Exhibit 10.19
ONE WILSHIRE ARCADE IMPERIAL, LTD.
FIRST AMENDMENT TO LEASE RE LICENSE
FOR USE OF TELECOMMUNICATIONS CONDUIT
AND SPECIAL CONDUIT INTERCONNECTION ROOM
PARTIES: ONE WILSHIRE ARCADE IMPERIAL, LTD,
a California Limited Partnership
624 S. Grand Avenue, Suite 1207
Los Angeles, CA 90017
("Landlord")
PRIMECALL, INC.
a Washington corporation
624 So. Grand Avenue
Suite 2840
Los Angeles, California 90017
("Tenant")
DATE: June 24, 1997
PLACE: Los Angeles, California
RECITALS
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A. Landlord is the owner of the One Wilshire Building, located at 624 S.
Grand Avenue, Los Angeles, California 90017 (the "Building"). Landlord leases to
Tenant Suite 2840 in the Building (the"Premises") pursuant to a written lease
dated June 10, 1996, as amended to date (the "Lease").
B. Landlord has set aside a portion of the fourth floor of the Building
for use as a special conduit room (the "Conduit Room") and has set aside a
portion of the Building's parking elevator shaft for use as a special conduit
shaft (the "Conduit Shaft"). The purpose of the Conduit Room and the Conduit
Shaft will be to facilitate interconnections between various telecommunications
company tenants in the Building who elect to participate.
C. Tenant wishes to obtain a license from Landlord for use of the Conduit
Room, in common with others, and use of certain conduit space (the "Connecting
Conduit") running from the Premises through the Conduit Shaft to the Conduit
Room. Landlord is willing to give Tenant a non-exclusive license, revocable by
Landlord at will under the circumstances described in Section 5 below, for use
of the Conduit Room and the Connecting Conduit on the terms and conditions set
forth below.
NOW THEREFORE, the parties hereby agree as follows:
1
AGREEMENT
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1. License for Use of Conduit. Landlord hereby grants to Tenant a
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non-exclusive license, revocable by Landlord at will under the circumstances
described in Section 5 below, for use of the Conduit Room and the Connecting
Conduit. Such use shall be on the terms and conditions set forth in this
Amendment. Tenant shall have the right to commence such use on or after the date
Landlord first makes the Conduit Room available for use by Landlord's licensees
following Landlord's construction of the Conduit Room and installation of the
Connecting Conduit (the "Effective Date"). If for any reason the Conduit Room
has not been constructed or the Connecting Conduit has not been installed by
the estimated Effective Date of August 1, 1997, Landlord shall have no liability
to Tenant for such delay. However, in such event, Tenant, as Tenant's sole and
exclusive remedy, shall have no obligation for the monthly license fee described
in Section 2 until the Conduit Room has been constructed, the Connecting Conduit
has been installed, and the Effective Date has occurred.
In connection with Tenant's use of the Conduit Room, Tenant shall be
provided with use of the following items ("Landlord Installations") in the
Conduit Room in the quantities indicated:
______ 22-inch relay racks
1 2' by 2' lockable cabinets
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______ 4' by 6' lockable cages
The Connecting Conduit shall run from the Premises and through the Conduit
Shaft to one of Tenant's racks, cages or cabinets in the Conduit Room, as
designated by Tenant. Landlord, in its reasonable discretion, shall designate
which conduit in the Conduit Shaft shall be used for the Connecting Conduit. The
Connecting Conduit shall consist of conduit in the following quantities and
sizes:
1 1-inch conduits
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______ 4-inch conduits
Tenant acknowledges that other tenants and licensees in the Building will
also be using similar Landlord Installations in the Conduit Room. Tenant agrees
to use the Conduit Room only for the purpose of facilitating interconnections
between Tenant's telecommunications system and the telecommunications systems of
other tenants and licensees who reserve Landlord Installations in the Conduit
Room and who consent in writing to such an interconnection. Tenant agrees not to
store, install or use any equipment, conduit, cable, connecting lines or other
property of Tenant in the Conduit Room for any other purpose. Tenant shall
cooperate in keeping the Conduit Room locked and in restricting access to the
Conduit Room to employees, contractors and other persons who need access in
order to facilitate such interconnections. In no event shall Tenant cause (or
permit its employees, representatives, contractors or invitees to cause) any
interference with or damage to the Landlord Installations, equipment, conduits,
cable, wiring or connecting lines owned or used by other tenants in the Conduit
Room. Landlord shall equip the Conduit Room with security cameras and a 24-hour
security access system. Landlord shall also provide all tenants and licenses of
Landlord who use the Conduit Room with standard specifications for all wiring,
cabling and connecting lines to be installed in the Conduit Room by such tenants
or licensees. Landlord also shall have the right, in Landlord's reasonable
discretion, to enforce such other security measures and installation guidelines
as Landlord deems appropriate. However, Landlord shall have no liability to
Tenant for any damage or in terference caused by any person to the Landlord
Installations assigned to Tenant or to the cable, wiring, connecting lines,
equipment or other property of Tenant in the Conduit Room or the Connecting
Conduit.
Landlord's only obligation to Tenant regarding the installation of
facilities pursuant to this Amendment shall be to install the Landlord
Installations assigned to Tenant in the Conduit Room and the Connecting Conduit.
The cost of such work, together with Landlord's related administrative fee, is
included in Tenant's installation payment to Landlord described in item
2
(b) in Section 2 below. Tenant's share of Landlord's cost of constructing the
Conduit Room and the Conduit Shaft themselves is included in Tenant's one-time
participation payment described in item (a) in Section 2.
All installation of wiring or cabling that Tenant wishes installed in the
Connecting Conduit shall be installed by Landlord's designated contractor at
Tenant's expense. Tenant agrees to pay Landlord the cost of such work, together
with Landlord's 10% administrative fee, within 10 days after receipt of a
billing from Landlord. Landlord shall have the right, at Landlord's election, to
require Tenant to pay for the work in advance.
All installation of wiring, cabling and connections for Tenant's use within
the Conduit Room, including but not limited to any wiring, cabling or
connections in or about the Landlord Installations, shall be performed at
Tenant's sole expense by a qualified, duly licensed contractor selected by
Tenant. Landlord shall have no obligation or liability with respect to such work
by Tenant's contractors. Tenant shall cause all such work by Tenant's
contractors to be completed and paid for promptly to prevent any mechanic's
liens being filed. Tenant shall also cause all such work by Tenant's contractors
to comply with Landlord's rules and regulations in effect from time to time for
work in the Building, as well as the requirements in Landlord's Special Conduit
Room Rules in effect from time to time. (The Special Conduit Room Rules
initially shall be as set forth in Exhibit A.) Such requirements include, but
shall not be limited to, the requirement that, prior to starting the work, the
contractor or Tenant must provide to Landlord (i) evidence of insurance coverage
for the work in conformity with the standards in Landlord's rules, (ii) copies
of all legally required permits for the work, and (iii) a copy of the written
consent of any other licensee in the Conduit Room with whose facilities a
connection will be made as part of the work. Tenant shall notify Landlord in
writing before Tenant's contractor commences any such work, so that Landlord
may, if Landlord so elects, post notices of nonresponsibility.
Tenant's ongoing use of the Conduit Room, the Connecting Conduit and
Tenant's cable, wiring, and connecting lines shall comply with all applicable
laws, the other provisions of the Lease, and the Building's rules (including but
not limited to the Special Conduit Room Rules) adopted by Landlord from time to
time. Tenant's use shall not interfere in any way with the operation of the
Building or with the occupancy or activities of any other tenant.
2. License Fees. Tenant agrees to pay Landlord a license fee for use of
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the Conduit Room and the Connecting Conduit, which initially shall be (a) a
one-time participation fee of $12,000 for use of the Conduit Room, plus (b)
installation costs in the amount of $11,100 for the Connecting Conduit and for
the Landlord Installations assigned to Tenant in the Conduit Room (not including
Tenant's cable, wiring, or connecting lines in the Connecting Conduit and the
Conduit Room). The additional installation amounts of section b shall be due and
payable within 30 days of the actual installation date. (No portion of such
amounts shall be refundable if the Lease or this license is terminated for any
reason.)
After Tenant's initial payment, the license fee for the Conduit Room and
the Connecting Conduit shall be $500 per month, subject to adjustment as
provided below. Such license fee shall be due and payable to Landlord on the
first day of each month or portion of a calendar month throughout the balance of
the Lease term, unless and until this license is revoked by Landlord in
accordance with Section 5 below. (Any such revocation shall not affect the
balance of the Lease, except that Landlord may treat any default by Tenant
hereunder as a default under the Lease.) Such license fee shall be paid together
with Tenant's Base Rent and other monthly charges, with the first such
installment of the license fee due on the Effective Date. The monthly license
fee for any partial calendar month shall be equitably prorated, as calculated by
Landlord in its reasonable discretion. In addition to the monthly charges stated
above, Tenant shall be obligated to pay for any power usage on a monthly basis
if Tenant requires equipment to be hooked up to a power source.
The amount of the monthly license fee shall be adjusted as of each January
1 during the Lease term. For purposes of calculating such adjustment, the
Consumer Price Index for All Urban Consumers, U.S. City Average, All Items
(1967=100), unadjusted (herein the "Index") published by the Bureau of Labor
Statistics of the United States Department of Labor for the month during which
the Effective Date occurs shall be the base Index figure (the "Base Index"). The
Base Index shall be compared to the Index figure for December of each year
during the term of the Lease, including the initial partial calendar year during
which the Effective Date occurs. In the event that the Index figure for December
of any year during the term of the Lease shall be greater than the Base Index,
then in addition to the monthly license fee, Tenant shall pay to Landlord a
monthly amount equal to the same percentage increase in the monthly license fee
as the percentage increase in the Index for
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such December over the Base Index. Such amount shall be payable monthly
commencing with the payment of the license fee for the January immediately
following such December.
In the event that the Index for any December during the term of the Lease
is not yet available upon the date that any installment of the monthly license
fee is due, Tenant shall continue paying the monthly license fee, as previously
adjusted, in the amount applicable for such December until the Index for that
month is published, whereupon Tenant shall immediately pay Landlord the
adjustments which would have been due in the months following such December had
the Index for such December been available. In the event that publication of the
Index is discontinued, Landlord and Tenant agree that the index of consumer
prices which is most closely analogous to the Index shall be used in place of
the Index for calculation of the adjustments payable hereunder. In the event
that the referents or techniques employed in the calculation of the Index shall
be modified and such modification would have resulted in a different figure for
the Base Index, Landlord and Tenant agree that the Base Index shall be
appropriately adjusted and that the Index, as modified, shall be used as
provided hereunder.
3. INDEMNITY AND WAIVER. Tenant hereby agrees to indemnify and hold
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harmless Landlord and its partners, its agent Paramount Group, Inc. and their
respective officers, directors, shareholders, agents and employees
(collectively, the "Landlord Group") from and against any and all claims
(including but not limited to claims for bodily injury or property damage),
actions, mechanic's liens, losses, liabilities, and expenses (including
reasonable attorney fees and costs of defense by Landlord's legal counsel)
(collectively, "Claims"), which may arise from the installation, operation, use,
maintenance or removal of conduit, cable, wiring, connecting lines, equipment or
other property pursuant to this Amendment or from Tenant's use of the Conduit
Room, the Connecting Conduit, or the Landlord Installations. Similarly, Tenant
shall pay upon demand by Landlord the costs to repair any physical damage to the
Building caused by such installation, operation, use, maintenance or removal.
Tenant hereby waives and releases the Landlord Group from any Claims Tenant may
have at any time (including but not limited to Claims relating to interruptions
in services) arising out of or relating in any way to the installation,
operation, use, maintenance, or removal of conduit, cable, wiring, connecting
lines, equipment or other property described in this Amendment or Tenant's use
of the Conduit Room, the Connecting Conduit, or the Landlord Installations,
whether or not caused by the negligence of any member of the Landlord Group or
Landlord's contractors. Such waiver and release shall not apply to Claims to the
extent caused by Landlord's wilful misconduct. However, in no event shall
Landlord or any member of the Landlord Group be liable to Tenant for lost
profits or consequential, incidental or punitive damages of any kind.
4. REMOVAL OF CABLE, WIRING AND CONNECTING LINES. Tenant agrees that,
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upon the termination of this license as described in Section 5 below, Tenant
(or, at Landlord's election, the contractor designated by Landlord) shall
promptly remove, at Tenant's sole cost and expense, all cable, wiring,
connecting lines, and other installations, equipment or property installed or
placed by or for Tenant in the Conduit Room or the Connecting Conduit (excepting
the Connecting Conduit itself and the Landlord Installations, which shall remain
the property of Landlord), and restore those portions of the Building damaged by
such removal to their condition immediately prior to the installation or
placement of such items. If Tenant fails to promptly remove all such items
pursuant to this Section 4, or if Landlord elects to have such work performed by
Landlord's contractor, Landlord may remove such items and restore those portions
of the Building damaged by such removal to their condition immediately prior to
the installation or placement of such items, in which case Tenant agrees
promptly to pay Landlord's reasonable costs of removal and restoration,
including Landlord's administrative fee.
5. NO LEASE OR EASEMENT OF CONDUIT ROOM OR CONNECTING CONDUIT:
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TERMINATION OF LICENSE. Tenant acknowledges that the rights granted to Tenant
- ----------------------
hereunder do not constitute a lease of any portion of the Conduit Room, the
Connecting Conduit or the Landlord Installations nor an easement, but rather
constitute a non-exclusive license for use in common with others. Such license
is revocable by Landlord in Landlord's sole discretion upon any default by
Tenant under the Lease which is not cured within the applicable cure period.
Landlord shall retain such rights of revocation notwithstanding any expenditure
of money on the installations described herein or other actual or alleged
reliance by Tenant. Such revocation shall be made by written notice from
Landlord to Tenant. The license shall terminate in any event, without notice
from Landlord, upon the expiration or termination of the Lease. Such license is
personal to Tenant, and Tenant's rights hereunder may not be assigned (except in
connection with a permitted assignment of Tenant's entire interest in the
Lease), sub-licensed, or otherwise transferred in any fashion, regardless of
whether such an arrangement is called an assignment, a sub-license, a co-
location agreement or any other name. Tenant agrees not to permit any third
party to place, use or operate their own equipment, wiring, cabling or
connecting lines in or about Tenant's Landlord Installations or Connecting
Conduit. Any default by Tenant under this Amendment shall be deemed to be a
default under the Lease. The license fee described in Section 2 above shall be
deemed to be additional rent for the Premises described in the Lease, and Tenant
acknowledges that the availability of the license enhances the value of those
Premises. Tenant shall remain obligated for such additional rent for the balance
of
4
the Lease term, and shall remain obligated for Tenant's other obligations under
this Amendment, regardless of whether Tenant actually makes use of the license,
or whether Tenant surrenders the license, or whether the license is terminated
due to Tenant's default under the Lease.
6. Applicability of Other Provisions. Except as explicitly provided
---------------------------------
otherwise herein, Tenant's obligations under the Lease for the protection of the
Building, Landlord, the Landlord Group, and third parties, including but not
limited to Tenant's obligations regarding maintenance, repairs, mechanic's
liens, insurance, attorneys' fees and costs of suit, shall apply in the same
fashion with respect to Tenant's use of the Conduit Room, the Connecting Conduit
and the Landlord Installations as they do with respect to Tenant's use of the
Premises.
7. Miscellaneous. This Amendment supersedes all prior or contemporaneous
-------------
understandings, negotiations, or agreements between the parties, whether written
or oral, with respect to its subject matter. The Lease, as amended herein, may
be further amended only in a writing signed by both Landlord and Tenant.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
and at the place first written above.
LANDLORD: ONE WILSHIRE ARCADE IMPERIAL, LTD.
a california Limited partnership
By: Paramount Group, Inc., Its Agent
By: /s/ Daniel K. Brown
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Daniel K. Brown
Its Director Property Management Western Region
-------------------------------------------
By:_____________________________________________
Its ___________________________________________
TENANT: PRIMECALL, INC.
a Washington corporation
BY: /s/ Mike Sims
---------------------------------------------
Mike Sims
Its COO
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By:________________________________________________
Its _______________________________________________
5
[LOGO OF PARAMOUNT GROUP, INC. APPEARS HERE]
ONE WILSHIRE BUILDING
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CONDUIT ("MEET POINT") ROOM RULES
---------------------------------
The Meet Point Room is a conduit room located on the fourth floor of the
One Wilshire Building located at 624 S. Grand Avenue, Los Angeles, California
90017 (the "Building") for the special purpose of facilitating interconnections
between various telecommunications providers and users who currently hold
licenses with the Building for the use of such facilities ("Participants"). As
a condition to maintaining their license and to the ongoing use of the Meet
Point Room, all Participants must comply with the Meet Point Room set forth
herein and as may be adopted or revised by the Building in its reasonable
discretion from time to time.
These Meet Point Room Rules are in addition to the terms, convenants, and
conditions of any agreement (including but not limited to a lease) between
Participant and the Building for use of the Meet Point Room. In the event these
Rules conflict with any provision of such agreement, such agreement shall
control.
The Building may waive any one or more of these Meet Point Room Rules for
the benefit of a Participant, but no such waiver by the Building shall be
construed as a waiver of such Rules in favor of anyone other than such
Participant for whose benefit such waiver was expressly intended, nor prevent
the Building from thereafter enforcing such Rules against such Participant or
any or all of the other Participants.
The Building reserves the right to make such other and reasonable Meet
Point Room Rules as, in its judgement, may from time to time be necessary or
desirable. Participant agrees to abide by all such Meet Point Room Rules as
stated herein and any additional rules and regulations which are adopted.
1. Participants must furnish the Building with the names (and other necessary
identification as Building may require) of its personnel who are authorized
by Participant to enter the Meet Point Room. Participants are responsible
for keeping such authorized user list current.
2. Participants wishing to enter into the Meet Point Room must sign in at the
Meet Point Room log book located at the Building Security Desk.
3. Each person wishing to enter the Meet Point Room must be on the authorized
user list. Positive proof of identity is required before entrance to the
Meet Point Room is permitted. A driver's license or other authenticated
photograph identification is the only acceptable form of positive proof.
Such form of identification will be held as security until Participant
completes Participant's activities in the Meet Point Room.
4. Each person wishing to enter the Meet Point Room must obtain a security
access card from Building Security each time he or she wishes to enter. On
entering or leaving the Meet Point Room, Participant must make sure the
door is shut and not left ajar.
5. If Participant intends to perform cross-connect work in the Meet Point
Room, upon entry Participant must submit a fully executed (by Participant
and the Building's authorized representative) Cross-Connect Authority Form
in the form provided by the Building.
6. Upon leaving the Meet Point Room, Participant must sign out in the Meet
Point Room log book at which time Participant's photo identification will
be returned.
7. All activities in the Meet Point Room must be in compliance with the law
including all applicable local, state, and federal laws, rules, codes and
regulations.
CRR-1
8. Participants desiring to interconnect to another Participant's cross-
connect array must negotiate such interconnection directly with such other
Participant and the Building shall have no obligations in that regard.
9. All cross-connects must be accomplished utilizing Building-standard cable
and wire and following approved procedures.
10. All wiring shall be routed through the furnished channels, raceways, etc.
All cable shall be dressed-in and secured so as to ensure a professional
appearance, run straight and level, with 90 degree corners where possible.
Where to wraps are used, the end shall be cut to preserve the professional
appearance.
11. Groups of cable routed to the Meet Point Room shall remain bundled together
to the degree possible for easy indentification.
12. All cables must be clearly labeled utilizing Building-provided tags.
13. The Meet Point Room must be kept clean and free of debris at all times.
14. Tampering in any way with other Participants' circuits and cross-connects
is not permissible and is grounds for immediate revocation of Participant's
Meet Point Room rights. All other infractions of Meet Point Room Rules must
be corrected within 24 hours of notification.
15. If circuit tampering is detected at any time by any Participant, it must be
reported immediately to the Building Security Desk.
16. Notification of infraction is accomplished by Building Management's
delivery of a written warning to the Participant.
17. Receipt of three (3) warnings within a six-month period is cause for
immediate revocation of Meet Point Room participation rights.
18. Meet Point Room participation rights are subject to revocation for any
default under the agreement between the Building and Participant regarding
Participant's use of the Meet Point Room.
19. Upon expiration or revocation of Meet Point Room participation rights,
Participant must make arrangements to vacate the Meet Point Room and remove
all cross-connects associated with Participant's assigned array(s) within
30 calender days of notification.
CRR-2
Amendment for Conduit Use
7/7/97
Meet Room
Pay one time $12,000.00 participation fee plus installation costs of $11,000.00.
Due 30 Days after actual installation date. The above fees are non refundable.
After above payment, a $500.00 a month license fee will be due on the 1st of
each month, through term of lease will be due.
The license fee rate will be review in the month of January yearly using factors
outlined in the agreement.
PARAMOUNT GROUP, INC.
