EXHIBIT 10.2
OFFICE LEASE
by and between
THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK,
as Landlord,
and
EARTHLINK NETWORK, INC.
as Tenant
TABLE OF CONTENTS
Page
No.
-----
SECTION I. TERMS AND DEFINITIONS...................................... 1
SECTION II. PROPERTY LEASED............................................ 2
A. Premises................................................... 2
B. Common Areas............................................... 2
C. Minor Variations in Area................................... 2
D. Substitution of Space...................................... 2
SECTION III. COMMENCEMENT OF TERM AND POSSESSION OF PREMISES............ 3
A. Lease Commencement Date.................................... 3
B. Completion of Tenant Improvements and Possession
of Premises............................................. 3
C. Extension of Lease Commencement Date....................... 3
D. Acceptance and Suitability................................. 4
SECTION IV. RENT ...................................................... 5
A. Monthly Rental............................................. 5
C. Rent and Additional Rent................................... 6
SECTION V. REIMBURSEMENT OF COMMON EXPENSES........................... 6
A. Definitions................................................ 6
B. Reimbursement............................................. 7
C. Rebate or Additional Charges.............................. 8
D. Control of Common Areas................................... 8
SECTION VI. SECURITY DEPOSIT See Addendum Section XXXV.D. ............ 9
SECTION VII. TENANT'S TAXES............................................ 9
SECTION VIII. USE OF PREMISES........................................... 10
A. Permitted Uses............................................ 10
B. Compliance with Laws...................................... 10
C. Hazardous Materials See Addendum Section XXXV.E. ......... 11
D. Landlord's Rules and Regulations.......................... 13
E. Traffic and Energy Management............................. 14
SECTION IX. SERVICE AND UTILITIES..................................... 14
A. Standard Building Services and Reimbursement by Tenant
See Addendum Sections XXXV.C.(2) and F. .................. 14
B. Limitation on Landlord's Obligations...................... 15
C. Excess Service............................................ 15
D. Security Services......................................... 16
SECTION X. MAINTENANCE AND REPAIRS................................... 16
A. Landlord's Obligations See Addendum Section XXXV.G. ...... 16
B. Tenant's Obligations...................................... 17
C. Landlord's Right to Make Repairs.......................... 17
D. Condition of Premises Upon Surrender...................... 17
SECTION XI. ENTRY BY LANDLORD......................................... 18
SECTION XII. ALTERATIONS, ADDITIONS AND TRADE FIXTURES................. 19
SECTION XIII. MECHANIC'S LIENS.......................................... 20
i
Page
No.
-----
SECTION XIV. INSURANCE................................................. 20
A. Tenant ................................................... 20
B. Landlord ................................................. 21
C. Waiver of Subrogation..................................... 22
SECTION XV. INDEMNITY................................................. 22
A. Tenant.................................................... 22
B. Limitation on Landlord's Liability; Release of
Directors, Officers and Partners of Landlord............ 22
SECTION XVI. ASSIGNMENT AND SUBLETTING BY TENANT....................... 23
SECTION XVII. TRANSFER OF LANDLORD'S INTEREST........................... 27
SECTION XVIII. DAMAGE AND DESTRUCTION.................................... 27
A. Minor Insured Damage...................................... 27
B. Major or Uninsured Damage................................. 28
C. Abatement of Rent......................................... 28
D. Waiver ................................................... 28
SECTION XIX. CONDEMNATION.............................................. 28
A. Total or Partial Taking................................... 28
B. Award .................................................... 29
C. Abatement in Rent......................................... 29
D. Temporary Taking.......................................... 29
E. Transfer of Landlord's Interest to Condemnor.............. 30
SECTION XX. DEFAULT .................................................. 30
A. Tenant's Default.......................................... 30
B. Remedies ................................................. 31
SECTION XXI. LATE PAYMENTS/INTEREST AND LATE CHARGES................... 33
A. Interest.................................................. 33
B. Late Charges.............................................. 34
C. Consecutive Late Payment of Rent.......................... 34
D. No Waiver................................................. 34
SECTION XXII. LIEN FOR RENT............................................. 35
SECTION XXIII. HOLDING OVER.............................................. 35
SECTION XXIV. ATTORNEYS' FEES........................................... 35
SECTION XXV. MORTGAGE PROTECTION/SUBORDINATION......................... 36
A. Subordination............................................. 36
B. Attornment................................................ 36
SECTION XXVI. ESTOPPEL CERTIFICATE/FINANCIAL STATEMENTS................. 37
A. Estoppel Certificate...................................... 37
B. Furnishing of Financial Statements........................ 38
SECTION XXVII. PARKING See Addendum Section XXXV.H. ..................... 38
SECTION XXVIII. SIGNS: NAME OF BUILDING See Addendum Section XXXV.I. ..... 39
ii
Page
No.
-----
SECTION XXIX. QUIET ENJOYMENT ....................................... 39
SECTION XXX. BROKER ................................................ 39
SECTION XXXI. NOTICES ............................................... 40
SECTION XXXII. NOTICE AND CURE TO LANDLORD AND MORTGAGE .............. 40
SECTION XXXIII. GENERAL ............................................... 40
A. Paragraph Headings .................................... 40
B. Incorporation of Prior Agreements; Amendments ......... 40
C. Waiver ................................................ 41
D. Short Form of Memorandum of Lease ..................... 41
E. Time of Essence ....................................... 41
F. Examination of Lease................................... 41
G. Severability........................................... 41
H. Surrender of Lease Not Merger.......................... 41
I. Corporate Authority.................................... 42
J. Governing Law.......................................... 42
K. Force Majeure.......................................... 42
L. Use of Language........................................ 42
M. Successors............................................. 42
N. No Reduction of Rental................................. 42
O. No Partnership......................................... 43
P. Exhibits .............................................. 43
Q. Indemnities............................................ 43
R. Nondisclosure of Lease Terms........................... 43
SECTION XXXIV. EXECUTION ............................................. 44
SECTION XXXV. ADDENDUM .............................................. 45
EXHIBIT A SITE PLAN FOR THE PROJECT
EXHIBIT B FLOOR PLAN OF THE PREMISES
EXHIBIT C CONSTRUCTION WORK LETTER
EXHIBIT D RENT SCHEDULE
EXHIBIT E RULES AND REGULATIONS
EXHIBIT F AMENDMENT OF LEASE COMMENCEMENT DATE
EXHIBIT G JANITORIAL SPECIFICATIONS
EXHIBIT H INTENTIONALLY DELETED
EXHIBIT I FORM OF LETTER OF CREDIT
EXHIBIT J SUBORDINATION, NONDISTURBANCE AND ATTORNMENT
AGREEMENT
iii
OFFICE LEASE
THIS LEASE is entered into by and between Landlord and Tenant effective as of
this ____ day of September, 1996.
SECTION I. TERMS AND DEFINITIONS
The following terms as used herein shall have the meanings as set forth below:
A. "Landlord" means THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK.
a New York corporation, and its successors and assigns.
B. "Tenant" means Earthlink Network, Inc., a Delaware corporation.
C. "Building" means the office building in which the Premises are located,
which Building has approximately 110,419 square feet of Rentable Area
and is located at 2947 Bradley Street in the City of Pasadena,
California.
D. "Project" means the Bradley Street Buildings located at 2923 and
2947 Bradley Street in the City of Pasadena, California, in which
Project the Building is located as shown on the site plan attached
hereto as EXHIBIT A.
E. "Premises" means Suite _______ located on the first floor of the
Building and consisting of approximately fifty-five thousand (55,000)
square feet of Rentable Area, as more particularly shown on EXHIBIT B
attached hereto and incorporated herein by this reference. See Addendum
Section XXXV.A
F. "Term" means the ten (10) year period commencing on the Lease
Commencement Date and expiring on the Expiration Date. See Addendum
Section XXXV.B
G. "Lease Commencement Date" means the date on which Landlord tenders
delivery of possession of the Premises to Tenant with "Landlord's Work"
(as defined in Section III.B. below) "Substantially Completed" (also as
defined in Section III.B. below), which is currently expected to be
February 14, 1997; once the Lease Commencement Date is determined in
accordance with this subsection and Section III.C. below, Landlord and
Tenant shall execute an Amendment of Lease Commencement Date in the
form of EXHIBIT F hereto, which shall specify the Lease Commencement
Date and Expiration Date.
H. "Expiration Date" means 11:59 p.m. (Pacific Standard Time) on the day
immediately preceding the tenth (10th) anniversary of the Lease
Commencement Date, as confirmed in an Amendment of Lease Commencement
Date executed as provided above.
I. "Monthly Rental" means the amounts specified in Section IV, below and
in the Rent Schedule attached hereto as EXHIBIT D and incorporated
herein, subject to adjustments as set forth in Section IV.B. below.
J. "Base Operating Expense" means the amount of Common Operating Costs (as
defined in Section V. below) actually incurred and adjusted pursuant to
Section V.A. (4) below for the period from January 1, 1997 to December
31, 1997, which shall be paid by Landlord and not Tenant.
K. "Rentable Area" is defined in EXHIBIT D attached hereto.
L. "Security Deposit" means Eight Hundred Thousand Dollars ($800,000.00).
See Addendum Section XXXV.D.
1
M. "Permitted Use" means general office and administrative uses including
computers and integrated or associated input and output devices and
data processing center, with kitchen, eating and break facilities for
employees.
N. "Broker" means Ramsey-Shilling Co. and Ares Realty Capital, Inc.
O. "Landlord's Address for Notice" means 19712 MacArthur Boulevard, Suite
200, Irvine, California 92715, Attn: Real Estate Vice President.
P: "Tenant's Address for Notice" means Suite _____, 2947 Bradley Street,
Pasadena, California.
Q. "Tenant's Proportionate Share" for Tenant's reimbursement of Common
Operating Costs and other expenses to be pro-rated hereunder means
49.81% which is the quotient obtained by dividing the total number
of square feet of Rentable Area in the Building into the total number
of square feet of Rentable Area within the Premises, which percentage
may be adjusted pursuant to EXHIBIT D hereto.
SECTION II. PROPERTY LEASED See Addendum Section XXXV.A.
A. PREMISES
Upon and subject to the terms, covenants and conditions hereinafter
set forth, Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, the Premises; reserving to Landlord, however, (a) the
use of the exterior walls, roof, return air plenum and the area under
the Premises floor and (b) the rights to make structural (building)
modifications and the right to install, maintain, use, repair and
replace pipes, ducts, conduits, and wires to serve or serving other
tenant premises in the Building through the Premises in locations
which will not materially interfer with Tenant's use (1) thereof.
B. COMMON AREAS
Subject to the terms, covenants and conditions of this Lease, Tenant
shall have the right, for the benefit of Tenant its employees,
suppliers, shippers, customers and invitees, to the non-exclusive use
of all of the Common Areas as hereinafter defined.
C. MINOR VARIATIONS IN AREA
Subject to the provisions of EXHIBIT D, the Rentable Area of the
Premises contained in Section I. is agreed to be the Rentable Area
of the Premises regardless of minor variations resulting from
construction of the Building and/or tenant improvements.
- -------------------
(1) and enjoyment
2
SECTION III. COMMENCEMENT OF TERM AND POSSESSION OF PREMISES
A. LEASE COMMENCEMENT DATE SEE ADDENDUM SECTION XXXV.B.
The Term of the Lease shall commence on the Lease Commencement Date (as
extended only pursuant to Section III.C. below, if applicable), and
shall continue, subject to earlier termination as provided herein,
until the Expiration Date (as extended only pursuant to subsection C.
below).
B. COMPLETION OF TENANT IMPROVEMENTS AND POSSESSION OF PREMISES
Upon execution of this Lease by the parties, Landlord shall proceed to
complete the tenant improvements in the Premises described as
"Landlord's Work" in the "Construction Work Letter" attached hereto and
incorporated herein as EXHIBIT C. At the time such work has been
substantially completed in accordance with the Construction Work
Letter(2) ("Substantial Completion"). Landlord shall notify Tenant
thereof and Tenant shall take possession of the Premises on the Lease
Commencement Date. In the event permission is given to Tenant to enter
or occupy all or a portion of the Premises prior to the Lease
Commencement Date, such occupancy shall be subject to all of the terms
and conditions of this Lease. Tenant shall complete all tenant
improvements described as "Tenant's Work" in EXHIBIT C hereto, and
shall open the Premises for business, on or before the Lease
Commencement Date. Any professional fees or costs and expenses incurred
by Landlord in reviewing plans and specifications for Tenant's Work
shall be(3) paid to Landlord by Tenant upon demand as additional rent.
All tenant improvements constructed in the Premises, whether by
Landlord or by (or on behalf of) Tenant and whether at Landlord's or
Tenant's expense, shall become part of the Premises and shall be and
remain the property of Landlord unless Landlord specifically agrees
otherwise in writing.
C. EXTENSION OF LEASE COMMENCEMENT DATE
If the Premises are not ready for occupancy by Tenant on the original
Lease Commencement Date specified in Section I. due to one or more
delays caused by Landlord or caused by matters beyond the control of
Landlord, this Lease and the obligations of Landlord and Tenant
hereunder shall nevertheless continue in full force and effect.
However, in such event Landlord and Tenant shall agree on an amendment
of the original Lease Commencement Date to reflect such delay or delays
and shall, in each instance, execute and attach hereto an amendment in
the form of that attached as EXHIBIT F hereto stating such amended
Lease Commencement Date and, if applicable, an amended Expiration Date
and no rental shall be payable by Tenant hereunder until the amended
Lease Commencement Date. The delay in commencement of the Term and in
the accrual of rent described in the foregoing sentence shall
constitute full settlement of
- ----------------
(2) , and any base Building improvements required for Tenant's occupancy of
the Premises are substantially completed
(3) credited against the Tenant Allowance (as defined in EXHIBIT C hereto),
if available, and otherwise shall be
3
all claims that Tenant might otherwise have by reason of the Premises
not being ready for occupancy on the original Lease Commencement Date
specified in Section I. above.
If the Premises are not ready for occupancy by Tenant on the Lease
Commencement Date due to one or more delays caused by Tenant, or anyone
acting under or for Tenant, Landlord shall have no liability for such
delay and the Lease Commencement Date shall nevertheless begin as of
the Lease Commencement Date stated in Section I. (as extended only
because of Landlord's delay pursuant to this subsection C., if
applicable).
(4)
D. ACCEPTANCE AND SUITABILITY
Within fifteen (15) days following the date Tenant takes possession
of the Premises, Tenant may provide Landlord with a "punch list"
which sets forth any itemization of any corrective work to be
performed by Landlord with respect to the Landlord's Work as set
forth in the Construction Work Letter; provided, however, that
Tenant's obligation to pay Monthly Rental as provided below shall
not be affected thereby. (5)If Tenant fails to submit such "punch
list" to Landlord within such fifteen (15) day period, Tenant agrees
that by taking possession of the Premises it will conclusively be
deemed to have inspected the Premises and found the Premises in
satisfactory condition. Tenant acknowledges that neither Landlord,
nor any agent, employee or servant of Landlord, has made any
representation with respect to the Premises or the Project, or with
respect to the suitability of them for the conduct of Tenant's
business, nor has Landlord agreed to undertake any modifications,
alterations, or improvements of the Premises or Project, except as
specifically provided in this Lease.
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, LANDLORD HEREBY
DISCLAIMS, AND TENANT WAIVES THE BENEFIT OF, ANY AND ALL IMPLIED
WARRANTIES, INCLUDING IMPLIED WARRANTIES OF HABITABILITY, FITNESS OR
SUITABILITY FOR PURPOSE, OR THAT THE BUILDING OR THE IMPROVEMENTS IN
THE PREMISES HAVE BEEN CONSTRUCTED IN A GOOD AND WORKMANLIKE MANNER.
TENANT EXPRESSLY ACKNOWLEDGES THAT LANDLORD DID NOT CONSTRUCT OR
APPROVE THE QUALITY OF CONSTRUCTION OF THE BUILDING.
[ILLEGIBLE]
- -------------------------
Tenant's Initials
- ---------------------------
(4) In the event that the Lease Commencement Date fails to occur within
sixty (60) days of the Lease Commencement Date specified in Section I.
above (which sixty (60) day period shall be extended one day for each
day of delay caused by Tenant or force majeure (as defined in Section
XXXIII.K. below)), then Tenant's obligation to pay Monthly Rental shall
be delayed one day for each day after expiration of such sixty (60) day
period (as so extended) and prior to the actual Lease Commencement
Date. For example, if the Lease Commencement Date occurs May 1, 1997
(a delay of seventy-six(76) days), solely as a result of Landlord
delay, then Tenant's obligation to pay Monthly Rental shall commence
May 17, 1997, notwithstanding the occurrence of the Lease Commencement
Date.
(5) Upon receipt of such punch-list, Landlord shall promptly commence to
complete the items noted thereon which Landlord agrees are properly
included on the punch-list, and will use reasonable efforts to complete
such items within thirty (30) days of receipt of the punch-list.
4
(4)
SECTION IV. RENT
A. MONTHLY RENTAL
Commencing on the Lease Commencement Date (subject, however, to any
modifications or adjustments specified hereinbelow and/or in the "Rent
Schedule" attached hereto as EXHIBIT D) Tenant shall pay to Landlord
during the Term, rental for the entire Term in the total amount as set
forth in EXHIBIT D payable in monthly installments (the "Monthly
Rental") in the amount set forth in EXHIBIT D, which sum shall be
payable by Tenant on or before the first day of each month, in advance,
without further notice, at the address specified for Landlord in
Section I, or such other place as Landlord shall designate, without any
prior demand therefor and (7) without any abatement, deduction or
setoff whatsoever. Monthly Rental for the first full month of the Term
when rental is due shall be paid upon the execution hereof. If the
Lease Commencement Date should occur on a day other than the first day
of a calendar month, or the Expiration Date should occur on a day other
than the last day of a calendar month, then the rental for such
fractional month shall be prorated on a daily basis upon a thirty (30)
day calendar month.
- -------------------------
(4) Notwithstanding the foregoing, Landlord will cure any latent defects
in Landlord's Work which are not readily ascertainable upon a thorough
walk-through of the Premises, which defects are identified by Tenant in
a written notice given to Landlord within six (6) months of the Lease
Commencement Date. Moreover, the provisions of this Section III.D.
shall not abrogate Landlord's obligations pursuant to Section X.A.
below.
(7) except as otherwise specifically permitted herein,
5
C. RENT AND ADDITIONAL RENT
As used in this Lease the term "rent" shall mean Monthly Rental and
additional rent, and the term "additional rent" shall mean all other
amounts payable by Tenant to Landlord pursuant to this Lease other than
Monthly Rental, including without limitation, Tenant's Proportionate
Share of Common Operating Costs in excess of the Base Operating
Expense. All Monthly Rental and additional rent shall be paid in lawful
money of the United States which shall be legal tender at the time of
payment. Where no other time is stated herein for payment, payment of
any amount payable from Tenant to Landlord hereunder shall be due,
and made, within ten (10) days after Tenant's receipt of Landlord's
invoice or statement therefor.
SECTION V. REIMBURSEMENT OF COMMON EXPENSES
A. DEFINITIONS See Addendum Section XXXV.C
(1) "Common Areas" means all areas, space, equipment and special
services provided by Landlord for the common or joint use and
benefit of the tenants, their employees, agents, servants,
suppliers, customers and other invitees, including, by way of
illustration, but not limitation, retaining walls, fences,
landscaped areas, parks, curbs, sidewalks, private roads,
restrooms, stairways, elevators, lobbies, hallways, patios,
service quarters, parking areas, all common areas and other
areas within the exterior of the Building and in the Project
or as shown on the site plan attached to this Lease as EXHIBIT
A.
(2) "Taxes" shall mean all real property taxes, personal property
taxes, improvement bonds, and other charges and assessments
which are levied or assessed upon or with respect to the
Building and Project and the land on which the Building and
Project are located and any improvements, fixtures and
equipment and all other property of Landlord, real or
personal, located in the Building and Project and used in
connection with the operation of the Building and Project and
the land on which the Building and Project are located,
including any increase in such taxes, whether resulting from a
reassessment of the value of the land, the Building or the
Project, personal property, or for any other reason, imposed
by any governmental authority, and any tax which shall be
levied or assessed in addition to or in lieu of such real or
personal property taxes and any license fees, commercial
rental tax, or other tax upon Landlord's business of leasing
the Building and the Project, but shall not include any
federal or state income tax, or any franchise, capital stock,
estate, inheritance, succession, transfer and excess profit
taxes imposed upon Landlord, and shall also include any tax
consultant fee or other costs incurred by Landlord to review
or contest any tax assessed against the Premises, Building or
Project.
