EXHIBIT 10.13
[***]=Certain information in this Exhibit has been omitted and filed separately
with the Securities and Exchange Commission.
TELECOMMUNICATIONS OFFICE LEASE
-------------------------------
CARRIER CENTER LOS ANGELES
600 SEVENTH STREET ASSOCIATES, INC.,
a California corporation
as Landlord,
and
EQUINIX, INC.,
a Delaware corporation,
as Tenant
CARRIER CENTER LOS ANGELES
--------------------------
INDEX
-----
ARTICLE SUBJECT MATTER PAGE
- ------- -------------- ----
ARTICLE 1 PREMISES, BUILDING, PROJECT, AND COMMON AREAS................. 1
ARTICLE 2 LEASE TERM; OPTION TERMS...................................... 1
ARTICLE 3 BASE RENT..................................................... 1
ARTICLE 4 ADDITIONAL RENT............................................... 1
ARTICLE 5 USE OF PREMISES............................................... 6
ARTICLE 6 SERVICES AND UTILITIES........................................ 7
ARTICLE 7 REPAIRS....................................................... 9
ARTICLE 8 ADDITIONS AND ALTERATIONS..................................... 10
ARTICLE 9 COVENANT AGAINST LIENS........................................ 11
ARTICLE 10 INSURANCE..................................................... 12
ARTICLE 11 DAMAGE AND DESTRUCTION........................................ 14
ARTICLE 12 NONWAIVER..................................................... 16
ARTICLE 13 CONDEMNATION.................................................. 16
ARTICLE 14 ASSIGNMENT AND SUBLETTING..................................... 16
ARTICLE 15 SURRENDER OF PREMISES; OWNERSHIP
AND REMOVAL OF TRADE FIXTURES................................. 20
ARTICLE 16 HOLDING OVER.................................................. 20
ARTICLE 17 ESTOPPEL CERTIFICATES......................................... 20
ARTICLE 18 SUBORDINATION................................................. 21
ARTICLE 19 DEFAULTS; REMEDIES............................................ 21
ARTICLE 20 COVENANT OF QUIET ENJOYMENT................................... 23
ARTICLE 21 SECURITY DEPOSIT.............................................. 23
ARTICLE 22 SUPPLEMENTAL EQUIPMENT........................................ 24
ARTICLE 23 SIGNS......................................................... 27
ARTICLE 24 COMPLIANCE WITH LAW........................................... 27
ARTICLE 25 LATE CHARGES.................................................. 27
ARTICLE 26 LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT.......... 27
ARTICLE 27 ENTRY BY LANDLORD............................................. 28
ARTICLE 28 PARKING....................................................... 28
ARTICLE 29 MISCELLANEOUS PROVISIONS...................................... 28
EXHIBITS
A-1 OUTLINE OF SUITE 600
A-2 ROOF SPACE AND ROOF SYSTEMS SUPPORT PAD
A-3 OUTLINE OF MUST TAKE SPACE
B TENANT WORK LETTER
C FORM OF NOTICE OF LEASE TERM DATES
D RULES AND REGULATIONS
E FORM OF TENANT'S ESTOPPEL CERTIFICATE
F FORM NON-DISTURBANCE AGREEMENT
G PROJECT SOUND REQUIREMENTS AND SPECIFICATIONS
H ANTENNA SPACE RIDER
I FORM OF MEMORANDUM OF LEASE
-i-
CARRIER CENTER LOS ANGELES
--------------------------
INDEX OF MAJOR DEFINED TERMS
----------------------------
LOCATION OF
DEFINITION IN
DEFINED TERMS OFFICE LEASE
- ------------- ------------
Abatement Event...................................................................... 13
Acceptable Changes................................................................... 15
Accountant........................................................................... 11
Additional Electrical Supply......................................................... 12
Additional Rent...................................................................... 5
Alterations.......................................................................... 14
Antenna Conduit Space......................................................... Exhibit H
Antenna Conduits.............................................................. Exhibit H
Antenna Space................................................................. Exhibit H
Antenna Space Effective Date.................................................. Exhibit H
Antennas...................................................................... Exhibit H
Auxiliary Space...................................................................... 30
Base Building........................................................................ 15
Base Rent............................................................................ 5
Base Year............................................................................ 5
BOMA................................................................................. 2
Brokers.............................................................................. 37
Building............................................................................. 1
Building Structure................................................................... 14
Building Systems..................................................................... 14
Claims........................................................................... 17, 31
Collocation Agreements............................................................... 23
Common Areas......................................................................... 1
Connecting Equipment................................................................. 29
Contract...................................................................... Exhibit B
Cost Pools........................................................................... 9
Customers............................................................................ 23
Damage Termination Date.............................................................. 20
Damage Termination Notice............................................................ 20
Direct Expenses...................................................................... 5
Effective Date....................................................................... iv
Electrical Equipment................................................................. 12
Eligibility Period................................................................... 13
Estimate............................................................................. 10
Estimate Statement................................................................... 10
Estimated Excess..................................................................... 10
Excess............................................................................... 9
Exercise Date........................................................................ 3
Expense Year......................................................................... 6
Fair Rental Value.................................................................... 3
Final Costs................................................................... Exhibit B
Fire-Suppression System.............................................................. 29
Force Majeure........................................................................ 35
Future Mortgage...................................................................... 26
HVAC................................................................................. 12
Landlord............................................................................. iv
Landlord Parties..................................................................... 16
Landlord Repair Notice............................................................... 19
Lease................................................................................ iv
Lease Commencement Date.............................................................. 2
Lease Expiration Date................................................................ 3
Lease Term........................................................................... 2
Lease Year........................................................................... 3
License.............................................................................. 29
Lines................................................................................ 30
Notices.............................................................................. 35
Operating Expenses................................................................... 6
-ii-
Option Rent.......................................................................... 3
Option Rent Notice................................................................... 3
Premises............................................................................. 1
Project.............................................................................. 1
Proposition 13....................................................................... 8
Quoted Rent.......................................................................... 22
Renovations.......................................................................... 37
Rent................................................................................. 5
Review Period........................................................................ 10
Security Deposit..................................................................... 28
Statement............................................................................ 9
Subject Space........................................................................ 21
Summary.............................................................................. iv
Supplemental Equipment............................................................... 30
Tax Expenses......................................................................... 8
Tenant............................................................................... iv
Tenant Damage Event.................................................................. 20
Tenant Work Letter................................................................... 1
Tenant's Conduit..................................................................... 30
Tenant's Exercise Notice............................................................. 3
Tenant's HVAC Equipment.............................................................. 29
Tenant's Share....................................................................... 9
Transfer Notice...................................................................... 21
Transfer Premium..................................................................... 23
Transferee........................................................................... 21
Transferee's Rent.................................................................... 22
Transfers............................................................................ 21
-iii-
CARRIER CENTER LOS ANGELES
--------------------------
TELECOMMUNICATIONS OFFICE LEASE
-------------------------------
This Telecommunications Office Lease (the "Lease"), dated as of the date
set forth in Section 1 of the Summary of Basic Lease Information (the
---------
"Summary"), below, is made by and between 600 SEVENTH STREET ASSOCIATES, INC., a
California corporation ("Landlord"), and EQUINIX, INC., a Delaware corporation
("Tenant").
SUMMARY OF BASIC LEASE INFORMATION
----------------------------------
TERMS OF LEASE DESCRIPTION
- -------------- -----------
1. Date: August 6, 1999 (the "Effective
Date)
2. Premises
(Article 1).
---------
2.1 Building: [*]
Los Angeles, California 90014
Building RSF: ______________
2.2 Premises: Approximately [*] rentable square
feet of space consisting of (i)
approximately [*] rentable square
feet of space comprising the entire
sixth (6th) floor of the Building,
and known as Suite 600 (the "Suite
600 Space"), and (ii) approximately
[*] rentable square feet of space
located on the roof of the Building
(the "Roof Space"), both as further
set forth in Exhibit A-1 and
-----------
Exhibit A-2 to this
-----------
Telecommunications Office Lease.
3. Lease Term
(Article 2).
---------
3.1 Length of Term: One Hundred Eighty (180) months.
3.2 Lease Commencement June 1, 2000
Date:
3.3 Lease Expiration Date: The date immediately preceding the
one hundred eightieth (180th) month
anniversary of the Lease
Commencement Date.
4. Base Rent (Article 3):
---------
4.1 Base Rent:
Annual
Monthly Rental Rate
Months of Annual Installment per Rentable
Lease Term Base Rent of Base Rent Square Foot
- ---------- --------- ------------ -----------
1 - 12 $[*] $[*] $[*]
13 - 24 $[*] $[*] $[*]
25 - 36 $[*] $[*] $[*]
37 - 48 $[*] $[*] $[*]
49 - 60 $[*] $[*] $[*]
61 - 72 $[*] $[*] $[*]
73 - 84 $[*] $[*] $[*]
85 - 96 $[*] $[*] $[*]
97 - 108 $[*] $[*] $[*]
109 - 120 $[*] $[*] $[*]
*CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
-iv-
121 - 132 $[*] $[*] $[*]
133 - 144 $[*] $[*] $[*]
145 - 156 $[*] $[*] $[*]
157 - 168 $[*] $[*] $[*]
169 - 180 $[*] $[*] $[*]
4.2 Base Rent Abatement Tenant shall be entitled to an abatement of Base
(Section 3.2): Rent for a portion of the Premises during the
first (1st) [*] months of the Lease Term
pursuant to the terms and conditions of Section
3.2.
5. Base Year Calendar year 2000.
(Article 4):
---------
6. Tenant's Share Approximately [*]%.
(Article 4):
---------
7. Permitted Use General office use and operation of
(Article 5): telecommunications equipment consistent with a
---------
first-class telecommunications building
8. Security Deposit $[*]
(Article 21):
----------
9. Address of Tenant 901 Marshall Avenue, 2nd Floor
(Section 29.18): Redwood City, CA 94063
-------------
Attention: Art Chinn
with a copy to:
[*]
Suite 600
Los Angeles, CA 90014
10. Address of Landlord See Section 29.18 of the Lease.
(Section 29.18): -------------
-------------
11. Parking Subject to the terms and conditions of Section
(Article 28) -------
----------
28, Tenant shall be permitted to rent up to
--
fifteen (15) undesignated and unreserved parking
passes in the Parking Structure.
12. Broker(s) Landlord's Representative:
(Section 29.24): -------------------------
-------------
Telecom Real Estate Services, Inc.
*CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
-v-
ARTICLE 1
---------
PREMISES, BUILDING, PROJECT, AND COMMON AREAS
---------------------------------------------
1.1 Premises, Building, Project and Common Areas.
--------------------------------------------
1.1.1 The Premises. Landlord hereby leases to Tenant and Tenant
------------
hereby leases from Landlord the premises set forth in Section 2.2 of the Summary
-----------
(the "Premises"). The outline of the Premises is set forth in Exhibit A-1 and
-----------
Exhibit A-2 attached hereto. The parties hereto agree that the lease of the
- -----------
Premises is upon and subject to the terms, covenants and conditions herein set
forth, and Tenant covenants as a material part of the consideration for this
Lease to keep and perform each and all of such terms, covenants and conditions
by it to be kept and performed and that this Lease is made upon the condition of
such performance. The parties hereto hereby acknowledge that the purpose of
Exhibits A-1, A-2 and A-3 is to show the approximate location of the Premises
- -------------------------
and the Must Take Space and the First Offer Space in the "Building," as that
term is defined in Section 1.1.2, below, only, and such Exhibits are not meant
-------------
to constitute an agreement, representation or warranty as to the construction of
the Premises or the Must Take Space, the precise area thereof or the specific
location of the "Common Areas," as that term is defined in Section 1.1.3, below,
-------------
or the elements thereof or of the accessways to the Premises, Must Take Space or
the "Project," as that term is defined in Section 1.1.2, below. Except as
-------------
specifically set forth in this Lease and in the work letter attached hereto as
Exhibit B (the "Tenant Work Letter"), Landlord shall not be obligated to provide
- ---------
or pay for any improvements, work or services related to the improvement,
remodeling or refurbishment of the Premises, and Tenant shall accept the
Premises in its "AS IS" condition on the Lease Commencement Date. Tenant also
acknowledges that neither Landlord nor any agent of Landlord has made any
representation or warranty regarding the condition of the Premises, the Building
or the Project or with respect to the suitability of any of the foregoing for
the conduct of Tenant's business. The taking of possession of the Premises by
Tenant shall conclusively establish that the Premises and the Building were at
such time in good and sanitary order, condition and repair.
1.1.2 The Building and The Project. The Premises are a part of that
----------------------------
certain seven (7) story office building set forth in Section 2.1 of the Summary
-----------
(the "Building"). The Building is part of an office project known as "Carrier
Center Los Angeles. The term "Project," as used in this Lease, shall mean (i)
the Building and the Common Areas, and (ii) the land (which is improved with
landscaping and other improvements) upon which the Building and the Common Areas
are located, and (iii) at Landlord's reasonable discretion, any additional real
property, areas, land, buildings or other improvements added thereto outside of
the Project, which Landlord reasonably anticipates will directly benefit Tenant.
1.1.3 Common Areas. Tenant shall have the non-exclusive right to use
------------
in common with other tenants in the Project, and subject to the rules and
regulations referred to in Article 5 of this Lease, those portions of the
---------
Project which are provided, from time to time, for use in common by Landlord,
Tenant and any other tenants of the Project (such areas, together with such
other portions of the Project designated by Landlord, in its discretion,
including certain areas designated for the exclusive use of certain tenants, or
to be shared by Landlord and certain tenants, are collectively referred to
herein as the "Common Areas"). The manner in which the Common Areas are
maintained and operated shall be consistent with other similarly situated
telecommunications buildings in the downtown Los Angeles area and Tenant's use
thereof shall be subject to such rules, regulations and restrictions as Landlord
may make from time to time. Landlord reserves the right to close temporarily,
make alterations or additions to, or change the location of elements of the
Project and the Common Areas, provided that Landlord shall use commercially
reasonable efforts to ensure that any such alterations or additions to the
Common Areas do not unreasonably interfere with Tenant's use and occupancy of
the Premises.
1.1.4 Access. Landlord agrees that, subject to Landlord's reasonable
------
rules and regulations, and access control systems and procedures, Tenant shall
have access to the Premises 24 hours a day, 365 days a year during the Lease
Term.
1.2 Must Take Space.
---------------
1.2.1 Description of Must Take Space. Commencing as of [*] (the
------------------------------
"Must Take Space Commencement Date") the Premises shall be expanded to include a
portion of the seventh (7th) floor of the Building consisting of approximately
[*] rentable square feet of space as more particularly shown on the floor plan
attached hereto as Exhibit A-3 (the "Must Take Space"). The Must Take Space
shall not include the areas shown as the "Leasing and Management Office" and
"Historic Suite" on Exhibit A-3.
------------
1.2.2 Base Rent. In addition to the Base Rent payable by Tenant to
---------
Landlord for the Premises, commencing upon the Must Take Commencement Date (as
defined above), Tenant shall pay to Landlord, as Base Rent for each rentable
square foot of the Must Take Space, an amount equal to the
*CONFIDENTIAL TREATMENT REQUESTED CONDIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
Base Rent paid by Tenant for each rentable square foot of the original Premises
as of the Must Take Space Commencement Date and shall be subject to adjustment
as set forth in Section 4 of the Summary. Tenant shall not be entitled to any
---------
Base Rent Abatement for the Must Take Space pursuant to Section 3.2 below. In
-----------
addition, for purposes of calculating Tenant's Share of Directing Expenses in
excess of Direct Expenses for the Base Year, effective as of the Must Take
Commencement Date, Tenant's Share shall be increased to [*]%, calculated by
dividing the rentable square feet of the Premises and Must Take Space by the
total rentable square feet within the Project.
1.2.3 Term. The lease term for the Must-Take Space shall commence as
----
of the Must Take Commencement Date, and shall expire at the expiration of the
Lease Term (as may be extended pursuant to Section 2.2 below).
-----------
1.2.4 Improvement of Must Take Space. The Must Take Space shall be
------------------------------
delivered to Tenant on the Must-Take Commencement Date in its "AS IS" condition,
without any obligation on Landlord's part to construct or pay for any Tenant
Improvements or alterations for the Must-Take Space; provided, however, Landlord
shall provide Tenant with a tenant improvement allowance for the Must Take Space
("Must Take Improvement Allowance") equal to $25.00 per square foot of the Must
Take Space for the construction of certain Tenant Improvements in the Must-Take
Space pursuant to the provisions of Exhibit B attached to this Lease, except for
purposes of the Must-Take Space only, the following modifications to Exhibit B
shall apply with respect to the Must Take Space: (i) all references in Exhibit B
to the "Premises" shall, for purposes of this Section 1.2, mean the "Must Take
Space" .1.2.5 Other Terms. The Must Take Space shall become part of the
-----------
Premises for all purposes of this Lease as of the Must Take Commencement Date,
and except as otherwise expressly provided in this Section 1.2, all of the terms
and conditions of this Lease shall apply to the Must Take Space following the
Must Take Commencement Date as though the Must Take Space was originally part of
the Premises. Following delivery of the Must-Take Space to Tenant, Tenant shall
execute an amendment adding such Must-Take Space to this Lease upon the
foregoing terms and conditions within thirty (30) days of delivery of such
amendment to Tenant by Landlord.
1.2.6 Additional Roof Rights: Commencing on the Must Take space
commencement date defined in Section 1.2.1 above, Tenant shall be entitled to
utilize the portion of the roof system support pad designated as Portion B on
Exhibit A-2 attached hereto for the installation of additional Tenants to
service the Must Take space.
1.4 Rentable Square Feet. The rentable square feet of the Premises are
--------------------
approximately as set forth in Section 2.2 of the Summary, and the rentable
-----------
square feet of the Building is approximately as set forth in Section 2.1 of the
-----------
Summary. For purposes hereof, the "rentable square feet" of the Premises, and
the Must Take Space shall be calculated by Landlord pursuant to the Standard
Method for Measuring Floor Area in Office Buildings, ANSI Z65.1-1996 ("BOMA"),
as modified for the Project pursuant to Landlord's standard rentable area
measurements for the Project, to include, among other calculations, (i) a
portion of the Common Areas and service areas of the Project, and (ii) the
vertical penetrations of the Project used for telecommunications and utility
purposes (i.e. the bus duct risers and conduit chases). The rentable square
feet of the Premises, the rentable square feet of the Must Take Space and the
rentable square feet of the Building are not subject to adjustment or
remeasurement by Tenant, but shall be remeasured by Landlord within ninety (90)
days following the delivery of the respective Premises, Expansion Space and any
First Offer Space to Tenant, and which measurements are subject to verification
from time to time by Landlord through Landlord's planner/designer, and such
verification shall be made in accordance with the provisions of this Section
-------
1.4. The determination of Landlord's planner/designer shall be conclusive and
- ---
binding upon the parties. In the event that Landlord's planner/designer
determines that the rentable square footage shall be different from those set
forth in this Lease, all amounts, percentages and figures appearing or referred
to in this Lease based upon such incorrect rentable square feet (including,
without limitation, the amount of the Base Rent and Tenant's Share) shall be
modified in accordance with such determination. If such determination is made,
it will be confirmed in writing by Landlord to Tenant.
*CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
-2-
ARTICLE 2
---------
LEASE TERM; OPTION TERMS
------------------------
2.1 Lease Term. The terms and provisions of this Lease shall be effective
----------
as of the date of this Lease. The term of this Lease (the "Lease Term") shall
be as set forth in Section 3.1 of the Summary, shall commence on the date set
-----------
forth in Section 3.2 of the Summary (the "Lease Commencement Date"), and shall
-----------
terminate on the date set forth in Section 3.3 of the Summary (the "Lease
-----------
Expiration Date") unless this Lease is sooner terminated as hereinafter
provided. For purposes of this Lease, the term "Lease Year" shall mean each
consecutive twelve (12) month period during the Lease Term; provided, however,
that the last Lease Year shall end on the Lease Expiration Date. At any time
during the Lease Term, Landlord or Tenant may deliver to the other party a
notice in the form as set forth in Exhibit C, attached hereto, as a confirmation
---------
only of the information set forth therein, which receiving party shall execute
and return such notice to the other party within ten (10) days of receipt
thereof.
2.2 Option Term.
-----------
2.2.1 Option Right. Landlord hereby grants to Tenant two (2)
------------
consecutive options to extend the Lease Term for a period of five (5) years each
(each, an "Option Term"), each of which options shall be exercisable only by
written notice delivered by Tenant to Landlord as provided below, provided that,
as of the date of delivery of any such notice, Tenant is not in default under
this Lease and Tenant has not previously been in default under this Lease beyond
any applicable cure periods more than three (3) times. Upon the proper exercise
of any such option to extend, and provided that, as of the end of the initial
Lease Term or initial Option Term, Tenant is not in default under this Lease
beyond any applicable cure periods and Tenant has not previously been in default
under this Lease beyond any applicable cure periods more than three (3) times,
the Lease Term, as it applies to the Premises, shall be extended for the
applicable Option Term. The rights contained in this Section 2.2 shall be
-----------
personal to the Original Tenant (and any Permitted Affiliates) and may only be
exercised by the Original Tenant and any assignee (including any Permitted
Affiliate) to which Tenant's entire interest in this Lease has been assigned
pursuant to Article 14 below, and may only be exercised by the Original Tenant
----------
or such assignee, as the case may be (but not by any sublessee or other
transferee of Tenant's interest in this Lease or the Premises) if the Original
Tenant or such assignee, as the case may be, occupies at least seventy percent
(70%) of the Premises as of the date Tenant purports to exercise the right to
lease the Expansion Space.
