Initial Public Offering (IPO): Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1 Registration Statement (General Form) 105 511K
9: EX-10.10 Material Contract 22 112K
10: EX-10.11 Material Contract 49 236K
11: EX-10.13 Material Contract 5 25K
12: EX-10.14 Material Contract 6 31K
13: EX-10.15 Material Contract 11 46K
14: EX-10.16 Material Contract 3 17K
15: EX-10.18 Material Contract 5 26K
16: EX-10.19 Material Contract 6 27K
2: EX-10.2 Material Contract 5 22K
17: EX-10.20 Exhbit 10.20 2 14K
18: EX-10.22 Material Contract 18 65K
19: EX-10.23 Material Contract 24 113K
20: EX-10.24 Material Contract 25 108K
21: EX-10.25 Material Contract 18 56K
22: EX-10.26 Material Contract 18 56K
23: EX-10.27 Material Contract 6 33K
3: EX-10.3 Material Contract 6 26K
4: EX-10.4 Material Contract 25 131K
5: EX-10.6 Material Contract 6± 26K
6: EX-10.7 Material Contract 7 34K
7: EX-10.8 Material Contract 5 26K
8: EX-10.9 Material Contract 23 79K
24: EX-23.2 Consent of Experts or Counsel 1 8K
25: EX-27.1 Financial Data Schedule (Pre-XBRL) 2 9K
EXHIBIT 10.11
STANDARD OFFICE LEASE
BETWEEN
WESTLAKE GARDENS, LLC,
a California limited liability company
AS LANDLORD
AND
NETZERO, INC.,
a California corporation
AS TENANT
SUITES 200 and 300
2555 Townsgate Road
Westlake Village, California
TABLE OF CONTENTS
[Download Table]
Page
ARTICLE 1 - BASIC LEASE PROVISIONS......................................... 1
ARTICLE 2 - TERM........................................................... 3
ARTICLE 3 - RENTAL ........................................................ 3
(a) Basic Rental......................................... 3
(b) Increase in Direct Costs............................. 3
(c) Definitions.......................................... 4
(d) Determination of Payment............................. 7
ARTICLE 4 - Security Deposit............................................... 8
ARTICLE 5 - HOLDING OVER................................................... 10
ARTICLE 6 - PERSONAL PROPERTY TAXES........................................ 10
ARTICLE 7 - USE............................................................ 11
ARTICLE 8 - CONDITION OF PREMISES.......................................... 11
ARTICLE 9 - REPAIRS AND ALTERATIONS........................................ 12
ARTICLE 10 - LIENS......................................................... 14
ARTICLE 11 - PROJECT SERVICES.............................................. 14
ARTICLE 12 - RIGHTS OF LANDLORD............................................ 16
ARTICLE 13 - INDEMNITY; EXEMPTION OF LANDLORD FROM LIABILITY............... 16
(a) Indemnity by Tenant. ................................ 16
(b) Indemnity by Landlord................................ 16
(c) Exemption of Landlord from Liability................. 16
ARTICLE 14 - INSURANCE..................................................... 17
(a) Tenant's Insurance................................... 17
(b) Form of Policies..................................... 17
(c) Landlord's Insurance................................. 17
(d) Waiver of Subrogation................................ 18
(e) Compliance with Law.................................. 18
ARTICLE 15 - ASSIGNMENT AND SUBLETTING..................................... 18
ARTICLE 16 - DAMAGE OR DESTRUCTION......................................... 20
ARTICLE 17 - SUBORDINATION................................................. 21
ARTICLE 18 - EMINENT DOMAIN................................................ 22
ARTICLE 19 - DEFAULT....................................................... 22
ARTICLE 20 - REMEDIES...................................................... 23
ARTICLE 21 - TRANSFER OF LANDLORD'S INTEREST............................... 24
-i-
[Download Table]
Page
ARTICLE 22 - BROKER........................................................ 25
ARTICLE 23 - PARKING....................................................... 25
ARTICLE 24 - WAIVER........................................................ 25
ARTICLE 25 - ESTOPPEL CERTIFICATE.......................................... 26
ARTICLE 26 - LIABILITY OF LANDLORD......................................... 26
ARTICLE 27 - INABILITY TO PERFORM.......................................... 26
ARTICLE 28 - HAZARDOUS WASTE............................................... 26
ARTICLE 29 - SURRENDER OF PREMISES; REMOVAL OF PROPERTY.................... 28
ARTICLE 30 - MISCELLANEOUS................................................. 29
(a) Severability; Entire Agreement....................... 29
(b) Attorneys' Fees; Waiver of Jury Trial................ 29
(c) Time of Essence...................................... 29
(d) Headings; Joint and Several.......................... 29
(e) Reserved Area........................................ 29
(f) No Option............................................ 30
(g) Use of Project Name; Improvements.................... 30
(h) Rules and Regulations................................ 30
(i) Quiet Possession..................................... 30
(j) Rent................................................. 30
(k) Successors and Assigns............................... 30
(l) Notices.............................................. 30
(m) Persistent Delinquencies............................. 31
(n) Right of Landlord to Perform......................... 31
(o) Access, Changes in Project, Facilities, Name......... 31
(p) Signing Authority.................................... 31
(q) Intentionally Omitted. ............................. 32
(r) Intentionally Omitted................................ 32
(s) Survival of Obligations.............................. 32
(t) Confidentiality...................................... 32
(u) Governing Law........................................ 32
(v) Exhibits and Addendum................................ 32
ARTICLE 31 - OPTION TO EXTEND.............................................. 32
(a) Option Right......................................... 32
(b) Option Rent.......................................... 32
(c) Exercise of Options.................................. 33
(d) Determination of Market Rent......................... 33
ARTICLE 32 - Right of First Offer.......................................... 34
ARTICLE 33 - Must Take Space............................................... 35
ARTICLE 34 - Top of Building Signage....................................... 35
ARTICLE 35 - GENERATOR..................................................... 36
ARTICLE 36 - TERMINATION OPTION............................................ 36
EXHIBIT "A" PREMISES....................................................... 1
-ii-
[Download Table]
Page
EXHIBIT "B" RULES AND REGULATIONS........................................... 1
EXHIBIT "C" NOTICE OF LEASE TERM DATES AND TENANT'S PERCENTAGE.............. 1
EXHIBIT "D" TENANT WORK LETTER.............................................. 1
EXHIBIT "E" CERTIFIED COPY OF BOARD OF DIRECTORS RESOLUTIONS OF............ 1
EXHIBIT "F" LETTER OF CREDIT................................................ 1
EXHIBIT "G" EXTERIOR SIGNS.................................................. 1
EXHIBIT "H" SUPERIOR RIGHTS................................................. 1
-iii-
STANDARD OFFICE LEASE
This Standard Office Lease ("Lease") is made and entered into
as of this 6th day of March, 1999, by and between WESTLAKE GARDENS, LLC, a
California limited liability company ("Landlord"), and NETZERO, INC., a
California corporation (the "Tenant").
Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the premises described as (i) Suite 200 (containing 4,000 rentable
square feet), (ii) Suite 300 (containing 13,114 rentable square feet), and (iii)
after the Must Take Commencement Date (as defined in Article 33 below), the Must
Take Space (defined in Article 33 below), as such premises are designated on the
plan attached hereto and incorporated herein as Exhibit "A" (collectively,
"Premises") of the project ("Project") whose address is 2555 Townsgate Road,
Westlake Village, California for the term and upon the terms and conditions
hereinafter set forth, and Landlord and Tenant hereby agree as follows:
ARTICLE 1 - BASIC LEASE PROVISIONS:
-----------------------------------
A. Term: Commencement Date: The earlier of (i) the date Tenant first
commences to conduct business in the
Premises, or (ii) the date of substantial
completion (as defined in the Tenant Work
Letter attached hereto as Exhibit "D") of
the tenant improvements to be constructed
by Landlord in the Premises pursuant to the
Work Letter Agreement. Upon Tenant's
occupancy of the Premises, Landlord and
Tenant agree to execute and deliver a
Commencement Letter in a form substantially
similar to that attached hereto as Exhibit
"C".
Expiration Date: The date immediately preceding the seventh
(7th) anniversary of the Commencement
Date; provided, however, that if the
Commencement Date is a date other than
the first day of a month, the Expiration
Date shall be the last day of the month
which is eighty-four (84) months after the
month in which the Commencement Date
falls, unless extended or earlier terminated
pursuant to this Lease.
B. Square Footage: Landlord and Tenant agree that the
Premises initially contains 17,114 rentable
square feet; after the Must Take
Commencement Date, the Premises shall
contain 30,162 rentable square feet. Such
square footage is hereby stipulated by the
parties to be true and correct.
-1-
C. Basic Rental:
[Download Table]
MONTHLY BASIC RENTAL A
LEASE MONTHS MONTHLY BASIC RENTAL RENTABLE SQUARE FOOT
------------ -------------------- ----------------------
Period from Month 1 $29,949.50 $1.75
until day immediately
preceding Must Take
Commencement Date
Must Take $52,783.50 $1.75
Commencement Date -
Month 9
Months 10-48 $63,943.44 $2.12
Months 49-60 $66,356.40 $2.20
Months 61-84 $69,372.60 $2.30
D. Base Year: Calendar Year 1999
E. Tenant's Proportionate Share: 34.48% prior to the Must Take
Commencement Date and 60.76% after the
Must Take Commencement Date (based
upon the rentable square footage of the
Premises divided by the rentable square
footage of the Project)
F. Security Deposit: $52,783.50 plus a letter of credit in
accordance with Article 4 below.
G. Permitted Use: General office use.
H. Broker: Grubb & Ellis Company and Westcord
Commercial Real Estate Services
I. Parking Passes: Tenant shall have the right to lease, free
of charge, up to sixty-nine (69) unreserved
parking passes prior to the Must Take
Commencement Date and one-hundred
twenty-one (121) unreserved parking passes
thereafter, and six (6) reserved parking
spaces (in locations designated by
Landlord) in accordance with the provisions
set forth in Article 23 of this Lease.
Additionally, Landlord agrees to designate
up to six (6) parking spaces in the parking
lot serving the Project as "thirty (30)
minute customer only" parking for
customers of all of the tenants of the
Project.
J. First Month's Rent: The first full month's rent of
$29,949.50 shall be due and payable by
Tenant to Landlord upon Tenant's
execution of this Lease.
-2-
ARTICLE 2 - TERM
----------------
The term of this Lease shall commence on the Commencement Date as set
forth in Article 1.A. of the Basic Lease Provisions, and shall end on the
Expiration Date set forth in Article 1.A. of the Basic Lease Provisions. For
purposes of this Lease, the term "Lease Year" shall mean each consecutive twelve
(12) month period during the Lease term, with the first Lease Year commencing on
the Commencement Date; however, (a) if the Commencement Date falls on a day
other than the first day of a calendar month, the first Lease Year shall end on
the last day of the eleventh (11th) month after the Commencement Date and the
second (2nd) and each succeeding Lease Year shall commence on the first day of
the next calendar month, and (b) the last Lease Year shall end on the Expiration
Date. Notwithstanding anything to the contrary contained herein, if the
substantial completion of the Tenant Improvements to be performed by Landlord
pursuant to the Work Letter Agreement attached hereto as Exhibit "D" has not
occurred on or before August 1, 1999 (the "Deadline Date"), Tenant shall have
the right to terminate this Lease by notifying Landlord in writing of such
election at any time prior to said substantial completion. In the event of any
such termination, neither party shall have any further rights, obligations or
liabilities hereunder from and after the effective date of such termination and
Landlord shall promptly return any monies paid by Tenant, including, without
limitation, the anticipated first month's rent and the security deposit to
Tenant. The Deadline Date shall be extended for any delays in the substantial
completion of the Tenant Improvements caused by a Tenant Delay (defined in the
Work Letter Agreement), force majeure event or governmental delay, provided that
in no event shall any force majeure event or governmental delay extend the
Deadline Date by more than ninety (90) days.
ARTICLE 3 - RENTAL
------------------
(a) BASIC RENTAL. Commencing on the Commencement Date and continuing
throughout the balance of the Term, Tenant agrees to pay to Landlord, at
Landlord's office, or to such other person or at such other place as directed
from time to time by written notice to Tenant from Landlord, the initial monthly
and annual sums as set forth in Article 1.C of the Basic Lease Provisions,
payable in advance on the first day of each calendar month, without demand,
setoff or deduction (except as otherwise specifically provided herein), and in
the event the Commencement Date or the Expiration Date of this Lease occurs
other than on the first day or last day of a calendar month, the rent for such
month shall be prorated. Notwithstanding the foregoing, the first full month's
rent shall be paid to Landlord in accordance with Article 1.J. of the Basic
Lease Provisions.
(b) INCREASE IN DIRECT COSTS. The term "Base Year" means the calendar
year set forth in Article 1.D. of the Basic Lease Provisions. If, in any
calendar year during the term of this Lease, the Direct Costs (as hereinafter
defined) paid or incurred by Landlord shall be higher than the Direct Costs for
the Base Year, Tenant shall pay an additional sum for such and each subsequent
calendar year equal to the product of Tenant's Proportionate Share (as defined
in Article 1.E of the Basic Lease Provisions) multiplied by such increased
amount of Direct Costs. In the event either the Premises and/or the Project is
expanded or reduced, then Tenant's Proportionate Share shall be appropriately
adjusted, and as to the calendar year in which such change occurs, Tenant's
Proportionate Share for such year shall be determined on the basis of the number
of days during that particular calendar year that such Tenant's proportionate
share was in effect. In the event this Lease shall terminate on any date other
than the last day of a calendar year, the additional sum payable hereunder by
Tenant during the calendar year in which this Lease terminates shall be prorated
on the basis of the relationship which the number of days which have elapsed
from the commencement of said calendar year to and including said date on which
this Lease terminates bears to three hundred sixty-five (365). Any and all
amounts due and payable by Tenant pursuant to Articles 3(b), (c) and (d) hereof
shall be deemed "Additional Rent", and Landlord shall be entitled to exercise
the same rights and remedies upon default in these payments as Landlord is
entitled to exercise with respect to defaults in Monthly Basic Rental payments.
-3-
(c) DEFINITIONS. As used herein the term "Direct Costs" shall mean the sum
of the following:
(i) "Tax Costs", which shall mean any and all real estate
taxes and other similar charges on real property or improvements, assessments,
water and sewer charges, and all other charges assessed, reassessed or levied
upon the Project and appurtenances thereto and the parking or other facilities
thereof, or the real property thereunder (collectively, "Real Property") or
attributable thereto or on the rents, issues, profits or income received or
derived therefrom which are assessed, reassessed or levied by the United States,
the State of California or any local government authority or agency or any
political subdivision thereof, and shall include Landlord's reasonable legal
fees, costs and disbursements incurred in connection with proceedings for
reduction of Tax Costs or any part thereof (but only up to the actual amount of
savings, amortized on a straight-line basis over the Lease Term); provided,
however, if at any time after the date of this Lease the methods of taxation now
prevailing shall be altered so that in lieu of or as a supplement to or a
substitute for the whole or any part of any Tax Costs, there shall be assessed,
reassessed or levied (a) a tax, assessment, reassessment, levy, imposition or
charge wholly or partially as a net income, capital or franchise levy or
otherwise on the rents, issues, profits or income derived therefrom, or (b) a
tax, assessment, reassessment, levy (including, but not limited to, any
municipal, state or federal levy), imposition or charge measured by or based in
whole or in part upon the Real Property and imposed upon Landlord, or (c) a
license fee measured by the rent payable under this Lease, then all such taxes,
assessments, reassessments or levies or the part thereof so measured or based,
shall be deemed to be included in the term "Direct Costs". In addition, when
calculating Tax Costs for the Base Year, special assessments shall only be
deemed included in Tax Costs for the Base Year to the extent that such special
assessments are included in Tax Costs for the applicable subsequent calendar
year during the Term. There shall be included in Tax Costs with respect to any
calendar year only the amount currently payable on any bonds or assessments,
including interest for such calendar year or the current annual installment for
such calendar year, and such sum shall be paid in the maximum number of
installments allowed. Notwithstanding anything to the contrary contained herein,
Tax Costs for the Base Year and all subsequent calendar years shall be
calculated on a fully-assessed basis.
(ii) PROPOSITION 13 PROTECTION. Despite any other provision of
this Lease, if any sale, refinancing, or change in ownership of the Project is
consummated and, as a result, all or part of the Project is reassessed
("Reassessment") for real estate tax purposes by the appropriate government
authority under the terms of Proposition 13 (as adopted by the voters of the
State of California in the June 1978 election), the terms of this Paragraph
3(c)(ii) shall apply.
I. For purposes of this Paragraph 3(c)(ii), the term "Tax
Increase" shall mean that portion of the Tax Costs, as calculated immediately
following the Reassessment, that is attributable solely to the Reassessment.
Accordingly, a Tax Increase shall not include any portion of the Tax Costs,
as calculated immediately following the Reassessment, that is:
(1) Attributable to the initial assessment of the value
of the Project, the base, shell and core of the Project, or the tenant
improvements located in the Project;
(2) Attributable to assessments pending immediately
before the Reassessment, but not otherwise excludable, that were conducted
during, and included in, that Reassessment or that were otherwise rendered
unnecessary following the Reassessment;
(3) Attributable to the annual inflationary increase
in real estate taxes; or
(4) Part of Tax Costs incurred or considered to be
incurred during the applicable Base Year as determined under this Lease.
-4-
II. Tenant shall not be obligated to pay a portion of the Tax Increase
relating to a Reassessment of the Project in accordance with the following
schedule:
[Download Table]
DATE OF REASSESSMENT EVENT PERCENT OF TAX INCREASE WHICH
-------------------------- TENANT IS PROTECTED AGAINST DUE
TO REASSESSMENT EVENT
-------------------------------
Months 1 - 12 100%
Months 13 - 24 80%
Months 25 - 36 60%
Months 37 - 48 40%
Months 49 - 60 20%
Months 61 - Expiration Date 0%
III. The amount of Tax Costs that Tenant is not obligated to pay or
shall not be obligated to pay during the Term in connection with a particular
Reassessment under the terms of this Paragraph 3(c)(ii) shall be referred to as
the Proposition 13 Protection Amount. If a Reassessment is reasonably
foreseeable by Landlord and the Proposition 13 Protection Amount attributable to
that Reassessment may be reasonably quantified or estimated for each Lease Year
beginning with the Lease Year in which the Reassessment will occur, the terms of
this Paragraph 3(c)(ii) shall apply to each such Reassessment. On notice to
Tenant, Landlord shall have the right to purchase the entire Proposition 13
Protection Amount relating to the applicable Reassessment (Applicable
Reassessment), at any time during the Term, by paying to Tenant an amount equal
to the Proposition 13 Purchase Price, as defined below, as long as the right of
any successor of Landlord to exercise its right of repurchase under this Lease
shall not apply to any Reassessment that results from the event under which that
successor became Landlord under this Lease. As used in this Lease, the term
"Proposition 13 Purchase Price" shall mean the present value of the Proposition
13 Protection Amount remaining during the Term, as of the date of payment of the
Proposition 13 Purchase Price by Landlord. The present value shall be calculated
by:
(1) Using the portion of the Proposition 13 Protection Amount
attributable to each remaining Lease Year (as though the portion of that
Proposition 13 Protection Amount benefited Tenant at the end of each Lease Year)
as the amounts to be discounted; and
(2) Using discount rates for each amount to be discounted
equal to:
(A) The average rates of yield for United States Treasury
Obligations with maturity dates as close as reasonably possible to the end of
each Lease Year during which the portions of the Proposition 13 Protection
Amount would have benefited Tenant, using the rates in effect as of
Landlord's exercise of its right to purchase, as set forth in this Paragraph
3(c)(ii); plus
(B) two percent (2%) per annum.