(3) "Common Operating Costs" shall mean the aggregate of all costs
and expenses payable by Landlord in connection with the
operation and maintenance of the Premises, Building, Project,
and Common Areas, including, but not limited to, (a) the cost
of landscaping, repaving, resurfacing, repairing, replacing,
painting, lighting, cleaning, removing trash, janitorial
services, security services and other similar items; (b) the
total cost of compensation and benefits of personnel to
implement the services referenced herein; (c) all Taxes; (d)
the cost of any insurance obtained by Landlord in connection
with the Building and Project, including but not limited to,
the insurance required to be obtained by Landlord pursuant to
this Lease; (e) the cost of operating, repairing and
maintaining life, safety, and access systems, including,
without limitation, sprinkler systems; (f) the cost of
monitoring services, if provided by Landlord, including,
without limitation, any monitoring or control devices used by
Landlord in regulating the parking areas; (g) the cost of
water, electricity, gas and any other utilities; (h)
6
legal, accounting and consulting fees and expenses; (i)
compensation (including employment taxes and fringe benefits)
of all persons who perform duties connected with the
operation, maintenance and repair of the Premises, Project,
Building or Common Areas; (j) energy allocation, energy use
surcharges or environmental charges; (k) expenditures made,
and costs, fees, assessments and other charges paid, by
Landlord in connection with traffic or energy management
programs applicable to the Project or in connection with
Landlord's compliance with laws or other governmental
requirements; (l) municipal inspection fees or charges; (m)
any other costs or expenses incurred by Landlord under this
Lease which are not otherwise reimbursed directly by tenants;
(8)(n) the amount charged by any management firm (who may be
an affiliate of Landlord) contracted by Landlord to provide
any or all of the foregoing services.
(4) In the event during all or any portion of any calendar year
(9) the Building is not (10) rented and occupied, Landlord
(11) make an appropriate adjustment to the Common Operating
Costs for such year, employing sound accounting and management
principles, to determine the Common Operating Costs that
would have been paid or incurred by Landlord had the Building
been (12) rented and occupied and the amount so determined
shall be deemed to have been the Common Operating Costs for
such year.
B. REIMBURSEMENT
Within a reasonable time before the commencement of each calendar year
during the Term, Landlord shall deliver to Tenant a reasonable estimate
of the anticipated Common Operating Costs for the forthcoming calendar
year. Tenant shall pay to Landlord, as additional rental, commencing on
(13), and continuing on the first day of each calendar month
thereafter, an amount equal to one-twelfth (1/12th) of the product
obtained by multiplying (1) the remainder of the then estimated Common
Operating Costs less the Base Operating Expense paid by Landlord, times
(2) Tenant's Proportionate Share; provided, however, that such amount
shall not be less than zero dollars($0). The estimated monthly charge
for Tenant's Proportionate Share may be adjusted periodically by
Landlord during the calendar year on the basis of Landlord's reasonably
anticipated costs. Any expenditure (14) by Landlord (e.g. resurfacing
of parking areas, painting buildings, refurbishing landscaping or
walkways and similar items) during the year which was not included in
determining the estimated Common Operating Costs, may be billed
separately to Tenant according to Tenant's Proportionate Share.
- -------------------
(8) and
(9) Including the year used for calculating the Base Operating Expense (i.e.,
1997)
(10) fully
(11) shall
(12) fully
(13) January 1, 1998
(14) unanticipated
7
C. REBATE OR ADDITIONAL CHARGES
Within a reasonable time after the end of each calendar year, Landlord
shall furnish to Tenant a statement (each, an "Annual Statement") showing
the total Common Operating Costs and Tenant's Proportionate Share of the
Common Operating Costs less the Basic Operating Expense for the calendar
year just ended. Tenant shall have the right, by written notice to Landlord
given within(15) days after receipt of an Annual Statement, to
protest specific items on the most recent Annual Statement; to be
effective, Tenant's notice must state with specificity the item(s) to which
Tenant objects. Tenant's failure to object to an Annual Statement as, when
and in the manner provided in the preceding sentence shall render such
Annual Statement binding on Tenant. If the amount of estimated Common
Operating Costs less the Base Operating Expense paid by Tenant for any year
during the Term exceeds the actual the Common Operating Costs less the Base
Operating Expense for such year, Landlord shall apply any amounts due to
Tenant hereunder to any outstanding amounts due or amounts next coming due
from Tenant to Landlord. If the estimated Common Operating Costs less the
Base Operating Expense for such year are less than the actual Common
Operating Costs less the Base Operating Expense for such year, then Tenant
shall pay to Landlord, within thirty (30) days of Tenant's receipt of the
Annual Statement, as additional rent. Tenant's Proportionate Share of the
difference between the amount of actual Common Operating Costs in excess of
the Base Operating Expense and the amount of estimated Common Operating
Costs in excess of Base Operating Expense. In the event the Term of this
Lease expires, or this Lease is otherwise terminated. Landlord shall
compute and prorate the credit or deficiency up to the date the Lease
expired or was terminated and may apply any credit due Tenant to any
outstanding amounts due by Tenant hereunder at that time and, at the end
of the Lease, so long as Tenant is not then in default, shall (16)
refund any excess to Tenant.
D. CONTROL OF COMMON AREAS
Landlord shall have the sole and exclusive control of the Common Areas, as
well as the right to make changes to the Common Areas. Notwithstanding the
preceding sentence, Landlord is not responsible for any harm or damage to
any of Tenant's officers, agents, or employees as a result of their use of
the Common Areas (17). Landlord's rights shall include, but not be limited
to, the right to (a) restrain the use of the Common Areas by unauthorized
persons, (b) utilize from time to time any portion of the Common Areas for
promotional and related matters, (c) temporarily close any portion of the
Common Areas for repairs, improvements or alterations, (d) change the shape
and size of the Common Areas or change the location of improvements within
Common Areas, including, without limitation, parking areas, roadways and
curb cuts, and (e) prohibit access to or use of Common Areas that are
designated for the storage of supplies or operation of equipment necessary
to operate the Project or Building. (18) Landlord may determine the
- ----------------------------
15 ninty (90)
16 promptly
17 except subject to Sections XIV.C. and XV.b. below, if and to the
extent it is determined by a court of competent jurisdiction the
same were caused by Landlord's gross negligence or willful misconduct.
18 ; provided, however, Landlord shall not exercise its rights pursuant
to (b), (c) or (d) above so as to unreasonably interfere with
Tenant's use and enjoyment of or access to the Premises
8
nature, size and extend of the Common Areas as well as make changes to the
Common Areas from time to time which, in its (19) opinion, are deemed
desirable.
SECTION VI. SECURITY DEPOSIT SEE ADDENDUM SECTION XXXV.D.
Upon execution of this Lease, Tenant shall deposit with Landlord the Security
Deposit defined in Section I. above, which shall be held by Landlord as
security for the performance by Tenant of all terms, covenants and conditions
of this Lease. It is expressly understood and agreed that such deposit is not
an advance rental deposit or a measure of Landlord's damage in case of
Tenant's default. If Tenant defaults with respect to any provision of this
Lease, including, but not limited to, the provisions relating to the payment
of rent or the obligation to repair and maintain the Premises or to perform
any other term, covenant or condition contained herein, Landlord may (but
shall not be required to), without prejudice to any other remedy provided
herein or provided by law and without notice to Tenant, use the Security
Deposit, or any portion of it, to cure the default or to compensate Landlord
for all damages sustained by Landlord resulting from Tenant's default. Tenant
shall immediately on demand pay to Landlord a sum equivalent to the portion
of the Security Deposit so expended or applied by Landlord as provided in
this paragraph so as to maintain the Security Deposit in the sum initially
deposited with Landlord. Although the Security Deposit shall be deemed the
property of Landlord, if Tenant is not in default at the expiration or
termination of this Lease, Landlord shall return the Security Deposit to
Tenant. Landlord shall not be required to keep the Security Deposit separate
from its general funds and Landlord, not Tenant, shall be entitled to all
interests, if any, accruing on any such deposit. Upon any sale or transfer of
its interest in the Building, Landlord shall transfer the Security Deposit to
its successor in interest in the Building. Landlord shall transfer the
Security Deposit to its successor in interest and thereupon. Landlord shall
be released from any liability or obligation with respect thereto.
SECTION VII. TENANT'S TAXES
To the extent not covered as a Common Operation Cost, Tenant shall be liable for
any tax (now or hereafter imposed by any governmental entity) applicable to or
measured by or on the rents or any other charges payable by Tenant under this
Lease, including (but not limited to) any gross income tax, gross receipts tax
or excise tax with respect to the receipt of such rent or other charges or the
possession, leasing or operation, use or occupancy of the Premises, but not
including any net income, franchise, capital stock, estate or inheritance taxes.
If any such tax is required to be paid to the governmental taxing entity
directly by Landlord, then Landlord shall pay the amount due and, upon demand,
shall be fully reimbursed by Tenant for such payment.
Tenant shall also be liable for all taxes levied against leasehold held by
Tenant or against any personal property, leasehold improvements, additions,
alterations and fixtures placed by or for Tenant in, on or about the
Premises, Building and Project or constructed by Landlord (20) for Tenant in
the Premises; and if any such taxes are levied against Landlord or Landlord's
property, or if the assessed value of such property is increased (whether by
special assessment or otherwise) by the inclusion therein of value placed on
such leasehold, personal property, leasehold improvements, additions,
alterations and fixtures, and Landlord pays such any such taxes (which
Landlord shall have the right to do regardless of the validity thereof).
Tenant, upon demand, shall fully reimburse Landlord for the taxes so paid by
Landlord or for the proportion of such taxes resulting from such increase in
any assessment.
- -------------------------
19 reasonable
20 at Tenant's expense
9
SECTION VIII. USE OF PREMISES
A. PERMITTED USES
Tenant shall use the Premises and Common Areas solely for the
Permitted Use specified in subsection I.M. above, and for no other
use, and under the name specified in subsection I.B. above. Tenant
shall, at its own cost and expense, obtain any and all licenses and
permits necessary for any such use. Tenant shall not do or permit
anything to be done in or about the premises, Common Areas, Building
or Project which will in any way (21) obstruct or interfere with the
rights of other tenants or occupants of the Project or injure them
or use or allow the Premises to be used for any unlawful purpose,
nor shall Tenant cause, maintain or permit any nuisance in, on or
about the Premises and Common Areas or permit any odors to emanate
from the Premises and intrude upon the Common Areas or the premises
of other tenants. Tenant shall not commit or suffer to be committed
any waste in or upon the Premises, Common Areas, Building or
Project. Tenant shall not do or permit anything to be done in or
about the Premises, Common Areas, Building or Project which may
render the insurance thereon void or increase the insurance risk
thereon. If an increase in any fire and extended coverage insurance
premiums paid by Landlord for the Building and Project is caused by
Tenant's use and occupancy of the Premises, (22) then tenant shall
pay as additional rental the amount of such increase to Landlord.
B. COMPLIANCE WITH LAWS
(23)
Tenant shall not use the Premises, Building, Project, or Common
Areas in any way (or permit or suffer anything to be done in or
about the same) which will conflict with any law, statute, ordinance
or governmental rule or regulation or any covenant, condition or
restriction (whether or not of public record) affecting the
Premises, Project or Building, now in force or which may hereafter
be enacted or promulgated including, but not limited to, the
provisions of any city or county zoning codes regulating the use
thereof. Tenant shall, at its sole cost and expense, promptly comply
with (a) all laws, statutes, ordinances and governmental rules and
regulations, now in force or which may hereafter be in force,
applicable to Tenant (24) its use of business or operations in the
Premises, (b) all requirements, and other covenants, conditions and
restrictions, now in force or which may hereafter be in force, which
affect the Premises, and (c) all requirements, now in force or which
may hereafter be in force, of any board of fire underwriters or
other similar body now or hereafter constituted relating to or
affecting the condition, use or occupancy of the Premises, Building
or Project. The judgment of any court of competent jurisdiction or
the admission by Tenant in any action against Tenant, whether
Landlord be a party thereto or not, that Tenant has violated any
law, statute, ordinance, governmental rule or regulation or any
requirement, covenant, condition or restriction shall be conclusive
of the fact as between Landlord and Tenant. Tenant agrees to fully
indemnify Landlord against any liability, claims or damages arising
as a result of a breach of the provisions of this subsection by
Tenant, and against
_______________________________
(21) , in Landlord's reasonable opinion,
(22) as evidenced by a letter from the insurance company,
(23) If and to the extent that Landlord's Work or the Common Areas are not in
compliance with applicable governmental requirements as in effect and as
applied to the Building as of the Lease Commencement Date, Landlord
shall, if, as and when required by such applicable governmental
authorities, cause Landlord's Work or the Common Areas, as applicable, to
comply therewith.
(24) relating to
10
all costs, expenses, fines or other charges arising therefrom,
including, without limitation, reasonable attorneys' fees and related
costs incurred by Landlord in connection therewith, which indemnity
shall survive the expiration or earlier termination of this Lease.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that, subject to (25) performance by Landlord of
Landlord's Work described in EXHIBIT C hereto. Tenant is accepting the
Premises "AS IS," in its present state and condition, without any
representations or warranties from Landlord of any kind whatsoever,
either express or implied, with respect to the Premises or the
Building, including without limitation the compliance of the Premises
or the Building with The Americans With Disabilities Act and the rules
and regulations promulgated thereunder, as amended from time to time
(the "ADA").(26) Except as otherwise provided for in EXHIBIT C hereto,
if Tenant's use of the Premises or operations therein cause Landlord
to incur any obligation under the ADA, as reasonably determined by
Landlord, then Tenant shall reimburse Landlord for Landlord's costs and
expenses in connection therewith. If Tenant's initial use of the
Premises is not a "place of public accommodation" within the meaning of
the ADA, then Tenant may not thereafter change the use of the Premises
to cause the Premises to become a "place of public accommodation." In
the event that Tenant desires or is required hereby to make Alterations
(as defined below) to the Premises in order to satisfy its obligations
under the ADA, then all such Alterations shall be subject to any
requirements in the Lease with respect to Alterations of the Premises,
and shall be performed at Tenant's sole cost and expense. Except for
Alterations to the Premises, Tenant shall have no right whatsoever to
make any alterations or modifications to any portion of the Building or
its appurtenant facilities. Tenant shall be responsible for insuring
that the Premises and Tenant's use thereof and operations therein fully
and completely comply with the ADA.
C. HAZARDOUS MATERIALS See Addendum Section XXXV.E.
Tenant covenants and agrees that it shall not cause or permit any
Hazardous Material (as defined below) to be brought upon, kept, or
used in or about the Premises, Building or Project by Tenant, its
agents, employees, contractors or invitees. The foregoing covenant
shall not extend to substances typically used in general office
applications so long as (i) such substances and any equipment which
generates such substances are maintained only in such quantities as
are reasonably necessary for Tenant's operations in the Premises,
(ii) such substances are used strictly in accordance with the
manufacturers' instructions therefor, (iii) such substances are not
disposed of in or about the Project in a manner which would
constitute a release or discharge thereof, and (iv) all such
substances and any equipment which generates such substances are
removed from the Project by Tenant upon the expiration or earlier
termination of this Lease. Any use, storage, generation, disposal,
release or discharge by Tenant of Hazardous Materials in or about
the Project as is permitted pursuant to this subsection C, shall be
carried out in compliance with all applicable federal, state and
local laws, ordinances, rules and regulations. Moreover, no
hazardous waste resulting from any operations by Tenant shall be
stored or maintained by Tenant in or about the Project for more than
ninety (90) days prior to removal by Tenant. Tenant shall, annually
within thirty (30) days after Tenant's receipt of Landlord's written
request therefor, provide to Landlord a written list identifying any
Hazardous Materials then maintained by Tenant in the Project, the use
of each such Hazardous Material and the approximate quantity
of each such Hazardous Material so maintained by Tenant, together with
written certification by Tenant stating, in substance, that neither
Tenant nor any person for whom Tenant is responsible has released or
discharged any Hazardous Materials in or about the Project.
______________________________
(25) footnote 23 above and to
(26) Notwithstanding the foregoing, but subject to the three immediately
succeeding sentences of this subsection B., Landlord shall be
responsible, at Landlord's sole cost and expense, for compliance of the
Common Areas with the ADA.
11
In the event that Tenant proposes to conduct any use or to operate
any equipment which will or may utilize or generate a Hazardous
Material other than as specified in the first paragraph of this
subsection, Tenant shall first in writing submit such use or
equipment to Landlord for approval. No approval by Landlord shall
relieve Tenant of any obligation of Tenant pursuant to this
subsection, including the removal, clean-up and indemnification
obligations imposed upon Tenant by this subsection. Tenant shall,
within five (5) days after receipt thereof, furnish to Landlord
copies of all notices or other communications received by Tenant
with respect to any actual or alleged release or discharge of any
Hazardous Material in or about the Premises or the Project and
shall, whether or not Tenant receives any such notice or
communication, notify Landlord in writing of any discharge or
release of Hazardous Material by Tenant or anyone for whom Tenant is
responsible in or about the Premises or the Project. In the event
that Tenant is required to maintain any Hazardous Materials license
or permit in connection with any use conducted by Tenant or any
equipment operated by Tenant in the Premises, copies of each such
license or permit, each renewal or revocation thereof and any
communication relating to suspension, renewal or revocation thereof
shall be furnished to Landlord within five (5) days after receipt
thereof by Tenant. Compliance by Tenant with the two immediately
preceding sentences shall not relieve Tenant of any other obligation
of Tenant pursuant to this subsection.
Upon any violation of the foregoing covenants, Tenant shall be
obligated, at Tenant's sole cost, to clean-up and remove from the
Project all Hazardous Materials introduced into the Project by Tenant
or any person or entity for whom Tenant is responsible. Such clean-up
and removal shall include all testing and investigation required by any
governmental authorities having jurisdiction and preparation and
implementation of any remedial action plan required by any governmental
authorities having jurisdiction. All such clean-up and removal
activities of Tenant shall, in each instance, be conducted to the
satisfaction of Landlord and all governmental authorities having
jurisdiction. Landlord's right of entry pursuant to Section XI. shall
include the right to enter and inspect the Premises for violations of
Tenant's covenants herein.
Tenant shall indemnify, defend and hold harmless Landlord, its
partners, and its and their successors, assigns, partners, officers,
employees, agents, lenders and attorneys from and against any and all
claims, liabilities, losses, actions, costs and expenses (including
attorneys' fees and costs of defense) incurred by such indemnified
persons, or any of them, as the result of (A) the introduction into or
about the Project by Tenant or anyone for whom Tenant is responsible of
any Hazardous Materials, (B) the usage, storage, maintenance,
generation, disposition or disposal by Tenant or anyone for whom Tenant
is responsible of Hazardous Materials in or about the Project, (C) the
discharge or release in or about the Project by Tenant or anyone for
whom Tenant is responsible of any Hazardous Materials, (D) any injury
to or death of persons or damage to or destruction of property
resulting from the use, introduction, maintenance, storage, generation,
disposal, disposition, release or discharge by Tenant or anyone for
whom Tenant is responsible of Hazardous Materials in or about the
Project, and (E) any failure of Tenant or anyone for whom Tenant is
responsible to observe the foregoing covenants of this subsection.
Upon any violation of the foregoing covenants, Landlord shall be
entitled to exercise all remedies available to a landlord against a
defaulting tenant, including but not limited to those set forth in
Section XX. Without limiting the generality of the foregoing, Tenant
expressly agrees that Landlord may, at its option, (I) (27) immediately
terminate this Lease or (II) (28) continue this Lease in effect until
______________________________
(27) which is not cured within the applicable cure period and, at Landlord's
sole option, upon the third or subsequent violation of any one or more of
the foregoing covenants (regardless of whether any prior violations were
cured within any applicable cure period),
(28) upon any such violation,
12
compliance by Tenant with its clean-up and removal covenant
notwithstanding any earlier expiration date of the term of this Lease.
No action by Landlord hereunder shall impair the obligations of Tenant
pursuant to this subsection.
As used in this subsection, "Hazardous Materials" is used in its
broadest sense and shall include any petroleum based products,
pesticides, paints and solvents, polychlorinated biphenyl, lead,
cyanide, DDT, acids, ammonium compounds and other chemical products and
any substance or material defined or designated as hazardous or toxic,
or other similar term, by any federal, state or local environmental
statute, regulation, or ordinance affecting the Premises, Building or
Project presently in effect or that may be promulgated in the future,
as such statutes, regulations and ordinances may be amended from time
to time, including but not limited to the statutes listed below:
Resource Conservation and Recovery Act of 1976, 42 U.S.C.
