1
EXHIBIT 10.76
OFFICE LEASE
BETWEEN
XXXXXXX XXXXXX REALTY FUND 1997, A CALIFORNIA LIMITED PARTNERSHIP
AS LANDLORD
AND
THE XXXXXX ENTERTAINMENT COMPANY, A CALIFORNIA CORPORATION
AS TENANT
DATED
SEPTEMBER 22, 1999
2
OFFICE LEASE
BASIC LEASE INFORMATION
Date: September 22, 1999
Landlord: XXXXXXX XXXXXX REALTY FUND 1997,
a California limited partnership
Tenant: THE XXXXXX ENTERTAINMENT COMPANY,
a California corporation
----------------------------------------------------------------------------------------------------------------------------------
SECTION
1.1 Premises: 00000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 000X
Xxx Xxxxxxx, Xxxxxxxxxx 00000
1.4 Rentable Area of Premises: approximately 13,973 square feet
1.4 Usable Area of Premises: approximately 11,849 square feet
2.1 Term: Seven (7) Years and One-Half (1/2) Month
Anticipated Commencement Date: December 15, 1999 (as modified by Section 2.1 and Exhibit B)
Anticipated Expiration: December 31, 2006 (as modified by Section 2.1)
3.1 Fixed Monthly Rent: $27,946.00
3.3 Fixed Monthly Rent Increase 3% per annum, pursuant to Section 3.3
Date of First Increase: January 1, 2001
Frequency of Increase: Annually thereafter
3.7 Security Deposit: $400,000.00 (as modified by Section 3.7)
4.1 Tenant's Share: 3.40 %
4.2 Base Year for Operating Expenses: 2000
6.1 Use of Premises: General business offices for entertainment/media company
16.1 Tenant's Address for Notices:
Before the Commencement Date: The Xxxxxx Entertainment Company
1999 Avenue of the Stars, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
After the Commencement Date: The Xxxxxx Entertainment Company
00000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 000X
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Contact: Xx. Xxx Xxxxxx
Landlord's Address for Notices: Xxxxxxx Xxxxxx Realty Fund 0000
X/x Xxxxxxx, Xxxxxx & Co.
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
20.5 Brokers: Xxxxxxx, Xxxxxx & Company
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000 AND
CRESA Partners, LLC
00000 Xxx Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
21.1 Parking Permits: Forty-two (42) permits for unreserved spaces; however, up to six (6)
of such permits may be converted to permits for reserved spaces
Except as noted hereinbelow, the foregoing Basic Lease Information is hereby
incorporated into and made a part of the Lease. The Section reference in the
left margin of the Basic Lease Information exists solely to indicate where such
reference initially appears in the Lease document. Except as specified
hereinbelow, each such reference shall in the Lease document shall incorporate
the applicable Basic Lease Information. However, in the event of any conflict
between any reference contained in the Basic Lease Information and the specific
information wording of the Lease, the wording of the Lease shall control.
ii
3
OFFICE LEASE
TABLE OF CONTENTS
ARTICLE PAGE
1 Demise of Premises...................................................................................1
2 Commencement Date and Term...........................................................................2
3 Payment of Rent, Late Charge and Security Deposit....................................................3
4 Additional Rent .....................................................................................6
5 Ethics ..............................................................................................8
6 Use of Premises .....................................................................................9
7 Condition Upon Vacating and Removal of Personal Property ............................................9
8 Utilities and Services .............................................................................10
9 Tenant's Indemnification and Limitation on Landlord's Liability.....................................12
10 Compliance with Laws ...............................................................................13
11 Assignment and Subletting ..........................................................................13
12 Maintenance, Repairs, Damage, Destruction, Renovation and/or Alteration.............................16
13 Condemnation .......................................................................................20
14 Mortgage Subordination and Attornment ..............................................................21
15 Estoppel Certificates ..............................................................................21
16 Notices ............................................................................................21
17 Default and Landlord's Option to Cure...............................................................22
18 Damages; Remedies; Re-Entry by Landlord; Etc. ......................................................24
19 Insurance ..........................................................................................25
20 Miscellaneous ......................................................................................27
21 Parking ............................................................................................29
22 Concierge Services..................................................................................30
23 Option............................................................................................. 30
Signatures ..................................................................................................32
Exhibits
--------
A -- Suite Plan
B -- Improvement Construction Agreement
B-1 -- Construction by Tenant During Term
C -- Rules and Regulations
iii
4
OFFICE LEASE
THIS OFFICE LEASE, dated September 22, 1999, is by and between XXXXXXX
XXXXXX REALTY FUND 1997, a California limited partnership ("Landlord"), with an
office at 00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000,
and THE XXXXXX ENTERTAINMENT COMPANY, a California corporation ("Tenant"), with
an office at 0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx
00000.
ARTICLE 1
DEMISE OF PREMISES
SECTION 1.1. DEMISE. Subject to the covenants and agreements contained in this
Lease, Landlord leases to Tenant and Tenant hires from Landlord, Suite Number
550E (the "Premises") on the 5th floor, in the building located at 00000 Xxxx
Xxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (the "Building"). The
configuration of the Premises is highlighted on Exhibit A, attached hereto and
made a part hereof by reference, and Landlord and Tenant acknowledge and agree
that the intent of both parties hereto is that said configuration shall not be
materially altered by construction of the demising walls separating the same
from the balance of the space from which it is being demised.
Tenant acknowledges that it has made its own inspection of and inquiries
regarding the Premises, which are already improved. Therefore, except for the
improvements to be completed pursuant to Exhibit B, attached hereto and made a
part hereof by reference, Tenant accepts the Premises in their "as-is"
condition. Tenant further acknowledges that Landlord has made no representation
or warranty, express or implied, except as are contained in this Lease and its
Exhibits, regarding the condition, suitability or usability of the Premises or
the Building for the purposes intended by Tenant.
The Building, the Building's parking facilities, any outside plaza areas,
land and other improvements surrounding the Building which are designated from
time to time by Landlord as common areas appurtenant to or servicing the
Building, and the land upon which any of the foregoing are situated, are herein
sometimes collectively referred to as the "Real Property."
SECTION 1.2. TENANT'S NON-EXCLUSIVE USE. Subject to the contingencies contained
herein, Tenant is granted the nonexclusive use of the common corridors and
hallways, stairwells, elevators, restrooms, parking facilities, lobbies and
other public or common areas located on the Real Property. However, the manner
in which such public and common areas are maintained and operated shall be at
the sole discretion of Landlord, and Tenant's use thereof shall be subject to
such reasonable and non-discriminatory rules, regulations and restrictions as
Landlord may make from time to time.
SECTION 1.3. LANDLORD'S RESERVATION OF RIGHTS. Landlord specifically reserves to
itself use, control and repair of the structural portions of all perimeter walls
of the Premises, any balconies, terraces or roofs adjacent to the Premises
(including any flagpoles or other installations on said walls, balconies,
terraces or roofs) and any space in and/or adjacent to the Premises used for
shafts, stairways, pipes, conduits, ducts, mail chutes, conveyors, pneumatic
tubes, electric or other utilities, sinks, fan rooms or other Building
facilities, and the use thereof, as well as access thereto through the Premises.
Landlord also specifically reserves to itself the following rights:
A) To designate all sources furnishing sign painting or lettering;
B) To constantly have pass keys to the Premises;
C) To grant to anyone the exclusive right to conduct any particular business
or undertaking in the Building, so long as Landlord's granting of the same
does not prohibit Tenant's use of the Premises for Tenant's Specified Use,
as defined in Article 6;
D) To enter the Premises at any reasonable time with reasonable notice (except
for emergencies) to inspect, repair, alter, improve, update or make
additions to the Premises or the Building;
E) During the last six (6) months of the Term, to exhibit the Premises to
prospective future tenants;
F) Subject to the provisions of Article 12, to, at any time, and from time to
time, whether at Tenant's request or pursuant to governmental requirement,
repair, alter, make additions to, improve, or decorate all or any portion
of the real property, Building or Premises. In connection therewith, and
without limiting the generality of the foregoing rights, Landlord shall
specifically have the right to remove, alter, improve or rebuild all or any
part of the lobby of the Building as the same is presently or shall
hereafter be constituted;
G) Subject to the provisions of Article 12, Landlord reserves the right to
make alterations or additions to or change the location of elements of the
Real Property and any common areas appurtenant thereto; and/or
H) To take such other actions as may reasonably be necessary when the same are
required to preserve, protect or improve the Premises, the Building, or
Landlord's interest therein.
SECTION 1.4. AREA. Landlord and Tenant agree that the Usable Area of the
Premises has been measured according to the June, 1996 standards published by
the Building Owners' and Managers' Association ("BOMA"), and that Landlord is
utilizing a deemed add-on factor of 17.93% to compute the Rentable Area of the
Premises. Rentable Area herein is calculated as 1.1793 times the estimated
Usable Area, regardless of what the actual square footage of the common areas of
the Building may be, and whether or not they are more or less than 17.93% of the
total estimated Usable Area of the Building. The purpose of this calculation is
solely to provide a general basis for comparison and pricing of this space in
relation to other spaces in the market area.
1
5
Landlord and Tenant further agree that even if the Rentable or Usable Area
of the Premises and/or the total Building Area are later determined to be more
or less than the figures stated herein, for all purposes of the Lease, the
figures stated herein shall be conclusively deemed to be the actual Rentable or
Usable Area of the Premises, as the case may be.
SECTION 1.5. QUIET ENJOYMENT. Contingent upon Tenant keeping, observing and
performing all of the covenants, agreements, terms, provisions and conditions of
this Lease on its part to be kept, observed and performed, and subject to the
limitations imposed under Article 14 of this Lease, Tenant shall lawfully and
quietly hold, occupy and enjoy the Premises during the Term.
SECTION 1.6. NO LIGHT, AIR OR VIEW EASEMENT. Any diminution or shutting off of
light, air or view by any structure which is now or may hereafter be erected on
lands adjacent to the Building shall in no way affect this Lease or impose any
liability on Landlord. Noise, dust or vibration or other ordinary incidents to
new construction of improvements on lands adjacent to the Building, whether or
not by Landlord, shall in no way affect this Lease or impose any liability on
Landlord.
SECTION 1.7. RELOCATION. Landlord shall have the right at any time, except
during the last six (6) months, of the Term, and after giving Tenant a minimum
of sixty (60) days prior written notice, to:
A) provide and furnish Tenant with space containing a substantially similar
level of improvements elsewhere in the Building (but only on the sixth (6th)
floor or higher) of approximately the same size and configuration (including
number and size of window offices) as the Premises (the "Substitute
Premises") and
B) relocate Tenant to such space.
Landlord shall pay all reasonable costs and expenses incurred as a result
of such relocation. If Landlord moves Tenant to the Substitute Premises, each
and every term, covenant and condition of this Lease shall remain in full force
and effect and be deemed applicable to the Substitute Premises, as though
Landlord and Tenant had entered into an express written amendment of this Lease
with respect thereto, except that if the approximate Rentable square footage of
the Substitute Premises is less than that of the Premises, the Fixed Monthly
Rent and Tenant's Proportionate Share of Operating Expense increases shall be
appropriately reduced.
If Tenant refuses to permit Landlord to relocate Tenant as specified above,
Landlord shall have the right to terminate this Lease effective ninety (90) days
from the date Landlord provided Tenant with the original notification of intent
to relocate.
ARTICLE 2
COMMENCEMENT DATE AND TERM
SECTION 2.1. COMMENCEMENT DATE AND TERM. This Lease shall commence five (5) days
after the date Landlord substantially completes the Improvements contemplated
under Exhibit B (the "Commencement Date"), and shall end, unless sooner
terminated as otherwise provided herein, at midnight on the last calendar day of
the calendar month which occurs seven (7) years and one (1) month (the "Term")
after the Commencement Date (the "Termination Date"). The anticipated
Commencement Date is December 15, 1999. Landlord and Tenant shall promptly
execute an amendment to this Lease (the "First Amendment"), confirming the
finalized Commencement Date and Term as soon as they are ascertained.
For purposes of establishing the Commencement Date, substantial completion
shall be defined as that point in the construction process when all of the
structural, mechanical, plumbing and electrical work specified herein has been
performed; the paint, carpet, hard flooring materials, base moldings, and
millwork, if any, have been installed, and a majority of the other finish work
specified in Tenant's plans has been completed in such a manner that Tenant
could, if it took possession of the Premises, enjoy beneficial occupancy
thereof, and further provided that Tenant is not prevented from lawfully taking
possession of the Premises due to any failure by Landlord to obtain a required
governmental permit.
Tenant's taking possession of the Premises (other than for installation of
Tenant's equipment and trade fixtures as hereinafter provided) and/or commencing
Tenant's normal business operations in the Premises shall be deemed conclusive
evidence that, as of the Commencement Date:
A) Landlord has substantially completed the Tenant Improvements contemplated
hereunder, except for any minor punchlist items to be completed; and
B) the Premises are in good order and repair.
Provided that Tenant does not delay Landlord's completion of the
Improvements that Landlord is required to complete, Tenant may take possession
of the Premises up to two (2) calendar weeks prior to the anticipated
Commencement Date, solely for the purpose of installing Tenant's furniture,
fixtures and equipment, computer and telephone cabling. Said early possession
shall be subject to Tenant complying with all of the provisions and covenants
contained herein, except that Tenant shall not be obligated to pay Fixed Monthly
Rent or Additional Rent until the Commencement Date. If Tenant's early
possession does so delay completion of the Improvements, then from the date of
notice by Landlord to Tenant of such delay until the cessation by Tenant of the
action causing the delay, such delay shall be chargeable to Tenant by:
C) reducing the Allowance by an amount equal to the per-diem Fixed Monthly Rent
payable hereunder, multiplied by the total number of days Landlord was so
delayed; and
D) extending the anticipated Commencement Date by an equal number of days as the
total number of days Landlord was so delayed.
2
6
If for any reason (including Landlord's inability to complete the
Improvements called for hereunder) Landlord is unable to deliver possession of
the Premises to Tenant on the anticipated Commencement Date, this Lease shall
not be void or voidable, nor shall Landlord be liable to Tenant for any damage
resulting from Landlord's inability to deliver such possession. However, Tenant
shall not be obligated to pay the Fixed Monthly Rent or Additional Rent that
Tenant is required to pay pursuant to Section 3.1 until such possession of the
Premises has been delivered to Tenant by Landlord. Except for such delay in the
commencement of Rent, Landlord's failure to give possession on the anticipated
Commencement Date shall in no way affect Tenant's obligations hereunder.
If possession of the Premises is not tendered by Landlord within one
hundred twenty (120) days after the anticipated Commencement Date, then Landlord
and Tenant shall each have the right, provided such party is not in default of
its obligations hereunder, to terminate this Lease by giving written notice, one
to the other, within ten (10) days after such failure. If such notice of
termination is not given by either Landlord or Tenant within said ten (10) day
time period, then this Lease shall continue in full force and effect.
If, due to Force Majeure, Landlord is unable to tender possession of the
Premises within one hundred eighty (180) days after the anticipated Commencement
Date, then this Lease, and the rights and obligations of Landlord and Tenant
hereunder, shall terminate automatically, without further liability by either
party to the other, and without further documentation being required.
SECTION 2.2. HOLDING OVER. If Tenant fails to deliver possession of the Premises
on the Termination Date, but holds over after the expiration or earlier
termination of this Lease without the express prior written consent of Landlord,
such tenancy shall be construed as a tenancy from month-to-month on the same
terms and conditions as are contained herein, except that the Fixed Monthly Rent
payable by Tenant during such period of holding over shall automatically
increase as of the Termination Date to an amount equal to one hundred fifty
percent (150%) for the initial sixty (60) days and two hundred percent (200%)
thereafter of the Fixed Monthly Rent payable by Tenant the calendar month
immediately prior to the date when Tenant commences such holding over (the
"Holdover Rent"). Such Holdover Rent shall be paid during such period as Tenant
retains possession of the Premises. However, Tenant's payment of such Holdover
Rent, and Landlord's acceptance thereof, shall not constitute a waiver by
Landlord of any of Landlord's rights or remedies with respect to such holding
over, nor shall it be deemed to be a consent by Landlord to Tenant's continued
occupancy or possession of the Premises past the time period covered Tenant's
payment of the Holdover Rent.
Furthermore, if Tenant fails to deliver possession of the Premises to
Landlord upon the expiration or earlier termination of this Lease, then, in
addition to any other liabilities to Landlord accruing therefrom, Tenant shall
protect, defend, indemnify and hold Landlord harmless from all loss, costs
(including reasonable attorneys' fees and expenses) and liability resulting from
such failure, including without limiting the foregoing, any claims made by any
succeeding tenant arising out of Tenant's failure to so surrender, and any lost
profits to Landlord resulting therefrom.
Notwithstanding the provisions contained hereinabove regarding Tenant's
liability for a continuing holdover, Landlord agrees to use commercially
reasonable efforts to insert into any future lease of another tenant proposing
to occupy the Premises provisions similar to those contained in Section 2.1,
permitting mitigation of Tenant's damages arising out of Tenant's temporary
holdover.
ARTICLE 3
PAYMENT OF RENT, LATE CHARGE
SECTION 3.1. PAYMENT OF FIXED MONTHLY RENT AND ADDITIONAL RENT. "Rent" shall
mean: all payments of monies in any form whatsoever required under the terms and
provisions of this Lease, and shall consist of:
A) "Fixed Monthly Rent," which shall be payable in equal monthly installments of
$27,946.00; plus
B) Additional Rent as provided in Article 4 and elsewhere in this Lease.
Provided that Tenant is not in default (after the expiration of time and
the opportunity to cure) on or at any time prior to the Commencement Date, one
hundred percent (100%) of the Fixed Monthly Rent due for the second (2nd) full
calendar month of the Term (the "Rent Deferral") shall be deferred until the end
of the Term.
Further provided that no event has occurred which, with the giving of
notice or the passage of time or both would be a material default by Tenant
under this Lease, and Tenant has remained in full compliance of the material
provisions contained herein throughout the Term, Landlord shall, on the last
calendar day of the Term, waive its right to collect the Rent Deferral.
If Tenant does enter into an uncured default at any time after the date of
said Rent Deferral, the full amount so deferred, including interest thereon at
the rate of ten percent (10%) per annum, computed from the date of such
deferral, shall be immediately due and payable, as if the same had been due if
the Rent Deferral had not occurred.
Except as otherwise stated, the entire Fixed Monthly Rent shall be due and
payable, in advance, on or before the first day of each and every calendar month
until the end of the Term, pursuant to this Section 3.1.
SECTION 3.2. MANNER OF PAYMENT. Tenant shall pay Fixed Monthly Rent and
Additional Rent immediately upon the same becoming due and payable, without
demand therefor, and without any abatement, set off or deduction whatsoever,
except as may be expressly provided in this Lease. Landlord's failure to submit
statements to Tenant stating the amount of Fixed Monthly Rent or Additional Rent
then due, including Landlord's failure to provide to Tenant a calculation of the
adjustment as required in Section 3.3 or the Escalation Statement referred to in
Article 4, shall not
3
7
constitute Landlord's waiver of Tenant's requirement to pay the Rent called for
herein. Tenant's failure to pay Additional Rent as provided herein shall
constitute a material default equal to Tenant's failure to pay Fixed Monthly
Rent when due.
Rent shall be payable in advance on the first day of each and every
calendar month throughout the Term, in lawful money of the United States of
America, to Landlord at 00000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, or at such other place(s) as Landlord designates in writing to
Tenant. Tenant's obligation to pay Rent shall begin on the Commencement Date and
continue throughout the Term, without abatement, setoff or deduction, except as
otherwise specified hereinbelow.
Concurrent with Tenant's execution and delivery to Landlord of this Lease,
Tenant shall pay to Landlord the Fixed Monthly Rent due for the first month of
the Term.
SECTION 3.3. FIXED MONTHLY RENT INCREASE. Commencing the first calendar day of
the thirteenth (13th) calendar month of the Term, and continuing through the
last calendar day of the twenty-fourth (24th) calendar month of the Term, the
Fixed Monthly Rent payable by Tenant shall increase from $27,946.00 per month to
$28,784.38 per month.
Commencing the first calendar day of the twenty-fifth (25th) calendar month
of the Term, and continuing through the last calendar day of the thirty-sixth
(36th) calendar month of the Term, the Fixed Monthly Rent payable by Tenant
shall increase from $28,784.38 per month to $29,647.91 per month.
Commencing the first calendar day of the thirty-seventh (37th) calendar
month of the Term, and continuing through the last calendar day of the
forty-eighth (48th) calendar month of the Term, the Fixed Monthly Rent payable
by Tenant shall increase from $29,647.91 per month to $30,537.35 per month.
Commencing the first calendar day of the forth-ninth (49th) calendar month
of the Term, and continuing through the last calendar day of the sixtieth (60th)
calendar month of the Term, the Fixed Monthly Rent payable by Tenant shall
increase from $30,537.35 per month to $31,453.47 per month.
Commencing the first calendar day of the sixty-first (61st) calendar month
of the Term, and continuing through the last calendar day of the seventy-second
(72nd) calendar month of the Term, the Fixed Monthly Rent payable by Tenant
shall increase from $31.453.47 per month to $32,397.07 per month.
Commencing the first calendar day of the seventy-third (73rd) calendar
month of the Term, and continuing throughout the remainder of the initial Term,
the Fixed Monthly Rent payable by Tenant shall increase from $32,397.07 per
month to $33,368.98 per month.
Landlord and Tenant shall, in the First Amendment, confirm the actual dates
upon which the changes in Fixed Monthly Rent specified above shall occur.
SECTION 3.4. TENANT'S PAYMENT OF CERTAIN TAXES. Tenant shall, concurrent with
Tenant's next scheduled payment of Fixed Monthly Rent, reimburse Landlord, as
Additional Rent, for any and all taxes, surcharges, levies, assessments, fees
and charges payable by Landlord when:
A) assessed on, measured by, or reasonably attributable to:
I) the cost or value of Tenant's equipment, furniture, fixtures and other
personal property located in the Premises, or
II) the cost or value of any leasehold improvements in or to the Premises
in excess of $35.00 per square foot, provided the same have been made
in connection with Tenant's execution of this Lease, and without
regard to whether title to or payment for such improvements vests with
Tenant or Landlord;
B) on or measured by any rent payable hereunder, including, without
limitation, any gross income tax, gross receipts tax, or excise tax levied
by the City or County of Los Angeles or any other governmental body with
respect to the receipt of such rent (computed as if such rent were the only
income of Landlord), but solely when levied by the appropriate City or
County agency in lieu of, or as an adjunct to, such business license(s),
fees or taxes as would otherwise have been payable by Tenant directly to
such taxing authority;
C) upon or with respect to the possession, leasing, operating, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises
or any portion thereof; or
D) solely because Landlord and Tenant entered into this transaction or
executed any document transferring an interest in the Premises to Tenant.
If it becomes unlawful for Tenant so to reimburse Landlord, the rent
payable to Landlord under this Lease shall be revised to net Landlord the
same rent after imposition of any such tax as would have been payable to
Landlord prior to the imposition of any such tax.
Said taxes shall be due and payable whether or not now customary or within
the contemplation of Landlord and Tenant. Notwithstanding the above, in no event
shall the provisions of this Section 3.4 serve to entitle Landlord to
reimbursement from Tenant for any federal, state, county or city income tax or
business license fee payable by Landlord or the managing agent of Landlord.