On payment of the Proposition 13 Purchase Price, subparagraph (II) of this
Paragraph 3(c)(ii) shall not apply to any Taxes attributable to the Applicable
Reassessment. Because Landlord is estimating the Proposition 13 Purchase Price
because a Reassessment has not yet occurred, an adjustment shall be made when a
Reassessment occurs. If Landlord has underestimated the Proposition 13 Purchase
Price, Landlord shall, on notice to Tenant, credit Tenant's Rent next due with
the amount of that underestimation (and Landlord's successor in interest shall
be bound by any such underestimation). If Landlord has overestimated the
Proposition 13 Purchase Price, Landlord shall, on notice to Tenant, increase
Tenant's Rent next due by the amount of the overestimation.
-5-
(iii) "Operating Costs", which shall mean all costs and
expenses incurred by Landlord in connection with the maintenance, operation,
replacement, ownership and repair of the Project, the equipment, the
intrabuilding network cable, adjacent walks, malls and landscaped and common
areas and the parking structure, areas and facilities of the Project,
including, but not limited to, salaries, wages, medical, surgical and general
welfare benefits and pension payments, payroll taxes, fringe benefits,
employment taxes, workers' compensation, uniforms and dry cleaning thereof
for all persons who perform duties on a full-time basis (or, if on a
part-time basis, prorated to reflect the percentage of time actually devoted
to the Project) connected with the operation, maintenance and repair of the
Project, its equipment, the intrabuilding network cable and the adjacent
walks and landscaped areas, including janitorial, gardening, security,
parking, operating engineer, elevator, painting, plumbing, electrical,
carpentry, heating, ventilation, air conditioning, window washing, hired
services, a reasonable allowance for depreciation of the cost of acquiring or
the rental expense of personal property used in the maintenance, operation
and repair of the Project, accountant's fees incurred in the preparation of
rent adjustment statements, legal fees (excluding fees incurred in connection
with negotiation and enforcement of leases), real estate tax consulting fees
(but only up to the actual amount of savings, amortized on a straight-line
basis over the Lease Term), personal property taxes on property used in the
maintenance and operation of the Project, capital expenditures incurred to
effect economies of operation (but only to the extent of the actual amount of
savings, amortized on a straight-line basis over the useful life of such
capital improvement) and capital expenditures required by government
regulations, laws, or ordinances, including, but not limited to the American
with Disabilities Act not in effect as of the date of this Lease (amortized
on a straight-line basis over the useful life of such capital improvement);
the cost of all charges for electricity, gas, water and other utilities
furnished to the Project, including any taxes thereon (except to the extent
that such costs are billed directly to any other tenant of the Project); the
cost of all charges for fire and extended coverage, liability and all other
insurance for the Project carried by Landlord (excluding earthquake coverage,
except to the extent earthquake insurance is carried in the Base Year); the
cost of all building and cleaning supplies and materials; the cost of all
charges for cleaning, maintenance and service contracts and other services
with independent contractors and administration fees (except to the extent
that such costs are billed directly to any other tenant of the Project); a
commercially reasonable property management fee (which fee may be imputed if
Landlord has internalized management or otherwise acts as its own property
manager); and license, permit and inspection fees relating to the Project
(excluding such fees paid in connection with the construction of other
tenant's premises). Notwithstanding the foregoing, the following shall not be
included in the calculation of Direct Costs: all costs associated with the
operation of the business of the entity which constitutes "Landlord" (as
distinguished from the costs of building operations) including, but not
limited to, Landlord's general corporate overhead and general administrative
expenses); costs incurred by Landlord in connection with the correction of
defects in design and construction of the Project; leasing commissions;
attorneys' fees and other costs relating to negotiations and disputes with
tenants and prospective tenants; costs relating to improvements, services,
common areas and other items that exclusively or primarily benefit tenants
other than Tenant (and which are not offered to Tenant); depreciation; costs
resulting from violations by Landlord and/or other tenants of laws
(including, but not limited to, laws relating to the storage and handling of
Hazardous Materials), leases and other contracts; interest, amortization,
fees and charges relating to indebtedness; ground rent; employee and other
costs relating to Landlord concessions; rents and other leasing costs for
capital items (other than (i) capital items which are expressly included in
Operating Costs, and (ii) equipment not affixed to the Project that is used
for janitorial or similar services, but only to the extent savings in
Operating Costs are reasonably anticipated as a result of said expenditure);
losses covered by insurance, to the extent of actual proceeds received;
advertising and promotional costs (other than expenses incurred for the
benefit of existing tenants of the Project generally and unrelated to
leasing); costs relating to the correction of law violations existing prior
to the execution of this Lease; franchise taxes, taxes imposed on (or
measured by) Landlord's income and other non-real estate taxes; costs
resulting from additions to the Project following the execution of this Lease
(except to the extent that there is a reasonably proportional corresponding
increase in the rentable square footage in the Project), costs paid or
required to be paid by other tenants (other than as an Operating Cost
pass-through item); overhead or profits paid to subsidiaries or affiliates of
-6-
Landlord, or to any party as a result of a non-competitive selection process,
for management or other services, supplies or other materials, to the extent
that the costs of such exceed the costs that would have been paid on a
competitive basis; any cost or expense related to the removal, cleaning,
abatement or remediation of Hazardous Materials (as defined below); any costs,
dues or contributions for political, charitable, industry associations or
similar organizations; any acquisition costs for sculptures, paintings or other
objects of fine art or the display of such items; and the cost of any new
categories of services provided subsequent to the Base Year which (I) were not
provided by Landlord during the Base Year as a result of the newly constructed
nature of the Project, and (II) were being provided at comparable buildings
during the Base Year. Operating Costs relating to periods that fall partly
within and partly without any Lease Year and/or the Lease Term shall be
reasonably allocated. In the event, during any calendar year (including the Base
Year), the Project is less than ninety-five percent (95%) occupied at all times,
the Operating Costs shall be adjusted to reflect the Operating Costs of the
Project as though ninety-five percent (95%) were occupied at all times, and the
increase or decrease in the sums owed hereunder shall be based upon such
Operating Costs as so adjusted. Such adjustment shall be made by Landlord by
increasing those costs included in the Operating Costs which according to
industry practice vary based upon the level of occupancy of the Project. Any
warranties in the Base Year and all subsequent calendar years shall be accounted
for as if such service was paid for and provided. Notwithstanding anything to
the contrary contained herein, in no event shall Landlord be permitted to charge
or collect more than the actual Operating Costs incurred in any calendar year.
(d) DETERMINATION OF PAYMENT.
(i) If for any calendar year ending or commencing within the
Term, Tenant's Proportionate Share of Direct Costs for such calendar year
exceeds Tenant's Proportionate Share of Direct Costs for the Base Year, then
Tenant shall pay to Landlord, in the manner set forth in Sections 3(d)(ii) and
(iii), below, and as additional rent, an amount equal to the excess (the
"Excess").
(ii) Landlord shall endeavor to give Tenant a yearly expense
estimate statement (the "Estimate Statement") on or before March 1 of each
calendar year which shall set forth Landlord's reasonable estimate (the
"Estimate") of what the total amount of Direct Costs for the then-current
calendar year shall be and the estimated Excess (the "Estimated Excess") as
calculated by comparing Tenant's Proportionate Share of Direct Costs for such
calendar year, which shall be based upon the Estimate, to Tenant's Proportionate
Share of Direct Costs for the Base Year. The failure of Landlord to timely
furnish the Estimate Statement for any calendar year shall not preclude Landlord
from enforcing its rights to collect any Estimated Excess under this Article 3.
If pursuant to the Estimate Statement an Estimated Excess is calculated for the
then-current calendar year, Tenant shall pay, beginning with its next
installment of Monthly Basic Rental due, a fraction of the Estimated Excess for
the then-current calendar year (reduced by any amounts paid pursuant to the last
sentence of this Section 3(d)(ii)). Such fraction shall have as its numerator
the number of months which have elapsed in such current calendar 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 Basic Rental installments, an amount equal to
one-twelfth (1/12th) of the total Estimated Excess set forth in the previous
Estimate Statement delivered by Landlord to Tenant.
(iii) In addition, Landlord shall endeavor to give to Tenant
on or before the first day of April (but in no event later than the first day of
September) following the end of each calendar year, a statement (the
"Statement") which shall state the Direct Costs incurred or accrued for such
preceding calendar year, and which shall indicate the amount, if any, of the
Excess. Upon receipt of the Statement for each calendar year during the Term, if
amounts paid by Tenant as Estimated Excess are less than the actual Excess as
specified on the Statement, Tenant shall pay, with its next installment of
Monthly Basic Rental due, the full amount of the Excess for such calendar year,
less the amounts, if any, paid during such calendar year as Estimated Excess.
If, however, the Statement indicates that amounts paid by Tenant as Estimated
Excess are greater than the actual Excess as specified on the Statement,
-7-
such overpayment shall be credited against Tenant's next installments of Monthly
Basic Rent. The failure of Landlord to timely furnish the Statement for any
calendar year shall not prejudice Landlord from enforcing its rights under this
Article 3. Even though the Term has expired and Tenant has vacated the Premises,
when the final determination is made of Tenant's Proportionate Share of the
Direct Costs for the calendar year in which this Lease terminates, if an Excess
is present, Tenant shall pay to Landlord within thirty (30) days an amount as
calculated pursuant to the provisions of this Article 3(d), and if Tenant has
overpaid during such calendar year, Landlord shall pay to Tenant within thirty
(30) days the amount of such overpayment. The provisions of this Section
3(d)(iii) shall survive the expiration or earlier termination of the Term.
(iv) Within two hundred seventy (270) days after receipt of a
Statement by Tenant ("Review Period"), if Tenant disputes the amount set forth
in the Statement, Tenant's employees or an independent certified public
accountant (which accountant is a member of a nationally or regionally
recognized accounting firm), designated by Tenant, may, after reasonable notice
to Landlord and at reasonable times, inspect Landlord's records at Landlord's
offices, provided that Tenant is not then in default after expiration of all
applicable cure periods and provided further that Tenant and such accountant or
representative shall, and each of them shall use their commercially reasonable
efforts to cause their respective agents and employees to, maintain all
information contained in Landlord's records in strict confidence.
Notwithstanding the foregoing, Tenant shall only have the right to review
Landlord's records one (1) time during any twelve (12) month period. Tenant's
failure to dispute the amounts set forth in any Statement within the Review
Period shall be deemed to be Tenant's approval of such Statement and Tenant,
thereafter, waives the right or ability to dispute the amounts set forth in such
Statement. If after such inspection, but not later than thirty (30) days after
the Review Period, Tenant notifies Landlord in writing that Tenant still
disputes such amounts, a certification as to the proper amount shall be made by
Tenant's certified public accountant, at Tenant's expense. Landlord shall
cooperate in good faith with Tenant and the accountant to show Tenant and the
accountant the information upon which the certification is to be based. However,
if such certification by Tenant's accountant (or pursuant to the terms set forth
below if Landlord disagrees with Tenant's accountant's determination) proves
that the Direct Costs set forth in the Statement were overstated by more than
three percent (3%) then the cost of Tenant's accountant and the cost of such
certification shall be paid for by Landlord. If such certification ultimately
proves that the Direct Costs set forth in the Statement were overstated by less
than 3%, then the cost of Landlord's accountant and the cost of such
certification shall be paid by Tenant. In the event Landlord disagrees with
Tenant's determination, Landlord shall engage an independent certified public
accountant to make a determination of the proper amount. In the event the
determination made by the accountant selected by Landlord and the amount
described in Tenant's certification are within ten percent (10%) of each other,
then the average of the two figures shall be used; if such figures are greater
than ten percent (10%) of each other, the parties shall mutually select a third
certified public accountant to make a determination (whose determination shall
be binding on both parties). Within thirty (30) days following the final
determination of any disputed amounts, the parties shall make such appropriate
payments or reimbursements, as the case may be, to each other, as are determined
to be owing pursuant to this paragraph.
(v) If the Project is a part of a multi-building development,
those Direct Costs attributable to such development as a whole (and not
attributable solely to any individual building therein) shall be allocated by
Landlord to the Project and to the other buildings within such development on an
equitable basis.
ARTICLE 4 - SECURITY DEPOSIT
----------------------------
Upon execution hereof, Tenant shall deposit with Landlord the sum set
forth in Article 1.F. of the Basic Lease Provisions as security for the full and
faithful performance of every provision of this Lease to be performed by Tenant.
If Tenant breaches any provision of this Lease, including but not limited to the
payment of rent, Landlord may use all or any part of this security deposit for
the payment of any rent or any other sums in default, or to compensate Landlord
for any other loss or damage which Landlord may suffer by reason of Tenant's
-8-
default. If any portion of said 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.
Tenant agrees that Landlord shall not be required to keep the security deposit
in trust, segregate it or keep it separate from Landlord's general funds, but
Landlord may commingle the security deposit with its general funds, and Tenant
shall not be entitled to interest on such deposit. At the expiration of the
Lease term, and provided there exists no default by Tenant hereunder, the
security deposit, or any balance thereof shall be returned to Tenant (or, at
Tenant's written request, to Tenant's assignee), provided that subsequent to the
expiration of this Lease, Landlord may retain from said security deposit (i) an
amount reasonably estimated by Landlord to cover potential Direct Cost
reconciliation payments due with respect to the calendar year in which this
Lease terminates or expires (such amount so retained shall not, in any event,
exceed ten percent (10%) of estimated Excess payments due from Tenant for such
calendar year through the date of expiration or earlier termination of this
Lease and any amounts so retained and not applied to such reconciliation shall
be returned to Tenant within thirty (30) days after Landlord's delivery of the
Statement for such calendar year), (ii) any and all amounts reasonably estimated
by Landlord to cover the anticipated costs to be incurred by Landlord to remove
any signage provided to Tenant under this Lease and to repair any damage caused
by such removal (in which case any excess amount so retained by Landlord shall
be returned to Tenant within thirty (30) days after such removal and repair),
and (iii) any and all amounts permitted by law or this Article 4. Tenant hereby
waives the provisions of Section 1950.7 of the California Civil Code and all
other provisions of law, now or hereafter in effect, 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
specified in this Article 4 above.
In addition to the cash security deposit referenced in Article 1.F. of
the Basic Lease Provisions, concurrently with the execution of this Lease by
Tenant, Tenant shall deliver to Landlord an additional security deposit in the
form of an irrevocable standby letter of credit in favor of Landlord in an
amount equal to $793,960.00 (the "Letter of Credit"). The Letter of Credit shall
be (i) from Silicon Valley Bank, (ii) in the form and content of that attached
hereto as Exhibit "F" (or on a different form which is reasonably acceptable to
Landlord), and (iii) subject to the conditions stated in this paragraph. The
Letter of Credit shall have a term of at least 12 months and be automatically
renewed (or a reasonably satisfactory replacement Letter of Credit from Silicon
Valley Bank or another bank reasonably acceptable to Landlord shall be in place
in strict accordance with the terms hereof) at least thirty (30) days prior to
expiration of each 12 month period for additional periods of 12 months each
until the 30th day following the expiration of the Term. The Letter of Credit
shall be held by Landlord as additional security for the full and faithful
performance by Tenant of the terms, covenants and conditions of this Lease
during the Term. Provided that Tenant is not in default under this Lease, after
all applicable notice and cure periods, the amount of the Letter of Credit shall
be reduced annually on the anniversary of the Commencement Date by the greater
of (i) 14% of the original amount of the Letter of Credit, or (ii) provided that
Tenant evidences to Landlord's reasonable satisfaction (based upon Landlord's
review of Tenants audited financial statements) that Tenant's business
operations from the Premises returned a net profit to Tenant during the
immediately preceding twelve (12) month period, twenty percent (20%) of the
original amount of the Letter of Credit.
In addition to the foregoing, (i) if Tenant becomes a publicly traded
company on a nationally recognized stock exchange with a market capitalization
in excess of $50,000,000 for no less than two (2) consecutive months, or (ii) if
Tenant evidences to Landlord's reasonable satisfaction that Tenant has received
at least $50,000,000 in a private equity investment from a third party investor
(either of the events identified in subparagraphs (i) and (ii) to be referred to
as an "LC Reduction Event"), then the outstanding amount of the Letter of Credit
shall be reduced by 50% on or before the date which is three (3) months after
the LC Reduction Event.
If Tenant breaches any of the terms or conditions of this Lease, beyond
the expiration of all applicable notice and cure periods, or if Tenant has filed
a voluntary petition under the United States Bankruptcy Code, or Tenant's
creditors have filed an involuntary petition under
-9-
the United States Bankruptcy Code, then Landlord may draw upon all or a portion
of the Letter of Credit for the payment of the required amount of any sum in
default, and for the payment of any amount that Landlord may spend or may become
obligated to spend by reason of Tenant's default, and to compensate Landlord for
any other loss or damage that Landlord suffers by reason of Tenant's default to
the extent Landlord is entitled to compensation therefor pursuant to the terms
of this Lease (any amount of the Letter of Credit which is drawn upon by
Landlord in accordance with the provisions hereof, but is not used or applied in
accordance with the terms of this Lease, shall be deemed a part of the Security
Deposit). The use, application or retention of the Letter of Credit, or any
portion thereof, shall not prevent Landlord from exercising any other rights or
remedies provided under this Lease, it being intended that Landlord shall not be
required to proceed against the Security Deposit, including the Letter of
Credit, and shall not operate as a limitation on any recovery to which Landlord
may otherwise be entitled.
ARTICLE 5 - HOLDING OVER
------------------------
Should Tenant, without Landlord's written consent, hold over after
termination of this Lease, Tenant shall become a tenant from month-to-month,
only upon each and all of the terms herein provided as may be applicable to a
month-to-month tenancy, and any such holding over shall not constitute an
extension of this Lease. During such holding over, Tenant shall pay in advance,
monthly rent at (a) one hundred twenty-five percent (125%) for the first month
of the holdover period and (b) one hundred fifty percent (150%) for each month
thereafter, of the rate in effect for the last month of the term of this Lease,
in addition to, and not in lieu of, all other payments required to be made by
Tenant hereunder, including, but not limited to, Tenant's Proportionate Share of
any Excess. Nothing contained in this Article 5 shall be construed as consent by
Landlord to any holding over of the Premises by Tenant, and Landlord expressly
reserves the right to require Tenant to surrender possession of the Premises to
Landlord as provided in this Lease upon the expiration or earlier termination of
the Term. If Tenant fails to surrender the Premises upon the expiration or
termination of this Lease, Tenant agrees to indemnify, defend and hold Landlord
harmless from all costs after 30 days of holding over, loss, expense or
liability, including without limitation, claims made by any succeeding tenant
and real estate brokers claims and attorneys' fees.