OFFICE LEASE
(CALIFORNIA)
TABLE OF CONTENTS
SUMMARY OF LEASE TERMS...................................................... 1
AGREEMENT................................................................... 3
1. PREMISES......................................................... 3
2. TERM............................................................. 3
3. RENT............................................................. 3
4. RENT ESCALATION.................................................. 3
5. TAX ON TENANT'S PROPERTY; OTHER TAXES............................ 6
6. SECURITY DEPOSIT................................................. 7
7. LATE PAYMENTS.................................................... 7
8. USE OF PREMISES.................................................. 7
9. BUILDING SERVICES................................................ 8
10. CONDITION OF PREMISES............................................ 9
11. DAMAGE TO PREMISES OR BUILDING................................... 9
12. EMINENT DOMAN.................................................... 10
13. DEFAULT.......................................................... 11
14. REMEDIES UPON DEFAULT............................................ 12
15. SURRENDER OF PREMISES; REMOVAL OF PROPERTY....................... 13
16. COSTS OF SUIT; ATTORNEYS' FEES; WAIVER OF JURY TRIAL............. 14
17. ASSIGNMENT AND SUBLETTING........................................ 15
18. TRANSFER OF LANDLORD'S INTEREST.................................. 18
19. HOLDING OVER..................................................... 18
20. NOTICES.......................................................... 18
21. QUIET ENJOYMENT.................................................. 18
22. TENANT'S FURTHER OBLIGATIONS..................................... 18
23. ESTOPPEL CERTIFICATE BY LESSEE................................... 19
24. SUBORDINATION AND ATTORNMENT..................................... 19
25. RIGHTS RESERVED TO LANDLORD...................................... 19
26. FORCE MAJEURE.................................................... 20
27. WAIVER OF CLAIMS; INDEMNITY...................................... 20
28. INSURANCE........................................................ 21
29. FIXTURES, TENANT IMPROVEMENTS AND LATERATIONS.................... 22
30. MECHANIC'S LIENS................................................. 23
31. ALTERNATE SPACE.................................................. 23
32. HAZARDOUS MATERIALS.............................................. 23
33. MISCELLANEOUS.................................................... 24
34. "AS IS" CONDITION................................................ 26
35. TENANT'S SUPPLEMENTAL AIR-CONDITIONING........................... 27
EXHIBITS AND RIDERS
PARAMOUNT GROUP, INC
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OFFICE LEASE
------------
(California)
THIS LEASE is made as of the 10th day of June, 1996, between One
Wilshire Arcade Imperial, Ltd., a California Limited Partnership, by Paramount
Group, Inc., a Delaware corporation, its agent (hereinafter called "Landlord"),
and Primecall, Inc., a Washington corporation (hereinafter called "Tenant").
SUMMARY OF LEASE TERMS
----------------------
A. Addresses:
1. Tenant's Premises and Notice Address: 624 South Grand Avenue, Suite
2840, Los Angeles,
CA 90017
2. Landlord's Notice Address: 642 South Grand Avenue, Suite
1207, Los Angeles, CA 90017
With copy to: Paramount Group, Inc., 1633
Broadway, Suite 1801, New
York, NY 10019
3. Landlord's Address for Rent Payments: One Wilshire Arcade Imperial,
Ltd., File #53077, Los
Angeles, CA 90074-3077
B. Approximate Rentable Area of the Premises:
1,500 rentable square feet. The parties agree that such figure is only a
reasonable estimate of the area of the Premises. The figures in items E, G,
H, and J below and the other provisions of this Lease shall not be adjusted
due to any difference between the actual area of the Premises and the
estimated area shown above.
C. Lease Term: 10 years, 0 months.
D. 1. Estimated Commencement Date: July 1, 1996.
2. Commencement Date: The later of the following 2 dates:
(a) July 1, 1996; or
(b) The date upon which Landlord tenders possession of the Premises
to Tenant.
E. Schedule of Monthly Base Rents:
The following schedule of monthly Base Rents shall apply during the term of
the Lease, subject to adjustments pursuant to the Rent Escalation Rider to the
Lease regarding increases in the Consumer Price Index:
Monthly Monthly
Period Base Rent Rent Credit
------ --------- -----------
From July 1, 1996 to Sept. 30, 1996 $3,375.00 $3,375.00
From Oct 1, 1996 to June 30, 2006 $3,375.00 None
The Base Rent for the period from October 1, 1996 to December 31, 1996,
shall be prepaid by Tenant upon execution of this Lease. If the actual
Commencement Date is before or after the Estimated Commencement Date, then all
dates set forth above shall be correspondingly accelerated or delayed, as the
case may be. Base Rent for any partial calendar month shall be equitably
prorated as calculated by Landlord in its reasonable discretion. In the event of
any default by Tenant under this Lease which is not cured within the applicable
cure period set forth in Section 13.2, Tenant shall be obligated to pay to
Landlord, without any further notice from Landlord, a sum equal to all rent
credits previously credited to Tenant pursuant to the above schedule, and no
further rent credits shall be applicable for the balance of the Lease term.
F. Base Years for Expenses: Real Estate Taxes-1996-1997; Operating and
Utility Costs-1996.
G. Tenant's "Percentage Share" of Real Estate Taxes, Operating and
Utility Costs: 0.2634%
H. Security Deposit: $3,375.00.
I. Permitted Use: Telecommunications business.
J. Maximum Tenant Improvement Allowance: None. Tenant to take space "as
is" as described in Section 34.
K. Tenant's Parking Allotment: 1 parking space.
L. Landlord's Brokers: None.
M. Riders:
The following exhibits, riders and addenda are attached to and are
part of this Lease:
Exhibit A - Floor Plan of Premises
Exhibit B - Rules and Regulations
Parking Space Rider
Rent Escalation Rider
Telecommunications Conduit Rider
Emergency Generator Rider
Extension Option Rider
N. Guaranty: Not applicable.
2
AGREEMENT
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1. PREMISES. Landlord hereby leases the Premises to Tenant and Tenant
hereby hires and takes the Premises from Landlord. The Premises are located at
the address set forth in Section A(1) on page 1 and are more particularly shown
on Exhibit "A" attached hereto and incorporated herein by this reference. The
office building in which the Premises are located is referred to herein as the
"Building."
2. TERM.
2.1 The term of this Lease shall commence on the "Commencement Date"
indicated in Section D on Page 1 and shall extend for the period set forth in
Section C on Page 1. In the event that Landlord, for any reason, cannot tender
possession of the Premises to Tenant on or before the "Estimated Commencement
Date" indicated in Section D on Page 1, this Lease shall not be void or
voidable, nor shall Landlord be liable to Tenant in any way as a result of such
failure to tender possession. In the event that Landlord cannot tender
possession of the Premises to Tenant for any reason other than the acts or
omissions of Tenant, Tenant's obligation to pay rent hereunder shall be deferred
by a period of time equal to the delay in Landlord's delivery of possession not
caused by Tenant. If such inability to tender possession of the Premises for
reasons other than the acts or omissions of Tenant continues for a period in
excess of 90 days after the Estimated Commencement Date, Tenant shall have the
right, exercisable by notice to Landlord, to terminate this Lease, but the
suspension of rent obligations and the right of termination pursuant to this
Section 2.1 shall be Tenant's sole remedies in the circumstances herein
described.
2.2 In the event that Tenant is allowed to enter into possession of the
Premises prior to the Commencement Date, such possession shall be deemed to be
pursuant to, and shall be governed by, the terms, covenants and conditions of
this Lease, including without limitation the covenant to pay rent, as though the
Commencement Date occurred upon the date of taking of possession by Tenant.
2.3 In the event that the Commencement Date falls on other than the first
day of a month, rent for any initial partial month of the term hereof shall be
appropriately prorated; and if the date of commencement of Tenant's rent
obligations is delayed, pursuant to Section 2.1, the end of the term hereof
shall be correspondingly delayed. At the request of either party hereto, both
parties shall execute a memorandum confirming the date of commencement of
Tenant's rent obligations.
3. RENT. Beginning on the Commencement Date (subject to adjustment
pursuant to Section 2.1 above), the base rent ("Base Rent") for the Premises
shall be in accordance with the Schedule of Monthly Base Rents set forth in
Section E on Page 2. Each installment of Base Rent shall be payable in advance
on the first day of each and every month throughout the term of this Lease.
Tenant agrees to pay all rent, without offset, demand or deduction of any kind,
to Landlord by mail to the address set forth in Section A(3) on page 1 or in
such manner, to such other person or at such other place as Landlord may from
time to time designate. Tenant agrees that no payment made to Landlord by check
or other instrument shall contain a restrictive endorsement of any kind; and if
any such instrument should contain a restrictive endorsement in violation of the
foregoing, that endorsement shall have no legal effect whatever, notwithstanding
that such item is processed for payment.
4. RENT ESCALATION.
4.1 Tenant shall pay, as monthly rent hereunder, in addition to the Base
Rent, the sums provided in this Section 4. Tenant shall be advised of any
change, from time to time, in rent escalation payments required hereunder by
written notice from Landlord, which shall include information in such detail as
Landlord may reasonably determine to be necessary in support of such change.
Tenant shall have 30 days after the receipt of any such notice to protest the
change indicated therein, and Tenant's failure to make such protest in a written
notice to Landlord within such 30-day period shall be conclusively deemed to be
Tenant's agreement to such charges. Notwithstanding any such protest all rent
escalation payments falling due after service of such notice shall be made in
accordance with such notice until the protest has been resolved, whereupon any
necessary adjustment shall be made between Landlord and Tenant. Any audit
arising out of such a protest by Tenant shall be done, at Tenant's expense, in
accordance with generally accepted auditing and management standards by a major
public accounting firm selected by Tenant and approved by Landlord in its
reasonable discretion. Such audit shall be performed at the offices of Paramount
Group, Inc. in New York City or at such other location in the United States as
Landlord may select from time to time for the maintenance of its accounting
records for the Building.
4.2 Following the first December 31 during the term of the Lease, Tenant
shall pay Landlord in a single lump sum upon billing therefor, Tenant's
Percentage Share (as defined in Section G on Page 2 of the Lease) of each of the
following amounts: (1) the amount (if any) by which Real Estate Taxes for the
then current tax fiscal year exceed the Real
3
Estate Taxes for the Base Year for Real Estate Taxes set forth in Section F on
Page 2; (2) the amount (if any) by which Operating Costs for the just completed
calendar year exceed the Operating Costs for the Base Year for Operating Costs
set forth in Section F on Page 2; and (3) the amount (if any) by which Utility
Costs for the just completed calendar year exceed the Utility Costs for the Base
Year for Utility Costs set forth in Section F on Page 2. At the same time Tenant
shall also pay to Landlord one-twelfth of Tenant's Percentage Share of such
amounts for each month that has commenced since December 31 as estimated
payments towards Tenant's share of the Real Estate Taxes, Operating Costs, and
Utility Costs for the following year. Following each succeeding December 31,
Landlord again shall determine in the same fashion the increase or decrease (if
any) in annual Real Estate Taxes, Operating Costs, and Utility Costs over or
under those for the previous year. If there is an increase in one or more of the
three categories, Tenant shall pay to Landlord in a single lump sum upon billing
Tenant's Percentage Share of the increase plus one-twelfth of Tenant's
Percentage Share of such increase for each month that has then commenced in the
new calendar year. If there is a decrease in one or more of the three
categories, Landlord shall refund to Tenant or, at Landlord's option, credit
against the next rent falling due under the Lease the amount of the overpayment
made by Tenant during the preceding calendar year, provided that the amount of
such refund or credit shall in no event exceed the total payments previously
made by Tenant for such calendar year toward Tenant's Percentage Share of excess
charges for the category in question. Thereafter, with each month's Base Rent
until the next adjustment hereunder, Tenant shall pay one-twelfth of Tenant's
Percentage Share of each of the following amounts: (I) the excess (if any) of
annual Real Estate Taxes (based on the then-current fiscal year) over the Base
Year Real Estate Taxes; (II) the excess (if any) of annual Operating Costs
(based on the preceding calendar year) over the Base Year Operating Costs; and
(III) the excess (if any) of annual Utility Costs (based on the preceding
calendar year) over Base Year Utility Costs. The Real Estate Taxes for any
partial fiscal year at the end of the Lease term and the Operating Costs and
Utility Costs for any partial calendar year at the end of the Lease term shall
be appropriately prorated.
For purposes hereof, "Real Estate Taxes" shall include any form of
assessment, license fee, license tax, business license fee, commercial rental
tax, levy, penalty, charge, tax or similar imposition (other than net income,
inheritance or estate taxes) imposed by any authority having the direct or
indirect power to tax, including any city, county, state or federal government,
or any school, agricultural, lighting, drainage, flood control or other special
district thereof, as against any legal or equitable interest of Landlord in the
Premises or in the real property of which the Premises and the Building are a
part, including, but not limited to, the following:
(i) Any tax on Landlord's "right" to rent or "right" to other
income from the Premises or as against Landlord's business of leasing the
Premises;
(ii) Any assessment, tax, fee, levy or charge in substitution,
partially or totally, of any assessment, tax, fee, levy of charge previously
included within the definition of Real Estate Taxes, it being acknowledged by
Tenant and Landlord that Proposition 13 was adopted by the voters of the State
of California in the June, 1978 Election and that assessments, taxes, fees,
levies and charges may be imposed by governmental agencies for such services as
fire protection, street, sidewalk and road maintenance, refuse removal and for
other governmental services formerly provided without charge to property owners
or occupants. It is the intention of Tenant and Landlord that all such new and
increased assessments, taxes, fees, levies and charges be included within the
definition of "Real Property Taxes" for the purpose of this Lease;
(iii) Any assessment, tax, fee, levy or charge allocable to or
measured by the area of the Premises or the rent payable hereunder, including,
without limitation, any gross income tax or excise tax levied by the State, City
or Federal government, or any political subdivision thereof, with respect to the
receipt of such rent, or upon or with respect to the possession, leasing,
operating, management, maintenance, alteration, repair, use or occupancy by
Tenant of the Premises, or any portion thereof;
(iv) Any assessment, tax, fee, levy or charge upon this transaction
or any document to which Tenant is a party, creating or transferring an interest
or an estate in the Premises;
(v) Any assessment, tax, fee, levy or charge by any governmental
agency related to any transportation plan, fund or system instituted within the
geographic area of which the Building is a part; or
(vi) Reasonable legal and other professional fees, costs and
disbursements incurred in connection with proceedings to contest, determine or
reduce real property taxes.
The definition of "Real Estate Taxes," including any additional tax the
nature of which was previously included within the definition of "Real Estate
Taxes," shall include any increases in such taxes, levies, charges or
assessments occasioned by increases in tax rates or increases in assessed
valuations, whether occurring by sale or otherwise.
4
As used in this Lease, the term "Operating Costs" shall mean all costs and
expenses of management, operation, maintenance, overhaul, improvement or repair
of the Building, the common areas and the site, as determined by standard
accounting practices, including the following costs by way of illustration but
not limitation:
(a) Any and all assessments imposed with respect to the Building,
common areas, and/or the site on which the Building is located, pursuant to any
covenants, conditions and restrictions affecting the site, common areas or
Building;
(b) Any costs, levies or assessments resulting from statutes or
regulations promulgated by any governmental authority in connection with the
use or occupancy of the Building or the Premises;
(c) Costs of all insurance obtained by Landlord;
(d) Wages, salaries and other labor costs (including but not
limited to social security taxes, unemployment, taxes, other payroll taxes
and governmental charges and the costs, if any, of providing disability,
hospitalization, medical welfare, pension, retirement or other employee
benefits, whether or not imposed by law) of employees, independent contractors
and other persons engaged in the management, operation, maintenance, overhaul,
improvement or repair of the Building;
(e) Building management office and storage rental;
(f) Management and administrative fees (which Tenant acknowledges
are presently 6% of accured gross revenues of the Building and which may be
adjusted from time to time);
(g) Supplies, materials, equipment and tools;
(h) Costs of, and appropriate reserves for, repair, painting,
resurfacing, and maintenance of the Building, the common areas, the site and
the parking facilities, and their respective fixtures and equipment systems,
including but not limited to the elevators, the structural portions of the
Building, and the plumbing, heating, ventilation, air-conditioning, telephone
cable riser, and electrical systems installed or furnished by Landlord;
(i) Depreciation on a straight-line basis and rental of personal
property used in maintenance;
(j) Amortization on a straight-line basis over the useful life
(together with interest at the interest rate defined in Subsection 33.9
of this Lease on the unamortized balance) of all costs of a capital nature
(including, without limitation, capital improvements, capital replacements,
capital repairs, capital equipment and capital tools);
(1) reasonably intended to produce a reduction in Operating
Costs, Utility Costs or energy consumption; or
(2) required under any governmental or quassi-governmental law,
rule, order, ordinance or regulation that was not applicable to the Building at
the time it was originally constructed; or
(3) for repair or replacement of any Building equipment needed
to operate the Building at the same quality levels as prior to the replacement;
(k) Costs and expenses of gardening and landscaping;
(l) Maintenance of signs (other than signs of tenants of the
Building);
(m) Personal property taxes levied on or attributable to personal
property used in connection with the Building, the common areas, or the site;
(n) Costs of all service contracts pertaining to the Premises, the
Building or the site;
(o) Reasonable accounting, audit, verification, legal and other
consulting fees;
(p) Costs and expenses of lighting, janitorial service, cleaning,
refuse removal, security and similar items, including appropriate reserves;
5
(q) Any costs incurred with respect to a transportation system
manager, rider share coordinator or any private transportation system
established for the benefit of tenants in the Building, whether or not imposed
by any governmental authority;
(r) If the Building has a helipad, it costs to the extent not covered
by users fees; and
(s) Fees imposed by any federal, state or local government for fire
and police protection, trash removal or other similar services which do not
constitute Real Estate Taxes.
The following shall be excluded from Operating Costs: federal and state
income taxes imposed on Landlord's net income; any and all costs or expenses to
procure tenants for the Building, including but not limited to brokerage
commissions, legal fees,and costs of remodeling suites; mortgage or debt
service; and depreciation, except that amortization or improvements of the type
specified in Subsection (j)above shall in no event be considered "depreciation".
For purposes hereof, "Utility Costs": shall include all charges, surcharges
and other costs of all utilities paid for by Landlord in connection with the
Premises and/or Building, cost of furnishing gas, electricity and other fuels or
power sources to the Premises and/or Building, and costs of furnishing water and
sewer services to the Premises and/or Building.
The term "Building" as used in this Section 4.2 shall be deemed to include
not only the Building but also any parking facility owned, leased or operated by
Landlord in order to meet the parking requirements of the Building.
If the average occupancy of the rentable area of the Building during the
Tenant's Base Year for Operating and Utility Costs as set forth in Section F on
page 2 or during any other calender year of the lease term is less than 90 % of
the total rentable area of the Building, the Operating Costs and Utility Costs
shall be adjusted by Landlord for such calendar year, prior to the pass-through
of Operating Costs and Utility Costs to Tenant pursuant to this Section 4.2, to
reflect what they would have been had 90% of the rentable area been occupied
during that year. In making such calculation, the Landlord's reasonable opinion
of what portion, if any, of each costs and affected by changes in occupancy
shall be binding upon the parties.
5. TAX ON TENANT'S PROPERTY; OTHER TAXES.
5.1 Tenants shall be liable for, and shall pay at least 10 days before
delinquency, and Tenant hereby indemnifies and holds Landlords harmless from
and against any personal property, fixtures, machinery, equipment, apparatus
systems and appurtenances placed by Tenant in or about, or utilized by Tenant
in, upon or in connection with, the Premises ("Equipment Taxes"). If any
Equipment Taxes are levied against Landlord or Landlord's property or if the
assessed value of Landlords property is increased by the inclusion therein of a
value placed upon such personal property, fixtures, machinery, equipment,
apparatus, systems or appurtenances of Tenant, and if Landlord, after written
notice to Tenant, pays the Equipment Taxes or taxes based upon such an increased
assessment (which Landlord shall have the right to do regardless of the validity
of such levy, but only under proper protest if requested by Tenant prior to such
payment and if payment under protest is permissible). Tenant shall pay to
Landlord upon demand, as additional rent hereunder, the taxes so levied against
Landlord or the proportion of such taxes resulting from such increased in the
assessment; provided however, that in any such event Tenant shall have the
right, in the name of Landlord and with Landlord's full cooperation, but at no
cost to Landlord, to bring suit in any court of competent jurisdiction to
recover the amount of such tax so paid under protest, and any amount so
recovered shall belong to Tenants.
5.2 If the tenant improvements in the Premises, whether installed and/or
paid for by Landlord or Tenant and whether or not affixed to the real property
so as to become a part thereof, are assessed for real property tax purposes at a
valuation higher than the valuation at which tenant improvements conforming to
Landlord's building standards in other space in the Building are assessed, then
the real property taxes and assessments levied against Landlord or Landlord's
property by reason of such excess assessed valuation shall be deemed to be
Equipment Taxes and shall be governed by the provisions of Section 5.1. Any such
amounts, and any similar amounts attributable to excess improvements by other
tenants of the Building and Recovered by Landlords from such other tenants under
comparable lease provisions, shall not be included in Real Estate Taxes for
purposes of rent escalation under Section 4 of this Lease.
5.3 Tenant shall pay, as additional rent hereunder, upon demand and in
such manner and at such times as Landlord shall direct from time to time by
written notice to Tenant, any excise, sales, privilege or other tax, assessment
or other charge (other than income or franchise taxes) imposed, assessed or
levied by any governmental or quasi-governmental authority or agency upon
Landlord on account of this Lease, the rent or other payments made by Tenant
6
hereunder, any other benefit received by Landlord hereunder, Landlord's business
as a lessor hereunder, or otherwise in respect of or as a result of the
agreement or relationship of Landlord and Tenant hereunder.
