, the Americans with Disabilities Act
and Title 24, and in good workmanlike manner; provided, however, in the event
that (A) the Approved Working Drawings differ with respect to the quality and
quantity of those tenant improvements depicted on the Final Space Plan, and/or
(B) Tenant shall request any changes or substitutions to any of the Construction
Drawings, and such differences, changes and/or substitutions result in increased
costs of construction of the Tenant Improvements in excess of the costs of those
tenant improvements depicted on the Final Space Plan, then Tenant shall pay such
excess costs (which shall include a Landlord supervision fee of four percent
(4%) of such costs) to Landlord in cash within ten (10) days after Landlord's
request therefor. In addition, to the extent any materials for the Tenant
Improvements are other than Building standards (unless specifically designated
in the Final Space Plan), Tenant shall pay for the cost of such non-Building
standard materials (including a four percent (4%) Landlord supervision fee for
such costs). Landlord shall pay for the cost of the Landlord's Work described in
Section 1.2 above, and there shall be no supervision fee charged to Tenant for
any such work. Notwithstanding the foregoing to the contrary, in no event shall
Landlord be obligated to pay for Tenant's Data Center Work, the
connection/extension of Tenant's fiber optics from the point of entry to the
Premises or any of Tenant's furniture, computer systems, telephone systems,
equipment or other personal property which may be depicted on the Construction
Drawings or otherwise required or desired by Tenant for the Premises; such items
shall be paid for by Tenant, at Tenant's sole cost and expense. Such costs to be
paid for by Tenant shall include a four percent (4%) Landlord supervision fee
but only with respect to the costs of the design and construction of the
improvements required for Tenant's Data Center Work, excluding, however (x) the
"hard" cost of acquisition of the Supplemental HVAC Units and (y) the costs of
any of Tenant's furniture, computer systems, telephone systems, equipment or
other personal property.
2.2 Construction of Data Center Work. Tenant shall construct Tenant's
--------------------------------
Data Center Work after Landlord substantially completes the Tenant Improvements
therefor described in clauses (A), (B) and (C) of Section 1.1 above, using
Landlord's contractor or such other contractors and subcontractors as Tenant
shall select subject to Landlord's reasonable approval thereof, except Landlord
may designate subcontractors to perform any work which may affect the Base
Building Systems or structural portions of the Building, provided such
subcontractors charge competitive costs for their work. To the extent
practicable and subject to receipt of all applicable governmental approvals and
permits, Landlord shall endeavor to substantially complete the Tenant
Improvements described in clauses (A), (B) and (C) of Section 1.1 above, at or
near the beginning of the construction process for the Tenant Improvements so
that Tenant will have a reasonable period of time to complete construction of
Tenant's Data Center Work. Tenant shall be solely responsible, at its expense,
for obtaining all permits and governmental approvals for Tenant's Data Center
Work and the certificate of occupancy, temporary certificate of occupancy (or
its equivalent) for the Data Center, and shall cause the Data Center Work to be
constructed in compliance with all laws, including, without limitation, the
Americans With Disabilities Act and Title 24, and pursuant to Landlord's
reasonable schedule requirements and construction rules and regulations. Tenant
shall construct the Data Center Work during Landlord's construction of the
Tenant Improvements (other than those Tenant Improvements described in clauses
(A), (B) and (C) of Section 1.1 above) and the parties shall cooperate with each
other and the Contractor in connection with the scheduling of such work so as to
minimize interference with such work (although any delays encountered by
Landlord in Substantial Completion of the Premises resulting from Tenant's Data
Center Work shall be a Tenant Delay as set forth in Section 3.2 below).
SECTION 3
---------
READY FOR OCCUPANCY; SUBSTANTIAL COMPLETION OF THE TENANT IMPROVEMENTS
----------------------------------------------------------------------
3.1 Ready for Occupancy; Substantial Completion. For purposes of
-------------------------------------------
determining the lease commencement date pursuant to Section 7.2 of the summary,
the premises shall be "READY FOR OCCUPANCY" upon Substantial Completion of the
Premises. "SUBSTANTIAL COMPLETION" of the Premises shall occur upon:
(i) the completion of construction of the Tenant Improvements in the
Premises pursuant to the Approved Working Drawings and completion of
construction of Landlord's Work, with the exception of (A) any punch-list items
(which shall be promptly completed), (B) Tenant's Data Center Work, and (C) any
tenant fixtures, work-stations, built-in furniture, systems or equipment to be
installed by Tenant or under the supervision of Contractor; and
(ii) the issuance of certificate or temporary certificate of occupancy
(or its equivalent) permitting occupancy of the Premises (other than the Data
Center). The Lease Commencement Date shall be determined notwithstanding the
date Tenant substantially completes Tenant's Data Center Work or obtains a
certificate of occupancy or temporary certificate of occupancy (or its
equivalent) for the Data Center.
3.2 Delay of the Substantial Completion of the Premises. If there shall
---------------------------------------------------
be a delay or there are delays in the Substantial Completion of the Premises as
a direct, indirect, partial, or total result of any of the following
(collectively, "TENANT DELAYS"):
3.2.1 Tenant's failure to timely approve the Working Drawings or any
other matter requiring Tenant's approval;
3.2.2 a breach by Tenant of the terms of this Tenant Work Letter or
the Lease;
3.2.3 Tenant's request for changes in any of the Construction
Drawings (other than changes to cause the Working Drawings to be consistent with
the Final Space Plan);
3.2.4 Tenant's requirement for materials, components, finishes or
improvements which are not available in a commercially reasonable time given the
estimated date of Substantial Completion of the Premises (but only if Landlord
notifies Tenant at the time of Tenant's selection of such items or within a
reasonable period of time thereafter, of such unavailability), as set forth in
the Lease, or which are different from, or not included in, Landlord's standard
improvement package items for the Building;
EXHIBIT B
-2-
3.2.5 changes to the base, shell and core work, structural components
or structural components or systems of the Building required by the Tenant's
Data Center Work;
3.2.6 Tenant's construction of Tenant's Data Center Work; or
3.2.7 any other acts or omissions of Tenant, or its agents, or
employees;
then, notwithstanding anything to the contrary set forth in the Lease and
regardless of the actual date of Substantial Completion, the Lease Commencement
Date (as set forth in Section 7.2 of the Summary) shall be deemed to be the date
the Lease Commencement Date would have occurred if no Tenant Delay or Delays, as
set forth above, had occurred. Notwithstanding the foregoing, for purposes of
determining whether the Lease Commencement Date should be so accelerated (but
not for purposes of determining the First or Second Outside Dates, as provided
in Section 3.3 below), no Tenant Delay shall be deemed to have occurred unless
and until Landlord has provided notice to Tenant (the "DELAY NOTICE"),
specifying the action or inaction by Tenant which Landlord contends constitutes
the Tenant Delay. If such action or inaction is not cured by Tenant within one
(1) business day of receipt of such Delay Notice (the "GRACE PERIOD"), then a
Tenant Delay, as set forth in such Delay Notice, shall be deemed to have
occurred commencing as of the expiration of the Grace Period; provided that
Tenant shall only be permitted an aggregate of three (3) days of Grace Period
and, thereafter, a Tenant Delay shall commence upon the delivery of the Delay
Notice to Tenant.