ARTICLE 6 - PERSONAL PROPERTY TAXES
-----------------------------------
Tenant shall pay, prior to delinquency, all taxes assessed against or
levied upon trade fixtures, furnishings, equipment and all other personal
property of Tenant located in the Premises. In the event any or all of Tenant's
trade fixtures, furnishings, equipment and other personal property shall be
assessed and taxed with property of Landlord, or if the cost or value of any
leasehold improvements in the Premises exceeds the cost or value of the Tenant
Improvement Allowance (as defined in the Work Letter Agreement attached hereto
as Exhibit "D") and, as a result, real property taxes for the Project are
increased, Tenant shall pay to Landlord its share of such taxes on the later of
(i) thirty (30) days prior to the delinquency date of such taxes, or (ii) twenty
(20) days following Tenant's receipt from Landlord of a statement in writing
setting forth the amount of such taxes applicable to Tenant's property or
improvements above the value of the Tenant Improvement Allowance. Tenant shall
assume and pay to Landlord at the time of paying Basic Rental any excise, sales,
use, rent, occupancy, garage, parking, gross receipts or other taxes (other than
net income taxes) which may be imposed on or on account of letting of the
Premises or the payment of Basic Rental or any other sums due or payable
hereunder, and which Landlord may be required to pay or collect under any law
now in effect or hereafter enacted. Tenant shall pay directly to the party or
entity entitled thereto all business license fees, gross receipts taxes and
similar taxes and impositions which may from time to time be assessed against or
levied upon Tenant, as and when the same become due and before delinquency.
Notwithstanding anything to the contrary contained herein, any sums payable by
Tenant under this Article 6 shall not be included in the computation of "Tax
Costs."
-10-
ARTICLE 7 - USE
---------------
Tenant shall use and occupy the Premises only for the use set forth in
Article 1.G. of the Basic Lease Provisions and shall not use or occupy the
Premises or permit the same to be used or occupied for any other purpose without
the prior written consent of Landlord, which Landlord consent may be given or
withheld in Landlord's reasonable discretion, and Tenant agrees that it will use
the Premises in such a manner so as not to interfere with or infringe upon the
rights of other tenants in the Project. Tenant shall, at its sole cost and
expense, promptly comply with all laws, statutes, ordinances and governmental
regulations or requirements now in force or which may hereafter be in force
relating to or affecting (i) the condition, use or occupancy of the Premises or
the Project excluding structural changes to the Project or the Premises not
related to Tenant's particular use of the Premises, and (ii) improvements
installed or constructed in the Premises by or for the sole benefit of Tenant
(other than the Tenant Improvements described in the Tenant Work Letter attached
hereto as Exhibit "D"). Tenant shall not do or permit to be done anything which
would invalidate or increase the cost of any fire and extended coverage
insurance policy covering the Project and/or the property located therein, and
Tenant shall comply with all rules, orders, regulations and requirements of any
organization which sets out standards, requirements or recommendations commonly
referred to by major fire insurance underwriters. Tenant shall promptly upon
demand reimburse Landlord for any additional premium charges for any such
insurance policy assessed or increased by reason of Tenant's failure to comply
with the provisions of this Article.
ARTICLE 8 - CONDITION OF PREMISES
---------------------------------
Subject to Landlord's construction of the Tenant Improvements as
provided in Exhibit "D" and any latent defects, Tenant hereby agrees that the
Premises shall be taken "as is", "with all faults", "without any representations
or warranties", except for minor punch-list items, and Tenant hereby agrees and
warrants that it has investigated and inspected the condition of the Premises
and the suitability of same for Tenant's purposes. Tenant acknowledges that
neither Landlord nor any agent nor any employee of Landlord has made any
representations or warranty with respect to the Premises or the Project or with
respect to the suitability of either for the conduct of Tenant's business, and
Tenant expressly warrants and represents that Tenant has relied solely on its
own investigation and inspection of the Premises and the Project in its decision
to enter into this Lease and let the Premises in an "as is" condition. The
Premises shall be initially improved as provided in, and subject to, the Tenant
Work Letter attached hereto as Exhibit "D" and made a part hereof. Tenant hereby
waives Sections 1941 and 1942 of the Civil Code of California or any successor
provision of law.
Landlord reserves the right from time to time: (i) to install, use,
maintain, repair, replace and relocate for service to the Premises and/or other
parts of the Project pipes, ducts, conduits, wires, appurtenant fixtures, and
mechanical systems, wherever located in the Premises or the Project, (ii) to
alter, close or relocate any facility in the Premises or the Common Areas or
otherwise conduct any of the above activities for the purpose of complying with
a general plan for fire/life safety for the Project or otherwise, and (iii) to
comply with any federal, state or local law, rule or order with respect thereto
or the regulation thereof not currently in effect. Landlord shall provide Tenant
with commercially reasonable prior notice and shall perform any such work with
the least inconvenience to Tenant as reasonably possible, but in no event shall
Tenant be permitted to withhold or reduce Basic Rental or other charges due
hereunder as a result of same, or otherwise make claim against Landlord for
interruption or interference with Tenant's business and/or operations; provided,
however, in the event such interruption or interference materially and adversely
interferes with the operation of Tenant's business in the Premises for more than
five (5) consecutive business days, then the Basic Rental shall be equitably
abated from and after such fifth (5th) business day during the continuance of
such interruption or interference.
-11-
ARTICLE 9 - REPAIRS AND ALTERATIONS
-----------------------------------
(a) Landlord shall maintain the structural portions of the Project
including the foundation, floor/ceiling slabs, roof, curtain wall, exterior
glass, columns, beams, shafts, stairs, stairwells, elevator cabs and common
areas and shall also maintain and repair the basic mechanical, electrical,
lifesafety, plumbing, sprinkler systems and heating, ventilating and
air-conditioning systems. Except as expressly provided as Landlord's obligation
in this Article 9, Tenant shall keep the Premises in good condition and repair,
reasonable wear and tear and casualty excepted. All damage or injury to the
Premises or the Project not covered by Landlord's insurance (unless such lack of
coverage results from Landlord's failure to maintain the insurance it is
required to maintain under this Lease) resulting from the act or negligence of
Tenant, its employees, agents or visitors, guests, invitees or licensees or by
the use of the Premises shall be promptly repaired by Tenant, at its sole cost
and expense, to the reasonable satisfaction of Landlord; provided, however, that
for damage to the Project as a result of casualty or for any repairs that may
impact the mechanical, electrical, plumbing, heating, ventilation or air
conditioning systems of the Project, Landlord shall have the right (but not the
obligation) to select the contractor and oversee all such repairs. Landlord may
make any repairs which are not promptly made by Tenant after Tenant's receipt of
written notice and the reasonable opportunity of Tenant to commence making said
repair within five (5) business days from receipt of said written notice, (with
supporting documentation), and charge Tenant for the cost thereof, which cost
shall be paid by Tenant within five (5) days from invoice from Landlord. Tenant
shall be responsible for the design and function of all non-standard
improvements of the Premises installed at Tenant's request. Except as otherwise
set forth in Article 9(b) below, Tenant waives all rights to make repairs at the
expense of Landlord, or to deduct the cost thereof from the rent. Tenant shall
make no alterations, changes or additions in or to the Premises (collectively,
"Alterations") without Landlord's prior written consent, and then only by
contractors or mechanics approved by Landlord in writing and upon the approval
by Landlord in writing of fully detailed and dimensioned plans and
specifications pertaining to the Alterations in question, to be prepared and
submitted by Tenant at its sole cost and expense. Notwithstanding the foregoing,
Tenant may make strictly cosmetic changes to the finish work in the Premises,
not including any changes affecting the Project structure, appearance, or
systems and equipment, provided (i) at least ten (10) days prior written notice
of such changes is provided to Landlord, and (ii) the cost of such changes does
not exceed $30,000 in any one instance or $60,000 over any 12-month period.
Tenant shall at its sole cost and expense obtain all necessary approvals and
permits pertaining to any Alterations approved by Landlord. If Landlord, in
approving any Alterations, specifies a commencement date therefor, Tenant shall
not commence any work with respect to such Alterations prior to such date.
Tenant hereby indemnifies, defends and agrees to hold Landlord free and harmless
from all liens and claims of lien, and all other liability, claims and demands
arising out of any work done or material supplied to the Premises by or at the
request of Tenant in connection with any Alterations. If permitted Alterations
are made, they shall be made at Tenant's sole cost and expense and shall be and
become the property of Landlord, except that Landlord may, by written notice to
Tenant, given concurrently with Landlord's initial consent to the proposed
Alterations, require Tenant at Tenant's expense to remove all partitions,
counters, railings and other Alterations installed by Tenant, and to repair any
damages to the Premises caused by such removal. Any and all costs attributable
to or related to the applicable building codes of the city in which the Project
is located (or any other authority having jurisdiction over the Project) arising
from Tenant's plans, specifications, improvements, alterations or otherwise
shall be paid by Tenant at its sole cost and expense. With regard to repairs,
Alterations or any other work arising from or related to this Article 9 which
Landlord performs on Tenant's behalf, Landlord shall be entitled to receive an
administrative/supervision fee of three percent (3%) of the total costs of said
repairs, Alterations or other work, provided that there shall be no such
supervision fee in those instances where Tenant or its agents or
representatives, rather than Landlord, are performing the requisite repair,
Alteration or other work, and such repair, Alteration or other work does not
affect the structure of the Project or any of the mechanical, electrical, HVAC,
plumbing or fire/life/safety systems of the Project. The construction of initial
improvements to the Premises shall be governed by the terms of the Tenant Work
Letter and not the terms of this Article 9.
-12-
(b) TENANT'S RIGHT TO MAKE REPAIRS.
(i) TENANT'S ACTIONS. If Tenant provides notice to Landlord of
an event or circumstance which requires the action of Landlord with respect to
an obligation of Landlord under the terms of this Lease (hereinafter, a
"Required Action"), and Landlord fails to provide such action as required by the
terms of this Lease, then Tenant may proceed to take the required action upon
delivery of an additional fifteen (15) days notice to Landlord specifying that
Tenant is taking such required action, and if such action was required under the
terms of Article 9 or 11 of this Lease to be taken by Landlord, then Tenant
shall be entitled to prompt reimbursement by Landlord of Tenant's reasonable
costs and expenses in taking such action. In the event Tenant takes such action
and such work will affect the systems and equipment, structure of the Project or
exterior appearance of the Project, Tenant shall use only those contractors used
by Landlord in the Project for such work unless such contractors are unwilling
or unable to 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 projects.
(ii) PAYMENT OF COSTS. 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 under Section 9(b)(i), above, 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 the Monthly Basic Rental 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 the Monthly Basic Rental, but as Tenant's sole remedy (except as
set forth in Article 16, below), Tenant may proceed to institute legal
proceedings against Landlord to collect the amount set forth in the subject
invoice. In the event Tenant prevails in such legal proceedings and receives a
judgment against Landlord, then Landlord shall pay such judgment to Tenant
within thirty (30) days of such judgment being entered. If such judgment is not
so paid, then Tenant shall be entitled to deduct from Monthly Basic Rental
payable by Tenant under this Lease in the amount of such judgment together with
interest thereon at the Interest Rate from the date Tenant advanced the funds
until the date of such deduction.
(iii) Notwithstanding the foregoing, if there exists an
emergency such that the Premises or a material portion thereof are rendered
untenantable and Tenant's personnel are forced to vacate the Premises or such
material portion thereof and if Tenant gives the Project's management office
written notice (the "Emergency Notice") of Tenant's intention to take action
with respect thereto (the "Necessary Action") and the Necessary Action is also a
Required Action, Tenant may take the Necessary Action if Landlord does not
commence the Necessary Action prior to the end of the business day which is one
(1) day following the day of Landlord's receipt of the Emergency Notice (the
"Emergency Cure Period") and thereafter use its commercially reasonably efforts
and due diligence to complete the Necessary Action as soon as reasonably
practicable. To the extent Tenant is entitled to recover damages from Landlord
by reason of Landlord's failure timely to commence and/or complete the Necessary
Action, Tenant's damages may include, without limitation, the fully documented,
reasonable, out-of-pocket costs incurred, during the period ending on the
substantial completion of the Necessary Action, in any relocation of Tenant's
personnel previously located in such untenantable space which shall have
occurred, including by way of example only, higher rent, brokers' commissions,
fees of consultants and other reasonable costs of moving to other premises. If
Tenant takes any Necessary Action hereunder, Tenant shall use only those
contractors used by Landlord in the Project for such work unless such
contractors are unwilling or unable to 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 projects.
-13-
ARTICLE 10 - LIENS
------------------
Tenant shall keep the Premises and the Project free from any mechanics'
liens, vendors' liens, or any other liens arising out of any work performed,
materials furnished, or obligations incurred by Tenant, and agrees to defend,
indemnify and hold harmless Landlord from and against any such lien or claim or
action thereon, together with costs of suit and reasonable attorneys' fees
incurred by Landlord in connection with any such claim or action. Before
commencing any work of alteration, addition or improvement to the Premises,
Tenant shall give Landlord at least ten (10) business days' written notice of
the proposed commencement of such work (to afford Landlord an opportunity to
post appropriate notices of non-responsibility). In the event that there shall
be recorded against the Premises or the Project or the Property of which the
Premises is a part any claim or lien arising out of any such work performed,
materials furnished or obligations incurred by Tenant and such claim or lien
shall not be removed or discharged or a bond with a face amount equal to one
hundred fifty percent (150%) of such claim posted within ten (10) business days
of filing, Landlord shall have the right but not the obligation to pay and
discharge said lien without regard to whether such lien shall be lawful or
correct or to require that Tenant deposit with Landlord in cash, lawful money of
the United States, one hundred fifty percent (150%) of the amount of such claim,
which sum may be retained by Landlord until such claim shall have been removed
of record or until judgment shall have been rendered on such claim and such
judgment shall have become final, at which time Landlord shall have the right to
apply such deposit in discharge of the judgment on said claim and any costs,
including attorneys' fees, incurred by Landlord, and shall remit the balance
thereof to Tenant.
ARTICLE 11 - PROJECT SERVICES
-----------------------------
(a) Landlord agrees to furnish to the Premises, at a cost to be
included in Operating Costs, from 8:00 a.m. to 6:00 p.m., Mondays through
Fridays, and 9:00 a.m. to 1:00 p.m. on Saturdays, excepting local and national
holidays, air conditioning and heat, all in such reasonable quantities as in the
judgment of Landlord is reasonably necessary for the comfortable occupancy of
the Premises and consistent with similar quality office buildings in the general
vicinity of the Project. In addition, Landlord shall provide electric current
for normal lighting and normal office machines, elevator service and water on
the same floor as the Premises for lavatory and drinking purposes in such
reasonable quantities as in the judgment of Landlord is reasonably necessary for
general, normal office use. Janitorial and maintenance services shall be
furnished five (5) days per week, after regular business hours, excepting local
and national holidays. Tenant shall comply with all rules and regulations which
Landlord may reasonably establish for the proper functioning and protection of
the common area air conditioning, heating, elevator, electrical intrabuilding
network cable and plumbing systems, provided such rules are consistently applied
to all tenants of the Project. Landlord shall not be liable for, and there shall
be no rent abatement as a result of, any stoppage, reduction or interruption of
any such services caused by governmental rules, regulations or ordinances, riot,
strike, labor disputes, breakdowns, accidents, necessary repairs or other cause,
unless such stoppage, reduction or interruption materially and adversely
interferes with Tenant's use of the Premises and continues for a period in
excess of five (5) consecutive business days. Except as specifically provided in
this Article 11, Tenant agrees to pay for all utilities and other services
utilized by Tenant and additional building services furnished to Tenant not
uniformly furnished to all tenants of the Project at the rate generally charged
by Landlord to tenants of the Project.
(b) Tenant will not, without the prior written consent of Landlord, use
any apparatus or device in the Premises, which will in any way increase the
amount of electricity or water usually furnished or supplied for use of the
Premises as general office space; nor connect any apparatus, machine or device
with water pipes or electric current (except through existing electrical outlets
in the Premises) for the purpose of using electric current or water.
(c) If Tenant shall require electric current in excess of that which
Landlord is obligated to furnish under Article 11(a) above, Tenant shall first
obtain the written consent of Landlord, which Landlord may refuse in its
reasonable discretion, to the use thereof and
-14-
Landlord may cause an electric current meter or submeter to be installed in the
Premises to measure the amount of such excess electric current consumed by
Tenant in the Premises. The cost of any such meter and of installation,
maintenance and repair thereof, shall be paid for by Tenant, and Tenant agrees
to pay to Landlord promptly upon demand therefor by Landlord, for all such
excess electric current consumed by any such use as shown by said meter at the
rates charged for such service by the city in which the Project is located or
the local public utility, as the case may be, furnishing the same, plus any
additional expense incurred by Landlord in keeping account of the electric
current so consumed.
(d) If any lights, machines or equipment (including, but not limited to
computers) are used by Tenant in the Premises which materially affect the
temperature otherwise maintained by the air conditioning system, or generate
substantially more heat in the Premises than would be generated by the building
standard lights and usual office equipment, Landlord shall have the right to
install any machinery and equipment which Landlord reasonably deems necessary to
restore temperature balance, including, but not limited to, modifications to the
standard air conditioning equipment, and the cost thereof, including the cost of
installation and any additional cost of operation and maintenance occasioned
thereby, shall be paid by Tenant to Landlord upon demand by Landlord. Landlord
shall not be liable under any circumstances for loss of or injury to property,
however occurring, through or in connection with, or incidental to, failure to
furnish any of the foregoing.
(e) If Tenant requires heating, ventilation and/or air conditioning
during times other than the times provided in Article 11(a) above in areas other
than Tenant's Network Room or its customer care area (which shall be separately
controlled and paid for by Tenant pursuant to Article 11(d) above), Tenant shall
give Landlord no less than 24 hours notice prior to the time such services are
required (provided, however, that in the event such systems are remotely
controlled via a telephone system or other Tenant accessible system, then no
such notice shall be required) and Landlord shall provide such services as
requested. Tenant shall pay Landlord's standard charge for such after-hours use
(which charge shall not exceed $25.00 per hour during the Term). Without
limiting the generality of the foregoing. Tenant shall be solely responsible for
all utility costs incurred by Landlord in connection with providing HVAC to a
portion of the Premises from the Supplemental HVAC Unit (as defined in the Work
Letter Agreement attached hereto as Exhibit "D").
(f) Landlord may impose a reasonable charge for any utilities or
services (other than electric current and heating, ventilation and/or air
conditioning which shall be governed by Articles 11(c) and (e) above) utilized
by Tenant in excess of the amount or type that is typical for general office
use.
(g) Subject to the terms and conditions of this Lease, Tenant and
Tenant's employees, agents and invitees may access the Premises twenty-four (24)
hours per day, seven (7) days per week, three hundred sixty-five (365) days per
year.