Section 6901 ET SEQ.
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, 42 U.S.C. Section 9601 ET SEQ.
Clean Air Act, 42 U.S.C. Sections 7401-7626
Water Pollution Control Act (Clean Water Act of 1977), 33
U.S.C. Section 1251 ET SEQ.
Insecticide, Fungicide, and Rodenticide Act (Pesticide Act of
1987), 7 U.S.C. Section 135 ET SEQ.
Toxic Substances Control Act, 15 U.S.C. Section 2601 ET SEQ.
Safe Drinking Water Act, 42 U.S.C. Section 300(f) ET SEQ.
National Environmental Policy Act (NEPA) 42 U.S.C. Section
4321 ET SEQ.
Refuse Act of 1899, 33 U.S.C. Section 407 ET SEQ.
California Health and Safety Code Section 25316 ET SEQ.
By its signature to this Lease, Tenant confirms that it has
(29)conducted its own examination of the Premises and the Project with
respect to Hazardous Materials and accepts the same "AS IS" and with no
Hazardous Materials present thereon(30).
Tenant acknowledges that incorporation of any material containing
asbestos into the Premises is absolutely prohibited. Tenant agrees,
represents and warrants that it shall not incorporate or permit or
suffer to be incorporated, knowingly or unknowingly, any material
containing asbestos into the Premises.
D. LANDLORD'S RULES AND REGULATIONS
Tenant shall, and Tenant agrees to cause its agents, servants,
employees, invitees and licensees to, observe and comply fully and
faithfully with the rules and regulations attached hereto as EXHIBIT E
or such (31)rules and regulations which may hereafter be adopted by
Landlord (the "Rules") for the care, protection, cleanliness, and
operation of the Premises, Building and Project, and any modifications
or additions to the Rules
____________________________
(29) had an opportunity to
(30) except as set forth in Addendum Section XXXV.E.
(31) reasonable
13
adopted by Landlord, provided that, Landlord shall give written notice
thereof to Tenant. Landlord shall not be responsible to Tenant for failure
of any other tenant or occupant of the Building or Project to observe or
comply with any of the Rules.
E. TRAFFIC AND ENERGY MANAGEMENT
Landlord and Tenant agree to cooperate and use their best efforts to
participate in governmentally mandated or voluntary traffic management
programs generally applicable to businesses located in the area in which the
Project is situated or to the Project and, initially, shall encourage and
support van and car pooling by employees and shall encourage and support
staggered and flexible working hours for employees to the fullest extent
permitted by the requirements of Tenant's business. Neither this subsection
nor any other provision in this Lease, however, is intended to or shall
create any rights or benefits in any other person, firm, company,
governmental entity or the public.
Landlord and Tenant agree to cooperate and use their best efforts to comply
with any and all guidelines or controls imposed upon either Landlord or
Tenant by federal or state governmental organizations or by any energy
conservation association to which Landlord is a party concerning energy
management.
Any costs, fees, fines or other levies assessed against Landlord as the
result of failure of Tenant to comply with this subsection shall be
reimbursed by Tenant to landlord as additional rent.
SECTION IX. SERVICE AND UTILITIES
A. STANDARD BUILDING SERVICES AND REIMBURSEMENT BY TENANT See Addendum
Sections XXXV.C.(2) and F.
So long as Tenant is not in default hereunder (of a type described in clauses
(4) - (6) of Section XX.A. below), Landlord agrees to make available to the
Premises, during the Building's normal business hours of 7:00 a.m. to 6:00
p.m. Monday through Friday and 8:00 a.m. to 12:00 p.m. on Saturday (holidays
excepted), which hours are subject to change from time to time as reasonably
determined by Landlord, such heat and air conditioning (hereinafter "HVAC"),
water and electricity, as may be required in Landlord's (32) judgment for the
comfortable use and occupation of the Premises for general office purposes
and at a level which is usual and customary in similar office buildings in
the area where the Project is located, all of which shall be subject to the
Rules of the Building as well as any governmental requirements or standards
relating to, among other things, energy conservation. Tenant agrees to pay,
as a Common Operating Cost in accordance with Section V. above, Tenant's
Proportionate Share in excess of the Base Operating Expense of the full cost
of all utilities supplied to the Premises, together with any taxes thereon,
(33) any such service or utilities (34) are separately metered to the
Premises, Tenant shall pay the cost thereof in a timely manner directly to
the utility company providing such service. Tenant's obligations in this
Section regarding utilities include, but are not limited to, all charges for
gas, water and electricity used on the Premises, and for all electric light
lamps or tubes. If any such utility or service is not separately metered to
the Premises, Tenant shall be required to pay any increased cost, as
additional rent, of any such utility and service, including without
limitation water, electricity and HVAC, resulting from any use of the
Premises at any time other
- --------------
(32) reasonable
(33) which are not separately metered to the Premises and, with respect to
(34) which
14
than the schedule of normal business hours for providing such utilities and
services as reasonably determined by Landlord or any unusual or non-customary
use beyond that which Landlord has agreed to make available as described
above, or resulting from special electrical, cooling and ventilating needs
created in certain areas by telephone equipment, computers and other similar
equipment or uses. If the Building is designed for individual tenant
operation of the HVAC, Tenant agrees to pay the cost of operating the HVAC at
any time other than the schedule of hours for providing the same set forth
above, which cost may include the operation of the HVAC for space located
outside the Premises when such space is serviced concurrently with the
operation of the HVAC for the benefit of the Premises.
B. LIMITATION ON LANDLORD'S OBLIGATIONS
Landlord shall not be in breach of its obligations under this Section unless
Landlord fails to make any repairs or perform maintenance which it is
obligated to perform hereunder and such failure persists for an unreasonable
time after written notice of a need for such repairs or maintenance is given
to Landlord by Tenant. Landlord shall not be liable for and Tenant shall not
be entitled to any abatement or reduction of rent by reason of Landlord's
failure to furnish any of the foregoing when such failure is caused by
accidents, breakage, repairs, strikes, brownouts, blackouts, lockouts or
other labor disturbances or labor disputes of any character, or by any other
cause, similar or dissimilar, beyond the reasonable control of Landlord, nor
shall such failure under such circumstances be construed as a constructive or
actual eviction of Tenant. (35) Landlord shall not be liable under any
circumstances for loss or injury to property or business, however occurring,
through or in connection with or incidental to Landlord's failure to furnish
any of said service or utilities.
C. EXCESS SERVICE
Tenant shall not, without the written consent of Landlord, use any apparatus
or device in the Premises, including, without limitation, electronic data
processing machines, punch card machines or machines using in excess of one
hundred twenty (120) volts or which consumes more electricity than is usually
furnished or supplied for the Permitted Use of the Premises, as determined
by Landlord. Tenant shall not consume water or electric current in excess of
that usually furnished or supplied for the use of the Premises (as determined
by Landlord), without first procuring the written consent of Landlord, which
Landlord may refuse. The excess cost (including any penalties for excess
usage) for such water and electric current shall be established by an
estimate made by a utility company or independent engineer hired by Landlord
at Tenant's expense and Tenant shall pay such excess costs each month with
the Monthly Rental. All costs and expenses of modifying existing equipment,
cables, lines, etc. or installing additional equipment, cables, lines, etc.
to accommodate such excess usage or use by Tenant of such apparatus or device
shall be borne by Tenant.
- --------------
(35) If, as a result of Landlord's negligence or willful misconduct,
utility service to the Premises is interrupted and continues
interrupted for a period of in excess of three (3) consecutive
business days after written notice thereof is given to Landlord by
Tenant (which three (3) business day period shall be extended by
force majeure events described in Section XXXIII.K below) and which
interruption materially prohibits the use of the Premises for the
Permitted Use, then Monthly Rental and Tenant's obligation to pay
Common Operating Costs shall abate from and after expiration of such
three (3) business day period (as so extended) until service is
restored (regardless of whether it is later interrupted) if and to
the extent that Tenant's ability to conduct business within the
Premises is materially and adversely affected by the interruption.
15
D. SECURITY SERVICES
Certain security measures (both by electronic equipment and personnel) may be
provided by Landlord in connection with the Building and Common Areas.
However, Tenant hereby acknowledges that such security is intended to be only
for the benefit of the Landlord in protecting its property from fire, theft,
vandalism and similar perils and while certain incidental benefits may accrue
to the Tenant therefrom, such security is not for the purpose of protecting
either the property of Tenant or the safety of its officers, employees,
servants or invitees. By providing such security, Landlord assumes no
obligation to Tenant and shall have no liability arising therefrom. If, as a
result of Tenant's occupancy of the Premises, Landlord in its (36) discretion
determines that it is necessary to provide security or implement additional
security measures or devices in or about the Building or the Common Areas,
Tenant shall be required to pay, as additional rent, the cost or increased
cost, as the case may be, of such security.
SECTION X. MAINTENANCE AND REPAIRS
A. LANDLORD'S OBLIGATIONS See Addendum Section XXXV.G.
Except for special or non-standard systems and equipment installed for
Tenant's exclusive use, Landlord shall keep in good condition and repair, at
Landlord's initial cost and expense subject to reimbursement by Tenant of
Tenant's Proportionate Share of such cost and expense(37), heating,
ventilating and air conditioning systems which service the Premises as well
as other premises within the Building, the foundations, exterior walls,
structural conditions of interior bearing walls and roof of the Premises,
interior walls, interior surfaces of exterior walls, ceilings, windows,
doors, cabinets, draperies, electrical and lighting facilities within the
Premises, window coverings, carpeting and other floor coverings, plate glass
and skylights located within the Premises and the Building, as well as the
parking lots, walkways, driveways, landscaping, fences, signs, and utility
installations of the Project. Landlord shall not be required to make any
repairs that are the obligation of any other tenant or occupant within the
Building or Project or repairs for damage caused by any negligent or
intentional act or omission of Tenant or any person claiming through or under
Tenant or any of Tenant's employees, suppliers, shippers, customers or
invitees, in which event Tenant shall repair such damage at its sole cost and
expense. Tenant hereby waives and releases its right to make repairs at
Landlord's expense under any law, statute, ordinance, rules and regulations
now or hereafter in effect in any jurisdiction in which the Project is
located.
- ------------------------------
(36) reasonable
(37) as a Common Operating Cost
(38) by Landlord, but at Tenant's sole cost and expense as set forth in
Addendum Section XXXV.C(2)
(39) Notwithstanding the foregoing, in the event Landlord fails to perform
its obligations pursuant to Section X.A. of this Lease, and such
failure continues without cure or commencement of cure by Landlord
for a period of five (5) business days after Tenant's written notice
to Landlord thereof then Tenant may, after expiration of such five
(5) business day period, provide Landlord with a second notice of
such failure, specifying what Tenant proposes as the nature and cost
of the cure thereof. If Landlord fails to commence to cure such
failure within five (5) business days after receipt of Tenant's
second notice, Tenant may perform the cure identified in Tenant's
second notice and Landlord shall reimburse to Tenant the
out-of-pocket costs incurred by Tenant in so
16
B. TENANT'S OBLIGATIONS
Tenant shall, at its sole cost and expense, make all repairs and
replacements reasonably necessary to preserve in good working order and
condition any special or supplementary heating, ventilating and air
conditioning systems located within the Premises and installed for the
exclusive use of the Premises, Tenant's cabling and telephone lines and
all other non-standard utility facilities and systems exclusively
serving the Premises, and all of Tenant's trade fixtures located within
the Premises. Tenant shall not commit or permit any waste in or about
the Premises, the Building or the Project. Tenant shall, at its sole
cost and expense, make all repairs to the Premises, Building and
Project which are required, in the reasonable opinion of Landlord, as a
result of any misuse, neglect, negligent or intentional act or omission
committed or permitted by Tenant or by any subtenant, agent, employee,
supplier, shipper, customer, invitee or servant of Tenant.
C. LANDLORD'S RIGHT TO MAKE REPAIRS
In the event that Tenant fails to maintain the Premises, Building or
Project in good and sanitary order, condition and repair as required by
this Lease, then, following written notification to Tenant (except in
the case of an emergency, in which case no prior notification shall be
required), Landlord shall have the right, but not the obligation, to
enter the Premises and to do such acts and expend such funds at the
expense of Tenant as are required to place the Premises, Building and
Project in good, safe and sanitary order, condition and repair. Any
amount so expended by Landlord shall be paid by Tenant promptly upon
demand as additional rent.
D. CONDITION OF PREMISES UPON SURRENDER
Except as otherwise provided in this Lease, Tenant shall, upon the
expiration or earlier termination of the Term, surrender the Premises
to Landlord in the same condition as on the date Tenant took
possession, reasonable wear and tear(40) excepted. All appurtenances,
fixtures, improvements, additions and other property attached to or
installed in the Premises whether by Landlord or by or on behalf of
Tenant, and whether at Landlord's expense or Tenant's expense, shall
be and remain the property of Landlord unless Landlord specifically(41)
agrees otherwise in writing.(42) Any (43)furnishings(44)
_____________________________
40 , condemnation and casualty
41 states
42 Notwithstanding the foregoing, Landlord and Tenant hereby agree that
(a) Tenant shall remove from the Data Center at the expiration of the
Term (i) 50KW Caterpillar diesel generator/fuel tank, (ii) Liebert
power distribution units, (iii) Liebert uninterruptible power systems
with batteries, (vi) Damac communication racks/equipment and (v)
command center in network operations room, (b) Tenant may, at Tenant's
option, remove from the Data Center at the expiration of the Term (i)
Liebert computer room air conditioners, (ii) security systems such as
cameras and monitors, (iii) alarm equipment such as Liebert site scan
and (iv) auto transfer switch, (c) Tenant must surrender with the Data
Center (i) the raised access floor, (ii) the Data Center walls, ceiling
and lighting, (iii) electrical conduits, wires, et cetera, (iv)
mechanical piping and ductwork and (v) cable trays under the raised
floor and above the T-bar ceiling, (d) Tenant may, with Landlord's
prior written consent obtained at the expiration or earlier termination
of the Term, which consent may be granted or withheld in Landlord's
sole discretion, removed from the Data Center rooftop heat rejectors
with pumps and accessories and/or electrical distribution panels, and
(e) Tenant may surrender with the balance of the Premises telephone and
data wiring which conforms to code and any Landlord's Work.
17
personal property(45) of Tenant located in the Premises, whether the
property of Tenant or leased by Tenant (including(46) the fixtures,
improvements and other items agreed, in writing, by Landlord to belong
to the Tenant as provided in the preceding sentence, shall be and
remain the property of Tenant and shall be removed by Tenant at
Tenant's sole cost and expense at the expiration of the Term. Tenant
shall promptly repair any damage to the Premises or the Building
resulting from such removal. Any of Tenant's property not removed from
the Premises prior to the expiration of the Term shall, at Landlord's
options, either become the property of Landlord or may be removed by
Landlord and Tenant shall pay to Landlord the cost of such removal
within ten (10) days after delivery of a bill therefor or Landlord, at
its option, may deduct such amount from the Security Deposit. Any
damage to the Premises, including any structural damage, resulting from
Tenant's use or from the removal of Tenant's fixtures, furnishings and
equipment, shall be repaired by Tenant at Tenant's expense.
SECTION XI. ENTRY BY LANDLORD
Landlord reserves and shall at any and all times have the right (48)to enter
the Premises at reasonable times to inspect the same to determine whether Tenant
is complying with its obligations hereunder; to supply janitorial service and
any other service to be provided by Landlord hereunder; and, upon reasonable
notice to Tenant, may exhibit the Premises to prospective purchasers,
mortgagees(49) or(50) prospective tenants(51); to post notices of
nonresponsiblity; and to alter, improve or repair the Premises and any
portion of the Building and Project, without abatement of rent, and may for
that purpose erect scaffolding and other necessary structures that are
reasonably required by the character of the work to be performed by Landlord,
provided that the business of Tenant shall not be interfered with unreasonably.
For each of the aforesaid purposes, Landlord shall at all times have an retain
a key with which to unlock all of the doors in, upon and about the Premises,
excluding Tenant's vaults and safes, and Landlord shall have the right to use
any and all means which Landlord may deem proper to open such doors in the
event of an emergency. Any entry to the Premises or portions thereof obtained
by Landlord by any of said means, or otherwise, shall not under any
circumstances be
_____________________________
43 furniture,
44 .
45 and movable trade fixtures
46 any
47 but excluding, at Landlord's option, any item paid for with the Tenant
Allowance
48 , upon reasonable advance notice to Tenant,
49 , prospective tenants of other premises at the Project
50 , during the last nine (9) months of the Term.
51 of the Premises, in connection with each of which Tenant shall have the
right to appoint a representative of Tenant to accompany Landlord
18
construed or deemed to be a forcible or unlawful entry into, or a detainer of,
the Premises, or an eviction, actual or constructive, of Tenant from the
Premises, or any portion thereof.
SECTION XII. ALTERATIONS, ADDITIONS AND TRADE FIXTURES
Tenant shall not make any alterations, additions or improvements to the
Premises, or any part thereof, whether structural or nonstructural (hereafter
"Alterations"), without Landlord's prior written consent(52). In order to
obtain Landlord's preliminary consent, which preliminary consent may be given
or denied(53) in Landlord's sole discretion.(54) Tenant shall submit such
information as Landlord may require, including without limitation plans and
specifications for the Alterations. Any professional fees or other costs and
expenses incurred by Landlord in reviewing such plans and specifications
shall be paid to Landlord by Tenant as additional rent upon demand. After
Landlord gives preliminary consent, in order to obtain Landlord's final
consent, which consent may not be unreasonably withheld. Tenant shall then
submit (i) permits, licenses, bonds, and the construction contract, all in
conformance with the plans and specifications preliminarily approved by
Landlord; (ii) evidence of insurance coverage in such types and amounts and
from such insurers as Landlord deems satisfactory; and (iii) such other
information as Landlord deems reasonably necessary. The construction contract
shall, at a minimum, require the general contractor and all subcontractors to
obey the rules and regulations of the Building and Project. All Alterations
shall be done in a good workmanlike manner by qualified and licensed
contractors or mechanics, as approved by Landlord. In no event shall any
Alterations affect the structure of the Building or its exterior appearance.
All Alterations made by or for Tenant (other than Tenant's moveable trade
fixtures), shall, unless Landlord expressly requires or agrees otherwise in
writing, immediately become the property of Landlord, without compensation to
Tenant, but Landlord has no obligation to repair, maintain or insure those
Alterations. Carpeting, shelving and cabinetry are considered improvements of
the Premises and not moveable trade fixtures, regardless of how or where
affixed. No Alterations will be removed by Tenant from the Premises either
during or at the expiration or earlier termination of the Term, and they
shall be surrendered as a part of the Premises unless Landlord has required
that Tenant removed them. At Landlord's discretion, Alterations are subject
to removal by Tenant and at Tenant's sole cost and expense(55). Upon any such
removal, Tenant shall repair any damage caused to the Premises thereby, and
shall return the Premises to the condition they were in prior to installation
of such Alterations so removed. Tenant shall indemnify, defend and keep
Landlord free and harmless from and against all liability, loss, damage,
cost, attorney's fees and any other expense incurred on account of claims by
any person performing work or furnishing materials or supplies for Tenant or
any person claiming under Tenant. Landlord may require Tenant to provide
Landlord, at Tenant's sole cost and expense, a lien and completion bond in an
amount equal to one and one-half times the estimated cost of such
improvements, to insure Landlord against any liability for mechanic's liens
and to insure completion of the work. Landlord shall have the right at all
times to post on the Premises any notices permitted or required by law, or
that Landlord shall deem proper, for the protections of Landlord, the
Premises, the Building and the Project, and any other party having an
interest therein, from
_____________________________
52 except that Tenant may make, without Landlord's prior consent but
subject to the remaining provisions of this Section XII,
non-structural Alterations to the Premises which do not affect the
Building systems or the floor plan of the Premises, which do not cost,
in the aggregate, over a twelve (12) month period in excess of
$50,000.00 and which are consistent, in terms of quality and design,
with the initial Tenant Improvements and Tenant's Work in the
Premises
53 , in the case of Alterations which affect Building structure and/or
systems or the floor plan of the Premises,
54 and otherwise in Landlord's reasonable discretion,
55 unless, upon Tenant's written request therefor made at the time Tenant
requests Landlord's consent to the Alterations, Landlords has
specified otherwise in writing
19
mechanics' and materialmen's liens, and Tenant shall give to Landlord written
notice of the commencement of any construction in or on the Premises at least
thirty (30) business days prior thereto. Prior to the commencement of any such
construction, Landlord shall be furnished certificates of insurance, naming
Landlord as an additional insured, evidencing that each contractor performing
work has insurance acceptable to Landlord, including but not limited to general
liability insurance of not less that Two Million Dollars ($2,000,000.00) and
worker's compensation insurance in the statutorily required amount.