SECTION 3.5. CERTAIN ADJUSTMENTS. If:
A) the Commencement Date occurs on other than January 1st of a calendar year,
or the Lease expires or terminates on other than December 31st of a
calendar year;
B) the size of the Premises changes during a calendar year;
C) or any abatement of Fixed Monthly Rent or Additional Rent occurs during a
calendar year, then
4
8
the amount payable by Tenant or reimbursable by Landlord during such year shall
be adjusted proportionately on a daily basis, and the obligation to pay such
amount shall survive the expiration or earlier termination of this Lease.
If the Commencement Date occurs on other than the first day of a calendar
month, or the Lease expires on a day other than the last day of a calendar
month, then the Fixed Monthly Rent and Additional Rent payable by Tenant shall
be appropriately apportioned on a prorata basis for the number of days remaining
in the month of the Term for which such proration is calculated.
If the amount of Fixed Monthly Rent or Additional Rent due is modified
pursuant to the Terms of this Lease, such modification shall take effect the
first day of the calendar month immediately following the date such modification
would have been scheduled.
SECTION 3.6. LATE CHARGE AND INTEREST. Tenant acknowledges that late payment by
Tenant to Landlord of Fixed Monthly Rent or Additional Rent will cause Landlord
to incur costs not contemplated by this Lease, the exact amount of which are
extremely difficult and impracticable to fix. Such costs include, without
limitation, processing and accounting charges and late charges that may be
imposed on Landlord by the terms of any encumbrance and note secured by any
encumbrance covering the Premises. Therefore, if any installment of Fixed
Monthly Rent or Additional Rent and other payment due from Tenant hereunder is
not received by Landlord within five (5) days of the date on which Landlord
delivers notice to Tenant that such amount is past due , Tenant shall pay to
Landlord on demand an additional sum equal to five percent (5%) of the overdue
amount as a late charge; provided however, Landlord shall not be required to
deliver such notice more than one (1) time in any twelve (12) month period (i.e.
- the five percent (5%) late charge shall apply to any subsequent failure during
such twelve (12) month period to pay an amount within five (5) days of the date
due, without the requirement of additional notice to Tenant). The parties agree
that this late charge represents a fair and reasonable settlement against the
costs that Landlord will incur by reason of Tenant's late payment. Acceptance of
any late charge shall not constitute a waiver of Tenant's default with respect
to the overdue amount, or prevent Landlord from exercising any of the other
rights and remedies available to Landlord.
Every installment of Fixed Monthly Rent and Additional Rent and any other
payment due hereunder from Tenant to Landlord which is not paid within twelve
(12) days after the same becomes due and payable shall, in addition to any Late
Charge already paid by Tenant, bear interest at the rate of ten percent (10%)
per annum from the date that the same originally became due and payable until
the date it is paid. Landlord shall xxxx Tenant for said interest, and Tenant
shall pay the same within five (5) days of receipt of Landlord's billing.
SECTION 3.7. SECURITY DEPOSIT. Concurrent with Tenant's execution and tendering
of this Lease to Landlord, Tenant shall deposit the sum of $400,000.00 (the
"Security Deposit"), which amount Tenant shall thereafter at all times maintain
on deposit with Landlord (subject to the reduction provisions set forth below in
this Section 3.7), as security for Tenant's full and faithful observance and
performance of its obligations under this Lease (expressly including, without
limitation, the payment as and when due of the Fixed Monthly Rent, Additional
Rent and any other sums or damages payable by Tenant hereunder and the payment
of any and all other damages for which Tenant shall be liable by reason of any
act or omission contrary to any of said covenants or agreements). Landlord shall
hold such Security Deposit separate and apart from other funds held by Landlord,
in an interest-bearing account ("Interest Account"). However, within thirty (30)
days of the occurrence of each anniversary of the Commencement Date, Tenant
shall have the right to submit a written request ("Reduction Request") to
Landlord, requesting that the Security Deposit be reduced by an amount up to but
not exceeding $60,000.00 ("Reduction Amount"), plus all interest accrued in the
Interest Account during such year. Provided Tenant is not in default of its
obligations pursuant to this Lease beyond any applicable notice and cure period
upon either (i) the date of Tenant's submission of the Reduction Request or (ii)
the date of Landlord's payment to Tenant of the Reduction Amount, then Landlord
shall, within thirty (30) days of its receipt of the Reduction Request, pay to
Tenant the Reduction Amount. However, any contrary provision of this Section 3.7
notwithstanding, the Security Deposit held by Landlord shall not be reduced to
less than $33,000.00.
If at any time Tenant defaults in the performance of any of its obligations
under this Lease, after the expiration of notice and the opportunity to cure,
then, Landlord may:
A) apply as much of the Security Deposit as may be necessary cure Tenant's
non-payment of the Fixed Monthly Rent, Additional Rent and/or other sums or
damages due from Tenant; and/or;
B) if Tenant is in default of any of the covenants or agreements of this
Lease; apply so much of the Security Deposit as may be necessary to
reimburse all expenses incurred by Landlord in curing such default; or
C) if the Security Deposit is insufficient to pay the sums specified in
Section 3.7 (a) or (b), elect to apply the entire Security Deposit in
partial payment thereof, and proceed against Tenant pursuant to the
provisions of Article 17 and Article 18 herein.
If, as a result of Landlord's application of any portion or all of the
Security Deposit, the amount held by Landlord is reduced, Tenant shall, within
ten (10) days after demand therefor, deposit with Landlord additional cash
sufficient to bring the then-existing balance held as the Security Deposit to
the amount immediately prior to such reduction. Tenant's failure to deposit said
amount shall constitute a material breach of this Lease.
5
9
At the expiration or earlier termination of this Lease, Landlord shall
deduct from the Security Deposit being held on behalf of Tenant any unpaid sums,
costs, expenses or damages payable by Tenant pursuant to the provisions of this
Lease; and/or any costs required to cure Tenant's default or performance of any
other covenant or agreement of this Lease, and shall, within thirty (30) days
after the expiration or earlier termination of this Lease, return to Tenant,
with all interest earned from the Interest Account, all or such part of the
Security Deposit as then remains on deposit with Landlord, except that in the
event of a Default Termination pursuant to the provisions of Section 18.1 of
this Lease, Tenant shall not be entitled to any undisbursed interest earned from
the Interest Account.
ARTICLE 4
ADDITIONAL RENT
SECTION 4.1. CERTAIN DEFINITIONS. As used in this Lease:
A) "ESCALATION STATEMENT" means a statement by Landlord, setting forth the
amount payable by Tenant or by Landlord, as the case may be, for a
specified calendar year pursuant to this Article 4.
B) "OPERATING EXPENSES" means the following in a referenced calendar year,
including the Base Year as hereinafter defined, calculated assuming the
Building is at least ninety-five percent (95%) occupied: all costs of
management, operation, maintenance, and repair of the Building.
By way of illustration only, Operating Expenses shall include, but not
be limited to: management fees paid by Landlord to any third-party, which
shall not exceed those reasonable and customary in the geographic area in
which the Building is located; water and sewer charges; any and all
insurance premiums not otherwise directly payable by Tenant; license,
permit and inspection fees; air conditioning (including repair of same);
heat; light; power and other utilities; steam; labor; cleaning and
janitorial services; guard services; supplies; materials; equipment and
tools.
Operating Expenses shall also include the cost or portion thereof of
those capital improvements made to the Building by Landlord during the
Term:
I) to the extent that such capital improvements reduce other direct
expenses, when the same were made to the Building by Landlord after
the Commencement Date, or
II) that are required under any governmental law or regulation that was
not applicable to the Building as of the Commencement Date.
Said capital improvement costs, or the allocable portion thereof (as
referred to in clauses (i) and (ii) above), shall be amortized over the
anticipated useful life of such capital improvement(s) pursuant to
generally-accepted accounting principles, together with interest on the
unamortized balance at the rate of eight percent (8%) per annum.
Operating Expenses shall also include all general and special real
estate taxes, increases in assessments or special assessments and any other
ad valorem taxes, rates, levies and assessments paid during a calendar year
(or portion thereof) upon or with respect to the Building and the personal
property used by Landlord to operate the Building, whether paid to any
governmental or quasi-governmental authority, and all taxes specifically
imposed in lieu of any such taxes (but excluding taxes referred to in
Section 3.4 for which Tenant or other tenants in the Building are liable)
including fees of counsel and experts, reasonably incurred by, or
reimbursable by Landlord in connection with any application for a reduction
in the assessed valuation of the Building and/or the land thereunder or for
a judicial review thereof, (collectively "Appeal Fees"), but solely to the
extent that the Appeal Fees result directly in a reduction of taxes
otherwise payable by Tenant. However, in no event shall the portion of
Operating Expenses used to calculate any billing to Tenant attributable to
real estate taxes and assessments for any expense year be less than the
billing for real estate taxes and assessments during the Base Year.
Operating Expenses shall also include, but not be limited to, the
premiums for the following insurance coverage: all-risk, structural, fire,
boiler and machinery, liability, earthquake and for replacement of tenant
improvements to a maximum of $35.00 per usable square foot, and for such
other coverage(s), and at such policy limit(s) as Landlord deems reasonably
prudent and/or are required by any lender or ground lessor, which coverage
and limits Landlord may, in Landlord's reasonable discretion, change from
time to time.
If, in any calendar year following the Base Year, as defined
hereinbelow (a "Subsequent Year"), a new expense item (e.g. earthquake
insurance, concierge services; entry card systems), is included in
Operating Expenses which was not included in the Base Year Operating
Expenses, then the cost of such new item shall be added to the Base Year
Operating Expenses for purposes of determining the Additional Rent payable
under this Article 4 for such Subsequent Year. During each Subsequent Year,
the same amount shall continue to be included in the computation of
Operating Expenses for the Base Year, resulting in each such Subsequent
Year Operating Expenses only including the increase in the cost of such new
item over the Base Year, as so adjusted. However, if in any Subsequent Year
thereafter, such new item is not included in Operating Expenses, no such
addition shall be made to Base Year Operating Expenses.
Conversely, as reasonably determined by Landlord, when an expense item
that was originally included in the Base Year Operating Expenses is, in any
Subsequent Year, no longer included in Operating Expenses, then the cost of
such item shall be deleted from the Base Year Operating Expenses for
purposes of determining the Additional Rent payable under this Article 4
for such Subsequent Year. The same amount shall continue to be deleted from
the Base Year Operating Expenses for each Subsequent Year thereafter that
the item is not included. However, if such expense item is again included
in the Operating Expenses for any Subsequent Year, then the
6
10
amount of said expense item originally included in the Base Year Operating
Expenses shall again be added back to the Base Year Operating Expenses.
Notwithstanding anything in this Section 4.1(b) to the contrary; for purposes of
this Lease, Operating Expenses shall not include the following:
(a) costs incurred in connection with the repair of any defective elements
in the original construction of the Building, or in connection with any major
change in the Building such as adding or deleting floors, or due to any failure
to complete the Improvements contemplated by Exhibit B attached hereto in full
compliance with all currently effective governmental requirements;
(b) depreciation, interest and principal payments on mortgages and other
debt costs, if any;
(c) marketing costs, legal fees, space planners' fees, amounts contributed
toward the construction of tenant improvements, advertising and promotional
expenses, and brokerage fees incurred in connection with the original
development, subsequent improvement, or future leasing of the Building;
(d) costs for which the Landlord is reimbursed, or would have been
reimbursed if Landlord had carried the insurance Landlord is required to carry
pursuant to this Lease, or would have been reimbursed if Landlord had used
commercially reasonable efforts to collect such amounts, by any tenant or
occupant of the Building or by insurance from its carrier or any tenant's
carrier;
(e) costs incurred to comply with any governmental or quasi-governmental
rule, regulation or requirement now in force or which may hereafter be enacted
or promulgated ("Applicable Law") as such Applicable Law may apply to hazardous
materials ("Hazardous Material") as defined by such Applicable Law, which
Hazardous Material was in existence in the Building prior to the Commencement
Date, and was of such a nature that a federal, state or municipal government or
quasi-government authority, if it had then had knowledge of the presence of such
Hazardous Material, in the state, and under the conditions that it then existed
in the Building or on the Real Property would have then required the removal,
remediation or other action with respect to such Hazardous Material; and costs
incurred with respect to Hazardous Material, which Hazardous Material is brought
into the Building or on the Real Property after the date hereof by Landlord and
is of such a nature, at that time, that a federal, state or municipal
governmental or quasi-governmental authority, if it had then had knowledge of
the presence of such Hazardous Material, in the state, and under the conditions,
that it then exists in the Building or on the Real Property, would have then
required the removal, remediation or other action with respect to such Hazardous
Material;
(f) Tenant's Share, if any, of deductible amounts on Landlord's insurance
coverages to the extent such amount exceeds $10,000.00 in any calendar year,
recognizing that in computing Tenant's Share, Landlord shall first amortize the
amount Landlord pays to cover the total policy deductible over the useful life
of the improvements being restored or repaired by Landlord; and
(g) Tenant's Share, if any, of increases in real property taxes to the
extent such increase is attributable to a restoration of an assessment which was
reduced as a result of a Proposition 8 appeal, unless the taxes for the Base
Year were or are also adjusted to remove the effect of such Proposition 8
appeal.
C) "TENANT'S SHARE" means 3.40%.
SECTION 4.2. CALCULATION OF TENANT'S SHARE OF INCREASES IN OPERATING EXPENSES.
If, commencing with the calendar year 2001, the Operating Expenses for any
calendar year during the Term, or portion thereof, (including the last calendar
year of the Term), have increased over the Operating Expenses for the calendar
year 2000 (the "Base Year"), then within thirty (30) days after Tenant's receipt
of Landlord's computation of such increase (an "Escalation Statement"), Tenant
shall pay to Landlord, as Additional Rent, an amount equal to the product
obtained by multiplying such increase by Tenant's Share.
Landlord may, at or after the start of any calendar year, subsequent to the
calendar year 2000, notify Tenant of the amount which Landlord estimates will be
Tenant's monthly share of any such increase in Operating Expenses for such
calendar year over the Base Year and the amount thereof shall be added to the
Fixed Monthly Rent payments required to be made by Tenant in such year. If
Tenant's Share of any such increase in rent payable hereunder as shown on the
Escalation Statement is greater or less than the total amounts actually billed
to and paid by Tenant during the year covered by such statement, then within
thirty (30) days thereafter, Tenant shall pay in cash any sums owed Landlord or,
if applicable, Tenant shall either receive a credit against any Fixed Monthly
Rent and/or Additional Rent next accruing for any sum owed Tenant, or if
Landlord's Escalation Statement is rendered after the expiration or earlier
termination of this Lease and indicates that Tenant's estimated payments have
exceeded the total amount to which Tenant was obligated, then provided that
Landlord is not owed any other sum by Tenant, Landlord shall issue a cash refund
to Tenant within thirty (30) days after Landlord's completion of such Escalation
Statement.
7
11
SECTION 4.3. TENANT'S PAYMENT OF DIRECT CHARGES AS ADDITIONAL RENT. Tenant shall
promptly and duly pay all costs and expenses incurred for or in connection with
any Tenant Change or Tenant Service, and discharge any mechanic's or other lien
created against the Premises, Building or the Real Property arising as a result
of or in connection with any Tenant Change or Tenant Service as Additional Rent
by paying the same, bonding or manner otherwise provided by law.
Any other cost, expense, charge, amount or sum (other than Fixed Monthly
Rent) payable by Tenant as provided in this Lease shall also be considered
Additional Rent.
Certain individual items of cost or expense may, in the reasonable
determination of Landlord, be separately charged and billed to Tenant by
Landlord, either alone or in conjunction with another party or parties, if they
are deemed in good faith by Landlord to apply solely to Tenant and/or such other
party or parties and are not otherwise normally recaptured by Landlord as part
of normal operating expenses. Insofar as is reasonable, Landlord shall attempt
to give Tenant prior notice and the opportunity to cure any circumstance that
would give rise to such separate and direct billing.
Said separate billing shall be paid as Additional Rent, regardless of
Tenant's Share. Such allocations by Landlord shall be binding on Tenant unless
patently unreasonable, and shall be payable within ten (10) days after receipt
of Landlord's billing therefor.
SECTION 4.4. LANDLORD'S BOOKS AND RECORDS. Within one hundred eighty (180) days
after receipt of an Escalation Statement by Tenant, if Tenant disputes the
amount of Additional Rent set forth in the Escalation Statement, an employee of
Tenant or an independent certified public accountant (which accountant is a
member of a regionally recognized accounting firm and is not working on a
contingency fee basis), designated and paid for by Tenant, may, after reasonable
notice to Landlord and at reasonable times, provided Landlord shall reasonably
cooperate to expeditiously conclude such inspection (including Landlord's
obligation to provide, at Tenant's expense, copies of applicable supporting
materials), and shall allow Tenant to inspect Landlord's records with respect to
the Escalation Statement at Landlord's offices, provided that Tenant is not then
in default under this Lease and further provided Tenant has paid all amounts
required to be paid under the applicable Escalation Statement. In connection
with such inspection, Tenant and Tenant's agent must agree in advance to follow
Landlord's reasonable rules and procedures regarding inspections of Landlord's
records, and shall execute a commercially reasonable confidentiality agreement
regarding such inspection. Tenant's failure to dispute the amount of Additional
Rent set forth in any Escalation Statement within one hundred eighty (180) days
of Tenant's receipt of such Escalation Statement shall be deemed to be Tenant's
approval of such Escalation Statement, and Tenant thereafter waives the right or
ability to dispute the amounts set forth in such Escalation Statement. If after
such inspection, Tenant still disputes such Additional Rent (as evidenced by
Tenant's written notice to Landlord, describing any remaining disputed items,
within thirty (30) days of Tenant's conclusion of its inspection), then a
determination as to the proper amount shall be made, at Tenant's expense, by an
independent certified public accountant (the "Accountant") selected by Landlord
and subject to Tenant's reasonable approval; provided that if such determination
by the Accountant determines that Operating Expenses were overstated by more
than five percent (5%), then the cost of the Accountant and the cost of such
determination shall be paid for by Landlord. Tenant hereby acknowledges that
Tenant's sole right to inspect Landlord's books and records and to contest the
amount of Operating Expenses payable by Tenant shall be as set forth in this
Section 4.4, and Tenant hereby waives any and all other rights pursuant to
applicable law to inspect such books and records and/or to contest the amount of
Operating Expenses payable by Tenant. Any contrary provision of this Section 4.4
notwithstanding, (i) Tenant does not waive its right, at any time, to fully
prosecute an action against Landlord or its affiliates based on any alleged
fraudulent actions or intentional misrepresentations of Landlord and/or its
affiliates, (ii) the exercise by Tenant of its rights pursuant this Section 4.4
shall not preclude the reconciliation of any material error which is
subsequently discovered by Landlord (which error shall be reconciled by Landlord
with Tenant whether or not such discovery is prompted by Tenant's inquiry or
that of any other tenant of the Building), and (iii) the request by an employee
of Tenant to receive, in the normal course of business, back-up or supporting
invoices or other statements, shall not be construed as an exercise of Tenant's
rights pursuant to this Section 4.4.
ARTICLE 5
ETHICS
SECTION 5.1. ETHICS. Landlord and Tenant agree to conduct their business or
practice in compliance with any appropriate and applicable codes of professional
or business practice.
ARTICLE 6
USE OF PREMISES
SECTION 6.1. USE. The Premises shall only be used as general business offices
for an entertainment/media company (the "Specified Use") and for no other
purposes, without Landlord's prior written consent, which consent shall be in
Landlord's reasonable discretion. Any proposed revision of the Specified Use by
Tenant shall be for a use consistent with those customarily found in first-class
office buildings. Reasonable grounds for Landlord withholding its consent shall
include, but not be limited to:
A) the proposed use will place a disproportionate burden on the Building
systems;
B) the proposed use is for governmental or medical purposes or for a company
whose primary business is that of conducting boiler-room type transactions
or sales;
C) the proposed use would generate excessive foot traffic to the Premises
and/or Building.
8
12
So long as Tenant is in control of the Premises, Tenant covenants and
agrees that it shall not use, suffer or permit any person(s) to use all or any
portion of the Premises for any purpose in violation of the laws of the United
States of America, the State of California, or the ordinances, regulations or
requirements of the City of Los Angeles or County of Los Angeles, or other
lawful authorities having jurisdiction over the Building.
Tenant shall not do or permit anything to be done in or about the Premises
which will in any way obstruct or unreasonably interfere with the rights of
other tenants or occupants of the Building, or injure or annoy them. Tenant
shall not use or allow the Premises to be used for any pornographic or violent
purposes, nor shall Tenant cause, commit, maintain or permit the continuance of
any nuisance or waste in, on or about the Premises. Tenant shall not use the
Premises in any manner that in Landlord's reasonable judgment would adversely
affect or interfere with any services Landlord is required to furnish to Tenant
or to any other tenant or occupant of the Building, or that would interfere with
or obstruct the proper and economical rendition of any such service.
SECTION 6.2. EXCLUSIVE USE. Landlord represents that Tenant's Specified Use of
the Premises does not conflict with exclusive use provisions granted by Landlord
in other leases for the Building. Landlord further agrees that it shall, in the
future, not grant an exclusive use privilege to any other tenant in the Building
that will prevent Tenant from continuing to use the Premises for its Specified
Use.
Tenant acknowledges and agrees that it shall not engage in any of the uses
specified hereinbelow, for which Landlord has already granted exclusive rights:
A) for any purposes customarily associated with a commercial banking
institution;
B) for a beauty salon;
C) for a quick copying and printing facility;
D) for a sundry shop; and/or
E) for a retail, sit-down style restaurant, serving BBQ-style food.
Provided that Tenant has received written notice of the same from Landlord,
and further provided that Landlord does not grant a future exclusive use right
that prohibits Tenant from engaging in the Specified Use, then Tenant agrees
that it shall not violate any exclusive use provision(s) granted by Landlord to
other tenants in the Building.
SECTION 6.3. RULES AND REGULATIONS. Tenant shall observe and comply with the
rules and regulations set forth in Exhibit C, and such other and further
reasonable and non-discriminatory rules and regulations as Landlord may make or
adopt and communicate to Tenant at any time or from time to time, when said
rules, in the reasonable judgment of Landlord, may be necessary or desirable to
ensure the first-class operation, maintenance, reputation or appearance of the
Building. However, if any conflict arises between the provisions of this Lease
and any such rule or regulation, the provisions of this Lease shall control.
Provided Landlord makes commercially reasonable efforts to seek compliance
by all occupants of the Building with the rules and regulations adopted by
Landlord, Landlord shall not be responsible to Tenant for the failure of any
other tenants or occupants of the Building to comply with said rules and
regulations.
ARTICLE 7
CONDITION UPON VACATING & REMOVAL OF PROPERTY
SECTION 7.1. CONDITION UPON VACATING. At the expiration or earlier termination
of this Lease, Tenant shall:
A) terminate its occupancy of, quit and surrender to Landlord, all or such
portion of the Premises upon which this Lease has so terminated,
broom-clean and in the same condition as received except for:
I) ordinary wear and tear, or
II) loss or damage by fire or other casualty;
B) surrender the Premises free of any and all debris and trash and any of
Tenant's personal property, furniture, fixtures and equipment that do not
otherwise become a part of the Real Property, pursuant to the provisions
contained in Section 7.2 hereinbelow; and
C) at Tenant's sole expense, forthwith and with all due diligence remove any
Tenant Change made by Tenant and restore the Premises to their original
condition, reasonable wear and tear excepted. However, Tenant shall only be
obligated to remove said Tenant Change if it was made without Landlord's
approval and/or if Landlord notified Tenant of its obligation to do so at
the time Landlord approved Tenant's request for a Tenant Change. If Tenant
fails to complete such removal and/or to repair any damage caused by the
removal of any Tenant Change, Landlord may do so and may charge the cost
thereof to Tenant.