6. SECURITY DEPOSIT.
6.1 A deposit (the "Security Deposit") in the amount set forth in Section
H on page 2 shall be paid by Tenant upon execution of this Lease and shall be
held by Landlord without liability for interest and as security for the
performance by Tenant of Tenant's covenants and obligations under this Lease, it
being expressly understood that the Security Deposit shall not be considered an
advance payment of rent or a measure of Landlord's damages in case of default by
Tenant. Upon the occurrence of any breach or default under this Lease by Tenant,
Landlord may, from time to time, without prejudice to any other remedy, use the
Security Deposit or any portion thereof to the extent necessary to make good any
arrearages of rent or any other damage, injury, expense, or liability caused to
Landlord by such breach or default. Following any application of the Security
Deposit, Tenant shall pay to Landlord on demand an amount to restore the
Security Deposit to its original amount. In the event of bankruptcy or other
debtor relief proceedings by or against Tenant, the Security Deposit shall be
deemed to be applied first to the payment of rent and other charges due
Landlord, in the order that such rent or charges become due and owing, for all
periods prior to filing of such proceedings. Landlord shall not be required to
keep the Security Deposit separate from its general funds. Upon termination of
this Lease any remaining balance of the Security Deposit shall be returned by
Landlord to Tenant within 14 days after termination of Tenant's tenancy.
6.2 (Intentionally deleted.)
7. LATE PAYMENTS. All covenants and agreements to be performed by Tenant
under any of the terms of this Lease shall be performed by Tenant at Tenant's
sole cost and expense and without any abatement of rent. Tenant acknowledges
that the late payment by Tenant to Landlord of any sums due under this Lease
will cause Landlord to incur costs not contemplated by this Lease, the exact
amount of such cost being extremely difficult and impractical to fix. Such costs
include, without limitation, processing and accounting charges, and late charges
that may be imposed on Landlord by terms of any note or other obligation secured
by any encumbrance covering the Premises or the Building of which the Premises
are a part. Therefore, if any monthly installment of rent is not received by
Landlord by the date when due, or if Tenant fails to pay any other sum of money
due hereunder, Tenant shall pay to Landlord, as additional rent, the sum of ten
percent (10%) of the overdue amount as a late charge. Landlord's acceptance of
any late charge, or interest pursuant to Section 33.9, shall not be deemed to be
liquidated damages, nor constitute a waiver of Tenant's default with respect to
the overdue amount, nor prevent Landlord from exercising any of the other rights
and remedies available to Landlord under this Lease or any law now or hereafter
in effect. Further, in the event such late charge is imposed by Landlord for 2
consecutive months for whatever reason, Landlord shall have the option to
require that, beginning with the first payment of rent due following the
imposition of the second consecutive late charge, rent shall no longer be paid
in monthly installments but shall be payable 3 months in advance.
8. USE OF PREMISES. Tenant, and any permitted subtenant or assignee,
shall use the Premises only for the use described in Section 1 on page 2. Any
other use of the Premises is absolutely prohibited. Tenant shall not use or
occupy the Premises in violation of any recorded covenants, conditions and
restrictions affecting the land on which the Building is located nor of any law,
ordinance, rule and regulation. Tenant shall not do or permit to be done
anything which will invalidate or increase the cost of any fire, extended
coverage or any other insurance policy covering the Building or property located
therein and shall comply with all rules, orders, regulations and requirements of
any applicable fire rating bureau or other organization performing a similar
function. Tenant shall promptly upon demand reimburse Landlord as additional
rent for any additional premium charged for any issuance policy by reason of
Tenant's failure to comply with the provision of this Section 8. Tenant shall
not do or permit anything to be done in or about the Premises which will in any
way obstruct or interfere with the rights of other tenants of occupants of the
Building, or injure or annoy them, or use or allow the Premises to be used for
any improper, immoral, unlawful or objectionable purpose, nor shall Tenant
cause, maintain or permit any nuisance in, on or about the Premises. Tenant
shall not commit or suffer to be committed any waste in or upon the Premises and
shall keep the Premises in first class repair and appearance. Tenant shall not
place a load upon the Premises exceeding the average pounds of live load per
square foot of floor area specified for the Building by Landlord's architect,
with any partitions to be considered a part of the live load. Landlord reserves
the right to prescribe the weight and position of all safes, files and heavy
equipment which Tenant desires to place in the Premises so as to distribute
properly the weight thereof. Tenant's business machines and mechanical equipment
which cause vibration or noise that may be transmitted to the Building structure
or to any other space in the Building shall be so installed, maintained and used
by Tenant as to eliminate such vibration or noise. Tenant shall be responsible
for the cost of all structural engineering required to determine structural
load. In any event, unless specifically authorized herein, Tenant shall not
prepare or serve, or authorize the preparation or service of, food or beverages
in the Premises, except only the occasional preparation of coffee, tea, hot
chocolate and other such common refreshments for Tenant and its employees.
Tenant shall not conduct any auction in or about the Premises or the Building
without Landlord's prior written consent.
7
9. BUILDING SERVICES.
9.1 Throughout the term of this Lease, subject to shortage and accidents
beyond Landlord's reasonable control, and subject to reimbursement pursuant to
Section 4.2, Landlord shall repair and maintain all structural elements of the
Building and common areas (including, without limitation, the structural walls,
doors, floor, ceilings, roof, elevators, stairwells, lobby, heating system, air
conditioning system, telephone cable riser for Building-standard service from
the Building's main terminal to the terminal box on the same floor as the
Premises [but excluding Tenant's telephone equipment and the cable and wiring
from such equipment to the terminal box], plumbing and electrical wiring) and
maintain the exterior of the Premises, including grounds, walks, drives and
loading area, if any. Tenant shall reimburse Landlord upon demand as additional
rent hereunder, for the cost of any repairs or extraordinary maintenance
necessitated by acts of Tenant or Tenant's employees, contractors, agents,
licensees or invitees.
9.2 Provided that Tenant is not in default hereunder, subject to
shortages and accidents beyond Landlord's reasonable control, Landlord shall
furnish building standard heating and air conditioning service Monday through
Friday from 8:00 A.M. to 6:00 P.M., and Saturday from 8:00 A:M. to 1:00 P.M.,
except for holidays. No heating or air conditioning will be furnished by
Landlord on Sundays, holidays or during hours other than as set forth above,
except upon prior arrangement with Tenant and at an extra charge as may be
agreed to between Landlord and Tenant. For purposes of this Section 9.2,
"holidays" shall mean and refer to the holidays of Christmas, New Year's Day,
President's Day, Memorial Day, the Fourth of July, Labor Day, Thanksgiving and
the day after Thanksgiving, as those holidays are defined, recognized or
established by governmental authorities or agencies from time to time and such
other days the New York Stock Exchange is closed. Tenant shall install, at its
expense, such additional air conditioning equipment as may be reasonably
determined by Landlord to be necessary in order to maintain building air
conditioning standards resulting from Tenant's installation and operation of
computer equipment or other special equipment or facilities placing a greater
burden on the air conditioning system than would general office use. Landlord
shall furnish electric current to the Premises in amounts reasonably sufficient
for normal business use, including operation of building standard lighting and
operation of typewriters and standard fractional horsepower office machinery.
Tenant agrees that, at all times during the term of this Lease, Tenant's use of
electric current shall never exceed the capacity of the feeders to the Building
or the risers or wiring installation in the Building. Tenant shall not install
or use or permit the installation or use upon or about the Premises of any
computer or electronic data processing or other equipment using current in
excess of 110 volts or requiring power in excess of 500 watts, without the
express prior written consent of Landlord. Tenant shall pay monthly upon billing
as additional rent under this Lease such sums as Landlord's building engineer
may reasonably determine to be necessary in order to reimburse Landlord for the
additional cost of utilities (including, without limitation, electricity, gas
and other fuels or power sources, and water, and Landlord's reasonable costs of
administration) attributable to the operation of additional air conditioning
equipment and any other requirements in excess of those for normal office use by
reason of the operation of computer equipment or other special equipment or
facilities, or attributable to Tenant's conducting business beyond the business
hours described in the first sentence of this Section 9.2. Moreover, at
Landlord's election, Landlord may separately meter at Tenant's expense the
electrical usage of some or all of Tenant's equipment, facilities or Premises.
In such event Tenant shall pay the charges for all such separately metered
electrical usage within 10 days after receipt of a billing therefor. Any such
amounts billed directly to Tenant shall not be included in the Building's
"Utility Costs" for purposes of Section 4 above. Any extra maintenance charges
or service calls attributable to the actions of Tenant (e.g., continual
---
adjustments of the thermostats or the failure to keep window coverings closed as
necessary) shall be payable by Tenant to Landlord upon demand, as additional
rent hereunder.
9.3 Landlord shall furnish unheated water from mains for drinking,
lavatory and toilet purposes drawn through fixtures installed by Landlord, or by
Tenant with Landlord's express prior written consent, and heated water for
lavatory purposes from regular building supply in such quantities as required in
Landlord's judgement for the comfortable and normal use of the Premises. Tenant
shall pay Landlord for additional water which is furnished for any other
purpose. The amount that Tenant shall pay Landlord for such additional water
shall be the average price per gallon charged to the Landlord for the Building
by the entity providing water, increased by 25% to cover Landlord's
administrative expense.
9.4 Landlord shall furnish janitor service (including washing of windows
with reasonable frequency as determined by Landlord) in and about the Premises,
to the extent necessitated by normal office use of the Premises, Monday through
Friday, holidays excepted. Landlord shall have no obligation to furnish janitor
service for any portion of the Premises which is occupied after 7:00 p.m., is
locked or may be used (to the extent permitted under this Lease) for the
preparation, dispensing or consumption of food or beverages or for any purpose
other than general office use, and Tenant shall keep all such portions of the
Premises in a clean and orderly condition at Tenant's sole cost and expense. In
the event that Tenant shall fail to keep such portions of the Premises in a
clean and orderly condition, Landlord may do so and any costs incurred by
Landlord in connection therewith shall be payable by Tenant to Landlord upon
demand, as additional rent hereunder. Tenant shall also pay to Landlord, as
additional rent hereunder, amounts equal to any increase in cost of janitor
service in and about the Premises if such increase in costs is due to (a) use of
the Premises by Tenant during hours other
8
than normal business hours, or (b) location in or about the Premises of any
fixtures, improvements, materials or finish items (including without limitation
wall coverings and floor coverings) other than those which are of the standard
type adopted by Landlord for the Building. Only those persons who have been
approved by Landlord may perform janitorial services.
9.5 Landlord shall furnish passenger and freight elevator service in
common with Landlord and other tenants Monday through Friday from 8:00 A.M. to
6.00 P.M. and Saturday from 8:00 A.M. to 1:00 P.M. Landlord shall provide
limited passenger elevator service daily at all times such normal passenger
service is not furnished.
9.6 Landlord does not warrant that any service will be free from
interruptions caused by repairs, renewals, improvements, changes of service,
alterations, strikes, lockouts, labor controversies, accidents, inability to
obtain fuel, steam, water or supplies or other cause, provided the cause is
beyond the reasonable control of Landlord. Landlord agrees to give Tenant notice
of any extended interruptions of which Landlord has prior knowledge. No
interruption of service shall be deemed an eviction or disturbance of Tenant's
use and possession of the Premises or any part thereof, nor relieve Tenant from
performance of Tenant's obligations under this Lease. Landlord shall not be
liable for any failure to make such repairs or furnish such services unless the
failure shall be reasonably curable by Landlord and nonetheless shall persist
for an unreasonable time after written notice from Tenant of the need for such
repairs or the failure to furnish such service. There shall be no abatement of
rent and no liability of Landlord by reason of any injury to or interference
with Tenant's business arising from the making of any repairs, alterations or
improvements, or provision of any service in or to any portion of the Building,
including the Premises, or in or to the fixtures, appurtenances and equipment
therein; provided that in making such repairs, alterations or improvements or
providing such service Landlord shall interfere as little as reasonably
practicable with the conduct of Tenant's business in the Premises, without,
however, being obligated to incur liability for overtime or other premium
payment to its agents, employees or contractors in connection therewith. If
Tenant's beneficial use of all or a substantial portion of the Premises is
prevented for a period in excess of 3 consecutive business days (excluding
Saturdays, Sundays, and holidays), the Base Rent shall be equitably abated
commencing with the fourth business day and continuing until such use is no
longer prevented. Such abatement, to the extent provided above, shall be
Tenant's sole remedy. Except as provided above, Tenant shall not be entitled to
any abatement or reduction of rent or other remedy by reason of Landlord's
failure to furnish any of the services or Building systems called for by this
Lease when such failure is caused by accident, breakage, repairs, strikes,
lockouts or other labor disturbances or labor disputes of any character, or any
other cause. As a material inducement to Landlord's entry into this Lease,
Tenant waives and releases any rights it may have to make repairs at Landlord's
expense under Sections 1941 and 1942 of the California Civil Code.
10. CONDITIONS OF PREMISES. By occupying the Premises, Tenant shall be
deemed to accept the same and acknowledge that they comply fully with Landlord's
covenants and obligations hereunder, subject to completion of any items which it
is Landlord's responsibility hereunder to furnish and which are listed by
Landlord and Tenant upon inspection of the Premises. Tenant acknowledges that
neither Landlord nor any agent, employee or representative of Landlord has made
any representation or warranty with respect to any matter, including but not
limited to any matter regarding the Building or Premises, the applicable zoning
or the effect of other applicable laws, or the suitability or fitness of the
Building or Premises for the conduct of Tenant's business or any other purpose.
Tenant is relying solely on its own investigations with respect to all such
matters. During the term of this Lease, Tenant shall maintain the Premises in as
good condition as when Tenant took possession, ordinary wear and tear and
repairs which are specifically made the responsibility of Landlord hereunder
excepted, and shall repair all damage or injury to the Building or to fixtures,
appurtenances and equipment of the Building caused by Tenant's installation or
removal of its property or resulting from the negligence or tortious conduct of
Tenant, its employees, contractors, agents, licensees and invitees. In the event
of failure by Tenant to perform its covenants of maintenance and repair
hereunder, Landlord may perform such maintenance and repair, and any amounts
expended by Landlord in connection therewith shall be payable by Tenant to
Landlord upon demand, as additional rent hereunder.
11. DAMAGE TO PREMISES OR BUILDING.
11.1 In the event that the Building should be totally destroyed by fire or
other casualty, this Lease shall terminate. In the event the Premises or a
substantial portion of the Building should be so damaged or destroyed that
rebuilding or repairs cannot, in Landlord's opinion, be completed within 180
days after the date of such damage or Landlord will not receive insurance
proceeds sufficient to cover the costs of such repairs, reconstruction and
restoration (including proceeds from Tenant and/or Tenant's insurance which
Tenant is required to deliver to Landlord pursuant to Subsection 11.2 below),
Landlord may at its option terminate this Lease upon notice to Tenant, or
Landlord may proceed to restore the Building. In the event that such rebuilding
or repairs can, in Landlord's opinion, be completed within 180 days after the
date of such damage and Landlord will receive insurance proceeds sufficient to
cover the costs of such repairs, reconstruction and restoration (including
proceeds from Tenant and/or Tenant's insurance which Tenant is required to
deliver to Landlord pursuant to Subsection 11.2 below), Landlord shall restore
the Building. In the event that Landlord is obligated or elects to restore the
Building, Landlord shall commence to rebuild or repair the Building reasonably
promptly after such
9
damage or destruction and shall proceed with reasonable diligence to restore it
to substantially the condition in which it was immediately prior to the
casualty, except that Landlord shall not be required to rebuild, repair or
replace any part of the partitions, fixtures, alterations, decorations or other
Improvements which may have been constructed by or specifically for Tenant
(except the improvements built by Landlord pursuant to the Landlord's
Improvement Construction Rider, which Landlord shall restore), or by or for
other tenants within the Building. In such event this Lease shall remain in full
force and effect, provided that if Tenant is dispossessed by reason of such
casualty from all or a substantial portion of the Premises for more than 3
consecutive business days, Tenant shall be entitled to a ratable abatement of
the Base Rent during the time and to the extent the Premises are unfit for
occupancy, commencing with the fourth business day; and provided further that
Tenant shall have the right to terminate this Lease upon notice served upon
Landlord prior to actual completion of any necessary restoration of the Premises
if such restoration is not substantially completed within 360 days after the
casualty. Such abatement or termination, to the extent provided above, shall be
Tenant's sole remedy. Notwithstanding the foregoing to the contrary, if the
damage is due to the negligence or wilful misconduct of Tenant or any of
Tenant's agents, employees or invitees, there shall be no abatement of rent.
Except for abatement of rent as provided hereinabove, Tenant shall not be
entitled to any compensation or damages for loss of, or interference with,
Tenant's business or use or access of all or any part of the Premises resulting
from any such damage, repair, reconstruction or restoration.
11.2 In the event of any damage or destruction of all or any part of the
Premises, Tenant shall immediately; (a) notify Landlord thereof; and (b) deliver
to Landlord all insurance proceeds received by Tenant with respect to the
Leasehold improvements and Tenant changes in the Premises to the extent such
items are not covered by Landlord's casualty insurance (excluding proceeds for
Tenant's furniture and other personal property), whether or not this Lease is
terminated as permitted in this Section 11, and Tenant hereby assigns to
Landlord all rights to receive such insurance proceeds. If, for any reason
(including Tenant's failure to obtain insurance for the full replacement cost of
any Tenant changes which Tenant is required to insure pursuant to this Lease),
Tenant fails to receive insurance proceeds covering the full replacement cost of
such Tenant changes which are damaged, Tenant shall be deemed to have
self-insured the replacement cost of such tenant changes, and upon any damage or
destruction thereof, Tenant shall immediately pay to Landlord the full
replacement cost of such items, less any insurance proceeds actually received by
Landlord from Landlord's or Tenant's insurance with respect to such items.
11.3 In the event any holder of a mortgage or deed of trust on the
Building should require that the insurance proceeds payable upon damage or
destruction to the Building by fire or other casualty be used to retire the debt
secured by such mortgage or deed of trust, or in the event any lessor under any
underlying or ground lease should require that such proceeds be paid to such
lessor, Landlord shall in no event have any obligation to rebuild, and at
Landlord's election this Lease shall terminate.
11.4 With the exception of insurance required to be carried by Tenant
under Section 28 of this Lease, and except as provided in Section 11.2, any
insurance which may be carried by Landlord or Tenant against loss or damage to
the Building or to the Premises shall be for the sole benefit of the party
carrying such insurance and under its sole control. Landlord shall not be
required to carry insurance of any kind on Tenant's property and, except by
reason of the breach by Landlord of any of its obligations hereunder, shall not
be obligated to repair any damage thereto or to replace the same.
11.5 In addition to its termination rights in Subsection 11.1 above,
Landlord shall have the right to terminate this Lease if any damage to the
Building or Premises occurs during the last 12 months of the Term of this Lease
and Landlord estimates that the repair, reconstruction or restoration of such
damage cannot be completed within the earlier of (a) the scheduled expiration
date of the Lease Term, or (b) 60 days after the date of such casualty.
11.6 Tenant, as a material inducement to Landlord's entering into this
Lease, irrevocably waives and releases its rights under the provisions of
Sections 1932(2) and 1933(4) of the California Civil Code (and any successor
statutes permitting Tenant to terminate this Lease as a result of any damage or
destruction), it being the intention of the parties hereto that the express
terms of this Lease shall control under any circumstances in which those
provisions might otherwise apply.
12. EMINENT DOMAIN.
12.1 In the event that the whole of the Premises, or so much thereof as to
render the balance unusable to Tenant for the purposes leased hereunder, as
reasonably determined by Landlord, shall be lawfully condemned or taken in any
manner for any public or quasi-public use, or conveyed by Landlord in lieu
thereof (a "Taking"), this Lease and the term hereby granted shall forthwith
cease and terminate on the date of the taking possession by of the condemning
authority (the "Date of Taking").
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12.2 In the event of a taking of a portion of the Premises which does not
result in the termination of this Lease pursuant to Section 12.1, above, the
Base Rent shall be abated in proportion to the part of the Premises so taken.
12.3 In the event that there is a Taking of a portion of the Building
other than the Premises, and if, in the opinion of Landlord, the Taking is so
substantial as to render the remainder of the Building uneconomic to maintain
despite reasonable reconstruction or remodeling, or if it would be necessary to
alter the Building or Premises materially, Landlord may terminate this Lease by
notifying Tenant of such termination within 60 days following the Date of
taking, and this Lease shall end on the date specified in the notice of
termination, which shall not be less than 60 days after the giving of such
notice.
12.4 No temporary Taking of the Building or Premises and/or of Tenant's
rights therein or under this Lease shall terminate this Lease or give Tenant any
right to abatement of rent hereunder. Tenant shall be entitled to receive such
portion or portions of any award made for the temporary use with respect to the
period of the taking which is within the term of this Lease, provided that, if
such taking shall remain in force at the expiration or earlier termination of
this Lease, then Tenant shall pay to Landlord a sum equal to the reasonable
costs of performing Tenant's obligations under Section 15 with respect to
Tenant's surrender of the Premises and, upon such payment, shall be excused from
such obligations. For purposes of this Section 12.4, a temporary taking shall be
defined as a taking for a period of 270 days or less.