ARTICLE 12 - RIGHTS OF LANDLORD
-------------------------------
Upon not less than twenty-four (24) hours prior notice (except in cases
of emergency and for ordinary scheduled cleaning) Landlord and its agents shall
have the right to enter the Premises at all reasonable times for the purpose of
cleaning the Premises, examining or inspecting the same, serving or posting and
keeping posted thereon notices as provided by law, or which Landlord deems
necessary for the protection of Landlord or the Property, showing the same to
prospective tenants (but only during the last six (6) months of the Term),
lenders or purchasers of the Project, in the case of an emergency, and for
making such alterations, repairs, improvements or additions to the Premises or
to the Project as Landlord may deem reasonably necessary or desirable. If Tenant
shall not be personally present to open and permit an entry into the Premises at
any time when such an entry by Landlord is necessary or permitted hereunder,
Landlord may enter by means of a master key or may enter forcibly, only in the
case of an emergency, without liability to Tenant except for any failure to
exercise due care for Tenant's property, and without affecting this Lease.
-15-
ARTICLE 13 - INDEMNITY; EXEMPTION OF LANDLORD FROM LIABILITY
------------------------------------------------------------
(a) INDEMNITY BY TENANT. Tenant shall indemnify, defend and hold
Landlord harmless from and against any and all claims arising from Tenant's use
of the Premises or the Project or from the conduct of its business or from any
activity, work or thing which may be permitted or suffered by Tenant in or about
the Premises or the Project and shall further indemnify, defend and hold
Landlord harmless from and against any and all claims arising from any breach or
default in the performance of any obligation on Tenant's part to be performed
under this Lease or arising from any negligence of Tenant or any of its agents,
contractors, employees or invitees, patrons, customers or members in or about
the Project and from any and all costs, attorneys' fees, expenses and
liabilities incurred in the defense of any claim or any action or proceeding
brought thereon, including negotiations in connection therewith. Tenant hereby
assumes all risk of damage to property or injury to persons in or about the
Premises from any cause, and Tenant hereby waives all claims in respect thereof
against Landlord, excepting where the damage is caused by the negligence or
willful misconduct of Landlord.
(b) INDEMNITY BY LANDLORD. Landlord shall indemnify, defend and hold
Tenant harmless from and against any and all claims arising from any negligence
of Landlord or any of its agents, contractors, employees or invitees, patrons,
customers or members in or about the Project and from any and all costs,
attorneys' fees, expenses and liabilities incurred in the defense of any claim
or any action or proceeding brought thereon, including negotiations in
connection therewith.
(c) EXEMPTION OF LANDLORD FROM LIABILITY. Landlord shall not be liable
for injury to Tenant's business, or loss of income therefrom, or for damage that
may be sustained by the person, goods, wares, merchandise or property of Tenant,
its employees, invitees, customers, agents, or contractors, or any other person
in, on or about the Premises directly or indirectly caused by or resulting from
fire, steam, electricity, gas, water, or rain which may leak or flow from or
into any part of the Premises, or from the breakage, leakage, obstruction or
other defects of the pipes, sprinklers, wires, appliances, plumbing, air
conditioning, light fixtures, or mechanical or electrical systems or from
intrabuilding network cable, whether such damage or injury results from
conditions arising upon the Premises or upon other portions of the Project or
from other sources or places and regardless of whether the cause of such damage
or injury or the means or repairing the same is inaccessible to Tenant, except
in connection with damage or injury resulting from the negligence or willful
misconduct of Landlord, or its authorized agents. Landlord shall not be liable
to Tenant for any damages arising from any act or neglect of any other tenant of
the Project.
Tenant acknowledges that Landlord's election to provide
mechanical surveillance or to post security personnel in the Project is solely
within Landlord's discretion; Landlord shall have no liability in connection
with the decision whether or not to provide such services, and Tenant hereby
waives all claims based thereon. Landlord shall not be liable for losses due to
theft, vandalism, or like causes.
ARTICLE 14 - INSURANCE
----------------------
(a) TENANT'S INSURANCE. Tenant, shall at all times during the term of
this Lease, and at its own cost and expense, procure and continue in force the
following insurance coverage: (i) Commercial General Liability Insurance with a
combined single limit for bodily injury and property damages of not less than
Two Million Dollars ($2,000,000) per occurrence and Three Million Dollars
($3,000,000) in the annual aggregate, including products liability coverage if
applicable, covering the insuring provisions of this Lease and the performance
of Tenant of the indemnity and exemption of Landlord from liability agreements
set forth in Article 13 hereof; (ii) a policy of standard fire, extended
coverage and special extended coverage insurance (all risks), including a
vandalism and malicious mischief endorsement, sprinkler leakage coverage and
earthquake sprinkler leakage, where sprinklers are provided, in an amount equal
to the full replacement value new without deduction for depreciation of all (A)
Alterations, fixtures and other improvements in the Premises which are the
property of
-16-
Tenant during the term hereof (but specifically excluding the initial Tenant
Improvements), and (B) trade fixtures, furniture, equipment and other personal
property installed by or at the expense of Tenant; and (iii) Workers'
Compensation coverage as required by law. Tenant shall carry and maintain during
the entire Lease term (including any option periods, if applicable), at Tenant's
sole cost and expense, increased amounts of the insurance required to be carried
by Tenant pursuant to this Article 14, and such other reasonable types of
insurance coverage and in such reasonable amounts covering the Premises and
Tenant's operations therein, as may be reasonably required by Landlord, to the
extent such insurance is customarily required by landlords of office buildings
comparable to the Project.
(b) FORM OF POLICIES. The aforementioned minimum limits of policies
and Tenant's procurement and maintenance thereof shall in no event limit the
liability of Tenant hereunder. The Commercial General Liability Insurance policy
shall name Landlord, Landlord's property manager, Landlord's lender(s) and such
other persons or firms as Landlord reasonably specifies from time to time, as
additional insureds with an appropriate endorsement to the policy(s). All such
insurance policies carried by Tenant shall be with companies having a rating of
not less than A-VIII in Best's Insurance Guide. Tenant shall furnish to
Landlord, from the insurance companies, or cause the insurance companies to
furnish, certificates of coverage. Tenant shall have the right to carry
reasonable deductible amounts under all insurance policies required to be
carried by Tenant. No such policy shall be cancelable or subject to reduction of
coverage or other modification or cancellation except after thirty (30) days'
prior written notice to Landlord by the insurer. All such policies shall be
endorsed to agree that Tenant's policy is primary and that any insurance covered
by Landlord is excess and not contributing with any Tenant insurance requirement
hereunder. Tenant shall, at least twenty (20) days prior to the expiration of
such policies, furnish Landlord with renewals or binders. Tenant agrees that if
Tenant does not take out and maintain such insurance or furnish Landlord with
renewals or binders, Landlord may (but shall not be required to) procure said
insurance on Tenant's behalf and charge Tenant the cost thereof, which amount
shall be payable by Tenant upon demand with interest (at the rate set forth in
Section 20(e) below) from the date such sums are extended. Tenant shall have the
right to provide such insurance coverage, pursuant to blanket policies obtained
by Tenant, provided such blanket policies expressly afford coverage to the
Premises and to Tenant as required by this Lease.
(c) LANDLORD'S INSURANCE. Landlord shall, as a cost to be included in
Operating Costs, procure and maintain at all times during the term of this
Lease, a policy or policies of insurance covering loss or damage to the Project
in the amount of the full replacement costs without deduction for depreciation
thereof (exclusive of Tenant's trade fixtures, inventory, personal property and
equipment), providing protection against all perils included within the
classification of fire and extended coverage, vandalism coverage, and malicious
mischief, sprinkler leakage, water damage, and special extended coverage on
buildings. Additionally, Landlord may (but shall not be required to) carry: (i)
bodily injury and property damage liability insurance and/or excess liability
coverage insurance; and (ii) rental income insurance (for not more than twelve
(12) months) at its election or if required by its lender from time to time
during the term hereof, in such amounts and with such limits as Landlord or its
lender may deem appropriate. The costs of such insurance shall be included in
Operating Costs (subject to the gross-up provisions of Article 3 above).
Landlord's policies of insurance shall be reasonably comparable to insurance
being carried by prudent landlords of commercial office properties in the
general area surrounding the Project.
(d) WAIVER OF SUBROGATION. Landlord and Tenant shall each obtain a
waiver of subrogation from its insurer(s) with respect to any policy of
insurance required under Section 14(a) or Section 14(c). If either party shall
fail to obtain a waiver of subrogation as required hereunder, such party shall
indemnify, defend and save the other party harmless from and against any and all
claims, demands, actions, suits, losses, damages, costs, expenses and
liabilities attributable to such failure. Tenant hereby waives any right that
Tenant may have against Landlord and Landlord hereby waives any right that
Landlord may have against Tenant as a result of any loss or damage to the extent
such loss or damage is paid by insurance under such policies.
-17-
(e) COMPLIANCE WITH LAW. Tenant agrees that it will not, at any time,
during the term of this Lease, carry any stock of goods or do anything in or
about the Premises which will in any way tend to increase the insurance rates
upon the Project. Tenant agrees to pay Landlord forthwith upon demand the amount
of any increase in premiums for insurance against loss by fire that may be
charged during the term of this Lease on the amount of insurance to be carried
by Landlord on the Project resulting from the foregoing, or from Tenant doing
any act in or about said Premises which does so increase the insurance rates,
whether or not Landlord shall have consented to such act on the part of Tenant.
If Tenant installs upon the Premises any electrical equipment which constitutes
an overload of electrical lines of the Premises, Tenant shall, at its own cost
and expense in accordance with all other Lease provisions, and subject to the
provisions of Articles 9, 10 and 11 hereof, make whatever changes are necessary
to comply with requirements of the insurance underwriters and any governmental
authority having jurisdiction thereover, but nothing herein contained shall be
deemed to constitute Landlord's consent to such overloading. Tenant shall, at
its own expense, comply with all requirements of the insurance authority having
jurisdiction over the Project necessary for the maintenance of reasonable fire
and extended coverage insurance for the Premises, including, without limitation
thereto, the installation of fire extinguishers or an automatic dry chemical
extinguishing system.
ARTICLE 15 - ASSIGNMENT AND SUBLETTING
--------------------------------------
Tenant shall have no power to, either voluntarily, involuntarily, by
operation of law or otherwise, sell, assign, transfer or hypothecate this Lease,
or sublet the Premises or any part thereof, or permit the Premises or any part
thereof to be used or occupied by anyone other than Tenant or Tenant's employees
without the prior written consent of Landlord which shall not be unreasonably
withheld or delayed. If Tenant is a corporation, unincorporated association,
partnership or limited liability company, the sale, assignment, transfer or
hypothecation of any class of stock or other ownership interest in such
corporation, association, partnership or limited liability company in excess of
fifty percent (50%) in the aggregate shall be deemed an assignment within the
meaning and provisions of this Article 15. Notwithstanding the above, Tenant
shall have the right to assign this Lease or sublet all or a portion of the
Premises to, WITHOUT LANDLORD'S CONSENT, any of the following (each a "Tenant
Affiliate"): (1) any corporation which controls, is controlled by or under
common control with Tenant, (2) any corporation resulting from the merger or
consolidation of Tenant, or (3) any person or entity which acquires all of the
assets of Tenant as a going concern of the business that is being conducted on
the Premises, provided, however, that (i) said Tenant Affiliate assumes in full
the obligations of Tenant under the Lease, and (ii) the net worth of said Tenant
Affiliate is no less than that of Tenant immediately prior to such transfer. The
term "control" or "controlled" as used herein shall mean the ownership, directly
or indirectly, of at least fifty percent (50%) of the voting securities of, or
possession of the right to vote, in the ordinary direction of its affairs, of at
least 50% of the voting interest in, an entity. Tenant may transfer its interest
pursuant to this Lease only upon the following express conditions, which
conditions are agreed by Landlord and Tenant to be reasonable:
(a) That the proposed transferee shall be subject to the prior written
consent of Landlord, which consent will not be unreasonably withheld but,
without limiting the generality of the foregoing, it shall be reasonable for
Landlord to deny such consent if:
(i) The use to be made of the Premises by the proposed
transferee is (a) not generally consistent with the character and nature of all
other tenancies in the Project, or (b) a use which conflicts with any so-called
"exclusive" then in favor of, or for any use which is the same as that stated in
any percentage rent lease to, another tenant of the Project, or (c) a use which
would be prohibited by any other portion of this Lease (including, but not
limited to, any rules and regulations then in effect);
(ii) The financial responsibility of the proposed transferee
is not at least equal to those which were possessed by Tenant as of the date of
execution of this Lease;
-18-
(iii) The proposed transferee is either a governmental agency
or instrumentality thereof; or
(iv) 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 (A) occupies space in the Project at the
time of the request for consent, or (B) is negotiating with Landlord or has
negotiated with Landlord during the six (6) month period immediately preceding
the date of the proposed transfer, to lease space in the Project.
(b) Whether or not Landlord consents to any such transfer, Tenant shall
pay to Landlord Landlord's then standard processing fee and reasonable
attorneys' fees incurred in connection with the proposed transfer up to the
aggregate sum of One Thousand Dollars ($1,000.00);
(c) That the proposed transferee shall execute an agreement pursuant to
which it shall agree to perform faithfully and be bound by all of the terms,
covenants, conditions, provisions and agreements of this Lease applicable to
that portion of the Premises so transferred; and
(d) That an executed duplicate original of said assignment and
assumption agreement or other transfer on a form reasonably approved by
Landlord, shall be delivered to Landlord within five (5) days after the
execution thereof, and that such transfer shall not be binding upon Landlord
until the delivery thereof to Landlord and the execution and delivery of
Landlord's consent thereto. Except for any subleasing, assignment or other
transfer of all of Tenant's interest in this Lease or the Premises (hereinafter
referred to as a "Transfer") to a Tenant Affiliate, it shall be a condition to
Landlord's consent to any Transfer that (i) upon Landlord's consent to any
Transfer, Tenant shall pay and continue to pay fifty percent (50%) of any
"Transfer Premium" (defined below), received by Tenant from the transferee after
payment to Tenant of all costs and expenses paid by Tenant in connection with
said Transfer, including, without limitation, leasing commissions and attorneys'
fees directly relating to the assignment of this Lease; (ii) any sublessee of
part or all of Tenant's interest in the Premises shall agree that in the event
Landlord gives such sublessee notice that Tenant is in default under this Lease,
such sublessee shall thereafter make all sublease or other payments directly to
Landlord, which will be received by Landlord without any liability whether to
honor the sublease or otherwise (except to credit such payments against sums due
under this Lease), and any sublessee shall agree to attorn to Landlord or its
successors and assigns at their request should this Lease be terminated for any
reason, except that in no event shall Landlord or its successors or assigns be
obligated to accept such attornment; (iii) any such Transfer and consent shall
be effected on forms reasonably satisfactory to Landlord and/or its legal
counsel; (iv) Landlord may require that Tenant not then be in default hereunder
in any respect (after applicable notice and cure period); and (v) Tenant or the
proposed subtenant or assignee (collectively, "Transferee") shall agree to pay
Landlord, upon demand, as additional rent, a sum equal to the additional costs,
if any, incurred by Landlord for maintenance and repair as a result of any
change in the nature of occupancy caused by such subletting or assignment.
"Transfer Premium" shall mean all rent, additional rent or other consideration
paid by a Transferee in connection with a Transfer in excess of the rent and
Additional Rent payable by Tenant under this Lease during the term of the
Transfer and if such Transfer is less than all of the Premises, the Transfer
Premium shall be calculated on a rentable square foot basis. "Transfer Premium"
shall also include, but not be limited to, key money, bonus money or other cash
consideration paid by a transferee to Tenant in connection with such Transfer,
and any payment in excess of fair market value for services rendered by Tenant
to the Transferee and any payment in excess of fair market value for assets,
fixtures, inventory, equipment, or furniture transferred by Tenant to the
Transferee in connection with such Transfer. Any sale, assignment,
hypothecation, transfer or subletting of this Lease which is not in compliance
with the provisions of this Article 15 shall be void and shall, at the option of
Landlord, terminate this Lease. In no event shall the consent by Landlord to an
assignment or subletting be construed as relieving Tenant, any assignee, or
sublessee from obtaining the express written consent of Landlord to any further
assignment or subletting, or as releasing Tenant from any
-19-
liability or obligation hereunder whether or not then accrued and Tenant shall
continue to be fully liable therefor. No collection or acceptance of rent by
Landlord from any person other than Tenant shall be deemed a waiver of any
provision of this Article 15 or the acceptance of any assignee or subtenant
hereunder, or a release of Tenant (or of any successor of Tenant or any
subtenant). Notwithstanding anything to the contrary in this Lease, if Tenant or
any proposed Transferee claims that Landlord has unreasonably withheld or
delayed its consent under this Article 15 or otherwise has breached or acted
unreasonably under this Article 15, their sole remedies shall be a declaratory
judgment and an injunction for the relief sought, including an action for
monetary damages, and Tenant hereby waives all other remedies, including,
without limitation, any right at law or equity to terminate this Lease, on its
own behalf and, to the extent permitted under all applicable laws, on behalf of
the proposed Transferee.
Notwithstanding anything to the contrary contained in this
Article 15, Landlord shall have the option by giving written notice to Tenant
within fifteen (15) days after Landlord's receipt of a request for consent to a
proposed Transfer, to terminate this Lease as to the portion of the Premises
which is the subject of the Transfer. If this Lease is so terminated with
respect to less than the entire Premises, the Basic Rental and Tenant's
Proportionate Share shall be prorated based on the number of rentable square
feet retained by Tenant as compared to the total number of rentable square feet
contained in the original Premises, and this Lease as so amended shall continue
thereafter in full force and effect, and upon the request of either party, the
parties shall execute written confirmation of the same. Notwithstanding the
above, Tenant shall have the right to rescind Landlord's notice of termination
by withdrawing Tenant's request for Landlord's consent within three (3) days of
receiving Landlord's notice of termination, and in such event this Lease shall
continue in full force and effect. The provisions of this paragraph SHALL NOT
AFFECT A TRANSFER TO a Tenant Affiliate.