3.3 Outside Date.
------------
3.3.1 Rent Abatement. Landlord shall use commercially
--------------
reasonable efforts to cause Substantial Completion of the Premises to occur by
November 20, 1998, but shall not be liable to Tenant for any delays, and Tenant
shall have no right to terminate this Lease as a result of any delays in
Substantial Completion beyond such date. Notwithstanding the foregoing, in the
event that the Lease Commencement Date has not occurred by the "FIRST OUTSIDE
DATE," which shall be December 20, 1998, as such December 20, 1998 date shall be
extended by the number of days of Tenant Delays (as determined pursuant to
Section 3.2 above without any notice or grace period) and by the number of days
of Force Majeure delays (as defined in Section 24.17 of the Lease) encountered
by Landlord affecting the work of design and construction of the Tenant
Improvements, then as Tenant's sole remedy for any such delay, Tenant shall
receive a day-for-day abatement of the monthly installments of Base Rent
initially payable by Tenant under this Lease for each day after such First
Outside Date that the Lease Commencement Date has not so occurred, which
abatement period shall commence as of the Lease Commencement Date.
3.3.1 Termination. In the event that the Lease Commencement
-----------
Date has not occurred by the "SECOND OUTSIDE DATE," which shall be April 1,
1999, as such April 1, 1999 date shall be extended by the number of days of
Tenant Delays (as determined pursuant to Section 3.2 above without any notice or
grace period) and by the number of Force Majeure Delays encountered by Landlord
affecting the work of design and construction of the Tenant Improvements, then
Tenant shall have the right, as its sole remedy for any such delay, to either
(i) deliver a notice to Landlord (the "OUTSIDE DATE TERMINATION NOTICE")
electing to terminate this Lease effective upon receipt of the Outside Date
Termination Notice by Landlord (the "EFFECTIVE DATE"), or (ii) continue any
rental abatement provided in Section 3.3.1 above. Except as provided
hereinbelow, the Outside Date Termination Notice must be delivered by Tenant to
Landlord, if at all, not earlier than the Second Outside Date and not later than
five (5) business days after the Second Outside Date. If Tenant delivers the
Outside Date Termination Notice to Landlord, then Landlord shall have the right
to suspend the Effective Date for a period ending thirty (30) days after the
original Effective Date. In order to suspend the Effective Date, Landlord must
deliver to Tenant, within five (5) business days after receipt of the Outside
Date Termination Notice, a certificate of the Contractor certifying that it is
such Contractor's best good faith judgment that Substantial Completion of the
Premises will occur within thirty (30) days after the original Effective Date.
If the Lease Commencement Date occurs within said thirty (30) day suspension
period, then the Outside Date Termination Notice shall be of no further force
and effect; if, however, the Lease Commencement Date does not occur within said
thirty (30) day suspension period, then this Lease shall terminate as of the
date of expiration of such thirty (30) day period. If prior to the Second
Outside Date Landlord determines that the Lease Commencement Date and
Substantial Completion of the Premises will not occur by the Second Outside
Date, Landlord shall have the right to deliver a written notice to Tenant
stating Landlord's opinion as to the date by which Substantial Completion of the
Premises and the Lease Commencement Date shall occur and Tenant shall be
required, within five (5) business days after receipt of such notice, to either
deliver the Outside Date Termination Notice (which will mean that this Lease
shall thereupon terminate and shall be of no further force and effect) or agree
to extend the Second Outside Date to that date which is set by Landlord. Failure
of Tenant to so respond in writing within said five (5) business day period
shall be deemed to constitute Tenant's agreement to extend the Second Outside
Date to that date which is set by Landlord. If the Second Outside Date is so
extended, Landlord's right to request Tenant to elect to either terminate or
further extend the Second Outside Date shall remain and shall continue to
remain, with each of the notice periods and response periods set forth above,
until the Lease Commencement Date occurs or until this Lease is terminated.
SECTION 4
---------
MISCELLANEOUS
-------------
In addition to Tenant's entering into the Premises to construct the Data
Center Work as provided in Section 2.2 above, Landlord and Contractor shall
allow Tenant access to the Premises up to approximately thirty (30) days prior
to the Substantial Completion of the Premises for the purpose of Tenant
installing overstandard equipment or fixtures (including Tenant's data and
telephone equipment) in the Premises, so long as Tenant and its agents do not
interfere with Contractor's work in the Building and the Premises in connection
therewith. Prior to Tenant's entry into the Premises as permitted by the terms
of this Section 4, Tenant shall submit a schedule to Landlord and Contractor,
for their approval, which schedule shall detail the timing and purpose of
Tenant's entry. Tenant shall hold Landlord harmless from and indemnify, protect
and defend Landlord against any loss or damage to the Premises or Real Property
and against injury to any persons caused by (i) Tenant's actions pursuant to
this Section 4 and/or (ii) Tenant's construction of the Data Center Work.
EXHIBIT B
-3-
EXHIBIT C
---------
AMENDMENT TO LEASE
------------------
This AMENDMENT TO LEASE ("Amendment") is made and entered into effective as
of _________________, 19__, by and between ____________________________________,
a Delaware limited partnership ("Landlord"), and ______________________________,
a __________________________ ("Tenant")
R E C I T A L S :
- - - - - - - -
A. Landlord and Tenant entered into that certain Office Lease dated as of
_____________________ (the "Lease") pursuant to which Landlord leased to Tenant
and Tenant leased from Landlord certain "Premises", as described in the Lease,
known as Suite ____ of the Building located at ____________________ California
__________.
B. Except as otherwise set forth herein, all capitalized terms used in
this Amendment shall have the same meaning five such terms in the Lease.
C. Landlord and Tenant desire to amend the Lease to confirm the
commencement and expiration dates of the term, as hereinafter provided.
NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Confirmation of Dates. The parties hereby confirm that (a) the
---------------------
Premises are Ready for Occupancy, (b) the term of the Lease commenced as of
____________________ (the "Lease Commencement Date") for a term of
_________________________ ending on _______________________ (unless sooner
terminated as provided in the Lease and (c) in accordance with the Lease, Rent
commenced to accrue on _______________________________.
2. No Further Modification. Except as set forth in this Amendment, all of
-----------------------
the terms and provisions of the Lease shall remain unmodified and in full force
and effect.
IN WITNESS WHEREOF, this Amendment to Lease has been executed as of the day
and year first above written.
"Landlord":
WHLNF REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: LPC MS, Inc.,
as agent and manager for Landlord
By: ________________________________
Name: D. ▇▇▇▇▇ ▇▇▇▇▇▇
Its: Senior Vice President
"Tenant":
_________________________________________
a _______________________________________
By: ____________________________________
Name:_______________________________
Its:________________________________
EXHIBIT C
-1-
EXHIBIT D
---------
RULES AND REGULATIONS
---------------------
Tenant shall faithfully observe and comply with the following Rules and
Regulations. Subject to Section 10.1 of the Lease, Landlord shall not be
responsible to Tenant for the nonperformance of any of said Rules and
Regulations by or otherwise with respect to the acts or omissions of any other
tenants or occupants of the Building.
1. Tenant shall not alter any lock or install any new or additional locks
or bolts on any doors or windows of the Premises without obtaining Landlord's
prior written consent. Tenant shall bear the cost of any lock changes or repairs
required by Tenant. Two keys will be furnished by Landlord for the Premises, and
any additional keys required by Tenant must be obtained from Landlord at a
reasonable cost to be established by Landlord.
2. All doors opening to public corridors shall be kept closed at all
times except for normal ingress and egress to the Premises, unless electrical
hold backs have been installed.