12.5 Except for the award in the event of a temporary Taking as
contemplated in Section 12.4, above, Tenant hereby releases and shall have no
interest in, or right to participate with respect to the determination of, any
compensation for any Taking, except only that Tenant shall be entitled to the
portion of any award specifically designated by the condemning authority to be
for any personal property of Tenant included in any such Taking or for any
relocation expenses or business interruption loss incurred by Tenant.
13. DEFAULT.
13.1 The following events shall be deemed to be events of default by
Tenant under this Lease:
(a) If Tenant shall fail to pay any installment of rent or any
other sum required to be paid by Tenant under this Lease as due.
(b) If Tenant shall fail to comply with any term, provision or
covenant of this Lease, other than provisions pertaining to the payment of
money.
(c) If Tenant shall make an assignment for the benefit of
creditors.
(d) If Tenant shall file a petition under any section or chapter
of the federal Bankruptcy Code, as amended from time to time, or under any
similar law or statute of the United States or any State thereof pertaining to
bankruptcy, insolvency or debtor relief, or Tenant shall have a petition or
other proceedings filed against Tenant under any such law or chapter thereof and
such petition or proceeding shall not be vacated or set aside within 60 days
after such filing.
(e) If a receiver or trustee shall be appointed for all or
substantially all of the assets of Tenant and such receivership shall not be
terminated and possession of such assets restored to Tenant within 30 days after
such appointment.
(f) If Tenant shall desert or vacate any substantial portion of
the Premises and the same shall remain unoccupied for more than 14 days
thereafter.
(g) If Tenant shall assign this Lease or sublet the Premises in
violation of the terms hereof.
13.2 Any shorter period for cure provided by law notwithstanding, and in
lieu thereof, including without limitation California Code of Civil Procedure
Section 1161, Tenant may cure any monetary default under Subsection 13.1(a),
above, at any time within 5 days after written notice of default is received by
Tenant from Landlord; and (except as specifically provided otherwise in Section
24) Tenant may cure any non-monetary default within 15 days after written notice
of default is received by Tenant from Landlord, provided that if such
non-monetary default is curable but is of such a nature that the cure cannot be
completed within 15 days, Tenant shall be allowed to cure the default if Tenant
promptly commences the cure upon receipt of the notice and diligently prosecutes
the same to completion, which completion shall occur not later than 60 days
from the date of such notice from Landlord.
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14. REMEDIES UPON DEFAULT.
14.1 Upon the occurrence of any event of default by Tenant, Landlord shall
have, in addition to any other remedies available to Landlord at law or in
equity, the option to pursue any one or more of the following remedies (each and
all of which shall be cumulative and non-exclusive) without any notice or demand
whatsoever:
(a) Terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may,
without prejudice to any other remedy which it may have for possession or
arrearages in rent, enter upon and take possession of the Premises and expel or
remove Tenant and any other person who may be occupying the Premises or any part
thereof, without being liable for prosecution or any claim or damages therefor;
and Landlord may recover from Tenant the following:
(1) The worth at the time of award of any unpaid rent which has
been earned at the time of such termination; plus
(2) The worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(3) 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 such rental loss that Tenant proves could have been reasonably
avoided; plus
(4) Any other amount necessary to compensate Landlord for all
the detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom, specifically including but not limited to attorney's fees,
removal and storage (or disposal) of Tenant's personal property, unreimbursed
leasehold improvement costs (e.g., the amounts Landlord has expended for
leasehold improvements which have not been recovered as of the termination of
the Lease when amortized on a straight-line basis over the originally scheduled
lease term), brokerage commissions and advertising expenses incurred, expenses
of remodeling the Premises or any portion thereof for a new tenant, whether for
the same or a different use, and any special concessions made to obtain a new
tenant; and
(5) At Landlord's election, such other amounts in addition to
or in lieu of the foregoing as may be permitted from time to time by applicable
law.
The term "rent" as used in this Subsection 14.1(a) shall be deemed to be and to
mean all sums of every nature required to be paid by Tenant pursuant to the
terms of this Lease, whether to Landlord or to others. Any such sums which are
based on percentages of income, increased costs or other historical data shall
be reasonable estimates or projections computed by Landlord on the basis of the
amounts thereof accruing during the 24-month period immediately prior to
default, except that if it becomes necessary to compute such sums before a
24-month period has expired, then the computation shall be made on the basis of
the amounts accruing during such shorter period. As used in Subsections
14.1(a)(1) and (2), above, the "worth at the time of award" shall be computed by
allowing interest from the date the sums became due at the lesser of (i) the
Bank of America prime rate on the due date plus 6%, or (ii) the maximum rate
permitted by law. As used in Subsection 14.1(a)(3), above, the "worth at the
time of award" shall be computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of award plus 1%.
(b) In the event of any such default by Tenant, in addition to any
other remedies available to Landlord under this Lease, at law or in equity,
Landlord shall also have the right, with or without terminating this Lease, to
re-enter the Premises and remove all persons and property from the Premises;
such property may be removed, stored and/or disposed of pursuant to any
procedures permitted by applicable law, including but not limited to those
described in Section 15.3. No re-entry or taking possession of the Premises by
Landlord pursuant to this Subsection 14.1(b), and no acceptance of surrender of
the Premises or other action on Landlord's part, shall be construed as an
election to terminate this Lease unless a written notice of such intention be
given to Tenant or unless the termination thereof be decreed by a court of
competent jurisdiction.
(c) In the event of any such default by Tenant, in addition to any
other remedies available to Landlord under this Lease, at law or in equity,
Landlord shall have the right to continue this Lease in full force and effect,
whether or not Tenant shall have abandoned the Premises. The foregoing remedy
shall also be available to Landlord pursuant to California Civil Code Section
1951.4 and any successor statute in the event Tenant has abandoned the Premises.
In the event Landlord elects to continue this Lease in full force and effect
pursuant to this Subsection 14.1(c), then Landlord shall
12
be entitled to enforce all of its rights and remedies under this Lease,
including the right to recover rent as it becomes due. Landlord's election not
to terminate this Lease pursuant to this Subsection 14.1(c) or pursuant to any
other provision of this Lease, at law or in equity, shall not preclude Landlord
from subsequently electing to terminate this Lease or pursuing any of its other
remedies.
(d) Whether or not Landlord elects to terminate this Lease on account
of any default by Tenant, Landlord shall have the right to terminate any and all
subleases, licenses, concessions or other consensual arrangements for possession
entered into by Tenant and affecting the Premises or may, in Landlord's sole
discretion, succeed to Tenant's interest in such subleases, licenses,
concessions or arrangements. If Landlord so elects to succeed to Tenant's
interest, Tenant shall, as of the date of notice by Landlord of such election,
have no further right to or interest in the rent or other consideration
receivable thereunder.
14.2 Following the occurrence of an event of default by Tenant, Landlord
shall have the right to require that any or all subsequent amounts paid by
Tenant to Landlord hereunder, whether in cure of the default in question or
otherwise, be paid in the form of cash, money order, cashier's or certified
check drawn on an institution acceptable to Landlord, or by other means approved
by Landlord, notwithstanding any prior practice of accepting payments in any
different form.
14.3 All rights, options and remedies of Landlord contained in this Section
14 and elsewhere in this Lease shall be construed and held to be cumulative, and
no one of them shall be exclusive of the other, and Landlord shall have the
right to pursue any one or more of such remedies or any other remedy or relief
which may be provided by law or in equity, whether or not stated in this Lease.
Nothing in this Section 14 shall be deemed to limit or otherwise affect Tenant's
indemnification of Landlord pursuant to any provision of this Lease.
14.4 Landlord shall not be deemed in default in the performance of any
obligation required to be performed by Landlord under this Lease unless Landlord
has failed to perform such obligation within 30 days after the receipt of
written notice from Tenant specifying in detail Landlord's failure to perform;
provided however, that if the nature of Landlord's obligation is such that more
than 30 days are required for its performance, then Landlord shall not be deemed
in default if it commences such performance within such 30-day period and
thereafter diligently pursues the same to completion. Upon any such uncured
default by Landlord, Tenant shall be entitled, as Tenant's sole and exclusive
remedy, to recover from Landlord Tenant's actual damages (but not lost profits
or other incidental or consequential damages) shown by Tenant to have been
directly caused thereby; provided, however; (a) Tenant shall have no right to
offset or abate rent in the event of any default by Landlord under this Lease,
except to the extent offset rights are specifically provided to Tenant in this
Lease; (b) Tenant shall in no event be entitled to terminate this Lease by
reason of Landlord's default; and (c) Tenant's rights and remedies hereunder
shall be limited to the extent Tenant has expressly waived in this Lease any of
such rights or remedies, including the limitation on Landlord's liability
contained in Section 33.17 hereof.
14.5 No waiver by Landlord or Tenant of any violation or breach of any of
the terms, provisions and covenants herein contained shall be deemed or
construed to constitute a waiver of any other or later violation or breach of
the same or any other of the terms, provisions, and covenants herein contained.
Forbearance by Landlord in enforcement of one or more of the remedies herein
provided upon an event of default shall not be deemed or construed to constitute
a waiver of such default. The acceptance of any rent hereunder by Landlord
following the occurrence of any default, whether or not known to Landlord, shall
not be deemed a waiver of any such default, except only a default in the payment
of the rent so accepted, subject to the provisions of Section 33.1.
15. SURRENDER OF PREMISES; REMOVAL OF PROPERTY.
15.1 No act or thing done by Landlord or any agent or employee of Landlord
during the term hereof shall be deemed to constitute an acceptance by Landlord
of a surrender of the Premises unless such intent is specifically acknowledged
in a writing signed by Landlord. The delivery of keys to the Premises to
Landlord or any agent or employee of Landlord shall not constitute a surrender
of the Premises or effect a termination of this Lease, whether or not the keys
are thereafter retained by Landlord, and notwithstanding such delivery Tenant
shall be entitled to the return of such keys at any reasonable time upon request
until this Lease shall have been properly terminated. The voluntary or other
surrender of this Lease by Tenant, whether accepted by Landlord or not, or a
mutual termination hereof, shall not work a merger, and at the option of
Landlord shall operate as an assignment to Landlord of all subleases or
subtenancies affecting the Premises.
15.2 Upon the expiration of the term of this Lease, or upon any earlier
termination of this Lease, Tenant shall, subject to the provisions of this
Section 15, quit and surrender possession of the Premises to Landlord in as good
order and condition as when Tenant took possession and as thereafter improved by
Landlord and/or Tenant, reasonable wear and tear and repairs which are
specifically made the responsibility of Landlord hereunder excepted. Upon such
expiration or
13
termination, Tenant shall, without expense to Landlord, remove or cause to be
removed from the Premises all debris and rubbish, and such items of furniture,
equipment, free-standing cabinet work, movable partitions and other articles of
personal property owned by Tenant or installed or placed by Tenant at its
expense in the Premises, and such similar articles of any other persons claiming
under Tenant, as Landlord may, in its sole discretion, require to be removed,
and Tenant shall repair at its own expense all damage to the Premises and
Building resulting from such removal.
15.3 Whenever Landlord shall re-enter the Premises as provided in this
Lease, any personal property of Tenant not removed by Tenant upon the expiration
of the term of this Lease, or within 48 hours after a termination by reason of
Tenant's default as provided in this Lease, shall be deemed abandoned by Tenant
and may be disposed of by Landlord (without liability to Tenant) in accordance
with Sections 1980 through 1991 of the California Civil Code and Section 1174 of
the California Code of Civil Procedure, or in accordance with any laws or
judicial decisions which may supplement or supplant those provisions from time
to time, or in accordance with any other legally permissible procedure, whether
by public or private sale or otherwise. Landlord shall be entitled to apply any
proceeds of the sale of such items to any sums due to Landlord by Tenant and to
Landlord's costs of removal, storage and sale of such items. Alternatively,
Landlord shall be entitled to treat Tenant's failure to remove such items from
the Premises as either a permitted or unpermitted holdover pursuant to Section
19 of this Lease.
15.4 All fixtures, alterations, additions, repairs, improvements and/or
appurtenances attached to or built into or on or about the Premises prior to or
during the term hereof, whether by Landlord at its expense or at the expense of
Tenant, or by Tenant at its expense, or by previous occupants of the Premises,
shall be and remain part of the Premises and shall not be removed by Tenant at
the end of the term of this Lease. Such fixtures, alterations, additions,
repairs, improvements and/or appurtenances shall include, without limitation,
floor coverings, drapes, paneling, molding, doors, kitchen and dishwashing
fixtures and equipment, plumbing systems, electrical systems, lighting systems,
silencing equipment, communication systems, all fixtures and outlets for the
systems mentioned above and for all telephone, radio, telegraph and television
purposes, and any special flooring or ceiling installations. Notwithstanding the
foregoing, Landlord may, in its sole discretion, require Tenant, at Tenant's
sole cost and expense, to remove any fixtures, alterations, additions, repairs,
improvements and/or appurtenances attached or built into or on or about the
Premises, and to repair any damage to the Building and Premises occasioned by
the installation, construction, operation and/or removal of such fixtures,
equipment, alterations, additions, repairs, improvements and/or appurtenances.
If Tenant shall fail to complete such removal and repair such damage, Landlord
may do so and may charge the reasonable cost thereof to Tenant.
15.5 Tenant hereby waives all claims for damages or other liability in
connection with Landlord's re-entering and taking possession of the Premises or
removing, retaining, storing or selling the property of Tenant as herein
provided, and Tenant hereby indemnifies and holds Landlord harmless from any
such damages or other liability, and no such re-entry shall be considered or
construed to be a forcible entry.
16. COSTS OF SUIT; ATTORNEYS' FEES; WAIVER OF JURY TRIAL.
16.1 If Tenant or Landlord shall bring any action for any relief,
declaratory or otherwise, against the other arising out of or under this Lease,
including any suit by Landlord for the recovery of rent or possession of the
Premises, the losing party shall pay the successful party its costs of suit,
including, without limitation, a reasonable sum for attorneys' and other
professional fees relating to such suit, and such fees shall be deemed to have
accrued on the commencement of such action and shall be paid whether or not such
action is contested or prosecuted to judgment.
16.2 In the event that Landlord shall, without fault of Landlord's part, be
made party to any litigation instituted by Tenant or by any third party against
Tenant, or by or against any person holding under or using the Premises by
license of Tenant, or for the foreclosure of any lien for labor or material
furnished to or for Tenant or of any such other person, Tenant hereby
indemnifies and holds Landlord harmless from and against all costs and expenses,
including reasonable attorneys' fees, incurred by Landlord in or in connection
with such litigation.
16.3 In order to limit the cost of resolving any disputes between the
parties, and as a material inducement to each party to enter into this Lease,
each party hereby waives the right to a jury trial with respect to any
litigation between the parties arising out of this Lease, Tenant's occupancy of
the Premises, or Landlord's ownership, operation or management of the Building,
irrespective of any rights to a jury trial which either party otherwise then
would have under applicable statutes, constitutions, judicial decisions or other
laws.
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17. ASSIGNMENT AND SUBLETTING.
17.1 Except as hereinafter provided, Tenant shall not sublet all or any
part of the Premises, nor assign this Lease, nor enter any license, "co-location
agreement" or other agreement permitting a third party (other than Tenant's
employees and occasional guests) to use or occupy any portion of the Premises,
without Landlord's express prior written consent, which consent shall not
unreasonably be withheld. (For purposes of the balance of this Section 17.1 and
Sections 17.2 through 17.4, the term "sublease" shall be deemed to include
licenses, co-location agreements, and other agreements for use or occupancy of
the Premises as described in the preceding sentence. The terms "subtenant" and
"sublet" shall be construed accordingly.)
In order to assist Landlord in evaluating any proposed assignment or
sublease, Tenant agrees to provide Landlord with the proposed subtenant or
assignee's current financial statement and financial statements for the
preceding 2 years and such other information concerning the business background
and financial condition of the proposed subtenant or assignee and of Tenant as
Landlord may reasonably request.
Landlord and Tenant hereby agree that Landlord's disapproval of any
proposed sublease or assignment hereunder shall be deemed reasonable if based
upon any reasonable factor, including, without limitation, any or all of the
following factors:
(a) The proposed transfer would result in more than two subleases of
portions of the Premises being in effect at any time during the term;
(b) The rent payable by the proposed transferee would be less than
the fair market rental value for the space as determined pursuant to the last
paragraph of this Section 17.1;
(c) The proposed transferee is an existing tenant or occupant of the
Building or has negotiated with Landlord within the last twelve months for space
in the Building or is another transferee prohibited by the next to last
paragraph of this Section 17.1;
(d) The proposed transferee is a governmental entity;
(e) The transaction calls for new demising walls to be built, and
the portion of the Premises proposed to be sublet or assigned is irregular in
shape and/or has inadequate means of ingress and egress;
(f) The use of the Premises by the proposed transferee (i) is not
permitted by the use provisions of this Lease, or (ii) might, in Landlord's
reasonable opinion, violate any right for an exclusive use granted by Landlord
to another Tenant in the Building;
(g) The transfer would likely result, in Landlord's reasonable
opinion, in a significant increase in the use of the parking areas or common
areas of the Building due to the transferee's employees or visitors, and/or
significant increase in the demand for utilities and services to be provided by
Landlord to the Premises;
(h) The assignee or subtenant does not, in Landlord's reasonable
opinion, have the financial capability to fulfill the obligations imposed by the
transfer, or in the case of an assignment, the assignee does not, in Landlord's
reasonable opinion, have income and net worth at least equal to that of Tenant;
(i) The transferee is not, in the Landlord's reasonable opinion, of
reputable or good character or consistent with Landlord's desired tenant mix;
(j) The transferee is a real estate developer or landlord or is
acting directly or indirectly on behalf of a real estate developer or landlord;
(k) The proposed transferee may, in Landlord's reasonable opinion,
increase the chances of significant hazardous waste contamination within the
Premises or the Building;
(l) In the reasonable judgment of the Landlord, the purpose for
which the transferee intends to use the Premises is not in keeping with the
standards of the Landlord for the Building or is in violation of the terms of
any other lease in the Building; or
(m) Landlord has not leased 95% of the rentable area in the
Building.
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Notwithstanding the foregoing, Tenant may, subject to the rest of the
terms hereof, sublet all of the Premises or assign this Lease to any entity
controlling, controlled by or under common control with Tenant, (including
assignment or subletting to any corporation resulting from a merger or
consolidation with Tenant, or to any person or entity which acquires all the
assets of Tenant's business as a going concern) provided that, with regard to
each such assignment or subletting: (A) Landlord receives the financial
statements prescribed above and such other financial and background information
as Landlord may request regarding the assignee or subtenant at least 20 days
prior to such proposed assignment or sublease; (B) the Landlord determines, in
its reasonable discretion, that the income and net worth of the assignee or
subtenant comply with the standards prescribed in item (h) above; (C) the use of
the Premises is not altered; (D) the Landlord determines, in its sole and
absolute discretion, that the transaction is not being entered into as a
subterfuge to avoid the restrictions on assignment and subletting in the Lease;
and (E) the subtenant or assignee expressly assumes the obligations of Tenant
hereunder as prescribed below in this Section 17.1.
Neither this Lease nor the term hereby demised shall be mortgaged by
Tenant, nor shall Tenant mortgage, assign, pledge or otherwise transfer the
interest of Tenant in and to any sublease or the rentals payable thereunder or
in the Security Deposit.
Any sublease, assignment, mortgage, pledge, encumbrance, or transfer made
in violation of this Section 17.1 shall be void and at Landlord's election shall
terminate this Lease.
Each subtenant, assignee or transferee of Tenant, other than Landlord,
shall assume all obligations of Tenant under this Lease and shall be and remain
liable jointly and severally with Tenant for the payment of the rent, and for
the due performance of all the terms, covenants, conditions and agreements
herein contained on Tenant's part to be performed for the term of this Lease
(provided that in the case of a sublease, the subtenant's obligations shall be
limited to those obligations relating to the subleased space and the common
areas during the sublease term). No sublease or assignment shall be deemed
approved by Landlord unless such subtenant or assignee and Tenant shall deliver
to Landlord a counterpart of such sublease or assignment and an instrument in a
form acceptable to Landlord, which contains a covenant of assumption by the
subtenant or assignee satisfactory in substance and form to Landlord, consistent
with the requirements of this Section 17.1, but the failure or refusal of the
subtenant or assignee to execute such instrument or assumption shall not release
or discharge the subtenant or assignee from its liability as set forth above.
No subtenant or assignee not complying with the foregoing requirements
shall have any interest in the Security Deposit. Any assignee that does
comply with the foregoing requirements shall automatically succeed to Tenant's
position with respect to the Security Deposit, and Landlord shall have the right
to refund all or any portion of the Security Deposit to the assignee at any time
or under any circumstances with no liability to the assignor.
Landlord may require that the assignee or subtenant remit directly to
Landlord on a monthly basis, all monies due to Tenant by said assignee or
subtenant. In such event Landlord shall apply the sums received to the
obligations of Tenant and its successors under this Lease.