ARTICLE 16 - DAMAGE OR DESTRUCTION
----------------------------------
If the Project is damaged by fire or other insured casualty and the
insurance proceeds have been made available therefor by the holder or holders of
any mortgages or deeds of trust covering the Premises or the Project, the damage
shall be repaired by Landlord to the extent such insurance proceeds are
available therefor and provided such repairs can, in Landlord's reasonable
opinion, be completed within 240 days after the necessity for repairs as a
result of such damage becomes known to Landlord without the payment of overtime
or other premiums. Until such repairs are completed, rent shall be abated in
proportion to the part of the Premises which is unusable by Tenant in the
conduct of its business (but there shall be no abatement of rent by reason of
any portion of the Premises being unusable for a period equal to one (1) day or
less). However, if the damage is due to the negligence or willful misconduct of
Tenant, its employees or agents, there shall be no abatement of rent, unless and
to the extent Landlord receives rental income insurance proceeds. 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
Section 14(a)(ii)(A) above; provided, however, that if the cost of repair of
improvements within the Premises by Landlord exceeds the amount of insurance
proceeds received by Landlord from Tenant's insurance carrier, as so assigned by
Tenant, such excess costs shall be paid by Tenant to Landlord prior to
Landlord's repair of such damage. If repairs cannot, in Landlord's opinion, be
completed within 240 days after the necessity for repairs as a result of such
damage becomes known to Landlord without the payment of overtime or other
premiums, either Landlord or Tenant may elect to terminate this Lease by
notifying the other party in writing of such termination within sixty (60) days
after Landlord notifies Tenant of its determination that such repair cannot be
made within the 240-day period, such notice to include a termination date which
is sixty (60) days after the date of such notice (without affecting Tenant's
rights, if any, to abate rent). If neither Landlord nor Tenant elects to
terminate this Lease pursuant to the preceding sentence, Landlord shall make
such repairs in a reasonable time and in such event this Lease shall continue in
effect and the rent shall be abated, if at all, in the manner provided in this
Article 16. In addition, Landlord may elect to terminate this Lease if the
Project shall be damaged by fire or other casualty or cause, whether or not the
Premises are affected, and the damage is not fully covered, except for
deductible amounts, by Landlord's insurance policies. Finally, if the Premises
or the
-20-
Project is damaged to any substantial extent during the last eighteen (18)
months of the Term, then notwithstanding anything contained in this Article 16
to the contrary, either Tenant or Landlord shall have the option to terminate
this Lease by giving written notice to the other party of the exercise of such
option within sixty (60) days after Landlord learns of the necessity for repairs
as the result of such damage. A total destruction of the Project shall
automatically terminate this Lease. Except as provided in this Article 16, there
shall be no abatement of rent and no liability of Landlord by reason of any
injury to or interference with Tenant's business or property arising from such
damage or destruction or the making of any repairs, alterations or improvements
in or to any portion of the Project or the Premises or in or to fixtures,
appurtenances and equipment therein. Tenant understands that Landlord will not
carry insurance of any kind on Tenant's furniture, furnishings, trade fixtures
or equipment, and that Landlord shall not be obligated to repair any damage
thereto or replace the same. Except for proceeds relating to Tenant's furniture,
furnishings, trade fixtures and equipment, Tenant acknowledges that Tenant shall
have no right to any proceeds of insurance relating to property damage. With
respect to any damage which Landlord is obligated to repair or elects to repair,
Tenant, as a material inducement to Landlord entering into this Lease,
irrevocably waives and releases its rights under the provisions of Sections 1932
and 1933 of the California Civil Code.
ARTICLE 17 - SUBORDINATION
--------------------------
This Lease is subject and subordinate to all ground or underlying
leases, mortgages and deeds of trust of record as of the date of this Lease
which affect the Property or the Project, including all renewals, modifications,
consolidations, replacements and extensions thereof; provided, however, if the
lessor under any such lease or the holder or holders of any such mortgage or
deed of trust shall advise Landlord that they desire or require this Lease to be
prior and superior thereto, upon written request of Landlord to Tenant, Tenant
agrees to promptly execute, acknowledge and deliver any and all documents or
instruments which Landlord or such lessor, holder or holders deem necessary or
desirable for purposes thereof. Landlord shall have the right to cause this
Lease to be and become and remain subject and subordinate to any and all ground
or underlying leases, mortgages or deeds of trust which may hereafter be
executed covering the Premises, the Project or the property or any renewals,
modifications, consolidations, replacements or extensions thereof, for the full
amount of all advances made or to be made thereunder and without regard to the
time or character of such advances, together with interest thereon and subject
to all the terms and provisions thereof; provided, however, that Landlord
obtains from the lender or other party in question a written undertaking in
favor of Tenant to the effect that such lender or other party will not disturb
Tenant's right of possession under this Lease if Tenant is not then or
thereafter in breach of any covenant or provision of this Lease. Tenant agrees,
within twenty (20) days after Landlord's written request therefor, to execute,
acknowledge and deliver upon request any and all documents or instruments
reasonably requested by Landlord or reasonably necessary or proper to assure the
subordination of this Lease to any such mortgages, deed of trust, or leasehold
estates; provided that no such document shall otherwise alter any of the terms
or provisions hereof. Tenant agrees that in the event any proceedings are
brought for the foreclosure of any mortgage or deed of trust or any deed in lieu
thereof, to attorn to the purchaser or any successors thereto upon any such
foreclosure sale or deed in lieu thereof as so requested to do so by such
purchaser and to recognize such purchaser as the lessor under this Lease so long
as such purchaser or successor agrees not to disturb Tenant's right of
possession hereunder except pursuant to the terms of this Lease. Tenant shall,
within ten (10) days after request execute such further instruments or
assurances as such purchaser may reasonably deem necessary to evidence or
confirm such attornment. Concurrently with its delivery to Landlord, Tenant
agrees to provide copies of any notices of Landlord's default under this Lease
to any mortgagee or deed of trust beneficiary whose address has been provided to
Tenant and Tenant shall provide such mortgagee or deed of trust beneficiary the
right to cure any such default on behalf of Landlord within the time periods set
forth in this Lease. 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.
-21-
ARTICLE 18 - EMINENT DOMAIN
---------------------------
If the whole of the Premises or the Project or so much thereof as to
render the balance unusable by Tenant shall be taken under power of eminent
domain, or is sold, transferred or conveyed in lieu thereof, this Lease shall
automatically terminate as of the date of such condemnation, or as of the date
possession is taken by the condemning authority, at either Landlord or Tenant's
option. No award for any partial or entire taking shall be apportioned, and
Tenant hereby assigns to Landlord any award which may be made in such taking or
condemnation, together with any and all rights of Tenant now or hereafter
arising in or to the same or any part thereof; provided, however, that nothing
contained herein shall be deemed to give Landlord any interest in or to require
Tenant to assign to Landlord any award made to Tenant for the taking of personal
property and trade fixtures belonging to Tenant and removable by Tenant at the
expiration of the term hereof as provided hereunder, for relocation costs, for
the interruption of, or damage to, Tenant's business and goodwill, or any other
amount in addition to the foregoing which does not reduce the amount of the
award payable to Landlord. In the event of a partial taking described in this
Article 18, or a sale, transfer or conveyance in lieu thereof which does not
result in a termination of this Lease, the rent shall be apportioned according
to the ratio that the part of the Premises remaining useable by Tenant bears to
the total area of the Premises and Landlord shall restore the Premises as close
as reasonably practicable to its prior condition. Tenant hereby waives any and
all rights it might otherwise have pursuant to Section 1265.130 of the
California Code of Civil Procedure.
ARTICLE 19 - DEFAULT
--------------------
Each of the following acts or omissions of Tenant or of any guarantor
of Tenant's performance hereunder, or occurrences, shall constitute an "Event of
Default":
(a) Failure or refusal to pay Basic Rental, Additional Rent or any
other amount to be paid by Tenant to Landlord hereunder within five (5) calendar
days after written notice that the same is due or payable hereunder; said five
(5) day period shall be in lieu of, and not in addition to, the notice
requirements of Section 1161 of the California Code of Civil Procedure or any
similar or successor law;
(b) Except as set forth in Subparagraphs (a) above and (c) through and
including (g) below, failure to perform or observe any other covenant or
condition of this Lease to be performed or observed within thirty (30) days
following written notice to Tenant of such failure; provided, however, that if
such failure cannot reasonably be cured within said thirty-day period, then so
long as Tenant commences to cure within said thirty-day period and diligently
pursues such cure to completion, then the same shall not be an Event of Default.
Such thirty (30) day notice shall be in lieu of, and not in addition to, any law
required under Section 1161 of the California Code of Civil Procedure or any
similar or successor law;
(c) The taking in execution or by similar process or law (other than
by eminent domain) of the estate hereby created;
(d) The filing by Tenant or any guarantor hereunder in any court
pursuant to any statute of a petition in bankruptcy or insolvency or for
reorganization or arrangement for the appointment of a receiver of all or a
portion of Tenant's property; the filing against Tenant or any guarantor
hereunder of any such petition, or the commencement of a proceeding for the
appointment of a trustee, receiver or liquidator for Tenant, or for any
guarantor hereunder, or of any of the property of either, or a proceeding by any
governmental authority for the dissolution or liquidation of Tenant or any
guarantor hereunder, if such proceeding shall not be dismissed or trusteeship
discontinued within sixty (60) days after commencement of such proceeding or the
appointment of such trustee or receiver; or the making by Tenant or any
guarantor hereunder of an assignment for the benefit of creditors;
(e) Tenant's failure to cause to be released or post a bond over any
mechanics liens filed against the Premises or the Project within twenty (20)
days after the date the same shall have been filed or recorded; or
-22-
(f) Tenant's failure to observe or perform according to the provisions
of Articles 17 or 25 within five (5) business days after written notice from
Landlord.
All defaults by Tenant of any covenant or condition of this Lease shall
be deemed by the parties hereto to be material.
ARTICLE 20 - REMEDIES
---------------------
(a) Upon the occurrence of an Event of Default under this Lease as
provided in Article 19 hereof, Landlord may exercise all of its remedies as may
be permitted by law, including, but not limited to, the remedy provided by
Section 1951.4 of the California Civil Code, and including, without limitation,
terminating this Lease, re-entering the Premises and removing all persons and
property therefrom, which property may be stored by Landlord at a warehouse or
elsewhere at the risk, expense and for the account of Tenant. If Landlord elects
to terminate this Lease, Landlord shall be entitled to recover from Tenant the
aggregate of all amounts permitted by law, including, but not limited to (i) the
worth at the time of the amount of any unpaid rent which had 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, specifically including, but not limited to,
brokerage commissions and advertising expenses incurred, expenses of remodeling
the Premises or any portion thereof for a new tenant, whether for the same or a
different use, and any special concessions made to obtain a new tenant; 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 Article 20(a) 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 Items (i) and (ii), above,
the "worth at the time of award" shall be computed by allowing interest at the
rate set forth in Item (e), below, but in no case greater than the maximum
amount of such interest permitted by law. As used in Item (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%).
(b) Nothing in this Article 20 shall be deemed to affect Landlord's
right to indemnification for liability or liabilities arising prior to the
termination of this Lease for personal injuries or property damage under the
indemnification clause or clauses contained in this Lease.
(c) Notwithstanding anything to the contrary set forth herein,
Landlord's re-entry to perform acts of maintenance or preservation of or in
connection with efforts to relet the Premises or any portion thereof, or the
appointment of a receiver upon Landlord's initiative to protect Landlord's
interest under this Lease shall not terminate Tenant's right to possession of
the Premises or any portion thereof and, until Landlord does elect to terminate
this Lease, this Lease shall continue in full force and effect, and Landlord may
enforce all of Landlord's rights and remedies hereunder including, without
limitation, 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.
(d) All rights, powers and remedies of Landlord hereunder and under any
other agreement now or hereafter in force between Landlord and Tenant shall be
cumulative and not
-23-
alternative and shall be in addition to all rights, powers and remedies given to
Landlord by law, and the exercise of one (1) or more rights or remedies shall
not impair Landlord's right to exercise any other right or remedy.
(e) Any amount due from Tenant to Landlord hereunder which is not paid
when due shall bear interest at the lower of ten percent (10%) per annum, or the
maximum lawful rate of interest from the due date (subject to applicable cure
periods, if any) until paid, unless otherwise specifically provided herein, but
the payment of such interest shall not excuse or cure any default by Tenant
under this Lease. In addition to such interest: (i) if Basic Rental is not paid
within ten (10) days after written notice that the same is due, a late charge
equal to five percent (5%) of the amount overdue or Five Hundred Dollars
($500.00), whichever is greater, shall be assessed and shall accrue for each
calendar month or part thereof until such rental, including the late charge, is
paid in full, which late charge Tenant hereby agrees is a reasonable estimate of
the damages Landlord shall suffer as a result of Tenant's late payment; and (ii)
a charge of Twenty-Five Dollars ($25.00) shall be assessed for any check given
to Landlord by or on behalf of Tenant which is not honored by the drawee
thereof, which damages include Landlord's additional administrative and other
costs associated with such late payment and unsatisfied checks, and the parties
agree that it would be impracticable or extremely difficult to fix Landlord's
actual damage in such event. Such charges for interest and late payments and
unsatisfied checks are separate and cumulative and are in addition to and shall
not diminish or represent a substitute for any or all of Landlord's rights or
remedies under any other provision of this Lease.
ARTICLE 21 - TRANSFER OF LANDLORD'S INTEREST
--------------------------------------------
In the event of any transfer or termination of Landlord's interest in
the Premises or the Project by sale, assignment, transfer, foreclosure, deed in
lieu of foreclosure, or otherwise, whether voluntary or involuntary, Landlord
shall be automatically relieved of any and all obligations and liabilities on
the part of Landlord from and after the date of such transfer or termination,
including furthermore without limitation the obligation of Landlord under
Article 4 above and California Civil Code 1950.7 to return the security deposit,
provided said security deposit is transferred to said transferee. Tenant agrees
to attorn to the transferee upon any such transfer and to recognize such
transferee as the lessor under this Lease so long as such transferee assumes the
obligations of Landlord arising under this Lease from and after the date of such
transfer and Tenant shall, within five (5) days after request, execute such
further instruments or assurances as such transferee may reasonably deem
necessary to evidence or confirm such attornment.
ARTICLE 22 - BROKER
-------------------
In connection with this Lease, Landlord and Tenant each warrants and
represents to the other that it has had dealings only with firm(s) set forth in
Article 1.H. of the Basic Lease Provisions and that it knows of no other person
or entity who is or might be entitled to a commission, finder's fee or other
like payment in connection herewith and Landlord and Tenant each does hereby
indemnify and agree to hold the other party, its agents, members, partners,
representatives, officers, affiliates, shareholders, employees, successors and
assigns harmless from and against any and all loss, liability and expenses which
such other party may incur should such warranty and representation prove
incorrect, inaccurate or false.
ARTICLE 23 - PARKING
--------------------
Tenant shall have the right (but not the obligation) to use, free of
charge, the number of reserved and/or unreserved parking passes set forth in
Article 1(I) of the Basic Lease Provisions, which parking passes shall pertain
to the Project parking facility. Tenant's continued right to use the parking
passes is conditioned upon Tenant abiding by all rules and regulations which are
prescribed from time to time for the orderly operation and use of the parking
facility where the parking passes are located, including any sticker or other
identification system reasonably established by Landlord, Tenant's cooperation
in seeing that Tenant's employees and visitors also comply with such rules and
regulations, and Tenant not
-24-
being in default under this Lease, after applicable notice and cure provisions.
Landlord specifically reserves the right to change the size, configuration,
design, layout and all other aspects of the Project parking facility at any time
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, close-off or restrict access to the Project parking facility for
purposes of permitting or facilitating any such construction, alteration or
improvements; provided that Landlord agrees to use its commercially reasonable
efforts to minimize any interference or disruption to Tenant as a result of any
such change. Landlord may delegate its responsibilities hereunder to a parking
operator or a lessee of the parking facility in which case such parking operator
or lessee shall have all the rights of control attributed hereby to the
Landlord. The parking passes used by Tenant pursuant to this Article 23 are
provided to Tenant solely for use by Tenant's own personnel and such passes may
not be transferred, assigned, subleased or otherwise alienated by Tenant without
Landlord's prior approval (except in connection with assignments and subleases
not requiring Landlord's prior approval).
ARTICLE 24 - WAIVER
-------------------
No waiver by Landlord of any provision of this Lease shall be deemed to
be a waiver of any other provision hereof or of any subsequent breach by Tenant
of the same or any other provision. No provision of this Lease may be waived by
Landlord, except by an instrument in writing executed by Landlord. Landlord's
consent to or approval of any act by Tenant requiring Landlord's consent or
approval shall not be deemed to render unnecessary the obtaining of Landlord's
consent to or approval of any subsequent act of Tenant, whether or not similar
to the act so consented to or approved. No act or thing done by Landlord or
Landlord's agents during the term of this Lease shall be deemed an acceptance of
a surrender of the Premises, and no agreement to accept such surrender shall be
valid unless in writing and signed by Landlord. Any payment by Tenant or receipt
by Landlord of an amount less than the total amount then due hereunder shall be
deemed to be in partial payment only thereof and not a waiver of the balance due
or an accord and satisfaction, notwithstanding any statement or endorsement to
the contrary on any check or any other instrument delivered concurrently
therewith or in reference thereto. Accordingly, Landlord may accept any such
amount and negotiate any such check without prejudice to Landlord's right to
recover all balances due and owing and to pursue its other rights against Tenant
under this Lease, regardless of whether Landlord makes any notation on such
instrument of payment or otherwise notifies Tenant that such acceptance or
negotiation is without prejudice to Landlord's rights.
ARTICLE 25 - ESTOPPEL CERTIFICATE
---------------------------------
Tenant shall, at any time and from time to time, upon not less than
twenty (20) days' prior written notice from Landlord, execute, acknowledge and
deliver to Landlord a statement in writing certifying the following information
(but not limited to the following information in the event further information
is requested by Landlord): (a) 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 modified, is in full force and effect); (b) the
dates to which the rental and other charges are paid in advance, if any; (c) the
amount of Tenant's security deposit, if any; and (d) acknowledging that there
are not, to the best of Tenant's knowledge, any uncured defaults on the part of
Landlord hereunder, and no events or conditions then in existence which, with
the passage of time or notice or both, would constitute a default on the part of
Landlord hereunder, or specifying such defaults, events or conditions, if any
are claimed. It is expressly understood and agreed that any such statement may
be relied upon by any prospective purchaser or encumbrancer of all or any
portion of the Real Property. Tenant's failure to deliver such statement within
such time shall constitute an admission by Tenant that all statements contained
therein are true and correct. Tenant agrees to execute all documents required in
accordance with this Article 25 within twenty (20) days after delivery of said
documents.
-25-
ARTICLE 26 - LIABILITY OF LANDLORD
----------------------------------
Notwithstanding anything in this Lease to the contrary, any remedy of
Tenant for the collection of a judgment (or other judicial process) requiring
the payment of money by Landlord in the event of any default by Landlord
hereunder or any claim, cause of action, obligation, contractual statutory or
otherwise by Tenant against Landlord concerning, arising out of or relating to
any matter relating to this Lease and all of the covenants and conditions or any
obligations, contractual, statutory, or otherwise set forth herein, shall be
limited solely and exclusively to an amount which is equal to the interest of
Landlord in and to the Project. No other property or assets of Landlord, or any
member, officer, director, shareholder, partner, trustee, agent, servant or
employee of Landlord ("Representative") shall be subject to levy, execution or
other enforcement procedure for the satisfaction of Tenant's remedies under or
with respect to this Lease, Landlord's obligations to Tenant, whether
contractual, statutory or otherwise, the relationship of Landlord and Tenant
hereunder, or Tenant's use or occupancy of the Premises. Tenant further
understands that Landlord shall not incur any additional liability, duty or
obligation to Tenant arising from and after the date that Landlord or any of
Landlord's Representatives no longer have any right, title or interest in or to
the Project.