3. Landlord reserves the right to close and keep locked all entrance and
exit doors of the Building during such hours as are customary for comparable
buildings in the vicinity of the Building. Tenant, its employees and agents must
be sure that the doors to the Building are securely closed and locked when
leaving the Premises if it is after the normal hours of business for the
Building. Any tenant, its employees, agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time when it is
considered to be after normal business hours for the Building, may be required
to sign the Building register when so doing. Access to the Building may be
refused unless the person seeking access has proper identification or has a
previously arranged pass for access to the Building. Landlord and its agents
shall in no case be liable for damages for any error with regard to the
admission to or exclusion from the Building of any person. In case of invasion,
mob, riot, public excitement, or other commotion, Landlord reserves the right to
prevent access to the Building during the continuance of same by any means it
deems appropriate for the safety and protection of life and property.
4. Landlord shall have the right to prescribe the weight, size and
position of all safes and other heavy property brought into the Building. Safes
and other heavy objects shall, if considered necessary by Landlord, stand on
supports of such thickness as is necessary to properly distribute the weight.
Landlord will not be responsible for loss of or damage to any such safe or
property in any case. All damage done to any part of the Building, its contents,
occupants or visitors by moving or maintaining any such safe or other property
shall be the sole responsibility of Tenant and any expense of said damage or
injury shall be borne by Tenant, except to the extent covered by Landlord's
insurance obtained as part of Operating Expenses.
5. No heavy and/or bulky furniture, freight, packages, supplies,
equipment or merchandise will be brought into or removed from the Building or
carried up or down in the elevators, except upon prior notice to Landlord, and
in such manner, in such specific elevator, and between such hours as shall be
designated by Landlord. Tenant shall provide Landlord with not less than 24
hours prior notice of the need to utilize an elevator for any such purpose, so
as to provide Landlord with a reasonable period to schedule such use and to
install such padding or take such other actions or prescribe such procedures as
are appropriate to protect against damage to the elevators or other parts of the
Building.
6. Landlord shall have the right to control and operate the public
portions of the Building, the public facilities, the HVAC, and any other
facilities furnished for the common use of tenants, in such manner as is
customary for Comparable Buildings.
7. The requirements of Tenant will be attended to only upon application
at the management office of the Building or at such office location designated
by Landlord. Employees of Landlord shall not perform any work or do anything
outside their regular duties unless under special instructions from Landlord.
8. Tenant shall not disturb, solicit, or canvass any occupant of the
Building and shall cooperate with Landlord or Landlord's agents to prevent same.
9. The toilet rooms, urinals, wash bowls and other
apparatus shall not be used for any purpose other than that for which they were
constructed, and no foreign substance of any kind whatsoever shall be thrown
therein. The expense of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by the tenant who, or whose employees or
agents, shall have caused it.
10. Tenant shall not overload the floor of the Premises, nor (except for
pictures and other normal office wall hangings) ▇▇▇▇, drive nails or screws, or
drill into the partitions, woodwork or plaster or in any way deface the Premises
or any part thereof without Landlord's consent first had and obtained.
11. Except for vending machines intended for the sole use of Tenant's
employees and invitees, no vending machine or machines of any description other
than fractional horsepower office machines shall be installed, maintained or
operated upon the Premises without the written consent of Landlord.
12. Tenant shall not use any method of HVAC other than that which may be
supplied by Landlord, without the prior written consent of Landlord.
13. Except as otherwise expressly provided in Article 5 of the Lease,
Tenant shall not use or keep in or on the Premises or the Building any kerosene,
gasoline or other inflammable or combustible fluid or material. Tenant shall not
use, keep or permit to be used or kept, any foul or noxious gas or substance in
or on the Premises, or permit or allow the Premises to be occupied or used in a
manner reasonably offensive or objectionable to Landlord or other occupants of
the Building by reason of noise, odors, or vibrations, or interfere in any way
with other tenants or those having business therein.
-1-
14. Tenant shall not bring into or keep within the Building or the
Premises any animals, birds, bicycles or other vehicles.
15. No cooking shall be done or permitted by Tenant on the Premises, nor
shall the Premises be used for the storage of merchandise, for lodging or for
any unlawful purposes. Notwithstanding the foregoing, Underwriters' laboratory-
approved equipment and microwave ovens may be used in the Premises for heating
food and brewing coffee, tea, hot chocolate and similar beverages, provided that
such use is in accordance with all applicable federal, state and city laws,
codes, ordinances, rules and regulations, and does not cause odors which are
objectionable to Landlord and other tenants.
16. Landlord will reasonably approve where and how telephone and telegraph
wires are to be introduced to the Premises. No boring or cutting for wires shall
be allowed without the consent of Landlord. The location of telephone, call
boxes and other office equipment affixed to the Premises shall be subject to the
approval of Landlord.
17. Landlord reserves the right to exclude or expel from the Building any
person who, in the judgment of Landlord, is intoxicated or under the influence
of liquor or drugs, or who shall in any manner do any act in violation of any of
these Rules and Regulations.
18. Tenant, its employees and agents shall not loiter in the entrances or
corridors, nor in any way obstruct the sidewalks, lobby, halls, stairways or
elevators, and shall use the same only as a means of ingress and egress for the
Premises.
19. Tenant shall not waste electricity, water or air conditioning and
agrees to cooperate fully with Landlord to ensure the most effective operation
of the Building's HVAC system, and shall refrain from attempting to adjust any
controls.
20. Tenant shall store all its trash and garbage within the interior of
the Premises. No material shall be placed in the trash boxes or receptacles if
such material is of such nature that it may not be disposed of in the ordinary
and customary manner of removing and disposing of trash and garbage in the city
in which the Building is located without violation of any law or ordinance
governing such disposal. All trash, garbage and refuse disposal shall be made
only through entry-ways and elevators provided for such purposes at such times
as Landlord shall designate.
21. Tenant shall comply with all safety, fire
protection and evacuation procedures and regulations established by Landlord or
any governmental agency.
22. Tenant shall assume any and all responsibility for protecting the
Premises from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed, when the Premises are not
occupied.
23. No awnings or other projection shall be attached to the outside walls
of the Building without the prior written consent of Landlord. No curtains,
blinds, shades or screens shall be attached to or hung in, or used in connection
with, any window or door of the Premises without the prior written consent of
Landlord. The sashes, sash doors, skylights, windows, and doors that reflect or
admit light and air into the halls, passageways or other public places in the
Building shall not be covered or obstructed by Tenant, nor shall any bottles,
parcels or other articles be placed on the windowsills. All electrical ceiling
fixtures hung in offices or spaces along the perimeter of the Building must be
fluorescent and/or of a quality, type, design and bulb color approved by
Landlord.
24. The washing and/or detailing of or, the installation of windshields,
radios, telephones in or general work on, automobiles shall not be allowed on
the Real Property.
25. Food vendors shall be allowed in the Building upon receipt of a
written request from the Tenant. The food vendor shall service only the tenants
that have a written request on file in the Building's management office. Under
no circumstance shall the food vendor display their products in a public or
common area including corridors and elevator lobbies. Any failure to comply with
this rule shall result in immediate permanent withdrawal of the vendor from the
Building.
26. Tenant must comply with requests by the Landlord concerning the
informing of their employees of items of importance to the Landlord.
27. Tenant shall comply with any non-smoking ordinance adopted by any
applicable governmental authority.