SECTION XIII. MECHANIC'S LIENS
Tenant shall keep the Premises, the Building and the Project free from any liens
arising out of any work performed, material furnished or obligation incurred by
or for Tenant or any person or entity claiming through or under Tenant. In the
event that Tenant shall not, within fifteen (15) days following the imposition
of any such lien, cause the same to be released of record by payment or passing
of a proper bond. Landlord shall have, in addition to all other remedies
provided herein and by law, the right, but not the obligation, to cause such
lien to be released by such means as Landlord deems proper, including payment of
the claim giving rise to such lien. All such sums paid and all expenses incurred
by Landlord in connection therewith shall be due and payable to Landlord by
Tenant on demand.
SECTION XIV. INSURANCE
A. TENANT
During the Term hereof, Tenant shall keep in full force and effect the
following insurance and shall provide appropriate insurance certificates to
Landlord prior to the Lease Commencement Date and annually thereafter before
the expiration of each policy:
(1) Commercial general liability insurance for the benefit of Tenant and
Landlord as an additional insured, with a limit of not less than One
Million Dollars ($1,000,000.00) combined single limit per occurrence,
against claims for personal injury liability including, without
limitation, bodily injury, death or property damage liability and
covering (i) the business(es) operated by Tenant and by any subtenant of
Tenant on the Premises, (ii) operations of independent contractors
engaged by Tenant for services or construction on or about the Premises,
and (iii) contractual liability;
(2) Fire, extended coverage, vandalism and malicious mischief insurance,
insuring the personal property, furniture, furnishings and fixtures
belonging to Tenant located on the Premises for not less than one
hundred percent (100%) of the actual replacement value thereof;
(3) Workers' compensation in the amount required by law;
(4) Business interruption or loss of income insurance in amounts
satisfactory to Landlord, with rental interruption rider assuring
Landlord that the rent due hereunder will be paid for a period of not
less than twelve (12) months if the Premises are destroyed or rendered
inaccessible by a risk insured against by a policy of all risk
insurance; and
(5) Such other insurance (57) as Landlord deems reasonably necessary (58).
- ------------------------
(56) fifteen (15)
(57) (other than earthquake insurance)
20
Each insurance policy obtained by Tenant pursuant to this Lease shall
contain a clause that the insurer will provide Landlord with at least thirty
(30) days' prior written notice of any material change, non-renewal or
cancellation of the policy, shall be in a for satisfactory to Landlord and
shall be taken out with an insurance company authorized to do business in
the State in which the Project is located and rated not less than Best's
Financial Class X and Best's Policy Holder Rating "A". In addition, any
insurance policy obtained by Tenant shall be written as a primary policy,
and shall not be contributing with or in excess of any coverage which
Landlord may carry, and shall have loss payable clauses satisfactory to
Landlord and in favor of Landlord naming Landlord, and any other party
reasonably designated by Landlord, as an additional insured. The liability
limits of the above described insurance policies shall in no matter limit
the liability of Tenant under the terms of Sections XV, below.
Not more frequently than every two (2) years, if, in the reasonable opinion
of Landlord, the amount of liability insurance specified in this Section
XIV, in not adequate, the above-described limits of coverage shall be
adjusted by Landlord, by written notification to Tenant, in order to
maintain the level of insurance protection at least equal to the protection
afforded on the date the Term commences(59). If Tenant fails to maintain and
secure the insurance coverage required under this Section XIV., then
Landlord shall have, in addition to all other remedies provided herein and
by law, the right, but not the obligation, to procure and maintain such
insurance, the cost of which shall be due and payable to Landlord by Tenant
on demand.
If, on account of the failure of Tenant to comply with the provisions of
this Section, Landlord is deemed a co-insurer by its insurance carrier, then
any loss or damage which Landlord shall sustain by reason thereof shall be
borne by Tenant and shall be immediately paid by Tenant as additional rent
upon receipt of a bill therefor and evidence of such loss.
B. LANDLORD
During the Term hereof, Landlord shall keep in full force and effect the
following insurance:
(1) Fire, extended coverage and vandalism and malicious mischief insurance
insuring the Building and Project of which the Premises are a part in an
amount not less than eighty percent (80%) (or such greater percentage as
may be required by law) of the full replacement cost thereof; and
(2) Such other insurance as Landlord deems necessary in its sole and
absolute discretion(60).
All insurance policies shall be issued in the names of Landlord and
Landlord's leader, and any other party reasonably designated by Landlord
as an additional insured, as their interests appear. The insurance policies
shall provide that any proceeds shall be made payable to Landlord, or to the
holders of mortgages or deed of trust encumbering.
- ------------------------
(58) , and which other owners of comparable buildings in the general
geographic area of the Project require tenants to carry
(59) and a level of insurance protection comparable to that required,
considering all pertinent factors, including, without limitation, the
use of the Premises, to be carried by landlords of first class
buildings in the Los Angeles area
(60) , provided that Landlord adjusts the Base Operating Expense appropriately
in the event Landlord carries additional insurance of a type not
included in determining the Base Operating Expense which is not a
replacement for insurance costs included in the Base Operating Expense.
21
Landlord's interest in the Premises, Building, and Project, or to any other
party reasonably designated by Landlord as an additional insured, as their
interests shall appear. All insurance premiums for Landlord's insurance
shall be included in Common Operating Costs.
(61)
C. WAIVER OF SUBROGATION
Landlord and Tenant each hereby waives any and all rights of recovery
against the other, and against any other tenant or occupant of the Project
and against the officers, employees, agents, representatives, customers and
business visitors of such other party and of each such other tenant or
occupant of the Project, for loss of or damage to such waiving party or its
property or the property of others under its control, arising from any cause
insured against under any policy of property insurance required to be
carried by such waiving party pursuant to the provisions of this Lease (or
any other policy of property insurance carried by such waiving party in lieu
thereof) at the time of such loss or damage. The foregoing waiver shall be
effective whether or not a waiving party actually obtains and maintains such
insurance which such waiving party is required to obtain and maintain
pursuant to this Lease (or any substitute therefor). Landlord and Tenant
shall, upon obtaining the policies of insurance which they are required to
maintain hereunder, give notice to their respective insurance carrier or
carriers that the foregoing mutual waiver of subrogation is contained in
this Lease.
SECTION XV. INDEMNITY
A. TENANT
Tenant agrees to indemnify, defend and hold Landlord and its officers,
directors, partners and employees entirely harmless from and against all
liabilities, losses, demands, actions, expenses or claims, including
reasonable attorneys' fees and court costs(62), for injury to
or death of any person or for damages to any property or for violation of
law arising out of or in any manner connected with (i) the use, occupancy or
enjoyment of the Premises, Building or Project by Tenant or Tenant's agents,
employees, invitees or contractors (the "Tenant's Agents") or any work,
activity or other things allowed or suffered by Tenant or Tenant's Agents to
be done in or about the Premises, Building or Project, (ii) any breach or
default in the performance of any obligation of Tenant under this Lease, and
(iii) any act or failure to act, whether negligent or otherwise tortious, by
Tenant or Tenant's Agents in or about the Premises, Building or Project(63).
B. LIMITATION ON LANDLORD'S LIABILITY: RELEASE OF DIRECTORS, OFFICERS, AND
PARTNERS OF LANDLORD
Tenant agrees that, in the event Tenant shall have any claim against
Landlord under this Lease arising out of the subject matter of this Lease,
Tenant's sole recourse shall be
- ------------------------
(61) If, on account of the failure of Landlord to comply with the provisions
of this Section, Tenant is deemed a co-insurer by its insurance
carrier, then any loss or damage which Tenant shall sustain by reason
thereof shall be borne by Landlord and shall be immediately paid by
Landlord upon receipt of a bill therefor and evidence of such loss.
(62) (herein "Claims")
(63) Notwithstanding the foregoing, if and to the extent that a court of
competent jurisdiction determines that a Claim was caused by the gross
negligence or willful misconduct of Landlord, then Landlord shall be
required to reimburse to Tenant the reasonable attorneys' fees incurred
by Tenant in defending Landlord in connection with such Claim.
22
against the Landlord's interest in the Building, for the satisfaction of
any claim, judgment or decree requiring the payment of money by Landlord
as a result of a breach hereof or otherwise in connection with this Lease,
and no other property or assets of Landlord, its successors or assigns,
shall be subject to the levy, execution or other enforcement procedure for
the satisfaction of any such claim, judgment, injunction or decree.
Moreover, Tenant agrees that Landlord shall in no event and under no
circumstances be responsible for any consequential damages incurred or
sustained by Tenant, or its employees, agents, contractors or invitees as a
result of or in any way connected to Tenant's occupancy of the Premises.
Tenant further hereby waives any and all right to assert any claim against
or obtain any damages from, for any reason whatsoever, the directors,
officers and partners of Landlord, including all injuries, damages, or
losses to Tenant's property, real and personal, whether known, unknown,
foreseen, unforeseen, patent or latent, which Tenant may have against
Landlord or its directors, officers or partners. Tenant understands and
acknowledges the significance and consequence of such specific waiver.
Landlord shall not be liable or responsible to Tenant for any loss or
damage to any property or person occasioned by theft, fire, act of God,
public enemy, injunction, riot, strike, insurrection, war, court order,
requisition, or order of governmental body or authority, or for any damage
or inconvenience that may arise through repair or alteration of any part of
the Project, the Building or the Premises, or a failure to make any such
repairs, except as expressly provided in this Lease.
SECTION XVI. ASSIGNMENT AND SUBLETTING BY TENANT
A. Tenant shall not, directly or indirectly, voluntarily or by operation of
law, sell, assign, encumber, pledge or otherwise transfer or hypothecate
all or any part of the Premises or Tenant's leasehold estate hereunder
(collectively "Assignment"), or permit the Premises to be occupied by
anyone other than Tenant or sublet the Premises ("Sublease") or any portion
thereof without Landlord's prior written consent being had and obtained in
each instance, subject to the terms and conditions contained in this
Section(64)
B. If Tenant desires at any time to enter into an Assignment of this Lease
or a Sublease of the Premises or any portion thereof(65), Tenant shall
request, in writing, at least sixty (60) days prior to the effective date
of the Assignment or Sublease, Landlord's consent to the Assignment or
Sublease, and shall provide Landlord with the following information:
(1) The name of the proposed assignee, subtenant or occupant;
(2) The nature of the proposed assignee's, subtenant's or occupant's
business to be carried on in the Premises;
- -------------------------
(64) Notwithstanding the foregoing, Landlord's consent to an Assignment or
Sublease to Tenant's parent or to a wholly-owned subsidiary of Tenant or
its parent (herein, "Affiliate") shall not be required so long as there is
no change in use of the Premises. Moreover, Landlord's prior consent shall
not be required in connection with an Assignment of the Lease in connection
with (1) a sale of all or substantially all of Tenant's assets to a single
purchaser in a single transaction, (2) a merger or consolidation of Tenant
with or into another entity or (3) in connection with a public offering of
Tenant's stock on a nationally recognized public exchange, so long as, in
connection therewith, (a) there shall be no change in use of the Premises
and (b) the net worth and proforma revenues of the assignee immediately
after such transfer are equal to or greater than that of Tenant immediately
prior to such transfer.
(65) for which Landlord's consent is required hereunder
23
(3) The terms and provisions of the proposed Assignment or Sublease and a
copy of such documents; and
(4) Such financial information concerning the proposed assignee, subtenant
or occupant which Landlord shall have requested following its receipt
of Tenant's request for consent.
(66)
C. At any time within thirty (30) days after Landlord's receipt of the notice
specified above, Landlord may by written notice to Tenant elect either to
(a) consent to the proposed Assignment or sublease(67), (b) refuse to
consent to the proposed Assignment or Sublease. Landlord the Tenant agree
(by way of example and without limitation) that Landlord shall be entitled
to take into account any fact or factor which Landlord reasonably deems
relevant to such decision, including but not necessarily limited to the
following, all of which are agreed to be reasonable factors for Landlord's
consideration:
(1) The financial strength of the proposed assignee or subtenant (which
shall be at least equal to that of Tenant as of the date of execution
of this Lease).
(2) The experience of the proposed assignee or subtenant with respect to
businesses of the type and size which such assignee or subtenant
proposes to conduct in the Premises.
(3) The quality and nature of the business and/or services to be conducted
in or from the Premises by the proposed assignee or subtenant and in
any other locations which it has.
(4) Violation of exclusive use rights previously granted by Landlord to
other tenants of the Building or Project.
(5) The effect of the type of services and business which the proposed
assignee or subtenant proposes to conduct in the Premises upon the
tenant mix in the Building or in the portion of the Project which
contains the Premises, including duplication of services offered by
surrounding tenants and compatibility of the services and business
which such assignee or subtenant proposes to conduct in or offer from
the Premises with business and services conducted by surrounding
tenants in the Project.
- -------------------------------
(66) Tenant shall also provide to Landlord the foregoing information at the time
Tenant notifies Landlord of any Assignment or Sublease for which Landlord's
consent is not required hereunder.
(67) or
24
(8) Whether the business in the Premises is, and whether the business to
be operated by the proposed assignee or subtenant will be, a(68)
(9) Whether there then exists any default by Tenant pursuant to this Lease
or any non-payment or non-performance by Tenant under this Lease
which, with the passage of time and/or the giving of notice, would
constitute a default under this Lease.
(10) Any fact or factor upon which Landlord reasonably concludes that the
business to be conducted by such assignee or subtenant will not be a
financial success in the Premises.
Moreover, Landlord shall be entitled to be reasonably satisfied that each
and every covenant, condition or obligation imposed upon Tenant by this
Lease and each and every right, remedy or benefit afforded Landlord by this
Lease is not impaired or diminished by such Assignment or Sublease. In no
event shall there be any substantial change in the use of the Premises in
connection with any Assignment or Sublease except as expressly approved in
writing by Landlord in advance. Landlord and Tenant acknowledge that the
express standards and provisions set forth in this Lease dealing with
Assignment and Sublease, including those set forth in subsections XVI.D.,
E. and G. have been freely negotiated and are reasonable at the date hereof
taking into account Tenant's proposed use of the Premises and the nature of
the Building and Project. No withholding of consent by Landlord for any
reason deemed sufficient by Landlord shall give rise to any claim by Tenant
or any proposed assignee or subtenant or entitle Tenant to terminate this
Lease or to any abatement of rent. Approval of any Assignment of Tenant's
interest shall, whether or not expressly so stated, be conditioned upon
such assignee assuming in writing all obligations of Tenant hereunder by a
written instrument satisfactory to Landlord.
D. If Landlord consents to the Sublease or Assignment within said thirty (30)
day period, Tenant may enter into such Assignment or Sublease of the
Premises or portion thereof, but only upon the terms and conditions set
forth in the notice furnished by Tenant to Landlord pursuant to subsection
B. above; provided, however, that in connections with(69) such Assignment
or Sublease(70), as a condition to Landlord's consent, Tenant shall pay to
Landlord one hundred percent (100%) of the excess, if any, of (i) in the
case of an Assignment, the rental and other payment obligations of the
proposed assignee under the terms of the proposed Assignment over (71) the
rental and other payment obligations of Tenant under the terms of this
Lease(72), or (ii) in the case of a Sublease, the amount proposed to be
paid by the sublessee over (73) the proportionate amount of rental and
other
- ----------------------------------
(68) place of public accommodation.
(69) any
(70) to any person or entity other than an Affiliate
(71) (a)
(72) plus (b) the unamortized costs of Improvements incurred and paid for by
Tenant (i.e., not covered by the Tenant Allowance) which are included
in Tenant's Work and which are usable and used by the assignee and
brokers' commissions, advertising costs and costs of tenant improvements
required to be paid or performed by Tenant as a condition to or in
connection with such Assignment
(73) (1)
25
payment obligations required to be paid by Tenant to Landlord under the terms
of this Lease (74) as applicable to the portion of the Premises so subleased.
E. No consent by Landlord to any Assignment or Sublease by Tenant shall
relieve Tenant of any obligation to be performed by Tenant under this Lease,
whether arising before or after the Assignment or Sublease. The consent by
Landlord to any Assignment or Sublease shall not relieve Tenant of the
obligation to obtain Landlord's express written consent to any other
Assignment or Sublease. Any Assignment or Sublease that is not in compliance
with this Section shall be void and, at the option of Landlord, shall
constitute a material default by Tenant under this Lease. The acceptance of
rent by Landlord or payment to Landlord of any other monetary obligation by a
proposed assignee or sublessee shall not constitute the consent by Landlord
to such Assignment or Sublease. Tenant shall promptly provide to Landlord a
copy of the fully executed Sublease or Assignment.
F. Any sale or other transfer, including transfer by consolidation, merger
or reorganization, of twenty-five percent (25%) or more of the voting stock
of Tenant, if Tenant is a corporation, or any sale or other transfer of
twenty-five percent (25%) or more of the partnership interest in Tenant, if
Tenant is a partnership, shall be an Assignment for purposes of this Section.
As used in this subsection, the term "Tenant" shall also mean any entity that
has guaranteed Tenant's obligation under this Lease, and the prohibition
hereof shall be applicable to any sales or transfers of stock or partnership
interests of said guarantor.
G. Each assignee, sublessee or other transferee, other than Landlord, shall
assume, as provided in this subsection all obligations of Tenant under this
Lease and shall be and remain liable jointly and severally with Tenant for
the payment of Monthly Rental and all other monetary obligations hereunder,
and for the performance of all the terms, covenants, conditions and
agreements herein contained on Tenant's part to be performed for the Term;
provided, however, that the assignee, sublessee, or other transferee shall be
liable to Landlord for rent only in the amount set forth in the Assignment or
Sublease. No Assignment shall be binding on Landlord unless the assignee or
Tenant shall deliver to Landlord a counterpart of the Assignment and an
instrument in recordable form that contains a covenant of assumption by the
assignee satisfactory in substance and form to Landlord, consistent with the
requirements of this subsection but the failure or refusal of the assignee to
execute such instrument of assumption shall not release or discharge the
assignee from its liability as set forth above.
H. If this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, 11 U.S.C. Section 101 ET SEQ., (the
"Bankruptcy Code"), any and all monies or other consideration payable or
otherwise to be delivered in connection with such assignment shall be paid
or delivered to Landlord, shall be and remain the exclusive property of
Landlord and shall not constitute property of Tenant or of the estate of
Tenant within the meaning of the Bankruptcy Code. Any and all monies or other
considerations constituting Landlord's property under the preceding sentence
not paid or delivered to Landlord shall be held in trust for the benefit of
Landlord and be promptly paid or delivered to Landlord.
I. Any person or entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code, shall be deemed, without further act or
deed, to have assumed all of the obligations arising under this Lease on and
after the date of such assignment. Any
- ---------------------------
(74) plus (2) the unamortized costs of improvements incurred and paid for
by Tenant (I.E., not covered by the Tenant Allowance) which are
included in Tenant's Work and which are usable and used by the
subtenant and brokers' commissions, advertising costs and costs of
tenant improvements required to be paid or performed by Tenant as a
condition to or in connection with such Sublease, spread evenly over
the term of the Sublease and deducted from the sublessee's rentals so
amortized, in each case
26
such assignee shall upon demand execute and deliver to Landlord an
instrument confirming such assumption.
J. Tenant shall pay Landlord's expenses and (75) attorneys' fees
incurred in processing an Assignment or Sublease, but in no event less than
Five Hundred Dollars ($500.00) for each such proposed transfer to cover
the legal review and processing expenses of Landlord, whether or not Landlord
shall grant its consent to such proposed transfers.
K. All options to extend, renew or expand, if any, contained in this Lease are
personal to Tenant (76). Consent by Landlord to any Assignment or
Subletting shall not include consent to the assignment or transfer of any
such rights with respect to the Premises or any special privileges or extra
services granted to Tenant by this Lease, or any addendum or amendment
hereto or letter of agreement. All such options, rights, privileges and extra
services shall terminate upon such assignment or subletting unless Landlord
specifically grants in writing such options, rights, privileges and extra
services to such assignee or subtenant.