ARTICLE 27 - INABILITY TO PERFORM
---------------------------------
This Lease and the obligations of Landlord and Tenant hereunder shall
not be affected or impaired because Landlord or Tenant, as the case may be, is
unable to fulfill any of its obligations hereunder or is delayed in doing so, if
such inability or delay is caused by reason of any prevention, delay, stoppage
due to strikes, lockouts, acts of God, or any other cause previously, or at such
time, beyond the reasonable control or anticipation of such party (collectively,
a "Force Majeure"), and such party's obligations under this Lease shall be
forgiven and suspended by any such Force Majeure.
ARTICLE 28 - HAZARDOUS WASTE
----------------------------
(a) Tenant shall not cause or permit any Hazardous Material (as defined
in Article 28(d) below) to be brought, kept or used in or about the Project by
Tenant, its agents, employees, contractors, or invitees except for small
quantities of normal office supplies (i.e., liquid paper, toner fluid, . . . )
used in compliance with all Hazardous Materials Laws. Tenant indemnifies
Landlord from and against any breach by Tenant of the obligations stated in the
preceding sentence, and agrees to defend and hold Landlord harmless from and
against any and all claims, judgments, damages, penalties, fines, costs,
liabilities, or losses (including, without limitation, diminution in value of
the Project, damages for the loss or restriction or use of rentable or usable
space or of any amenity of the Project, damages arising from any adverse impact
or marketing of space in the Project, and sums paid in settlement of claims,
attorneys' fees, consultant fees, and expert fees) which arise during or after
the term of this Lease as a result of such breach. This indemnification of
Landlord by Tenant includes, without limitation, costs incurred in connection
with any investigation of site conditions or any cleanup, remedial, removal, or
restoration work required by any federal, state, or local governmental agency or
political subdivision because of Hazardous Material present in the soil or
ground water on or under the Project. Without limiting the foregoing, if the
presence of any Hazardous Material on the Project caused or permitted by Tenant
results in any contamination of the Project and subject to the provisions of
Articles 9, 10 and 11 hereof, Tenant shall promptly take all actions at its sole
expense as are necessary to return the Project to the condition existing prior
to the introduction of any such Hazardous Material and the contractors to be
used by Tenant for such work must be approved by Landlord, which approval shall
not be unreasonably withheld so long as such actions would not potentially have
any material adverse long-term or short-term effect on the Project and so long
as such actions do not materially interfere with the use and enjoyment of the
Project by the other tenants thereof.
(b) Intentionally Omitted
-26-
(c) It shall not be unreasonable for Landlord to withhold its consent
to any proposed transfer if (i) the proposed transferee's anticipated use of the
Premises involves the generation, storage, use, treatment, or disposal of
Hazardous Material (other than as permitted above); (ii) the proposed transferee
has been required by any prior landlord, lender, or governmental authority to
take remedial action in connection with Hazardous Material contaminating a
property if the contamination resulted from such transferee's actions or use of
the property in question; or (iii) the proposed transferee is subject to an
Enforcement Order issued by any governmental authority in connection with the
use, disposal, or storage of a Hazardous Material.
(d) 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 of California or the United States
Government. The term "Hazardous Material" includes, without limitation, any
material or substance which is (i) defined as "Hazardous Waste", "Extremely
Hazardous Waste", or "Restricted Hazardous Waste" under Sections 25115, 25117 or
25122.7, or listed pursuant to Section 25140 of the California Health and Safety
Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law); (ii) defined as a
"Hazardous Substance" under Section 25316 of the California Health and Safety
Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance
Account Act); (iii) defined as a "Hazardous Material", "Hazardous Substance", or
"Hazardous Waste" under Section 25501 of the California Health and Safety Code,
Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and
Inventory); (iv) defined as a "Hazardous Substance" under Section 25281 of the
California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage
of Hazardous Substances); (v) petroleum; (vi) asbestos; (vii) listed under
Article 9 or defined as "Hazardous" or "Extremely Hazardous" pursuant to Article
11 of Title 22 of the California Administrative Code, Division 4, Chapter 20;
(viii) designated as a "Hazardous Substance" pursuant to Section 311 of the
Federal Water Pollution Control Act (33 U.S.C. Section 1317); (ix) defined as a
"Hazardous Waste" pursuant to Section 1004 of the Federal Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, et seq. (42 U.S.C. Section 6903); or
(x) defined as a "Hazardous Substance" pursuant to Section 101 of the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601, et seq. (42 U.S.C. Section 9601).
(e) As used herein, the term "laws" means any applicable federal, state
or local law, ordinance, or regulation relating to any Hazardous Material
affecting the Project, including, without limitation, the laws, ordinances, and
regulations referred to in Article
28 (d) above.
(f) Landlord represents to Tenant that, to the best of Landlord's
actual knowledge (without any independent inquiry or investigation), Landlord
has not received any notice from any governmental authority that the Premises or
the Project are in violation of any laws as of the date of this Lease. Landlord
shall indemnify, defend and hold harmless Tenant, its officers, directors,
employees and agents harmless from and against any and all claims, judgments,
damages, penalties, fines, costs, liabilities or losses and attorneys' fees
arising out of (i) any hazardous materials in, on or about the Project or the
Premises as of the dates of this Lease, and (ii) any Hazardous Materials which
were created, handled, placed, stored, used, transported or disposed of by
Landlord or Landlord's agents, after the dates of this Lease, excluding,
however, any Hazardous Materials whose presence was caused by Tenant or any of
Tenant's agents, employees, representatives or invitees.
ARTICLE 29 - SURRENDER OF PREMISES; REMOVAL OF PROPERTY
-------------------------------------------------------
(a) The voluntary or other surrender of this Lease by Tenant to
Landlord, or a mutual termination hereof, shall not work a merger, and shall at
the option of Landlord, operate as an assignment to it of any or all subleases
or subtenancies affecting the Premises.
-27-
(b) Upon the expiration of the term of this Lease, or upon any earlier
termination of this Lease, Tenant shall quit and surrender possession of the
Premises to Landlord in as good order and condition as the same are now and
hereafter may be improved by Landlord or Tenant, reasonable wear and tear,
casualty and repairs which are Landlord's obligation excepted, and shall,
without expense to Landlord, remove or cause to be removed from the Premises all
debris and rubbish, all furniture, equipment, business and trade fixtures,
free-standing cabinet work, moveable partitioning and other articles of personal
property owned by Tenant or installed or placed by Tenant at its own expense in
the Premises, and all similar articles of any other persons claiming under
Tenant unless Landlord exercises its option to have any subleases or
subtenancies assigned to it, and Tenant shall repair all damage to the Premises
resulting from the installation and removal of such items to be removed.
(c) Whenever Landlord shall re-enter the Premises as provided in
Article 12 hereof, or as otherwise provided in this Lease, any property of
Tenant not removed by Tenant upon the expiration of the term of this Lease (or
within forty-eight (48) hours after a termination by reason of Tenant's
default), as provided in this Lease, shall be considered abandoned, and Landlord
may remove any or all of such items and dispose of the same in any manner
permitted by law or store the same in a public warehouse or elsewhere for the
account and at the expense and risk of Tenant, and if Tenant shall fail to pay
the cost of storing any such property after it has been stored for a period of
ninety (90) days or more, Landlord may sell any or all of such property at
public or private sale, in such manner and at such times and places as Landlord,
in its sole discretion, may deem proper, without notice or to demand upon
Tenant, for the payment of all or any part of such charges or the removal of any
such property, and shall apply the proceeds of such sale as follows: first, to
the cost and expense of such sale, including reasonable attorneys' fees for
services rendered; second, to the payment of the cost of or charges for storing
any such property; third, to the payment of any other sums of money which may
then or thereafter be due to Landlord from Tenant under any of the terms hereof;
and fourth, the balance, if any, to Tenant.
(d) All fixtures, equipment, Alterations and/or appurtenances attached
to or built into the Premises prior to or during the term of the Lease (other
than Tenant's personal property and trade fixtures), whether by Landlord or
Tenant and whether at the expense of Landlord or Tenant, or of both, shall be
and remain part of the Premises and shall not be removed by Tenant at the end of
the term unless otherwise expressly provided for in this Lease or unless such
removal is required by Landlord pursuant to the provisions of Article 9 above.
Such fixtures, equipment, alterations, additions, improvements and/or
appurtenances shall include, but not be limited to all floor coverings, drapes,
paneling, built-in cabinetry, molding, doors, vaults (including vault doors),
plumbing systems, electrical systems, lighting systems, silencing equipment,
communication systems, all fixtures and outlets for the systems mentioned above
and for all telephone, radio, telegraph and television purposes, and any special
flooring or ceiling installations.
ARTICLE 30 - MISCELLANEOUS
--------------------------
(a) SEVERABILITY; ENTIRE AGREEMENT. Any provision of this Lease which
shall prove to be invalid, void, or illegal shall in no way affect, impair or
invalidate any other provision hereof, and any such other provisions shall
remain in full force and effect. This Lease and the exhibits and any Addendum
attached hereto constitute the entire agreement between the parties hereto with
respect to the subject matter hereof, and no prior agreement or understanding
pertaining to any such matter shall be effective for any purpose. No provision
of this Lease may be amended or supplemented except by an agreement in writing
signed by the parties hereto or their successor-in-interest.
-28-
(b) ATTORNEYS' FEES; WAIVER OF JURY TRIAL.
(i) In any action to enforce the terms of this Lease,
including any suit by Landlord for the recovery of rent or possession of the
Premises, the losing party shall pay the successful party a reasonable sum for
attorneys' fees in such suit and such attorneys' fees shall be deemed to have
accrued prior to the commencement of such action and shall be paid whether or
not such action is prosecuted to judgment.
(ii) Should Landlord, without fault on Landlord's part, be
made a party to any litigation instituted by Tenant or by any third party
against Tenant, or by or against any person holding under or using the Premises
by license of Tenant, or for the foreclosure of any lien for labor or material
furnished to or for Tenant or any such other person or otherwise arising out of
or resulting from any act or transaction of Tenant or of any such other person,
Tenant covenants to save and hold Landlord harmless from any judgment rendered
against Landlord or the Premises or any part thereof and from all costs and
expenses, including reasonable attorneys' fees incurred by Landlord in
connection with such litigation.
(iii) When legal services are rendered by an attorney at law
who is an employee of a party, attorneys' fees incurred by that party shall be
deemed to include an amount based upon the number of hours spent by such
employee on such matters multiplied by an appropriate billing rate determined by
taking into consideration the same factors, including but not limited by, the
importance of the matter, seniority, qualifications, time applied, difficulty
and results, as are considered when an attorney not in the employ of a party is
engaged to render such service.
(iv) EACH PARTY HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION SEEKING SPECIFIC PERFORMANCE OF ANY PROVISION OF THIS LEASE, FOR
DAMAGES FOR ANY BREACH UNDER THIS LEASE, OR OTHERWISE FOR ENFORCEMENT OF ANY
RIGHT OR REMEDY HEREUNDER.
(c) TIME OF ESSENCE. Each of Tenant's covenants herein is a condition,
and time is of the essence with respect to the performance of every provision of
this Lease.
(d) HEADINGS; JOINT AND SEVERAL. The article headings contained in
this Lease are for convenience only and do not in any way limit or amplify any
term or provision hereof. The terms "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular, the neuter shall include the
masculine and feminine genders and the obligations herein imposed upon Tenant
shall be joint and several as to each of the persons, firms or corporations of
which Tenant may be composed.
(e) RESERVED AREA. Tenant hereby acknowledges and agrees that the
exterior walls of the Premises and the area between the finished ceiling of the
Premises and the slab of the floor of the Project thereabove have not been
demised hereby, and the use thereof, together with the right to install,
maintain, use, repair and replace pipes, ducts, conduits and wires leading
through, under or above the Premises in locations which will not materially
interfere with Tenant's use of the Premises and serving other parts of the
Project, are hereby excepted and reserved unto Landlord.
(f) NO OPTION. The submission of this Lease by Landlord, its agent or
representative for examination or execution by Tenant does not constitute an
option or offer to Lease the Premises upon the terms and conditions contained
herein or a reservation of the Premises in favor of Tenant, it being intended
hereby that this Lease shall only become effective upon the execution hereof by
Landlord and delivery of a fully executed lease to Tenant.
-29-
(g) USE OF PROJECT NAME; IMPROVEMENTS. Tenant shall not be allowed to
use the name, picture or representation of the Project, or words to that effect,
in connection with any business carried on in the Premises or otherwise (except
at Tenant's address) without the prior written consent of Landlord. In the event
that Landlord undertakes any additional improvements on the Real Property,
including but not limited to new construction or renovation or additions to the
existing improvements, Landlord shall not be liable to Tenant for any noise,
dust, vibration or interference with access to the Premises or disruption in
Tenant's business caused thereby; provided, however, in the event such
disruption or interference materially and adversely interferes with the
operation of Tenant's business in the Premises for more than five (5)
consecutive business days, then from and after such fifth (5th) business day,
the Basic Rental shall be equitably abated during the continuance of such
disruption or interference.
(h) RULES AND REGULATIONS. Tenant shall observe faithfully and comply
strictly with the Rules and Regulations attached to this Lease as Exhibit "B"
and made a part hereof, and such other rules and regulations as Landlord may
from time to time reasonably adopt for the safety, care and cleanliness of the
Project, the facilities thereof, or the preservation of good order therein.
Landlord shall not be liable to Tenant for violation of any such rules and
regulations, or for the breach of any covenant or condition in any Lease by any
other tenant in the Project; provided, however, that Landlord shall enforce the
Rules and Regulations in a non-discriminatory manner. A waiver by Landlord of
any rule or regulation for any other tenant shall not constitute nor be deemed a
waiver of the rules or regulations for this Tenant. Landlord agrees to enforce
said Rules and Regulations in a non-discriminatory manner against all tenants of
the Project.
(i) QUIET POSSESSION. Upon Tenant's paying the Basic Rent, Additional
Rent and other sums provided hereunder and observing and performing all of the
covenants, conditions and provisions on Tenant's part to be observed and
performed hereunder, Tenant shall have quiet possession of the Premises for the
entire term hereof, subject to all of the provisions of this Lease.
(j) RENT. All payments required to be made hereunder to Landlord shall
be deemed to be rent, whether or not described as such.
(k) SUCCESSORS AND ASSIGNS. Subject to the provisions of Article 15
hereof, all of the covenants, conditions and provisions of this Lease shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns.
(l) NOTICES. Any notice required or permitted to be given hereunder
shall be in writing and may be given by personal service evidenced by a signed
receipt or sent by registered or certified mail, return receipt requested,
addressed to Tenant at the Premises or to Landlord at the address of the place
from time to time established for the payment of rent and which shall be
effective upon proof of delivery. Either party may by notice to the other
specify a different address for notice purposes except that, upon Tenant's
taking possession of the Premises, the Premises shall constitute Tenant's
address for notice purposes. A copy of all notices to be given to Landlord
hereunder shall be concurrently transmitted by Tenant to such party hereafter
designated by notice from Landlord to Tenant. Any notices sent by Landlord
regarding or relating to eviction procedures, including without limitation three
day notices, may be sent by regular mail.
(m) PERSISTENT DELINQUENCIES. In the event that Tenant shall be
delinquent by more than fifteen (15) days in the payment of rent on three (3)
separate occasions in any twelve (12) month period, Landlord shall have the
right to collect rent quarterly in advance.
-30-
(n) RIGHT OF LANDLORD TO PERFORM. All covenants and agreements to be
performed by Tenant under any of the terms of this Lease shall be performed by
Tenant at Tenant's sole cost and expense and without any abatement of rent,
except as provided herein. If Tenant shall fail to pay any sum of money, other
than rent, required to be paid by it hereunder or shall fail to perform any
other act on its part to be performed hereunder, and such failure shall continue
beyond any applicable cure period set forth in this Lease, Landlord may, but
shall not be obligated to, without waiving or releasing Tenant from any
obligations of Tenant, make any such payment or perform any such other act on
Tenant's part to be made or performed as is in this Lease provided. All sums so
paid by Landlord and all reasonable incidental costs, together with interest
thereon at the rate of ten percent (10%) per annum from the date of such payment
by Landlord, shall be payable to Landlord on demand, and Tenant covenants to pay
any such sums, and Landlord shall have (in addition to any other right or remedy
of Landlord) the same rights and remedies in the event of the non-payment
thereof by Tenant as in the case of default by Tenant in the payment of the
rent.
(o) ACCESS, CHANGES IN PROJECT, FACILITIES, NAME.
(i) Every part of the Project except the inside surfaces of
all walls, windows and doors bounding the Premises (including exterior building
walls, core corridor walls and doors and any core corridor entrance), and any
space in or adjacent to the Premises used for shafts, stacks, pipes, conduits,
fan rooms, ducts, electric or other utilities, sinks or other building
facilities, and the use thereof, as well as access thereto through the Premises
for the purposes of operation, maintenance, decoration and repair, are reserved
to Landlord.
(ii) Tenant shall permit Landlord to install, use and maintain
pipes, ducts and conduits within the walls, columns and ceilings of the
Premises.
(iii) Landlord reserves the right, without incurring any
liability to Tenant therefor, to make such changes in or to the Project and the
fixtures and equipment thereof, as well as in or to the street entrances, halls,
passages, elevators, stairways and other improvements thereof, as it may deem
reasonably necessary or desirable, provided such changes do not materially and
adversely impair Tenant's ability to conduct its business operations from the
Premises.
(iv) Landlord may adopt any name for the Project, and Landlord
reserves the right to change the name or address of the Project at any time.
(p) SIGNING AUTHORITY. If a party is a corporation, partnership or
limited liability company, each individual executing this Lease on behalf of
said entity represents and warrants that this Lease is binding upon said entity
in accordance with its terms, and that he or she is duly authorized to execute
and deliver this Lease on behalf of said entity in accordance with: (i) if such
party is a corporation, a duly-adopted resolution of the Board of Directors of
said corporation or in accordance with the by-laws of said corporation, (ii) if
such party is a partnership, the terms of the partnership agreement, and (iii)
if such party is a limited liability company, the terms of its operating
agreement. Concurrently with Tenant's execution of this Lease, Tenant shall
provide to Landlord a copy of: (a) if Tenant is a corporation, such resolution
of the Board of Directors authorizing the execution of this Lease on behalf of
such corporation, which copy of resolution shall be duly certified by the
secretary or an assistant secretary of the corporation to be a true copy of a
resolution duly adopted by the Board of Directors of said corporation and shall
be in the form of Exhibit "E" or in some other form reasonably acceptable to
Landlord, (b) if Tenant is a partnership, a copy of the provisions of the
partnership agreement granting the requisite authority to each individual
executing this Lease on behalf of said partnership, and (c) if Tenant is a
limited liability company, a copy of the provisions of its operating agreement
granting the requisite authority to each individual executing this Lease on
behalf of said limited liability company.
(q) INTENTIONALLY OMITTED.
(r) INTENTIONALLY OMITTED
-31-
(s) SURVIVAL OF OBLIGATIONS. Any obligations of Tenant occurring prior
to the expiration or earlier termination of this Lease shall survive such
expiration or earlier termination.