28. Landlord may waive any one or more of these Rules and Regulations for
the benefit of any particular tenant or tenants, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of any
other tenant or tenants, nor prevent Landlord from thereafter enforcing any such
Rules or Regulations against any or all tenants of the Building; provided,
however, Landlord shall not enforce such Rules and Regulations against Tenant in
a discriminatory manner. Landlord reserves the right, upon notice to Tenant, to
make reasonable changes to and/or to rescind any one or more of these Rules and
Regulations, or to make such other and further reasonable Rules and Regulations
as in Landlord's reasonable judgment may from time to time be necessary for the
management, safety, care and cleanliness of the Premises, Building and Real
Property, and for the preservation of good order therein, as well as for the
convenience of other occupants and tenants therein; provided, however, that no
such changes or additions thereto shall interfere with Tenant's permitted use of
the Premises as set forth in Article 5 and no changes or additions to the Rules
and Regulations shall increase the Basic Rent to be paid by Tenant hereunder.
Subject to Section 10.1 of the Lease, Landlord shall not be responsible to
Tenant or to any other person for the nonobservance of the Rules and Regulations
by another tenant or other person. Tenant shall be deemed to have read these
Rules and Regulations and to have agreed to abide by them as a condition of its
occupancy of the Premises.
-2-
EXHIBIT E
---------
CLEANING SPECIFICATIONS
-----------------------
-1-
EXHIBIT F
---------
TENANT CERTIFICATE
------------------
--------------------------------------------------------------------------------
Please complete all of the blanks with the appropriate information
--------------------------------------------------------------------------------
LEASED PREMISES: ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the
"Leased Premises")
---------------
LANDLORD/BORROWER: WHLNF REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited
partnership (the "Landlord")
--------
TENANT: REALSELECT, INC., a Delaware corporation (the "Tenant")
------
LEASE DATED: September 18, 1998 (the "Lease")
TENANT'S NOTICE ADDRESS: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
(Prior to Lease Commencement Date)
and
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
(After Lease Commencement Date)
DATE: September 18, 1998
--------- ----
GENERAL ELECTRIC CAPITAL CORPORATION ("GECC") has made or is about to make a
----
loan (the "Loan") to the Landlord which will be secured by a mortgage or deed of
----
trust and security agreement (the "Deed of Trust"), covering the real property
-------------
described on EXHIBIT A and the buildings and improvements located thereon
---------
(collectively, the "Real Property"). In connection with the making of the Loan,
-------------
GECC has requested that the Tenant complete this Tenant Certificate with the
appropriate information as it pertains to the Tenant's lease and to agree to the
requirements set forth herein.
The undersigned, Tenant, hereby certifies to and agrees with GECC, as to the
following:
ACKNOWLEDGMENT OF LEASE
-----------------------
1. The Leased Premises contain approximately 34,324 rentable square feet. The
term of the Lease is for five (5) years, and shall commence on the Lease
Commencement Date as determined pursuant to the Lease.
2. The minimum monthly Base Rent initially payable under the Lease is
$58,495.15, and is subject to adjustment as set forth in the Lease.
3. Concurrently with Tenant's execution of the Lease, Tenant is required to
deliver to Landlord a security deposit of $70,020.96, and a letter of
credit in the amount of $250,000.00.
4. No rent or other sum which is payable under the Lease has been paid by or
on behalf of Tenant more than one (1) month in advance.
5. The Lease, upon execution by the Landlord, is valid and in full force and
effect, and, to the best of Tenant's knowledge, neither Landlord nor Tenant
is in default thereunder.
6. Any improvements required by the Lease to be made by Landlord have been
completed to the full satisfaction of Tenant, except as required pursuant
to Exhibit B attached to the Lease.
---------
7. The Lease has not been assigned, modified, supplemented or amended in any
way. Tenant shall not enter into any assignment, modification, supplement
or amendment to the Lease without the prior written consent of GECC. The
Lease constitutes the entire agreement between the parties and there are no
other agreements (including any letter agreements) between Landlord and
Tenant concerning the Leased Premises. Tenant shall not, without obtaining
the prior written consent of GECC, (a) prepay any of the rents, additional
rents or other sums due under the Lease for more than one (1) month in
advance of the due dates thereof, (b) voluntarily surrender the Leased
Premises or terminate the Lease without cause, or (c) assign the Lease or
sublet the Leased Premises other than pursuant to the provisions of the
Lease.
-1-
SUBORDINATION
-------------
8. The Lease (including, without limitation, all rights to insurance proceeds
and condemnation awards, any rights of first refusal, options to purchase,
and any other rights granted to Tenant pursuant to the Lease) is, and shall
at all times continue to be, subject and subordinate in each and every
respect, to (a) the Deed of Trust and to any and all liens, security
interests, rights and any other interest created thereby and to any and all
increases, renewals, modifications, extensions, substitutions, replacements
and/or consolidations of the Deed of Trust and the Loan, and (b) any
additional financing of the Real Property or portions thereof provided by
GECC and the liens and security interests under the documents evidencing
and securing such additional financing, and to any increases therein or
supplements thereto.
NON-DISTURBANCE
---------------
9. So long as the Lease is in full force and effect and Tenant is not in
default in the payment of rent, additional rent, taxes, utility charges or
other sums payable by Tenant under the terms of the Lease, or under any of
the other terms, covenants or conditions of the Lease on Tenant's part to
be performed (beyond the period, if any, specified in the Lease within
which Tenant may cure such default) (a) Tenant's possession of the Leased
Premises under the Lease shall not be disturbed or interfered with by GECC
in the exercise of any of its rights under the Deed of Trust, including any
foreclosure, and (b) GECC will not join Tenant as a party defendant for the
purpose of terminating Tenant's interest and estate under the Lease in any
proceeding for foreclosure of the Deed of Trust.
ATTORNMENT
----------
10. If, at any time GECC (or any person, or such person's successors or
assigns, who acquire the interest of the Landlord under the Lease through
foreclosure action of the Deed of Trust, or upon a transfer of the Real
Property by conveyance in lieu of foreclosure, or otherwise) shall succeed
to the rights of the Landlord under the Lease as a result of a default or
event of default under the Mortgage, and if the Tenant is not then in
default under the Lease (beyond the time permitted therein, if any, to cure
such default), then (a) the Lease shall not terminate, (b) upon receipt by
Tenant of written notice of such succession, Tenant shall attorn to and
recognize such person as succeeding to the rights of the Landlord under the
Lease (herein sometimes called "Successor Landlord"), upon the terms and
------------------
conditions of the Lease, and (c) Successor Landlord shall accept such
attornment and recognize Tenant as the Successor Landlord's tenant under
the Lease. Upon such attornment and recognition, the Lease shall continue
in full force and effect as, or as if it were, a direct lease between the
Successor Landlord and Tenant upon all of the terms, conditions and
covenants (including any right under the Lease on the part of the Tenant to
extend the term of the Lease) as are set forth in the Lease and which shall
be applicable after such attornment and recognition. Notwithstanding
anything to the contrary set forth herein, GECC or such Successor Landlord
shall not be (i) liable for any act or omission of any previous landlord,
including the Landlord, except for any continuing non-monetary defaults
(such as, for example, failure to make Landlord required repairs under the
Lease), (ii) subject to any offset, defense or counterclaim which Tenant
might be entitled to assert against any previous landlord, including the
Landlord, except for any offset and abatement rights specifically provided
in the Lease, (iii) bound by any payment of rent or additional rent made by
the Tenant to any previous landlord (including the Landlord) for more than
one (1) month in advance, unless the same was paid to and received by the
Successor Landlord, (iv) bound by any material amendment or modification of
the Lease hereafter made without the written consent of GECC, or (v) liable
for any deposit that Tenant may have given to any previous landlord
(including the Landlord) which has not been transferred to the Successor
Landlord. Further, notwithstanding anything to the contrary set forth
herein, the liability of GECC for any obligations under the Lease shall be
limited to GECC's interest in the Real Property. GECC shall not have any
liability or responsibility under or pursuant to the terms of the Lease
after it ceases to own an interest in or to the Real Property.