SECTION 7.2. TENANT'S PROPERTY. All fixtures, equipment, improvements and
installations attached or built into the Premises at any time during the Term
shall, at the expiration or earlier termination of this Lease, be deemed the
property of Landlord; become a permanent part of the Premises and remain
therein. However, if said equipment improvements and/or installations can be
removed without causing any structural damage to the Premises, then, provided
after such removal Tenant restores the Premises to the condition existing prior
to installation of Tenant's trade fixtures or equipment, Tenant shall be
permitted, at Tenant's sole expense, to remove said trade fixtures and
equipment.
9
13
ARTICLE 8
UTILITIES AND SERVICES
SECTION 8.1. NORMAL BUILDING HOURS / HOLIDAYS. The "Normal Business Hours" of
the Building, during which Landlord shall furnish the services specified in this
Article 8 are defined as 8:00 A.M. to 6:00 P.M., Monday through Friday, and 9:00
A.M. to 1:00 P.M. on Saturday, any one or more Holiday(s) excepted.
The "Holidays" which shall be observed by Landlord in the Building are
defined as any federally-recognized holiday and any other holiday specified
enumerated herein, which are: New Years Day, Presidents' Day, Memorial Day, the
4th of July, Labor Day, Thanksgiving Day, the day after Thanksgiving, and
Christmas Day (each individually a "Holiday"). Tenant acknowledges that the
Building shall be closed on each and every such Holiday, and Tenant shall not be
guaranteed access to Landlord or Landlord's managing agent(s) on each such
Holiday.
SECTION 8.2. ACCESS TO THE BUILDING AND GENERAL SERVICES. Subject to Force
Majeure and any power outage(s) which may occur in the Building when the same
are out of Landlord's reasonable control, Landlord shall furnish the following
services to the Premises twenty-four (24) hours per day, seven days per week:
A) During Normal Business Hours, bulb replacement for building standard
lights;
B) access to and use of the parking facilities for persons holding valid
parking permits;
C) access to and use of the elevators and Premises,
D) use of electrical lighting on an as-needed basis within the Premises; and
E) use of a reasonable level of water for kitchen and toilet facilities in the
Premises and common area bathrooms.
SECTION 8.3. JANITORIAL SERVICES. Landlord shall furnish the Premises with
reasonable and customary janitorial services five (5) days per business week,
except when the Building is closed on any Holiday. Landlord shall retain the
sole discretion to choose and/or revise the janitorial company providing said
services to the Premises and/or Building.
SECTION 8.4. SECURITY SERVICES. Tenant acknowledges that Landlord currently
provides uniformed guard service to the Building from 5 p.m. to 11 p.m., Monday
through Friday, and 8:00 a.m. to 1:00 p.m. on Saturdays, solely for the purposes
of providing surveillance of, information and directional assistance to persons
entering the Building.
Tenant acknowledges that such guard service shall not provide any measure
of security or safety to the Building or the Premises, and that Tenant shall
take such actions as it may deem necessary and reasonable to ensure the safety
and security of Tenant's property or person or the property or persons of
Tenant's agents, clients, contractors, directors, employees, invitees,
licensees, officers, partners or shareholders. Tenant agrees and acknowledges
that, except in the case of the gross negligence or willful misconduct of
Landlord or its directors, employees, officers, partners or shareholders,
Landlord shall not be liable to Tenant in any manner whatsoever arising out of
the failure of Landlord's guard service to secure any person or property from
harm.
Tenant agrees and acknowledges that Landlord, in Landlord's sole
discretion, shall have the option, but not the obligation to add, decrease,
revise the hours of and/or change the level of services being provided by any
guard company serving the Building. Tenant further agrees that Tenant shall not
engage or hire any outside guard or security company without Landlord's prior
written consent, which shall be in Landlord's reasonable discretion.
SECTION 8.5. UTILITIES. During Normal Business Hours Landlord shall furnish a
reasonable level of water, heat, ventilation and air conditioning ("HVAC"), and
a sufficient amount of electric current to provide customary business lighting
and to operate ordinary office business machines, such as a single personal
computer and ancillary printer per one hundred and twenty (120) Rentable square
feet contained in the Premises, facsimile machines, small copiers customarily
used for general office purposes, and such other equipment and office machines
as do not result in above-standard use of the existing electrical system. So
long as the same remain reasonably cost competitive, Landlord shall retain the
sole discretion to choose the utility vendor(s) to supply such services to the
Premises and the Building.
Except with the prior written consent of Landlord, which shall not be
unreasonably withheld, conditioned and/or delayed, Tenant shall not install or
use any equipment, apparatus or device in the Premises that requires the
installation of a 220 voltage circuit; consumes more than five (5) kilowatts per
hour per item; or the aggregate use of which will in any way increase the
connected load to more than 5 Xxxxx per square foot, or cause the amount of
electricity to be furnished or supplied for use in the Premises to more than 1.2
kWh per usable square foot, per month.
Except with the prior written consent of Landlord, Tenant shall not connect
any electrical equipment to the electrical system of the Building, except
through electrical outlets already existing in the Premises, nor shall Tenant
xxxxxx, revise, delete or add to the electrical, plumbing, mechanical or HVAC
systems in the Premises.
SECTION 8.6. AFTER HOURS HVAC AND/OR EXCESS UTILITY USAGE. If Tenant requires
HVAC service during other than Normal Business Hours ("Excess HVAC"), Tenant
shall make its request at least one (1) hour before the close of the normal
business day. Otherwise, Landlord shall have no obligation to provide Excess
HVAC. Tenant's request shall be deemed conclusive evidence of its willingness to
pay the costs specified herein.
If Tenant requires electric current in excess of the amounts specified
hereinabove, water or gas in excess of that customarily furnished to the
Premises as office space ("Excess Utility Use"), Tenant
10
14
shall first procure Landlord's prior written consent to such Excess Utility Use,
which Landlord may reasonably refuse.
In lieu of Landlord's refusal, Landlord may cause a meter or sub-meter to
be installed to measure the amount of water, gas and/or electric current
consumed by Tenant in the Premises. The cost of any such meter(s), and the
installation, maintenance, and repair thereof, shall be paid by Tenant as
Additional Rent.
After completing installation of said meter(s), and/or if Tenant requests
Excess HVAC, then Tenant shall pay, as Additional Rent, within thirty (30)
calendar days after Tenant's receipt of Landlord's billing, for the actual
amounts of all water, steam, compressed air, electric current and/or Excess HVAC
consumed beyond the normal levels Landlord is required herein to provide. Said
billing shall be calculated on the usage indicated by such meter(s),
sub-meter(s), or Tenant's written request therefor, and shall be issued by
Landlord at the rates charged for such services by the local public utility
furnishing the same, plus any additional expense reasonably incurred by Landlord
in providing said Excess Utility Use and/or in keeping account of the water,
steam, compressed air and electric current so consumed, plus an administrative
and billing fee equal to twenty-five percent (25%) of the costs so billed.
SECTION 8.7. CHANGES AFFECTING HVAC. Tenant shall also pay as Additional Rent
for any additional costs Landlord incurs to repair any failure of the HVAC
equipment and systems to perform their function when said failure arises out of
or in connection with any change in, or alterations to, the arrangement of
partitioning in the Premises after the Commencement Date, or from occupancy by,
on average, more than one person for every one hundred and twenty-five (125)
usable square feet of the Premises, or from Tenant's failure to keep all HVAC
vents within the Premises free of obstruction.
SECTION 8.8. DAMAGED OR DEFECTIVE SYSTEMS. Tenant shall give written notice to
Landlord within twenty-four (24) hours of any alleged damage to, or defective
condition in any part or appurtenance of the Building's sanitary, electrical,
HVAC or other systems serving, located in, or passing through, the Premises.
Provided that the repair or remedy of said damage or defective condition is
within the reasonable control of Landlord, it shall be remedied by Landlord with
reasonable diligence. Otherwise, Landlord shall make such commercially
reasonable efforts as may be available to Landlord to effect such remedy or
repair, but except in the case of Landlord's gross negligence and/or willful
misconduct or the gross negligence and/or willful misconduct of Landlord's
agents, contractors, directors, employees, officers, partners, and/or
shareholders, Landlord shall not be liable to Tenant for any failure thereof.
Tenant shall not be entitled to claim any damages arising from any such
damage or defective condition nor shall Tenant be entitled to claim any eviction
by reason of any such damage or defective condition unless:
A) the same was caused by Landlord's gross negligence or willful misconduct
while operating or maintaining the Premises or the Building;
B) the damage or defective condition has substantially prevented Tenant from
conducting its normal business operations or obtaining access to at least
seventy-five percent (75%) of the Premises; and
C) Landlord shall have failed to commence the remedy thereof and proceeded
with reasonable diligence to complete the same after Landlord's receipt of
notice thereof from Tenant.
Furthermore, if such damage or defective condition was caused by, or is
attributed to, a Tenant Change or the unreasonable or improper use of such
system(s) by Tenant or its employees, licensees or invitees:
D) the cost of the remedy thereof shall be paid by Tenant as Additional Rent
pursuant to the provisions of Section 4.3;
E) in no event shall Tenant be entitled to any abatement of rent as specified
above; and
F) Tenant shall be estopped from making any claim for damages arising out of
Landlord's repair thereof.
SECTION 8.9. LIMITATION ON LANDLORD'S LIABILITY FOR FAILURE TO PROVIDE UTILITIES
AND/OR SERVICES. Except in the case of Landlord's gross negligence or willful
misconduct or the gross negligence or willful misconduct of Landlord's agents,
contractors, directors, employees, licensees, officers, partners or
shareholders, Tenant hereby releases Landlord from any liability for damages, by
abatement of rent or otherwise, for any failure or delay in furnishing any of
the services or utilities specified in this Article 8, (including, but not
limited to telephone and telecommunication services), or for any diminution in
the quality or quantity thereof.
Tenant's release of Landlord's liability shall be applicable when such
failure, delay or diminution is occasioned, in whole or in part, by repairs,
replacements, or improvements, by any strike, lockout or other labor trouble, by
Landlord's inability to secure electricity, gas, water or other fuel at the
Building after Landlord's reasonable effort to do so, by accident or casualty
whatsoever, by act or default of Tenant or parties other than Landlord, or by
any other cause beyond Landlord's reasonable control. Such failures, delays or
diminution shall never be deemed to constitute a constructive eviction or
disturbance of Tenant's use and possession of the Premises, or serve to relieve
Tenant from paying Rent or performing any of its obligations under the Lease.
Furthermore, Landlord shall not be liable under any circumstances for a
loss of, injury to, or interference with, Tenant's business, including, without
limitation, any loss of profits occurring or arising through or in connection
with or incidental to Landlord's failure to furnish any of the services or
utilities required by this Article 8.
11
15
Notwithstanding the above, Landlord shall use commercially reasonable
efforts to remedy any delay, defect or insufficiency in providing the services
and or utilities required hereunder.
SECTION 8.10. TENANT PROVIDED SERVICES. Tenant shall make no contract or employ
any labor in connection with the maintenance, cleaning or other servicing of the
physical structures of the Premises or for installation of any computer,
telephone or other cabling, equipment or materials provided in or to the
Premises (collectively and individually a "Tenant Service") without the prior
consent of Landlord, which consent shall not be unreasonably withheld. Tenant
shall not permit the use of any labor, material or equipment in the performance
of any Tenant Service if the use thereof, in Landlord's reasonable judgment,
would violate the provisions of any agreement between Landlord and any union
providing work, labor or services in or about the Premises, Building and/or
create labor disharmony in the Building.
SECTION 8.11. RENT ABATEMENT. Notwithstanding the foregoing, if:
A) Tenant is substantially prevented from using the Premises as a result of
Landlord's failure to provide the utilities and services called for
hereunder;
B) The remedy of such failure is reasonably within the control of Landlord;
C) Tenant has promptly notified Landlord in writing of such interruption;
D) Such interruption of services was not caused by or materially contributed
to by Tenant; and
E) Such interruption continues for more than six (6) consecutive business days
(the "Interruption Period") after Tenant has given Landlord written notice;
then Tenant's Fixed Monthly Rent and Additional Rent shall be abated from and
after the last day of the Interruption Period until such time as Landlord
restores the utilities or service so interrupted. However, in any event,
Landlord shall promptly cure or commence to cure such interruption and
diligently prosecute same to completion.
ARTICLE 9
TENANT'S INDEMNIFICATION AND LIMITATION ON LANDLORD'S LIABILITY
SECTION 9.1. TENANT'S INDEMNIFICATION AND HOLD HARMLESS. For the purposes of
this Section 9.1, "Indemnitee(s)" shall jointly and severally refer to Landlord
and Landlord's agents, clients, contractors, directors, employees, officers,
partners, and/or shareholders.
Tenant shall indemnify and hold Indemnitees harmless from and against all
claims, suits, demands, damages, judgments, costs, interest and expenses
(including attorneys fees and costs incurred in the defense thereof) to which
any Indemnitee may be subject or suffer when the same arise out of the
negligence or willful misconduct of Tenant or the negligence or willful
misconduct of Tenant's agents, contractors, directors, employees, licensees,
officers, partners or shareholders in connection with the use of, work in,
construction to, or actions in, on, upon or about the Premises, including any
actions relating to the installation, placement, removal or financing of any
Tenant Change, improvements, fixtures and/or equipment in, on, upon or about the
Premises.
Tenant's indemnification shall extend to any and all claims and
occurrences, whether for injury to or death of any person or persons, or for
damage to property (including any loss of use thereof), or otherwise, occurring
during the Term or prior to the Commencement Date (if Tenant has been given
early access to the Premises for whatever purpose), and to all claims arising
from any condition of the Premises due to or resulting from any default by
Tenant in the keeping, observance or performance of any covenant or provision of
this Lease, or from the negligence or willful misconduct of Tenant or the
negligence or willful misconduct of Tenant's agents, contractors, directors,
employees, licensees, officers, partners or shareholders.
SECTION 9.2. NULLITY OF TENANT'S INDEMNIFICATION IN EVENT OF GROSS NEGLIGENCE.
Notwithstanding anything to the contrary contained in this Lease, Tenant's
indemnification shall not extend to the gross negligence or willful misconduct
of Landlord or the gross negligence or willful misconduct of Landlord's agents,
contractors, directors, employees, officers, partners or shareholders, nor to
such events and occurrences for which Landlord otherwise carries insurance
coverage.
SECTION 9.3. TENANT'S WAIVER OF LIABILITY. Provided that any injury or damage
suffered by Tenant or Tenant's agents, clients, contractors, directors,
employees, invitees, officers, partners, and/or shareholders did not arise out
of the gross negligence or willful misconduct of Landlord or the gross
negligence or willful misconduct of Landlord's agents, contractors, employees,
officers, partners or shareholders, Tenant shall make no claim against Landlord
and Landlord shall not be liable or responsible in any way for, and Tenant
hereby waives all claims against Landlord with respect to or arising out of:
injury or damage to any person or property in or about the Premises by or from
any cause whatsoever under the reasonable control or management of Tenant.
SECTION 9.4. LIMITATION OF LANDLORD'S LIABILITY. Tenant expressly agrees that,
notwithstanding anything in this Lease and/or any applicable law to the
contrary, the liability of Landlord and Landlord's agents, contractors,
directors, employees, licensees, officers, partners or shareholders, including
any successor in interest thereto (collectively and individually the "Landlord
Parties"), and any recourse by Tenant against Landlord or the Landlord Parties
shall be limited solely and exclusively to an amount which is equal to the
interest of Landlord in the Building.
12
16
SECTION 9.5. TRANSFER OF LANDLORD'S LIABILITY. Tenant expressly agrees that, to
the extent that any transferee assumes the obligations of Landlord hereunder,
and provided Landlord has either transferred the complete Security Deposit held
pursuant to this Lease or refunded the same to Tenant as of the date of such
transfer, then the covenants and agreements on the part of Landlord to be
performed under this Lease which arise and/or accrue after the date of such
transfer shall not be binding upon Landlord herein named from and after the date
of transfer of its interest in the Building.
SECTION 9.6. LANDLORD'S INDEMNIFICATION. Landlord shall indemnify, and hold
Tenant and Tenant's agents, contractors, directors, employees, officers,
partners or shareholders harmless from and against any and all claims, causes of
action, liabilities, losses, reasonable costs and expenses, including reasonable
attorneys' fees and court costs, arising from or in connection with:
A) any activity occurring, or condition existing, at or in the Building (other
than in the Premises) when such activity or condition is under the
reasonable control of Landlord, except when the same is caused in whole or
in part by the negligence or willful misconduct of Tenant or Tenant's
employees, agents, or contractors, or by Tenant's breach or default in the
performance of any obligation under this Lease; or
B) any activity occurring, or condition existing in the Premises when solely
caused by the negligence or willful misconduct of Landlord or Landlord's
employees, agents, or contractors.
ARTICLE 10
COMPLIANCE WITH LAWS
SECTION 10.1. TENANT'S COMPLIANCE WITH LAWS. Tenant shall not use, permit to be
used, or permit anything to be done in or about all or any portion of the
Premises which will in any way violate any laws, statutes, ordinances, rules,
orders or regulations duly issued by any governmental authority having
jurisdiction over the Premises, or by the Board of Fire Underwriters (or any
successor thereto) (collectively "Codes").
SECTION 10.2. TENANT TO COMPLY AT SOLE EXPENSE. Tenant shall, at its sole
expense, promptly remedy any violation of such Codes, provided, however, that
nothing contained in this Section 10.2 shall require Tenant to make any
structural changes to the Premises, unless such changes are required due to
either Tenant or Tenant's agents, clients, contractors, directors, employees,
invitees, licensees, officers, partners or shareholders use of the Premises for
purposes other than general office purposes consistent with a Class A office
building.
SECTION 10.3. CONCLUSIVE EVIDENCE OF VIOLATION. The judgment of any court of
competent jurisdiction; Tenant's admission; or the admission of any one or more
of Tenant's agents, contractors, directors, employees, officers, partners or
shareholders in any action against Tenant, whether or not Landlord is a party
thereto, that Tenant has so violated any one or more Codes shall be conclusive
evidence of such violation as between Landlord and Tenant.
ARTICLE 11
ASSIGNMENT AND SUBLETTING
SECTION 11.1. PERMISSION REQUIRED FOR ASSIGNMENT OR SUBLET. Unless Landlord's
prior written consent has been given, which consent shall not be unreasonably
withheld, conditioned and/or delayed, this Lease shall not, nor shall any
interest herein, be assignable as to the interest of Tenant by operation of law;
nor shall Tenant:
A) assign, mortgage, pledge, encumber or otherwise transfer this Lease, the
Term and estate hereby granted or any interest hereunder;
B) permit the Premises or any part thereof to be utilized by anyone other than
Tenant (whether as by a concessionaire, franchisee, licensee, permittee or
otherwise); or
C) except as hereinafter provided, sublet the Premises or any part thereof
(collectively with the items contained in this Section 11.1, a "Transfer").
Any assignment, mortgage, pledge, encumbrance, transfer or sublease without
Landlord's prior written consent shall be voidable, and, in Landlord's sole
election, shall constitute a material default under this Lease.
SECTION 11.2. VOLUNTARY ASSIGNMENT DUE TO CHANGES IN STRUCTURE OF TENANT. Any
dissolution, merger, consolidation, or other reorganization of Tenant, or the
single sale or other transfer of a controlling percentage of the capital stock
of Tenant (other than the sale of such stock pursuant to a public offering that
results in a majority of the same members of the Board and executive officers
remaining in control of said corporation) and or the single sale of fifty
percent (50%) or more of the value of the assets of Tenant, shall be deemed a
voluntary assignment. The phrase "controlling percentage" means the ownership
of, and the right to vote stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of Tenant's capital stock issued,
outstanding, and entitled to vote for the election of directors. Notwithstanding
anything to the contrary contained herein, the preceding paragraph shall not
apply to corporations whose stock is traded through a recognized United States
exchange or over the counter.
Any withdrawal or change (whether voluntary, involuntary, or by operation
of law) in the partnership by one or more partners who own, in the aggregate
fifty percent (50%) or more of the partnership, or the dissolution of the
partnership, shall be deemed a voluntary assignment.
If Tenant is comprised of more than one individual, a purported assignment
(whether voluntary, involuntary, or by operation of law), by any one of the
persons executing this Lease shall be deemed a voluntary assignment.
13
17
SECTION 11.3. REQUEST TO ASSIGN OR SUBLEASE. If at any time during the Term,
Tenant wishes to assign this Lease or any interest therein, or to sublet all or
any portion of the Premises, then at least thirty (30) days prior to the date
when Tenant desires the assignment or sublease to be effective, Tenant shall
give written notice to Landlord setting forth the name, address, and business of
the proposed assignee or sublessee, business and personal credit applications
completed on Landlord's standard application forms, and information (including
references and such financial documentation as Landlord shall reasonably
prescribe) concerning the character and financial condition of the proposed
assignee or sublessee, the effective date of the assignment or sublease, and all
the material terms and conditions of the proposed assignment, and with reference
solely to a sublease: a detailed description of the space proposed to be sublet,
together with any rights of the proposed sublessee to use Tenant's improvements
and/or ancillary services with the Premises.
SECTION 11.4. LANDLORD'S CONSENT. Landlord shall have twenty (20) days after
Tenant's notice of assignment and/or sublease is received with the financial
information reasonably requested by Landlord to advise Tenant of Landlord's
consent to or disapproval of such proposed assignment or sublease, which consent
shall not be unreasonably withheld, conditioned and/or delayed. Any disapproval
by Landlord shall contain Landlord's detailed reasons for such disapproval.
Tenant acknowledges that Landlord's consent shall be based upon the
criteria listed in Sections 11.4 (a) through (e) below, and subject to
Landlord's right to disapprove of any proposed assignment and/or sublease, based
on the existence of any condition contained within Section 11.5 hereinbelow. If
Landlord provides its consent or fails to provide its disapproval within the
time period specified, Tenant shall be free to complete the assignment and/or
sublet such space to the party contained in Tenant's notice, subject to the
following conditions:
A) The assignment and/or sublease shall be on the same terms as were set forth
in the notice given to Landlord;
B) The assignment and/or sublease shall be documented in a written format that
is reasonably acceptable to Landlord, which form shall specifically include
the assignee's and/or sublessee's acknowledgement and acceptance of the
obligation contained in this Lease, in so far as applicable;
C) The assignment and/or sublease shall not be valid, nor shall the assignee
or sublessee take possession of the Premises, or subleased portion thereof,
until an executed duplicate original of such sublease and/or assignment has
been delivered to Landlord;
D) The assignee and/or sublessee shall have no further right to assign this
Lease and/or sublease the Premises;
E) Tenant shall pay monthly to Landlord one-half (1/2) of the "Net Rental
Profit" per square foot actually received by Tenant. Such Net Rental Profit
shall be payable to Landlord as Additional Rental under this Lease without
affecting or reducing any other obligation of Tenant hereunder.