SECTION XVII. TRANSFER OF LANDLORD'S INTEREST
In the event Landlord shall sell or otherwise convey its title to the
Building, then, after the effective date of such sale or conveyance, Landlord
shall have no further liability under this Lease to Tenant except as to
matters of liability which have accrued and are unsatisfied as of the date of
sale or conveyance, and Tenant shall seek performance solely from Landlord's
purchaser or successor in title. In connection with such sale or transfer,
Landlord may assign its interest under this Lease without notice to or
consent by Tenant. In such event, Tenant agrees to be bound to any successor
Landlord.
SECTION XVIII. DAMAGE AND DESTRUCTION
A. MINOR INSURED DAMAGE
In the event the Premises or the Building, or any portion thereof, is damaged
or destroyed by any casualty that is covered by the insurance maintained by
Landlord pursuant to Section XIV, above, then Landlord shall rebuild, repair
and restore the damaged portion thereof, provided that (1) the amount of
insurance proceeds available to Landlord equals or exceeds the cost of such
rebuilding, restoration and repair, (2) such rebuilding, restoration and
repair can be completed within one hundred eighty (180) days after the work
commences in the (77) opinion of a registered architect or engineer
appointed by Landlord, (3) the damage or destruction has occurred more than
twelve (12) months before the expiration of the Term, and (4) such
rebuilding, restoration or repair is then permitted, under applicable
governmental laws, rules and regulations, to be done in such a manner as to
return the damaged portion thereof to substantially its condition immediately
prior to the damage or destruction, including, without limitation, the same
net rentable floor area. To the extent that insurance proceeds must be paid
to a mortgagee or beneficiary under, or must be applied to reduce any
indebtedness secured
- ---------------------------
(75) reasonable
(76) , and may be transferred by Tenant only to an Affiliate to whom Tenant
assigns the Lease
(77) reasonable
27
[MISSING TEXT]
[PAGE TO COME]
28
the condemnation or taking, this Lease shall automatically terminate as of
the earlier of the date on which actual physical possession is taken by the
condemnor or the date of dispossession of Tenant as a result of such
condemnation or other taking. If less than all or substantially all of the
Premises is so condemned or taken, this Lease shall automatically terminate
only as to the portion of the Premises so taken as of the earlier of the date
on which actual physical possession is taken by the condemnor or the date of
dispossession of Tenant as a result of such condemnation or taking (79). If
such portion of the Building is condemned or otherwise taken so as to
require, in the opinion of Landlord, a substantial alteration or
reconstruction of the remaining portions thereof, this Lease may be
terminated by Landlord, as of the date on which actual physical possession is
taken by the condemnor or dispossession of Tenant as a result of such
condemnation or taking, by written notice to Tenant within sixty (60) days
following notice to Landlord of the date on which such physical possession is
taken or dispossession will occur.
B. AWARD
Landlord shall be entitled to the entire award if any condemnation
proceeding or other proceeding for taking for public or quasi-public use,
including, without limitation, any award made for the value of the leasehold
estate created by this Lease. No award for any partial or total taking shall
be apportioned, and Tenant hereby assigns to Landlord any award that may be
made in such condemnation or other taking, together with any and all rights
of Tenant now or hereafter arising in or to the same or any part thereof.
Although all damages in the event of any condemnation are to belong to
Landlord whether such damages are awarded as compensation for diminution in
value of the leasehold or to the fee of the Premises. Tenant shall have the
right to claim and recover from the condemnor, but not from Landlord, such
compensation as may be separately awarded or recoverable by Tenant in
Tenant's own right on account of damages to Tenant's business by reason of
the condemnation and for or on account of any cost or loss to which Tenant
might be put in removing Tenant's merchandise, furniture and other personal
property, fixtures, and equipment or for the interruption of or damage to
Tenant's business.
C. ABATEMENT IN RENT
In the event of a partial condemnation or other taking that does not
result in a termination of this Lease as to the entire Premises pursuant to
this Section the rent and all other charges shall abate in proportion to the
portion of the Premises taken by such condemnation or other taking. If this
Lease is terminated, in whole or in part, pursuant to any of the provisions
of this Section all rentals and other charges payable by Tenant to Landlord
hereunder and attributable to the Premises taken shall be paid up to the date
upon which actual physical possession shall be taken by the condemnor.
Landlord shall be entitled to retain all of the Security Deposit until such
time as this Lease is terminated as to all of the Premises.
D. TEMPORARY TAKING
If all or any portion of the Premises is condemned or otherwise taken for
public or quasi-public use for a limited period of time (80), this Lease
shall remain in full force and effect and Tenant shall continue to perform
all terms, conditions and covenants of this Lease; provided, however, the
rent and all other charges payable by Tenant to Landlord
- ---------------------------
(79) ; provided, hovever, if more than ten percent (10%) of the Premises is
taken in condemnation, then unless Landlord makes available additional
replacement space in the Building, Tenant shall have the right to
terminate the Lease, effective as of the date such portion of the
Premises is taken.
(80) (not to exceed six (6) consecutive months, if the taking materially
impairs Tenant's ability to use the Premises)
29
(a) The worth at the time of award of the unpaid rent which had been
earned at the time of termination;
(b) The worth at the time of award of the amount by which the unpaid
rent which would have been earned after termination until the time
of award exceeds the amount of such rental loss that Tenant
proves could have been reasonably avoided;
(c) The worth at the time of award of the amount by which the unpaid
rent for the balance of the Term after the time of award exceeds
the amount of rental loss that Tenant proves could be reasonably
avoided; and
(d) Any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure
to perform its obligations under this Lease or which in the
ordinary course of things would be likely to result therefrom,
including, but not limited to, any(93) attorneys' fees,
broker's commissions or finder's fees (not only in connection
with the reletting of the Premises, but also that portion of
any leasing commission paid by Landlord in connection with
this Lease which is applicable to that portion of the Term
which is unexpired as of the date on which this Lease is
terminated); the then unamortized cost of any tenant
improvements constructed for or on behalf of Tenant by or at the
expense of Landlord or of any moving allowance or other
concession made available to Tenant and/or paid by Landlord
pursuant to this Lease; any costs for repairs, clean-up,
refurbishing, removal (including the repair of any damage
caused by such removal) and storage (or disposal) of Tenant's
personal property, equipment, fixtures, and anything else that
Tenant is required (under this Lease) to remove but does not
remove; any costs for alterations, additions and renovations;
and any other costs and expenses, including reasonable
attorneys' fees and costs, incurred by Landlord in regaining
possession of and reletting (or attempting to relet) the
Premises.
(2) The right to continue this Lease in effect and to enforce all of
Landlord's rights and remedies under this Lease, including the right
to recover rent and any other additional monetary charges as they
become due, for as long as Landlord does not terminate Tenant's right
to possession. Acts of maintenance or preservation, efforts to relet
the Premises, the appointment of a receiver upon Landlord's initiative
to protect its interest under this Lease or Landlord's withholding of
consent to an Assignment or Subletting pursuant to the terms and
conditions of Section XVI, above shall not constitute a termination of
Tenant's right to possession.
(3) The foregoing provisions of clause (2) shall apply even
though Tenant has breached the Lease and abandoned the Premises, in
which case Landlord shall have the right to re-enter the Premises
with or without process of law to eject therefrom all parties in
possession thereof, and, without terminating this Lease, at any
time and from time to time, but without obligation to do so, to
relet the Premises and the improvements located therein or any part
or parts of any thereof for the account of Tenant, or otherwise, on
such conditions as Landlord in its discretion may deem proper, with
the right to make alterations and repairs to the Premises in
connection therewith, and to receive and collect the rents
therefor, and apply the same (i) first to the payment of such costs
and expenses as Landlord may have paid, assumed or incurred: (A) in
recovering possession of the Premises and said improvements,
including attorneys' fees, and costs; (B) expenses for placing the
Premises and said improvements in good order and condition, for
decorating and preparing the Premises for reletting; (C) for making
- ---------------------
(93) reasonable
32
any alterations, repairs, changes or additions to the Premises that
may be necessary or convenient; and (D) all other costs and
expenses, including leasing and subleasing commissions, and charges
paid, assumed or incurred by Landlord in or upon reletting the
Premises and said improvements, or in fulfillment of the covenants
of Tenant under this Lease; (ii) then to the payment of Monthly
Rental, Tenant's Proportionate Share of Common Operating Costs, and
other monetary obligations due and unpaid hereunder; and (iii) any
balance shall be held by Landlord and applied in payment of future
amounts as the same may become due and payable hereunder. Any such
reletting may be for the remainder of the term of this Lease or for
a longer or shorter period. The tenant(s) or subtenant(s)
thereunder shall be under no obligation whatsoever with regard to
the application by Landlord of any rent collected by Landlord from
such tenant or subtenant to any and all sums due and owing or which
may become due and owing under the provisions of this Lease, nor
shall Tenant have any right or authority whatever to collect any
rent whatever from such tenant(s) or subtenant(s). If Tenant has
been credited with any rent received by such reletting and such
rent shall not be promptly paid to Landlord by the tenant(s) or
subtenant(s), or if such rentals received from reletting during any
month are less than those to be paid during that month by Tenant
hereunder, Tenant shall pay any such deficiency to Landlord. Such
deficiency shall be calculated and paid monthly. Tenant shall also
pay to Landlord as soon as ascertained, any costs and expenses
incurred by Landlord in such reletting or in making such
alterations and repairs not covered by the rentals received from
such reletting. No taking of possession of the Premises by Landlord
shall be construed as Landlord's acceptance of a surrender of the
Premises by Tenant or an election of Landlord's part to terminate
this Lease unless written notice of such intention is given to
Tenant. Notwithstanding any such subletting without termination,
Landlord may at any time thereafter elect to terminate this Lease
for such previous breach. Election by Landlord to proceed pursuant
to this clause (3) shall be made upon written notice to Tenant and
shall be deemed an election of the remedy described in California
Civil Code Section 1951.4 (providing that a lessor of real property
may continue a lease in effect after a lessee's breach or
abandonment and recover rent as it becomes due, if the lessee has
the right to sublet or assign, subject only to reasonable
limitations). If Landlord elects to pursue such remedy, unless
Landlord relets the Premises, Tenant shall have the right to
sublet the Premises and to assign its interest in this Lease,
subject to all of the standards and conditions set forth in Section
XVI. Landlord may elect to terminate the prosecution of such remedy
at any time by written notice to Tenant, and the right of Tenant to
sublet or assign shall terminate upon receipt by Tenant of such
notice.
(4) The right to have a receiver appointed for Tenant, upon
application by Landlord, to take possession of the Premises and to
apply any rental collected from the Premises and to exercise all
other rights and remedies granted to Landlord pursuant to this
subsection.
SECTION XXI. LATE PAYMENTS/INTEREST AND LATE CHARGES
A. INTEREST
Any amount due from Tenant to Landlord which is not paid when
due shall bear interest at the maximum rate permitted by law from
the date such payment is due until paid, except that amounts spent
by Landlord on behalf of Tenant shall bear interest at such rate
from the date of disbursement by Landlord which Tenant agrees is to
compensate
33
Landlord for Tenant's use of Landlord's money after it is due.
Payment of such interest shall not excuse or cure any default by Tenant
pursuant to this Lease. Such rate shall remain in effect after the
occurrence of any breach or default hereunder by Tenant to and
until payment of the entire amount due.
B. LATE CHARGES
TENANT HEREBY ACKNOWLEDGES THAT IN ADDITION TO LOST INTEREST,
THE LATE PAYMENT BY TENANT TO LANDLORD OF RENT OR ANY OTHER SUMS
DUE HEREUNDER WILL CAUSE LANDLORD TO INCUR OTHER COSTS NOT
CONTEMPLATED IN THIS LEASE, THE EXACT AMOUNT OF WHICH WILL BE
EXTREMELY DIFFICULT AND IMPRACTICABLE TO ASCERTAIN. SUCH OTHER
COSTS INCLUDE, BUT ARE NOT LIMITED TO, PROCESSING, ADMINISTRATIVE
AND ACCOUNTING COSTS, AND LATE CHARGES WHICH MAY BE IMPOSED UPON
LANDLORD BY THE TERMS OF ANY ENCUMBRANCE COVERING THE PREMISES.
ACCORDINGLY, IF ANY INSTALLMENT OF RENT OR ANY ADDITIONAL RENT OR
OTHER SUM DUE FROM TENANT SHALL NOT BE RECEIVED BY LANDLORD WHEN
SUCH AMOUNT SHALL BE DUE (WITHOUT REGARD TO ANY GRACE PERIOD
GRANTED IN THIS LEASE), TENANT SHALL PAY TO LANDLORD AS ADDITIONAL
RENT HEREUNDER A LATE CHARGE EQUAL TO (94) PERCENT ((95)%) OF SUCH OVERDUE
AMOUNT. THE PARTIES HEREBY AGREE THAT (I) SUCH LATE CHARGE REPRESENTS A
FAIR AND REASONABLE ESTIMATE OF THE COSTS LANDLORD WILL INCUR IN
PROCESSING SUCH DELINQUENT PAYMENT BY TENANT, (II) SUCH LATE CHARGE
SHALL BE PAID TO LANDLORD AS LIQUIDATED DAMAGES FOR EACH DELINQUENT
PAYMENT, AND (III) THE PAYMENT OF THE LATE CHARGE IS TO COMPENSATE
LANDLORD FOR THE ADDITIONAL ADMINISTRATIVE EXPENSE INCURRED BY LANDLORD
IN HANDLING AND PROCESSING DELINQUENT PAYMENTS.
/s/ /s/
-------------------- --------------------
Landlord's Initials Tenant's Initials
C. CONSECUTIVE LATE PAYMENT OF RENT
Following each (96) consecutive late payment of rent, Landlord shall
have the option (i) to require that beginning with the first payment of
rent next due, rent shall no longer be paid in monthly installments but
shall be payable quarterly three (3) months in advance and/or (ii) to
require that Tenant increase the amount, if any, of the Security Deposit
by one hundred percent (100%), which additional Security Deposit shall
be retained by Landlord, and may be applied by Landlord, in the manner
provided for Security Deposits in this Lease.
D. NO WAIVER
Neither assessment nor acceptance of partial payments, interest
or late charges by Landlord shall constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord
from exercising any of its other rights and remedies under this
Lease. Nothing contained in this Section shall be deemed to
condone, authorize, sanction or grant to Tenant an option for the
late payment of rent, additional rent or
- ---------------------
(94) FIVE
(95) 5
(96) third
34
other sums due hereunder, and Tenant shall be deemed in default with
regard to any such payments should the same not be made by the date
on which they are due.
SECTION XXII. LIEN FOR RENT
SECTION XXIII. HOLDING OVER
Any holding over by Tenant in the possession of the Premises, or any
portion thereof, after the expiration or earlier termination of the
Term, with or without the consent of Landlord, shall be construed to
be a tenancy from month to month at (97) of the Monthly Rental
herein specified for the last month in the Term (prorated on a
monthly basis) unless Landlord shall specify a lesser amount for
rent in its sole discretion, together with an amount estimated by
Landlord for the monthly Common Operating Costs payable under this
Lease, and shall otherwise be on the terms and conditions herein
specified as far as applicable. Any holding over without Landlord's
consent shall constitute a default by Tenant and shall entitle
Landlord to pursue all remedies provided in this Lease and Tenant
shall be liable for any and all direct or consequential damages or
losses of Landlord resulting from Tenant's holding over without
Landlord's consent.
SECTION XXIV. ATTORNEYS' FEES
Tenant shall pay to Landlord all amounts for costs and expenses, including,
but not limited to, reasonable attorneys' fees and amounts paid to any
collection agency, incurred by Landlord in
- ----------------------
(97) one hundred fifty percent (150%)
35
connection with any breach or default by Tenant under this Lease. Tenant
shall also pay to Landlord all such amounts, including attorneys' fees,
incurred by Landlord in responding to any request by Tenant (a) to amend or
modify this Lease or (b) to prepare any statement or document in connection
with this Lease, including without limitation estoppel certificates or
subordination agreements or the like. Such amounts shall be payable upon
demand. In addition, if any action shall be instituted by either Landlord or
Tenant for the enforcement or interpretation of any of its rights or remedies
in or under this Lease, the prevailing party shall be entitled to recover from
the losing party all costs incurred by the prevailing party in said action
and any appeal therefrom, including reasonable attorneys' fees and court
costs to be fixed by the court therein. In the event Landlord is made a party
to any litigation between Tenant and any third party, then Tenant shall pay
all costs and attorneys' fees incurred by or imposed upon Landlord in
connection with such litigation; provided, however, if Landlord is ultimately
held to be liable, then Landlord shall reimburse Tenant for the cost of any
attorneys' fees paid by Tenant on behalf of Landlord.
SECTION XXV. MORTGAGE PROTECTION/SUBORDINATION
A. SUBORDINATION
The rights of Tenant under this Lease are and shall be, at the
option of Landlord, either subordinate or superior to any mortgage
or deed of trust (including a consolidated mortgage or deed of
trust) constituting a lien on the Premises, Building or Project, or
Landlord's interest therein or any part thereof, whether such
mortgage or deed of trust has heretofore been, or may hereafter be,
placed upon the Premises by Landlord, and to any ground or master
lease if Landlord's title to the Premises or any part thereof is or
shall become a leasehold interest. To further assure the foregoing
subordination or superiority, Tenant shall, upon Landlord's request,
together with the request of any mortgagee under a mortgage or
beneficiary under a deed of trust or ground or master lessor,
execute any instrument (including without limitation an amendment to
this Lease that does not materially and adversely affect Tenant's
rights or duties under this Lease), or instruments intended to
subordinate this Lease, or at the option of Landlord, to make it
superior to any mortgage, deed of trust, ground or master lease.
Notwithstanding any such subordination, Tenant's right to occupy the
Premises pursuant to this Lease shall remain in effect for the full
Term as long as Tenant is not in default hereunder.
(98)
B. ATTORNMENT
Notwithstanding subsection A, above, Tenant agrees (1) to attorn to
any mortgagee of a mortgage or beneficiary of a deed of trust
encumbering the Premises and to any party acquiring title to the
Premises by judicial foreclosure, trustee's sale, or deed in lieu of
foreclosure, and to any ground or master lessor, as the successor to
Landlord hereunder, (2) to execute any attornment agreement reasonably
requested by a mortgagee, beneficiary, ground or master lessor, or
party so acquiring title to the Premises, and (3) that this Lease,
subject to the rights under any outstanding non-disturbance agreement,
at the option of such mortgagee, beneficiary, or ground or master
lessor, or other party, shall remain in force notwithstanding any such
judicial foreclosure, trustee's sale, deed in lieu of foreclosure, or
merger of titles. Notwithstanding the foregoing, neither a
- ----------------------
(98) Notwithstanding the foregoing, this Lease shall not be subordinate to
any future encumbrance in favor of Landlord's lender for the Project
unless and until Tenant, Landlord and such lender shall have mutually
executed and delivered a Subordination, Non-Disturbance and Attornment
Agreement, substantially in the form of EXHIBIT 1 hereto (which Tenant
shall, upon request by Landlord, execute and deliver, and Tenant's
failure to do so within ten (10) days after written demand therefor by
Landlord shall constitute a default by Tenant under this Lease).
36
mortgagee of a mortgage or beneficiary of a deed of trust encumbering
the Premises, any party acquiring title to the Premises by judicial
foreclosure, trustee sale, or deed in lieu of foreclosure, or any
ground lessor or master lessor, as the successor to Landlord hereunder,
shall be liable or responsible for any breach of a covenant contained
in this Lease that occurred before such party acquired its interest in
the Premises or for any continuing breach thereof until after the
successor Landlord has received the notice and right to cure as
provided herein, and no such party shall be liable or responsible for
any security deposits held by Landlord hereunder which have not been
transferred or actually received by such party, and such party shall
not be bound by any payment of rent or additional rent for more than
two (2) months in advance.
C. AMENDMENT
If any lending institution with which Landlord has negotiated or may
negotiate for financing for the Building or Project requires any
changes to this Lease, Tenant shall promptly execute and deliver an
amendment to this Lease prepared by Landlord and embodying such
changes, so long as such changes do not materially increase Tenant's
obligations (99) hereunder.(100) In the event that Tenant shall fail
to execute and deliver such amendment within twenty (20) days after
receipt thereof by Tenant, such failure shall constitute a default
hereunder by Tenant and shall entitle Landlord to all remedies
available to a landlord against a defaulting tenant pursuant to a
written lease, including but not limited to those remedies set forth
in Section XX.