11. The provisions of this Tenant Certificate regarding non-disturbance and
attornment by Tenant shall be self-operative and effective without the
necessity of execution of any new lease or other document on the part of
any party hereto or the respective heirs, legal representatives, successors
or assigns of any such party. Tenant agrees, however, to execute and
deliver at any time and from time to time, upon the request of GECC or of
any Successor Landlord, any instrument or certificate which, in the
reasonable judgment of GECC or such Successor Landlord may be necessary or
appropriate in any such foreclosure proceeding or otherwise to evidence
such non-disturbance and attornment, including, if requested, a new lease
of the Leased Premises on the same terms and conditions as the Lease.
HAZARDOUS MATERIALS
-------------------
12. Tenant shall neither suffer nor itself manufacture, store, handle,
transport, dispose of, spill, leak or dump any toxic or hazardous waste,
waste product or substance (as they may be defined in any federal or state
statute, rule or regulation pertaining to or governing such wastes, waste
products or substances) on the Leased Premises or on any property in the
vicinity of the Leased Premises at any time during the term (including any
renewal term) of the Lease and during Tenant's occupancy of the Leased
Premises.
NOTICE
------
13. Tenant hereby acknowledges and agrees that: (a) from and after the date
hereof, in the event of any act or omission of Landlord which would give
Tenant the right, either immediately or after the lapse of time, to
terminate the Lease or to claim a partial or total eviction, Tenant will
not exercise any such right (i) until it has given written notice of such
act or omission to GECC and (ii) until the expiration of thirty (30) days
following such giving of notice to GECC in which time period GECC shall be
entitled to cure any such act or omissions of Landlord; (b) Tenant shall
send to Landlord all copies of any such default, notice or statement under
the Lease at the same time such notice is sent to Landlord; and (c) if GECC
notifies Tenant of a default under the Deed of Trust and demands that
Tenant pay its rent and all other sums due under the Lease to GECC, Tenant
shall honor such demand and pay its rent and all of the sums due under the
Lease directly to
-2-
STATE OF ___________________)
) ss.
COUNTY OF __________________)
GECC or as otherwise required pursuant to such notice, and following such
payment by Tenant, Tenant shall have no liability to Landlord for those
payments.
All notices and other communications from Tenant to GECC shall be in
writing and shall be delivered or mailed by registered mail, postage paid,
return receipt requested, or delivered by an overnight courier, addressed
to GECC at:
General Electric Capital Corporation
16479 Dallas Parkway, Suite ▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Re: Loan No. __________________________
or at such other address as GECC, any successor, purchaser or transferee
shall furnish to the Tenant in writing.
This Tenant Certificate is being executed and delivered by Tenant to induce
GECC to make the Loan which is to be secured in part by an assignment to GECC of
Landlord's interest in the Lease and with the intent and understanding that the
above statements will be relied upon by GECC. This Tenant Certificate shall
inure to the benefit of and be binding upon the parties hereto, their successors
and permitted assigns, and any purchaser or purchasers at foreclosure of the
Real Property, and their respective heirs, personal representatives, successors
and assigns.
TENANT:
REALSELECT, INC.
a Delaware corporation
By:____________________________(Please sign name)
Name:__________________________(Please print name)
Title:_________________________(Please print title within Company)
Date:__________________________(Please print date of execution)
GECC:
GENERAL ELECTRIC CAPITAL CORPORATION,
a New York corporation
By:_______________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Its Attorney-In-Fact
Date:_____________________
LANDLORD:
WHLNF REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: LPC MS, Inc.,
as agent and manager for Landlord
By: _________________________
Name: D. ▇▇▇▇▇ ▇▇▇▇▇▇
Its: Senior Vice President
SIGNATURES MUST BE ACKNOWLEDGED, PLEASE ATTACH NOTARY FORMS.
-3-
STATE OF______________)
) ss.
COUNTY OF_____________)
On ______________________________, before me, ___________________, a Notary
Public in and for said state, personally appeared _______________________ and
____________________________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the persons whose names are subscribed to
the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument, the
persons, or the entity upon behalf of which the persons acted, executed the
instrument.
WITNESS my hand and official seal.
____________________________________________
Notary Public in and for said State
STATE OF______________)
) ss.
COUNTY OF_____________)
On ______________________________, before me, ___________________, a Notary
Public in and for said state, personally appeared _______________________ and
____________________________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the persons whose names are subscribed to
the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument, the
persons, or the entity upon behalf of which the persons acted, executed the
instrument.
WITNESS my hand and official seal.
____________________________________________
Notary Public in and for said State
STATE OF______________)
) ss.
COUNTY OF_____________)
On ______________________________, before me, ___________________, a Notary
Public in and for said state, personally appeared _______________________ and
____________________________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the persons whose names are subscribed to
the within instrument and acknowledged to me that they executed the same in
their authorized capacities, and that by their signatures on the instrument, the
persons, or the entity upon behalf of which the persons acted, executed the
instrument.
WITNESS my hand and official seal.
____________________________________________
Notary Public in and for said State
-4-
EXTENSION OPTION RIDER
----------------------
This Extension Option Rider ("EXTENSION RIDER") is made and entered into by
and between WHLNF REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited liability
partnership ("LANDLORD"), and REALSELECT, INC., a Delaware corporation
("TENANT"), and is dated as of the date of the Office Lease ("LEASE") by and
between Landlord and Tenant to which this Extension Rider is attached. The
agreements set forth in this Extension Rider shall have the same force and
effect as if set forth in the Lease. To the extent the terms of this Extension
Rider are inconsistent with the terms of the Lease, the terms of this Extension
Rider shall control.
1. Option Right. Landlord hereby grants Tenant one (1) option to extend
------------
the Lease Term for all, but not less than all of, the Premises leased by Tenant,
for a period of five (5) years (the "OPTION TERM"), which option shall be
exercisable only by written Exercise Notice (as defined below) delivered by
Tenant to Landlord as provided below, provided that, as of the date of delivery
of such Exercise Notice, Tenant is not in default under the Lease beyond any
applicable notice and cure period. Upon the proper exercise of such option to
extend, and provided that, as of the end of the initial Lease Term Tenant is not
in default under the Lease beyond any applicable notice and cure period, the
Lease Term shall be extended for the Option Term. The rights contained in this
Extension Rider shall be personal to the original Tenant executing the Lease and
any assignee to which Tenant's entire interest in this Lease has been assigned
pursuant to Article 14, and may only be exercised by the original Tenant or such
assignee, as the case may be (but not by any sublessee or other transferee of
Tenant's interest in the Lease) if the original Tenant or such assignee occupies
at least 50% of the Premises as of the date of the Exercise Notice.