Net Rental Profit shall be calculated by subtracting the Rent and
Additional Rent paid to Landlord by Tenant, as well as Tenant's reasonable
costs of subletting such space (such as rent abatement, fair market leasing
commissions, reasonable marketing expenses, new leasehold improvements, and
reasonable attorney fees and expenses, as well as any economic
consideration received by Tenant arising out of the sale of Tenant's
business, or because Tenant provides ancillary business services to the
sublessee, such as reception or secretarial services, or office furnishings
or equipment, from the average rent per square foot that Tenant is to be
paid by any sublessee or assignee over the term of the Transfer, which
shall only be payable as received by Tenant.
Tenant shall deliver to Landlord a statement within thirty (30) days
after the end of each calendar year and/or within thirty (30) days after
the expiration or earlier termination of the Term of this Lease in which
any sublease of the Premises has occurred, specifying for each such
sublease:
I) the date of its execution and delivery, the number of square feet of
the Rentable Area demised thereby and the Term thereof, and
II) a computation in reasonable detail showing
1) the amounts (if any) paid and payable by Tenant to Landlord
pursuant to this Section 11.4 with respect to such sublease for
the period covered by such statement and
2) the amounts (if any) paid and payable by Tenant to Landlord
pursuant to this Section 11.4 with respect to any payments
received from a sublessee during such period but which relate to
an earlier period.
SECTION 11.5. REASONABLE GROUNDS FOR DENIAL OF ASSIGNMENT AND/OR SUBLEASE.
Landlord and Tenant agree that, in addition to such other reasonable grounds as
Landlord may assert for withholding its consent, it shall be reasonable under
this Lease and any applicable law for Landlord to withhold its consent to any
proposed Transfer, where any one or more of the following conditions exists:
A) The proposed sublessee or assignee (a "Transferee") is, in Landlord's
reasonable judgment, of a character or reputation which is not consistent
with those businesses customarily found in a Class A office building;
B) The Transferee is engaged in a business or intends to use all or any
portion of the Premises for purposes which are not consistent with those
generally found in the Building or other Class A office buildings in the
vicinity of the Building, provided, however, that in no event shall
Landlord be permitted to decline Tenant's request for a Transfer solely on
the basis of said Transferee's intent to change the Specified Use from that
of Tenant, unless such proposed change shall violate any Exclusive Use
provision already granted by Landlord;
C) The Transferee is either a governmental agency or instrumentality thereof;
14
18
D) The Transfer will result in more than a reasonable and safe number of
occupants within the Premises;
E) The Transferee is not a party of reasonable financial worth and/or
financial stability in light of the responsibilities involved under the
sublease, if a sublessee, or the Lease, if an assignee, on the date consent
is requested, or has demonstrated a prior history of credit instability or
unworthiness;
F) The Transfer will cause Landlord to be in violation of another lease or
agreement to which Landlord is a party, or would give another occupant of
the Building a right to cancel its lease;
G) The Transferee will retain any right originally granted to Tenant to
exercise a right of renewal, right of expansion, right of first offer or
other similar right held by Tenant. However, nothing contained herein shall
prevent Tenant from exercising any Option to Extend the Term hereof it may
have early, concurrent with Tenant's request for such transfer;
H) The proposed Transferee:
I) is a tenant in the Building at the time Tenant requests approval of the
proposed Transfer (and Landlord has space available in the Building of
a similar size and for a similar term as that proposed to be assigned
or sublet by Tenant), or
II) is engaged in on-going negotiations with Landlord to lease space in the
Building at the time Tenant requests approval of the proposed Transfer;
III) The Transferee intends to use all or a portion of the Premises for
medical procedures or for a primary business which is as a boiler-room
type sales or marketing organization.
Tenant hereby waives all other remedies(and to the extent permitted by
applicable law, on behalf of the proposed Transferee, as well), with regard to
any claim that Landlord has acted improperly by withholding, delaying or
conditioning its consent to a proposed Transfer, except that Tenant (i) shall
retain the right to xxx Landlord for any actual damages suffered by Tenant
(other than damages or injury to, or interference with, Tenant's business,
including without limitation, loss of profits), and (ii) shall retain the right
to prosecute an action for declaratory relief.
SECTION 11.6. TENANT'S CONTINUED OBLIGATION. Any consent by Landlord to an
assignment of this Lease and/or sublease of the Premises shall not release
Tenant from any of Tenant's obligations hereunder or be deemed to be a consent
by Landlord to any subsequent hypothecation, assignment, subletting, occupation
or use by another person, and Tenant shall remain liable to pay the Rent and/or
perform all other obligations to be performed by Tenant hereunder. Landlord's
acceptance of Rent or Additional Rent from any other person shall not be deemed
to be a waiver by Landlord of any provision of this Lease. Landlord's consent to
one assignment or subletting shall not be deemed consent to any subsequent
assignment or subletting.
If any assignee or sublessee of Tenant or any successor of Tenant defaults
in the performance of any of the provisions of this Lease, whether or not
Landlord has collected Rent directly from said assignee or sublessee, Landlord
may proceed directly against Tenant without the necessity of exhausting remedies
against such assignee, sublessee or other successor-in-interest.
Provided that in no event shall any further assignment, sublease, amendment
or modification to this Lease serve to either increase Tenant's liability or
expand Tenant's duties or obligations hereunder, or relieve Tenant of its
liability under this Lease, then Landlord may consent to subsequent assignments
or subletting of this Lease or amendments or modifications to this Lease with
any assignee, without notifying Tenant or any successor of Tenant, and without
obtaining their consent thereto.
SECTION 11.7. TENANT TO PAY LANDLORD'S COSTS. If Tenant assigns or sublets the
Premises or requests the consent of Landlord to any assignment, subletting or
other modification of this Lease, or if Tenant requests the consent of Landlord
for any act that Tenant proposes to do, whether or not Landlord shall grant
consent thereto, then Tenant shall, concurrent with Tenant's submission of any
written request therefor, pay Landlord's reasonably anticipated costs for review
of Tenant's documentation, credit check and processing fees, as well as any
reasonable legal fees incurred by Landlord in connection therewith.
SECTION 11.8. SUCCESSORS AND ASSIGNS. Subject to the provisions contained
herein, the covenants and agreements contained in this Lease shall bind and
inure to the benefit of Landlord and Tenant, their respective successors and
assigns and all persons claiming by, through or under them.
SECTION 11.9 AFFILIATED COMPANIES/RESTRUCTURING OF BUSINESS ORGANIZATION. Any
contrary provision of this Article 11 notwithstanding, the assignment or
subletting by Tenant of all or any portion of this Lease or the Premises to (i)
a parent or subsidiary of Tenant, or (ii) any person or entity which controls,
is controlled by or under common control with Tenant, or (iii) any entity which
purchases all or substantially all of the assets of Tenant, or (iv) any entity
into which Tenant is merged or consolidated (all such persons or entities
described in (i), (ii), (iii) and (iv) being sometimes hereinafter referred to
as "Affiliates") shall not be deemed a Transfer under this Article 11 and thus
shall not be subject to Landlord's prior consent, and Landlord shall not be
entitled to any Net Rental Profit resulting therefrom, provided that:
a) any such Affiliate was not formed as a subterfuge to avoid the
obligations of this Article 11;
b) Tenant gives Landlord at least ten (10) days' prior notice of any such
assignment or sublease to an Affiliate;
c) the successor of Tenant and Tenant have as of the effective date of any
such assignment or sublease a tangible net worth, in the aggregate, computed in
accordance with generally accepted accounting principles (but excluding good
will as an asset), which is sufficient to meet the obligations of Tenant under
this Lease and is equal to or greater than the net worth of Tenant as of the
date of execution of this Lease;
15
19
d) any such assignment or sublease shall be subject and subordinate to all
of the terms and provisions of this Lease, and such assignee or sublessee shall
assume, in a written document reasonably satisfactory to Landlord and delivered
to Landlord upon or prior to the effective date of such assignment or sublease,
all the obligations of Tenant under this Lease with respect to that portion of
the Premises which is the subject of such Transfer (other than the amount of
Fixed Monthly Rent payable by Tenant with respect to a sublease); and
e) Tenant and any guarantor shall remain fully liable for all obligations
to be performed by Tenant under this Lease.
ARTICLE 12
MAINTENANCE, REPAIRS, DAMAGE, DESTRUCTION, RENOVATION AND/OR ALTERATION
SECTION 12.1. TENANT'S OBLIGATION TO MAINTAIN. Tenant shall, at Tenant's sole
expense, maintain the Premises in good order and repair, and shall also keep
clean any portion of the Premises which Landlord is not obligated to clean. Such
obligation shall include the clean-out; repair and/or replacement of Tenant's
garbage disposal(s), Instant-Heat or other hot water producing equipment, if
any, and the cleaning and removal of any dishes and/or food prior to the same
becoming unsanitary. If Tenant becomes obligated to repair anything within the
Premises, Tenant shall advise Landlord's managing agent of such need, which
request shall be presumed conclusive evidence of Tenant's obligation and
willingness to reimburse Landlord for such repair(s).
Further, Tenant shall pay the cost of any injury, damage or breakage in,
upon or to the Premises created by Tenant's gross negligence or willful
misconduct or the gross negligence or willful misconduct of Tenant's agents,
clients, contractors, directors, employees, invitees, licensees, officers,
partners or shareholders.
Subject to Tenant's obligation for reimbursement to Landlord, as specified
herein, Landlord shall make all repairs to the Premises and the exterior walls,
foundation and roof of the Building, the structural portions of the floors of
the Building, the systems and equipment of the Building and the Tenant
Improvements installed in the Premises. However, if such repairs, maintenance or
cleaning are required due to Tenant's gross negligence or willful misconduct or
the gross negligence or willful misconduct of Tenant's agents, clients,
contractors, directors, employees, invitees, licensees, officers, partners or
shareholders, then, Tenant shall, within ten (10) days after receipt of
Landlord's billing therefor, reimburse Landlord, as Additional Rent, for any
expense of such repairs, cleaning and/or maintenance in excess of any insurance
proceeds available for reimbursement thereof, including for any deductible
anticipated in connection therewith.
Tenant hereby waives all right to make repairs at Landlord's expense under
the provisions of Section 1932(1), 1941 and 1942 of the Civil Code of
California.
SECTION 12.2. REPAIR PERIOD NOTICE. Tenant shall give prompt notice
to Landlord of Tenant's actual knowledge of any damage or destruction to all or
any part of the Premises or Building resulting from or arising out of any fire,
earthquake, or other identifiable event of a sudden, unexpected or unusual
nature (individually or collectively a "Casualty"). The time periods specified
in this Section 12.2. shall commence after Landlord receives said written notice
from Tenant of the occurrence of a Casualty. After receipt of Tenant's written
notice that a Casualty has occurred, Landlord shall, within the later of:
A) forty-five (45) days after the date on which Landlord determines the full
extent of the damage caused by the Casualty; or
B) thirty (30) days after Landlord has determined the extent of the insurance
proceeds available to effectuate repairs, but
C) in no event more than ninety (90) after the Casualty,
provide written notice to Tenant indicating the anticipated time period for
repairing the Casualty (the "Repair Period Notice"). The Repair Period Notice
shall also state, if applicable, Landlord's election either to repair the
Premises, or to terminate this Lease, pursuant to the provisions of Section
12.3, and if Landlord elects to terminate this Lease, Landlord shall use
commercially reasonable efforts to provide Tenant with a minimum period of
ninety (90) days within which to fully vacate the Premises.
SECTION 12.3. LANDLORD'S OPTION TO TERMINATE OR REPAIR. Notwithstanding anything
to the contrary contained herein, Landlord shall have the option, but not the
obligation to elect not to rebuild or restore the Premises and/or the Building
if one or more of the following conditions is present:
A) repairs to the Premises cannot reasonably be completed within one hundred
and eighty (180) days after the date of the Casualty (when such repairs are
made without the payment of overtime or other premiums);
B) repairs required cannot be made pursuant to the then-existing laws or
regulations affecting the Premises or Building, or the Building cannot be
restored except in a substantially different structural or architectural
form than existed before the Casualty;
C) the holder of any mortgage on the Building or ground or underlying lessor
with respect to the Real Property and/or the Building shall require that
all or such large a portion of the insurance proceeds be used to retire the
mortgage debt, so that the balance of insurance proceeds remaining
available to Landlord for completion of repairs shall be insufficient to
repair said damage or destruction;
D) the holder of any mortgage on the Building or ground or underlying lessor
with respect to the Real Property and/or the Building shall terminate the
mortgage, ground or underlying lease, as the case may be (and Landlord or
an affiliate does not continue to maintain an interest in the Real
Property);
16
20
E) provided Landlord has carried the coverage Landlord is required to obtain
under Section 19.1 of this Lease, the damage is not fully covered, except
for deductible amounts, by Landlord's insurance policies;
F) more than fifty percent (50%) of the Building is damaged or destroyed,
whether or not the Premises is affected, provided that Landlord elects to
terminate all other leases for offices of a similar size in the Building.
If Landlord elects not to complete repairs to the Building or Premises,
pursuant to this Section 12.3, Landlord's election to terminate this Lease shall
be stated in the Repair Period Notice, in which event this Lease shall cease and
terminate as of the date contained in Landlord's Repair Period Notice.
If one hundred percent of the Building is damaged or destroyed, as
certified by an independent building inspector, this Lease shall automatically
terminate after Tenant's receipt of written notice of such termination from
Landlord, and without action beyond the giving of such notice being required by
either Landlord or Tenant.
Upon any termination of this Lease pursuant to this Section 12.3, Tenant
shall pay its prorata share of Fixed Monthly Rent and Additional Rent, properly
apportioned up to the date of such termination, reduced by any abatement of Rent
to which Tenant is entitled under Section 12.5; after which both Landlord and
Tenant shall thereafter be freed and discharged of all further obligations under
the Lease, except for those obligations which by their provisions specifically
survive the expiration or earlier termination of the Term.
SECTION 12.4. TENANT'S OPTION TO TERMINATE. If
A) the Repair Period Notice provided by Landlord indicates that the
anticipated period for repairing the Casualty exceeds one hundred and
eighty (180) days after the Casualty (the "Repair Period"), or
B) The Casualty to the Premises occurs during the last twelve (12) months of
the Term; then
Tenant shall have the option, but not the obligation, to terminate this
Lease by providing written notice ("Tenant's Termination Notice") to Landlord
within thirty (30) days after receiving the Repair Period Notice in the case of
12.4 (a); or within thirty (30) days after the Casualty, in the case of Section
12.4 (b). Furthermore, if:
C) Landlord does not complete the repairs required hereinabove within the
Repair Period, and
D) further provided Landlord has not diligently commenced and continued to
prosecute to completion repair of the damage and/or destruction caused by
the Casualty, and
E) Landlord has not completed the repairs thereafter on or before thirty (30)
days after the expiration of the Repair Period,
then Tenant shall also have the option, but not the obligation, to
terminate this Lease by giving Landlord written notice of its intention to so
terminate, which notice shall be given not more than forty-five (45) days after
expiration of the Repair Period.
Tenant's failure to provide Landlord with Tenant's Termination Notice
within the time periods specified hereinabove shall be deemed conclusive
evidence that Tenant has waived its option to terminate this Lease.
SECTION 12.5. TEMPORARY SPACE AND/OR RENT ABATEMENT DURING REPAIRS OR
RENOVATION. During the Repair Period or during any such period that Landlord
completes Work (as defined hereinbelow) or Renovations (as defined hereinbelow),
if available, and if requested by Tenant, Landlord shall make available to
Tenant other space in the Building which, in Tenant's reasonable opinion, is
suitable for the temporary conduct of Tenant's business. However, if such
temporary space is smaller than the Premises, Tenant shall pay Fixed Monthly
Rent and Additional Rent for the temporary space based upon the calculated rate
per Rentable square foot payable hereunder for the Premises, times the number of
Rentable square feet available for Tenant's use in the temporary space.
If no temporary space is available that is reasonably satisfactory to
Tenant, and any part of the Premises is rendered untenantable by reason of such
Casualty, Work or optional renovation, then to the extent that all or said
portion of the usable area of the Premises is so rendered untenantable by reason
of such Casualty, Work or optional renovation, Tenant shall be provided with a
proportionate abatement of Fixed Monthly Rent and Additional Rent. Said
proportional abatement shall be based on the Usable Square Footage of the
Premises that cannot and is not actually used by Tenant, divided by the total
Usable square feet contained in the Premises. That proportional abatement, if
any, shall be provided during the period beginning on the later of:
A) the date of the Casualty; or
B) the actual date on which Tenant ceases to conduct Tenant's normal business
operations in all or any portion of the Premises, and
shall end on the date Landlord achieves substantial completion of
restoration of the Premises. Tenant's acceptance of said abatement of Rent shall
be deemed conclusive evidence of Tenant's waiver of any further claim or right
of future claim for any loss or damage asserted by Tenant arising out of the
Casualty Repair, Work or Renovation, as the case may be.
SECTION 12.6. TENANT'S WAIVER OF CONSEQUENTIAL DAMAGES. Subject to Sections 12.4
and 12.7, the provisions contained in Section 12.5 are Tenant's sole remedy
arising out of any Casualty. Landlord shall not be liable to Tenant or any other
person or entity for any direct, indirect, or consequential damage (including
but not limited to lost profits of Tenant or loss of or interference with
Tenant's business).
17
21
SECTION 12.7. REPAIR OF THE PREMISES. If the cost of repair of any Casualty is
covered under one or more of the insurance policies Landlord is required herein
to provide, then, Landlord shall restore the base core and shell of the Premises
to its condition prior to the Casualty and repair and/or replace the
Improvements previously installed in the Premises, to a maximum of $35.00 per
usable square foot. Tenant shall have the option to either, at Tenant's sole
expense, complete the balance of repairs needed to restore the Improvements
contained in the Premises to their condition prior to the Casualty or to
continue Tenant's normal business operations in the Premises in the condition to
which Landlord has so restored the Improvements.
If Landlord has elected to complete repairs to the Premises, and has not
elected to terminate this Lease, as specified in Section 12.3, then Landlord
shall complete such repairs within the Repair Period, in a manner, and at times,
which do not unreasonably interfere with Tenant's use of that portion of the
Premises remaining unaffected by the Casualty. Provided Landlord has elected to
make the repairs required hereunder, this Lease shall not be void or voidable
during the Repair Period, nor shall Landlord be deemed to have constructively
evicted Tenant thereby, nor shall Landlord be liable for any inconvenience or
annoyance to Tenant or Tenant's agents, clients, contractors, directors,
employees, invitees, licensees, officers, partners or shareholders, or for
injury to the business of Tenant resulting in any way from such Casualty, or
from Landlord's undertaking of such repairs in accordance with the terms of this
Lease.
SECTION 12.8. Intentionally Omitted.
SECTION 12.9. REPAIR OF THE BUILDING. Except as specified hereinabove. unless
Landlord terminates this Lease as permitted hereinabove, Landlord shall repair
the Building, parking structure or other supporting structures and facilities
within two hundred and seventy (270) days after Landlord becomes aware of such
damage and/or destruction.
SECTION 12.10. GOVERNMENT-REQUIRED REPAIRS. If, during the Term, additional
inspections other than those standard annual or biannual inspections to which
the Building may generally be subject; testing, repairs and/or reconstruction
(collectively the "Work") are required by any governmental authority, or if,
upon the recommendation of its engineers, Landlord independently elects to
undertake all or any portion of the Work prior to being required to do so by
such governmental authority, Landlord shall give notice thereof to Tenant and
shall use its best efforts not to unreasonably interfere with Tenant's use of
the Premises while completing the Work. Tenant shall cooperate fully with
Landlord in connection with the Work and, upon the prior written request of
Landlord, shall make the Premises available for completion of the Work. Tenant
agrees that Landlord shall allocate all costs associated with completion of the
Work to the Building's Operating Expenses, when permitted under to the
provisions of Section 4.1 of this Lease.
If Landlord elects to undertake the Work during the Term, then Tenant shall
be entitled to an abatement of rent, pursuant to the provisions of Section 12.5
hereinabove, and Landlord shall be completely responsible for repair of any
damage to the Premises and all costs associated with the removal, moving and/or
storage of Tenant's furniture, artwork, office equipment and files. Landlord
will restore any and all areas damaged by completion of the Work to their
previous quality and pay all clean-up costs. Landlord further agrees that it
shall use commercially reasonable efforts to see that all construction, such as
coring or power nailing that could be disruptive to Tenant's normal business
operations shall, in so far as is reasonably possible, be performed between the
hours of 7:00 p.m. to 7:00 a.m. Monday through Friday; after 1:00 p.m. on
Saturdays and/or at any time on Sundays.
Except in the case of Landlord's gross negligence and/or willful misconduct
or the gross negligence and/or willful misconduct of Landlord's agents,
contractors, directors, employees, officers, partners, and/or shareholders,
Tenant shall not have the right to terminate this Lease as a result of Landlord
undertaking the Work, nor shall Tenant or any third party claiming under Tenant
be entitled to make any claim against Landlord for any interruption,
interference or disruption of Tenant's business or loss of profits therefrom as
a result of the Work, and Tenant hereby releases Landlord from any claim which
Tenant may have against Landlord arising from or relating to, directly or
indirectly, the performance of the Work by Landlord.
SECTION 12.11. OPTIONAL LANDLORD RENOVATION. It is specifically understood and
agreed that Landlord has no obligation and has made no promises to alter,
remodel, improve, renovate or decorate the Premises, Building, or any part
thereof and that, except as set forth herein, no representations respecting the
condition of the Premises or the Building have been made by Landlord to Tenant.
However, Tenant acknowledges that, at any time and from time to time during
the Term, Landlord may elect, in Landlord's sole discretion, to renovate,
improve, alter or modify the Building and/or Premises including without
limitation, the parking facilities, common areas, systems, equipment, roof, and
structural portion of the same, which Renovations may include, without
limitation:
A) modifying the common areas and tenant spaces to comply with applicable laws
and regulations, including regulations relating to the physically disabled,
seismic conditions and building safety and security and
B) installing new carpeting, lighting and wall covering in the Building common
areas,
which Sections 12.11 (a) and 12.11 (b) shall hereinafter collectively be
known as "the "Renovations".
In connection with such Renovations, Landlord may, among other things,
erect scaffolding or other necessary structures in the Building, limit or
eliminate access to portions of the Building, common areas or parking facilities
serving the Building, or perform other work in the Building, which work may
create noise, dust or debris that remains in the Building.
18
22
Landlord shall have the right to access through the Premises as well as the
right to take into and upon and through all or any part of the Premises, or any
other part of the Building, all materials that may reasonably be required to
make such repairs, alterations, decorating, additions or improvements pursuant
to the provisions of this Section 12.11. So long as Tenant shall maintain
reasonable access to the Premises, Building and parking facilities, Landlord
shall also have the right, in the course of the Renovations, to close entrances,
doors, corridors, elevators, or other building facilities, or temporarily to
xxxxx the operation of such facilities.
So long as Tenant is not required to vacate the Premises for any reason
arising out of the Renovations, and maintains reasonable access to the Premises,
Tenant shall permit all of the Renovations to be done, and except in the case of
Landlord's gross negligence or willful misconduct or the gross negligence or
willful misconduct of Landlord's contractors, directors, employees, officers,
partners or shareholders, without claiming Landlord is guilty of the
constructive eviction or disturbance of Tenant's use and possession.