In the event of default by any assignee or subtenant or any successor of
Tenant in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
such assignee, subtenant or successor.
Landlord may consent to subsequent assignments of the Lease or sublettings
or amendments or modifications to the Lease with the assignee or other successor
of Tenant, and without obtaining Tenant's consent thereto, and any such actions
shall not relieve Tenant of liability under this Lease.
Consent by Landlord to one assignment or subletting shall not be deemed
consent to any subsequent assignment or subletting.
If Tenant is a corporation which, under California law, is not deemed a
publicly-held corporation, or is an unincorporated association or partnership,
the transfer, assignment or hypothecation of any stock or interest controlling
such corporation, association or partnership shall be deemed an assignment
within the meaning and provisions of this Section 17. For purposes hereof,
"control" shall be deemed to refer to any amount, in the aggregate, exceeding
25% of the voting power of such corporation, association or partnership.
Notwithstanding the foregoing, the immediately preceding sentence shall not
apply to any transfer of stock of Tenant if Tenant is a publicly-held
corporation and such stock is transferred publicly over a recognized security
exchange or over-the-counter market.
Tenant agrees that all advertising by Tenant to market the space in the
Premises to be sublet or assigned shall require Landlord's prior written
approval, which shall not be unreasonably withheld. Tenant further agrees that
it shall not,
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without Landlord's prior written consent, which may be granted or withheld in
Landlord's sole discretion, market any space in the Premises, assign the lease
or sublet any space in the Premises to existing tenants or occupants of the
Building, or to any entity controlling, controlled by, or under common control
with any existing tenant or occupant of the Building, except for any entity
controlling, controlled by or under common control with Tenant.
Tenant agrees that it shall not sublet, nor assign, nor advertise as
available for subletting or assignment, nor list with brokers for subletting or
assignment, all or any portion of the Premises for a consideration which is
equal to less than the fair market rental value, as determined by Landlord in
its reasonable discretion, for comparable space in the Building for a comparable
term commencing concurrently with the assignment or sublease term, with
comparable rent credits and tenant improvement allowances. Within 10 days after
Landlord receives any written request from Tenant for Landlord's estimate of the
fair market rental value for specified space (which request shall identify the
space in question, the proposed term and the proposed rent credits and
improvement allowances), Landlord shall notify Tenant in writing of the fair
market rental value for such space for a comparable term with comparable rent
credits and tenant improvement allowances.
17.2 In the event that Tenant desires to assign this Lease, or to enter
into a sublease, as to all or any portion of the Premises, except where the
subtenant or assignee is an entity controlling, controlled by or under common
control with Tenant, Tenant shall, prior to solicitation of offers therefor,
give Landlord notice of Tenant's desire to assign or sublet and of the portion
of the Premises to be affected by the proposed assignment or sublease. Landlord
shall have the right, exercisable by notice to Tenant within 60 days after
Landlord's receipt of Tenant's notice of desire to assign or sublet, to
terminate this Lease as to the portion of the Premises affected by the proposed
assignment or sublease, such termination to be effective as of the date 60 days
after notice by Landlord to Tenant of such termination.
In the event of a termination of this Lease as to a portion of the Premises
pursuant to this Section 17.2, effective as of such termination, the Premises
shall be deemed to no longer include the portion of the Premises subject to such
termination, Tenant shall surrender possession of that portion of the Premises
in accordance with the provisions of this Lease, and the rent payable hereunder
and Tenant's Percentage Share shall be appropriately adjusted based upon the
rentable area remaining within the Premises.
If Landlord does not elect to terminate pursuant to this Section 17.2, and
if Tenant does not enter into an assignment or sublease as specified in Tenant's
notice of desire to assign or sublet within 6 months after the expiration of
Landlord's 60-day period for election to terminate, then Tenant shall again
comply with the provisions of this Section 17.2 before assigning this Lease, or
entering into a sublease, as to all or any portion of the Premises.
17.3 In the event that Tenant has sought and received Landlord's consent
to assign this Lease, or to enter into a sublease as to all or any portion of
the Premises, the monthly rent payable by Tenant to Landlord, pursuant to
Section 3, shall be increased by the amount to be received by Tenant during each
month pursuant to the terms of the assignment or sublease, in excess of Tenant's
monthly rental payable to Landlord for the space subject to the assignment or
sublease. The amounts referred to in the previous sentence include rent,
additional rent, or any other payment in respect of use or occupancy, or in
reimbursement of costs of leasehold improvements installed by Tenant, and
whether paid in a lump sum or periodic payments. In no event shall the total
sums payable to the Landlord be less than the monthly rental Landlord would have
received but for such assignment or sublease.
The additional rent shall be due and payable to Landlord in accordance with
the schedule specified in the sublease or assignment instrument, and the failure
of any subtenant or assignee to make any payments in accordance with that
schedule shall not affect the obligation of Tenant to pay the additional rent to
Landlord.
The calculation of the amount of rentable space being sublet shall be made
by Landlord in accordance with its usual standards. Landlord may require
acknowledgment by Tenant of Tenant's concurrence on the Landlord's calculation
of the amount of rentable space being sublet as a condition to Landlord's
consent to any sublease.
The provisions of a sublease or assignment instrument consented to by
Landlord cannot be modified, nor the sublease or assignment terminated, other
than in accordance with its terms, without the prior written consent of the
Landlord, which consent shall not be unreasonably withheld. The terms of this
Section 17.3 shall apply to any subleasing or assignment by any subtenant or
assignee.
17.4 Tenant shall pay to Landlord, promptly upon receipt of a billing from
Landlord, the amount of Landlord's reasonable attorney fees incurred in
connection with Landlord's review or approval of any sublease or assignment
transaction requiring Landlord's consent hereunder.
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18. TRANSFER OF LANDLORD'S INTEREST. In the event of any transfer of
Landlord's interest in the Building or Premises, other than a transfer for
security purposes only, the transferor shall be automatically relieved of any
and all obligations and liabilities on the part of Landlord accruing from and
after the date of such transfer, including, without limitation, the obligation
of Landlord to return the Security Deposit as provided in this Lease: provided
that the transferor shall, within a reasonable time, transfer any Security
Deposit then held by Landlord, or any portion thereof remaining after proper
deductions therefrom, to the transferee and shall thereafter notify Tenant of
such transfer, of any claims made against the Security Deposit, and of the
transferee's name and address, by written notice delivered personally (in which
case Tenant shall acknowledge receipt of such notice by signing Landlords's copy
of such notice) or by registered or certified mail.
19. HOLDING OVER. If Tenant holds over after the term hereof, with or
without the express or implied consent of Landlord, such tenancy shall be from
month-to-month only, and shall not constitute a renewal hereof or an extension
for any further term, and in such case, Base Rent shall be payable at a monthly
rate equal to the greater of: (a) two hundred percent (200%) of the Base Rent
applicable to the Premises immediately prior to the date of such expiration or
earlier termination; or (b) one hundred fifty percent (150%) of the prevailing
market rate excluding any rental or other concessions (as reasonably determined
by Landlord) for the Premises in effect on the date of such expiration or
earlier termination. Such month-to-month tenancy shall be subject to every
other term, covenant and agreement contained herein. Nothing contained in this
Section 19 shall be construed as consent by Landlord to any holding over by
Tenant, and Landlord expressly reserves the right to require Tenant to surrender
possession of the Premises to Landlord as provided in this Lease upon the
expiration or other termination of this Lease.
20. NOTICES. In every case when, under the provisions of this Lease, it
shall be necessary or desirable for one party hereto to serve any notice,
request or demand on the other, such notice or demand shall be in writing and
shall be served personally or by deposit in the United States mail, postage and
fees fully prepaid, registered or certified mail, with return receipt requested,
addressed to the applicable address for notice set forth in Section A on page 1.
Landlord or Tenant may, from time to time, by notice in writing served upon the
other as aforesaid, designate a different mailing address or a different
person to whom all such notices or demands are thereafter to be addressed.
Service of any such notice or demand if given personally shall be deemed
complete upon delivery, and if made by mail shall be deemed complete on the day
of actual delivery as shown by the addressee's registry or certification receipt
or at the expiration of 2 business days after the date of mailing, whichever is
earlier.
Notwithstanding the provisions of this Section 20, any notice of default as
described in Section 13.2 and any pleadings or notices given by either party to
the other with respect to any judicial proceeding between the parties shall be
served in the manner prescribed by applicable California law without reference
to this paragraph, and shall be deemed served at such time as is provided by
such applicable law without reference to this paragraph.
21. QUIET ENJOYMENT. Landlord covenants that Tenant, upon paying the
rent and performing the covenants of this Lease on Tenant's part to be
performed, shall and may peaceably and quietly have, hold and enjoy the Premises
for the term of this Lease.
22. TENANT'S FURTHER OBLIGATIONS.
22.1 Except for ordinary wear and as otherwise provided in this Lease,
Tenant shall, at Tenant's expense, keep in good order, condition and repair the
interior of the Premises and shall promptly and adequately repair all damage to
the interior of the Premises and replace or repair all glass, fixtures,
equipment and appurtenances therein damaged or broken, under the supervision and
with the approval of Landlord and, if Tenant does not do so, Landlord may, but
need not, make such repairs and replacements. If Landlord does so, Tenant shall
pay Landlord the cost thereof promptly upon demand, as additional rent
hereunder.
22.2 Tenant shall comply with all laws, ordinances, rules, regulations,
orders and directives of governmental and quasi-governmental bodies and
authorities having jurisdiction over Tenant or the Premises from time to time
and shall obtain and keep in effect all licenses, permits (including but not
limited to conditional use permits) and other authorizations required with
respect to the business or businesses conducted by Tenant within or from the
Premises or with respect to any special equipment or facilities of Tenant
permitted under the other provisions of this Lease. Tenant and its employees,
agents, licensees and invitees shall also comply with all reasonable rules and
regulations which Landlord may adopt from time to time for the protection and
welfare of the Building and its tenants and occupants; provided that Tenant
shall not be responsible for compliance with any rule or regulation adopted by
Landlord unless or until Tenant is furnished with a copy thereof. The present
rules and regulations for the Building are attached hereto as Exhibit "B".
Landlord shall have no liability to Tenant for the failure of any other tenant
in the Building to observe the rules and regulations.
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23. ESTOPPEL CERTIFICATE BY TENANT. At any time and from time to time,
within 15 days after written request by Landlord, Tenant shall execute,
acknowledge and deliver to Landlord a statement in writing certifying that this
Lease is unmodified and in full force and effect (or if there have been
modifications, that this Lease is in full force and effect as modified and
stating the modifications), that Tenant knows of no default hereunder by
Landlord and has no right of offset or deduction against the rent or any other
charge payable to Landlord (or specifying any claimed), the amount of any
security posted by Tenant, the dates to which the rent and other charges have
been paid in advance, any increases or decreases of rent that are anticipated,
the commencement date of the Lease and such other matters as may be reasonably
requested by Landlord. It is intended that any statement delivered pursuant to
this Section 23 may be relied upon by any purchaser of the fee or mortgagee or
beneficiary or assignee of any mortgage or trust deed upon the fee of the
Building or Premises. Tenant's failure to deliver the statement within the
period specified above shall be conclusive and binding upon Tenant that the
Lease is in full force and effect without modification except as may be
represented by Landlord, that there are no uncured defaults in Landlord's
performance and that Tenant has no right of offset, counterclaim or deduction
against rental, and that no more than one month's rental has been paid in
advance.
24. SUBORDINATION AND ATTORNMENT. This Lease is and at all times shall
be subject and subordinate to any ground or underlying leases, mortgages, trust
deeds or like encumbrances, which may now or hereafter affect the Building or
Premises, and to all renewals, modifications, consolidations, replacements and
extensions of any such lease, mortgage, trust deed or like encumbrance. As a
condition precedent to the effectiveness of any such subordination of this Lease
to any future ground or underlying leases or the lien of any future mortgages,
deeds of trust, or like encumbrances, Landlord shall provide to Tenant a
commercially reasonable non-disturbance and attornment agreement in favor of
Tenant executed by such future ground lessor, master lessor, mortgagee or deed
of trust beneficiary, as the case may be, which shall provide that Tenant's
quiet possession of the Premises shall not be disturbed on account of such
subordination to such future lease or lien so long as Tenant is not in default
under any provisions of this Lease. Notwithstanding the foregoing, Landlord
shall have the right to subordinate or cause to be subordinated any or all
ground or underlying leases or the lien of any or all mortgages, deeds of trust
or like encumbrances to the Lease. In the event that any ground or underlying
lease terminates for any reason or any mortgage, deed of trust or like
encumbrance is foreclosed or a conveyance in lieu of foreclosure is made for any
reason, then at the election of Landlord's successor-in-interest, Tenant shall
attorn to and become the tenant of such successor. Tenant hereby waives its
rights under any current or future law which gives or purports to give Tenant
any right to terminate or otherwise adversely affect this Lease and the
obligations of Tenant hereunder in the event of any such foreclosure proceeding
or sale. Tenant covenants and agrees to execute and deliver to Landlord in the
form reasonably required by Landlord, within 10 days after receipt of written
demand by Landlord, any additional documents evidencing the priority or
subordination of this Lease with respect to any ground or underlying lease or
the lien of any mortgage, deed of trust, or like encumbrance. Should Tenant fail
to sign and return any such documents within said 10-day period, Tenant shall be
in default hereunder without the benefit of any additional notice or cure
periods, except as may be required by statute.
25. RIGHTS RESERVED TO LANDLORD.
25.1 All portions of the Building are reserved to Landlord, including
exterior building walls, core corridor walls and doors and any core corridor
entrance, but excluding the Premises and the inside surfaces of all walls,
windows and doors bounding the Premises. Landlord also reserves any space in or
adjacent to the Premises used for shafts, stacks, pipes, conduits, fan rooms,
ducts, electric or other utilities, sinks or other building facilities, and the
use thereof, as well as the right to access thereto through the Premises for the
purposes of operation, maintenance, decoration and repair.
25.2 Landlord shall have the following rights exercisable without notice
and without liability to Tenant for damage or injury to property, person or
business (all claims for damage being hereby released), and without effecting an
eviction or disturbance of Tenant's use or possession or giving rise to any
claim for setoffs or abatement of rent:
(a) To enter the Premises at all reasonable times during the
term of this Lease for the purpose of inspecting the same, supplying janitorial
service, posting notices of non-responsibility, exhibiting the Premises to
prospective tenants, purchasers or others, or making such repairs or
replacements therein as may be required by this Lease or as Landlord may deem
appropriate; provided that Landlord shall use all reasonable efforts not to
disturb Tenant's use and occupancy and shall, when practical, give Tenant prior
notice of such repairs. For each of the foregoing purposes, Tenant shall
provide to Landlord a key with which to unlock at any time all of the doors in,
upon and about the Premises, excluding Tenant's vaults and safes. Landlord may
use any other means which Landlord may deem proper to open such doors in an
emergency in order to obtain entry to the Premises. Any entry to the Premises
obtained by Landlord by any means shall not under any circumstances be construed
or deemed to be a forcible or unlawful entry into, or a detainer of, the
Premises, or an eviction of Tenant from the Premises or any portion thereof, or
grounds for any abatement or reduction of rent. Any damages or losses on
account of any such entry by Landlord shall be Tenant's sole responsibility
except as otherwise
19
expressly provided herein. Nothing in this Section 25 shall be construed as
obligating Landlord to perform any repairs, alterations or decorations, except
as otherwise expressly required in this Lease.
(b) To change the name or street address of the Premises or
Building.
(c) To install and maintain signs on the exterior and interior of
the Building, except within the Premises.
(d) To have pass keys to the Premises.
(e) To decorate, remodel, repair, alter or otherwise prepare the
Premises for reoccupancy during the last 6 months of the term hereof if, during
or prior to such time, Tenant has vacated the Premises, or at any time after
Tenant abandons the Premises.
(f) To have access to all mail chutes according to the rules of the
United States Postal Service.
(g) To do or permit to be done any work in or about the exterior of
the Building or any adjacent or nearby building, land, street or alley.
(h) To grant to anyone the exclusive right to conduct any business
or render any service in the Building, provided such exclusive right shall not
operate to exclude Tenant from the use expressly permitted by this Lease.
26. FORCE MAJEURE. Whenever there is provided in this Lease a time
limitation for performance by Landlord or Tenant of any construction, repair,
maintenance or service, the time provided for shall be extended for as long as
and to the extent that delay in compliance with such limitation is due to an act
of God, governmental control or other factors beyond the reasonable control of
Landlord or Tenant, respectively.
27. WAIVER OF CLAIMS; INDEMNITY.
27.1 Tenant, as a material part of the consideration to Landlord, hereby
assumes all risk of, and waives all claims it may have against Landlord, its
agents, employees, affiliates and successors in interest for damage to or loss
of property or personal injury or loss of life resulting from the Building or
Premises or any part thereof becoming out of repair, by reason of any repair or
alteration thereof, or resulting from any accident within the Building or
Premises or on or about any space adjoining the Building or Premises, or
resulting directly or indirectly from any act or omission of any person, or due
to any condition, design or defect of the Building or Premises, or any space
adjoining the Building or Premises, or the mechanical systems of the Building or
Premises, which may exist or occur, whether such damage, loss or injury results
from conditions arising upon the Premises or upon other portions of the
Building, or from other sources or places, and regardless of whether the cause
of such damage, loss or injury or the means of repairing the same is accessible
to Tenant; provided such assumption and waiver shall not apply to claims caused
by the gross negligence or willful misconduct of Landlord or its agents.
27.2 Tenant hereby indemnifies and holds Landlord and Landlord's agents,
employees, affiliates and successors in interest harmless from and against any
and all claims, demands, suits, fines, losses and other liabilities for or
relating to injury or loss of life to persons or damage to or loss of property
arising from Tenant's use of the Building or the Premises or from the conduct of
Tenant's business or from any work done, permitted or suffered by Tenant in or
about the Premises or elsewhere, and further indemnifies and holds Landlord and
Landlord's agents, employees, affiliates and successors in interest harmless
from and against any and all claims arising from any breach or default in the
performance of any obligation on Tenant's part to be performed under the terms
of this Lease, or arising from any negligence or intentional conduct of Tenant
or Tenant's agents, employees, contractors, licensees, invitees, representatives
or successors in interest, and from and against all costs, attorneys' and other
professional fees, expenses and liabilities incurred by Landlord or Landlord's
agents, employees, affiliates and successors in interest in or in connection
with any such claim, demand, suit, fine or proceeding. In the event that any
action or proceeding be brought against Landlord or Landlord's agents,
employees, affiliates or successors in interest by reason of any such claim,
Tenant upon notice from Landlord shall defend such action or proceeding at
Tenant's cost and expense by counsel approved by Landlord, such approval not to
be unreasonably withheld.
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28. INSURANCE.
28.1 Tenant shall procure and shall maintain in effect, at Tenant's sole
cost and expense throughout the term of this Lease, including any extensions and
renewals thereof, public liability and property damage insurance against claims
for bodily injury, death or property damage occuring upon or about the Premises
or Building, in each case naming Landlord as additional insured and, upon
request by Landlord, naming the holder of any mortgage, deed of trust or like
encumbrance or the lessor under any underlying lease covering the Building as
additional insured, with a limit of liability of (a) not less than $1,000,000.00
single limit during the initial three-year period of the Lease term from the
Commencement Date to the third anniversary of the Lease term; and (b) not less
than $2,000,000.00 single limit during the balance of the Lease term from the
day after the third anniversary of the Lease term to the end of the Lease term.
If from time to time, the limits of liability set forth in Subsection 28.1(b)
above are, in the reasonable opinion of Landlord, inadequate, Tenant shall
increase such insurance coverage to an amount as shall be designated by
Landlord's notice to Tenant.
Tenant shall also procure and maintain, at Tenant's sole cost and expense
throughout the term of this Lease, casualty insurance on Tenant's personal
property in the Premises and any leasehold improvements which the Tenant
installed at its own cost in an amount at least equal to the full replacement
cost of such property, providing coverage against all perils insured against by
a "fire and extended coverage" policy, as well as sprinkler damage, vandalism
and malicious mischief.
Tenant shall also obtain the following insurance:
(a) Worker's compensation and employer's liability insurance in
form and amount satisfactory to Landlord.
(b) Loss of income and extra expense insurance in such amounts as
will reimburse Tenant for direct or indirect loss of earnings attributable to
all perils commonly insured against by prudent tenants or attributable to
prevention of access to or use of the Premises or the Building as a result of
such perils.
(c) Liquor liability insurance coverage in limits of not less than
Five Hundred Thousand Dollars ($500,000) if at any time during the term hereof
any alcoholic beverages of any nature are served on the Premises.
(d) Any other form or forms of insurance as Landlord or Landlord's
lender or ground or primary lessors may reasonably require from time to time in
form, in amounts, and for insurance risks against which a prudent tenant of a
comparable size and in a comparable business would protect itself.
Such policies of insurance shall be with insurance companies acceptable to
Landlord, shall not have a deductible amount exceeding $5,000.00 in the
aggregate, and shall specifically provide that the insurance afforded by such
policies for the benefit of Landlord and Landlord's mortgagees and ground
lessors shall be primary, and that any insurance carried by Landlord or
Landlord's, mortgagees and ground lessors shall be excess and non-contributing.