2. Option Rent. The Annual Base Rent payable by Tenant during the Option
-----------
Term (the "OPTION RENT") shall be equal to the "Fair Market Rental Rate" for the
Premises. As used herein, the "FAIR MARKET RENTAL RATE" for purposes of
determining the Annual Base Rent for the Option Term (and/or for purposes of
determining the Annual Base Rent for the First Offer Space pursuant to Section
1.4 of the Lease) shall mean the Annual Base Rent at which non-renewal, non-
equity, non-expansion tenants, as of the commencement of the Option Term (or the
lease term for the First Offer Space, as the case may be), will be leasing non-
sublease, unencumbered space comparable in size, location and quality to the
Premises (or First Offer Space, as the case may be) for a comparable term, which
comparable space is located in the Building and in other Comparable Buildings
(as defined in Section 6.1 of the Lease), taking into consideration free rent,
reduced rent, free and/or reduced parking (if any), and other lease concessions
(including tenant improvement allowances, but in determining such allowances,
the age, quality, value and layout of the existing tenant improvements in the
Premises, or First Offer Space, as the case may be, shall be taken into account)
generally being granted at such time for such comparable space for the Option
Term (or the lease term for the First Offer Space, as the case may be). The Fair
Market Rental Rate will be an effective rate, not specifically including, but
accounting for, the appropriate concessions described above. All other terms and
conditions of the Lease shall apply throughout the Option Term; however, Tenant
shall, in no event, have the option to extend the Lease Term beyond the Option
Term described in Section 1 above.
3. Exercise of Option. The option contained in this Extension Rider shall
------------------
be exercised by Tenant, if at all, only in the following manner: (i) Tenant
shall deliver written notice to Landlord not more than fifteen (15) months nor
less than twelve (12) months prior to the expiration of the initial Lease Term
stating that Tenant may be interested in exercising its option; (ii) Landlord,
---
after receipt of Tenant's notice, shall deliver notice (the "OPTION RENT
NOTICE") to Tenant not less than ten (10) months prior to the expiration of the
initial Lease Term setting forth Landlord's determination of the Option Rent;
and (iii) if Tenant wishes to exercise such option, Tenant shall, on or before
the date (the "EXERCISE DATE") which is the earlier of (A) the date occurring
nine (9) months prior to the expiration of the initial Lease Term, and (B) the
date occurring thirty (30) days after Tenant's receipt of the Option Rent
Notice, exercise the option by delivering written notice ("EXERCISE NOTICE")
thereof to Landlord. Concurrently with Tenant's delivery of the Exercise Notice,
Tenant may object, in writing, to Landlord's determination of the Fair Market
Rental Rate set forth in the Option Rent Notice, in which event such Fair Market
Rental Rate shall be determined pursuant to Section 4 below. Tenant's failure to
deliver the Exercise Notice on or before the Exercise Date, shall be deemed to
constitute Tenant's waiver of its extension right hereunder. If Tenant timely
delivers the Exercise Notice but fails to timely object in writing to Landlord's
determination of the Fair Market Rental Rate set forth in the Option Rent
Notice, Tenant shall be deemed to have objected thereto and the following
provisions of Section 4 shall apply.
4. Determination of Fair Market Rental Rate. If Tenant timely objects to
----------------------------------------
the Fair Market Rental Rate submitted by Landlord in the Option Rent Notice (or
timely objects to Landlord's determination of the Fair Market Rental Rate for
the First Offer Space pursuant to Section 1.4.3 of the Lease), Landlord and
Tenant shall thereafter attempt in good faith to agree upon such Fair Market
Rental Rate, using their best good faith efforts. If Landlord and Tenant fail to
reach agreement on such Fair Market Rental Rate within thirty (30) days
following Tenant's objection to such Fair Market Rental Rate (the "OUTSIDE
AGREEMENT DATE") then the applicable Fair Market Rental Rate shall be submitted
to appraisal in accordance with Sections 4.1 through 4.7 below.
4.1 Landlord and Tenant shall each appoint one (1) appraiser who
shall by profession be a real estate appraiser who shall have been active over
the five (5) year period ending on the date of such appointment in the appraisal
of office buildings in Conejo Valley. The determination of the appraisers shall
be limited solely to the issue of whether Landlord's or Tenant's submitted Fair
Market Rental Rate is the closer to the actual Fair Market Rental Rate as
determined by the appraisers, taking into account the requirements with respect
thereto set forth in Section 2 above. Each such appraiser shall be appointed
within fifteen (15) days after the Outside Agreement Date.
4.2 The two (2) appraisers so appointed shall, within fifteen (15)
days of the date of the appointment of the last appointed appraiser, agree upon
and appoint a third appraiser who shall be qualified under the same criteria set
forth hereinabove for qualification of the initial two (2) appraisers.
4.3 The three (3) appraisers shall, within thirty (30) days of the
appointment of the third appraiser, reach a decision as to which of Landlord's
or Tenant's submitted Fair Market Rental Rate is closer to the actual Fair
Market Rental Rate and shall select such closer determination as the Fair Market
Rental Rate and notify Landlord and Tenant thereof.
-1-
4.4 The decision of the majority of the three (3) appraisers shall be
binding upon Landlord and Tenant.
4.5 If either Landlord or Tenant fails to appoint an appraiser within
the time period specified in Section 4.1 hereinabove, the appraiser appointed by
one of them shall reach a decision, notify Landlord and Tenant thereof, and such
appraiser's decision shall be binding upon Landlord and Tenant.
4.6 If the two (2) appraisers fail to agree upon and appoint a third
appraiser, a third appraiser shall be appointed by the Superior Court of Los
Angeles County, California.
4.7 Each party shall pay the fees and expenses of the appraiser
appointed by or on behalf of it, and each shall pay one-half of the fees and
expenses of the third appraiser, if any.
"Landlord":
WHLNF REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited liability partnership
By: LPC MS, Inc.,
as agent and manager for Landlord
By: ___________________________________
Name: D. ▇▇▇▇▇ ▇▇▇▇▇▇
Its: Senior Vice President
"Tenant":
REALSELECT, INC.,
a Delaware corporation
By: ___________________________________
Name:______________________________
Its:_______________________________
By: ___________________________________
Name:______________________________
Its:_______________________________
-2-
LETTER OF CREDIT RIDER
----------------------
This Letter of Credit Rider ("▇▇ ▇▇▇▇▇") is made and entered into by and
between WHLNF REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited liability
partnership ("LANDLORD"), and REALSELECT, INC., a Delaware corporation
("TENANT"), and is dated as of the date of the Office Lease ("LEASE") by and
between Landlord and Tenant to which this ▇▇ ▇▇▇▇▇ is attached. The agreements
set forth in this Letter of Credit Rider shall have the same force and effect as
if set forth in the Lease. To the extent the terms of this ▇▇ ▇▇▇▇▇ are
inconsistent with the terms of the Lease, the terms of this ▇▇ ▇▇▇▇▇ shall
control.