Further, except in the case of Landlord's gross negligence or willful
misconduct, or that of its agents, contractors, employees, officers, partners or
shareholders, Landlord shall not be liable to Tenant in any manner, whether for
reimbursement of any expense, injury, loss or damage to Tenant's property,
business, or any person claiming by or under Tenant, and whether by reason of
interference with the business of Tenant or inconvenience or annoyance to Tenant
or the customers of Tenant resulting from any work done in or about the Premises
or the Building or to any adjacent or nearby building, land, street or alley.
However, Landlord agrees that the Renovations shall be scheduled insofar as is
commercially reasonable to permit Tenant to continue its normal business
operations, with advance notice thereof, and in such commercially reasonable
manner so as to minimize Tenant's inconvenience.
SECTION 12.12. OPTIONAL TENANT CHANGES DURING THE TERM. After completion of the
initial Improvements contemplated hereunder, if any, Tenant shall make no
alteration, change, addition, removal, demolition, improvement, repair or
replacement in, on, upon, to or about the Premises, or at any time to any
portion of the Building (collectively or individually a "Tenant Change"),
without the prior written consent of Landlord, which consent shall be in
Landlord's reasonable discretion. Except as otherwise specified in Article 7,
any Tenant Change shall, at the termination of this Lease, become a part of the
Building and belong to Landlord, pursuant to the provisions of Article 7. Any
application for Landlord's consent to a Tenant Change, and the completion
thereof, shall be in conformance with the provisions of Exhibit B-1, attached
hereto and made a part hereof by reference.
Tenant shall not knowingly permit Tenant's agents, clients, contractors,
directors, employees, invitees, licensees, officers, partners or shareholders to
deface the walls, floors and/or ceilings of the Premises, nor xxxx, drive nails,
screws or drill holes into, paint, or in any way mar any surface in the
Building. Notwithstanding the above, Tenant is hereby permitted to install such
pictures, certificates, licenses, artwork, bulletin boards and similar items as
are normally used in Tenant's business, so long as such installation is
carefully attached to the walls by Tenant in a manner reasonably prescribed by
Landlord.
If Tenant desires, as a part of any Tenant Change, to make any revisions
whatsoever to the electrical, HVAC, mechanical, plumbing, or structural systems
of the Building or Premises, such revisions must be completed by subcontractors
specified by Landlord and in the manner and location(s) reasonably prescribed by
Landlord. If Tenant desires to install any telephone outlets, the same shall be
installed in the manner and location(s) reasonably prescribed by Landlord.
If Landlord consents to any requested Tenant Change, Tenant shall give
Landlord a minimum of fifteen (15) days written notice prior to commencement
thereof. Landlord reserves the option, but not the obligation, to enter upon the
Premises for the purpose of posting and maintaining such notices on the Premises
as may be reasonably necessary to protect Landlord against mechanic's liens,
material man's liens or other liens, and/or for posting any other notices that
may be proper and necessary in connection with Tenant's completion of the Tenant
Change.
If any alterations, additions or improvements made by Tenant result in
Landlord being required to make any alterations to other portions of the
Building in order to comply with any applicable statutes, ordinances or
regulations (e.g., "handicap ordinances") then Tenant shall reimburse Landlord
upon demand for all costs and expenses incurred by Landlord in making such
alterations.
Notwithstanding anything to the contrary contained in this Article 12, Tenant
may make non-structural alterations, additions or improvements to the interior
of the Premises (collectively, the "Acceptable Changes") without Landlord's
consent, provided that (i) Tenant delivers to Landlord reasonable prior notice
(given the scope of the work to be undertaken) of such Acceptable Changes prior
to the commencement thereof, (ii) the aggregate cost of all such Acceptable
Changes during any twelve (12) consecutive month period does not exceed fifteen
thousand dollars ($15,000.00), (iii) such Acceptable Changes shall be performed
by or on behalf of Tenant in compliance with the other provisions of this
Article 12, (iv) such Acceptable Changes do not require the issuance of a
building permit or other governmental approval, (v) such Acceptable Changes do
not affect any mechanical, electrical or plumbing systems of the Building and
cannot be seen from outside the Premises, and (vi) such Acceptable Changes shall
be performed by qualified contractors and subcontractors which normally and
regularly perform similar work in comparable buildings.
SECTION 12.13. EXPRESS AGREEMENT. The provisions of this Lease, including those
contained in this Article 12, constitute an express agreement between Landlord
and Tenant that applies in the event of any Casualty to the Premises, Building
or Real Property. Tenant, therefore, fully waives the provisions of any statute
or regulations, including California Civil Code Sections 1932(2) and 1933(4),
and any other law or statute which purports to govern the rights or obligations
of Landlord and Tenant
19
23
concerning a Casualty in the absence of express agreement. Tenant and Landlord
expressly agree and accept that any successor or other law of like import shall
have no application hereunder.
ARTICLE 13
CONDEMNATION
SECTION 13.1. CONDEMNATION OF THE PREMISES. If more than twenty five percent
(25%) of the Premises is lawfully condemned or taken in any manner for any
public or quasi-public use, or if any portion of the Building is condemned or
taken in such a manner that Tenant is reasonably prevented from obtaining access
to the Building or the Premises, this Lease may be terminated at the option of
either Landlord or Tenant by one party giving the other thirty (30) days written
notice of its intent to do so. If either Landlord or Tenant provide the other
party written notice of termination, the Term and estate hereby granted shall
forthwith cease and terminate as of the earlier of the date of vesting of title
in such condemnation or taking or the date of taking of possession by the
condemning authority.
If less than twenty-five percent (25%) of the Premises is so condemned or
taken, then the term and estate hereby granted with respect to such part shall
forthwith cease and terminate as of the earlier of the date of vesting of title
in such condemnation or taking or the date of taking of possession by the
condemning authority, and the Fixed Monthly Rent payable hereunder (and
Additional Rent payable pursuant to Articles 3 or 4) shall be abated on a
prorated basis, by dividing the total number of Usable square feet so taken by
the total number of Usable square feet contained in the Premises, then
multiplying said percentage on a monthly basis, continuing from the date of such
vesting of title to the date specified in this Lease for the expiration of the
Term hereof.
Notwithstanding the above, if any vacant space remains in the Building,
Landlord shall provide Tenant a first right of offer to lease such vacant space
on the same terms and conditions as are contained in this Lease, in which case
this Lease shall be amended to replace the Premises with such vacant space.
SECTION 13.2. CONDEMNATION OF THE BUILDING. If less than twenty-five percent
(25%) of the Building is so condemned or taken, then Landlord shall, to the
extent of the proceeds of the condemnation payable to Landlord and with
reasonable diligence, restore the remaining portion of the Building as nearly as
practicable to its condition prior to such condemnation or taking; except that,
if such proceeds constitute less than ninety percent (90%) of Landlord's
estimate of the cost of rebuilding or restoration, then Landlord may terminate
this Lease on thirty (30) days prior written notice to Tenant.
If more than twenty-five percent (25%) of the Building is so condemned or
taken, but the Premises are unaffected thereby, then Landlord shall have the
option but not the obligation, which election shall be in Landlord's sole
discretion, to terminate this Lease, effective the earlier of the date of
vesting of title in such condemnation or the date Landlord delivers actual
possession of the Building and Premises to the condemning authority, which
election by Landlord shall be provided to Tenant in writing.
SECTION 13.3. AWARD. If any condemnation or taking of all or a part of the
Building takes place, Tenant shall be entitled to join in any action claiming
compensation therefore, and Landlord shall be entitled to receive that portion
of the award made for the value of the Building, Premises, leasehold
improvements made or reimbursed by Landlord, or bonus value of the Lease, and
Tenant shall only be entitled to receive any award made for the value of the
estate vested by this Lease in Tenant and the unamortized cost of any
improvements to the Premises to the extent paid for by Tenant, including
Tenant's proximate damages to Tenant's business and reasonable relocation
expenses. Nothing shall preclude Tenant from intervening in any such
condemnation proceeding to claim or receive from the condemning authority any
compensation to which Tenant may otherwise lawfully be entitled in such case in
respect of Tenant's property or for moving to a new location.
SECTION 13.4. CONDEMNATION FOR A LIMITED PERIOD. Notwithstanding the provisions
of Section 13.1, 13.2 or 13.3, except during the final twelve (12) months of the
Term, if all or any portion of the Premises are condemned or taken for
governmental occupancy for a limited period, anticipated to be no longer than
sixty (60) days then this Lease shall not terminate; there shall be no abatement
of Fixed Monthly Rent or Additional Rent payable hereunder; and Tenant shall be
entitled to receive the entire award therefor (whether paid as damages, rent or
otherwise).
If, during the final twelve (12) months of the Term, all or any portion of
the Premises are condemned or taken for governmental occupancy for a limited
period anticipated to be in excess of sixty (60) days, or for a period extended
after the expiration of the initial Term, Tenant shall have the option, but not
the obligation, to terminate this Lease, in which case, Landlord shall be
entitled to such part of such award as shall be properly allocable to the cost
of restoration of the Premises, and the balance of such award shall be
apportioned between Landlord and Tenant as of the date of such termination.
If the termination of such governmental occupancy is prior to expiration of
this Lease, and Tenant has not elected to terminate this Lease, Tenant shall,
upon receipt thereof and to the extent an award has been made, restore the
Premises as nearly as possible to the condition in which they were prior to the
condemnation or taking.
ARTICLE 14
MORTGAGE SUBORDINATION; ATTORNMENT AND MODIFICATION OF LEASE
SECTION 14.1. SUBORDINATION. Subject to Tenant's receipt of an appropriate
non-disturbance agreement(s) as set forth below, this Lease shall be subject and
subordinate to all present and future ground or underlying leases of the
Building and to the lien of any mortgage, trust deed or other encumbrances now
or hereafter in force against the Building, if any, and to all renewals,
extensions, modifications, consolidations and replacements thereof, and to all
advances made or hereafter to be made upon the security of such mortgages or
trust deeds, unless the holders of such mortgages, trust
20
24
deeds or other encumbrances, or the lessors under such ground lease or
underlying leases, require in writing that this Lease be superior thereto.
Landlord's delivery to Tenant of commercially reasonable non-disturbance
agreement(s) (the "Nondisturbance Agreement") in favor of Tenant from any ground
lessors, mortgage holders or lien holders of Landlord who come into existence
following the date hereof but prior to the expiration of the Lease Term shall be
in consideration of and a condition precedent to, Tenant's agreement to be bound
by the provisions of this Article 14. Such commercially reasonable
non-disturbance agreement(s) shall include the obligation of any such successor
ground lessor, mortgage holder or lien holder to recognize Tenant's rights
specifically set forth in this Lease and Landlord's obligations to comply with
the provisions of this Lease. Subject to Tenant's receipt of the non-disturbance
agreement(s) described above, Tenant covenants and agrees in the event any
proceedings are brought for the foreclosure of any such mortgage or deed in lieu
thereof (or if any ground lease is terminated), to attorn to the lienholder or
purchaser or any successors thereto upon any such foreclosure sale or deed in
lieu thereof (or to the ground lessor), to recognize such purchaser or
lienholder or ground lessor as the lessor under this Lease, provided such
lienholder or purchaser or ground lessor shall agree to accept this Lease and
not disturb Tenant's occupancy, so long as Tenant is not in default of its
obligations pursuant to this Lease. Landlord's interest herein may be assigned
as security at any time to any lienholder. Tenant shall, within ten (10)
business days of request by Landlord, execute such further instruments or
assurances as Landlord may reasonably deem necessary to evidence or confirm the
subordination or superiority of this Lease to any such mortgages, trust deeds,
ground leases or underlying leases in accordance with the provisions of this
Article 14. Subject to Tenant's receipt of the Nondisturbance Agreement
described herein, Tenant waives the provisions of any current or future laws
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.
SECTION 14.2. ATTORNMENT. Tenant confirms that if by reason of a default under
an underlying mortgage the interest of Landlord in the Premises is terminated,
provided Tenant is granted in writing continued quiet enjoyment of the Premises
pursuant to the terms and provisions of this Lease, Tenant shall attorn to the
holder of the reversionary interest in the Premises and shall recognize such
holder as Tenant's landlord under this Lease. Tenant shall, within ten (10)
calendar days after request therefor, execute and deliver, at any time and from
time to time, upon the request of Landlord or of the holder of an underlying
mortgage any instrument which may be necessary or appropriate to evidence such
attornment. If Tenant fails to so execute and deliver any such instrument, then
Tenant hereby irrevocably appoints Landlord or such holder as its
attorney-in-fact to execute and deliver for and on behalf of Tenant any such
instrument.
SECTION 14.3. MODIFICATION OF LEASE. If any current or prospective mortgagee or
ground lessor for the Building requires a modification or modifications of this
Lease, which modification or modifications will not cause an increased cost or
expense to Tenant or in any other way materially and adversely change the rights
and obligations of Tenant hereunder, then in such event, Tenant agrees that this
Lease may be so modified. Tenant agrees to execute and deliver to Landlord
within ten (10) calendar days following the request therefor whatever documents
are required to effectuate said modification. Should Landlord or any such
current or prospective mortgagee or ground lessor require execution of a short
form of Lease for recording, containing, among other customary provisions, the
names of the parties, a description of the Premises and the Term, Tenant agrees
to execute and deliver to Landlord such short form of Lease within ten (10)
calendar days following the request therefor.
ARTICLE 15
ESTOPPEL CERTIFICATES
SECTION 15.1. ESTOPPEL CERTIFICATES. Tenant shall, within ten (10) business days
after receipt of Landlord's written request therefor, execute, acknowledge and
deliver to Landlord an Estoppel Certificate, which may be conclusively relied
upon by any prospective purchaser, mortgagee or beneficiary under any deed of
trust covering the Building or any part thereof. Said Estoppel Certificate shall
certify the following:
A) that this Lease is unmodified and in full force and effect (or, if there
have been modifications, that this Lease is in full force and effect, as
modified, and stating the date and nature of each modification);
B) the date, if any, to which rental and other sums payable hereunder have
been paid;
C) that no notice has been received by Tenant of any default which has not
been cured, except as to defaults specified in the certificate;
D) that Landlord is not in default under this Lease or, if so, specifying such
default; and
E) such other factual matters as may be reasonably requested by Landlord.
Tenant's failure to deliver the Estoppel Certificate within the time period
specified above shall constitute a material default under the Lease, and
Landlord shall have the option, but not the obligation, to enforce the remedies
contained in Article 18.
ARTICLE 16
NOTICES
SECTION 16.1. NOTICES. Any notice, consent, approval, agreement, certification,
request, xxxx, demand, statement, acceptance or other communication hereunder (a
"notice") shall be in writing and shall be considered duly given or furnished
when:
A) delivered personally or by messenger or overnight delivery service, with
signature evidencing such delivery;
21
25
B) upon the date of delivery, after being mailed in a postpaid envelope, sent
certified mail, return receipt requested, when addressed to Landlord as set
forth in the Basic Lease Information and to Tenant at the Premises and any
other address for Tenant specified in the Basic Lease Information; or to
such other address or addressee as either party may designate by a written
notice given pursuant hereto; or
C) upon confirmation of good transmission if sent via facsimile machine to
such phone number as shall have been provided in writing by Landlord or
Tenant, one to the other.
If Tenant fails to provide another valid address, other than the Premises,
upon which service to Tenant can be perfected, then Tenant hereby appoints as
its agent to receive the service of all dispossessory or distraint proceedings
and notices thereunder the person in charge of or occupying the Premises at the
time, and if no person shall be in charge of or occupy the same, then such
service may be made by attaching the same to the main entrance of the Premises.
ARTICLE 17
DEFAULT AND LANDLORD'S OPTION TO CURE
SECTION 17.1. TENANT'S DEFAULT. For the purposes of this Section 17.1, if the
term "Tenant", as used in this Lease, refers to more than one person, then, such
term shall be deemed to include all of such persons or any one of them; if any
of the obligations of Tenant under this Lease are guaranteed, the term "Tenant,"
as used in Section 17.1(e) and Section 17.1(f), shall be deemed to also include
the guarantor or, if there is more than one guarantor, all or any one of them;
and if this Lease has been assigned, the term "Tenant," as used in Sections 17.1
(a) through (h), inclusive, shall be deemed to include the assignee and
assignor, jointly and severally, unless Landlord shall have, in connection with
such assignment, previously released the assignor from any further liability
under this Lease, in which event the term "Tenant," as used in said
subparagraphs, shall not include the assignor that was previously released.
Tenant's continued occupancy and quiet enjoyment of the Premises and this
Lease and the covenants and estate hereby granted are subject to the limitation
that:
A) if Tenant defaults in the payment of any Fixed Monthly Rent or Additional
Rent on any date upon which the same becomes due and fails thereafter to
make such payment within five (5) days of its receipt of notice that such
amount is past due; or
B) if Tenant abandons or vacates the Premises, or
C) if Tenant defaults in the keeping, observance or performance of any
covenant or agreement set forth in Sections 6.1, 6.2, or 19.3, and if such
default continues and is not cured by Tenant before the expiration of
Landlord's written 3-Day Notice to Cure or Quit; or
D) if Tenant defaults in the keeping, observance or performance of any
covenant or agreement including any provisions of the rules and regulations
established by Landlord (other than a default of the character referred to
in Sections 17.1 (a), (b) or (c), and if such default continues and is not
cured by Tenant within fifteen (15) days after Landlord has given to Tenant
a notice specifying the same, or, in the case of such a default which for
causes beyond Tenant's reasonable control (including occupancy of a
sublessee) cannot with due diligence be cured within such period of fifteen
(15) days, if Tenant:
I) does not, promptly upon Tenant's receipt of such notice, advise
Landlord of Tenant's intention duly to institute all steps necessary
to cure such default or
II) does not duly institute and thereafter diligently prosecute to
completion all steps (including, if appropriate, legal proceedings
against a defaulting sublessee) necessary to cure the same, or
E) INTENTIONALLY OMITTED.
F) if Tenant:
I) applies for or consents to the appointment of, or the taking of
possession by a receiver, custodian, trustee or liquidator of itself
or of all or a substantial part of its property;
II) admits in writing its inability, or is generally unable, to pay its
debts as such debts become due;
III) makes a general assignment for the benefit of its creditors;
IV) commences a voluntary case under federal bankruptcy laws (as now or
hereafter in effect);
V) files a petition seeking to take advantage of any other law relating
to bankruptcy, insolvency, reorganization, winding up, or composition
or adjustment of debts;
VI) fails to controvert in a timely or appropriate manner, or acquiesces
in writing to, any petition filed against it in an involuntary case
under such bankruptcy laws;
VII) take any action for the purpose of effecting any of the foregoing, or
G) if a proceeding or case is commenced, without the application or consent of
Tenant, in any court of competent jurisdiction, seeking:
I) the liquidation, reorganization, dissolution, winding up, or
composition or readjustment of debts, of Tenant; or
II) the appointment of a trustee, receiver, custodian, liquidator or the
like of Tenant or of all or a substantial part of its assets; or
III) similar relief with respect of Tenant under any law relating to
bankruptcy, insolvency, reorganization, winding up, or composition or
adjustment of debts, and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering any
of the foregoing shall be entered and continue unstayed and in effect,
for a period of sixty (60) days, or an order for relief against Tenant
shall be entered in an involuntary case under such bankruptcy laws, or
22
26
H) if Tenant fails to take possession of and move into the Premises within
fifteen (15) calendar days after Landlord tenders the same in writing to
Tenant, unless Tenant acknowledges and accepts the Commencement Date as
occurring within such fifteen-day time period, and pays Rent thereon from
such Commencement Date;
then, in any or each such event, Tenant shall be deemed to have committed a
material default under this Lease.
SECTION 17.2. LANDLORD'S OPTION TO CURE TENANT'S DEFAULT. If Tenant enters into
a default under this Lease, in lieu of Landlord's issuance of a written notice,
as specified hereinbelow, Landlord may cure the same at the sole expense of
Tenant:
A) immediately and without notice in the case of emergency; if said default is
specified in Sections 17.1 (a), (b) or (c), or if such default unreasonably
interferes with the use by any other tenant of the Building; with the
efficient operation of the Building; or will result in a violation of law
or in a cancellation of any insurance policy maintained by Landlord, and
B) after the expiration of Landlord's 3-Day Notice of Intent to Cure, in the
case of any default other than those specified in Section 17.2 (a)
hereinabove.
SECTION 17.3. LANDLORD'S OPTION TO TERMINATE THIS LEASE. Provided all applicable
cure periods have expired, then In addition to any other remedies Landlord may
have at law or in equity, Landlord shall be entitled to give to Tenant a written
notice of intention to terminate this Lease at the expiration of three (3) days
from the date of the giving of such notice, and if such notice is given by
Landlord, and Tenant fails to timely cure the defaults specified therein, then
this Lease and the Term and estate hereby granted (whether or not the
Commencement Date has already occurred) shall terminate upon the expiration of
such three (3) day period (a "Default Termination"), with the same effect as if
the last of such three (3) days were the Termination Date, except that Tenant
shall remain liable for damages as provided hereinbelow or pursuant to law.
SECTION 17.4. CERTAIN PAYMENTS. Bills for all reasonable costs and expenses
incurred by Landlord in connection with any performance by it under Section 17.2
shall be payable, as Additional Rent, pursuant to the provisions of Section 4.3.
SECTION 17.5. CERTAIN WAIVERS. Unless Tenant has submitted documentation that it
validly disputes Landlord's billing for Fixed Monthly Rent hereunder, or is
completing an audit of Landlord's Operating Expense Statement, if Tenant is in
default in payment of Fixed Monthly Rent or Additional Rent hereunder, Tenant
waives the right to designate the items against which any payments made by
Tenant are to be credited. In lieu thereof, Landlord may apply any payments
received from Tenant to the then-oldest billing remaining unpaid on Tenant's
rental account or to any other payment due from Tenant, as Landlord sees fit.
SECTION 17.6. LANDLORD DEFAULT. Notwithstanding anything to the contrary set
forth in this Lease, Landlord shall not be in default in the performance of any
obligation required to be performed by Landlord pursuant to this Lease unless:
A) in the event such default is with respect to the payment of money, Landlord
fails to pay such unpaid amounts within five (5) business days of written
notice from Tenant that the same was not paid when due, or
B) in the event such default is other than the obligation to pay money,
Landlord fails to perform such obligation within thirty (30) days after the
receipt of notice from Tenant specifying in detail Landlord's failure to
perform; provided, however, if the nature of Landlord's obligation is such
that more than thirty (30) days are required for its performance, then
Landlord shall not be in default under this Lease if it shall commence such
performance within such thirty (30) days period and thereafter diligently
pursue the same to completion within a reasonable time period.
Upon any such default by Landlord under this Lease, Tenant may, except as
otherwise specifically provided in this Lease to the contrary, exercise any of
its rights provided at law or in equity.