2.2.2 Option Rent. The "Rent," as that term is defined in Section
----------- -------
4.1, below, payable by Tenant during the applicable Option Term (the "Option
- ---
Rent") shall be equal to the greater of (i) the "Fair Rental Value" for the
Premises as of the commencement of the then applicable Option Term, and (ii) the
Rent payable by Tenant for the period immediately prior to the end of the Lease
Term or then applicable Option Term. The "Fair Rental Value" shall mean the
rent (including the obligation to directly pay electrical and janitorial
expenses and including additional rent and considering any "base year" or
"expense stop" applicable thereto), including all escalations, at which tenants
using their premises predominantly for telecommunications oriented purposes
(including without limitation the One Wilshire and 611 Wilshire buildings
located in Los Angeles, California), as of the commencement of the applicable
Option Term, are leasing non-sublease, non-encumbered, non-equity space
comparable in size, location and quality to the Premises for a term of five (5)
years, which comparable space is located in the Building or in comparable
buildings in the downtown Los Angeles office market.
2.2.3 Exercise of Option. The applicable option contained in this
------------------
Section 2.2 shall be exercised by Tenant, if at all, and only in the following
- -----------
manner: (i) Tenant shall deliver written notice to Landlord not more than
eighteen (18) months nor less than nine (9) months prior to the expiration of
the applicable Lease or Option Term, stating that Tenant may be interested in
exercising its option; (ii) Landlord, after receipt of Tenant's notice, shall
deliver notice (the "Option Rent Notice") to Tenant not less than seven (7)
months prior to the expiration of the applicable Lease or Option Term, setting
forth Landlord's determination of the Option Rent; and (iii) if Tenant wishes to
exercise such option, Tenant shall, on or before the date (the "Exercise Date")
which is the earlier of (A) the date occurring six (6) months prior to the
expiration of the applicable Lease or Option Term, and (B) the date occurring
thirty (30) days after Tenant's receipt of the Option Rent Notice, exercise the
option by delivering written notice thereof to Landlord ("Tenant's Exercise
Notice"), and concurrent with, such exercise, and in Tenant's Exercise Notice,
Tenant may, at its option, object to the Option Rent contained in the Option
Rent Notice, in which case the parties shall follow the procedure, and the
Option Rent shall be determined, as set forth in Section 2.2.4 below. Tenant's
failure to deliver Tenant's Exercise Notice on or before the Exercise Date,
shall be deemed to constitute Tenant's waiver of its extension rights hereunder.
2.2.4. Determination of Option Rent. In the event Tenant timely and
----------------------------
appropriately objects in Tenant's Exercise Notice to the Option Rent initially
determined by Landlord, Landlord and
Tenant shall attempt to agree upon the Option Rent, using their best good-faith
efforts. If Landlord and Tenant fail to reach agreement within thirty (30) days
following Landlord's receipt of Tenant's Exercise Notice objecting to the Option
Rent (the "Outside Agreement Date"), then each party shall submit to the other
party a separate written determination of the Option Rent within ten (10)
business days after the Outside Agreement Date, and such determinations shall be
submitted to arbitration in accordance with Sections 2.2.4.1 through 2.2.4.8
below. Failure of Tenant or Landlord to submit a written determination of the
Option Rent within such ten (10) business day period shall conclusively be
deemed to be the non-determining party's approval of the Option Rent submitted
within such ten (10) business day period by the other party.
2.2.4.1 Landlord and Tenant shall each appoint one arbitrator who
shall by profession be an independent real estate broker who shall have been
active over the five (5) year period ending on the date of such appointment in
the leasing of comparable commercial office buildings in Los Angeles County,
California. The determination of the arbitrators shall be limited solely to the
issue of whether Landlord's or Tenant's submitted Option Rent is the closest to
the actual Fair Market Rent for the Premises as determined by the arbitrators,
taking into account the requirements of Section 2 above. Each such arbitrator
shall be appointed within thirty (30) days after the Outside Agreement Date.
2.2.4.2 The two (2) arbitrators so appointed shall within ten (10)
days of the date of the appointment of the last appointed arbitrator agree upon
and appoint a third arbitrator who shall be qualified under the same criteria
set forth hereinabove for qualification of the initial two (2) arbitrators.
2.2.4.3 The three (3) arbitrators shall within thirty (30) days after
the appointment of the third arbitrator reach a decision as to whether the
parties shall use Landlord's or Tenant's submitted Option Rent and shall notify
Landlord and Tenant thereof.
2.2.4.4 The decision of the majority of the three (3) arbitrators
shall be binding upon Landlord and Tenant.
2.2.4.5 If either Landlord or Tenant fails to appoint an arbitrator
within thirty (30) days after the applicable Outside Agreement Date, the
arbitrator appointed by one of them shall reach a decision, notify Landlord and
Tenant thereof, and such arbitrator's decision shall be binding upon Landlord
and Tenant.
2.2.4.6 If the two (2) arbitrators fail to agree upon and appoint a
third arbitrator within the time period provided in Section 2.2.4.2 above, then
the parties shall mutually select the third arbitrator. If Landlord and Tenant
are unable to agree upon the third arbitrator within ten (10) days, then either
party may, upon at least five (5) days prior written notice to the other party,
request the Presiding Judge of the Los Angeles County Superior Court, acting in
his private and nonjudicial capacity, to appoint the third arbitrator. Following
the appointment of the third arbitrator, the panel of arbitrators shall within
thirty (30) days thereafter reach a decision as to whether Landlord's or
Tenant's submitted Option Rent shall be used and shall notify Landlord and
Tenant thereof.
2.2.4.7 The cost of the arbitrators and the arbitration proceeding
shall be paid by Landlord and Tenant equally, except that each party shall pay
for the cost of its own witnesses and attorneys.
2.2.4.8 Notwithstanding any such determination of Fair Market Rent by
any such arbitrators, in no event shall the Annual Base Rent payable by Tenant
during the Option Term be less than the Annual Base Rent payable by Tenant for
the Lease Year immediately preceding Tenant's exercise of the applicable Option
Term.
-2-
2.3 Delay in Delivery of Possession/Early Occupancy.
-----------------------------------------------
2.3.1 Delay in Delivery of Possession. Landlord shall endeavor to
-------------------------------
deliver possession of the Premises to Tenant on or before December 1, 1999 (the
"Scheduled Delivery Date"). If Landlord fails to deliver the Premises to Tenant
on or before the Scheduled Delivery Date, Landlord shall not be in default under
this Lease, and shall not be liable to Tenant for any damages or expenses
resulting therefrom. In such event the Lease Commencement Date shall be delayed
(i) day for day for each such day of Landlord Delay for the first sixty (60)
days of such delay beyond the Scheduled Delivery Date (the "First Delay
Period"), (ii) two (2) days for each such day of Landlord Delay beyond the First
Delay Period until the date which is one hundred twenty (120) days following the
Scheduled Delivery Date (the "Second Delay Period"), and (iii) three (3) days
for each such day of Landlord Delay beyond the Second Delay Period until the
date which is one hundred eighty (180) days following the Scheduled Delivery
Date (the "Third Delay Period"). Notwithstanding the foregoing limitation on
Landlord's liability to the contrary, if Landlord fails to deliver possession of
the Premises to Tenant on or before June 1, 2000 (the "Outside Delivery Date"),
then Tenant, as its sole and exclusive remedy, shall have the right to terminate
this Lease by written notice delivered to Landlord by no later than June 15,
2000. Notwithstanding the foregoing, Tenant shall not be entitled to either (i)
the Lease Commencement Date delays set forth in this Section 2.3.1(ii) and (iii)
--------- -----
hereinabove, or (ii) the termination right set forth in this Section 2.3.1, if
-------------
Landlord's inability to deliver the Premises to Tenant on the Scheduled Delivery
Date or Outside Delivery Date, as applicable, results from a Force Majeure Event
described in Section 29.16 below.
-------------
2.3.2 Early Occupancy. If Landlord delivers possession of the
---------------
Premises to Tenant prior to the Lease Commencement Date, all the provisions of
this Lease shall apply with respect to Tenant's possession and/or occupancy of
the Premises, except that Tenant shall not be obligated to pay Base Rent during
any such early occupancy period.
ARTICLE 3
---------
BASE RENT
---------
3.1 Base Rent. Subject to Section 3.2 below, Tenant shall pay, without
--------- -----------
prior notice or demand, to Landlord or Landlord's agent at the management office
of the Project, or, at Landlord's option, at such other place as Landlord may
from time to time designate in writing, by a check for currency which, at the
time of payment, is legal tender for private or public debts in the United
States of America, base rent for the Premises ("Base Rent") as set forth in
Section 4 of the Summary, payable in equal monthly installments as set forth in
- ---------
Section 4 of the Summary in advance on or before the first day of each and every
- ---------
calendar month during the Lease Term, without any setoff or deduction whatsoever
except as otherwise set forth herein. The Base Rent for the first full month of
the Lease Term shall be paid at the time of Tenant's execution of this Lease.
If any Rent payment date (including the Lease Commencement Date) falls on a day
of the month other than the first day of such month or if any payment of Rent is
for a period which is shorter than one month, the Rent for any fractional month
shall accrue on a daily basis for the period from the date such payment is due
to the end of such calendar month or to the end of the Lease Term at a rate per
day which is equal to 1/365 of the applicable annual Rent. All other payments
or adjustments required to be made under the terms of this Lease that require
proration on a time basis shall be prorated on the same basis.
3.2 Base Rent Abatement. Notwithstanding anything to the contrary
-------------------
contained in Section 3.1, Landlord hereby waives Tenant's obligation to pay Base
-----------
Rent for [*] rentable square feet of the initial Premises (the "Rent Abatement
Space") for the first [*] ([*]) months after the Lease Commencement Date (the
"Abatement Period"); provided, however, that if at any time during the Abatement
Period (i) Tenant commences to utilize any portion of the Rent Abatement Space
for installation or operation of Customer or Tenant's telecommunications
equipment, or (ii) Landlord issues a notice to Tenant respecting a default on
the part of Tenant which default is not cured within the applicable grace
period, if any, Landlord's agreement to waive payment of Base Rent shall (a) in
the event of item (i) above, be immediately revoked without further notice to
Tenant and the rights of Tenant pursuant to this Section 3.2 shall be null and
-----------
void with respect to the portion of the Rent Abatement Space from which Tenant
has commenced business operations, and (b) in the event of item (ii) above, be
completely and immediately revoked without further notice to Tenant and the
rights of Tenant pursuant to this Section 3.2 shall be null and void. In any
-----------
such notice given by Landlord, Landlord shall have the right to demand any and
all Base Rent which would have been due and payable in accordance with the Lease
absent the waiver contained in this Section 3.2. Notwithstanding anything to
-----------
the contrary contained in this Section 3.2, Tenant shall be required to make all
-----------
payments of Direct Expenses and Additional Rent during the Abatement Period and
throughout the Lease Term.
*CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
ARTICLE 4
---------
ADDITIONAL RENT
---------------
4.1 General Terms. In addition to paying the Base Rent specified in
-------------
Article 3 of this Lease, Tenant shall pay "Tenant's Share" of the annual "Direct
- ---------
Expenses," as those terms are defined in Sections 4.2.6 and 4.2.2 of this Lease,
-------------- -----
respectively allocated to the tenants of the Building, to the extent such Direct
Expenses allocated to the tenants of the Building are in excess of Tenant's
share of Direct Expenses applicable to the "Base Year," as that term is defined
in Section 4.2.1 of this Lease. Such payments by Tenant, together with any and
-------------
all other amounts payable by Tenant to Landlord pursuant to the terms of this
Lease (including without limitation the Conduit Rental described in Section 6.4
-----------
below), are hereinafter collectively referred to as the "Additional Rent", and
the Base Rent and the Additional Rent are herein collectively referred to as
"Rent." All amounts due under this Article 4 as Additional Rent shall be
---------
payable for the same periods and in the same manner as the Base Rent. Without
limitation on other obligations of Tenant which survive the expiration of the
Lease Term, the obligations of Tenant to pay the Additional Rent provided for in
this Article 4 shall survive the expiration of the Lease Term.
---------
4.2 Definitions of Key Terms Relating to Additional Rent. As used in this
----------------------------------------------------
Article 4, the following terms shall have the meanings hereinafter set forth:
- ---------
4.2.1 "Base Year" shall mean the period set forth in Section 5 of the
---------
Summary.
4.2.2 "Direct Expenses" shall mean "Operating Expenses" and "Tax
Expenses."
4.2.3 "Expense Year" shall mean each calendar year in which any
portion of the Lease Term falls, through and including the calendar year in
which the Lease Term expires, provided that Landlord, upon notice to Tenant, may
change the Expense Year from time to time to any other twelve (12) consecutive
month period, and, in the event of any such change, Tenant's Share of Direct
Expenses shall be equitably adjusted for any Expense Year involved in any such
change.
4.2.4 "Operating Expenses" shall mean all expenses, costs and amounts
of every kind and nature which Landlord pays or accrues during any Expense Year
because of or in connection with the ownership, management, maintenance,
security, repair, replacement, restoration or operation of the Project, or any
portion thereof. Without limiting the generality of the foregoing, Operating
Expenses shall specifically include any and all of the following: (i) the cost
of supplying all utilities (except for utilities provided to the Premises or to
the premises of other tenants in the Building), the cost of operating,
repairing, maintaining, and renovating the utility, telephone, mechanical,
sanitary, storm drainage, and elevator systems, and the cost of maintenance and
service contracts in connection therewith; (ii) the cost of licenses,
certificates, permits and inspections and the cost of contesting any
governmental enactments which may affect Operating Expenses, and the costs
incurred in connection with a transportation system management program or
similar program; (iii) the cost of all insurance carried by Landlord in
connection with the Project, and the amounts of insurance deductibles to the
extent otherwise includable in Operating Expenses; (iv) the cost of landscaping,
relamping, and all supplies, tools, equipment and materials used in the
operation, repair and maintenance of the Project, or any portion thereof; (v)
costs incurred in connection with any parking areas servicing the Building
(including without limitation the Parking Structure); (vi) fees and other costs,
including management fees, consulting fees, legal fees and accounting fees, of
all contractors and consultants in connection with the management, operation,
maintenance and repair of the Project (including city sidewalks); (vii) payments
under any equipment rental agreements and the fair rental value of any
management office space; (viii) wages, salaries and other compensation and
benefits, including taxes levied thereon, of all persons engaged in the
operation, maintenance and security of the Project; (ix) costs under any
instrument pertaining to the sharing of costs by the Project; (x) operation,
repair, maintenance and replacement of all systems and equipment and components
thereof of the Building; (xi) the cost of janitorial (except for janitorial
services provided to the Premises or to the premises of other tenants in the
Building), alarm, security and other services, replacement of wall and floor
coverings, ceiling tiles and fixtures in the Project and in the Common Areas,
maintenance and replacement of curbs and walkways, repair to roofs and re-
roofing; (xii) amortization (including interest on the unamortized cost at a
rate equal to the floating commercial loan rate announced from time by Bank of
America, a national banking association, or its successors, as its prime rate,
plus two percent (2%) per annum (the "Interest Rate")) of the cost of acquiring
or the rental expense of personal property used in the maintenance, operation
and repair of the Project, or any portion thereof; (xiii) the cost of capital
improvements or other costs incurred in connection with the Project (A) which
are intended to effect economies in the operation or maintenance of the Project,
or any portion thereof, to the extent of any reasonably anticipated savings by
Landlord (B) that are required to comply with present or anticipated
conservation programs, (C) which are replacements or modifications of
nonstructural items located in the Project required to keep the Project in good
order or condition, or (D) that are required under any governmental law or
regulation enacted after the Lease Commencement Date; provided, however, that
any capital expenditure shall be amortized (including interest on the
unamortized cost at the Interest Rate in effect at the time such expenditure is
placed in service) over its useful life as Landlord shall reasonably determine;
(xiv) costs, fees, charges or assessments imposed by, or resulting from any
mandate imposed on Landlord by, any federal, state or local government for fire
and police protection, trash removal, community services, or other services
which do not constitute "Tax Expenses" as that term is defined in Section 4.2.5,
-------------
below; and (xv) payments under any easement, license, operating agreement,
declaration, restrictive covenant, or instrument pertaining to the sharing of
costs by the Building. If the Project is not at least ninety-five percent (95%)
occupied during all or a portion of any Expense Year, Landlord shall make an
adjustment to the components of Operating Expenses for such year to determine
the amount of Operating Expenses that would have been incurred had the Building
been ninety-five percent (95%) occupied; and the amount so determined shall be
deemed to have been the amount of Operating Expenses for such year. Operating
Expenses for the Base Year shall not include market-wide labor-rate increases
due to extraordinary circumstances, including, but not limited to, boycotts and
strikes, and utility rate increases due to extraordinary circumstances
including, but not limited to, conservation surcharges, boycotts, embargoes or
other shortages, or amortized costs relating to capital improvements provided
that, upon written request by Tenant, Landlord shall give Tenant notice of any
such items which were not included in Operating Expenses for the Base Year. In
no event shall the components of Direct Expenses for any Expense Year related to
electrical costs be less than the components of Direct Expenses related to
electrical costs in the Base Year.
In the event Landlord does not carry earthquake insurance during the
Base Year, and if Landlord adds earthquake insurance during any subsequent
Expense Year, then from and after the date upon which such earthquake insurance
is so added and continuing throughout the period during which such earthquake
insurance is carried, Operating Expenses for the Base Year shall be deemed to be
increased during the period of the Lease Term for which such earthquake
insurance is maintained by Landlord in an amount equal to the actual cost of
such earthquake insurance in the Expense Year it was implemented by Landlord,
Notwithstanding the foregoing, for purposes of this Lease, Operating
Expenses shall not, however, include:
(A) bad debt expenses, rent loss or reserves for bad debts and
interest, principal payments, attorneys' fees, points and fees on debts,
including lender costs and closing costs (except in connection with the
financing of items which may be included in Operating Expenses) or amortization
on any ground lease, mortgage or mortgages or any other debt instrument
encumbering the Building or Project;
(B) marketing costs, including leasing commissions, incurred in
connection with lease, sublease and/or assignment transactions with present or
prospective tenants or other occupants of the Building;
(C) legal fees incurred in negotiating and enforcing tenant leases or
other occupancy agreements or the defense of Landlord's title to or interest in
the Project;
(D) costs, including permit, license and inspection costs or
architects and engineers fees, incurred with respect to the installation of
other tenants' or occupants' improvements made for tenants or other occupants in
the Project or incurred in renovating or otherwise improving, decorating,
painting or redecorating vacant space for tenants or other occupants in the
Project;
(E) the cost of providing any service directly to and paid directly
by any tenant of the Building;
(F) costs of any items (including, but not limited to, costs incurred
by Landlord for the repair of damage to the Project or for items which are
reimbursable under any contractor, manufacturer or supplier warranty), to the
extent Landlord receives reimbursement from insurance proceeds (or would have
received had Landlord maintained the insurance required under this Lease),
condemnation proceeds or from a contractor, manufacturer, supplier or any other
third party (other than reimbursement by tenants pursuant to the Operating
Expenses pass-through provisions of their leases); such proceeds shall be
credited to Operating Expenses in the year in which received, except that any
deductible amount under any insurance policy shall be included within Operating
Expenses in an amount of up to but not exceeding twenty thousand dollars
($20,000) per Expense Year;
(G) costs of capital additions, capital alterations or capital
improvements (including any replacements) in excess of a total of $25,000 for
the Building per Expense Year, except those set forth in Section 4.2.4 (xiii)
--------------------
above;
(H) depreciation, amortization and interest payments, except as set
forth in Sections 4.2.4 (vii), (xii) and (xiii) above, and except on materials,
--------------------------------------
tools, supplies and vendor-type equipment purchased by Landlord to enable
Landlord to supply services Landlord might otherwise contract for with
-2-
a third party, where such depreciation, amortization and interest payments would
otherwise have been included in the charge for such third party's services, all
as determined in accordance with standard accounting practices and when
depreciation or amortization is permitted or required, the item shall be
amortized over its reasonably anticipated useful life;
(I) Tax Expenses;
(J) expenses in connection with services, utilities or other benefits
which are not offered to Tenant or for which Tenant is charged for directly but
which are provided to another tenant or occupant of the Project without charge;
(K) costs and the overhead and profit increment paid to Landlord or
to subsidiaries or affiliates of Landlord for goods and/or services in the
Project to the extent the same exceeds the costs of such by unaffiliated third
parties on a competitive basis;
(L) Landlord's general corporate overhead and general and
administrative expenses, including without limitation, all compensation above
that which is normal and customary in the Los Angeles market to employees of
Landlord above the level of building manager;
(M) advertising and promotional expenditures, and costs of signs in
or on the Project identifying the owner of the Project or other tenants' signs;
(N) tax penalties on the Project arising out of Landlord's acts or
omissions incurred as a result of Landlord's negligence, inability or
unwillingness to make payments or file returns when due;
(O) costs arising from Landlord's charitable or political
contributions;
(P) costs, penalties, fines, awards or interest necessitated by or
resulting from the gross negligence or willful misconduct of Landlord, or any of
its agents, employees or independent contractors;
(Q) rent and other payments under any ground or underlying lease of
the Building or Project;
(R) the cost of correcting any latent defects in the initial design
or construction of the Building or the Project improvements other than any cost
arising out of the Tenant Improvements or Alterations;
(S) costs of removing or remediating any asbestos or asbestos
containing materials in the Project;
(T) costs incurred to remove, remedy, contain, or treat Hazardous
Materials (defined in Section 5.2.4 below), which (i) were in existence in the
-------------
Building or Project prior to the Lease Commencement Date, (ii) are brought into
the Building or Project after the Lease Commencement Date by Landlord or
Landlord's employees, agents, contractors or other tenants and which are of such
a nature, at the time of such introduction, that a federal, state or municipal
governmental authority, if it had then had knowledge of such hazardous materials
would have then required the removal of such hazardous materials or other
remedial or containment action with respect thereto or (iii) migrated onto the
Project after the Lease Commencement Date, and which are of such a nature, at
the time off such introduction, that a federal, state, or municipal government
authority, if it had knowledge of such Hazardous Material migration of the time
of such migration would have then required the removal of such Hazardous
Material or other remedial or containment action with respect thereto;
(U) wages or salaries of employees or attendants in parking garages,
newsstands or other commercial concessions, if any, operated by Landlord in the
Building;
(V) costs of purchasing, installing and replacing artwork; and
(W) the cost of any management fees paid to the manager of the
Project in excess of the management fee being charged or paid by other landlords
for first class office buildings in the downtown Los Angeles office market.