1. Within seven (7) days after Tenant's execution of the Lease, Tenant
shall deliver to Landlord, as collateral for the full and faithful performance
by Tenant of all of its obligations under the Lease and for all losses and
damages Landlord may suffer as a result of any default by Tenant under the
Lease, an irrevocable and unconditional negotiable letter of credit (the "LETTER
OF CREDIT"), in the form and containing the terms required herein, payable in
the County of Los Angeles, California, running in favor of Landlord issued by a
solvent bank under the supervision of the Superintendent of Banks of the State
of California, or a National Banking Association, in the amount of $250,000.00
("LC AMOUNT"), as the same may be reduced pursuant to Paragraph 5 below. The
Letter of Credit shall be (i) at sight and irrevocable, (ii) subject to the
terms of this ▇▇ ▇▇▇▇▇, maintained in effect, whether through replacement,
renewal or extension, for the entire period from the date of execution of this
Lease through the Lease Expiration Date and Tenant shall deliver a new Letter of
Credit or certificate of renewal or extension to Landlord at least fifteen (15)
days prior to the expiration of the Letter of Credit, without any action
whatsoever on the part of Landlord, (iii) subject to the Uniform Customs and
Practices for Documentary Credits (1993-Rev) International Chamber of Commerce
Publication #500, and (iv) fully assignable by Landlord in connection with a
transfer of Landlord's interest in the Lease and permit partial draws. In
addition to the foregoing, the form and terms of the Letter of Credit (and the
bank issuing the same) shall be acceptable to Landlord, in Landlord's reasonable
discretion, and shall provide, among other things, in effect that: (A) Landlord,
or its then managing agent, shall have the right to draw down an amount up to
the face amount of the Letter of Credit upon the presentation to the issuing
bank of Landlord's (or Landlord's then managing agent's) of a written statement
that such amount is due to Landlord under the terms and conditions of the Lease,
it being understood that if Landlord or its managing agent be a corporation,
partnership or other entity, then such statement shall be signed by an officer
(if a corporation), a general partner (if a partnership), or any authorized
party (if another entity); (B) the Letter of Credit will be honored by the
issuing bank without inquiry as to the accuracy thereof and regardless of
whether the Tenant disputes the content of such statement; and (C) in the event
of a transfer of Landlord's interest in the Building, Landlord shall transfer
the Letter of Credit, in whole or in part (or cause a substitute letter of
credit to be delivered, as applicable) to the transferee and thereupon the
Landlord shall, without any further agreement between the parties, be released
by Tenant from all liability therefor, and it is agreed that the provisions
hereof shall apply to every transfer or assignment of the whole or any portion
of said Letter of Credit to a new Landlord.
2. If, as result of any application or use by Landlord of all or any part
of the Letter of Credit (or any "Cash Collateral," as that term is defined,
below), the amount of the Letter of Credit and Cash Collateral shall
collectively be less than the LC Amount, Tenant shall, within ten (10) days
thereafter, provide Landlord with either (i) cash (the "CASH COLLATERAL") to be
held and applied by Landlord as collateral in the same manner as if Landlord
held such amount as part of the Letter of Credit, or (ii) additional letter(s)
of credit in an amount equal to the deficiency (or a replacement letter of
credit in the total amount of the Letter of Credit Amount) and any such
additional (or replacement) letter of credit shall comply with all of the
provisions of this ▇▇ ▇▇▇▇▇, and if Tenant fails to comply with the foregoing,
the same shall constitute an uncurable default by Tenant. Tenant further
covenants and warrants that it will neither assign nor encumber the Letter of
Credit or Cash Collateral, as the case may be, or any part thereof and that
neither Landlord nor its successors or assigns will be bound by any such
assignment, encumbrance, attempted assignment or attempted encumbrance. Without
limiting the generality of the foregoing, if the Letter of Credit expires
earlier than the Lease Expiration Date, Landlord will accept Cash Collateral, a
renewal letter of credit or substitute letter of credit (such renewal or
substitute letter of credit or Cash Collateral to be in effect and delivered to
Landlord, as applicable, not later than fifteen (15) days prior to the
expiration of the Letter of Credit), which with respect to any letter of credit
shall be irrevocable and automatically renewable as above provided through the
Lease Expiration Date upon the same terms as the expiring Letter of Credit or
such other terms as may be acceptable to Landlord in its reasonable discretion.
However, if Cash Collateral is not timely delivered or the Letter of Credit is
not timely renewed or a substitute Letter of Credit is not timely received, or
if Tenant fails to maintain the Letter of Credit and/or the Cash Collateral in
the amount and in accordance with the terms set forth in this ▇▇ ▇▇▇▇▇, Landlord
shall have the right to present the Letter of Credit to the bank in accordance
with the terms of this ▇▇ ▇▇▇▇▇, and the entire sum evidenced thereby shall be
paid to and held by Landlord as Cash Collateral for performance of all of
Tenant's obligations under the Lease and for all losses and damages Landlord may
suffer as a result of any default by Tenant under the Lease.
3. If there shall occur a default under the Lease as set forth in Article
19 of the Lease, Landlord may, but without obligation to do so, draw upon the
Letter of Credit and/or utilize the Cash Collateral, in part or in whole, to
cure any default of Tenant and/or to compensate Landlord for any and all damages
of any kind or nature sustained or which may be sustained by Landlord resulting
from Tenant's default. Tenant agrees not to interfere in any way with payment
to Landlord of the proceeds of the Letter of Credit, either prior to or
following a "draw" by Landlord of any portion of the Letter of Credit,
regardless of whether any dispute exists between Tenant and Landlord as to
Landlord's right to draw from the Letter of Credit. No condition or term of the
Lease shall be deemed to render the Letter of Credit conditional to justify the
issuer of the Letter of Credit in failing to honor a drawing upon such Letter of
Credit in a timely manner.
4. Landlord and Tenant acknowledge and agree that in no event or
circumstance shall the Letter of Credit or any renewal thereof or substitute
therefor or Cash Collateral be (i) deemed to be or treated as a "security
deposit" within the meaning of California Civil Code Section 1950.7, (ii)
subject to the terms of such Section 1950.7, or (iii) intended to serve as a
"security deposit" within the meaning of such Section 1950.7. The parties
hereto (A) recite that the Letter of Credit and/or Cash Collateral, as the case
may be, is not intended to serve as a security deposit and such Section 1950.7
and any and all other laws, rules and regulations applicable to security
deposits in the commercial context ("SECURITY DEPOSIT LAWS") shall have no
applicability or relevancy thereto and (B) waive any and all rights, duties and
obligations either party may now or, in the future, will have relating to or
arising from the Security Deposit Laws.
-1-
5. (a) Subject to Paragraph 5(c) below, notwithstanding the foregoing
provisions of this ▇▇ ▇▇▇▇▇ to the contrary, in the event that Tenant
successfully completes an initial public offering of stock in Tenant through the
New York Stock Exchange or other nationally recognized stock exchange, then the
LC Amount shall be reduced by $150,000.00 (such that the remaining LC Amount
shall be $100,000) upon the date which is fifteen (15) days after Tenant
requests such reduction and delivers to Landlord evidence of such initial public
offering. Any such reduction in the LC Amount shall be accomplished through
amendment or replacement Letter of Credit to be provided by Tenant to Landlord
at Tenant's sole cost and expense.
(b) Subject to Paragraph 5(c) below, if at any time during the Lease
Term, whether or not the LC Amount has been reduced pursuant to the provisions
of Paragraph 5(a) above, Tenant shall be able to concurrently meet all three of
the following financial criteria, as evidenced by audited financial statements
certified as true and accurate by a national independent public accounting firm
selected by Tenant and approved by Landlord, then within fifteen (15) days
after Landlord's receipt of such certified audited financial statements and
Tenant's notice to Landlord that Tenant has met such financial criteria, Tenant
shall no longer be required to provide the Letter of Credit to Landlord and
Landlord shall return the Letter of Credit to Tenant:
(i) Tenant has at least $10,000,000.00 in cash held in its bank
accounts;
(ii) Tenant has at least $25,000,000.00 million in current
shareholder's equity; and
(iii) Tenant has positive net profitability for at least each of
the last four consecutive quarters ending prior to the date Tenant delivers such
notice to Landlord.
(c) There shall be no reduction in the LC Amount or return of the
Letter of Credit to Tenant at any time while Tenant is in default of any of its
obligations under this Lease.