23
27
SECTION 17.7 TENANT'S SELF-HELP RIGHTS. Notwithstanding anything to the contrary
set forth in this Lease, if Tenant provides written notice to Landlord of the
need for repairs and/or maintenance which are Landlord's obligations to perform
under this Lease, and Landlord fails to undertake such repairs and/or
maintenance within a reasonable period of time, given the circumstances, after
receipt of such notice (but in no event earlier than ten (10) days after receipt
of such notice), then Tenant may proceed to undertake such repairs and/or
maintenance upon delivery of an additional three (3) business day notice to
Landlord specifically referencing Tenant's right pursuant to this Section 17.7
and stating that Tenant intends to take such required action. If such repairs
and /or maintenance were required under the terms of this Lease to be performed
by Landlord, then Tenant shall be entitled to reimbursement by Landlord of
Tenant's reasonable costs and expenses in performing such maintenance and/or
repairs. Such reimbursement shall be made within thirty (30) days after
Landlord's receipt of invoice of such costs and expenses, and if Landlord fails
to so reimburse Tenant within such 30-day period, then Tenant shall be entitled
to deduct from Rent payable by Tenant under this Lease the amount of such
invoice; provided, however, that notwithstanding the foregoing to the contrary,
if (i) Landlord delivers to Tenant within such three (3) business day period
described above, a written objection to Tenant's right to receive any such
reimbursement based upon Landlord's claim that such action did not have to be
taken by Landlord pursuant to the terms of this Lease, or (ii) Landlord delivers
to Tenant, within thirty (30) days after receipt of Tenant's invoice, a written
objection to the payment of such invoice based upon Landlord's claim that such
charges are excessive (in which case, Landlord shall reimburse Tenant, within
such 30-day period, the amount Landlord contends would not be excessive), then
Tenant shall not be entitled to such reimbursement or deduction from Rent, but
Tenant, as its sole remedy, may proceed to institute legal proceedings to
determine and collect the amount, if any, of such reimbursement. In the event
Tenant prevails in such legal proceedings and receives a monetary judgment
against Landlord, then Landlord shall play such judgment to Tenant within thirty
(30) days of date such monetary judgment is entered. If such monetary judgment
is not so paid, then, notwithstanding any contrary provision of this Lease,
Tenant shall be entitled to deduct from Rent payable under this Lease the amount
of such monetary judgment. In the event Tenant undertakes such repairs and/or
maintenance, and such work will affect the mechanical, electrical or plumbing
systems, any structural portions of the Buildings, and/or the exterior
appearance of the Building, then Tenant shall use only those unrelated third
party contractors used by Landlord in the Buildings for such work unless such
contractors are unwilling or unable to perform such work at competitive prices,
in which event Tenant may utilize the services of any other qualified contractor
which normally and regularly performs similar work in comparable buildings.
ARTICLE 18
DAMAGES; REMEDIES; RE-ENTRY BY LANDLORD; ETC.
SECTION 18.1. DAMAGES. If Landlord terminates this Lease, pursuant to the
provisions of Section 17.3 (a "Default Termination"), then Landlord may recover
from Tenant the total of:
A) the worth at the time of award of the unpaid Fixed Monthly Rent and
Additional Rent earned to the date of such Default Termination; and
B) the worth at the time of award of the amount by which the unpaid Fixed
Monthly Rent and Additional Rent which would have been earned after the
date of such Default Termination until the time of award exceeds the amount
of such rental loss that Tenant proves could have been reasonably avoided;
and
C) the worth at the time of award of the amount by which the unpaid Fixed
Monthly Rent and Additional Rent which would have been earned for the
balance of the Term after the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided; and
D) any other amount reasonably necessary to compensate Landlord for all of the
detriment proximately caused by Tenant's failure to observe or perform any
of its covenants and agreements under this Lease or which in the ordinary
course of events would be likely to result therefrom, including, without
limitation, the payment of the reasonable expenses incurred or paid by
Landlord in re-entering and securing possession of the Premises and in the
reletting thereof (including, without limitation, altering and preparing
the Premises for new tenants and brokers' commission); and
E) at Landlord's sole election, such other amounts in addition to or in lieu
of the foregoing as may be permitted from time to time under applicable
California laws.
SECTION 18.2. COMPUTATIONS: The "worth at the time of award" is computed:
A) in paragraphs (a) and (b) above, by allowing interest at the rate of ten
percent (10%) per annum (but in no event in excess of the maximum rate
permitted by law); and
B) in paragraph (c) above, 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%).
C) For purposes of computing unpaid rental which would have accrued and become
payable under this Lease, unpaid rental shall consist of the sum of:
I) the total Fixed Monthly Rent for the balance of the Term, plus
II) a computation of Tenant's Share of Additional Rent due under the Lease
including, without limitation, Tenant's Proportionate Share of any
increase in Operating Expenses (including real estate taxes) for the
balance of the Term. For purposes of computing any increases due
Landlord hereunder, Additional Rent for the calendar year of the
default and for each future calendar year in the Term shall be assumed
to be equal to the Additional Rent for the calendar year prior to the
year in which default occurs, compounded at a rate equal to the mean
average
24
28
rate of inflation for the preceding five calendar years as determined
by the United States Department of Labor, Bureau of Labor Statistics
Consumer Price Index (All Urban Consumers, all items, 1982-84 equals
100) for the metropolitan area or region of which Los Angeles,
California is a part. If such index is discontinued or revised, the
average rate of inflation shall be determined by reference to the
index designated as the successor or substitute index by the
government of the United States.
SECTION 18.3. RE-ENTRY BY LANDLORD.
A) If a Default Termination occurs or any default specified in Sections 17.1
(a) through (g) occurs and continues beyond the period of grace (if any)
therefor, Landlord or Landlord's authorized representatives may re-enter
the Premises and remove all persons and all property therefrom, either by
summary dispossession proceedings or by any suitable action or proceeding
at law, without being liable to indictment, prosecution or damages
therefor, and may repossess and enjoy the Premises. No re-entry or
repossession of the Premises by Landlord or its representatives under this
Section 18.3 shall be construed as an election to terminate this Lease
unless a notice of such election is given to Tenant or unless the
termination thereof is decreed by a court of competent jurisdiction. The
words "re-enter", "re-entry" and "re-entering" as used herein are not
restricted to their technical legal meanings.
B) If any default specified in Sections 17.1 (a) through (g) occurs and
continues beyond the period of grace (if any) therefor, then if Landlord
does not elect to terminate this Lease Landlord may, from time to time and
without terminating this Lease, enforce all its rights and remedies under
this Lease, including the right to recover the Fixed Monthly Rent and
Additional Rent as the same becomes payable by Tenant hereunder.
If Landlord consents thereto, Tenant may sublet the Premises or any
part thereof (which consent Landlord agrees will not be unreasonably
withheld), subject to Tenant's compliance with the requirements of Article
11 of this Lease. So long as Landlord is exercising this remedy it will not
terminate Tenant's right to possession of the Premises, but it may engage
in the acts permitted by Section 1951.4(c) of the California Civil Code.
C) If Tenant abandons the Premises in breach of this Lease, Landlord shall
have the right to relet the Premises or any part thereof on such terms and
conditions and at such rentals as Landlord in its sole discretion may deem
advisable, with the right to make alterations and repairs in and to the
Premises necessary to reletting. If Landlord so elects to relet, then gross
rentals received by Landlord from the reletting shall be applied:
I) FIRST, to the payment of the reasonable expenses incurred or paid by
Landlord in re-entering and securing possession of the Premises and in
the reletting thereof (including, without limitation, altering and
preparing the Premises for new tenants and brokers' commissions);
II) SECOND, to the payment of the Fixed Monthly Rent and Additional Rent
payable by Tenant hereunder; and
III) THIRD, the remainder, if any, to be retained by Landlord and applied
to the payment of future Fixed Monthly Rent and Additional Rent as the
same become due.
Should the gross rentals received by Landlord from the reletting be
insufficient to pay in full the sums stated in Section 18.3 (a) and (b)
hereinabove, Tenant shall, upon demand, pay the deficiency to Landlord.
SECTION 18.4. CERTAIN WAIVERS. After Landlord has actually obtained possession
of the Premises pursuant to any lawful order of possession granted in a valid
court of law, Tenant thereafter waives and surrenders for Tenant, and for all
claiming under Tenant, all rights and privileges now or hereafter existing to
redeem the Premises (whether by order or judgment of any court or by any legal
process or writ); to assert Tenant's continued right to occupancy of the
Premises; or to have a continuance of this Lease for the Term hereof. Tenant
also waives the provisions of any law relating to notice and/or delay in levy of
execution in case of an eviction or dispossession for nonpayment of rent, and of
any successor or other law of like import.
SECTION 18.5. CUMULATIVE REMEDIES. The remedies of Landlord provided for in this
Lease are cumulative and are not intended to be exclusive of any other remedies
to which Landlord may be lawfully entitled. The exercise by Landlord of any
remedy to which it is entitled shall not preclude or hinder the exercise of any
other such remedy.
ARTICLE 19
INSURANCE
SECTION 19.1. LANDLORD OBLIGATIONS: Landlord agrees to at all times secure from
a company holding a Best's rating of A-7 or better and admitted to do business
in the State of California, and maintain during the entire Term of this Lease
the following coverage:
A) A Commercial General Liability policy with extended Risk endorsements and a
combined single limit of Two Million Dollars ($2,000,000).
B) An All Risk policy of standard fire and extended coverage, with vandalism
and malicious mischief endorsements, covering full replacement value of the
Building, the parking facilities, common area improvements and any and all
improvements installed in, on or upon the Premises and affixed thereto,
provided that the premium cost for coverage of the Improvements to the
Premises in excess of a total value equal to thirty-five Dollars ($35.00)
per usable square foot of the Premises shall, at the sole option of Tenant
be directly reimbursed from Tenant to Landlord, pursuant to the provisions
of Article 4 of this Lease, or be covered by Tenant's self-insurance, at
Tenant's sole risk.
25
29
Tenant acknowledges and agrees that Landlord shall have no obligation and
shall not carry insurance of any kind on Tenant's goods, furniture or
furnishings or on Tenant's Property, nor shall Landlord be obligated to repair
any damage thereto or to replace the same.
SECTION 19.2. TENANT OBLIGATIONS. Within ten (10) days prior to the earlier of
the Commencement Date or Tenant's anticipated early possession date of the
Premises, Tenant shall secure and maintain during the entire Term insurance
coverage from a company holding a Best's rating of A-7 or better, and admitted
to do business in the State of California, as follows:
A) A Commercial General Liability policy, with extended Risk endorsements and
a Combined Single Limit of Two Million Dollars ($2,000,000).
B) An All Risk policy of standard fire and extended coverage, with vandalism
and malicious mischief endorsements, covering the full replacement value of
its personal property, for losses occurring in, on, or about the Premises.
The proceeds from any such policy shall first be used by Tenant for the
replacement of the personal property so damaged or destroyed;
C) Workmen's Compensation insurance in a minimum amount of $500,000, and in
full compliance with the requirements of the State of California; and
D) A policy of insurance covering Tenant's losses from interruption of
Tenant's normal business activities.
Each and every policy which Tenant is to provide hereunder shall
specifically include the liability assumed by Tenant pursuant to the provisions
of this Lease (provided that the amount of such insurance shall not serve to
limit the liability of Tenant hereunder), and shall be primary insurance for
such liability, and not excess over or contributory with any other existing or
new insurance in force for or on behalf of Landlord. Each policy shall not
eliminate cross-liability and shall contain a severability of interest clause.
SECTION 19.3. COMPLIANCE WITH BUILDING INSURANCE REQUIREMENTS. After Tenant
takes occupancy of the Premises, Tenant shall not violate or knowingly permit
in, on or upon the Premises the violation of any condition imposed by such
standard fire insurance policies as are normally issued for office buildings in
the City or County in which the Building is located. Tenant shall not do, suffer
or permit anything to be done, or keep, suffer or permit anything to be kept, in
the Premises which would increase the risk ratings or premium calculation
factors on the Building or property therein (collectively an "Increased Risk"),
or which would result in insurance companies of good standing refusing to insure
the Building or any property appurtenant thereto in such amounts and against
such risks as Landlord may reasonably determine from time to time are
appropriate.
Notwithstanding the above, if additional insurance is available to cover
such Increased Risk, Tenant shall not be in default hereunder if:
A) Tenant authorizes Landlord in writing to obtain such additional insurance;
and
B) prepays the annual cost thereof to Landlord for such additional coverage,
as well as the additional costs, if any, of any increase in Landlord's
other insurance premiums resulting from the existence or continuance of
such Increased Risk;
SECTION 19.4. ADDITIONAL INSUREDS. Tenant agrees that Landlord shall be named as
an additional insured or loss payee on the aforementioned policies of insurance,
as appropriate in the insurance industry.
SECTION 19.5. WAIVER OF SUBROGATION. Landlord and Tenant intend that their
respective property loss risks shall be borne by reasonable insurance carriers
to the extent above provided, and Landlord and Tenant hereby agree to look
solely to, and seek recovery only from, their respective insurance carriers in
the event of a property loss to the extent that such coverage is agreed to be
provided hereunder or if higher, to the extent such insurance has been obtained.
The parties each hereby waive all rights and claims against each other for such
losses, and waive all rights of subrogation of their respective insurers,
provided such waiver of subrogation shall not affect the right of the insured to
recover thereunder. The parties agree that their respective insurance policies
are now, or shall be, endorsed such that the waiver of subrogation shall not
affect the right of the insured to recover thereunder. If Landlord or Tenant
shall fail to carry the amounts and types of insurance required to be carried
pursuant to this Article 19, in addition to any remedies Landlord or Tenant may
have under this Lease, such failure shall be deemed to be a covenant and
agreement by the party failing to carry such insurance to self-insure with
respect to the type and amount of insurance such party so failed to carry, with
full waiver of subrogation with respect thereto.
SECTION 19.6. PROOF OF COVERAGE. Upon written request from one to the other, the
parties hereto shall each provide the other a certified copy or copies of the
certificate(s) of insurance evidencing the existence of the coverage required
hereunder. SECTION 19.7. PROTECTION AGAINST CANCELLATION. Upon written request,
proof must also be given by each party to the other, that each of the policies
required pursuant to this Article 19 expressly provides that the policy shall
not be canceled until the expiration of thirty (30) days' prior written notice
to the other party.
SECTION 19.8. FAILURE TO SECURE. If at any time during the Term, and after
expiration of ten(10) business days prior written demand therefore from
Landlord, Tenant fails to:
A) Provide Landlord with access to a registered insurance broker of record
that can verify Tenant's compliance with the requirement contained in this
Article 19; or
B) provide documentation reasonably acceptable to Landlord that Tenant has
secured and maintained the insurance coverage required hereunder, then
26
30
such failure shall be considered a material default under the Lease, and
Landlord shall have the option, but not the obligation, without further notice
or demand to obtain such insurance on behalf of or as the agent of Tenant and in
Tenant's name.
Tenant shall pay Landlord's billing for the premiums associated with such
insurance policy or policies within five (5) days after receipt of Landlord's
billing, as well as such other reasonable costs and fees arising out of such
default, together with interest on the entire amount so advanced by Landlord, at
the rate of ten percent (10%) per annum, computed from the date of such advance.
Such advances, if made by Landlord, shall be construed as and considered
Additional Rent under this Lease.
SECTIONS 19.9. PROCEEDS. Proceeds from any such policy or policies shall be
payable to both Landlord and Tenant as their respective interests may appear.
ARTICLE 20
MISCELLANEOUS
SECTION 20.1. ENTIRE AGREEMENT. This Lease, including the exhibits and guaranty
of lease, if any, annexed hereto, contains all of the agreements and
understandings relating to the leasing of the Premises and the obligations of
Landlord and Tenant in connection therewith and neither party and no agent or
representative thereof has made or is making, and neither party in executing and
delivering this Lease is relying upon, any warranties or representations, except
to the extent set forth in this Lease. All understandings and agreements
heretofore had between Landlord and Tenant relating to the leasing of the
Premises are merged in this Lease, which alone fully and completely expresses
their agreement. The Riders (if any) and Exhibits annexed to this Lease and the
Construction Agreement are hereby incorporated herein and made a part hereof.
SECTION 20.2. NO WAIVER OR MODIFICATION. The failure of Landlord or Tenant to
insist in any instance upon the strict keeping, observance or performance of any
covenant or agreement contained in this Lease or to exercise any election herein
contained shall not be construed as a waiver or relinquishment for the future of
such covenant or agreement, but the same shall continue and remain in full force
and effect. No waiver or modification by either Landlord or Tenant of any
covenant or agreement contained in this Lease shall be deemed to have been made
unless the same is in writing executed by the party whose rights are being
waived or modified. No surrender of possession of any part of the Premises shall
release Tenant from any of its obligations hereunder unless accepted in writing
by Landlord. The receipt and retention by Landlord, and the payment by Tenant,
of Fixed Monthly Rent or Additional Rent with knowledge of the breach of any
covenant or agreement contained in this Lease shall not be deemed a waiver of
such breach by either Landlord or Tenant.
SECTION 20.3. TIME OF THE ESSENCE. Time is of the essence of this Lease and of
all provisions hereof, except in respect to the delivery of possession of the
Premises at the Commencement Date.
SECTION 20.4. FORCE MAJEURE. For the purposes of this Lease, "Force Majeure"
shall be defined as any or all prevention, delays or stoppages and/or the
inability to obtain services, labor, materials or reasonable substitutes
therefor, when such prevention, delay, stoppage or failure is due to strikes,
lockouts, labor disputes, acts of God, governmental actions, civil commotion,
fire or other casualty, and/or other causes beyond the reasonable control of the
party obligated to perform, except that Force Majeure may not be raised as a
defense for Tenant's non-performance of any obligations imposed by the Lease
with regard to the payment of Fixed Monthly Rent and/or Additional Rent.
Notwithstanding anything to the contrary contained in this Lease, Force
Majeure shall excuse the performance of such party for a period equal to any
such prevention, delay, stoppage or inability. Therefore, if this Lease
specifies a time period for performance of an obligation by either party, that
time period shall be extended by the period of any delay in such party's
performance caused by a Force Majeure.
SECTION 20.5. BROKER. Landlord and Tenant represent to one another that each has
dealt with no broker in connection with this Lease other than XXXXXXX, XXXXXX &
COMPANY and CRESA PARTNERS, LLC. Landlord and Tenant shall hold one another
harmless from and against any and all liability, loss, damage, expense, claim,
action, demand, suit or obligation arising out of or relating to a breach by the
indemnifying party of such representation. Landlord agrees to pay all
commissions due to the brokers listed above created by Tenant's execution of
this Lease.
SECTION 20.6. GOVERNING LAW. This Lease shall be governed by and construed in
accordance with the laws of the State of California.
SECTION 20.7. SUBMISSION OF LEASE. Whether or not rental deposits have been
received by Landlord from Tenant, and whether or not Landlord has delivered to
Tenant an unexecuted draft version of this Lease for Tenant's review and/or
signature, no contractual or other rights shall exist between Landlord and
Tenant with respect to the Premises, nor shall this Lease be valid and/or in
effect until this Lease has been fully executed and a duplicate original of said
fully-executed Lease has been delivered to both Landlord and Tenant.
The submission of this Lease to Tenant shall be for examination purposes
only, and does not and shall not constitute a reservation of or an option for
Tenant to lease, or otherwise create any interest by Tenant in the Premises or
any other offices or space situated in the Building. Execution of this Lease by
Tenant and its return to Landlord shall not be binding upon Landlord,
notwithstanding any time interval, until Landlord has in fact executed and
delivered a fully-executed duplicate original of this Lease to Tenant. Landlord
and Tenant agree hereby to authorize transmission of all or portions of
documents, including signature lines thereon, by facsimile machines, and further
authorize the other party to rely conclusively upon such facsimile transmissions
as if the original had been received.
27
31
SECTION 20.8. CAPTIONS. The captions in this Lease are for convenience only and
shall not in any way limit or be deemed to construe or interpret the terms and
provisions hereof.
SECTION 20.9. SINGULAR AND PLURAL, ETC. The words "Landlord" and "Tenant", as
used herein, shall include the plural as well as the singular. Words used in the
masculine gender include the feminine and neuter. If there be more than one
Landlord or Tenant the obligations hereunder imposed upon Landlord and Tenant
shall be joint and several.
SECTION 20.10. INDEPENDENT COVENANTS. Except where the covenants contained in
one Article of this Lease are clearly affected by or contingent upon fulfillment
by either party of another Article or paragraph of this Lease, this Lease shall
be construed as though the covenants herein between Landlord and Tenant are
independent and not dependent and Tenant hereby expressly waives the benefit of
any statute to the contrary and agrees that if Landlord fails to perform its
obligations set forth herein, Tenant shall not be entitled to make any repairs
or perform any actions hereunder at Landlord's expense or to any set-off of the
Rent or other amounts owing hereunder against Landlord; provided, however, that
the foregoing shall in no way impair the right of Tenant to commence a separate
action against Landlord for the violation by Landlord of the provisions hereof
so long as notice is first given to Landlord and any holder of a mortgage or
deed of trust covering the Building, Real Property or any portion thereof, of
whose address Tenant has theretofore been notified, and an opportunity is
granted to Landlord and such holder to correct such violations as provided
above.
SECTION 20.11. SEVERABILITY. If any covenant or agreement of this Lease or the
application thereof to any person or circumstance shall be held to be invalid or
unenforceable, then and in each such event the remainder of this Lease or the
application of such covenant or agreement to any other person or any other
circumstance shall not be thereby affected, and each covenant and agreement
hereof shall remain valid and enforceable to the fullest extent permitted by
law.
SECTION 20.12. WARRANTY OF AUTHORITY. If Landlord or Tenant signs as a
corporation or a partnership, each of the persons executing this Lease on behalf
of Landlord or Tenant hereby covenant and warrant that each is a duly authorized
and existing entity, that each has and is qualified to do business in
California, that the persons signing on behalf of Landlord or Tenant have full
right and authority to enter into this Lease, and that each and every person
signing on behalf of either Landlord or Tenant are authorized to do so. If
either party hereto is a corporation, said party shall affix the appropriate
corporate seal to each area on the document where request therefore is noted,
and the other party shall be entitled to conclusively presume that by doing so
the party so affixing said seal is attesting to and ratifying this Lease.
SECTION 20.13. NO REPRESENTATIONS OR WARRANTIES. Neither Landlord nor Landlord's
agents or attorneys have made any representations or warranties with respect to
the Premises, the Building or this Lease, except as expressly set forth herein,
and no rights, easements or licenses are or shall be acquired by Tenant by
implication or otherwise.
SECTION 20.14. NO JOINT VENTURE OR PARTNERSHIP. This Lease shall not be deemed
or construed to create or establish any relationship of partnership or joint
venture or similar relationship or arrangement between Landlord and Tenant
hereunder.
SECTION 20.15. TENANT'S OBLIGATIONS AT ITS SOLE EXPENSE.
Notwithstanding the fact that certain references in this Lease to acts required
to be performed by Tenant hereunder, or to breaches or defaults of this Lease by
Tenant, omit to state that such acts shall be performed at Tenant's sole
expense, or omit to state that such breaches or defaults by Tenant are material,
unless the context clearly implies to the contrary each and every act to be
performed or obligation to be fulfilled by Tenant pursuant to this Lease shall
be performed or fulfilled at Tenant's sole expense, and all breaches or defaults
by Tenant hereunder shall be deemed material.
SECTION 20.16. ATTORNEYS' FEES. If litigation is instituted between Landlord and
Tenant, the cause for which arises out of or in relation to this Agreement, the
prevailing party in such litigation shall be entitled to receive its costs (not
limited to court costs), expenses and reasonable attorneys' fees from the
non-prevailing party as the same may be awarded by the court.