Such policies shall be evidenced by certificates of insurance delivered to
Landlord from time to time showing such insurance to be at all times prepaid and
in full force and effect and providing that such insurance cannot be cancelled
or modified upon less than 30 days' prior written notice to Landlord. If at any
time Tenant has not provided Landlord with a then currently effective
certificate of insurance acceptable to Landlord as to any insurance required to
be maintained by Tenant, Landlord may, without further inquiry as to whether
such insurance is actually in force, obtain such a policy and Tenant shall
reimburse Landlord, upon demand as additional rent hereunder, for the cost
thereof, together with Landlord's administrative fee equal to 25% of the
premium.
28.2 Tenant hereby waives its rights against Landlord and its managing
agent and their respective partners, officers, directors, shareholders,
employees, agents, representatives, contractors, affiliates, successors,
licensees, and invitees with respect to any claims or damages or losses
(including any claims for bodily injury to persons and/or damage to property)
which are caused by or result from (a) risks insured against under any insurance
policy carried by Tenant at the time of such claim, damage, loss or injury, or
(b) risks which would have been covered under any insurance required to be
obtained and maintained by Tenant under this Lease had such insurance been
obtained and maintained as required. The foregoing waivers shall be in addition
to, and not a limitation of, any other waivers or releases contained in this
Lease.
28.3 Tenant shall cause each insurance policy required to be obtained by
it pursuant to this Section 28 to provide that the insurer waives all rights of
recovery by way of subrogation against Landlord and its managing agent and their
respective partners, officers, directors, shareholders, employees, agents,
representatives, contractors, affiliates, successors, licensees, and invitees in
connection with any claims, losses and damages covered by such policy. If Tenant
21
fails to maintain insurance required hereunder, Tenant shall be deemed to be
self-insured with a deemed full waiver of subrogation as set forth in the
immediately preceding sentence.
29. FIXTURES, TENANT IMPROVEMENTS AND ALTERATIONS.
29.1 Except as otherwise provided in any rider to this Lease, all
improvements, fixtures and/or equipment which Tenant may install or place in or
about the Premises, and all alterations, repairs or changes to the Premises, and
all signs installed in, on or about the Premises, from time to time shall be at
the sole cost of Tenant. Landlord shall be without any obligation in connection
therewith. Tenant hereby indemnifies and holds Landlord harmless from any
liability, cost, obligation, expense or claim of lien in any manner relating to
the installation, placement, removal or financing of any such alterations,
repairs, changes, improvements, fixtures and/or equipment in, on or about the
Premises.
29.2 Nothwithstanding any provision in this Section 29 to the contrary,
Tenant is absolutely prohibited from making any alterations, additions,
improvements or decorations which: (i) affect any area outside the Premises;
(ii) affect the Building's structure, equipment, services or systems, or the
proper functioning thereof, or Landlord's access thereto; (iii) affect the
outside appearance, character or use of the Building or the common areas; (iv)
weaken or impair the structural strength of the Building; (v) in the opinion of
Landlord, lessen the value of the Building; (vi) will violate or require a
change in any occupancy certificate applicable to the Premises; or (vii) in the
opinion of Landlord, will increase the Building's Operating Costs or Utility
Costs.
29.3 Before proceeding with any alteration, repair or change which is not
otherwise prohibited in Subsection 29.2 above, Tenant must first obtain
Landlord's written approval of(i) the plans and specifications for all such
work; (ii) with respect to any connecting lines that will be outside the
Premises (if such lines are permitted by Landlord in its sole discretion), a
description of the areas of the Building to which Tenant will require access
both for the initial work and for ongoing maintenance of the improvements or
installations; (iii) the names of all contractors and subcontractors who will
perform such work, all of whom shall be selected from Landlord's then-current
list of approved contractors, which Landlord may compile in Landlord's sole
discretion and will provide to Tenant within ten days following Landlord's
receipt of Tenant's written request; (iv) copies of all liability, casualty and
worker's compensation insurance applicable to the construction, maintenance and
ongoing operation of the improvements and installations; and (v) copies of all
governmental permits required for the work. Landlord's consent to such matters
shall not unreasonably be withheld; provided, however, that with regard to any
such matters which may affect the structural members, the heating, ventilation,
air conditioning or other building systems, exterior walls, windows and doors of
the Building, and with regard to the installation of any signs outside the
Premises, Landlord may grant or withhold its consent in its unlimited
discretion. Landlord may impose, as a condition of its consent to any
alterations, repairs or changes of the Premises, such requirements as Landlord
in its sole discretion may deem desirable, including, but not limited to, the
requirement that Tenant utilize for such purposes only contractors, materials,
mechanics and materialmen previously used and currently approved by Landlord for
work in the Building.
29.4 After Landlord has approved the change, repair or alteration and the
other items listed in Section 29.3, Tenants shall enter into an agreement for
the performance of such change, repair or alteration with the contractors and
subcontractors approved by Landlord, as provided in Section 29.3. Before
proceeding with any change, repair or alteration Tenant shall (i) provide
Landlord with 10 days' prior written notice thereof; and (ii) pay to Landlord,
within 10 days after written demand, the costs of any increased insurance
premiums incurred by Landlord as a result of such changes, repairs or
alterations. In additions, before proceeding with any change, repair or
alteration, Tenant's contractors shall obtain, on behalf of Tenant and at
Tenant's sole cost and expense: (A) all necessary governmental permits and
approvals for the commencement and completion of such change, repair or
alteration; and (B) a completion and lien indemnity bond, or other surety,
satisfactory to Landlord for such change, repair or alteration. Landlord's
approval of permits pursuant to Section 29.3 shall not relieve Tenant of the
obligation to obtain any other or supplemental permits required by the preceding
sentence.
29.5 Tenant shall pay to Landlord, as additional rent, the reasonable
costs of Landlord's engineers and other consultants (but not Landlord's on-site
management personnel) for review of all plans, specifications and working
drawings for the change, repair or alteration within 10 business days after
Tenant's receipt of invoices either from Landlord or such consultants. In
addition to such costs, Tenant shall pay to Landlord, within 10 business days
after completion of any change, repair or alteration, the actual, reasonable
costs incurred by Landlord for services rendered by Landlord's management
personnel and engineers to coordinate and/or supervise any of the change, repair
or alteration to the extent such services are provided in excess of or after the
normal on-site hours of such engineers and management personnel.
29.6 All changes, repairs and alterations shall be performed: (i) in
accordance with the approved plans, specifications and working drawings; (ii)
lien-fee and in a fist-class and workmanlike manner; (iii) in compliance with
all laws, rules, and regulations of all governmental agencies and authorities;
(iv) in such a manner so as to not interfere with
22
the occupancy of any other tenant in the Building, nor impose any additional
expense or delay upon Landlord in the maintenance and operation of the Building;
and (v) at such times, in such manner and subject to rules and regulations as
Landlord may from time to time reasonably designate.
29.7 Throughout the performance of any such change, repair or alteration
Tenant shall obtain, or cause its contractors to obtain, worker's compensation
insurance and general liability insurance covering the work in compliance with
provisions of Section 28 of this Lease, and builder's risk insurance for the
work reasonably acceptable to Landlord.
29.8 In the event Tenant orders any construction, alteration, decorating or
repair work directly from Landlord, or from the contractor selected by Landlord,
the charges for such work, together with Landlord's administration fee equal to
15% of the contract price, shall be deemed additional rent under this Lease,
payable upon billing therefor, either in advance of the start of work, or
periodically during construction, or upon the substantial completion of such
work, at Landlord's option.
30. MECHANIC'S LIENS. Tenant agrees to give Landlord written notice of
the commencement date of any alterations, improvements or repairs to be made in,
to or upon the Premises not later than 15 days prior to the commencement of any
such work, in order to give Landlord time to post notices of nonresponsibility.
Tenant will not permit any mechanic's, materialman's or other lien to be placed
upon the Premises or Building or improvements therein during the term thereof;
and in the event that any mechanic's materialman's or other lien is filed
against the Premises or Building or improvements therein in connection with any
alteration, repair, improvement or change of, or installation of fixtures or
equipment in, the Premises, Tenant shall cause such lien to be released within
10 days after such filing, either by satisfaction of such claim or by posting of
a bond. Notwithstanding the foregoing, Landlord shall have the right and
privilege at Landlord's option of paying the amount of any such lien or claim,
or any portion thereof, without inquiry as to the validity thereof, and any
amounts so paid, including expenses and interest, shall be deemed additional
rent hereunder due from Tenant to Landlord upon demand.
31. ALTERNATE SPACE. If the Premises comprise less than a full floor
in the Building, Landlord shall have the privilege of moving Tenant to other
space in the Building comparable to the Premises, and all terms hereof shall
apply to the new space with equal force. In such event Landlord shall give
Tenant at least 60 days' prior notice in writing and shall move Tenant's effects
to the new space at Landlord's sole cost and expense at such time and in such
manner as to inconvenience Tenant as little as practicable.
32. HAZARDOUS MATERIALS.
32.1 In addition to its other obligations under this Lease, Tenant
covenants to comply with all laws relating to Hazardous Materials, as defined
below, with respect to the Premises and the Building. Except for general office
supplies typically used in an office area in the ordinary course of business
(such as copier toner, liquid paper, glue, ink and cleaning solvents), for use
in the manner for which they were designed and only in accordance with all
Hazardous Materials laws and the highest standards prevailing in the industry
for such use, and then only in such amounts as may be normal for the office
business operations conducted by Tenant on the Premises, neither Tenant nor any
of Tenant's agents, employees, contractors, subtenants, assignees, licensees or
invitees ("Tenant's Parties") shall use, handle store or dispose of any
Hazardous Materials in, on, under or about the Premises, the Building or the
site on which the Building is located. Tenant shall promptly take all actions,
as its sole cost and expense, as are necessary to return the Premises, Building
and site to the condition existing prior to the introduction of any such
Hazardous Materials by Tenant or any Tenant Parties, provided Landlord's
approval of such actions shall first be obtained. Furthermore, Tenant shall
immediately notify Landlord of any inquiry, test, investigation or enforcement
proceeding by or against Tenant or the Premises concerning the presence of any
Hazardous Material.
32.2 Tenant shall be solely responsible for and shall indemnify, defend
(with counsel reasonably approved by Landlord) and hold Landlord harmless from
and against any and all claims, demands, judgments, suits, causes of action,
damages, penalties, fines, liabilities, losses and expenses (including, without
limitation, investigation and clean-up costs, attorneys' fees, consultant fees
and court costs) which arise during or after the term of this Lease as a result
of the breach of any of the obligations and covenants set forth in this Section
33, and/or any contamination of the Premises, Building or site directly or
indirectly arising from the activities of Tenant or any Tenant Parties.
32.3 For purposes of this Lease, the term "Hazardous Materials" shall mean,
collectively, asbestos, any petroleum fuel, and any hazardous or toxic
substance, material or waste which is or becomes regulated or defined as
hazardous or toxic by any local governmental authority, the State of California
or the United States Government, including, but not limited to, any material or
substance defined as hazardous or toxic under the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. (S) 9601, et seq.; the
-- ---
Resource Conservation and Recovery Act,
23
42 U.S.C. Sections 6901, et seq.; the Toxic Substances Control Act, 15 U.S.C.
------
Sections 2601, et seq.; the Federal Water Pollution Control Act, 33 U.S.C.
------
Sections 1251, et seq.; the California Hazardous Substance Account Act,
------
California Health and Safety Code Sections 25330, et seq.; the California
------
Hazardous Waste Control Act, California Health and Safety Code Sections 25100,
et seq.; the California Safe Drinking Water and Toxic Health Enforcement Act,
- ------
California Health and Safety Code Sections 25249.5, et seq.; California Health
------
and Safety Code Sections 25280, et seq. (Underground Storage of Hazardous
------
Substances); the California Hazardous Waste Treatment Reform Act, California
Health and Safety Code Sections 25179.1, et seq.; California Health and Safety
------
Code Sections 25501, et seq. (Hazardous Materials Release Response Plans and
------
Inventory); Petroleum Underground Storage Tank Cleanup, Health and Safety Code
Sections 25299.10, et seq.; and the Porter-Cologne Water Quality Control Act,
------
California Water Code Sections 13000, et seq., as such laws may be amended from
------
time to time.
32.4 The foregoing covenants and indemnities of Tenant shall survive the
expiration or earlier termination of the Lease.
33. MISCELLANEOUS.
33.1 No receipt of money by Landlord from Tenant after the termination of
this Lease, the service of any notice, the commencement of any suit or final
judgement for possession shall reinstate, continue or extend the term of this
Lease or affect any such notice, demand, suit or judgment. No payment by Tenant
or receipt by Landlord of a lesser amount than the rent payment herein
stipulated shall be deemed to be other than on account of the rent, nor shall
any endorsement or statement on any check or any letter accompanying any check
or payment as rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of such rent or pursue any other remedy provided in this Lease. Tenant
agrees that each of the foregoing covenants and agreements shall be applicable
to all obligations of Tenant to Landlord, whether expressly contained in this
Lease or imposed by any statute or at common law.
33.2 If any provision of this Lease or its application to any party or
circumstances shall be determined by any court of competent jurisdiction to be
invalid or unenforceable to any extent, the remainder of this Lease or the
application of such provision to such person or circumstances, other than those
as to which it is so determined invalid or unenforceable to any extent, shall
not be affected thereby, and each provision hereof shall be valid and shall be
enforced to the fullest extent permitted by law; and it is the intention of the
parties to this Lease that in lieu of each clause or provision of this Lease
that is illegal, invalid or unenforceable, there be added as a part of this
Lease a clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible and be legal, valid and
enforceable.
33.3 The covenants and obligations of Tenant pursuant to this Lease shall
be independent of performance by Landlord of the covenants and obligations of
Landlord pursuant to this Lease, and performance by Tenant of each covenant and
obligation of Tenant pursuant to this Lease shall be a condition precedent to
the duty of Landlord to perform the covenants and obligations of Landlord
pursuant to this Lease.
33.4 The headings of Sections of this Lease are of convenience only and do
not define, limit or construe the contents thereof. References made in this
Lease to numbered Sections, Paragraphs and Subparagraphs shall refer to numbered
Sections, Paragraphs or Subparagraphs of this Lease unless otherwise indicated.
33.5 Where appropriate, words in the singular, including without limitation
the words "Landlord" and Tenant", include the plural, and vice versa. Words in
the neuter gender include the masculine and feminine genders, and vice versa,
and words in the masculine gender include the feminine gender, and vice versa.
33.6 If more than one person or entity executes this Lease as Tenant: (a)
each of them is and shall be jointly and severally liable for the covenants,
conditions, provisions and agreements of this Lease to be kept, observed and
performed by Tenant; and (b) the act or signature of, or notice from or to, any
one or more of them with respect to this Lease shall be binding upon each and
all of the persons and entities executing this Lease as Tenant with the same
force and effect as if each and all of them had so acted or signed, or given or
received such notice.
33.7 Time is of the essence of this Lease. Failure of either party to
perform any act strictly within the applicable period specified herein shall
entitle the other to exercise all remedies herein contemplated. All references
in this Lease to "days" shall mean calendar days unless specifically stated
herein to be "business" days.
33.8 This Lease shall be governed by and interpreted in accordance with
the laws of the State of California.
24
33.9 All monetary obligations of either party hereunder to the other
remaining past due 10 days or more after the date specified herein for payment
shall bear interest until paid at the lesser of (i) the Bank of America prime
rate as of the due date plus 6%, or (ii) the maximum rate permitted by law.
33.10 This instrument, along with any riders, exhibits and attachments or
other documents referred to in Section M on page 2 (all of which riders,
exhibits, attachments and other documents are hereby incorporated into this
instrument by this reference), constitutes the entire and exclusive agreement
between Landlord and Tenant relating to the Premises, and this agreement and
said riders, exhibits and attachments and other documents may be altered,
amended or revoked only by an instrument in writing signed by the party to be
charged thereby. All prior or contemporaneous oral agreements, understandings
and/or practices relative to the leasing of the Premises are merged herein or
revoked hereby. References in this instrument to this "Lease" shall mean, refer
to and include this instrument as well as any riders, exhibits, attachments or
other documents referred to in Section M, and references to any covenant,
condition, obligation and/or undertaking "herein", "hereunder" or "pursuant
hereto" (or language of like import) shall mean, refer to and include the
covenants, conditions, obligations and undertakings existing pursuant to this
instrument and such riders, exhibits, attachments or other documents. All terms
defined in this instrument shall be deemed to have the same meanings in all
riders, exhibits, attachments or other documents referred to in Section M unless
the context thereof clearly requires the contrary.
33.11 Tenant hereby consents to amendment of this Lease as and to the
extent required by any lender which makes a loan to Landlord secured in whole or
in part by the Building, provided that no such change shall increase the rent
payable hereunder or impair Tenant's use of the Premises.
33.12 Unless otherwise agreed in writing, if Tenant has dealt with any
real estate broker or other person or firm with respect to leasing or renting
space in the Building, Tenant shall be solely responsible for the payment of any
fee due said broker, person or firm and Tenant hereby indemnifies and holds
Landlord harmless from and against any liability with respect thereto.
Notwithstanding the foregoing, Landlord agrees to pay, and to hold Tenant
harmless from, the commission owing to the brokers identified in Section L on
page 2, as provided in a separate agreement between Landlord and such brokers.
33.13 Tenant agrees to pay to Landlord as additional rent hereunder any
taxes required by law to be paid by Tenant and collected from Tenant by
Landlord.
33.14 Submission of this Lease for examination, even though executed by
Tenant, shall not bind Landlord in any manner, and no lease or other obligation
on the part of Landlord shall arise until this Lease is executed and delivered
by Landlord to Tenant. This Lease shall not be binding and in effect until a
counterpart hereof has been executed and delivered by the parties, each to the
other.
33.15 Tenant shall not cause the recordation of this Lease, a short form
memorandum of this Lease or any reference to this Lease.
33.16 Upon 10 days' prior written request from Landlord (which Landlord
may make at any time during the term but no more than two times in any calendar
year), Tenant shall deliver to Landlord (a) a current financial statement of
Tenant and any guarantor of this Lease, and (b) financial statements of Tenant
and such guarantor for the two years prior to the current financial statement
year. Such statements shall be prepared in accordance with generally acceptable
accounting principles, and certified as true in all material respects by Tenant
(if Tenant is an individual) or by an authorized officer or general partner of
Tenant (if Tenant is a corporation or partnership, respectively).
33.17 Notwithstanding anything contained in this Lease to the contrary,
the obligations of Landlord under this Lease (including any actual or alleged
breach or default of Landlord) do not constitute personal obligations of the
individual partners, directors, officers, shareholders, agents or employees of
Landlord or of Landlord's partners or agents, and Tenant shall not seek recourse
against any such persons or entities or any of their personal assets for
satisfaction of any liability with respect to this Lease. In addition, in
consideration of the benefits accruing hereunder to Tenant and notwithstanding
anything contained in this Lease to the contrary, Tenant hereby covenants and
agrees for itself and all of its successors and assigns that the liability of
Landlord for its obligations under this Lease (including any liability as a
result of any actual or alleged failure, breach or default hereunder by
Landlord) shall be limited solely to, and Tenant's and its successors' and
assigns' sole and exclusive remedy shall be against, Landlord's interest in the
Building and proceeds therefrom, and no other assets of Landlord.
33.18 If Tenant is identified herein as a corporation, then the persons
executing this Lease on behalf of Tenant hereby represent that they are duly
authorized to execute and deliver this Lease on behalf of Tenant pursuant to
Tenant's by-laws or a resolution of its board of directors.
25
If Tenant is identified herein as a partnership, the undersigned represent
that they are all of the general partners of Tenant, that Tenant has been formed
under the laws of the State of California, and is duly qualified to do business
in the State of California, and that this Lease is being executed on behalf of
Tenant. Each of the partners of Tenant executing this Lease agrees that he or
she and Tenant are irrevocably bound by execution of any amendment to or
modification of this Lease by one or more of the partners of Tenant. Tenant
agrees that each new partner in Tenant shall be obligated under this Lease, in
the same fashion as the existing partners, and that each new partner shall
execute a copy of this Lease and deliver it to Landlord within 60 days after
that partner's admission to the partnership. In the event that such newly
admitted partner is a corporation, the principal or principals for whose benefit
the corporation has been organized shall execute and deliver to Landlord a lease
guaranty in form acceptable to Landlord. Each newly admitted partner in Tenant
shall be jointly and severally liable with the remaining partners for the
performance and satisfaction of all obligations of the Tenant under this Lease
accruing from and after the effective date of the admission of the new partner
to the Partnership. If the provisions of this paragraph are satisfied, the
admission of a new partner shall not be considered an assignment of the lease
for the purposes of Section 17 hereof.
33.19 Subject to the provisions of Section 17 above, and except as
otherwise provided in this Lease, all of the covenants, conditions and
provisions of this Lease shall be binding upon, and shall inure to the benefit
of the parties hereto and their respective heirs, personal representatives and
permitted successors and assigns; provided, however, that no rights shall inure
to the benefit of any transferee of Tenant unless the transfer to such
transferee is made in compliance with the provisions of Section 17, and no
options or other rights which are expressly made personal to the original Tenant
hereunder or in any rider attached hereto shall be assignable to or exercisable
by anyone other than the original Tenant under this Lease.