4.2.5 Taxes.
-----
4.2.5.1 "Tax Expenses" shall mean all federal, state, county, or
local governmental or municipal taxes, fees, charges or other impositions of
every kind and nature, whether general, special, ordinary or extraordinary,
(including, without limitation, real estate taxes, general and special
assessments, transit taxes, leasehold taxes or taxes based upon the receipt of
rent, including gross receipts or sales taxes applicable to the receipt of rent,
unless required to be paid by Tenant, personal
-3-
property taxes imposed upon the fixtures, machinery, equipment, apparatus,
systems and equipment, appurtenances, furniture and other personal property used
in connection with the Project, or any portion thereof), which shall be paid or
accrued during any Expense Year (without regard to any different fiscal year
used by such governmental or municipal authority) because of or in connection
with the ownership, leasing and operation of the Project, or any portion
thereof.
4.2.5.2 Tax Expenses shall include, without limitation: (i)
any tax on the rent, right to rent or other income from the Project, or any
portion thereof, or as against the business of leasing the Project, or any
portion thereof; (ii) any assessment, tax, fee, levy or charge in addition to,
or in substitution, partially or totally, of any assessment, tax, fee, levy or
charge previously included within the definition of real property tax, it being
acknowledged by Tenant and Landlord that Proposition 13 was adopted by the
voters of the State of California in the June 1978 election ("Proposition 13")
and that assessments, taxes, fees, levies and charges may be imposed by
governmental agencies for such services as fire protection, street, sidewalk and
road maintenance, refuse removal and for other governmental services formerly
provided without charge to property owners or occupants, and, in further
recognition of the decrease in the level and quality of governmental services
and amenities as a result of Proposition 13, Tax Expenses shall also include any
governmental or private assessments or the Project's contribution towards a
governmental or private cost-sharing agreement for the purpose of augmenting or
improving the quality of services and amenities normally provided by
governmental agencies; (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 business or gross income tax or excise tax
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; and (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.
4.2.5.3 Any costs and expenses (including, without
limitation, reasonable attorneys' fees) incurred in attempting to protest,
reduce or minimize Tax Expenses shall be included in Tax Expenses in the Expense
Year such expenses are paid. Tax refunds shall be credited against Tax Expenses
and refunded to Tenant regardless of when received, based on the Expense Year to
which the refund is applicable, provided that in no event shall the amount to be
refunded to Tenant for any such Expense Year exceed the total amount paid by
Tenant as Tax Expenses under this Article 4 for such Expense Year. If Tax
---------
Expenses for any period during the Lease Term or any extension thereof are
increased after payment thereof for any reason, including, without limitation,
error or reassessment by applicable governmental or municipal authorities,
Tenant shall pay Landlord upon demand Tenant's Share of any such increased Tax
Expenses included by Landlord as Building Tax Expenses pursuant to the terms of
this Lease. Notwithstanding anything to the contrary contained in this Section
-------
4.2.5 there shall be excluded from Tax Expenses (i) all excess profits taxes,
- -----
franchise taxes, gift taxes, capital stock taxes, inheritance and succession
taxes, estate taxes, federal and state income taxes, and other taxes to the
extent applicable to Landlord's general or net income (as opposed to rents,
receipts or income attributable to operations at the Project), (ii) any items
included as Operating Expenses, and (iii) any items paid by Tenant under Section
-------
4.5 of this Lease.
- ---
4.2.5.4 The amount of Tax Expenses for the Base Year
attributable to the valuation of the Project, inclusive of tenant improvements,
shall be known as "Base Taxes." If in any comparison year subsequent to the Base
Year, the amount of Tax Expenses decreases below the amount of Base Taxes, then
for purposes of all subsequent comparison years, including the comparison year
in which such decrease in Tax Expenses occurred, the Base Taxes shall be
decreased by an amount equal to the decrease in Tax Expenses.
4.2.6 "Tenant's Share" shall mean the percentage set forth in Section
-------
6 of the Summary, and is based on the ratio of the rentable square footage of
- -
the Premises to the total rentable square footage of the Building.
4.3 Allocation of Direct Expenses; Cost Pools. Landlord shall have the
-----------------------------------------
right, from time to time, to equitably allocate some or all of the Direct
Expenses for the Project among different portions or occupants of the Project
(the "Cost Pools"), in Landlord's reasonable discretion. Such Cost Pools may
include, but shall not be limited to, the office space tenants and
telecommunications tenants of the Project. The Direct Expenses within each such
Cost Pool shall be allocated and charged to the tenants within such Cost Pool in
an equitable manner.
4.4 Calculation and Payment of Additional Rent. Tenant shall pay to
------------------------------------------
Landlord, in the manner set forth in Section 4.4.1 below, the Additional Rent as
-------------
follows:
4.4.1 Calculation of Excess. If for any Expense Year ending or
---------------------
commencing within the Lease Term, Tenant's Share of Direct Expenses for such
Expense Year exceeds Tenant's Share of the amount of Direct Expenses applicable
to the Base Year, then Tenant shall pay to Landlord, in the manner
-4-
set forth in Section 4.4.2, below, and as Additional Rent, an amount equal to
-------------
such excess of the Direct Expenses, as applicable (the "Excess").
4.4.2 Statement of Actual Direct Expenses and Payment by Tenant.
---------------------------------------------------------
Landlord shall endeavor to give to Tenant following the end of each Expense
Year, a statement (the "Statement") which shall state the Direct Expenses
incurred or accrued for such preceding Expense Year, and which shall indicate
the amount of the Excess. Within ten (10) days of receiving the Statement for
each Expense Year, if an Excess is present, Tenant shall pay the full amount of
the Excess for such Expense Year, less the amounts, if any, paid during such
Expense Year as "Estimated Excess," as that term is defined in Section 4.4.3
-------------
below. If the Statement indicates that the amount of Estimated Excess paid by
Tenant to Landlord for the applicable Expense Year exceeds the actual amount of
the Excess for such year, Landlord shall refund to Tenant such overpayment
within thirty (30) days after such Statement is delivered to Tenant. The
failure of Landlord to timely furnish the Statement for any Expense Year shall
not prejudice Landlord or Tenant from enforcing its rights under this Article 4.
---------
Even though the Lease Term has expired and Tenant has vacated the Premises, when
the final determination is made of Tenant's Share of Direct Expenses for the
Expense Year in which this Lease terminates, if an Excess if present, Tenant
shall immediately pay to Landlord such amount (or Landlord shall, within such
thirty (30) day period, refund to Tenant any overpayment of any Estimated Excess
paid by Tenant for such Expense Year). The provisions of this Section 4.4.2
-------------
shall survive the expiration or earlier termination of the Lease Term.
4.4.3 Statement of Estimated Direct Expenses. In addition, Landlord
--------------------------------------
shall endeavor to give Tenant a yearly expense estimate statement (the "Estimate
Statement") which shall set forth Landlord's reasonable estimate (the
"Estimate") of what the total amount of Direct Expenses for the then-current
Expense Year shall be and the estimated excess (the "Estimated Excess") as
calculated by comparing the Direct Expenses for such Expense Year, which shall
be based upon the Estimate, to the amount of Direct Expenses for the Base Year.
The failure of Landlord to timely furnish the Estimate Statement for any Expense
Year shall not preclude Landlord from enforcing its rights to collect any
Estimated Excess under this Article 4, nor shall Landlord be prohibited from
---------
revising any Estimate Statement or Estimated Excess theretofore delivered to the
extent necessary. Thereafter, Tenant shall pay, with its next installment of
Base Rent due, a fraction of the Estimated Excess for the then-current Expense
Year (reduced by any amounts paid pursuant to the next to last sentence of this
Section 4.4.3). Such fraction shall have as its numerator the number of months
- -------------
which have elapsed in such current Expense Year, including the month of such
payment, and twelve (12) as its denominator. Until a new Estimate Statement is
furnished (which Landlord shall have the right to deliver to Tenant at any
time), Tenant shall pay monthly, with the monthly Base Rent installments, an
amount equal to one-twelfth (1/12) of the total Estimated Excess set forth in
the previous Estimate Statement delivered by Landlord to Tenant.
4.5 Taxes and Other Charges for Which Tenant Is Directly Responsible.
----------------------------------------------------------------
4.5.1 Tenant shall be liable for and shall pay ten (10) days before
delinquency, taxes levied against Tenant's equipment (including without
limitation Tenant's switching and antenna equipment), furniture, fixtures and
any other personal property located in or about the Premises. If any such taxes
on Tenant's equipment, furniture, fixtures and any other personal property are
levied against Landlord or Landlord's property or if the assessed value of
Landlord's property is increased by the inclusion therein of a value placed upon
such equipment, furniture, fixtures or any other personal property and if
Landlord pays the taxes based upon such increased assessment, which Landlord
shall have the right to do regardless of the validity thereof but only under
proper protest if requested by Tenant, Tenant shall upon demand repay to
Landlord the taxes so levied against Landlord or the proportion of such taxes
resulting from such increase in the assessment, as the case may be.