SECTION 20.17. WAIVER OF TRIAL BY JURY. IN THE INTEREST OF SAVING TIME AND
EXPENSE, LANDLORD AND TENANT HEREBY CONSENT TO TRIAL WITHOUT A JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO
AGAINST THE OTHER OR THEIR SUCCESSOR-IN-INTEREST IN RESPECT TO ANY MATTERS
ARISING OUT OF OR RELATING TO THIS LEASE.
SECTION 20.18. NO MERGER. The voluntary or other surrender of this Lease by
Tenant, or a mutual cancellation thereof, shall not work a merger, and shall, at
the option of Landlord terminate all or any existing subleases or subtenancies,
or may, at the option of Landlord, operate as an assignment to it of any or all
such subleases or subtenancies.
SECTION 20.19. PROHIBITION AGAINST RECORDING. Except as provided in Section 14.3
of this Lease, neither this Lease, nor any memorandum, affidavit or other
writing with respect thereto, shall be recorded by Tenant or by anyone acting
through, under or on behalf of Tenant, and the recording thereof in violation of
this provision shall make this Lease null and void at Landlord's election.
SECTION 20.20. HAZARDOUS WASTE. Tenant specifically agrees that, except for such
limited quantities of office materials and supplies as are customarily used in
Tenant's normal business operations, Tenant shall not engage or permit at any
time, any operations or activities upon, or any use or occupancy of the
Premises, or any portion thereof, for the purpose of or in any way involving the
handling, manufacturing, treatment, storage, use, transportation, spillage,
leakage, dumping, discharge or disposal (whether legal or illegal, accidental or
intentional) of any hazardous substances, materials or wastes, or any wastes
regulated under any local, state or federal law.
28
32
Tenant shall, during the Term, remain in full compliance with all
applicable laws governing its use and occupancy of the Premises, including,
without limitation, the handling, manufacturing, treatment, storage, disposal,
discharge, use, and transportation of hazardous substances, materials or wastes,
and any wastes regulated under any local, state or federal law. Tenant will
remain in full compliance with the terms and conditions of all permits and
licenses issued to it by any governmental authority on account of any or all of
its activities on the Premises.
SECTION 20.21. TRANSPORTATION MANAGEMENT. Tenant shall, at Tenant's sole
expense, fully comply with all present or future programs intended to manage
parking, transportation or traffic in and around the Building, when the same
have been mandated by an outside governmental authority having jurisdiction
therefor and not when required for the convenience of Landlord.
In connection therewith, Tenant shall be responsible for the transportation
planning and management for all of Tenant's employees while located at the
Premises, by working directly with Landlord, any governmental transportation
management organization or any other transportation-related committees or
entities reasonably designated by Landlord. Such programs may include, without
limitation:
A) restrictions on the number of peak-hour vehicle trips generated by Tenant;
B) requirements for increased vehicle occupancy;
C) implementing an in-house ride-sharing program and/or appointing an employee
transportation coordinator;
D) working with employees of any Building (or area-wide) ridesharing program
manager;
E) instituting employer-sponsored incentives (financial or in-kind) to
encourage employees to ridesharing; and
F) utilizing flexible work shifts for employees.
SECTION 20.22. SIGNAGE. Tenant may not install, inscribe, paint or affix any
awning, shade, sign, advertisement or notice on or to any part of the outside or
inside of the Building, or in any portion of the Premises visible to the outside
of the Building or common areas without Landlord's prior written consent, which
shall not be unreasonably withheld, conditioned or delayed.
All signage and/or directory listings installed on behalf of Tenant,
whether installed in, on or upon the public corridors, doorways, Building
directory and/or parking directory (if any), or in any other location whatsoever
visible outside of the Premises, shall be installed by Landlord, at Tenant's
sole expense.
Tenant's identification on or in any common area of the Building shall be
limited to Tenant's name and suite designation, and in no event shall Tenant be
entitled to the installation of Tenant's logo in any portion of the Building or
common areas. Furthermore, the size, style, and placement of letters to be used
in any of Tenant's signage shall be determined by Landlord, in Landlord's sole
discretion, in full conformance with previously-established signage program for
the Building.
Except as specified hereinbelow, Tenant shall only be entitled to one (1)
listing on the Building directory, or any parking directory ancillary thereto,
which shall only show Tenant's business name and suite designation. Tenant shall
also be entitled to a maximum of twenty-four (24) additional listings on said
Building and/or parking directory, which listings shall be limited solely to
Tenant's officers, employees, subsidiaries, affiliates and/or sublessees, if
any. All of said listings shall be subject to Landlord's prior written approval,
which shall not be unreasonably withheld, conditioned or delayed.
SECTION 20.23. DISCLOSURE. Landlord and Tenant acknowledge that principals of
Landlord have a financial interest in Xxxxxxx Xxxxxx Realty Advisors and P.L.E.
Builders.
SECTION 20.24. CONFIDENTIALITY. Landlord and Tenant agree that the covenants and
provisions of this Lease shall not be divulged to anyone not directly involved
in the management, administration, ownership, lending against, or subleasing of
the Premises, which permitted disclosure shall include, but not be limited to,
the board members, legal counsel and/or accountants of either Landlord or
Tenant.
ARTICLE 21
PARKING
SECTION 21.1. PARKING. Throughout the Term, Tenant shall purchase and assign to
its employees monthly parking permits up to the maximum number of permits set
forth in Section 21.1 of the Basic Lease Information ("BLI"). Except as
otherwise permitted by Landlord's management agent in its reasonable discretion,
and based on the availability thereof, in no event shall Tenant be entitled to
purchase more than forty-two (42)nor less than twenty-four (24) parking permits,
subject to the last paragraph of this Section 21.1. However, to the minimum
limit specified hereinabove, Tenant may decrease the total number of parking
permits purchased pursuant to this Article 21 at any time during the Term after
Tenant has given Landlord at least thirty (30) days prior written notice of such
reduction.
Furthermore, if additional parking permits are available on a
month-to-month basis, which determination shall be in the sole discretion of
Landlord's parking agent, Tenant shall be permitted to purchase one or more of
said permits on a first-come, first-served basis.
29
33
At any time that Tenant either elects to purchase less than the total
number of permits to which Tenant is entitled, or fails to pay for the total
number of parking permits to which Tenant is entitled, Tenant shall lose the
right to purchase any additional parking permits beyond those that had been
purchased and/or paid for by Tenant the calendar month immediately preceding the
date of such loss, until the expiration of thirty (30) days prior written notice
given from Tenant to Landlord, indicating Tenant's intention to reclaim one or
more of said lost parking permits, at which time, to the extent that Landlord
has not already leased one or more of the parking permits Tenant had previously
surrendered to another occupant of the Building on a long-term basis, Landlord
shall restore the total number of parking permits contained in Tenant's written
notice to Landlord. The above provision notwithstanding however, so long as
Tenant has complied with its rental obligations pursuant to this Section 21.1,
Landlord shall conduct its long-term rental of parking spaces such that a
minimum total of thirty-three (33) permits shall remain available to Tenant on
thirty (30) days written notice.
The initial rates to be paid by Tenant for such permits shall be: $93.50
per single unreserved permit; and $159.50 per single reserved permit per month,
including the ten percent (10%) tax currently charged by the City of Los
Angeles.
Said parking permits shall allow Tenant to park in the Building parking
facility at the prevailing monthly parking rate then in effect, which rate may
be thereafter changed from time to time, in Landlord's sole discretion. Landlord
shall retain sole discretion to designate the location of each parking space,
and whether it shall be assigned, or unassigned, unless specifically agreed to
otherwise in writing between Landlord and Tenant.
Guests and invitees of Tenant shall have the right to use, in common with
guests and invitees of other tenants of the Building, the transient parking
facilities of the Building at the then-posted parking rates and charges, or at
such other rate or rates and charges as may be agreed upon from time to time
between Landlord and Tenant in writing. Such rate(s) or charges may be changed
by Landlord from time to time in Landlord's sole discretion to reflect
Landlord's good faith determination of applicable market conditions, and shall
include, without limitation, any and all fees or taxes relating to parking
assessed to Landlord for such parking facilities.
Tenant or Tenant's agents, clients, contractors, directors, employees,
invitees, licensees, officers, partners or shareholders continued use of said
transient, as well as monthly parking, shall be contingent upon Tenant and
Tenant's agents, clients, contractors, directors, employees, invitees,
licensees, officers, partners or shareholders continued compliance with the
reasonable and non-discriminatory rules and regulations adopted by Landlord,
which rules and regulations may change at any time or from time to time during
the Term hereof in Landlord's sole discretion.
Any contrary provision of this Section 21.1 notwithstanding, in the event
that Tenant has entirely and permanently vacated the Premises but otherwise is
not in material default of its obligations pursuant to this Lease, Tenant shall
not be required to lease parking spaces.
ARTICLE 22
CONCIERGE SERVICES
SECTION 22.1. PROVISION OF SERVICES. Landlord and Tenant acknowledge and
understand that Landlord may, from time to time, make it possible for Tenant to
use or purchase a variety of personal services which may include, but not be
limited to, personal shopping, assistance with choosing or obtaining travel
reservations, accommodations and/or tickets; tickets to performances,
recommendations to eating establishments; and the like (collectively "Concierge
Services").
Tenant acknowledges that said Concierge Services are provided by Landlord
solely as an accommodation to and for the convenience of Tenant and Tenant's
agents, contractors, directors, employees, licensees, officers, partners or
shareholders, and Landlord does not make any representation, warranty or
guarantee, express or implied, as to the quality, value, accuracy, or
completeness of said Concierge Services, or whether or not Tenant shall be
satisfied with the services and/or goods so provided and/or recommended.
Landlord hereby disclaims any control over the variety or sufficiency of such
services to be provided.
Tenant acknowledges that Tenant is not required to use such Concierge
Services as a condition precedent to compliance with the Lease; that Tenant's
use of such Concierge Services is strictly voluntary, and at the sole discretion
and control of Tenant. Tenant shall independently make such financial
arrangements for payment of the services provided as Tenant deems reasonable and
of value.
SECTION 22.2. INDEMNIFICATION AND RELEASE BY TENANT. Notwithstanding anything to
the contrary contained in the Lease, any city, county, state or federal
ordinance, statute, regulation or law, Tenant's signature hereon indicates
Tenant's agreement that solely as it relates to the purchase or use of Concierge
Services by Tenant or the agents, contractors, employees, officers, partners,
and/or shareholders of Tenant, Tenant, on behalf of itself and its agents,
contractors, directors, employees, licensees, officers, partners or
shareholders, does and shall hereby forever hold Landlord and Landlord's
affiliates, agents, assigns, contractors, directors, employees, officers, parent
organization, partners, representatives, shareholders, and subsidiaries
(collectively the "Indemnitees") harmless from and forever release, remise,
discharge, acquit and relieve the Indemnitees from and against any and all
claims, demands, causes of action, obligations, liabilities, agreements,
damages, cost (including, without limitation, reasonable attorneys' fees), loss,
or liability of any kind or nature, whether asserted, known or unknown,
suspected or unsuspected, in any way connected with, which any one or more of
the Indemnitees may sustain or incur by reason of, related to, associated with,
or arising out of the provision, use or the rendering of any such Concierge
Services or the delivery of such Concierge Services to Tenant or Tenant's
agents, clients, contractors, directors, employees, invitees, licensees,
officers, partners or shareholders.
30
34
Solely as it relates to the purchase or use of Concierge Services by Tenant
or the agents, contractors, employees, officers, partners, and/or shareholders
of Tenant, Tenant hereby expressly waives all rights and benefits conferred by
the provisions of Section 1542 of the Civil Code of the State of California,
which reads as follows:
" A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE
AND WHICH, IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR."
In so doing, Tenant acknowledges that it will be unable to make any claim
against Landlord or any other Indemnitees for damages that may exist as of the
date or after the date of this release, but which Tenant does not know to exist,
and which, if known, would materially have affected Tenant's decision to execute
this document, regardless of whether Tenant's lack of knowledge, if any, is the
result of ignorance, oversight, error, negligence or other cause.
ARTICLE 23
OPTION TO EXTEND TERM
SECTION 23.1. OPTION TO EXTEND TERM. Provided Tenant is not in material default
after the expiration of notice and the opportunity to cure on the date or at any
time during the remainder of the Term after Tenant gives notice to Landlord of
Tenant's intent to exercise its rights pursuant to this Article 23, Tenant is
given the option to extend the term for an additional Five (5) year period (the
"Extended Term"), commencing the next calendar day after the expiration of the
Term (the "Option"). The Option shall apply only to the entirety of the
Premises, and Tenant shall have no right to exercise the Option as to only a
portion of the Premises.
Tenant's exercise of this Option is contingent upon Tenant giving written
notice to Landlord (the "Option Notice") of Tenant's election to exercise its
rights pursuant to this Option by Certified Mail, Return Receipt Requested, no
more than twelve (12) and no less than nine (9) months prior to the Termination
Date.
SECTION 23.2. MONTHLY FIXED RENT PAYABLE. As Monthly Fixed Rent during the
Extended Term, Tenant shall pay Landlord the Fair Market Value of the Premises
for the Extended Term. The term "Fair Market Value" shall be defined as the
effective rent reasonably achievable by Landlord, and shall include but not be
limited to, all economic benefits obtainable by Landlord, such as Monthly Fixed
Rent, periodic Fixed Rent adjustments, Additional Rent in the form of Operating
Expense reimbursements, and any and all other monetary or non-monetary
consideration that may be given in the market place to a non-renewal tenant, as
is chargeable for a similar use of comparable space in the geographic area of
the Premises.
Said computation shall specifically be based on the Premises in its "as-is"
condition, without payment of any brokerage commission to any broker. If either
Landlord or Tenant elect to have a broker represent them during negotiations for
extension of the Term, and/or Tenant requests the installation of any further
improvements into the Premises, the cost of such improvements to be made and/or
commissions to be paid shall be amortized over the Extended Term on a
straight-line basis, with interest thereon at ten percent (10%), by
appropriately increasing the Fair Market Value previously determined.
Landlord and Tenant shall have 30 days (the "Negotiation Period") after
Landlord receives the Option Notice in which to agree on the Fair Market Value.
If Landlord and Tenant agree on the Fair Market Value during the Negotiation
Period, they shall immediately execute an amendment to the Lease extending the
Term and stating the Fair Market Value.
SECTION 23.3 APPRAISERS TO SET FIXED RENT. If Landlord and Tenant are unable to
agree on the Fair Market Value during the Negotiation Period, then:
A) Within five (5) days after the expiration of the Negotiation Period, Tenant
shall have the right to void the Option Notice by hand delivery of written
notice (the "Termination Notice") to Landlord within such five (5) days
period, and the Lease shall expire on the Termination Date; or
B) If the Termination Notice is not timely delivered by Tenant, Landlord and
Tenant, each at its own cost, shall select an independent real estate
appraiser with at least ten (10) years full-time commercial appraisal
experience in the area in which the Premises are located, and shall provide
written notice to the other party of the identity and address of the
appraiser so appointed. Landlord and Tenant shall make such selection
within ten (10) days after the expiration of the Negotiation Period.
C) Within thirty (30) days of having been appointed to do so (the "Appraisal
Period"), the two (2) appraisers so appointed shall meet and set the Fair
Market Value for the Extended Term. In setting the Fair Market Value, the
appraisers shall solely consider the use of the Premises for general office
purposes.
SECTION 23.4 FAILURE BY APPRAISERS TO SET FAIR MARKET VALUE. If the two (2)
appointed appraisers are unable to agree on the Fair Market Value within ten
(10) days after expiration of the Appraisal Period, they shall elect a third
appraiser of like or better qualifications, and who has not previously acted in
any capacity for either Landlord or Tenant. Landlord and Tenant shall each bear
one half of the costs of the third appraiser's fee.
Within 30 days after the selection of the third appraiser (the "Second
Appraisal Period") the Fair Market Value for the Extended Term shall be set by a
majority of the appraisers now appointed.
31
35
If a majority of the appraisers are unable to set the Fair Market Value
within the Second Appraisal Period, the three (3) appraisers shall individually
render separate appraisals of the Fair Market Value, and their three (3)
appraisals shall be added together, then divided by three (3); resulting in an
average of the appraisals, which shall be the Fair Market Value during the
Extended Term.
However, if the low appraisal or high appraisal, or both, varies by more
than Ten Percent (10%) from the middle appraisal, then such appraisal(s) shall
be disregarded. If only one (1) appraisal is disregarded, the remaining two (2)
appraisals shall be added together and their total divided by two (2), and the
resulting average shall be the Fair Market Value. If both the low and high
appraisal are disregarded, the middle appraisal shall be the Fair Market Value
for the Premises during the Extended Term. The appraisers shall immediately
notify Landlord and Tenant of the Fair Market Value so established, and Landlord
and Tenant shall immediately execute an amendment to the Lease, extending the
Term and revising the Fixed Rent payable pursuant to the Fair Market Value so
established.
Landlord or Tenant's failure to execute such amendment establishing the
Fair Market Value within fifteen (15) days after the other party's request
therefor shall constitute a material default under the Lease. and if Tenant is
the party failing to so execute, this Option shall become null and void and of
no further force or effect.
SECTION 23.5. NO RIGHT OF REINSTATEMENT OR FURTHER EXTENSION. Once Tenant has
either failed to exercise its rights to extend the term pursuant to this Article
23 or failed to execute the amendment called for hereunder, it shall have no
right of reinstatement of its Option to Extend the Term, nor shall Tenant have
any right to a further or second extension of the Term beyond the period stated
in Section 23.1 hereinabove.
SECTION 23.6. NO ASSIGNMENT OF OPTION. This Option is personal to the original
Tenant signing the Lease, and shall be null, void and of no further force or
effect as of the date that Tenant assigns the Lease to an unaffiliated entity
and/or subleases more than forty-nine percent (49%) of the total Rentable Area
of the Premises.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease,
effective the day and year first above written.
LANDLORD: TENANT:
XXXXXXX XXXXXX REALTY FUND 1997, THE XXXXXX ENTERTAINMENT COMPANY,
a California limited partnership a California corporation
By: XXXXXXX, XXXXXX & COMPANY, By:
its agent ------------------------------------------------------------------
Signer's Name:
---------------------------------------------------
By: [ ] President [ ] Vice President or [ ] Chief Executive Officer
-------------------------
Xxxxxxx Xxxxxx (Check Title Above)
AND
Dated: By:
---------------------- -----------------------------------------------------------------
Signer's Name:
---------------------------------------------------
[ ] Secretary [ ] Treasurer or [ ] Chief Financial Officer
(Check Title Above)
AFFIX CORPORATE SEAL HERE
Dated:
-------------------------------------------------------------
32
36
EXHIBIT B-1
CONSTRUCTION BY TENANT DURING TERM
1. If Tenant wishes to make a Tenant Change, as specified in Section 12.12 of
the Lease, such Tenant Change shall be completed pursuant to the provisions of
Section 12.12. of the Lease and this Exhibit B-1. Tenant shall bear all costs of
said Tenant Change, which shall be paid directly to Tenant's general contractor
("Contractor").
Contractor shall complete construction to the Premises pursuant to the
final Plans and Specifications approved in writing by Landlord and Tenant (the
"Tenant Change"), in compliance with all applicable codes and regulations.
Tenant's selections of finishes and materials shall be indicated on the Plans
and Specifications, and shall be equal to or better than the minimum Building
standards and specifications. All work not shown on the final Plans and
Specifications, but which is to be included in the Tenant Change, including but
not limited to, telephone service installation, furnishings or cabinetry, shall
be installed pursuant to Landlord's reasonable directives.
2. Prior to commencing any work:
A) Tenant's proposed Contractor and the Contractor's proposed subcontractors
and suppliers shall be approved in writing by Landlord, which approval
shall not be unreasonably withheld, conditioned or delayed. As a condition
of such approval, so long as the same are reasonably cost competitive, then
Contractor shall use Landlord's Heating, Venting, and Air-conditioning,
plumbing, and electrical subcontractors for such work.
During completion of any Tenant Change, neither Tenant or Contractor
shall permit any sub-contractors, workmen, laborers, material or equipment
to come into or upon the Building if the use thereof, in Landlord's
reasonable judgment, would violate Landlord's agreement with any union
providing work, labor or services in or about the Building.
B) Contractor shall submit to Landlord and Tenant a written bid for completion
of the Tenant Change. Said bid shall include Contractor's overhead, profit,
and fees, and, if the proposed Tenant Change is for cosmetic work in excess
of $5,000 in aggregate value per occurrence or for structural work of any
kind, Contractor shall:
I) pre-pay to Landlord's managing agent $250.00 as partial payment of said
managing agent's construction administration fee, as specified
hereinbelow, and
II) upon completion of said Tenant Change, pay an administration fee for
supervision of said Tenant Change equal to fifty dollars ($50.00) per
hour, to a maximum of four percent ( 4%) of the total cost of the
Tenant Change, to defray said agent's costs for supervision of the
construction;
C) Tenant or Contractor shall submit all Plans and Specifications to Landlord,
and no work on the Premises shall be commenced before Tenant has received
Landlord's final written approval thereof, which shall not be unreasonably
withheld, delayed or conditioned;.
D) Contractor shall complete all architectural and planning review and obtain
all permits, including signage, required by the city, state or county in
which the Premises are located; and
E) Contractor shall submit to Landlord verification of public liability and
workmen's compensation insurance adequate to fully protect Landlord and
Tenant from and against any and all liability for death or injury to
persons or damage to property caused in or about or by reason of the
construction of any work done by Contractor or Contractor's subcontractors
or suppliers.
F) Unless otherwise waived in writing by Landlord, which waiver shall be in
Landlord's sole discretion, Contractor shall provide payment and
performance bonds in an amount equal to 100% of the estimated amount of
Tenant Change, as specified to Landlord pursuant to Paragraph 2 (b).
3. Contractor and Contractor's subcontractors and suppliers shall be subject to
Landlord's reasonable administrative control and supervision. Landlord shall
provide Contractor and Contractor's subcontractors and suppliers with reasonable
access to the Premises.
4. During construction of the Tenant Change, Contractor shall adhere to the
procedures contained hereinbelow, which represent Landlord's minimum
requirements for completion of the Tenant Change.
5. Upon completion of the Tenant Change, Tenant shall provide Landlord with such
evidence as Landlord may reasonably request that the Contractor has been paid in
full, and Contractor shall provide Landlord with lien releases as requested by
Landlord, confirmation that no liens have been filed against the Premises or the
Building. If any liens arise against the Premises or the Building as a result of
the Tenant Change, Tenant shall immediately, at Tenant's sole expense, remove
such liens and provide Landlord evidence that the title to the Building and
Premises have been cleared of such liens.
6. Whether or not Tenant or Contractor timely complete the Tenant Change, unless
the Lease is otherwise terminated pursuant to the provisions contained therein,
Tenant acknowledges and agrees that Tenant's obligations under the Lease to pay
Fixed Monthly Rent and/or Additional Rent shall continue unabated.
CONSTRUCTION POLICY
The following policies outlined are the construction procedures for the
Building. As a material consideration to Landlord for granting Landlord's
permission to Tenant to complete the construction contemplated hereunder, Tenant
agrees to be bound by and follow the provisions contained hereinbelow:
1. ADMINISTRATION
A) Contractors to notify the management office for the Building prior to
starting any work. NO EXCEPTIONS. All jobs must be scheduled by the general
contractor or sub-contractor when no general contractor is being used.