33.20 The voluntary or other surrender of this Lease by Tenant or a mutual
termination thereof shall not work as a merger and shall, at the option of
Landlord, either (a) terminate all and any existing subleases, or (b) operate as
an assignment to Landlord of Tenant's interest under any or all such subleases.
33.21 Except for Tenant's identity sign on the entry doors of the Premises
and Tenant's elevator lobby identity sign on any full floor of the Building
leased by Tenant (which signs shall be consistent with the Building's signage
program and otherwise subject to Landlord's prior written approval), Tenant
shall have no right to place any sign upon the Premises, the Building or the
site on which the Building is located or which can be seen from outside the
Premises.
33.22 The effectiveness of this Lease and Landlord's obligations hereunder
are subject to and conditional upon Tenant's delivery to Landlord of a lease
guaranty in the form prescribed by Landlord in its sole discretion, fully
executed by the guarantor or guarantors specified in Section N on page 2 of this
Lease.
34. "AS IS" CONDITION. Tenant is taking the Premises in its "as is"
shall condition existing as of the execution of this Lease. Landlord shall have
no obligation for the construction or modification of tenant improvements for
Tenant. In constructing its own tenant improvements to the Premises, Tenant
shall comply with the other applicable provisions of this Lease (including but
not limited to Section 29) and shall utilize only contractors, materials,
mechanics, materialmen, architects and engineers used and currently approved in
writing by Landlord for work in the Building.
26
35. TENANT'S SUPPLEMENTAL AIR-CONDITIONING. Tenant shall have the right to
install in the Premises its own self-contained 24-hour heating, ventilating and
air-conditioning unit, subject to compliance with the other provisions of this
Lease, including but not limited to obtaining Landlord's prior written consent
to the plans and specifications for the work and electrical requirements of the
unit. Tenant shall in no event be permitted to exhaust such system out of the
west side of the Building. Tenant shall pay all costs of electricity for such
unit and, at Landlord's election, the electrical requirements for such unit
shall be separately metered to Tenant at Tenant's expense.
IN WITNESS WHEREOF, this instrument has been duly executed by the parties
hereto, as of the date first above written.
PRIMECELL, INC.,
a Washington corporation
By: /s/ Alan Chin
------------------------------------------
Its: Secretary
---------------------------------------
By:_________________________________________
Its:______________________________________
ONE WILSHIRE ARCADE IMPERIAL, LTD.,
a California limited partnership
By Paramount Group, Inc., Agent
By:____________________________________
Its:________________________________
By: [SIGNATURE ILLEGIBLE]
-----------------------------------
SENIOR VICE PRESIDENT
-------------------------
PROPERTY MANAGEMENT-OFFICE BUILDINGS
27
Suite 2840
Approximate location.
Exact location on the
Floor subject to
change at any time
prior to delivery of
the premises.
[FLOOR PLAN APPEARS HERE]
Exhibit A
Primecall, Inc.
Suite 2840
Approximately 1,500
Rentable sq. ft.
28TH FLOOR
ONE WILSHIRE BUILDING
624 SOUTH GRAND AVE., LOS ANGELES, CA 90017
[LOGO PARAMOUNT GROUP, INC. APPEARS HERE]
EXHIBIT B
RULES AND REGULATIONS
1. Tenant shall not obstruct or interfere with the rights or other
tenants of the Building, or of persons having business in the Building, or in
any way injure or annoy such tenants or persons. Tenant shall not obstruct any
sidewalks, halls, passages, corridors, exits, entrances, courts, lobby areas,
vestibules, garages, parking areas, elevators, escalators, or stairways in and
about the Building (collectively, the "Common Areas"). Such Common Areas are not
for the general public, and Landlord shall in all cases retain the right to
control and prevent access thereto of all persons whose presence in the judgment
of Landlord would be prejudicial to the safety, character, reputation and
interests of the Building and its tenants; provided that nothing herein
contained shall be construed to prevent such access to persons with whom any
tenant normally deals in the ordinary course of its business, unless such
persons are engaged in illegal activities.
2. Tenant shall not commit any act or permit any thing in or about the
Building which shall or might subject Landlord to any liability or
responsibility for injury to any person or property by reason of any business or
operation being carried on in or about the Building or for any other reason.
3. Tenant shall not use the Building for lodging, sleeping, cooking, or
for any immoral or illegal purpose or for any purpose that will damage the
Building, or the reputation thereof, or for any purposes other than those
specified in the Lease.
4. Canvassing, soliciting and peddling in the Building are prohibited,
and Tenant shall cooperate to prevent such activities.
5. Tenant shall not bring or keep within the Building any bicycle or
motorcycle.
6. Tenant shall not conduct mechanical or manufacturing operations, cook
or prepare food, or place or use any inflammable, combustible, explosive or
hazardous fluid, chemical, device, substance, or material in or about the
Building without the prior written consent of Landlord. Tenant shall comply with
all statutes, ordinances, rules, orders, regulations and requirements imposed by
governmental or quasi-governmental authorities or by Landlord from time to time
in connection with security, fire and panic safety and fire prevention and shall
not commit any act, or permit any object to be brought or kept in the Building,
which shall result in a change of the rating of the Building by the Insurance
Services Office or any similar person or entity. Tenant shall not commit any act
or permit any object to be brought or kept in the Building which shall increase
the rate of fire insurance on the Building or on property located therein.
Tenant shall provide Landlord with a name of a designated responsible employee
to represent Tenant on all matters pertaining to fire or security regulations.
Tenant shall cooperate fully in all matters concerning fire and other emergency
procedures.
7. Tenant shall not use the Building for manufacturing or for the storage
of goods, wares or merchandise, except as such storage may be incidental to the
use of the Premises for general office purposes and except in such portions of
the Premises as may be specifically designated by Landlord for such storage.
Tenant shall not occupy the Building or permit any portion of the Building to be
occupied for the manufacture or direct sale of liquor, narcotics, or tobacco in
any form, or as a medical office, barber shop, manicure shop, music or dance
studio or employment agency. Tenant shall not conduct in or about the Building
any auction, public or private, without the prior written approval of Landlord.
8. Tenant shall not install or use in the Building any air conditioning
unit, engine, boiler, generator, machinery, heating unit, stove, water cooler,
ventilator, radiator or any other similar apparatus without the express prior
written consent of Landlord, and then only as Landlord may direct.
9. Tenant shall not use in the Building any machines, other than standard
office machines such as typewriters, calculators, copying machines and similar
machines, without the express prior written consent of Landlord. If Tenant
requires telegraphic, telephonic, burglar alarm or similar services, it shall
first obtain, and comply with, Landlord's
B-1
instructions in their installation. Tenant shall not install, maintain or
operate upon the Premises any vending machine without the consent of Landlord.
10. Tenant shall move all freight, supplies, furniture, fixtures and other
personal property into, within and out of the Building only at such times and
through such entrances as may be designated by Landlord, and such movement of
such items shall be under the supervision of Landlord. Landlord reserves the
right to inspect all such freight, supplies, furniture, fixtures and other
personal property to be brought into the Building and to exclude from the
Building all such objects which violate any of these rules and regulations or
the provisions of the Lease. Tenant shall not move or install such objects in or
about the Building in such a fashion as to unreasonably obstruct the activities
of other tenants, and all such moving shall be at the sole expense, risk and
responsibility of Tenant. Prior to permitting access into the Building of the
moving company or other persons performing such moving activities, Landlord may
require from such moving company or other persons evidence of insurance
reasonably acceptable to Landlord, from an insurer and with coverage and amounts
reasonably acceptable to Landlord, covering the moving activities and naming
Landlord and its managing agent as additional insureds. Tenant shall not use in
the delivery, receipt or other movement of freight, supplies, furniture,
fixtures and other personal property to, from or within the Building, any hand
trucks other than those equipped with rubber tires and side guards. Any freight
elevator shall be available for use by Tenant in common with other tenants in
the Building, subject to such reasonable scheduling as Landlord in its
discretion shall deem appropriate. No equipment, materials, furniture, packages,
supplies, merchandise or other property will be received in the Building or
carried in the elevators except between such hours and in such elevators as may
be designated by Landlord.
11. Tenant shall not place a load upon any floor of the Premises which
exceeds the load per square foot which such floor was designed to carry and
which is allowed by law. Landlord shall have the right to prescribe the weight,
size and position of all equipment, materials, furniture or other property
brought into the Building. Heavy objects, if such objects are considered
necessary by Tenant, and are permitted by Landlord, shall stand on such
platforms as determined by Landlord to be necessary to properly distribute the
weight. Business machines and mechanical equipment belonging to Tenant, which
cause noise or vibration that may be transmitted to the structure of the
Building or to any space therein to such a degree as to be objectionable to
Landlord or to any tenants in the Building, shall be placed and maintained by
Tenant, at Tenant's expense, on vibration eliminators or other devices
sufficient to eliminate noise or vibration. The persons employed to move such
equipment in or out of the Building must be acceptable to Landlord. Landlord
will not be responsible for loss of, or damage to, any such equipment or other
property from any cause, and all damage done to the Building by maintaining or
moving such equipment or other property shall be repaired at the expense of
Tenant.
12. Tenant shall not deposit any trash, refuse, cigarettes, or other
substances of any kind within or out of the Building, except in the refuse
containers provided therefor. Tenant shall not introduce into the Building any
substance which might add an undue burden to the cleaning or maintenance of the
Premises or the Building, and Tenant shall not place in any trash box or
receptacle any material which cannot be disposed of in the ordinary and
customary manner of trash and garbage disposal. All garbage and refuse disposal
shall be made in accordance with directions reasonably issued from time to time
by Landlord. Tenant shall exercise its best efforts to keep the Common Areas
clean and free from rubbish.
13. Tenant shall use the Common Areas only as a means of ingress and
egrees, and Tenant shall permit no loitering by any persons upon Common Areas or
elsewhere within the Building. The Common Areas and roof of the Building are not
for the use of the general public, and Landlord shall in all cases retain the
right to control or prevent access thereto by all persons whose presence, in the
judgment of Landlord, shall be prejudicial to the safety, character, reputation
or interests of the Building and its tenants. Neither Tenant nor any employee or
invitee of Tenant shall enter the mechanical rooms, air conditioning rooms,
electrical closets, janitorial closets, or similar areas or go upon the roof of
the Building without the express prior written consent of Landlord.
14. Landlord reserves the right to exclude or expel from the Building any
person who, in the judgment of Landlord, is intoxicated or under the influence
of liquor or drugs or who shall in any manner act in violation of the rules and
regulations of the Building.
15. Landlord shall have the right to designate the area or areas, if any,
in which Tenant and Tenant's servants, employees, contractors, jobbers, agents,
licensees, invitees, guests and visitors may park vehicles, and Tenant and its
servants, employees, contractors, jobbers, agents, licensees, invitees, guests,
and visitors shall observe and comply with all driving and parking signs and
markers within and about the Building. All parking ramps and areas and any
pedestrian walkways, plazes or other public areas forming a part of the Building
or the land upon which the Building is situated shall be under the sole and
absolute control of Landlord, who shall have the exclusive right to regulate and
control those areas.
B-2
16. Tenant shall not use the washrooms, restrooms and plumbing fixtures
of the Building, and appurtenances thereto, for any other purpose than the
purpose for which they were constructed, and Tenant shall not deposit any
sweepings, rubbish, rags or other improper substances therein. Tenant shall not
waste water by interfering or tampering with the faucets or otherwise. If Tenant
or Tenant's servants, employees, contractors, jobbers, agents, licensees,
invitees, guests or visitors cause any damage to such washrooms, restrooms,
plumbing fixtures or appurtenances, such damage shall be repaired at Tenant's
expense, and Landlord shall not be responsible therefor.
17. Tenant shall not mark, paint, drill into, cut, string wires within,
or in any way deface any part of the Building, without the express prior written
consent of Landlord, and as Landlord may direct. Upon removal of any wall
decorations or installations or floor coverings by Tenant, any damage to the
walls or floors shall be repaired by Tenant at Tenant's sole cost and expense.
All cleaning and janitorial services for the Building and the Premises shall be
provided exclusively through Landlord, and except with the written consent of
Landlord, no person or persons other than those approved by Landlord shall be
employed by Tenant or permitted to enter the Building for the purpose of
cleaning the same. Tenant shall not cause any unnecessary labor by carelessness
or indifference to the good order and cleanliness of the Premises. Landlord
shall not in any way be responsible to Tenant for any loss of property on the
Premises, however occurring, or for any damage to any Tenant's property by the
janitor or any other employee or any other person. Without limitation upon any
of the provisions of the Lease, Tenant shall refer all contractors'
representatives, installation technicians, janitorial workers and other
mechanics, artisans and laborers rendering any service in connection with the
repair, maintenance or improvement of the Premises to Landlord for Landlord's
supervision, approval and control before performance of any such service. This
Paragraph 17 shall apply to all work performed in the Building, including
without limitation installation of telephones, telegraph equipment, electrical
devices and attachments and installations of any nature affecting floors, walls,
woodwork, trim, windows, ceilings, equipment or any other portion of the
Building. Plans and specifications for such work prepared at Tenant's sole
expense, shall be submitted to Landlord and shall be subject to Landlord's
express prior written approval in each instance before the commencement of work.
All installations, alterations and additions shall be constructed by Tenant in a
good and workmanlike manner and only good grades of material shall be used in
connection therewith. The means by which telephone, telegraph and similar wires
are to be introduced to the Premises and the location of telephones, call boxes
and other office equipment affixed to the Premises shall be subject to the
express prior written approval of Landlord. Tenant shall not lay linoleum or
similar floor coverings so that the same shall come into direct contact with the
floor of the Premises and, if linoleum or other similiar floor covering is to be
used, such use shall be subject to the prior written approval of Landlord, and
Landlord may require, among other things, that an interlining of builder's
deadening felt shall be first affixed to the floor, by a paste or other material
soluble in water. The use of cement or other similar adhesive material is
expressly prohibited.
18. No signs, awnings, showcases, advertising devices or other
projections or obstructions shall be attached to the outside walls of the
Building or attached or placed upon any Common Areas. No window shades, blinds,
drapes or other window coverings shall be installed in the Building without the
express prior written consent of Landlord. No sign, picture, advertisement,
window display or other public display or notice shall be inscribed, exhibited,
painted or affixed by Tenant upon or within any part of the Premises in such a
fashion as to be seen from the outside of the Premises or the Building without
the express prior written consent of Landlord. In the event of the violation of
any of the foregoing by Tenant, Landlord may remove the articles constituting
the violation without any liability and Tenant shall reimburse Landlord for the
expense incurred in such removal upon demand as additional rent under the Lease.
Interior signs on doors and upon the Building directory shall be subject to the
express prior written approval of Landlord and shall be inscribed, painted, or
affixed by Landlord at the expense of Tenant. Tenant shall not install any radio
or television antennas, loudspeaker, or other device on the roof or exterior
walls of the Building, unless explicitly permitted elsewhere in this Lease, and
Tenant shall not interfere with radio or television broadcasting or reception
from or in the Building or elsewhere.
19. Tenant shall not use the word "Paramount" or the name of the Building
or of the Landlord in its business name, trademarks, signs, advertisements,
descriptive material, letterhead, insignia or any other similar item without
Landlord's express prior written consent, except for the purpose of identifying
Tenant's address.
20. Tenant shall be entitled to have its name entered upon the directory
of the Building. In the event that Tenant wishes to have additional entries made
upon the Building directory for the names of employees of Tenant who occupy
office space within the Premises, such entries may be allowed by Landlord in its
reasonable discretion, and Landlord may require that Tenant pay a reasonable fee
for each such additional entry. However, the directory of the Building is
provided primarily for the display of the name and location of tenants only, and
Landlord reserves the right to exclude any other names therefrom at any time.
All entries upon the Building directory shall be in uniform print of a size,
style and format selected by Landlord.
B-3
21. The sashes, sash doors, skylights, windows and doors that reflect or
admit light or air into the Common Areas shall not be covered or obstructed by
Tenant, through placement of objects upon window sills or otherwise. Tenant
shall cooperate with Landlord in obtaining maximum effectiveness of the cooling
and heating systems of the Building by keeping corridor doors closed and by
closing drapes and other window coverings when the sun's rays fall upon windows
of the Premises and at the end of the business day. Tenant shall not obstruct,
alter or in any way impair the efficient operation of Landlord's heating,
ventilating, air conditioning, electrical, fire, safety or lighting systems, nor
shall Tenant tamper with or change the setting of any thermostat or temperature
control valves in the Building. Tenant shall not waste electricity, water or air
conditioning and agrees to cooperate fully with Landlord to assure the most
effective operation of the Building's heating and air conditioning and to comply
with any governmental energy-saving rules, laws or regulations of which Tenant
has actual notice.
22. Subject to applicable fire or other safety regulations, all doors
opening onto Common Areas and all doors upon the perimeter of the Premises shall
be kept closed and, during non-business hours, locked, except when in use for
ingress or egress. If Tenant uses the Premises after regular business hours or
on non-business days Tenant shall lock any entrance doors to the Building or to
the Premises used by Tenant immediately after using such doors.
23. The requirements of Tenant will be attended to only upon appropriate
application to the office of the Building by an authorized individual. Tenant
shall not request employees of Landlord to perform any work or do anything
outside of their regular duties unless under special instructions from Landlord
or the project manager for the Building. Tenant shall not request any employee
of Landlord to admit any person (Tenant or otherwise) to any office without
specific instructions from Landlord or the project manager for the Building.
Employees of Landlord shall not receive or carry messages for or to Tenant or
any other person, nor contract with nor render free or paid services to Tenant
or Tenant's servants, employees, contractors, jobbers, agents, invitees,
licensees, guests or visitors. In the event that any of Landlord's employees
perform any such services, such employees shall be deemed to be the agents of
Tenant regardless of whether or how payment is arranged for such services, and
Tenant hereby indemnifies and holds Landlord harmless from any and all
liability in connection with any such services and any associated injury or
damage to property or injury or death to persons resulting therefrom.
24. All keys to the exterior doors of the Premises shall be obtained by
Tenant from Landlord, and Tenant shall pay to Landlord a reasonable deposit
determined by Landlord from time to time for such keys. Landlord will furnish
Tenant, free of charge except for the deposit, with two keys to each door lock
in the Premises. Landlord may make a reasonable charge for any additional keys.
Tenant shall not make or have made duplicate copies of such keys. Tenant shall
not install additional locks or bolts of any kind upon any of the doors or
windows of, or within, the Building, nor shall Tenant make any changes in
existing locks or the mechanisms thereof. Tenant shall, upon the termination of
its tenancy, provide Landlord with the combination locks on safes, safe cabinets
and vaults and deliver to Landlord all keys to the Building, the Premises and
all interior doors, cabinets, and other key-controlled mechanisms therein,
whether or not such keys were furnished to Tenant by Landlord. In the event of
the loss of any key furnished to Tenant by Landlord, Tenant shall pay to
Landlord the cost of replacing the same or of changing the lock or locks opened
by such lost key if Landlord shall deem it necessary to make such a change.
25. Access may be had by Tenant to the Common Areas and to the Premises at
any time between the hours of 8:00 A.M. and 6:00 P.M., Monday through Friday,
legal holidays excepted. At other times access to the Building may be refused
unless the person seeking admission is known to the watchman in charge, if any,
and/or has a pass or is properly identified. Tenant shall be responsible for all
persons for whom Tenant requests passes, and shall be liable to Landlord for all
acts of such persons. In the event Building has, or there is subsequently, a
card access system for using the elevators at other than normal operating hours
for the Building, Landlord may deny access to any area served by the elevators
by anyone not having the necessary elevator access card. Landlord shall in no
case be liable for damages for the admission or exclusion of any person from the
Building. In case of invasion, mob, riot, public excitement, or other commotion,
Landlord reserves the right to prevent access to the Building for the safety of
tenants and protection of property in the Building.
26. Landlord shall not be responsible for, and Tenant hereby indemnifies
and holds Landlord harmless from any liability in connection with, the loss,
theft, misappropriation or other disappearance of furniture, furnishings,
fixtures, machinery, equipment, money, jewelry or other items of personal
property from the Premises or other parts of the Building, regardless of whether
the Premises or Building are locked at the time of such loss.
27. Tenant shall not use or permit to be used in the Premises any foul or
noxious gas or substance, or permit or allow the Premises to be occupied or
used in a manner offensive or objectionable to Landlord or other occupants of
the
B-4
[LOGO OF PARAMOUNT GROUP, INC. APPEARS HERE]
PARKING SPACE RIDER
-------------------
Provided Tenant is not in default under this Lease and pays the applicable
prevailing monthly parking rate in effect from time to time, and subject to such
rules and regulations as may be adopted from time to time by Landlord or the
operator of the parking facility serving the Building, Tenant and Tenant's
authorized employees designated by Tenant ("Authorized Users") shall have the
right to use in such parking facility up to the full Tenant's Parking Allotment
described in Paragraph K on page 2 of this Lease, on an unreserved monthly basis
until the expiration or termination of this Lease. However, if at any time
during the term of this Lease, Tenant does not choose to pay for the full number
of such parking spaces, Tenant shall not thereafter have the right to recommence
the use of the spaces not paid for if other commitments have been made for those
spaces in the interim.