(t) CONFIDENTIALITY. Tenant and Landlord acknowledge that the content
of this Lease and any related documents are confidential information. Each party
shall keep such confidential information strictly confidential and shall not
disclose such confidential information to any person or entity other than its
financial, legal and space planning consultants, any proposed subtenants,
assignees, lenders or purchasers.
(u) GOVERNING LAW. This Lease shall be governed by and construed in
accordance with the laws of the State of California. No conflicts of law rules
of any state or country (including, without limitation, California conflicts of
law rules) shall be applied to result in the application of any substantive or
procedural laws of any state or country other than California. All
controversies, claims, actions or causes of action arising between the parties
hereto and/or their respective successors and assigns shall be brought, heard
and adjudicated by the courts of the State of California, with venue in the
County of Los Angeles. Each of the parties hereto hereby consents to personal
jurisdiction by the courts of the State of California in connection with any
such controversy, claim, action or cause of action, and each of the parties
hereto consents to service of process by any means authorized by California law
and consent to the enforcement of any judgment so obtained in the courts of the
State of California on the same terms and conditions as if such controversy,
claim, action or cause of action had been originally heard and adjudicated to a
final judgment in such courts. Each of the parties hereto further acknowledges
that the laws and courts of California were freely and voluntarily chosen to
govern this Lease and to adjudicate any claims or disputes hereunder.
(v) EXHIBITS AND ADDENDUM. The Exhibits and Addendum, if applicable,
attached hereto are incorporated herein by this reference as if fully set forth
herein.
ARTICLE 31 - OPTION TO EXTEND
-----------------------------
(a) OPTION RIGHT. Landlord hereby grants the Tenant named in this Lease
and to any Tenant Affiliate ("Original Tenant") one (1) option (the "Option") to
extend the Lease term for a period of five (5) years (the "Option Term"), which
Option shall be exercisable only by written notice delivered by Tenant to
Landlord as set forth below. The rights contained in this Article 31 shall be
personal to the Original Tenant and may only be exercised by the Original Tenant
(and not any assignee, sublessee or other transferee of the Original Tenant's
interest in this Lease).
(b) OPTION RENT. The rent payable by Tenant during the Option Term
("Option Rent") shall be equal to the "Market Rent" (defined below) but in no
event shall the Option Rent be less than Tenant is paying under the Lease on the
month immediately preceding the Option Term for Monthly Basic Rental, including
all escalations, any Excess, additional rent and other charges. "Market Rent"
shall mean the applicable Monthly Basic Rental, including all escalations, any
Excess, additional rent and other charges at which tenants, as of the
commencement of the Option Term, are leasing non-sublease, non-encumbered, space
comparable in size, location and quality to the Premises in renewal transactions
for a term comparable to the Option Term, which comparable space is located in
office buildings comparable to the Project in the Thousand Oaks/Westlake Village
office market area, taking into consideration the value of the existing
improvements in the Premises to Tenant, as compared to the value of the existing
improvements in such comparable space, with such value to be based upon the age,
quality and layout of the improvements and the extent to which the same could be
utilized by Tenant with consideration given to the fact that the improvements
existing in the Premises are specifically suitable to Tenant.
-32-
(c) EXERCISE OF OPTIONS. The Option shall be exercised by Tenant only
in the following manner: (i) Tenant shall not be in default on the delivery date
of the Interest Notice and Tenant's Acceptance; (ii) Tenant shall deliver
written notice ("Interest Notice") to Landlord not more than ten (10) months nor
less than eight (8) months prior to the expiration of the Lease Term, stating
that Tenant is interested in exercising the Option, (iii) within fifteen (15)
business days of Landlord's receipt of Tenant's written notice, Landlord shall
deliver notice ("Option Rent Notice") to Tenant setting forth the Option Rent;
and (iv) if Tenant desires to exercise such Option, Tenant shall provide
Landlord written notice within five (5) business days after receipt of the
Option Rent Notice ("Tenant's Acceptance") and upon, and concurrent with such
exercise, Tenant may, at its option, object to the Option Rent contained in the
Option Rent Notice. Tenant's failure to deliver the Interest Notice or Tenant's
Acceptance on or before the dates specified above shall be deemed to constitute
Tenant's election not to exercise the Option. If Tenant timely and properly
exercises its Option, the Lease Term shall be extended for the Option Term upon
all of the terms and conditions set forth in this Lease, except that the rent
for the Option Term shall be as indicated in the Option Rent Notice unless
Tenant, concurrently with Tenant's Acceptance, objects to the Option Rent
contained in the Option Rent Notice, in which case the parties shall follow the
procedure and the Option Rent shall be determined, as set forth in Section 31(d)
below.
(d) DETERMINATION OF MARKET RENT. If Tenant timely and appropriately
objects to the Option Rent in Tenant's Acceptance, Landlord and Tenant shall
attempt to agree upon the Market Rent using their best good-faith efforts. If
Landlord and Tenant fail to reach agreement within twenty-one (21) days
following Tenant's Acceptance ("Outside Agreement Date"), then each party shall
make a separate determination of the Market Rent which shall be submitted to
each other and to arbitration in accordance with the following items (i) through
(vii):
(i) Landlord and Tenant shall each appoint, within ten (10)
days of the Outside Agreement Date, one arbitrator who shall by profession be a
current real estate broker or appraiser of comparable properties in the
immediate vicinity of the Project, and who has been active in such field over
the last five (5) years, and who has not been retained or employed by either
party during the prior twelve (12) months. The determination of the arbitrators
shall be limited solely to the issue of whether Landlord's or Tenant's submitted
Market Rent is the closest to the actual Market Rent as determined by the
arbitrators, taking into account the requirements of item (b), above.
(ii) The two (2) arbitrators so appointed shall within five
(5) business days of the date of the appointment of the last appointed
arbitrator agree upon and appoint a third arbitrator who shall be qualified
under the same criteria set forth hereinabove for qualification of the initial
two (2) arbitrators.
(iii) The three (3) arbitrators shall within fifteen (15) days
of the appointment of the third arbitrator reach a decision as to whether the
parties shall use Landlord's or Tenant's submitted Market Rent, and shall notify
Landlord and Tenant thereof.
(iv) The decision of the majority of the three (3) arbitrators
shall be binding upon Landlord and Tenant.
(v) If either Landlord or Tenant fails to appoint an
arbitrator within ten (10) days after the applicable Outside Agreement Date, the
arbitrator appointed by one of them shall reach a decision, notify Landlord and
Tenant thereof, and such arbitrator's decision shall be binding upon Landlord
and Tenant.
(vi) If the two arbitrators fail to agree upon and appoint a
third arbitrator, or both parties fail to appoint an arbitrator, then the
appointment of the third arbitrator shall be dismissed and the matter to be
decided shall be forthwith submitted to arbitration under the provisions of the
American Arbitration Association, but subject to the instruction set forth in
this item (vi).
-33-
(vii) The cost of arbitration shall be paid by Landlord and
Tenant equally.
ARTICLE 32 - RIGHT OF FIRST OFFER
---------------------------------
(a) Landlord hereby grants to Tenant a right of first offer with
respect to any available space in the balance of the Project (but not in the
office building located at 2535 Townsgate Road, Westlake Village) ("First Offer
Space"). Notwithstanding the foregoing, (i) such first offer right of Tenant
shall commence only following the expiration or earlier termination of (A) any
existing lease pertaining to the First Offer Space, and (B) as to any First
Offer Space which is vacant as of the date of this Lease, the first lease
pertaining to any portion of such First Offer Space entered into by Landlord
after the date of this Lease (collectively, the "Superior Leases"), including
any renewal of such existing or future lease, whether or not such renewal is
pursuant to an express written provision in such lease, and regardless of
whether any such renewal is consummated pursuant to a lease amendment or a new
lease, and (ii) such first offer right shall be subordinate and secondary to all
rights of expansion, first refusal, first offer or similar rights granted to (A)
the tenants of the Superior Leases and (B) any other tenant of the project and
identified on Exhibit "H" attached hereto (the rights described in items (i) and
(ii), above to be known collectively as "Superior Rights"). Tenant's right of
first offer shall be on the terms and conditions set forth in this Article 32.
(i) Procedure for Offer. Landlord shall notify Tenant ("First
Offer Notice") from time to time when Landlord determines that Landlord shall
commence the marketing of any First Offer Space because such space shall become
available for lease to third parties, where no holder of a Superior Right
desires to lease such space. The First Offer Notice shall describe the space so
offered to Tenant and shall set forth Landlord's proposed economic terms and
conditions applicable to Tenant's lease of such space (collectively, the
"Economic Terms"). Notwithstanding the foregoing, Landlord's obligation to
deliver the First Offer Notice shall not apply during the last eight (8) months
of the initial Lease Term unless Tenant has timely delivered Tenant's Acceptance
to Landlord pursuant to Article 31 above.
(ii) Procedure for Acceptance. If Tenant wishes to exercise
Tenant's right of first offer with respect to the space described in the First
Offer Notice, then within five (5) business days after delivery of the First
Offer Notice to Tenant, Tenant shall deliver notice to Landlord of Tenant's
exercise its right of first offer with respect to the entire space described in
the First Offer Notice. If concurrently with Tenant's exercise of the first
offer right, Tenant notifies Landlord that it does not accept the Economic Terms
set forth in the First Offer Notice, Landlord and Tenant shall, for a period of
fifteen (15) days after Tenant's exercise, negotiate in good faith to reach
agreement as to such Economic Terms. If Tenant does not so notify Landlord that
it does not accept the Economic Terms set forth in the First Offer Notice
concurrently with Tenant's exercise of the first offer right, the Economic Terms
shall be as set forth in the First Offer Notice. In addition, if Tenant does not
exercise its right of first offer within the five (5) business day period, or,
if Tenant exercises its first offer right but timely objects to Landlord's
determination of the Economic Terms and if Landlord and Tenant are unable to
reach agreement on such Economic Terms within said fifteen (15) day period, then
Landlord shall be free to lease the space described in the First Offer Notice to
anyone to whom Landlord desires on any terms Landlord desires and Tenant's right
of first offer shall terminate as to the First Offer Space described in the
First Offer Notice. Notwithstanding anything to the contrary contained herein,
Tenant must elect to exercise its right of first offer, if at all, with respect
to all of the space offered by Landlord to Tenant at any particular time, and
Tenant may not elect to lease only a portion thereof.
(iii) Construction of First Offer Space. Except as otherwise
included in the Economic Terms, Tenant shall take the First Offer Space in its
"as-is" condition, and Tenant shall be entitled to construct improvements in the
First Offer Space in accordance with the provisions of Article 9 of this Lease.
-34-
(iv) Lease of First Offer Space. If Tenant timely exercises
Tenant's right to lease the First Offer Space as set forth herein, Landlord and
Tenant shall execute an amendment adding such First Offer Space to this Lease
upon the same non-economic terms and conditions as applicable to the initial
Premises, and the economic terms and conditions as provided in this Article 32.
Tenant shall commence payment of rent for the First Offer Space and the Lease
Term of the First Offer Space shall commence upon the date of delivery of such
space to Tenant. The Lease Term for the First Offer Space shall expire
co-terminously with Tenant's lease of the initial Premises.
(v) No Defaults. The rights contained in this Article 32 shall
be personal to the Original Tenant, and may only be exercised by the Original
Tenant (and not any assignee, sublessee or other transferee of the Original
Tenant's interest in this Lease) if Tenant occupies the entire Premises as of
the date of the First Offer Notice. Tenant shall not have the right to lease
First Offer Space as provided in this Article 32 if, as of the date of the First
Offer Notice, or, at Landlord's option, as of the scheduled date of delivery of
such First Offer Space to Tenant, Tenant is in default under this Lease, after
the expiration of applicable notice and cure periods, or Tenant has previously
been in default under this Lease more than two times.
ARTICLE 33 - MUST TAKE SPACE
----------------------------
Commencing on the Must Take Commencement Date (defined below), Tenant
hereby agrees to add to the Premises the Must Take Space. Tenant's lease of the
Must Take Space shall be on the same terms and conditions as affect the original
Premises throughout the Lease Term, including, without limitation, the same
Basic Rental rate (per rentable square foot) as then applies to the original
Premises (as set forth in Article 1.C. of the Basic Lease Provisions above);
provided, however, that (a) Tenant's Proportionate Share shall be increased to
take into account the additional number of rentable square feet of the Must Take
Space, and (b) except for the performance of the Tenant Improvements, the Must
Take Space shall be leased to Tenant in its then "as is" condition. The term
"Must Take Commencement Date" shall mean the earlier of (i) the date Tenant
first commences to conduct business from at least twenty-five percent (25%) of
the Must Take Space, or (ii) October 1, 1999. The term "Must Take Space" shall
mean the balance of that portion of the Premises which is located on the second
floor (other than the 4,000 rentable square feet referred to herein as Suite
200), which balance contains 13,048 rentable square feet (which square footage
Landlord and Tenant stipulate and agree is true and correct).
ARTICLE 34 - TOP OF BUILDING SIGNAGE
------------------------------------
(i) Subject to the approval of all necessary governmental or
regulatory agencies with jurisdiction over the Project, and provided (a)
Original Tenant directly leases from Landlord and occupies no less than fifty
percent (50%) of the total rentable square footage of the Project, and (b)
Original Tenant is not in default under this Lease, after the expiration of
applicable notice and cure periods, Original Tenant (and not any assignee,
sublessee, or other transferee of the Original Tenant's interest in this Lease)
shall have the right to install one (1) non-exclusive exterior sign at the top
of the Project (the "Top of Building Signage"), the size, location, method of
attachment, design and all other aspects of said signage to be subject to the
approval of Landlord. Original Tenant shall be solely responsible for all costs
incurred in connection with the purchase and initial installation of said Top of
Building Signage. Original Tenant shall furthermore be solely responsible for
all costs associated with maintaining, operating or otherwise repairing said Top
of Building Signage. At the expiration or earlier termination of this Lease, or
in the event the conditions precedent to the grant of said Top of Building
Signage to Original Tenant are no longer satisfied, Original Tenant shall remove
said signage, at its sole expense, and repair any damage to the Project or
otherwise caused by said removal. Tenant's Top of Building signage shall be
subject to the rules and regulations attached hereto as Exhibit "G".
(ii) Provided Tenant is not in default under this Lease,
Tenant, at Tenant's expense, shall have the right to (A) a building standard
number of lines on the directory board in the lobby of the Project, and (B)
building standard suite entrance signage.
-35-
ARTICLE 35 - GENERATOR
----------------------
(a) Subject to obtaining any necessary governmental and regulatory
approvals and the approval of Landlord, in Landlord's sole discretion, as to its
design, location and construction, Tenant shall have the right to install an
emergency power generator at the Project, together with the cabling or wiring
necessary to connect the generator to the Premises (collectively, the
"Generator"). All costs and expenses for the equipment, installation, connection
to and the maintenance, repair and operation of the Generator during the Term
shall be the sole responsibility of Tenant. Tenant shall not be charged any rent
or other fees for the location in which the Generator is placed, provided that
if the Generator is located on one (1) or more parking stalls, the number of
reserved parking stalls otherwise allocated to Tenant pursuant to Article 1.I.
of the Basic Lease Provisions shall be reduced by the number of parking stalls
used to accommodate the Generator. Tenant shall be entitled to install battery
backup systems in the Premises.
(b) Landlord shall have the right from time to time during the Term to
have Tenant relocate the Generator, provided Landlord shall give Tenant prior
notice of the need to relocate the Generator, and shall coordinate such
relocation with Tenant so as not to interfere with or interrupt Tenant's use of
the Generator. The cost of any such relocation shall be borne by Tenant to the
extent such relocation is required by any act or omission by Tenant or as a
result of any law, ordinance, rule, regulation or statute affecting the Project
which was not in effect as of the date of this Lease; otherwise, said relocation
cost shall be borne by Landlord. Landlord may require, in Landlord's sole and
absolute discretion, that the Generator be screened from view by a screen which
shall be constructed by Tenant, at Tenant's cost, in accordance with the
specifications provided to Tenant by Landlord. To the extent Landlord
determines, in its reasonable discretion, that the plans and specifications for
the installation of the Generator need to be reviewed by an outside consultant,
Tenant shall reimburse Landlord for all out-of-pocket costs incurred by Landlord
in connection with such review. Tenant agrees that upon the expiration or
earlier termination of this Lease, Tenant shall remove the Generator, all
related cabling and/or wiring in accordance with all applicable governmental and
regulatory requirements and repair all damage to the Project where the Generator
was installed caused thereby and restore all such items in the area to the
extent reasonably necessary to effect a complete and effective repair to their
condition prior to the installation of the Generator, ordinary wear and tear
excepted.
(c) The installation of the Generator shall be completed in a good and
workmanlike manner and in accordance with all laws, ordinances, rules,
regulations and orders affecting the Project, as well as the requirements set
forth in Article 9 above.
(d) Tenant shall be responsible for obtaining, if required, any
building permits and any licenses or permits required by any governmental agency
having jurisdiction over the Project. Landlord agrees to reasonably assist and
cooperate, at no expense to Landlord, with Tenant to obtain any appropriate
licenses or permits. Notwithstanding anything to the contrary contained herein,
the engineering with respect to the installation of the Generator shall be
coordinated through the Project's designated engineers.
ARTICLE 36 - TERMINATION OPTION
-------------------------------
TERMINATION RIGHT.
(a) Tenant shall have the one-time option (the "Termination Option") to
terminate the entire Lease, but not any portion of the Lease. Such termination
shall be effective at any time after the last day of the month which is
forty-two (42) months after the month in which the Commencement Date falls (the
"Termination Date"), upon the following terms and conditions:
-36-
(i) Tenant gives Landlord written notice (the "Termination
Notice") of Tenant's election to exercise the Termination Option on or before
5:00 p.m. Pacific Standard Time on or before the date which is no less than
seven (7) months prior to the Termination
Date (the "Termination Notice Date");
(ii) There exists no Event of Default under the Lease on the
date of the Termination Notice or on the Termination Date;
(iii) Tenant shall pay to Landlord no later than the date
which is four (4) months prior to the Termination Date an amount equal to the
Termination Fee (defined below). The "Termination Fee" shall mean the sum of (I)
the then total Basic Rental for the five (5) month period immediately following
the Termination Date, plus (II) the unamortized Leasing Costs (defined below) as
of the Termination Date, based upon an amortization period from the Commencement
Date until the Expiration Date, with interest accruing on said unamortized
Leasing Costs at 8% per annum from the date they were paid. The term "Leasing
Costs" shall mean the sum of (A) all costs and expenses incurred by Landlord in
connection with the Tenant Improvements, and (B) the brokerage commissions paid
by Landlord in connection with this Lease. Landlord agrees to provide to Tenant
the amount of the Termination Fee within 5 business days of Tenant's request for
such amount.