B1-1
37
EXHIBIT B-1 (continued)
CONSTRUCTION BY TENANT DURING TERM
B) The general contractor is to provide the Building Manager with a copy of
the projected work schedule for the suite, prior to the start of
construction.
C) Contractor will make sure that at least one set of drawings will have the
Building Manager's initials approving the plans and a copy delivered to the
Building Office.
D) As-built construction, including mechanical drawings and air balancing
reports will be submitted at the end of each project.
E) The HVAC contractor is to provide the following items to the Building
Manager upon being awarded the contract from the general contractor:
I) A plan showing the new ducting layout, all supply and return air grille
locations and all thermostat locations. The plan sheet should also
include the location of any fire dampers.
II) An Air Balance Report reflecting the supply air capacity throughout the
suite, which is to be given to the Chief Building Engineer at the
finish of the HVAC installation.
F) All paint bids should reflect a one-time touch-up paint on all suites. This
is to be completed approximately five (5) days after move-in date.
G) The general contractor must provide for the removal of all trash and debris
arising during the course of construction. At no time are the building's
trash compactors and/or dumpsters to be used by the general contractor's
clean-up crews for the disposal of ANY trash or debris accumulated during
construction. The Building Office assumes no responsibility for bins.
Contractor is to monitor and resolve any problems with bin usage without
involving the Building Office. Bins are to be emptied on a regular basis
and NEVER allowed to overflow. Trash is to be placed IN the bin.
H) Contractors will include in their proposals all costs to include: parking,
elevator service, additional security (if required), restoration of
carpets, etc. Parking will be validated only if contractor is working
directly for the Building Office.
I) Any problems with construction per the plan, will be brought to the
attention of and documented to the Building Manager. Any changes that need
additional work not described in the bid will be approved in writing by the
Building Manager. All contractors doing work on this project should first
verify the scope of work (as stated on the plans) before submitting bids;
not after the job has started.
2. BUILDING FACILITIES COORDINATION
A) All deliveries of material will be made through the parking lot entrance.
B) Construction materials and equipment will not be stored in any area without
prior approval of the Building Manager.
C) Only the freight elevator is to be used by construction personnel and
equipment. Under no circumstances are construction personnel with materials
and/or tools to use the "passenger" elevators.
3. HOUSEKEEPING
A) Suite entrance doors are to remain closed at all times, except when hauling
or delivering construction materials.
B) All construction done on the property that requires the use of lobbies or
common area corridors will have carpet or other floor protection. The
following are the only prescribed methods allowed:
I) Mylar: Extra heavy-duty to be taped from the freight elevator to the
suite under construction.
II) Masonite: 1/4 inch Panel, Taped to floor and adjoining areas. All
corners, edges and joints to have adequate anchoring to provide safe
and "trip-free" transitions. Materials to be extra heavy-duty and
installed from freight elevator to the suite under construction.
C) Restroom wash basins will not be used to fill buckets, make pastes, wash
brushes, etc. If facilities are required, arrangements for utility closets
will be made with the Building Office.
D) Food and related lunch debris are NOT to be left in the suite under
construction.
E) All areas the general contractor or their sub-contractors work in must be
kept clean. All suites the general contractor works in will have
construction debris removed PRIOR to completion inspection. This includes
dusting of all window xxxxx, light diffusers, cleaning of cabinets and
sinks. All common areas are to be kept clean of building materials at all
times so as to allow tenants access to their suites or the building.
4. CONSTRUCTION REQUIREMENTS
A) All Life and Safety and applicable Building Codes will be strictly enforced
(i.e. tempered glass, fire dampers, exit signs, smoke detectors, alarms,
etc.). Prior coordination with the Building Manager is required.
B) Electric panel schedules must be brought up to date identifying all new
circuits added.
C) All electrical outlets and lighting circuits are to be properly identified.
Outlets will be labeled on back side of each cover plate.
B1-2
38
EXHIBIT B-1 (continued)
CONSTRUCTION BY TENANT DURING TERM
D) All electrical and phone closets being used must have panels replaced and
doors shut at the end of each day's work. Any electrical closet that is
opened with the panel exposed must have a work person present.
E) All electricians, telephone personnel, etc. will, upon completion of their
respective projects, pick up and discard their trash leaving the telephone
and electrical rooms clean. If this is not complied with, a clean-up will
be conducted by the building janitors and the general contractor will be
back-charged for this service.
F) Welding or burning with an open flame will NOT be done without prior
approval of the Building Manager. Fire extinguishers must be on hand at all
times.
G) All "anchoring" of walls or supports to the concrete are NOT to be done
during normal working hours (7:30 AM - 6:00 PM, Monday through Friday).
This work must be scheduled before or after these hours during the week or
on the weekend.
H) All core drilling is NOT to be done during normal working hours (7:30 AM -
6:00 PM, Monday through Friday). This work must be scheduled before or
after these hours during the week or on the weekend.
I) All HVAC work must be inspected by the Building Engineer. The following
procedures will be followed by the general contractor:
I) A preliminary inspection of the HVAC work in progress will be scheduled
through the Building Office prior to the reinstallation of the ceiling
grid.
II) A second inspection of the HVAC operation will also be scheduled
through the Building Office and will take place with the attendance of
the HVAC contractor's Air Balance Engineer. This inspection will take
place when the suite in question is ready to be air-balanced.
III) The Building Engineer will inspect the construction on a periodic
basis as well.
J) All existing thermostats, ceiling tiles, lighting fixtures and air
conditioning grilles shall be saved and turned over to the Building
Engineer.
GOOD HOUSEKEEPING RULES AND REGULATIONS WILL BE STRICTLY ENFORCED. THE
BUILDING OFFICE AND ENGINEERING DEPARTMENT WILL DO EVERYTHING POSSIBLE TO MAKE
YOUR JOB EASIER. HOWEVER, CONTRACTORS WHO DO NOT OBSERVE THE CONSTRUCTION POLICY
WILL NOT BE ALLOWED TO PERFORM WITHIN THIS BUILDING. THE COST OF REPAIRING ANY
DAMAGES THAT ARE CAUSED BY TENANT OR TENANT'S CONTRACTOR DURING THE COURSE OF
CONSTRUCTION SHALL BE DEDUCTED FROM TENANT'S ALLOWANCE OR TENANT'S SECURITY
DEPOSIT, AS APPROPRIATE.
LANDLORD: TENANT:
XXXXXXX XXXXXX REALTY FUND 1997, THE XXXXXX ENTERTAINMENT COMPANY,
a California limited partnership a California corporation
By: XXXXXXX, XXXXXX & COMPANY, By:
its agent ------------------------------------------------------------------
Signer's Name:
---------------------------------------------------
By: [ ] President [ ] Vice President or [ ] Chief Executive Officer
-------------------------
Xxxxxxx Xxxxxx (Check Title Above)
AND
Dated: By:
--------------------- -----------------------------------------------------------------
Signer's Name:
---------------------------------------------------
[ ] Secretary [ ] Treasurer or [ ] Chief Financial Officer
(Check Title Above)
AFFIX CORPORATE SEAL HERE
Dated:
-------------------------------------------------------------
B1-3
39
EXHIBIT C
RULES AND REGULATIONS
EXHIBIT C (CONTINUED)
RULES AND REGULATIONS
BUILDING RULES AND REGULATIONS
1. ACCESS. Tenant and/or Tenant's agents, clients, contractors, directors,
employees, invitees, licensees, officers, partners or shareholders shall only
use the sidewalks, entrances, lobby(ies), garage(s), elevators, stairways, and
public corridors as a means of ingress and egress, and shall take such actions
as may reasonably be necessary to ensure that the same remain unobstructed at
all times.
The entrance and exit doors to the Premises are to be kept closed at all
times except as required for orderly passage to and from the Premises. Except on
balconies available for the joint or exclusive use of Tenant as otherwise
specified hereinabove, Tenant shall not permit its agents, clients, contractors,
directors, employees, invitees, licensees, officers, partners or shareholders to
loiter in any part of the Building or obstruct any means of ingress or egress.
Tenant shall not cover any doors, and shall not cover any window, other than
with vertical or mini-blinds pre-approved in writing by Landlord. Landlord
specifically disapproves the installation of any film or foil covering
whatsoever on the windows of the Premises.
Neither Tenant, nor its agents, clients, contractors, directors, employees,
invitees, licensees, officers, partners or shareholders shall go up on the roof
or onto any balcony serving the Building, except upon such roof, portion
thereof, or balcony as may be contiguous to the Premises and is designated in
writing by Landlord as a roof-deck, roof-garden area, or exclusive use balcony
area.
2. RESTROOM FACILITIES. The toilet rooms, toilets, urinals, wash bowls and other
apparatus (the "Restroom Facilities"), whether contained in the common areas of
the Building and/or the interior of the Premises, shall not be used for any
purpose other than that for which they were designed. Tenant shall not permit
its agents, clients, contractors, directors, employees, invitees, licensees,
officers, partners or shareholders to throw foreign substances of any kind
whatsoever or papers not specifically designated for use in the Restroom
facilities down any toilet, or to dispose of the same in any way not in keeping
with the instructions provided to Tenant by the management of the Building
regarding same, and Tenant hereby specifically agrees to reimburse Landlord
directly for the expense of any breakage, stoppage or damage resulting from
Tenant's violation of this rule.
3. HEAVY EQUIPMENT. Landlord reserves the right, in Landlord's sole discretion,
to decline, limit or designate the location for installation of any safes, other
unusually heavy, or unusually large objects to be used or brought into the
Premises the Building. In each case where Tenant requests installation of one or
more such unusually heavy item(s), which request shall be conclusively evidenced
by Tenant's effort to bring such item(s) into the Building or Premises, Tenant
shall reimburse Landlord for the costs of any engineering or structural analysis
required by Landlord in connection therewith. In all cases, each such heavy
object shall be placed on a metal stand or metal plates or such other mounting
detail of such size as shall be prescribed by Landlord.
Tenant hereby indemnifies Landlord against any damage or injury done to
persons, places, things or the Building or its common areas when such damage or
injury primarily arises out of Tenant's installation or use of one or more
unusually heavy objects. Tenant further agrees to reimburse Landlord for the
costs of repair of any damage done to the Building or property therein by
putting in, taking out, or maintaining such safes or other unusually heavy
objects.
4. TRANSPORTATION OF FREIGHT. Except as otherwise agreed to by Landlord in
writing, Tenant or Tenant's agents, clients, contractors, directors, employees,
invitees, licensees, officers, partners or shareholders shall only carry
freight, furniture or bulky materials in or out of the Building before or after
Normal Business Hours, as specified in Section 15 of these rules. Tenant may
only install and/or move such freight, furniture or bulky material after
previous written notice of its intention to complete such a move, given to the
Office of the Building. The persons and/or company employed by Tenant for such
work must be professional movers, reasonably acceptable to Landlord, and said
movers must provide Landlord with a certificate of insurance evidencing the
existence of workmen's compensation and all risk liability coverage in a minimum
amount of $2,000,000.
Tenant may, subject to the provisions of the immediately preceding
paragraph, move freight, furniture, bulky matter and other material in or out of
the Premises on Saturdays between the hours of 8:00 A.M. and 6:00 P.M., provided
that Tenant pays in advance for Landlord's reasonably anticipated additional
costs, if any, for elevator operators, security guards and other expenses
arising by reason of such move by Tenant.
5. FLAMMABLE MATERIALS. Except for such limited quantities of office materials
and supplies as are customarily utilized in Tenant's normal business operations,
Tenant shall not use or keep in the Premises or the Building any kerosene,
gasoline, flammable or combustible fluid or material, other than those limited
quantities of normal business operating materials as may reasonably be necessary
for the operation or maintenance of office equipment. Nor shall Tenant keep or
bring into the Premises or the Building any other toxic or hazardous material
specifically disallowed pursuant to California state law.
6. COOKING / ODORS / NUISANCES. Tenant shall not permit its agents, clients,
contractors, directors, employees, invitees, licensees, officers, partners or
shareholders to engage in the preparation and/or serving of foods unless the
Premises includes a self-contained kitchen area. Nor shall Tenant permit
40
EXHIBIT C (CONTINUED)
RULES AND REGULATIONS
the odors arising from such cooking, or any other improper noises, vibrations,
or odors to be emanate from the Premises. Tenant shall not obtain for use in the
Premises, ice, drinking water, food, beverage, towel or other similar services
except at such reasonable hours and under such reasonable regulations as may be
specified by Landlord.
Tenant hereby agrees to instruct all persons entering the Premises to
comply with the requirements of the Building, by advising all persons entering
the Premises that smoking of any tobacco or other substance is prohibited at all
times, except in such common areas located outside the Building as may be
designated by the Building management.
Tenant shall not permit Tenant's agents, clients, contractors, directors,
employees, invitees, licensees, officers, partners or shareholders to interfere
in any way with other tenants of the Building or with those having business with
them.
Tenant shall not permit its agents, clients, contractors, directors,
employees, invitees, licensees, officers, partners or shareholders to bring or
keep within the Building any animal, bird or bicycle, except such seeing-eye dog
or other disability assistance type animal as may comply with the requirements
of any handicapped ordinances having jurisdiction therefor.
Tenant shall store its trash and garbage within the Premises. No material
shall be placed in the trash boxes or receptacles if such material is a
hazardous waste or toxic substance or is of such a nature that its disposal in
Landlord's ordinary and customary manner of removing and disposing of trash and
garbage would be a violation of any law, ordinance or company regulation
governing such disposal. All garbage and refuse disposal shall be made only
through entry ways and elevators provided for such purposes and at such times as
Landlord shall designate. As and when directed by Landlord and/or if required by
any governmental agency having jurisdiction therefor, Tenant shall comply with
all directives for recycling and separation of trash.
Tenant shall not employ any person to do janitorial work in any part of the
Premises without the prior written consent of Landlord, which consent may be
withheld in Landlord's sole discretion.
Landlord reserves the right to exclude or expel from the Building any
person who in Landlord's sole discretion is intoxicated or under the influence
of liquor or drugs or who, in any manner, engages in any act in violation of the
Rules and Regulations of the Building.
Tenant shall not conduct any public or private auction, fire sale or other
sale of Tenant's personal property, furniture, fixtures or equipment or any
other property located in or upon the Premises, without Landlord's prior written
consent, which consent shall be in Landlord's sole discretion.
7. STORAGE. Tenant may only store goods, wares, or merchandise on or in the
Premises in areas specifically designated by Landlord for such storage.
8. DIRECTIVES TO MANAGEMENT. Tenant's requirements, other than those Landlord
specifically agrees to perform elsewhere in this Lease, shall only be attended
to upon the Building management's receipt of Tenant's written request therefor.
Landlord's employees shall not perform any work or do anything outside of their
regular duties unless under special instruction from the Building management. No
security guard, janitor or engineer or other employee of the Building management
shall admit any person (Tenant or otherwise) to the Premises without specific
instructions from the Office of the Building and written authorization for such
admittance from Tenant.
9. KEYS AND LOCKS. Landlord shall furnish Tenant with two keys to each door lock
existing in the Premises. Tenant shall reimburse Landlord a reasonable charge
for these and any additional keys. Tenant shall not be permitted to have keys
made, nor shall Tenant alter any lock or install a new or additional lock or
bolts on any door of the Premises without Landlord's prior written consent.
Tenant shall, in each case, furnish Landlord with a key for any additional lock
installed or changed by Tenant or Tenant's agent(s). Tenant, upon the expiration
or earlier termination of this Lease, shall deliver to Landlord all keys in the
possession of Tenant or Tenant's agents, clients, contractors, directors,
employees, invitees, licensees, officers, partners or shareholders for doors in
the Building, whether or not furnished to Tenant by Landlord. If Tenant, or
Tenant's agents, clients, contractors, directors, employees, invitees,
licensees, officers, partners or shareholders, lose or misplace any key(s) to
the Building, Landlord shall, in Landlord's sole discretion, either replace said
key(s) or re-key such locks as may be affected thereby, and Tenant shall
reimburse Landlord for all such costs of such re-keying and/or replacement.
10. SOLICITATION. Tenant and/or its agents, clients, contractors, directors,
employees, invitees, licensees, officers, partners or shareholders shall not
permit any canvassing, peddling, soliciting and/or distribution of handbills or
any other written materials to occur in the Premises and/or the Building, nor
shall Tenant or Tenant's agents, clients, contractors, directors, employees,
invitees, licensees, officers, partners or shareholders engage in such
solicitation or distribution activities.
C-2
41
EXHIBIT C (CONTINUED)
RULES AND REGULATIONS
11. RETAIL SALES, SERVICES AND MANUFACTURING PROHIBITED. Except with the prior
written consent of Landlord, Tenant shall not sell, or permit the retail sale
of, newspapers, magazines, periodicals, theater tickets or any other goods or
merchandise to the general public in or on the Premises, nor shall Tenant carry
on or permit or allow any employee or other person to carry on the independent
business of stenography, typewriting or any similar business in or from the
Premises for the service or accommodation of other occupants of any other
portion of the Building. Tenant shall not permit the Premises to be used for
manufacturing or for any illegal activity of any kind, or for any business or
activity other than for Tenant's specific use.
12. CHANGE IN NAME OR ADDRESS. Landlord shall have the right, exercisable
without notice and without liability to Tenant, to change the name and street
address of the Building.
13. PROJECTIONS FROM PREMISES. Tenant shall not install any radio or television
antenna, loudspeaker or other device on the roof or the exterior walls of the
Building or in any area projecting outside the interior walls of the Premises.
Tenant shall not install or permit to be installed any awnings, air conditioning
units or other projections, without the prior written consent of Landlord.
14. SUPERIORITY OF LEASE. These Rules and Regulations are in addition to, and
shall not be construed to in any way modify or amend, in whole or in part, the
covenants, agreements or provisions of this Lease. If a conflict or disagreement
between the Lease and these Rules becomes apparent, this Lease shall prevail.
15. CHANGES TO RULES AND REGULATIONS. Provided such changes do not materially
harm Tenant's ability to conduct its normal business operations, Landlord shall
retain the right to change, add or rescind any rule or regulation contained
herein, or to make such other and further reasonable and non-discriminatory
Rules and Regulations as in Landlord's sole judgment may, from time to time,
become necessary for the management, safety, care and cleanliness of the
Premises, the Building or the Parking Facilities, or for the preservation of
good order therein, or for the convenience of other occupants and tenants
therein, so long as such recision, addition, deletion or change is thereafter
reasonably applied to all occupants of the Building affected thereby.
PARKING RULES AND REGULATIONS
A. Tenant shall strictly comply with all posted speed limits, directional
signs, yield signs, stops signs and all other signs within or about the
parking facilities.
B. Tenant shall register all vehicle license plate numbers with the Building
management.
C. Tenant shall be responsible for the cost of repairing any damage to the
parking facilities or cleaning any debris create or left by Tenant,
including, without limitation, oil leakage from motor vehicles parked in
the parking facilities under its auspices.
D. Landlord, in addition to reserving the right to designate one or more areas
solely for visitor parking, which areas may be changed by Landlord from
time to time with or without prior notice to Tenant, reserves the right to
allocate additional visitor spaces on any floor of the parking facilities.
Tenant shall not park any vehicles in any spaces designated as visitor only
spaces or customer spaces within the parking facilities.
E. Tenant shall strictly comply with all rules, regulations, ordinances, speed
limits, and statutes affecting handicapped parking and/or access, and shall
not park any vehicles within the fire lanes, along parking curbs or in
striped areas.
F. Tenant shall only use the number of parking permits allocated to it and
shall not permit more than one of its employees to utilize the same parking
permit. Landlord reserves the right to assign or re-assign parking spaces
within the Parking facilities to Tenant from time to time, and provided
Landlord is required to do so by reason of any action arising out of a
governmental mandate imposed on Landlord, Landlord further reserves the
right at any time to substitute an equivalent number of parking spaces in a
parking facilities or subterranean or surface parking facility within a
reasonable distance of the Premises.
G. Except with Landlord's managing agent(s)' prior written consent, Tenant
shall not leave vehicles in the parking facilities overnight, nor park any
vehicles in the parking facilities other than automobiles, motorcycles,
motor-driven or non-motor-driven bicycles or four-wheeled trucks or vans.
Landlord may, in its sole discretion, designate separate areas for bicycles
and motorcycles. Tenant shall ensure that vehicles parking in the parking
facilities by using the parking permits assigned to Tenant shall be parked
entirely within the striped lines designating a single space and are not so
situated or of such a width or length as to impede access to or egress from
vehicles parked in adjacent areas or doors or loading docks. Further, all
vehicles utilizing Tenant's parking permits shall not be higher than any
height limitation that may be posted, or of such a size, weight or
dimension so that entry of such vehicle into the parking facilities would
cause any damage or injury thereto.
C-3
42
EXHIBIT C (CONTINUED)
RULES AND REGULATIONS
H. Tenant shall not allow any of the vehicles parked using Tenant's permits,
or the vehicles of any of Tenant's suppliers, shippers, customers or
invitees to be loaded or unloaded in any area other than those specifically
designated by Landlord for loading.
I. Tenant shall not use or occupy the parking facilities in any manner which
will unreasonably interfere with the use of the parking facilities by other
tenants or occupants of the Building. Without limitation, Tenant agrees to
promptly turn off any vehicle alarm system activated and sounding an alarm
in the parking facilities. In the event said alarm system fails to turn off
and no longer sound an intruder alert fifteen (15) minutes after commencing
such an alarm, Landlord shall reserve the right to remove the vehicle from
the parking facilities at Tenant's sole expense.
J. Tenant acknowledges that the Rules and Regulations as posted herein shall
be in effect twenty-four hours per day, seven days per week, without
exception.
K. Tenant acknowledges that the uniformed guard officers and parking
attendants serving the parking facilities are authorized to issue verbal
and written warnings of Tenant's violations of any of the rules and
regulations contained herein. Except in the case of a car alarm continuing
to sound in excess of a maximum of fifteen minutes, in which case no
further notice by Landlord shall be required. If Tenant or Tenant's agents,
contractors, directors, employees, officers, partners or shareholders
continue to materially breach these rules and regulations after expiration
of written notice and the opportunity to cure has been given to Tenant,
then in addition to such other remedies and request for injunctive relief
it may have, Landlord shall have the right, without additional notice, to
remove or tow away the vehicle involved and store the same, all costs of
which shall be borne exclusively by Tenant and/or revoke Tenant's parking
privileges and rights under the Lease.
LANDLORD: TENANT:
XXXXXXX XXXXXX REALTY FUND 1997, THE XXXXXX ENTERTAINMENT COMPANY,
a California limited partnership a California corporation
By: XXXXXXX, XXXXXX & COMPANY, By:
its agent ------------------------------------------------------------------
Signer's Name:
---------------------------------------------------
By: [ ] President [ ] Vice President or [ ] Chief Executive Officer
-------------------------
Xxxxxxx Xxxxxx (Check Title Above)
AND
Dated: By:
--------------------- ------------------------------------------------------------------
Signer's Name:
---------------------------------------------------
[ ] Secretary [ ] Treasurer or [ ] Chief Financial Officer
(Check Title Above)
AFFIX CORPORATE SEAL HERE
Dated:
-------------------------------------------------------------
C-4