4.5.2 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 standard" in other space in the Building are
assessed, then the Tax Expenses levied against Landlord or the property by
reason of such excess assessed valuation shall be deemed to be taxes levied
against personal property of Tenant and shall be governed by the provisions of
Section 4.5.1, above.
- -------------
4.5.3 Notwithstanding any contrary provision herein, Tenant shall pay
prior to delinquency any (i) rent tax or sales tax, service tax, transfer tax or
value added tax, or any other applicable tax on the rent or services herein or
otherwise respecting this Lease, (ii) taxes assessed upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises or any portion of the Project, including
the Project parking facility; or (iii) taxes assessed upon this transaction or
any document to which Tenant is a party creating or transferring an interest or
an estate in the Premises.
-5-
4.6 Tenant Audit. In the event Tenant disputes the amount of the Direct
------------
Expenses set forth in the Statement delivered by Landlord to Tenant pursuant to
Section 4.4.2 above, Tenant shall have the right, at Tenant's cost, after
reasonable notice to Landlord, to inspect, at Landlord's office during normal
business hours, Landlord's books and records directly relevant to the Direct
Expenses set forth in such Statement; provided, however, Tenant shall have no
right to conduct such inspection, have an audit performed by the Accountant as
described below, or object to or otherwise dispute the amount of the Direct
Expenses set forth in any Statement, unless Tenant does so within one (1) year
immediately following Landlord's delivery of the particular Statement in
question (the "Review Period"); provided, further, that notwithstanding any such
timely objection, dispute, inspection and/or audit, and as a condition precedent
to Tenant's exercise of its right of objection, dispute, inspection and/or audit
as set forth in this Section 4.6, Tenant shall not be permitted to withhold
-----------
payment of, and Tenant shall timely pay to Landlord, the full amounts as
required by the provisions of this Article 4 in accordance with such Statement.
However, such payment may be made under protest pending the outcome of any audit
which may be performed by the Accountant as described below. If after such
inspection, Tenant still disputes the amount of the Direct Expenses set forth in
the Statement, Tenant shall have the right, within the Review Period, to cause
an independent certified public accountant which shall be one of the "Big 5"
national accounting firms selected by Tenant which (i) has not represented or
been engaged by Tenant on Tenant's behalf in the past ten (10) years, and (ii)
is not paid on a contingent fee basis (the "Accountant"), to commence and
complete an audit of Landlord's books and records directly relevant to
Landlord's calculation of the Direct Expenses to determine the proper amount of
the Direct Expenses incurred and amounts payable by Tenant for the Expense Year
which is the subject of such Statement, which audit shall be final and binding
upon Landlord and Tenant. If such audit reveals that Landlord has over-charged
Tenant, then within thirty (30) days after the results of such audit are made
available to Landlord, Landlord shall reimburse to Tenant the amount of such
over-charge. If the audit reveals that the Tenant was under-charged, then
within thirty (30) days after the results of such audit are made available to
Tenant, Tenant shall reimburse to Landlord the amount of such under-charge.
Tenant agrees to pay the cost of such audit unless it is subsequently determined
that Landlord's original Statement which was the subject of such audit was in
error to Tenant's disadvantage by more than five percent (5%), in which case
Landlord shall reimburse Tenant for the reasonable cost of such audit. The
payment by Tenant of any amounts pursuant to this Article 4 shall not preclude
Tenant from questioning the correctness of any Statement provided by Landlord at
any time during the Review Period, but the failure of Tenant to object thereto,
conduct and complete its inspection and request that Landlord have the
Accountant conduct and finalize the audit as described above prior to the
expiration of the Review Period shall be conclusively deemed Tenant's approval
of the Statement in question and the amount of Direct Expenses shown thereon.
ARTICLE 5
---------
USE OF PREMISES
---------------
5.1 Use. Tenant shall use the Premises solely for the Permitted Use set
---
forth in Section 7 of the Summary, and Tenant shall not use or permit the
---------
Premises to be used for any other purpose or purposes whatsoever. Tenant
further covenants and agrees that it shall not use, or suffer or permit any
person or persons to use, the Premises or any part thereof for any use or
purpose contrary to the Rules and Regulations, or in violation of the laws of
the United States of America, the State of California, or the ordinances,
regulations or requirements of the local municipal or county governing body or
other lawful authorities having jurisdiction over the Project (including laws
pertaining to Hazardous Materials, as defined below). Tenant shall comply with
the Rules and Regulations. Landlord shall not be responsible to Tenant for the
nonperformance of any of such Rules and Regulations by or otherwise with respect
to the acts or omissions of any other tenants or occupants of the Project.
Tenant shall comply with all recorded covenants, conditions, and restrictions
now or hereafter affecting the Project.
5.2 Hazardous Materials.
-------------------
5.2.1 Prohibition on Use. Tenant shall not use or allow another
------------------
person or entity to use any part of the Premises for the storage, use,
treatment, manufacture or sale of Hazardous Materials. Landlord acknowledges,
however, that Tenant will maintain products in the Premises which are incidental
to the operation of its telecommunications and ancillary offices, such as dry or
gel cell batteries, photocopy supplies, secretarial supplies and limited
janitorial supplies, which products contain chemicals which are categorized as
Hazardous Materials. Landlord agrees that the use of such products in the
Premises in compliance with all applicable laws and in the manner in which such
products are designed to be used shall not be a violation by Tenant of this
Section 5.2.1.
- -------------
5.2.2 Indemnity. Tenant agrees to indemnify, defend, protect and
---------
hold Landlord and the Landlord Parties (as defined in Section 10.1 below)
------------
harmless from and against any and all claims, actions, administrative
proceedings (including informal proceedings), judgments, damages, punitive
damages, penalties, fines, costs, liabilities, interest or losses, including
reasonable attorneys' fees and expenses, consultant fees, and expert fees,
together with all other costs and expenses of any kind or
-6-
nature, that arise during or after the Lease Term directly or indirectly from or
in connection with the presence, suspected presence, release or suspected
release of any Hazardous Materials in or into the air, soil, surface water or
groundwater at, on, about, under or within the Premises or Project or any
portion thereof, caused by Tenant, its customers, assignees or subtenants and/or
their respective agents, employees, contractors, licensees or invitees
(collectively, "Tenant Parties").
5.2.3 Remedial Work. In the event any investigation or monitoring of
-------------
site conditions or any clean-up, containment, restoration, removal or other
remedial work (collectively, the "Remedial Work") is required under any
applicable federal, state or local laws or by any judicial order, or by any
governmental entity as the result of operations or activities upon, or any use
or occupancy of any portion of the Premises by Tenant or the Tenant Parties,
Tenant shall perform or cause to be performed the Remedial Work in compliance
with such laws or order. All Remedial Work shall be performed by one or more
contractors, selected by Tenant and approved in advance in writing by Landlord.
All costs and expenses of such Remedial Work shall be paid by Tenant, including,
without limitation, the charges of such contractor(s), the consulting engineers,
and Landlord's reasonable attorneys' fees and costs incurred in connection with
monitoring or review of such Remedial Work.
5.2.4 Definition of Hazardous Materials. As used herein, the term
---------------------------------
"Hazardous Materials" means any hazardous or toxic substance, material or waste
which is or becomes regulated by any local governmental authority, the State of
California or the United States Government, including, without limitation, any
material or substance which is (i) defined or listed as a "hazardous waste,"
"extremely hazardous waste," "restricted hazardous waste," "hazardous substance"
or "hazardous material" under any applicable federal, state or local law or
administrative code promulgated thereunder, (ii) petroleum, or (iii) asbestos.
ARTICLE 6
---------
SERVICES AND UTILITIES
----------------------
6.1 Standard Tenant Services.
------------------------
6.1.1 Heating and air conditioning ("HVAC") service in the Premises
will be provided by Tenant, at Tenant's sole cost and expense, through separate
package units which shall be subject to the direct control of Tenant. Subject
to Landlord's prior written approval of Tenant's plans and specifications, such
approval not to be unreasonably withheld or delayed, Tenant shall have the right
to install in a location within the Premises and/or Project designated in
writing by Landlord "Tenant's HVAC Equipment" pursuant to Article 22 below. The
----------
acquisition and operation of Tenant's HVAC Equipment (including without
limitation the purchase, installation, and maintenance thereof) shall be at
Tenant's sole cost and expense, and the electrical consumption resulting from
Tenant's usage of Tenant's HVAC equipment shall be separately metered, billed to
Tenant and paid by Tenant pursuant to Section 6.1.2 below.
-------------
6.1.2 Tenant shall install in the Premises, at Tenant's sole cost and
expense and subject to Landlord's prior approval of the plans and specifications
therefore such approval not be unreasonably withheld or delayed, a transformer
tying into the Building's bus duct system to obtain an electrical supply for the
Premises providing up to 10,000 amps at 480 volts, three-phase wiring, through
two (2) separate bus ducts run to the Premises. The cost of such electrical
supply and all other electricity provided to the Premises shall be separately
metered to the Premises at Tenant's sole cost and expense (including without
limitation, the cost of any metering equipment or the installation cost
thereof). Tenant shall pay directly to Landlord within ten (10) days after
receipt of written demand and as Additional Rent under this Lease (and not as
part of Operating Expenses) the cost of all electricity and HVAC provided to
and/or consumed in the Premises and by all of Tenant's equipment (including
without limitation Tenant's HVAC Equipment) plus a Landlord administration fee
equal to two and one-half percent (2 1/2%) of the total utility bill for Tenant
at the Project. In addition, Tenant shall bear the cost of replacement of
lamps, starters and ballasts for lighting fixtures within the Premises. In the
event Tenant desires electric power in excess of the level set forth in the
first sentence in this Section 6.1.2 or available from Landlord ("Additional
-------------
Electrical Supply"), Tenant may, at its own expense, elect to make direct
arrangements with the Los Angeles Department of Water and Power to obtain such
Additional Electric Supply directly from the Department of Water and Power, if
feasible. Landlord makes no representations or warranties regarding such
arrangements (including their feasibility), but agrees to cooperate with Tenant
and the Department of Water and Power reasonably and in good faith in this
regard. The plans and specifications for any new vault or transformer space
(including, but not limited to, the location of such space within the Building,
which shall be designated by Landlord in its discretion, provided that Landlord
is willing to make such space available) and for any transformer, related
equipment, facilities or connections to provide the Additional Electrical
Supply, shall be subject to Landlord's prior written approval. Tenant agrees to
pay all bills from the Department of Water and Power for such direct electrical
service when due and shall pay a reasonable rental as established by Landlord in
its good faith, but sole, discretion for any new vault or transformer space used
by Tenant to provide the Additional Electrical Supply. The initial
-7-
transformer to be installed by Tenant as described above, and any subsequent
transformers and other electrical equipment which Tenant elects to install to
provide Additional Electrical Supply to the Premises, shall sometimes be
referred to herein collectively as the "Electrical Equipment." Notwithstanding
anything in this Lease to the contrary, commencing on the earlier to occur of
(i) the date which is the thirty-sixth (36th) month of the Lease Term, and (ii)
the date upon which Tenant has placed ninety percent (90%) of its collocation
Customers in the Premises, Landlord shall have the right to meter and test
Tenant's connected peak amperage load used at the Premises, and in the event
that over a thirty (30) day period, Landlord's metering and testing procedures
demonstrate that Tenant is not utilizing on a daily average business day basis,
all of the amps initially reserved by Tenant in this Section 6.1.2, Landlord may
-------------
reclaim up to seventy-five percent of any amperage Landlord reasonably
determines through such process is being unused by Tenant.