(b) In the event Tenant timely and properly exercises the Termination
Option, the term of the Lease shall terminate effective as of the Termination
Date. Basic Rental and all other monetary obligations under the Lease shall be
paid through and apportioned as of the Termination Date, and neither Landlord
nor Tenant shall have any rights, liabilities or obliga tions accruing under the
Lease after the Termination Date, except for such rights and liabilities which,
by the terms of the Lease are obligations of the Tenant or Landlord which
expressly survive the expiration of the Lease. The Termination Option shall
automatically terminate and become null and void upon (a) the failure of Tenant
to timely or properly exercise the Termination Option; or (b) Tenant's right to
possession of the Premises being terminated prior to the exercise of the
Termination Option.
IN WITNESS WHEREOF, the parties have executed this Lease, consisting of
the foregoing provisions and Articles, including all exhibits and other
attachments referenced therein, as of the date first above written.
"TENANT" "LANDLORD"
NETZERO, INC., a California corporation WESTLAKE GARDENS, LLC, a
California limited liability company
By: /s/ RONALD T. BURR By:________________________________
-------------------
Name: Ronald T. Burr Name:___________________________
--------------
Title: CEO Its:____________________________
--------------
By: /s/ ANDREA L. ROSCHKE By:________________________________
----------------------
Name: Andrea L. Roschke Name:___________________________
-----------------
Title: CFO Its:____________________________
-----------------
-37-
FIRST AMENDMENT TO STANDARD OFFICE LEASE
This First Amendment to Standard Office Lease (this "Amendment") is
made and entered into as of this 6th day of May, 1999, by and between ARDEN
REALTY LIMITED PARTNERSHIP, a Maryland limited partnership ("Landlord"), and
NETZERO, INC., a California corporation ("Tenant"), with reference to the
following facts:
RECITALS
A. Landlord's predecessor-in-interest and Tenant entered into that
certain Standard Office Lease dated as of March 6, 1999 (the "Original
Lease") for (i) certain premises (the "Initial Premises") commonly known as
Suite No. 200 (consisting of approximately 4,000 rentable square feet) and
Suite No. 300 (consisting of approximately 13,114 rentable square feet), and
(ii) certain "Must Take Space" (as defined in the Original Lease), both
located in that certain project (the "Project") commonly known as 2555
Townsgate Road, Westlake Village, California, as more particularly described
in the Original Lease (the Initial Premises and Must Take Space are herein
collectively referred to as the "Original Premises").
B. Landlord has succeeded to the interests of Landlord's
predecessor-in-interest under the Original Lease.
C. Landlord and Tenant desire to, among other things, add to
the Original Premises (i) that certain additional space (the "Initial Expansion
Premises") containing approximately 5,467 rentable square feet, and (ii) that
certain additional space containing approximately 13,245 rentable square feet
(the "Second Must Take Space"), containing a total of approximately 18,712
rentable square feet), located on the 1st floor of the Project, as such space is
further identified on Exhibit "A" attached hereto (collectively, the "Expansion
Space").
D. All capitalized terms used herein but not specifically defined in
this Amendment shall have the meanings ascribed to such terms in the Original
Lease. The term "Lease" shall hereinafter refer to the Original Lease, as
amended by this Amendment.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, Landlord and Tenant hereby agree as
follows:
1. EXPANSION PREMISES. Subject to the terms and conditions of this
Amendment, Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the Initial Expansion Premises and, commencing on the Second Must
Take Commencement Date (defined below), the Second Must Take Space. The
square footage of the Expansion Premises set forth in Recital Paragraph C
above is hereby stipulated by Landlord and Tenant to be true and correct.
Except as expressly set forth in this Amendment, from and after the Expansion
Premises Commencement Date (defined below), all references in the Lease to
the term "Premises" shall be deemed to include the Expansion Premises.
2. EXPANSION PREMISES COMMENCEMENT DATE; TERM. The "Expansion
Premises Commencement Date" shall mean the earlier of (i) the date that
Tenant first commences to conduct business in any portion of the Initial
Expansion Premises, or (ii) the date of substantial completion (as defined in
the Tenant Work Letter attached to the Original Lease as Exhibit "D" (the
"Work Letter Agreement")) of the tenant improvements to be constructed by
Landlord in the Initial Expansion Premises pursuant to the Work Letter
Agreement. Upon Tenant's occupancy of each of the Initial Expansion Premises
and the Second Must Take Space, Landlord and Tenant agree to execute and
deliver a Commencement Letter in a form substantially similar to that
attached to the Original Lease as Exhibit "C". The term of Tenant's lease of
the Expansion Premises (the "Expansion Term") shall commence on the Expansion
Premises Commencement Date and shall expire upon the Expiration Date (defined
below).
3. EXPIRATION DATE. That portion of Article 1.A of the Original
Lease entitled "Expiration Date" is hereby deleted in its entirety and
replaced with the following:
"Expiration Date: The date immediately preceding the tenth
(10th) anniversary of the Commencement Date;
provided, however, that if the Commencement Date
is a date other than the first day of a month, the
Expiration Date shall be the last day of the month
which is one hundred twenty (120) months after the
month in which the Commencement Date falls, unless
extended or earlier terminated pursuant to the
Lease."
4. RENT. (a) Effective as of the Expansion Premises Commencement
Date until the Expiration Date, and in addition to its obligations under the
Original Lease with respect to the Original Premises, Tenant's payments of
Monthly Basic Rental with respect to the Expansion Premises only shall be as
follows:
[Download Table]
Monthly Basic Rental per
Lease Months Monthly Basic Rental Rentable Square Foot
------------ -------------------- ------------------------
Period from Expansion $9,567.25 $1.75
Premises Commencement
Date until day immediately
preceding Second Must
Take Commencement
Date
Second Must Take $32,746.00 $1.75
Commencement Date
Month 9 following
Commencement Date
-2-
[Download Table]
Months 10-48 following $39,669.44 $2.12
Commencement Date
Months 49-60 following $41,166.40 $2.20
Commencement Date
Months 61-84 following $43,037.60 $2.30
Commencement Date
(b) Commencing at the end of the 84th month of the Term, Tenant's
payments of Monthly Basic Rental with respect to both the Original Premises
and the Expansion Premises shall be as follows:
[Download Table]
Monthly Basic Rental per
Lease Months Monthly Basic Rental Rentable Square Foot
------------ -------------------- ------------------------
Months 85-120 $117,297.60 $2.40
5. OPERATING EXPENSES. Effective as of the Expansion Premises
Commencement Date, and prior to the Must Take Commencement Date and the
Second Must Take Commencement Date, "Tenant's Proportionate Share" (defined
in Article 1E of the Original Lease) shall equal 45.49%. Effective after the
Second Must Take Commencement Date, and prior to the Must Take Commencement
Date, Tenant's Proportionate Share shall equal 72.17%. Effective after the
Must Take Commencement Date, Tenant's Proportionate Share shall equal 100%.
6. SECURITY DEPOSIT; LETTER OF CREDIT.
(a) Concurrently with the execution of this Amendment, Tenant shall
pay to Landlord a sum equal to $32,746.00 which amount shall be retained by
Landlord as an additional security deposit to be held by Landlord in
accordance with Article 4 of the Original Lease (thereby increasing the total
security deposit to be held by Landlord to $85,529.50).
(b) Concurrently with the execution of this Amendment, Tenant shall
increase the amount of the Letter of Credit (defined in the Original Lease)
by the sum of $595,019.27, so that the total amount of the Letter of Credit
shall equal $1,388,979.27.
7. SECOND MUST TAKE COMMENCEMENT DATE. The "Second Must Take
Commencement Date" shall mean the earlier of (i) the date Tenant first
commences to conduct business from at least 25% of the Second Must Take
Space, or (ii) August 1, 1999.
8. TERMINATION OPTION. (a) In addition to Tenant's Termination Option
contained in the Original Lease with respect to the Original Premises, Tenant
shall have the one-time option (the "Expansion Termination Option") to terminate
the Lease with respect to the
-3-
Expansion Premises only, but not any portion of the Expansion Premises. Such
termination shall be effective at any time after the last day of the month
which is twenty four (24) months after the Termination Date (defined in the
Original Lease) (the "Expansion Termination Date"), upon the following terms
and conditions:
(i) Tenant gives Landlord written notice (the "Expansion Termination
Notice") of Tenant's election to exercise the Expansion Termination Option on
or before 5:00 p.m. Pacific Standard Time on or before the date which is no
less than seven (7) months prior to the Expansion Termination Date (the
"Expansion Termination Notice Date");
(ii) There exists no Event of Default under the Lease on the date of
the Expansion Termination Notice or on the Expansion Termination Date; and
(iii) Tenant shall pay to Landlord no later than the date which is
four (4) months prior to the Expansion Termination Date an amount equal to
the Expansion Termination Fee (defined below). The "Expansion Termination
Fee" shall mean the sum of (I) the then total Basic Rental for the five (5)
month period immediately following the Expansion Termination Date, plus (II)
the unamortized Expansion Leasing Costs (defined below) as of the Expansion
Termination Date, based upon an amortization period from the Expansion
Premises Commencement Date until the Expiration Date, with interest accruing
on said unamortized Expansion Leasing Costs at 8% per annum from the date
they were paid. The term "Expansion Leasing Costs" shall mean the sum of (A)
all costs and expenses incurred by Landlord in connection with the Expansion
Improvements (defined below) for the Expansion Premises, and (B) the
brokerage commissions paid by Landlord in connection with this Amendment.
Landlord agrees to provide to Tenant a statement of the amount of the
Expansion Termination Fee within five (5) business days of Tenant's request
for such amount.
(b) In the event that Tenant timely and properly exercises the
Expansion Termination Option:
(i) the term of the Lease with respect to the Expansion Premises
only shall terminate effective as of the Expansion Termination Date. Basic
Rental and all other monetary obligations under the Lease with respect to the
Expansion Premises only shall be paid through and apportioned as of the
Expansion Termination Date, and neither Landlord nor Tenant shall have any
rights, liabilities or obligations accruing under the Lease after the
Expansion Termination Date, except for such rights and liabilities which, by
the terms of the Lease are obligations of the Tenant or Landlord which
expressly survive the expiration of the Lease; and
(ii) Tenant shall, at its expense, prior to the Expansion
Termination Date, restore the Initial Expansion Premises to the same
condition which existed prior to the date of the Original Lease (i.e., the
condition which existed prior to the date that any work in connection with
the Expansion Improvements was commenced at the Project), and repair any
damage to the Project or Initial Expansion Premises as a result of such
restoration.
-4-
(c) The Expansion Termination Option shall automatically terminate
and become null and void upon (i) the failure of Tenant to timely or properly
exercise the Expansion Termination Option; or (ii) Tenant's right to
possession of the Expansion Premises being terminated prior to the exercise
of the Expansion Termination Option.
(d) Notwithstanding the length of the amortization period set forth
in paragraph 8(a)(iii) above with respect to the Expansion Termination Fee,
Article 36(a)(iii) of the Lease shall be amended to provide that the length
of the amortization period with respect to the "Termination Fee" shall be
seven (7) years, commencing on the Commencement Date and expiring on the
seven (7) year anniversary of the Commencement Date.
9. PARKING. Commencing on the Expansion Premises Commencement Date,
the number of unreserved parking passes which Tenant is entitled to use
within the Project's parking structure shall be increased by sixteen (16)
passes, and after the Second Must Take Commencement Date, the number of
unreserved parking passes shall be increased by an additional fifty-nine (59)
passes [total increase of 75 passes]. The use of such additional passes shall
be subject to the terms of the Original Lease, including without limitation,
Articles 1.I and 23 of the Original Lease.
10. "AS-IS." (a) Except as provided in Section 10(b) below, and
except for any latent defects and minor punch-list items, the Expansion
Premises shall be delivered to Tenant as of the Expansion Premises
Commencement Date in its "as-is, where-is condition", with all faults.
(b) In addition to the Tenant Improvement Allowance under Exhibit
"D" of the Original Lease, Tenant shall be entitled to a one-time tenant
improvement allowance (the "Expansion Allowance") in the amount of
$383,275.00 (based on $25.00 per usable square foot of the Expansion
Premises) for the costs relating to the initial design and construction of
Tenant's improvements which are permanently affixed to the Expansion Premises
(the "Expansion Improvements"). The Expansion Improvements shall include,
without limitation, the installation of (i) the Network Room (defined in
paragraph 12 below) in the Initial Expansion Premises, and (ii) the HVAC Unit
(defined in paragraph 12 below). In no event shall Landlord be obligated to
make disbursements pursuant to this provision in a total amount which exceeds
the Expansion Allowance. Subject to the following exceptions, the Work Letter
Agreement attached to the Original Lease shall apply to the construction of
the Expansion Improvements with full force and effect:
(i) The second sentence of Section 2.1 of the Work Letter
Agreement shall not apply to the construction of the Expansion Improvements;
(ii) The terms "Tenant Improvement Allowance" and "Tenant
Improvements" in the Work Letter Agreement shall be replaced with the terms
"Expansion Allowance" and "Expansion Improvements", respectively (as such
terms are defined above);
-5-
(iii) The reference to $3,996.73 in Section 2.2 of the Work Letter
shall be replaced with "$2,299.65";
(iv) Section 4.1 of the Work Letter shall be modified to provide
that the "Contractor" shall be Silagi Development; and
(v) Landlord shall pay Tenant up to an amount equal to (y) the sum
of the Tenant Improvement Allowance plus the Expansion Allowance
(collectively, the "Total Allowance") less (z) the total amount spent for the
costs relating to the initial design and construction of the Tenant
Improvements and Expansion Improvements (the "FF&E Allowance"). The FF&E
Allowance shall be used to compensate Tenant for Tenant's actual
out-of-pocket costs paid to third-parties for (i) the purchase and
installation of any furniture, fixtures and equipment in the Premises, and
(ii) telephone and data cabling installation and hook-up in the Premises.
Such payment shall be made by Landlord to Tenant within a reasonable period
of time following a written request therefor from Tenant to Landlord,
provided that Tenant has performed all of its obligations under the Lease up
to and including the date of the proposed payment, and provided Tenant has
delivered to Landlord invoices from such third-parties covering items
included in Tenant's request for payment. Any such payment by Landlord
hereunder shall be applied against the Total Allowance. Tenant shall be
entitled to a rental credit in the event that the FF&E Allowance exceeds the
actual out-of-pocket costs paid by Tenant in connection with the items
referenced above.
11. BUILDING SIGNAGE. Subject to the approval of all necessary
governmental or regulatory agencies with jurisdiction over the Project, and
provided (a) Original Tenant directly leases from Landlord and occupies at
least two (2) of the three (3) floors of the Project, and (b) Original Tenant
is not in default under the Lease, after the expiration of applicable notice
and cure periods, Original Tenant (and not any assignee, sublessee, or other
transferee of the Original Tenant's interest in the Lease) shall have the
right to install one (1) sign in the lobby of the Project identifying
Original Tenant (the "Lobby Signage"), the size, location, method of
attachment, design and all other aspects of said signage to be subject to the
approval of Landlord. Original Tenant shall be solely responsible for all
costs incurred in connection with the purchase and installation of said Lobby
Signage. Original Tenant shall furthermore be solely responsible for all
costs associated with maintaining, operating or otherwise repairing said
Lobby Signage. At the expiration or earlier termination of the Lease, or in
the event the conditions precedent to the grant of said Lobby Signage to
Original Tenant are no longer satisfied, Original Tenant shall remove said
signage, at its sole expense, and repair any damage to the Project or
otherwise caused by said removal.
12. PROJECT SERVICES. Landlord hereby acknowledges and agrees that
Tenant, at Tenant's expense, is installing a computer network room ("Network
Room") within the Initial Expansion Premises that will house computers and
other equipment that will demand a greater use of electric current than
normal, and Landlord hereby consents to the placement of such equipment
within the Initial Expansion Premises. All plans and specifications relating
to the Network Room shall be subject to approval by Landlord and the Network
Room shall be
-6-
constructed in accordance with the terms of the Work Letter Agreement, as
modified by paragraph 10 above.
The parties hereby acknowledge and agree that the Network Room will
be separately metered, at Tenant's expense, and that Tenant shall pay the
costs of any electric current consumed therein. The parties also hereby
acknowledge and agree that the Network Room and Tenant's customer care area
will be monitored and cooled by a separate air conditioning and heating
package unit, (the "HVAC Unit"), the operating costs of which shall be
separately metered and paid by Tenant.
13. ORIGINAL LEASE DELETION. Article 32 of the Original Lease is
hereby deleted in its entirety and shall be of no further force and effect.
14. ASSIGNMENT/SUBLETTING. The last paragraph of Article 15 of the
Original Lease is hereby amended to provide that Landlord shall have no right
to terminate the Lease pursuant to said paragraph as a result of any request
by Tenant to sublease all or any portion of the Second Must Take Space for a
term not exceeding the end of the eighteen (18) month period immediately
following the date of this Amendment.
15. ESTOPPEL. Tenant warrants, represents and certifies to Landlord,
to the best of Tenant's actual knowledge, that as of the date of this
Amendment, (a) Landlord is not in default under the Lease, and (b) Tenant
does not have any defenses or offsets to payment of rent and performance of
its obligations under the Lease as and when same becomes due.
16. BROKERS. Tenant and Landlord each represents and warrants to the
other that, other than Grubb & Ellis, it has not dealt with any other broker
with respect to this Amendment. If Tenant or Landlord has dealt with any
other broker, Tenant or Landlord, as applicable, shall be solely responsible
for the payment of any fees due said person or firm and Tenant or Landlord,
as applicable, shall protect, indemnify, hold harmless and defend the other
from any liability in respect thereto.
17. AUTHORITY. Tenant has full power and authority to enter into
this Amendment and the person signing on behalf of Tenant has been fully
authorized to do so by all necessary corporate or partnership action on the
part of Tenant.
18. LEASE IN FULL FORCE. Except for those provisions which are
inconsistent with this Amendment and those terms, covenants and conditions
for which performance has heretofore been completed, all other terms,
covenants and conditions of the Original Lease shall remain in full force and
effect and Tenant hereby ratifies the Original Lease, as amended hereby.
IN WITNESS WHEREOF, this Amendment is executed as of the date first
written above.
"LANDLORD" "TENANT"
-7-
ARDEN REALTY LIMITED NETZERO, INC., a California corporation
PARTNERSHIP, a Maryland limited
partnership
By: /s/ Andrea L. Roschke
By: ARDEN REALTY, INC. Name: Andrea L. Roschke
a Maryland corporation Title: V.P. Acctg./Admin.
Its: Sole General Partner
By: /s/ Stacy Haitsuka
By: /s/ Victor J. Coleman Name:
VICTOR J. COLEMAN Title:_______________________
Its: President and COO
By: /s/ Andrew J. Sobel
ANDREW J. SOBEL
Its: Exec. V.P. and Assistant
Secretary
-8-
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘S-1’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 10/1/99 | | 39 | | | | | None on these Dates |
| | 8/1/99 | | 7 | | 44 |
| Filed on: | | 7/14/99 |
| | 3/6/99 | | 42 |
| List all Filings |
↑Top
Filing Submission 0001047469-99-027445 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
About — Privacy — Redactions — Help —
Fri., Apr. 19, 4:34:02.1am ET 