"Landlord":
WHLNF REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited liability partnership
By: LPC MS, Inc.,
as agent and manager for Landlord
By: ___________________________________
Name: D. ▇▇▇▇▇ ▇▇▇▇▇▇
Its: Senior Vice President
"Tenant":
REALSELECT, INC.,
a Delaware corporation
By: ___________________________________
Name:______________________________
Its:_______________________________
By: ___________________________________
Name:______________________________
Its:_______________________________
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GUARANTY OF LEASE
-----------------
The Office Lease (the "Lease") dated September 18, 1998, herewith has been
or will be executed by and between WHLNF ESTATE LIMITED PARTNERSHIP
("Landlord"), and REALSELECT, a Delaware corporation ("Tenant"), whereby
Landlord leased to Tenant and Tenant leased from Landlord certain space more
commonly known as Suite 100 in the Building whose address is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇. Landlord requires, as a condition to Landlord's
execution of the Lease, that NetSelect, Inc. ("Guarantor"), guaranty the full
performance of the obligations of Tenant under the Lease and execute and deliver
this Guaranty to Landlord.
NOW, THEREFORE, in consideration of Landlord's execution of the Lease and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Guarantor agrees as follows:
1. Guarantor hereby absolutely and unconditionally guaranties the full
and timely performance of each and all of the terms, covenants and obligations
of the Lease, as amended, to be kept and performed by Tenant, including payment
of all rent, expenses and charges thereunder, throughout the Term of the Lease,
as may be extended.
2. Guarantor hereby further agrees that this Guaranty shall continue in
favor of Landlord, notwithstanding any modification or alteration of the Lease
entered into by and between the parties thereto, or their successors or assigns,
and notwithstanding any assignment of the Lease (with or without the consent of
Landlord), and no modification, alteration or assignment of the Lease shall in
any manner release or discharge Guarantor. Guarantor hereby consents to any
such modification, alteration or assignment of the Lease.
3. No action which Landlord may take or omit to take in connection with
the Lease, and no course of dealing with Tenant or any other person, shall
relieve Guarantor's obligations hereunder, affect this Guaranty in any way, or
afford Guarantor any recourse against Landlord. By way of example, but not in
limitation of the foregoing, Guarantor hereby expressly agrees that Landlord
may, from time to time without notice to Guarantor, do any of the following:
(a) amend, change or modify in whole or in part the Lease, or any
document executed now or hereafter in connection therewith;
(b) waive any terms, conditions or obligations of the Lease, or any
document executed now or hereafter in connection therewith, or grant any
extension of time or forbearance of same;
(c) compromise or settle any amount due or owing, or claimed to be due
or owing, under the Lease, or any document executed now or hereafter in
connection therewith; and
(d) release, substitute or add to Guarantor.
4. Guarantor expressly waives notice of acceptance of this Guaranty,
presentment for payment or performance of the Lease, nonpayment or
nonperformance of the Lease, any right of set-off against amounts due under this
Guaranty, protest and notice of protest, demand, notice of dishonor, notice of
any and all proceedings to collect amounts due under such agreements and to
enforce any security given therefor, and diligence in collecting sums due under
such agreements or any liability under this Guaranty. Guarantor further waives
the following: (a) any defense by reason of any disability of Tenant; (b) any
defense arising out of the absence, impairment or loss of any right of
reimbursement, contribution, subrogation or any other rights or remedies of
Guarantor against Tenant, whether resulting from Landlord's election to exercise
certain rights or remedies it may have against Tenant, or otherwise; (c) any
defense to the obligations of Guarantor under this Guaranty arising from any
bankruptcy proceedings against Tenant, including, but not limited to, those
arising from Landlord's exercise of its right to file a claim in such
proceedings, or the exercise of any trustee's powers under Federal Bankruptcy
Code Sections 364 and 365; and (d) the right to enforce any remedies that
Landlord now has, or later may have, against Tenant. Guarantor expressly waives
the provisions of Sections 2809, 2810, 2819, 2820, 2821, 2822, 2845, 2848 and
2849 of the Civil Code of the State of California, as recodified from time to
time (except the right to require contribution from co-sureties as set forth in
Section 2848 therein). Until all of Tenant's obligations to Landlord have been
discharged in full, Guarantor shall have no right of subrogation against Tenant.
Guarantor agrees that Landlord shall have no duty to disclose to Guarantor any
information it receives regarding the financial status of Tenant, whether or not
such information indicates that the risk that Guarantor may be required to
perform hereunder has been or may be increased. Guarantor assumes full
responsibility for being and keeping informed of all such matters.
5. In the event of any default in the performance of Tenant's obligations
under the Lease, Landlord shall have the right (a) to enforce its rights under
this Guaranty, and/or (b) to enforce its right against Tenant including, without
limitation, its rights under any and all such instruments, in any order. All
remedies available to Landlord shall be nonexclusive. The obligations of
Guarantor hereunder are independent of the obligations of Tenant, and Landlord
may enforce its right under this Guaranty without first proceeding against or
joining Tenant or any other person, and without applying or enforcing any
security for the Lease. Guarantor hereby waives any rights that Guarantor may
have to compel Landlord to proceed against Tenant or against any security from
Tenant or to participate in any such security. Guarantor hereby authorizes
Landlord, its successors and assigns, in their sole discretion, without notice
to Guarantor, to exercise any right or remedy which Guarantor may have, even
though any rights which Guarantor may have against the Tenant or others may be
diminished or destroyed by the exercise or election to exercise any such remedy.
6. Guarantor hereby authorizes Landlord, without notice to Guarantor, to
apply all payments and credits received from Tenant or from Guarantor or
realized from the security from Tenant for the Lease, in such manner and in such
priority as Landlord, in its sole judgment, shall see fit.
-1-
7. Guarantor agrees to indemnify Landlord for, and hold Landlord harmless
against, all losses, costs and expenses, including without limitation, all court
costs and attorneys' fees (including appellate fees, if any), incurred or paid
by Landlord in enforcing or compromising any rights under this Guaranty or
enforcing or compromising the performance of the Lease.
8. Guarantor's obligations hereunder shall not be assigned or delegated.
9. This Guaranty may not be changed orally, and no obligations of
Guarantor can be released or waived by Landlord, except in writing by Landlord.
10. If any term or provisions of this Guaranty shall be determined to be
illegal or unenforceable, all other terms and provisions hereof shall
nevertheless remain effective and shall be enforceable to the fullest extent
permitted by law.
11. If Guarantor shall become bankrupt or insolvent, or any application
shall be made to have Guarantor declared bankrupt or insolvent, or Guarantor
shall make an assignment for the benefit of creditors, notice of such occurrence
or event shall be promptly furnished to Landlord by Guarantor or Guarantor's
fiduciary. This Guaranty shall extend to and be binding upon Guarantor's
successors and assigns, including, but not limited to, trustees in bankruptcy.
12. If more than one person or entity executes this Guaranty as Guarantor,
each such person and entity shall be jointly and severally liable as guarantors
hereunder.
13. This Guaranty shall be construed and enforced in accordance with the
laws of the State of California. Guarantor hereby irrevocably consents to the
jurisdiction of the State of California, and agrees that any court of competent
jurisdiction sitting in Los Angeles County, State of California, shall be an
appropriate and convenient place of venue, and shall be the sole place of venue,
to resolve any dispute with respect to this Guaranty.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the 18th day
of September, 1998.
"GUARANTOR"
NETSELECT, INC.
a Delaware corporation
By: _________________________________
Name:____________________________
Title:___________________________
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