6.1.3 Landlord shall not provide janitorial services to the Premises.
Tenant shall be solely responsible, at Tenant's sole cost and expense, for
keeping all areas of the Project used by Tenant, in a neat, clean and safe
condition, and for performing all janitorial services and other cleaning of the
Premises appropriate to maintain the Premises in a manner consistent with a
first-class telecommunications building; provided that Tenant shall use a
janitor on Landlord's designated Building janitorial list (which list shall
contain two or more janitorial companies) for all janitorial services within the
Project.
6.1.4 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 prior written consent, and heated water for lavatory
purposes from regular building supply in such quantities as required in
Landlord's judgment for the comfortable and normal use of the Premises. Tenant
shall pay Landlord, as Additional Rent, for any 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.
6.2 Interruption of Use. Tenant agrees that Landlord shall not be liable
-------------------
for damages, by abatement of Rent (except as expressly provided in Section 6.3
-----------
below) or otherwise, for failure to furnish or delay in furnishing any service
(including without limitation telephone, telecommunication and emergency power
services), or for any diminution or interruption in the quality or quantity
thereof, when such failure or delay or diminution is occasioned, in whole or in
part, by repairs, replacements, or improvements, by any strike, lockout or other
labor trouble, by inability to secure electricity, gas, water, or other fuel at
the Building or Project after commercially reasonable effort to do so, by any
accident or casualty whatsoever, by act or default of Tenant or other parties,
or by any other cause; and such failures or delays or diminution shall never be
deemed to constitute an eviction or disturbance of Tenant's use and possession
of the Premises or relieve Tenant from paying Rent or performing any of its
obligations under this Lease. Furthermore, Landlord shall not be liable under
any circumstances for a loss of, or injury to, property or for injury to, or
interference with, Tenant's business, including, without limitation, loss of
profits, however occurring, through or in connection with or incidental to a
failure to furnish any of the services or utilities as set forth in this Article
-------
6. Landlord may comply with voluntary controls or guidelines promulgated by any
- -
governmental entity relating to the use or conservation of energy, water, gas,
light or electricity or the reduction of automobile or other emissions without
creating any liability of Landlord to Tenant under this Lease, provided that
such voluntary compliance with such controls shall not unreasonable interfere
with Tenant's use or occupancy of the Premises. 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.
6.3 Special Abatement of Rent. Notwithstanding the provisions of Section
------------------------- -------
6.2 above to the contrary, in the event that during the Lease Term Tenant is
- ---
prevented from using, and does not use, the Premises or any portion thereof as a
result of (i) any failure by Landlord to provide any of the essential utilities
and services to the Premises required to be provided by Landlord under Section
-------
6.1 of this Lease, (ii) any failure by Landlord to provide access to the
- ---
Premises (including as a result of any Renovations undertaken by Landlord
pursuant to Section 29.30 of this Lease or construction pursuant to Section
------------- -------
29.32), (iii) any act by Landlord which unreasonably prevents Tenant from
- -----
conducting its business in the Premises (and Tenant does not conduct its
business in the Premises as a result of such act) or (iv) Landlord's failure to
promptly, timely and diligently perform any repairs, maintenance or alterations
required by this Lease to be performed by Landlord, after the Lease Commencement
Date, which substantially interferes with Tenant's use of the Premises (any such
set of circumstances as set forth in items (i) through (iv), above, to be known
as an "Abatement Event"), then Tenant shall give Landlord notice of such
Abatement Event. If such Abatement Event continues for five (5) consecutive
business days after Landlord's receipt of any such notice from Tenant
("Eligibility Period"), then the Base Rent shall be abated or reduced, as the
case may be, during such time after the Eligibility Period that Tenant continues
to be so prevented from using, and does not use, the Premises or a portion
thereof, in the proportion that the rentable area of the portion of the Premises
that Tenant is prevented from using, and does not use, bears to the total
rentable area of the Premises; provided, however, in the event that Tenant is
prevented from using, and does not use, a portion of the Premises for a period
of time in excess of the
-8-
Eligibility Period, then for such time after expiration of the Eligibility
Period during which Tenant is so prevented from effectively conducting its
business therein, the Base Rent shall be abated for such time as Tenant
continues to be so prevented from using, and does not use, the Premises. If,
however, Tenant re-occupies any portion of the Premises during such period, the
Base Rent allocable to such re-occupied portion, based on the proportion that
the rentable square feet of such re-occupied portion of the Premises bears to
the total rentable square feet of the Premises, shall be payable by Tenant from
the date Tenant re-occupies such portion of the Premises. For purposes of this
Section 6.3, Tenant shall not be deemed to be occupying or using the Premises
- -----------
merely by having Tenant's furniture or personal property remaining in the
Premises. Such right to abate Base Rent shall be Tenant's sole and exclusive
remedy at law or in equity for an Abatement Event; provided, however, that if
Landlord does not cure such Abatement Event within one hundred eighty (180) days
after Landlord's receipt from Tenant of notice of the occurrence of the
Abatement Event, Tenant shall have the right to terminate this Lease during the
first five (5) business days in each calendar month following the end of such
one hundred eighty (180) day period until such time as Landlord has cured the
Abatement Event, which right may be exercised only by delivery of thirty (30)
days notice to Landlord (the "Abatement Event Termination Notice") during such
ten (10) business day period and shall be effective as of the date set forth in
the Abatement Event Termination Notice (the "Abatement Event Termination Date"),
which Abatement Event Termination Date shall not be less than thirty (30) days
and not more than one hundred twenty (120) days, following the delivery of the
Abatement Event Termination Notice. The foregoing abatement and termination
rights shall not be applicable if the Abatement Event is caused by damage or
destruction or an eminent domain taking described in Articles 11 and 13 of this
----------- --
Lease, since Tenant's rent abatement rights with respect to such events are set
forth in Articles 11 and 13 of this Lease. Except as expressly provided in this
----------- --
Section 6.3, nothing contained herein shall be interpreted to mean that Tenant
- -----------
is excused from paying Rent due hereunder.
ARTICLE 7
---------
REPAIRS
-------
7.1 Landlord's Repairs. Landlord shall maintain in good order, repair and
------------------
condition (i) the structural portions of the Building, including the foundation,
roof, curtain wall, mullions, columns, beams, shafts (including elevator
shafts), stairwells, elevator cabs, and Building mechanical, electrical and
telephone closets (collectively, "Building Structure"), (ii) the Building's
mechanical, electrical, life safety, plumbing, sprinkler and HVAC systems
located outside the Premises (collectively, the "Building Systems"), and (iii)
the Common Areas. Notwithstanding anything in this Lease to the contrary,
Tenant shall be required to pay for the cost of repairs to the Building
Structure, the Building Systems and/or the Common Areas to the extent required
because of (1) Tenant's use of the Premises for other than normal and customary
business office operations, and/or (2) Tenant's Alterations (as defined in
Section 8.1 below).
- -----------
7.2 Tenant's Repairs. Subject to Landlord's repair obligations set forth
----------------
in Section 7.1 above, Tenant shall, at Tenant's own expense, pursuant to the
-----------
terms of this Lease, including without limitation Article 8 hereof, keep the
---------
Premises, including all improvements, fixtures, equipment (including without
limitation the Supplemental Equipment) and furnishings therein, in good order,
repair and condition at all times during the Lease Term. In addition, Tenant
shall, at Tenant's own expense, but under the supervision and subject to the
prior approval of Landlord, and within any reasonable period of time specified
by Landlord, pursuant to the terms of this Lease, including without limitation
Article 8 hereof, promptly and adequately repair all damage to the Premises and
- ---------
replace or repair all damaged, broken, or worn fixtures and appurtenances,
except for damage caused by ordinary wear and tear or beyond the reasonable
control of Tenant; provided however, if Tenant fails to make such repairs
following any applicable notice and cure rights of Tenant, Landlord may, but
need not, make such repairs and replacements, and Tenant shall pay Landlord the
cost thereof, including an administration fee equal to five percent (5%) of the
cost thereof (to be uniformly established for the Building and/or the Project)
sufficient to reimburse Landlord for all overhead, general conditions, fees and
other costs or expenses arising from Landlord's involvement with such repairs
and replacements forthwith upon being billed for same. Tenant hereby waives any
and all rights under and benefits of subsection 1 of Section 1932 and Sections
1941 and 1942 of the California Civil Code or under any similar law, statute, or
ordinance now or hereafter in effect.
ARTICLE 8
---------
ADDITIONS AND ALTERATIONS
-------------------------
8.1 Landlord's Consent to Alterations. Tenant may not make any
---------------------------------
improvements, alterations, additions or changes to the Premises or any
mechanical, plumbing or HVAC facilities or systems pertaining to the Premises
(collectively, the "Alterations") without first procuring the prior written
consent (the "Alteration Consent Request") of Landlord to such Alterations,
which consent shall be requested by Tenant not less than thirty (30) days prior
to the commencement thereof, and which
-9-
consent shall not be unreasonably withheld by Landlord, provided it shall be
deemed reasonable for Landlord to withhold its consent to any Alteration which
adversely affects the structural portions or the systems or equipment of the
Building or is visible from the exterior of the Building. Landlord shall notify
Tenant of its approval or denial of any Alterations within fifteen (15) days of
receipt of the applicable Alteration Consent Request, and Landlord's failure to
respond within such fifteen (15) day period shall be deemed Landlord's consent
to the Alteration described in the applicable Alteration Consent Request. The
construction of the initial improvements to the Premises shall be governed by
the terms of the Tenant Work Letter and not the terms of this Article 8.