Landlord reserves the right at any time to relocate any parking spaces and
to substitute an equivalent number of parking spaces in another parking
structure or subterranean parking facility or in a surface parking area within a
reasonable distance of the Premises.
Tenant agrees that it will use its best efforts to cooperate in programs
which may be undertaken by Landlord independently, or in cooperation with local
municipalities or governmental agencies or other property owners in the vicinity
of the Building, to reduce peak levels of commuter traffic. Such programs may
include, but shall not be limited to, car pools, van pools and other ride
sharing programs, public and private transit, and flexible work hours.
Tenant and Tenant's Authorized Users shall comply with the Parking Rules
and Regulations set forth in this Rider. Landlord reserves the right to modify,
add, or delete from time to time such Parking Rules and Regulations as it deems
reasonably necessary for the operation of such parking. Landlord may refuse to
permit any person who violates the Parking Rules and Regulations to park in the
Building parking facility, and any violation of the rules shall subject to the
car to removal, at the vehicle owner's expense. Tenant agrees to use its best
efforts to acquaint Tenant's Authorized Users and visitors with the Parking
Rules and Regulations set forth in this Rider.
PARKING RULES AND REGULATIONS
1. Neither Tenant nor Tenant's Authorized Users shall park vehicles in any
parking areas designated by Landlord, the parking operator or governmental
entities with jurisdiction for other uses, including use by visitors or
other tenants. Tenant and such Authorized Users shall not leave vehicles in
the Building parking areas overnight nor park any vehicles in the Building
parking areas other than automobiles, motorcycles, motor driven or non-
motor driven bicycles or four-wheeled trucks. Landlord may, in its sole
discretion, designate separate areas for bicycles and motorcycles.
2. Tenant shall not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant's employees or Authorized Users, suppliers,
shippers, customers, or invitees to be loaded, unloaded, or parked in areas
other than those designated by Landlord for such activities. If Tenant
permits or allows any of the prohibited activities described in this
Parking Rider, then Landlord shall have the right, without notice, in
addition to such other rights and remedies that it may have, to remove or
tow away the vehicle involved and charge the cost to Tenant, which cost
shall be immediately payable upon demand by Landlord.
3. Tenant shall submit a written notice in a form reasonably specified by
Landlord or the parking operator, containing the names, home and office
addresses and telephone numbers of those persons who are designated as
Authorized Users by Tenant to use the parking privileges on a monthly basis
and shall use its best efforts to identify each vehicle by make, model and
license number. Such notice, as amended from time to time, is hereafter
referred to as the "Parking Notice." No person whose name and address is
not contained in the Parking Notice shall have any right to park a vehicle
in the area of the Building parking facilities designated for monthly
parking, and no person whether or not his name is included in the Parking
Notice shall have any right to park in such facilities a
PR-1
vehicle not identified in the Parking Notice without paying the parking
charge then applicable for daily parking and parking in the area designated
for daily parking.
4. Cars must be parked entirely within the stall lines painted on the floor.
5. All directional signs and arrows must be observed.
6. The speed limit within all parking areas shall be 5 miles per hour.
7. Parking is prohibited, unless a floor parking attendant approved by
Landlord directs otherwise:
a. In areas not striped for parking;
b. In aisles;
c. Where "No Parking" or "Handicap" signs are posted (except that
handicapped persons displaying on their vehicles the legalty
prescribed identification may park in such "Handicap" areas);
d. On ramps;
e. In crosshatched areas; or
f. In reserved spaces and in such other areas as may be designated
by Landlord or the parking operator.
8. Parking stickers or any other device or form of identification supplied by
Landlord or the parking operator shall remain the property of Landlord or
the parking operator, as the case may be. Such parking identification
device must be displayed as requested and may not be mutilated in any
manner. The serial number of the parking identification may not be
obliterated. Devices are not transferable, and any device not in the
possession of an Authorized User will be void. There will be a replacement
charge to the Tenant or Authorized User for loss of any magnetic parking
card or other parking identification device.
9. Every Authorized User is requested to park and lock his own car. All
responsibility for damage to or loss of cars is assumed by Authorized
Users, and Landlord shall not be responsible for any such damage or loss by
water, fire, defective brakes, the act or omission by others, theft, or by
any other cause. Tenant shall repair or cause to be repaired at its sole
cost and expense any and all damage to the Building parking facility or any
part thereof caused by Tenant or its Authorized Users or vehicles of Tenant
or such Authorized Users.
10. Loss or theft of parking identification devices from automobiles must be
reported to the garage manager immediately, and a lost or stolen report
must be filed by the Tenant or user of such parking identification device
at that time. Any parking identification devices found on any unauthorized
vehicle will be confiscated and the illegal holder will be subject to
prosecution. Lost or stolen devices previously reported and then found must
be reported found to the office of the garage immediately. Landlord has the
right to exclude any vehicle from the parking facilities that does not have
a parking identification device.
11. Spaces are for the express purpose of one automobile per space unless a
floor parking attendant approved by Landlord directs otherwise. Washing,
waxing, cleaning or servicing of any vehicle in the parking facility by
Tenant or by the Authorized User and/or his agents is prohibited.
PR-2
[LOGO OF PARAMOUNT GROUP, INC. APPEARS HERE]
RENT ESCALATION RIDER
---------------------
In order to adjust the rent payable under the Lease in accordance with
changes in the cost of living from time to time, Tenant agrees to pay to
Landlord, with the installments of Base Rent, and as additional monthly rent
under the Lease, an amount representing rent escalation. For purposes of
calculating the rent escalation payable hereunder, the Consumer Price Index for
All Urban Consumers, U.S. City Average, All Items (1967=100), unadjusted (herein
the "Index") published by the Bureau of Labor Statistics of the United States
Department of Labor for the month of June, 1996 shall be the base Index figure
(the "Base index"). The Base Index shall be compared to the index figure for
December of each year during the term of the Lease, including the initial
partial calendar year if the Lease term commences other than during December. In
the event that the Index figure for December of any year during the term of the
Lease shall be greater than the Base Index, in addition to the Base Rent Tenant
shall pay rent escalation to Landlord in an amount equal to the same percentage
increase in the Base Rent as the percentage increase in the index for such
December over the Base Index. Such amount shall be payable monthly commencing
with the payment of Base Rent for the month following such December.
In the event that the Index for any December during the term of the Lease
is not yet available upon the date that any installment(s) of Base Rent is due,
Tenant shall continue paying the monthly installments of Base Rent and rent
escalation in the amount applicable for such December until the index for that
month is published, whereupon Tenant shall immediately pay Landlord the rent
escalation which would have been due in the months following such December had
the index for such December been available. In the event that publication of the
Index is discontinued, Landlord and Tenant agree that the index of consumer
prices which is most closely analogous to the index shall be used in place of
the index for calculation of the rent escalation payable hereunder. In the event
that the referents or techniques employed in the calculation of the index shall
be modified and such modification would have resulted in a different figure for
the Base Index, Landlord and Tenant agree that the Base Index shall be
appropriately adjusted and that the Index, as modified, shall be used as
provided hereunder.
The term "Base Rent" as used in this Rider shall be deemed to include the
additional monthly rent for conduit space pursuant to Section 2 of the
Telecommunications Conduit Rider (excluding the initial one-time payment of
$7,200) as well as the Base Rent described in Section E on page 2 and Section 3
on page 3 of the body of this Lease. Thus, the additional rent for the conduit
space shall be adjusted from time to time in the same fashion as the Base Rent.
RER-1
[LOGO OF PARAMOUNT GROUP, INC. APPEARS HERE]
TELECOMMUNICATIONS CONDUIT RIDER
--------------------------------
1. Lease and Use of Conduit. Landlord hereby leases to Tenant, as part of
------------------------
the Premises for the Lease Term, the conduit space described below (the "Conduit
Space"). Tenant shall use the Conduit Space solely for telecommunications cable
to connect the Premises to the Premises of other telecommunications companies
that lease space on the floors of the Building through which the Conduit Space
passes. Any such connection shall require the mutual written agreement of Tenant
and the other affected telecommunications companies.
The Conduit Space is contained within one 1-inch interduct running from
floor 3 through floor 28.
The interduct from floor 3 through floor 18 runs through conduit closets in
the northwest corner of the corridor on each floor. Access to the conduit closet
on each floor shall, at Landlord's election, be restricted so that no entry to
the closet will be permitted unless Landlord's designated contractor or other
representative is present. The interduct from floor 19 to floor 28 is located in
the north stairwell of the Building. Landlord may require any installation of
cable in the Conduit Space or any connection of Tenant's cable to the Premises
or cable of other tenants in the Building to be performed by Landlord's approved
contractor. All costs of such installations and connections (including but not
limited to Landlord's administrative fee) and the ongoing use and maintenance of
such items shall be at Tenant's sole expense. Tenant shall pay Landlord any
costs incurred by Landlord, together with Landlord's administrative fee, within
ten days after Tenant's receipt of a bill for such items. Tenant's use of the
Conduit Space and such cable and connecting lines shall comply with all
applicable laws, the other provisions of the Lease, and such Building Rules as
are adopted by Landlord from time to time, and shall not interfere in any way
with the operation of the Building or with the use by any other tenant of the
Building of such tenant's premises or the common areas of the Building. All
required cabling and connecting lines shall be installed out of sight.
Prior to any installation of cable in the Conduit Space or connecting lines
to the Premises or the premises of other tenants, Tenant shall obtain Landlord's
written approval as set forth in Section 29.3 of the Lease, and in the case of
connecting lines to the Premises or cable systems of another tenant, obtain the
written consent of such other tenants to the work.
2. Conduit Rent. Tenant agrees to pay Landlord additional rent for the
------------
Conduit Space, which initially shall be a one-time payment of $7,200. Such
$7,200 shall be due and payable upon execution of this Lease. (No portion of
such payment shall be refundable if the Lease is terminated for any reason.)
Thereafter, the additional rent for the Conduit Space shall be $50 per month
during the remaining Lease Term, subject to adjustment as provided below. Such
additional rent shall be due and payable to Landlord on the first day of each
month or portion of a calendar month throughout the Lease Term, together with
Tenant's Base Rent and other monthly charges, with the first such installment of
additional rent due on the Commencement Date. The amount of such monthly conduit
rent shall be adjusted from time to time in accordance with the Rent Escalation
Rider to this Lease to reflect increases in the Consumer Price Index as
described in that Rider.
3. Indemnity and Waiver. Tenant hereby agrees to indemnify and hold
--------------------
harmless Landlord and its partners, its agent Paramount Group, Inc. and their
respective officers, directors, shareholders, agents and employees
(collectively, the "Landlord Group") from and against any and all claims
(including but not limited to claims for bodily injury or property damage),
actions, mechanic's liens, losses, liabilities, and expenses (including
reasonable attorney fees and costs of defense by Landlord's legal counsel)
(collectively, "Claims"), which may arise from the installation, operation, use,
maintenance or removal of the cable and connecting lines pursuant to this Rider
and the Lease. Similarly, Tenant shall pay upon demand by Landlord the costs to
repair any damage to the Building caused by such installation, operation, use,
maintenance or
TCR-1
removal. Tenant hereby waives and releases the Landlord Group from any Claims
Tenant may have at any time (including but not limited to Claims relating to
interruptions in services) arising out of or relating in any way to the
installation, operation, use, maintenance, or removal of the cable and
connecting lines described in this Rider and the Lease, whether or not caused by
the negligence of any member of the Landlord Group or Landlord's contractors. In
no event shall Landlord or any member of the Landlord Group be liable to Tenant
for lost profits or consequential, incidental, or punitive damages of any kind.
4. Removal of Cable and Connecting lines. Tenant agrees that, upon the
-------------------------------------
expiration or termination of the Lease, Tenant (or, at Landlord's election, the
contractor designated by Landlord) shall promptly remove, at Tenant's sole cost
and expense, all cable, connecting lines, and other installations installed
under this Rider and the Lease (excepting the interduct and conduit themselves,
which shall remain the property of Landlord), and restore those portions of the
Building damaged by such removal to their condition immediately prior to the
installation of such items. If Tenant fails to promptly remove all such items
pursuant to this Section 4, or if Landlord elects to have such work performed by
Landlord's contractor, Landlord may remove such items installed hereunder, and
restore those portions of the Building damaged by such removal to their
condition immediately prior to the installation, in which case Tenant agrees
promptly to pay Landlord's reasonable costs of removal and restoration,
including Landlord's administrative fee.
5. Applicability of Other Provisions. Except as explicitly provided
---------------------------------
otherwise herein, Tenant's obligaitons under the Lease for the protection of the
Building, Landlord, the Landlord Group, and third parties, including but not
limited to Tenant's obligations regarding maintenance, repairs, mechanic's
liens, insurance, attorneys' fees and costs of suit, shall apply in the same
fashion with respect to Tenant's use of the Conduit Space and the cable and
connecting lines described in this Rider as they do with respect to Tenant's use
of the rest of the Premises.
6. Miscellaneous. This Rider supersedes all prior or contemporaneous
-------------
understandings, negotiations, or agreements between the parties, whether written
or oral, with respect to its subject matter.
TCR-2
[LOGO PARAMOUNT GROUP, INC. APPEAR HERE]
PARAMOUNT
GROUP, INC.
EMERGENCY GENERATOR RIDER
-------------------------
1. The parties acknowledge that Landlord has installed a second Emergency
Generator in the Building which is in service as of the execution of this Lease.
Tenant is granted the right to use up to 20 kilowatts of emergency power from
such Emergency Generator in the event of an interruption of normal electrical
service to the Premises during the Lease Term, provided that: (a) Tenant
notifies Landlord in writing within thirty (30) days following the Commencement
Date of the number of kilowatts (not to exceed 20 kilowatts) of emergency power
which Tenant reserves the right to use; (b) Tenant pays Landlord, at the time of
notification in (a) above, a one-time installation fee in an amount equal to
$475 per kilowatt of emergency power so reserved; and (c) Tenant pays Landlord
as additional rent under the Lease a monthly sum in an amount reasonably
determined by Landlord in good faith based on the amount of emergency power
reserved by Tenant, and Landlord's costs of operation, use, maintenance, fuel,
oil, governmental permits, licenses and fees, insurance, Landlord's profit and
administration and other expenses relating to the Emergency Generator. The
monthly amount of the additional rent described in item (c) initially shall be
$75 per month.
2. Each such payment described in subparagraph 1(c) above shall be due on
the first day of each month with Tenant's other rent payments, with the first
such payment due on the Commencement Date. Such monthly amount may be adjusted
annually, in Landlord's discretion, during the term of the Lease and any
extensions thereto.
3. Tenant's use of such emergency power shall be in accordance with such
rules and regulations as may be established by Landlord from time to time.
4. Landlord shall repair and maintain the Emergency Generator, provided
that Tenant shall reimburse Landlord upon demand, as additional rent hereunder,
for the cost of any repairs or extraordinary maintenance for the Emergency
Generator necessitated by acts of Tenant or Tenant's employees, contractors,
assignees, sublessees, agents, licensees or invitees. In addition, any
installation of equipment or cabling in the Premises or the Building for the
purpose of enabling Tenant to access the Emergency Generator shall be performed
by Landlord in accordance with plans and specifications approved by the parties
in writing in advance, and Tenant shall reimburse Landlord for the costs of such
installation, including, but not limited to, design fees and costs of
demolition.
5. The provision of Emergency Generator service by Landlord to Tenant
shall be subject to Section 9.6 of the Lease.
6. This Emergency Generator Rider supersedes all prior or contemporaneous
understandings, negotiations, or agreements between the parties, whether written
or oral, with respect to its subject matter. This Emergency Generator Rider is
part of and shall be attached to the Lease.
7. All terms of the Lease which have not been expressly altered by this
Emergency Generator Rider shall remain in full force and effect.
EGR-1
[LOGO OF PARAMOUNT GROUP, INC. APPEARS HERE]
EXTENSION OPTION RIDER
----------------------
Provided that Tenant is not in default under this Lease, Tenant shall have
the option to extend the term of this Lease for an additional five-year period
following the expiration of the initial term. Tenant may exercise such option
only by giving Landlord a written notice at least nine (9) months, but not more
than twelve (12) months, prior to the commencement of the five-year period, and
only if Tenant is not in default at the time Tenant gives such notice. If Tenant
has exercised such option, but is in default on the date the additional
five-year extended term is to commence, then at Landlord's election, the
extended term shall not commence until and unless the Tenant timely cures such
default.
With respect to the additional five-year term, the Lease shall be adjusted
to reflect the following: (a) a new Base Rent for the Premises at a rate equal
to the Base Rent rates being charged by Landlord for telecommunications space in
the Building of comparable size and quality in comparable renewal leases for a
comparable term entered into by Landlord within six months prior to the date
Tenant exercises this option (provided, however, that if no such comparable
renewal leases were entered into within such six month period, then the
valuation of comparable transactions shall be based on the Base Rent rate
Landlord would have been willing to accept at that time in such comparable
renewal leases, as reasonably calculated by Landlord in good faith); (b) a new
rental rate for the Conduit Space based on the then-prevailing rate being
charged by Landlord for similar conduits in the Building; and (c) a new rental
rate for use of the Emergency Generator as provided for in the Emergency
Generator Rider attached to the Lease, based on the then-prevailing rate charged
by Landlord for comparable usage.
Landlord shall advise Tenant of such rental adjustments within one month
after Landlord's receipt of Tenant's notice. Tenant shall have ten days
following Tenant's receipt of notice of the rental adjustment within which to
accept such terms by executing any appropriate documentation submitted by
Landlord to Tenant. If Tenant fails to so accept such terms, Tenant's rights to
extend the term pursuant to this Rider shall be cancelled.
In no event shall the terms offered by Landlord under this Rider bind
Landlord to offer such terms to Tenant or to any other person or entity at any
time except as explicitly set forth in this Rider, nor shall such terms prevent
Landlord from leasing the Premises to any person or entity on different terms if
Tenant does not timely accept the terms determined in accordance with this
Rider.
EOR-1
[LETTERHEAD & LOGO OF PARAMOUNT GROUP, INC.]
August 26, 1996
Mr. Alan Chin
PRIMECALL, INC.
1520 Eastlake Avenue East
Suite 205
Seattle, Washington 98101
Dear Alan:
Enclosed are three (3) Lease Commencement Certificates confirming commencement
date of August 1, 1996 which require your signature. Please sign and return all
three (3) to my attention. An executed copy will be returned for your files.
If you have any questions, please do not hesitate to call me.
Sincerely,
/s/ Mark Messana
Mark Messana
Project Manager
MM:ie
Enclosures
LEASE COMMENCEMENT CERTIFICATE
THIS CERTIFICATE, made as of this 26th day of August, 1996, by ONE WILSHIRE
ARCADE IMPERIAL, LTD., a limited corporation (hereinafter called "Landlord") and
Primecall, Inc. (hereinafter called "Tenant").
WITNESSETH:
WHEREAS, by agreement of lease dated June 10, 1996, (hereinafter called the
"Lease Agreement"), Landlord leased to Tenant and Tenant hired from Landlord
certain premises (hereinafter called the "Demised Premises") deemed to contain
1,500 rentable square feet (including common area factor) on the 28th floor(s)
of the building known as ONE WILSHIRE BUILDING, the address of which is 624
South Grand Avenue, Los Angeles, California 90017; and
WHEREAS, the Lease Agreement provides that immediately after the
Commencement Date and the expiration date shall be confirmed by Landlord and
Tenant in writing; and
WHEREAS, the Lease Agreement requires Tenant to certify various other
matters pertaining to the Lease Agreement when requested to do so by Landlord.
NOW, THEREFORE, in consideration of the mutual covenants contained in the
Lease Agreement:
1. Landlord and Tenant confirm that the Commencement Date of the Lease
Agreement is August 1, 1996, and that the expiration date of the Lease Agreement
is July 31, 2006, subject, however, to the provisions of the Lease Agreement;
2. Tenant certifies that all work required to be performed by Landlord in
preparation of the Demised Premises for Tenant's occupancy, if any, has been
satisfactorily completed by Landlord in
accordance with the provisions of the Lease Agreement and accepted by Tenant;
3. Tenant certifies that the Demised Premises have been delivered to and
accepted by Tenant;
4. Landlord and Tenant certify that the Lease Agreement is in full force
and effect and has not been modified, altered or amended; and
5. Tenant certifies that as of the date hereof it has no offsets or
defenses against the enforcement of any provision of the Lease Agreement.
This Certificate shall be binding upon and inure to the benefit of the
parties hereto, their successors and assigns, and may be relied upon by a
prospective purchaser, lessor, mortgagee, or holder of a deed of trust, of or on
any real property including all or any portion of the Demised Premises.
IN WITNESS WHEREOF, and intending to be legally bound hereby, Landlord and
Tenant have caused this Certificate to be duly executed as of the date first
above written.
Landlord:
ONE WILSHIRE ARCADE IMPERIAL, LTD.
a California Limited Partnership
By: Paramount Group, Inc., Its Agent
Attest:
_____________________________ By:________________________________
Its:_______________________________
Tenant:
Attest: PRIMECALL, INC.
_____________________________ By: /s/ Alan Chin
-------------------------------
V.P./SECRETARY
Its:-------------------------------