SECTION XXVI. ESTOPPEL CERTIFICATE/FINANCIAL STATEMENTS
A. ESTOPPEL CERTIFICATE
Tenant, at any time and from time to time upon not less that ten (10)
days prior written notice from Landlord, agrees to execute and deliver
to Landlord a statement in the form provided by Landlord (a) certifying
that this Lease is unmodified and in full force and effect, or, if
modified, stating the nature of such modification and certifying that
this Lease, as so modified, is in full force and effect and the date
to which the rent and other charges are in advance, if any; (b)
acknowledging that there are not, to Tenant's knowledge, any uncured
defaults on the part of Landlord hereunder, or specifying such defaults
if they are claimed evidencing the status of this Lease; (c)
acknowledging the amount of the Security Deposit held by Landlord; and
(d) containing such other information regarding this Lease or Tenant as
Landlord reasonably requests.(101) Tenant's failure to deliver an
estoppel certificate within such time shall be conclusive upon Tenant
that (i) this Lease is in full force and effect without modification
except as may be represented by Landlord, (ii) to Tenant's knowledge
there are no uncured defaults in Landlord's performance, (iii) no
rent has been paid in advance except as set forth in this Lease, and
(iv) such other information regarding this Lease and Tenant set forth
therein by Landlord is true and complete.
- ----------------------
(99) or materially decrease Tenant's rights
(100) In no event shall Tenant be required to execute an amendment
pursuant to this subsection C, which reduces the Rentable Area of the
Premises, increases the Monthly Rental rate(s), changes the base year
for the purposes of calculating Tenant's Proportionate Share of Common
Operating Costs, deprives Tenant of its options pursuant to Addendum
Section XXXV.A., restricts Tenant's ability to access or use the
Premises for the Permitted Use, reduces the parking spaces available to
Tenant or requires Tenant to use Landlord's provider of janitorial
services.
(101) Upon Tenant's written request therefor, Landlord agrees to deliver
to Tenant, not more than twice per calendar year, an estoppel
certificate containing information of the type described in clauses
(a) through (d) of the previous sentence.
37
B. FURNISHING OF FINANCIAL STATEMENTS
Landlord has reviewed the financial statements, if any, requested of
the Tenant and has relied upon the truth and accuracy thereof with
Tenant's knowledge and representations of the truth and accuracy of
such statements and that said statements accurately and fairly depict
the financial condition of Tenant. Said financial statements are an
inducing factor and consideration for the entering into of this Lease
by Landlord with this particular Tenant. Tenant shall, at any time and
from time to time (102) upon not less than ten (10) days' prior written
notice from Landlord, furnish Landlord with (a) Tenant's most recent
audited financial statements, including a balance sheet and income
statement, or a document in which Tenant states that its books are not
independently audited (103) and (b) unaudited financial statements,
including a balance sheet and income statement, dated within ninety
(90) days of the request from Landlord. (104)
SECTION XXVII. PARKING See Addendum Section XXXV.H.
Landlord agrees to maintain or cause to be maintained an automobile parking
area and to maintain and operate, or cause to be maintained and operated,
said automobile parking area during the Term of this Lease for the benefit
and use of customers, service suppliers, other invitees and employees of
Tenant. Whenever the words "automobile parking area" or "parking area" are
used in this Lease, it is intended that the same shall include, whether in a
surface parking area or a parking structure, the automobile parking stalls,
driveways, loading docks, truck areas, service drives, entrances and exits
and sidewalks, landscaped areas, pedestrian passageways in conjunction
therewith and other areas designed for parking. Landlord shall keep said
automobile parking area in a neat, clear and orderly condition, lighted and
landscaped, and shall repair any damage to the facilities thereof, the cost
of which shall be included in Common Operating Costs. Nothing contained
herein shall be deemed to impose liability upon Landlord for personal injury
or theft, for damage to any motor vehicle, or for loss of property from
within any motor vehicle, which is suffered by Tenant or any of its
employees, customers, service suppliers or other invitees in connection with
their use of said automobile parking areas. Landlord shall also have the
right to establish such reasonable rules and regulations as may be deemed
desirable, at Landlord's sole discretion, for the proper and efficient
operation and maintenance of said automobile parking area. Such rules and
regulations may include, without imitation, (i) restrictions in the hours
during which the automobile parking area shall be open for use and (ii)(105)
the establishment of charges for parking therein (on either a reserved or
unreserved basis, at Landlord's sole discretion) by tenants of the Building and
Project as well as by their employees, customers and service suppliers.
Landlord shall at all times during the Term hereof have the sole and
exclusive control of the automobile parking area, and may at any time during
the Term hereof exclude and restrain any person from use or occupancy
thereof; excepting, however, Tenant and employees, customers, service
suppliers and other invitees of Tenant and of other tenants in the Building
and Project who make use of said area in accordance with any rules and
regulations established by Landlord from time to time with respect thereto.
The rights of Tenant and its employees, customers, service suppliers and
invitees referred to in this Section XXVII, shall at all times be subject to
(i) the rights of Landlord and other tenants in the Building and Project to
use the same in common with Tenant and its employees, customers, service
suppliers and invitees, (ii) the availability of parking spaces in said
automobile parking area, and (iii) Landlord's rights to
- ----------------------
(102) (but no more frequently than quarterly)
(103) or, if Tenant's stock is publicly traded, Tenant's most recent 10K
report
(104) Landlord will keep such statements confidential and not disclose
such statements, except to any persons or entity to whom Landlord is
permitted to disclose the terms of this Lease pursuant to Section
XXXIII.R.
(105) subject to Addendum Section XXXV.H.
38
change the location of any assigned reserved parking spaces in such instances
as shall be determined at Landlord's sole discretion. (106)Notwithstanding
Landlord's exclusive control and obligations to provide a parking area,
Landlord is not responsible or liable for any damage to any automobiles or
persons in the parking area.
SECTION XXVIII. SIGNS; NAME OF BUILDING SEE ADDENDUM SECTION XXXV.I.
Tenant shall not have the right to place, construct, or maintain on or about
the Premises, Building or Project, or in any interior portions of the
Premises that may be visible from the exterior of the Building or Common
Areas, any signs, names, insignia, trademark, advertising placard,
descriptive material or any other similar item ("Sign") without Landlord's
prior written consent, which consent may be withheld in Landlord's sole
discretion; provided, however, any Signs are further subject to approval of
any applicable governmental authority and/or compliance with applicable
governmental requirements. In the event Landlord consents to Tenant placing a
Sign on or about the Premises, Building or Project, any such Sign shall be
subject to Landlord's approval of the color, size, style and location of such
Sign, and shall conform to any current or future Sign criteria established by
Landlord for the Building or Project. If Landlord enacts a Sign criteria or
revises an existing Sign criteria, after Tenant has erected a Sign to which
Landlord has granted its consent, if Landlord so elects, Tenant agrees, at
Landlord's expense, subject to Landlord's prior approval of the cost thereof,
to make the necessary changes to its Sign in order to conform the Sign to
Landlord's Sign criteria, as enacted or revised, provided that such changes
shall be limited to the color, size, style and location of Tenant's Sign and
that Tenant shall not be required to change the content of its Sign. In the
event Landlord consents to Tenant's placement of a Sign on the Building,
Tenant shall, at its sole cost, remove such Sign from the Building at the end
of the Term, restore the Building to the same condition as before the
installation of the Sign, ordinary wear and tear excepted and remove any
discoloration of the Building caused by the presence of such sign.
Landlord reserves the right at any time it deems necessary or appropriate to
(a) place Signs at any location on the Building and Project as it deems
necessary and (b) change the name, address or designation of the Building and
Project(107).
SECTION XXIX. QUIET ENJOYMENT
Upon payment by Tenant of the rents herein provided, and upon the observance
and performance of all the covenants, terms and conditions on Tenant's part
to be observed and performed, Tenant shall peaceably and quietly hold and
enjoy the Premises for the Term without hindrance or interruption by
Landlord or any other person or persons lawfully or equitably claiming by,
through or under Landlord, subject, nevertheless, to the terms and conditions
of this Lease, and any mortgage and/or deed of trust to which this Lease is
subordinate.
SECTION XXX. BROKER
Tenant warrants and represents that it has not dealt with any real estate
broker or agent in connection with this Lease or its negotiation except the
Broker identified in Section I.N. Tenant shall indemnify and hold Landlord
harmless from any cost, expense or liability (including costs of suit and
reasonable attorneys' fees) for any compensation, commission or fees claimed
by any
- --------------
(106) In no event shall Landlord reduce the parking available for the
Building to less than the parking ratio required to be maintained by
applicable governmental authorities, and if Landlord changes the
parking area for the Building, Landlord shall continue to be made
available to Tenant parking in an area adjacent to the Building.
(107) ; provided, however, in no event shall Landlord change the name of
the Building (as opposed to installing signs on the Building or at
the Project) to the name of a competitor of Tenant or to any name
other than that befitting an institutional office building
39
other real estate broker or agent in connection with this Lease or its
negotiation by reason of any act of Tenant.
SECTION XXXI. NOTICES
Any notice, demand, approval, consent, bill, statement or other communication
("Notice") required or desired to be given under this Lease shall be in
writing, shall be directed to Tenant at Tenant's Address for Notice or to
Landlord at Landlord's Address for Notice and shall be personally served or
given by pre-paid certified U.S. Mail or "overnight" delivery service. In the
case of personal delivery, any Notice shall be deemed to have been given when
delivered; in the case of service by certified mail, any Notice shall be
deemed delivered of the date of receipt, refusal or non-delivery indicated on
the return receipt; and in the case of overnight delivery service, any Notice
shall be deemed given when delivered as evidenced by a receipt. If more than
one Tenant is named under this Lease, service of any Notice upon any one of
said Tenants shall be deemed as service upon all of such Tenants. The parties
hereto and their respective heirs, successors, legal representatives, and
assigns may from time to time change their respective addresses for Notice by
giving at least fifteen (15) days' written notice to the other party,
delivered in compliance with this Section.
SECTION XXXII. NOTICE AND CURE TO LANDLORD AND MORTGAGEE
On any act or omission by Landlord which might give, or which Tenant claims
or intends to claim gives, Tenant the right to damages from Landlord or the
right to terminate this Lease by reason of a constructive or actual eviction
from all or part of the Premises, or otherwise, Tenant shall not sue for
damages or attempt to terminate this Lease until it has give written notice
of the act or omission to Landlord and to the holder(s) of the indebtedness
or other obligations secured by any mortgage or deed of trust affecting the
Premises as identified by Landlord, and a reasonable period of time for
remedying the act or omission has elapsed following the giving of the notice,
during which time Landlord and the lienholder(s), or either of them, their
agents or employees, may enter upon the Premises and do therein whatever is
necessary to remedy the act or omission.(108) During the period after the
giving of notice and during the remedying of the act or omission, the Monthly
Rental payable by Tenant shall not be abated and apportioned except to the
extent that the Premises are untenantable.
SECTION XXXIII. GENERAL
A. PARAGRAPH HEADINGS
The paragraph headings used in this Lease are for the purposes of
convenience only. They shall not be construed to limit or to extend the
meaning of any part of this Lease.
B. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS
This Lease contains all agreements of Landlord and Tenant with respect to
any matter mentioned, or dealt with, herein, No prior agreement or
understanding pertaining to any such matter shall be binding upon
Landlord. Any amendments to or modifications of this Lease shall be in
writing, signed by the parties hereto, and neither Landlord nor Tenant
shall be liable for any oral or implied agreements.
- --------------
(108) As used in the previous sentence, the phrase "reasonable period of
time" means, as to Landlord thirty (30) days and, as to Landlord's
lender, sixty (60) days, in each case within which to effect a cure
or commence a cure and thereafter diligently prosecute the same to
completion.
40
LANDLORD HAS NOT MADE, AND TENANT MAY NOT RELY ON, ANY REPRESENTATIONS OR
WARRANTIES, EXPRESSED OR IMPLIED, WITH REGARD TO THE PROJECT, THE
BUILDING, THE PREMISES OR OTHERWISE OR THE SUITABILITY THEREOF FOR
TENANT'S BUSINESS, EXCEPT AS EXPRESSLY STATED IN THIS LEASE. IN
PARTICULAR, LANDLORD HAS NOT AUTHORIZED ANY AGENT OR BROKER TO MAKE A
REPRESENTATION OR WARRANTY INCONSISTENT WITH THE TERMS OF THIS LEASE AND
TENANT MAY NOT RELY ON ANY SUCH INCONSISTENT REPRESENTATION OR WARRANTY.
C. WAIVER
Any waiver by Landlord of any breach of any term, covenant, or condition
contained in this Lease shall not be deemed to be a waiver of such term,
covenant, or condition or of any subsequent breach of the same or of any
other term, covenant, or condition contained in this Lease. Landlord's
consent to, or approval of, any act shall not be deemed to render
unnecessary the obtaining of Landlord's consent to, or approval of, any
subsequent act by Tenant. The acceptance of rent or other sums payable
hereunder by Landlord shall not be a waiver of any preceding breach by
Tenant of any provision hereof, other than failure of Tenant to pay the
particular rent or other sum so accepted, regardless of Landlord's
knowledge of such preceding breach at the time of acceptance of such
rent, or sum equivalent to rent.
D. SHORT FORM OR MEMORANDUM OF LEASE
Tenant agrees, at the request of Landlord, to execute, deliver, and
acknowledge a short form or memorandum of this Lease satisfactory to
counsel for Landlord, and Landlord may, in its sole discretion, record
such short form or memorandum in the county where the Premises are
located. Tenant shall not record this Lease, or a short form or
memorandum of this Lease, without Landlord's prior written consent.
E. TIME OF ESSENCE
Time is of the essence in the performance of each provision of this Lease.
F. EXAMINATION OF LEASE
Submission of this instrument for examination or signature by Tenant does
not constitute a reservation of or option for lease, and it is not
effective as a lease or otherwise until execution by and delivery to both
Landlord and Tenant.
G. SEVERABILITY
If any term or provision of this Lease or the application thereof to any
person or circumstance shall, to any extent, be invalid or unenforceable,
the remainder of this Lease, or the application of such term or provision
to persons or circumstances other than those as to which it is held or
unenforceable, shall not be affected thereby, and each term and provision
of this Lease shall be valid and be enforced to the fullest extent
permitted by law.
H. SURRENDER OF LEASE NOT MERGER
Neither the voluntary or other surrender of the Lease by Tenant nor the
mutual cancellation thereof shall cause a merger of the titles of
Landlord and Tenant, but such surrender or cancellation shall, at the
option of Landlord, either terminate all or any existing subleases or
operate as an assignment to Landlord of any such subleases.
41
I. CORPORATE AUTHORITY
If Tenant is a corporation, each individual executing this Lease on
behalf of Tenant represents and warrants (1) that he is duly authorized
to execute and deliver this Lease on behalf of Tenant in accordance with a
duly adopted resolution of the Board of Directors of Tenant in accordance
with the By-laws of Tenant and (2) that this Lease is binding upon and
enforceable by Landlord against Tenant in accordance with its terms. If
Tenant is a corporation, Tenant shall, concurrently with delivery of an
executed Lease to Landlord, deliver to Landlord a certified copy of a
resolution of its Board of Directors authorizing or ratifying the
execution of this Lease.
J. GOVERNING LAW
This Lease and the rights and obligations of the parties hereto shall be
interpreted, construed and enforced in accordance with the local laws of
the State in which the Project is located.
K. FORCE MAJEURE
If the performance by (109) of any provision of this Lease is delayed or
prevented by any act of God, strike, lockout, shortage of material or
labor, restriction by any governmental authority, civil riot, flood, and
any other cause not within the control of (110), then the period for
(111) performance of the provision shall be automatically extended for
the same time (112) is so delayed or hindered.(113)
L. USE OF LANGUAGE
Words of gender used in this Lease include any other gender, and words in
the singular include the plural, unless the context otherwise requires.
M. SUCCESSORS
The terms, conditions and covenants contained in the Lease inure to the
benefit of and are binding on, the parties hereto and their respective
successors in interest, assigns and legal representatives, except as
otherwise herein expressly provided. All rights, privileges, immunities
and duties of Landlord under this Lease, including without limitation,
notices required or permitted to be delivered by Landlord to Tenant
hereunder, may, at Landlord's option, be exercised or performed by
Landlord's agent or attorney.
N. NO REDUCTION OF RENTAL
Except as otherwise expressly and unequivocally provided in this Lease,
Tenant shall not for any reason withhold or reduce the amounts payable by
Tenant under this Lease, it being understood that the obligations of
Landlord hereunder are independent of Tenant's obligations. If Landlord
is required by governmental authority to reduce energy consumption or
impose a parking or similar charge with respect to the Premises, Building
- --------------
(109) a party
(110) the party required to perform
(111) the performing party's
(112) the party required to perform
(113) The foregoing shall not, however, apply to delay payment of rent.
42
or Project, to restrict the hours of operation of, limit access to, or
reduce parking spaces available at the Building, or take other limiting
actions, then Tenant is not entitled to abatement or reduction of rent or
to terminate this Lease.
O. NO PARTNERSHIP
Notwithstanding anything else to the contrary, Landlord is not, and under
no circumstances shall it be considered to be, a partner of Tenant, or
engaged in a joint venture with Tenant.
P. EXHIBITS
All exhibits attached hereto are made a part hereof and are incorporated
herein by a reference. A complete list of said exhibits is set forth in
the Table of Contents.
Q. INDEMNITIES
The obligations of the indemnifying party under each and every
indemnification and hold harmless provision contained in this Lease shall
survive the expiration or earlier termination of this Lease to and until
the last to occur of (a) the last date permitted by law for the bringing
of any claim or action with respect to which indemnification may be
claimed by the indemnified party against the indemnifying party under
such provision or (b) the date on which any claim or action for which
indemnification may be claimed under such provision is fully and finally
resolved and, if applicable, any compromise thereof or judgment or award
thereon is paid in full by the indemnifying party and the indemnified
party is reimbursed by the indemnifying party for any amounts paid by the
indemnified party in compromise thereof or upon a judgment or award
thereon and in defense of such action or claim, including reasonable
attorneys' fees incurred. Payment shall not be a condition precedent to
recovery upon any indemnification provision contained herein.
R. NONDISCLOSURE OF LEASE TERMS
Landlord and Tenant agree that the terms of this Lease are confidential
and constitute proprietary information of the parties hereto. Disclosure
of the terms hereof could adversely affect the ability of Landlord to
negotiate with other tenants of the Project. Each of the parties hereto
agrees that such party, and its respective partners, officers, directors,
employees, agents and attorneys, shall not disclose the terms and
conditions of this Lease to any other person without the prior written
consent of the other party hereto except pursuant to an order of a court
of competent jurisdiction. Provided, however, that Landlord may disclose
the terms hereof to any lender now or hereafter having a lien on
Landlord's interest in the Project, or any portion thereof, and either
party may disclose the terms hereof to its respective independent
accountants who review its respective financial statements or prepare its
respective tax returns, (114)to any prospective transferee of all or any
portions of their respective interests hereunder (including a prospective
sublessee or assignee of Tenant), to any lender or prospective lender to
such party, to any governmental entity, agency or person to whom
disclosure is required by applicable law, regulation or duty of diligent
inquiry (115)and in connection with any action brought to enforce the
terms of this Lease, on account of the breach or alleged breach hereof or
to seek a judicial determination of the rights and obligations of the
parties hereunder.
- --------------
(114) to its attorneys,
(115) (including in connection with a public offering)
43
ADDENDUM TO LEASE BETWEEN THE MUTUAL LIFE INSURANCE COMPANY
OF NEW YORK, AS LANDLORD, AND EARTHLINK NETWORK, INC., AS TENANT,
DATED SEPTEMBER __, 1996
SECTION XXXV. ADDENDUM
A. PREMISES
(1) RIGHT OF FIRST REFUSAL
During the twelve (12) month period commencing on the Lease
Commencement Date, Tenant shall have a one-time right of first
refusal to lease the second floor of the Building (the "Expansion
Space") from Landlord if, after the Lease Commencement Date and
during the initial Term of this Lease, Landlord is or becomes
interested in marketing such space. Landlord shall notify Tenant in
writing upon receipt by Landlord from a third party of an offer for
any portion of the Expansion Space (including all) that Landlord
desires to accept. Tenant shall, within five (5) business days
following its receipt of Landlord's notice, indicate in writing its
intention to add to the Premises the entire portion of the Expansion
Space (including all) so offered by Landlord on the terms and
conditions specified herein. Any failure by Tenant to respond to
Landlord's notice within such five (5) business day period, or any
notice by Tenant specifying Tenant's acceptance of the Expansion
Space on terms other than those set forth herein or of only a
portion of the Expansion Space so offered by Landlord, shall cause
Tenant's rights under this subsection A.(1) to terminate with
respect to the Expansion Space so offered, and Landlord shall
thereafter be free to lease the Expansion Space so offered to
another party at any rate and on any terms Landlord chooses.
If Tenant is entitled to and gives notice to Landlord within such
five (5) business days of its desire to add the offered Expansion
Space to the Premises, the entire Expansion Space shall be added to
the Premises on the following terms and conditions: the Expansion
Space so offered shall be delivered by Landlord to Tenant as soon as
the same is available and shall be added to the Premises on the same
terms and conditions set forth in this Lease with respect to the
Premises (except that the Security Deposit for the Expansion Space
shall be prorated such that Tenant shall deposit an amount equal to
$1.455 per square foot of Rentable Area within the Expansion Space
(per year) of the balance of the Term with respect to such Expansion
Space, the Tenant Allowance shall be an amount equal to $2.50 per
square foot of Rentable Area within the Expansion Space per year of
the balance of the Term with respect to the Expansion Space and the
Lease Commencement Date with respect to the Expansion Space shall be
a date selected by Landlord as the date for Substantial Completion
of Landlord's Work therein) AND the balance of the Expansion Space
(i.e., the portion of the Expansion Space, if any, not covered by
the third party offer) shall be added to the Premises and delivered
by Landlord to Tenant on the day before the first anniversary of the
date Landlord's notice offering Tenant the Expansion Space was given
(or sooner, if mutually agreed in writing by Landlord and Tenant),
on the terms and conditions set forth herein with respect to the
Expansion Space identified in Landlord's notice.
Notwithstanding anything to the contrary contained in this
subsection A.(1), Landlord shall be required to offer any portion of
the Expansion Space (including all) to Tenant, and Tenant shall be
entitled to exercise its rights hereunder with respect thereto, only
if, at the time of such offer and exercise, respectively, Tenant is
not in default under any of the terms, conditions, provisions or
45
(b) Within ten (10) days after such notice is given,
Tenant may elect in written notice to Landlord
either to (i) unequivocally accept such Monthly
Rental for the ensuing Additional Term as determined
by Landlord or (ii) submit the matter of the fair
market value for the purpose of determining Monthly
rental (only) to appraisal in accordance with (c)
below. Tenant's failure to make a written election
strictly in accordance with the preceding sentence
shall be deemed to be an acceptance of the Monthly
Rental as determined by Landlord, EXCEPT that an
equivocal acceptance of the Monthly Rental shall be
deemed an election by Tenant to submit the matter of
the fair market value for the purpose of determining
Monthly rental (only) to appraisal in accordance with
(c) below; and
(c) If Tenant elects or is deemed to have elected to
submit the matter to appraisal in accordance with (b)
above, then each party shall, by written notice to
the other party given within ten (10) days after such
election or deemed election by Tenant, select an
appraiser. If either party shall fail to select an
appraiser in such manner and within such time, the
single appraiser actually selected shall perform the
appraisal. If each party timely and properly selects
an appraiser, the two appraisers selected by the
parties shall determine and attempt to agree on the
fair market rental value for the ensuing Additional
Term within thirty (30) days after their appointment;
if they are unable to so agree and their appraised
values differ by more than five percent (5%) in the
aggregate over the ensuing Additional Term, the two
appraisers shall, by written notice to Landlord and
Tenant, select a third appraiser within five (5) days
after expiration of the thirty (30) day period within
which they were to determine and agree on the fair
market rental, which third appraiser shall analyze
the fair market rental for the ensuing Additional
Term. If they cannot agree on a third appraiser
within such time period, or if both parties fail to
select an appraiser in the manner and within the time
herein provided, either party may have the third (or
sole, if applicable) appraiser appointed by
application to the presiding judge of the Los Angeles
County Superior Court or his or her designee. If
the appraised values of the first two appraisers are
within five percent (5%) in the aggregate over the
ensuing Additional Term, then Landlord shall
calculate the average of the two appraised values
as a flat rental rate for the ensuing Additional
Term, which average shall be the fair market rental
rate for such Additional Term.
The appraisers shall have the MAI designation and a
minimum of ten (10) years experience in the Los
Angeles County (Glendale/Pasadena) office market.
Each of the first two appraisers shall analyze the
fair market rental value of the Premises and shall
give written notice to the parties of his or her
appraisal within thirty (30) days following his or
her appointment or selection, but in no event later
than the commencement of the Additional Term. If a
single appraiser is used, his or her determination
shall be the fair market rental rate. If three
appraisers are used, the third appraiser shall select
one of the values determined by the first two
appraisers as the fair market rental rate. The cost
of the appraisals shall be shared equally by Landlord
and Tenant.
(2) The provisions of Sections III.B. and C. and EXHIBIT C shall
not apply to the Additional Term; and
(3) In the case of the First Additional Term, there shall be one
further option to extend the Term, and, in the case of the
Second Additional Term, there shall be no further options to
extend the Term. In the event Tenant fails or is not entitled
to exercise its option for the First Additional Term, or
Tenant is deemed
47
(pursuant to (1)(b) above) to have elected to terminate the
Lease upon receipt of Landlord's notice of the fair market
rental for the First Additional Term, then Tenant's option for
the Second Additional Term shall lapse and shall thereafter
not be exercisable by Tenant.
C. COMMON OPERATING COSTS
(1) As used in this Lease, the term "Project Operating Costs"
shall include all costs of the type included in Common
Operating Costs applicable to the Common Areas and/or the
Project in general, such as real property taxes applicable to
the Common Areas, liability insurance with respect to the
Common Areas, maintenance service for the buildings within the
Project and repair costs with respect to the Project or any
equipment or machinery therein, but excluding costs which are
directly and separately identifiable to the operation and
maintenance of the Building or other buildings within the
Project. Common Operating Costs shall also include the
Building's share of Project Operating Costs, which shall
include, as appropriate, liability and other insurance with
respect to the Project generally, expenses of operating and
maintaining the parking structures, landscaping expenses for
exterior landscaping within the Project, security services
for the Project, property management fees and costs for a
manager and fees and other charges in connection with
membership in energy conservation associations and traffic
management organizations. To the extent that, in Landlord's
sole but reasonable judgment, it may not be equitable to
allocate certain Project Operating Costs on a pro rata basis
based upon the Rentable Areas of the buildings in the
Project, as the case may be, then Landlord may allocate the
same on such basis as Landlord, in its sole but reasonable
judgment, determines to be equitable.
(2) Notwithstanding anything to the contrary in the Lease,
Tenant's Proportionate Share of any and all costs of providing
janitorial service to the Premises which are includable in
Common Operating Costs in accordance with this Lease shall be
payable by Tenant, commencing on the Lease Commencement Date
and on the first day of each calendar month in the Term
thereafter, without any deduction for the Base Operating
Expense attributable to such janitorial services. In addition,
electrical service to the Premises will be separately metered,
and Tenant shall pay such separately metered costs directly to
the providers of such utilities as provided in Section IX.A.
of the Lease. Accordingly, costs attributable to tenant-area
janitorial services and/or to tenant-area electrical shall be
excluded from the Base Operating Expense, and Tenant's
Proportionate share of all Common Operating Costs, other than
such janitorial and electrical utility costs, shall be
determined by reference to the Base Operating Expense, as so
reduced.
(3) In the event that during all or any portion of any calendar
year, including the year used in calculating the Base
Operating Expense, the Building is not assessed as a completed
building, at such time as the Building is thereafter assessed
as a fully completed building, Landlord shall make an
adjustment to the Common Operating Costs for such year
(including the year for the Base Operating Expense, if
applicable) employing sound accounting and management
principles, to reflect the Common Operating Costs that would
have been paid or incurred by Landlord had the Building been
fully completed. In no event shall Landlord be entitled to
recover from tenants of the Project more than one hundred
percent (100%), in the aggregate, of the increase in Common
Operating Costs actually incurred by Landlord.
(4) Notwithstanding the foregoing, the following shall not be
included in Common Operating Costs (or shall be deducted
therefrom if included therein):
(a) Costs incurred by Landlord in performing or providing
special work or services to a particular tenant of
the Project at such tenant's cost, and
48
costs of any additions, changes, replacements and
other items to tenant-area premises which are made
exclusively to prepare for a new tenant's occupancy
and which benefit only that particular tenant;
(b) Compensation paid to officers and executives of
Landlord and of Landlord's managing agent who are not
directly involved in the management of the Project;
(c) Costs which were previously included in Common
Operating Costs for either the base year (i.e., 1997)
or any other year during the Term which are
reimbursed to Landlord by insurance or condemnation
proceeds, under warranty or otherwise outside of
Common Operating Costs;
(d) Costs of repairs or restoration incurred by reason of
fire or other casualty if and to the extent that
Landlord failed to obtain insurance against such fire
or casualty, if such insurance was available at
commercially reasonable rates and was required to be
carried by Landlord pursuant to this Lease; provided,
however, that the foregoing shall not apply to
preclude Landlord from including in Common Operating
Costs the deductible amounts under insurance policies
maintained by Landlord;
(e) Any financing or refinancing costs and expenses
secured by real estate within the Project including,
but not limited to, interest or amortization on debt
and rent under any ground or underlying lease;
(f) Any real estate brokerage commissions or other costs
incurred in procuring tenants or any fee or other
form of compensation in lieu of such commission;
(g) Any media advertising or any other advertising
expenses incurred in connection with the marketing of
the Building or any rentable space therein; provided,
however, that the foregoing shall not apply to
preclude Landlord from including in Common Operating
Costs, costs incurred in connection with signage for
the Project which is not exclusively for marketing
purposes;
(h) Costs of capital repairs, replacements or
improvements (as reasonably determined by Landlord)
except: (i) to the extent the same are amortized over
the reasonable useful life of the item as reasonably
determined by Landlord and included in Common
Operating Costs as so amortized, or (ii) those
designed to reduce Common Operating Costs; provided,
however, in no event shall the foregoing apply to
preclude Landlord from including in Common Operating
Costs, costs of routine maintenance and repair;
(i) Rental payments for base building equipment, such as
HVAC equipment and elevators, which, if purchased by
Landlord, would be excluded from Common Operating
Costs pursuant to item (h) above; provided, however,
in no event shall the foregoing preclude Landlord
from including in Common Operating Costs rental
payments for equipment leased temporarily (e.g., in
order to facilitate repair or replacement of
Building equipment) or equipment leased to perform
routine maintenance and repair (e.g., window washing
equipment);
(j) Depreciation or amortization which would be excluded
pursuant to items (h) or (i) above;
49
(k) Costs for materials or services paid to a related
person or entity, if and to the extent that such
costs exceed the amount that would have been paid if
the services or materials had been procured from an
unrelated person or entity;
(l) Costs incurred by Landlord due to the violation by
Landlord of the terms and conditions of any lease of
space in the Building or the Project which would not
otherwise be included in Common Operating Costs in
the absence of such default;
(m) Fines or penalties for late payments or
non-compliance with laws assessed against Landlord as
a result of Landlord's negligence;
(n) Painting or decorating space in the Project other
than the Common Areas and/or the management office at
the Building; and
(o) Costs incurred in connection with bringing the
Premises, Building, Project or Common Areas into
initial compliance with any laws as in effect and as
applicable thereto as of the date of this Lease.
(5) Upon receipt of Tenant's notice protesting an Annual Statement
delivered to Tenant by Landlord pursuant to Section V.C. of
the Lease, Landlord will provide to Tenant reasonable
documentary back-up for those item(s) protested by Tenant.
Tenant shall pay to Landlord upon demand as additional rent
the costs and expenses incurred by Landlord in responding to
such request. In the event that, upon reviewing the back-up so
provided by Landlord, Tenant disagrees with the amount charged
by Landlord to Tenant for any such item, Tenant may so notify
Landlord. If Landlord agrees with the findings of Tenant, then
an appropriate adjustment shall be made. In the event that
there is a disagreement, then Landlord and Tenant shall each
identify an accountant, who shall meet to resolve the dispute,
whose determination shall be binding upon Landlord and Tenant.
Any such dispute must be resolved within nine (9) months after
the end of the year to which the Annual Statement applies.
D. SECURITY DEPOSIT
All or any portion of the Security Deposit described in Section I.L. of
the Lease may be provided by Tenant in the form of one or more
irrevocable letters of credit from an independent financial institution
selected by Tenant and acceptable to Landlord in the form of EXHIBIT
"I" hereto (collectively (if applicable) the "Letter of Credit"). If
Tenant elects to provide a Letter of Credit to satisfy all or a portion
of its obligations pursuant to Sections I.L. and VI. of the Lease,
Tenant shall deliver to Landlord, concurrently with the execution and
delivery of this Lease, cash and/or a Letter of Credit in the aggregate
amount of Eight Hundred Thousand Dollars ($800,000.00) as security for
Tenant's full and faithful performance of its obligations and payment
of amounts due pursuant to this Lease. Notwithstanding anything to the
contrary herein, in no event shall Landlord be required to accept a
letter of credit in excess of, in the aggregate, Four Hundred Thousand
Dollars ($400,000.00) from any one financial institution.
Notwithstanding the foregoing sentence, (a) Landlord hereby agrees that
the Letter of Credit initially provided to Landlord upon execution and
delivery of this Lease may be drawn on Union Bank of California in the
entire amount required to be posted (i.e., $800,000.00) and (b) prior
to renewing the Letter of Credit annually, Tenant shall give notice to
Landlord of the financial institution(s) with whom Tenant proposes to
renew the Letter of Credit for the ensuing year, and Landlord shall
have the right to approve such financial institution(s) for the renewal
Letter of Credit, and may require Tenant to provide two Letters of
Credit if the aggregate amount thereof is greater than Four Hundred
Thousand Dollars ($400,000.00) if Landlord, in its sole but reasonable
discretion, deems the financial strength of the proposed financial
institution to be insufficient. Any Letter of Credit
50
provided hereunder shall be as available to Landlord as if the same
were a cash security deposit made pursuant to Section VI. of the Lease.
Any such Letter of Credit shall be renewed by Tenant annually, on or
before its expiration date and, if Landlord does not receive an
original replacement letter of credit at least three (3) business days
prior to the expiration date of an expiring Letter of Credit, then
Landlord shall have the right to draw the as-yet unexpired Letter of
Credit in full, provided, however, that in the absence of the
occurrence, prior to the applicable anniversary date set forth below,
of any event giving rise to Landlord's right to use, apply or retain
all or any part of the Security Deposit pursuant to Section VI. of
the Lease (herein, an "Event"), then Tenant's obligation shall be to
renew the Letter of Credit in an applicable amount (in the aggregate,
if applicable, with other Letters of Credit provided hereunder) set
forth below. The occurrence of an Event prior to any anniversary date
set forth below shall cause Tenant's obligation to provide the Letter
of Credit pursuant to this Addendum Section to continue thereafter
without any of the subsequent reductions described herein.
ANNIVERSARY DATE AMOUNT OF RENEWED LETTER OF CREDIT
1st "Anniversary" $700,000.00
2nd Anniversary $600,000.00
3rd Anniversary $500,000.00
4th Anniversary $400,000.00
5th Anniversary $300,000.00
6th Anniversary $200,000.00
7th Anniversary $100,000.00
8th Anniversary -0-
As used in the foregoing table, the term "Anniversary" refers to the
applicable anniversary of the Lease Commencement Date specified in the
table.
E. HAZARDOUS MATERIALS
(1) To the best of Landlord's knowledge, Landlord has not itself
used the Building or Project in violation of governmental laws
and regulations governing Hazardous Materials applicable to
the Project and, Landlord's actual knowledge, the Building
does not contain any Hazardous Materials in violation of law
and/or friable asbestos, and the only non-friable asbestos
discovered in the Building is in roofing materials located on
the roof of the Building. Notwithstanding anything to the
contrary in this Lease, in the event that Hazardous Materials
are discovered in the Project, the presence of which is not
caused by a breach of the obligations of Tenant set forth in
Section VI.C. of the Lease, Landlord shall, at Landlord's sole
cost and expense, remove, remediate, or otherwise deal with
such Hazardous Materials if, as and when required by
applicable governmental authorities.
(2) Due to the former existence of a landfill in the area of the
Project, a methane venting system has been installed at the
Project and on adjacent properties. In addition, a nearby
property owner, whose property is closer to the Southern
California Edison (SCE) power lines which are in the general
geographic area of the Project, has experienced some
interference with MacIntosh computers adjacent to the walls of
its premises nearest the power lines, which may be caused by
electric and magnetic fields which may be being induced by the
SCE power lines. Landlord is unaware of any similar or related
complaints from the occupant of the other building at the
Project or from the former occupant of the Building.
Information with respect to the possible effects of power
lines on equipment and human health is available from SCE, and
Landlord will make available to Tenant upon request a copy of
such SCE information and any other environmental reports in
Landlord's possession regarding the Project. Tenant accepts
the Premises "AS-IS" with respect to the SCE power lines and
the effect thereof.
51
F. SERVICE AND UTILITIES
Access to the Building is available 24 hours per day, 7 days per week
via a card-key security system. Landlord may assess a charge for any
access cards for such system provided to Tenant and/or its employees.
Utilities are, subject to Section XXXIII.K. below, available 24 hours
per day, subject to Tenant's payment to Landlord of the reasonable
costs thereof, as determined by Landlord. In the event that the
Premises are not separately zoned such that after-hours HVAC can be
made available to the Premises (only), and Tenant requests after-hours
HVAC service to the Premises at the same time as a tenant or occupant
of another area of the Building which is in the same zone as the
Premises requests the same, then (unless the fees to Tenant and such
other tenant or occupant are prorated by Landlord) any fees received by
Landlord for such after-hours HVAC from such other tenant or occupant
for any period of time for which Tenant is assessed a charge for
after-hours HVAC shall be applied to reduce the charge imposed on
Tenant.
G. JANITORIAL SERVICE
So long as Tenant is the only occupant of the Building, Tenant may
provide janitorial service to the Premises, the scope and the provider
of which are subject to Landlord's prior written approval. Landlord
hereby approves Omni Facility Group of Pasadena as that initial
provider of Tenant's janitorial service; provided, however, that
Landlord reserves the right to approve the proposed scope of such
provider's service and the contract therefor, and further reserves
the right to require Tenant to replace such provider (and any
subsequent provider) if Landlord determines that health, cleanliness
or maintenance conditions are adversely affected by the standard and
level of service provided. If Tenant elects to contract directly for
janitorial service, Tenant shall provide to Landlord a copy of the
contract therefor for Landlord's approval. In the event that another
tenant or occupant takes occupancy of the Building, Landlord shall
have the right to require that janitorial service to the Premises be
provided by Landlord's contractor, at Tenant's cost as provided in
Addendum Section XXXV.C.(2) above, in accordance with Landlord's
standard janitorial specifications, a copy of which are attached to
the Lease as EXHIBIT G, but which are subject to change from time to
time.
H. PARKING
Landlord shall make available for the use of Tenant, its employees,
contractors, agents and invitees up to 4 unreserved parking spaces per
1,000 square feet of Rentable Area, free of charge (subject to
applicable governmental requirements) for the initial Term. If and so
long as Tenant is the only tenant in the Building, Tenant may, with
Landlord's prior written consent, restrict access to the parking area
serving the Building so long as Landlord and its agents, employees and
invitees are provided free access thereto and any improvements in
connection therewith are treated as "Alterations" within the meaning of
Section XII. of the Lease.
I. SIGNAGE
Notwithstanding anything to the contrary in Section XXVIII. of the
Lease, Tenant may install on or before the Lease Commencement Date, at
Tenant's sole cost and expense, one sign indicating Tenant's name on
the Building and may erect a monument sign for the Project, and, on
such date (if any) as the entire second floor is added to the Premises
pursuant to Addendum Section XXXV.A. above upon exercise by Tenant of
its rights thereunder, a second sign above the entrance to the
Building, and in each case the contents, design, size, materials,
location and method of application of each such sign shall be subject
to Landlord's prior written approval and compliance with the CC&Rs for
the Project, all applicable sign programs and all other governmental
requirements then in effect for the Project. From and after the date,
if any, that Tenant leases the entire Building, and so long as there
is no other occupant of the Building, Landlord shall not
52
FIRST AMENDMENT TO LEASE
This First Amendment to Lease (the "Amendment") is dated as of this ___
day of July, 1994, by and between THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK,
a New York corporation ("Landlord"), and EARTHLINK NETWORK, INC., a Delaware
corporation ("Tenant"), with respect to the following:
RECITALS
A. Landlord is the landlord and Tenant is the tenant pursuant to that
certain Office Lease dated effective as of September __, 1996, by and between
Landlord and Tenant (the "Lease"). The Lease covers certain premises commonly
known as Suite __ (the "Premises"), 2947 Bradley Street, Pasadena, California.
B. At the time of execution of the Lease, the Premises were estimated
to contain approximately 55,000 square feet of Rentable Area (as defined in the
Lease). Pursuant to the Lease, Landlord reserved the right prior to the
commencement of the term of the Lease (the "Term") to remeasure the Premises.
The parties therefore desire to enter into this Amendment to correct the
Rentable Area of the Premises and to make certain other adjustments to the Lease
in connection therewith, on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, IN CONSIDERATION OF the foregoing recitals, and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. DEFINED TERMS. All capitalized terms used and not defined herein but
defined in the Lease shall have the meanings given to such terms in the lease.
2. RENTABLE AREA.
a. The Rentable Area of the Premises set forth in Section I.E.
of the Lease is hereby amended to be Fifty-Four Thousand Seven Hundred
Forty-Eight (54,748) square feet.
b. Tenant's Proportionate Share of Common Operating Costs set
forth in Section I.Q. of the Lease is hereby amended to be forty-nine and
fifty-eight one-hundredths percent (49.58%).
c. EXHIBIT D to the Lease is hereby deleted and replaced with
Exhibit D to this Amendment.
d. The Tenant Allowance (as defined in EXHIBIT C to the Lease)
is hereby amended to be $1,368,700.00 ($25.00 per square foot of Rentable Area
in the Premises).
3. LEASE IN EFFECT. Landlord and Tenant acknowledge and agree that the
Lease, as hereby amended, remains in full force and effect in accordance with
its terms. To the extent that any provision of this Amendment shall conflict
with the Lease as in effect prior to the date hereof, this Amendment shall
prevail.
IN WITNESS WHEREOF, the undersigned have executed this Amendment to be
effective as of the day and year first above written.
SECOND AMENDMENT TO LEASE
This Second Amendment to Lease (the "Amendment") is dated as of this __
day of February, 1997, by and between THE MUTUAL LIFE INSURANCE COMPANY OF NEW
YORK, a New York corporation ("Landlord"), and EARTHLINK NETWORK, INC., a
Delaware corporation ("Tenant"), with respect to the following:
RECITALS
A. Landlord is the landlord and Tenant is the tenant pursuant to
that certain Office Lease dated effective as of September 26, 1996, by and
between Landlord and Tenant, as amended by that certain First Amendment to
Lease dated as of _____________, 1996, by that certain letter agreement dated
October 8, 1996 (regarding the letter of credit), by that certain letter
agreement dated October 10, 1996 (regarding submetering of utilities), by
that certain letter agreement dated November 19, 1996 (regarding modification
to parabolic light fixtures) and by that certain letter agreement dated
February 24, 1997 (regarding payment for submeters) (collectively, the
"Lease"). The Lease covers certain premises commonly known as Suite 100 (the
"Premises"), 2947 Bradley Street, Pasadena, California.
B. Tenant desires to expand the Premises by including therein the
additional space depicted on EXHIBIT A hereto consisting of approximately
seventy-seven (77) square feet of Rentable Area, and Landlord is willing to
consent thereto. The parties therefore desire to enter into this Amendment to
adjust the Rentable Area of the Premises (as so expanded) and to make certain
other adjustments to the Lease in connection therewith, on the terms and
conditions set forth herein.
AGREEMENT
NOW, THEREFORE, IN CONSIDERATION OF the foregoing recitals, and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. DEFINED TERMS. All capitalized terms used and not defined herein but
defined in the Lease shall have the meanings given to such terms in the Lease.
2. PREMISES. The Additional Space is hereby added to the Premises.
3. RENTABLE AREA.
a. The Rentable Area of the Premises set forth in Section I.E.
of the Lease is hereby amended to be Fifty-Four Thousand Eight Hundred
Twenty-Five (54,825) square feet.
b. Tenant's Proportionate Share of Common Operating Costs set
forth in Section I.Q. of the Lease is hereby amended to be forty-nine and
sixty-five one-hundredths percent (49.65%).
c. EXHIBIT D to the Lease is hereby deleted and replaced with
Exhibit D to this Amendment.
d. The Tenant Allowance (as defined in EXHIBIT C to the Lease)
is hereby amended to be $1,370,625.00 ($25.00 per square foot of Rentable Area
in the Premises).
4. LEASE IN EFFECT. Landlord and Tenant acknowledge and agree that the
Lease, as hereby amended, remains in full force and effect in accordance with
its terms. To the extent that any provision of this Amendment shall conflict
with the Lease as in effect prior to the date hereof, this Amendment shall
prevail.
IN WITNESS WHEREOF, the undersigned have executed this Amendment to be
effective as of the day and year first above written.
LANDLORD TENANT
THE MUTUAL LIFE INSURANCE EARTHLINK NETWORK, INC., a
COMPANY OF NEW YORK, a New York Delaware corporation
corporation
By: /s/ By: /s/
----------------------------- --------------------------
Title: Vice President, Authorized Title: Chief Financial Officer
Signatory, ARES Realty -----------------------
Capital
---------------------------
By: /s/
---------------------------
Title:
------------------------
THIRD AMENDMENT TO LEASE
THIS THIRD AMENDMENT TO LEASE ("Third Amendment") is made and
entered into as of August 11, 1998, by and between WHMNY Real Estate Limited
Partnership, a Delaware limited partnership ("Landlord"), and Earthlink
Network, Inc., a Delaware corporation ("Tenant").
RECITALS
A. ORIGINAL LEASE. Pursuant to that certain Office Lease dated
September 26, 1996 (the "Original Lease"), Landlord's predecessor in
interest, The Mutual Life Insurance Company of New York ("MONY"), leased to
Tenant certain premises in Suite 100 consisting of the first floor (the
"Original Premises") of the building located at 2947 Bradley Street,
Pasadena, California, 91107 (the "Building").
B. FIRST AMENDMENT. The Original Lease was amended by that certain
First Amendment to Lease (the "First Amendment") dated February 1997, and by
the following letter agreements, each by and between MONY and Tenant; that
certain letter agreement dated October 8, 1996 (regarding the letter of
credit); that certain letter agreement dated October 10, 1996 (regarding
submetering of utilities); that certain letter agreement dated November 18,
1996 (regarding modification to parabolic light fixtures); and that certain
letter agreement dated February 24, 1997 (regarding payment for submeters)
(collectively, the "Letter Agreements").
C. SECOND AMENDMENT. The Original Lease was further amended to confirm
the size of the Original Premises by that certain Second Amendment to Lease (the
"Second Amendment") dated February 1997, by and between MONY and Tenant.
D. EXISTING LEASE. The Original Lease, as amended by the First
Amendment, the Letter Agreements, and the Second Amendment, is referred to
herein as the "Existing Lease."
E. LEASE. The Existing Lease, as amended by this Third Amendment, is
referred to herein as the Lease.
F. PURPOSE. Landlord and Tenant desire to further amend the Existing
Lease as set forth herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby mutually acknowledged, Landlord and Tenant hereby
agree as follows:
1. PREMISES. The description of the Premises set forth in the Existing
Lease is hereby amended by adding the following:
Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the lobby area on the first floor and the entire
second floor of the building (the "First Additional
Premises"), as shown on the floor plan attached hereto as
Exhibit "A". Unless otherwise expressly provided to the
contrary herein, on the after the First Additional Premises
Commencement Date (defined below) the term "Premises" as used
in this Lease shall consist of the existing Premises (the
entire first floor) and the First Additional Premises (the
first floor lobby and the entire second floor), for a total of
approximately 110,497 rentable square feet, and shall be
commonly referred to as Suite 100. Except as otherwise
provided in this Third Amendment, the First Additional
Premises shall be leased by Tenant on the same terms and
conditions as are applicable from time to time to the Existing
Premises.
2. TERM. The description of the term set forth in the Existing Lease is
hereby amended by adding the following:
The term of this Lease with respect to the First Additional
Premises shall commence on October 1, 1998 (the "First
Additional Premises Commencement Date"), shall run
concurrently with the remaining term of the Existing Lease,
and shall terminate on February 13, 2007. Notwithstanding the
foregoing to the contrary, upon the full execution of this
Third Amendment by Landlord and Tenant, and until the First
Additional Premises Commencement Date, Tenant shall have the
right to occupy the First Additional Premises, subject to all
of the provisions of this Lease excepting only those requiring
the payment of Rent respecting the First Additional Premises.
3. MONTHLY RENTAL. Section IVA of the Original Lease, Exhibit D
attached to the Original Lease, and paragraph 3c of the Second Amendment are
hereby amended by adding the following:
Tenant agrees to pay to Landlord, as Monthly Rental for the
Existing Premises and the First Additional Premises, the
amounts set forth below per month for the time periods set
forth below payable on the first day of each calendar month
without offset or deduction during the term of this Lease.
EFFECTIVE DATES MONTHLY RENTAL
10/01/1998-09/30/1999 $ 92,071.00
10/01/1999-01/31/2002 $147,081.00
02/01/2002-02/28/2002 $153,294.00
03/01/2002-12/31/2003 $158,046.00
01/01/2004-01/31/2007 $167,307.00
02/01/2007-02/13/2007 $ 72,499.70
4. COMMON OPERATING COSTS. Section IQ of the Original Lease, and
paragraph 3b of the Second Amendment are hereby amended by adding the following:
On and after the First Additional Premises Commencement Date,
Tenant's Proportionate Share of Common Operating Costs shall
be 100%.
5. PARKING. As of the First Additional Premises Commencement Date,
Tenant shall have the exclusive use of the entire Building, including its
parking lot, and Tenant shall have no obligation to pay rent for the use of the
spaces in such lot.
6. SECURITY DEPOSIT. Section IL of the Original Lease, and Section
XXXV.D of the Addendum attached to the Original Lease, are hereby amended by
adding the following:
On or before the First Additional Premises Commencement Date,
Tenant shall deliver a new Letter of Credit from no more than
two (2) banks in the aggregate amount of $1,000,000.00 as
security for Tenant's full and faithful performance of its
obligations and payments due under this Lease (the "New Letter
of Credit"). Once the New Letter of Credit is delivered to
Landlord, the existing Letter of Credit in effect at the time
of execution of this Third Amendment (the "Existing Letter of
Credit") shall be cancelled and shall be of no further force
or effect. Upon execution of this Third Amendment by Landlord
and Tenant, Landlord shall deliver the Existing Letter of
Credit to the bank that issued same, to be held in trust by
such bank
2
pending the issuance of the New Letter of Credit and the
subsequent cancellation of the Existing Letter of Credit. All
terms of Section XXXV.D of the Addendum to the Original Lease
respecting the Existing Letter of Credit shall apply to the
New Letter of Credit, with the following exceptions: the
Anniversary Dates shall be measured from the First Additional
Premises Commencement Date, and the aggregate amount of the
New Letter of Credit shall be reduced by $120,000.00 each year
on the Anniversary Dates, as set forth below:
AMOUNT OF RENEWED
ANNIVERSARY DATES NEW LETTER OF CREDIT
10/01/1998 $1,000,000.00
10/01/1999 $ 880,000.00
10/01/2000 $ 760,000.00
10/01/2001 $ 640,000.00
10/01/2002 $ 520,000.00
10/01/2003 $ 400,000.00
10/01/2004 $ 280,000.00
10/01/2005 $ 160,000.00
10/01/2006 - 02/13/2007 $ 40,000.00
7. TENANT IMPROVEMENT ALLOWANCE. Landlord shall provide Tenant with a
Tenant Improvement Allowance in the amount of $1,231,900.00 (the "Tenant
Improvement Allowance") to be applied towards the cost of the work to be
performed within the Premises by Tenant (the "Tenant Improvements"), in
accordance with the Work Letter attached hereto as Exhibit "B." Landlord and
Tenant acknowledge and agree that on or before March 31, 2000, the entire Tenant
Improvement Allowance must be used for the Tenant Improvement Costs (as defined
in the Work Letter), and any unused amount after such date shall be retained by
Landlord.
8. EXPANSION OPTIONS. Sections XXXV.A(1) and XXXV.A(2) of the Addendum
to the Original Lease are hereby deleted in their entirety and Landlord and
Tenant acknowledge that Tenant has no right to further expand in the building.
9. BROKERS. Neither Landlord nor Tenant has dealt with any broker or
agent in connection with the negotiation or execution of this Third Amendment,
other than Insignia/ESG and Ramsey-Schilling Commercial Real Estate Services,
Inc. ("RSCO"). Landlord shall pay Insignia/ESG a commission in the amount of
three percent (3%) for months 1 through 60, and one and one-half percent
(1 1/2%) for months 61 through 101, in accordance with a separate listing
agreement, and shall pay RSCO a commission in the amount of four percent (4%)
for months 1 through 60, and two percent (2%) for months 61 through 101, in
accordance with a separate commission agreement originally by and between MONY
and RSCO, and assumed by Landlord. Tenant and Landlord shall each indemnify the
other against all costs, expenses, attorney fees, and other liability for
commissions or other compensation claims by any broker or agent claiming the
same by, through, or under the indemnifying party.
10. FULL FORCE AND EFFECT. Except as expressly amended by this Third
Amendment, the Existing Lease shall remain in full force and effect for the
entire remaining term and any extensions thereof.
3
IN WITNESS WHEREOF, the parties hereto have executed this Third
Amendment effective as of the date first written above.
LANDLORD: WHMNY REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership
By: WHMNY GEN-PAR, INC., a Delaware
corporation, General Partner
By: /s/
--------------------------------------
Name: Nancy M. Haag
Title: Assistant Vice President
TENANT: EARTHLINK NETWORK, INC.,
a Delaware corporation
By: /s/
--------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
By:
--------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
4
FOURTH AMENDMENT TO LEASE
THIS FOURTH AMENDMENT TO LEASE ("Fourth Amendment") is made and entered
into as of December 1, 1999, by and between WHMNY Real Estate Limited
Partnership, a Delaware limited partnership ("Landlord"), and Earthlink Network,
Inc., a Delaware corporation ("Tenant").
RECITALS
A. ORIGINAL LEASE. Pursuant to that certain Office Lease dated
September 26, 1996 (the "Original Lease"), Landlord's predecessor in interest,
The Mutual Life Insurance Company of New York ("MONY"), leased to Tenant certain
premises in Suite 100 consisting of the first floor (the "Original Premises") of
the building located at 2947 Bradley Street, Pasadena, California, 91107 (the
"Building"). The Building, together with the land on which the Building is
located, the building located at 2923 Bradley Street, and all related
improvements, is referred to herein as the "Project."
B. FIRST AMENDMENT. The Original Lease was amended by that certain
First Amendment to Lease (the "First Amendment") dated February 1997, and by the
following letter agreements, each by and between MONY and Tenant: that certain
letter agreement dated October 8, 1996 (regarding the letter of credit); that
certain letter agreement dated October 10, 1996 (regarding submetering of
utilities); that certain letter agreement dated November 18, 1996 (regarding
modification to parabolic light fixtures); and that certain letter agreement
dated February 24, 1997 (regarding payment for submeters) (collectively, the
"Letter Agreements").
C. SECOND AMENDMENT. The Original Lease was further amended to confirm
the size of the Original Premises by that certain Second Amendment to Lease (the
"Second Amendment") dated February 1997, by and between MONY and Tenant.
D. THIRD AMENDMENT. The Original Lease was further amended to expand
the Original Premises to include all of the rentable space in the Building (the
"Existing Premises"), by that certain Third Amendment to Lease dated August 11,
1998, by and between Landlord and Tenant.
E. EXISTING LEASE. The Original Lease, as amended by the First
Amendment, the Letter Agreements, the Second Amendment, and the Third Amendment
is referred to herein as the "Existing Lease."
F. LEASE. The Existing Lease, as amended by this Fourth Amendment, is
referred to herein as the Lease.
G. PURPOSE. Landlord and Tenant desire to further amend the Existing
Lease as set forth herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby mutually acknowledged, Landlord and Tenant hereby
agree as follows:
1. LEASE. Landlord hereby leases to Tenant and Tenant hereby accepts
from Landlord the portion of the Project depicted on EXHIBIT A attached hereto
and incorporated herein by reference ("Generator Space"). In the Generator
Space, Tenant shall (i) construct, operate and maintain a structure to house the
existing electrical generators for the Project, (ii) install additional
generators and equipment within the structure ("Tenant Equipment"), and (iii)
make certain related improvements within the Project and the Building to connect
the generators to the Building electrical system, all pursuant to Paragraph 3
below and EXHIBIT B and EXHIBIT B-1 attached hereto and incorporated herein by
reference (collectively "Tenant Work"). Except as otherwise provided in this
Fourth Amendment, the Generator Space shall be used by Tenant on the same terms
and conditions as are applicable from time to time to the Existing Premises. All
of the terms and conditions applicable to the Existing Premises pursuant to the
Existing Lease shall also be applicable to the
1
Generator Space, provided, however, Tenant shall not be required to pay any
additional Monthly Rental or other rent to Landlord for use of the Generator
Space. Tenant shall timely pay for all utilities used with respect to the
Generator Space directly to the provider thereof.
2. TERM. The term of this Lease with respect to the Generator Space
shall commence on the date first written above, shall run concurrently with the
remaining term of the Existing Lease, and shall terminate on February 13, 2007.
3. TENANT WORK AND INSURANCE. Commencing on the date first written
above, at its sole cost and expense, Tenant shall cause to be constructed the
Tenant Work. Landlord shall not be required by this Fourth Amendment to make any
changes or improvements to the Generator Space or the Existing Premises. Without
limitation of Paragraph 1 above, all insurance required by the Existing Lease
applicable to the Existing Premises shall also apply to the Generator Space. In
addition to all insurance required by the Existing Lease, and subject to the
terms set forth in Section XIV of the Original Lease, prior to completion of the
Tenant Work Tenant shall obtain and keep in full force and effect all risk
extended coverage, fire, vandalism and malicious mischief insurance insuring the
Tenant Work in an amount not less than one hundred percent (100%) of the full
replacement cost thereof.
4. RESTORATION OF PREMISES. At Landlord's option, Landlord may require
Tenant to restore the Premises, Building and Project to their original condition
existing before the construction of the Tenant Work, including without
limitation, restoration of landscaping and parking surfaces. Prior to
commencement of construction of the Tenant Work, Tenant shall provide Landlord
with a bond or irrevocable letter of credit in an amount sufficient, in
Landlord's reasonable judgment, to restore the Premises, Building and Project to
such original condition. This restoration right shall be in addition to any
restoration or similar rights set forth in the Lease. Provided that Tenant has
performed all of its obligations hereunder, Tenant may remove all Tenant
Equipment placed in the Generator Space by Tenant (but Tenant may not remove any
such item which was paid for, in whole or in part, by Landlord or any wiring or
cabling unless Landlord requires such removal).
5. MAINTENANCE, REPAIR AND OPERATION. During the entire term of this
Lease respecting the Generator Space, and in addition to any and all maintenance
and repair obligations of Tenant set forth in the Existing Lease, at Tenant's
sole cost and expense Tenant shall repair and at all times maintain the Tenant
Work in good working order and condition and in accordance with all applicable
laws, rules, regulations, ordinances, orders, permits and approvals. Tenant
shall promptly reimburse Landlord for any costs and expenses incurred by
Landlord, if any, in connection with the maintenance, repair or operation of the
Tenant Work and/or Generator Space promptly on demand by Landlord.
6. ENTRY BY LANDLORD. Landlord reserves and shall at any and all times
have the right to enter the Generator Space.
7. FULL FORCE AND EFFECT. Except as expressly amended by this Fourth
Amendment, the Existing Lease shall remain in full force and effect for the
entire remaining term and any extensions thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Fourth
Amendment effective as of the date first written above.
LANDLORD: WHMNY REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: WHMNY GEN-PAR, INC., a Delaware
corporation, General Partner
By: /s/
----------------------------------
Name: Nancy M. Haag
Title: Assistant Vice President
2
TENANT: EARTHLINK NETWORK, INC.,
a Delaware corporation
By: /s/
------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
3