---------
Notwithstanding the foregoing, Tenant may make non-structural changes to the
Premises (such non-structural changes to be referred to hereafter collectively
as the "Acceptable Changes") without Landlord's prior consent provided (i)
Tenant delivers to Landlord written notice of such Acceptable Changes at least
fifteen (15) days prior to the commencement thereof, (ii) such Acceptable
Changes do not cost in excess of Twenty Five Thousand Dollars ($25,000.00) for
any one (1) job, (iii) such Acceptable Changes do not affect the exterior
appearance of the Building or Common Areas, the structural aspects of the
Building, or the Building systems and equipment of the Premises or Building, and
(iv) Tenant obtains and delivers to Landlord prior to commencement of
construction of such Acceptable Changes, all permits and approvals required by
any local, state or federal authorities for such Acceptable Changes.
8.2 Manner of Construction. Landlord may impose, as a condition of its
----------------------
consent to any and all Alterations or repairs of the Premises or about the
Premises, such requirements as Landlord in its reasonable discretion may deem
desirable, including, but not limited to, the requirement that Tenant utilize
for such purposes only contractors, subcontractors, materials, mechanics and
materialmen selected by Tenant from a list provided and approved by Landlord
(provided such list shall include more than one (1) contractor and shall also
include Carlson and/or any other Carlson entity reasonably approved by
Landlord), the requirement that upon Landlord's request, Tenant shall, at
Tenant's expense, remove such Alterations upon the expiration or any early
termination of the Lease Term if Landlord gave Tenant written notice that such
removal would be required at the time Landlord consented to such Alteration. If
such Alterations will involve the use of or disturb Hazardous Materials or
substances existing in the Premises, Tenant shall comply with Landlord's rules
and regulations concerning such Hazardous Materials or substances. Tenant shall
construct such Alterations and perform such repairs in a good and workmanlike
manner, in conformance with any and all applicable federal, state, county or
municipal laws, rules and regulations and pursuant to a valid building permit,
issued by the City of Los Angeles, all in conformance with Landlord's
construction rules and regulations. In the event Tenant performs any
Alterations in the Premises which require or give rise to governmentally
required changes to the "Base Building," as that term is defined below, then
Landlord shall, at Tenant's expense, make such changes to the Base Building.
The "Base Building" shall include the structural portions of the Building, and
the public restrooms and the systems and equipment located in the internal core
of the Building on the floor or floors on which the Premises are located. In
performing the work of any such Alterations, Tenant shall have the work
performed in such manner so as not to obstruct access to the Project or any
portion thereof, by any other tenant of the Project, and so as not to obstruct
the business of Landlord or other tenants in the Project. Tenant shall not use
(and upon notice from Landlord shall cease using) contractors, services,
workmen, labor, materials or equipment that, in Landlord's reasonable judgment,
would disturb labor harmony with the workforce or trades engaged in performing
other work, labor or services in or about the Building or the Common Areas. In
addition to Tenant's obligations under Article 9 of this Lease, upon completion
---------
of any Alterations, Tenant agrees to cause a Notice of Completion to be recorded
in the office of the Recorder of the County of Los Angeles in accordance with
Section 3093 of the Civil Code of the State of California or any successor
statute, and Tenant shall deliver to the Project management office a
reproducible copy of the "as built" drawings of the Alterations as well as all
permits, approvals and other documents issued by any governmental agency in
connection with the Alterations.
8.3 Payment for Improvements. If payment is made directly to contractors,
------------------------
Tenant shall comply with Landlord's requirements for final lien releases and
waivers in connection with Tenant's payment for work to contractors. Whether or
not Tenant orders any work directly from Landlord, Tenant shall reimburse
Landlord for any and all reasonable costs and expenses arising from Landlord's
involvement with such work.
8.4 Construction Insurance. In addition to the requirements of Article 10
---------------------- ----------
of this Lease, in the event that Tenant makes any Alterations, prior to the
commencement of such Alterations, Tenant shall provide Landlord with evidence
that Tenant carries "Builder's All Risk" insurance in an amount approved by
Landlord covering the construction of such Alterations, and such other insurance
as Landlord may reasonably require, it being understood and agreed that all of
such Alterations shall be insured by Tenant pursuant to Article 10 of this Lease
----------
immediately upon completion thereof. In addition, Landlord may, in its
discretion, require Tenant to obtain a lien and completion bond or some
alternate form of security satisfactory to Landlord in an amount sufficient to
ensure the lien-free completion of such Alterations and naming Landlord as a co-
obligee.
8.5 Landlord's Property. All Alterations, improvements, fixtures,
-------------------
conduit, (excluding Tenant's Generator, generator enclosures, paralleling gear,
DC plant or UPS system and Tenant HVAC
-10-
Equipment, Liebert units and chillers [collectively, "Tenant's Trade Fixtures"])
and/or appurtenances which may be installed or placed in or about the Premises,
from time to time, including any non-general office use improvements made at the
time of Tenant's initial occupancy of the Premises, shall be at the sole cost of
Tenant and shall be and become the property of Landlord, and shall be and remain
part of the Premises and shall not be removed by Tenant at the end of the term
of this Lease, unless Landlord agreed to its removal at the time Landlord
consented to such Alteration. Such fixtures, alterations, additions, repairs,
improvements and/or appurtenances shall include, without limitation, the Base,
Shell and Core (as defined in the Tenant Work Letter) and improvements, built-in
utilities such as heating, ventilating and air conditioning units in the
Premises, floor coverings, drapes, paneling, molding, doors, kitchen and
dishwashing fixtures, plumbing systems, electrical systems, lighting systems,
silencing equipment, switching conduit and cabling, 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, by written notice to Tenant at the
time Tenant requests Landlord's consent to any Alteration pursuant to Section
-------
8.1 or Section 22, or given following any earlier termination of this Lease,
- --- ----------
require Tenant, at Tenant's expense, to remove any Alterations, improvements,
fixtures, conduits and/or appurtenances (not including the initial Tenant
Improvements to be constructed by Tenant pursuant to the Tenant Work Letter) in
the Premises and Project, and to repair any damage to the Premises and Building
caused by such removal and return the affected portion of the Premises and
Project to a building standard tenant improved condition as determined by
Landlord. If Tenant fails to complete such removal and/or to repair any damage
caused by the removal of any Alterations, improvements, fixtures, conduits
and/or appurtenances in the Premises and Project, and returns the affected
portion of the Premises and Project to a building standard tenant improved
condition as determined by Landlord, Landlord may do so and may charge the cost
thereof to Tenant. Tenant hereby protects, defends, 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, improvements, fixtures, conduit, and/or appurtenances in,
on or about the Premises and Project, which obligations of Tenant shall survive
the expiration or earlier termination of this Lease.
8.6 Landlord Lien Waivers. Subject to Article 9 below, within a reasonable
--------------------- ---------
period of time after receipt of written request therefor from a lender and/or a
vendor under a conditional sales agreement or other agreement requiring a
security interest in any furniture, trade fixtures or equipment installed or to
be installed in the Premises, Landlord shall execute a commercially reasonable
form of landlord lien waiver agreement which shall assure the vendor of the
seniority of the vendor's lien claim relative to such furniture, trade fixtures
and equipment in relation to Landlord's interest therein; such agreement shall
permit the removal of such affected furniture, fixtures and equipment at any
time during the Lease Term upon prior written notice to Landlord and shall
require such vendor to repair any damage resulting from such removal.
ARTICLE 9
---------
COVENANT AGAINST LIENS
----------------------
Except as provided in Section 8.6 above, Tenant shall keep the Project and
-----------------
Premises free from any liens or encumbrances arising out of the work performed,
materials furnished or obligations incurred by or on behalf of Tenant, and shall
protect, defend, indemnify and hold Landlord harmless from and against any
claims, liabilities, judgments or costs (including, without limitation,
reasonable attorneys' fees and costs) arising out of same or in connection
therewith. Tenant shall give Landlord notice at least twenty (20) days prior to
the commencement of any such work on the Premises (or such additional time as
may be necessary under applicable laws) to afford Landlord the opportunity of
posting and recording appropriate notices of non-responsibility. Tenant shall
remove any such lien or encumbrance by bond or otherwise within ten (10 ) days
after notice by Landlord, and if Tenant shall fail to do so, Landlord may pay
the amount necessary to remove such lien or encumbrance, without being
responsible for investigating the validity thereof. The amount so paid shall be
deemed Additional Rent under this Lease payable upon demand, without limitation
as to other remedies available to Landlord under this Lease. Nothing contained
in this Lease shall authorize Tenant to do any act which shall subject
Landlord's title to the Premises to any liens or encumbrances whether claimed by
operation of law or express or implied contract. Any claim to a lien or
encumbrance upon the Premises arising in connection with any such work or
respecting the Premises not performed by or at the request of Landlord shall be
null and void, or at Landlord's option shall attach only against Tenant's
interest in the Premises and shall in all respects be subordinate to Landlord's
title to the Project, Building and Premises.
-11-
ARTICLE 10
----------
INSURANCE
---------
10.1 Indemnification.
---------------
10.1.1 Tenant's Indemnification of Landlord and Waiver. Subject to
-----------------------------------------------
the limitations, exclusions and Landlord's indemnity of Tenant as set forth in
Sections 10.1.2 and 10.1.3 below, Tenant hereby (i) assumes all risk of damage
- --------------- ------
to property or injury to persons in, upon or about the Premises from any cause
whatsoever and (ii) agrees that Landlord, its partners, subpartners and their
respective officers, agents, servants, employees, and independent contractors
(collectively, "Landlord Parties") shall not be liable for, and are hereby
released from any responsibility for, any damage either to person or property or
resulting from the loss of use thereof, which damage is sustained by Tenant or
by other persons claiming through Tenant. Tenant shall indemnify, defend,
protect, and hold harmless the Landlord Parties from any and all loss, cost,
damage, expense and liability including without limitation court costs and
reasonable attorneys' fees (collectively, "Claims") incurred in connection with
or arising from any cause in, on or about the Premises, any acts, omissions or
negligence of Tenant or of any person claiming by, through or under Tenant, or
of any of Tenant's Customers (as defined in Section 14.6 below) (except to the
------------
extent such Customer is a tenant of the Project and the Claims do not arise as a
result of such Customer's activities in the Premises), the contractors, agents,
servants, employees, invitees, guests or licensees of Tenant or any such person,
in, on or about the Project or any breach of the terms of this Lease, provided
that the terms of the foregoing indemnity shall not apply to any Claims to the
extent caused by the gross negligence or willful misconduct of Landlord and not
insured or required to be insured by Tenant under this Lease. Should Landlord
be named as a defendant in any suit brought against Tenant in connection with or
arising out of Tenant's occupancy of the Premises, Tenant shall pay to Landlord
its costs and expenses incurred in such suit, including without limitation, its
actual professional fees such as appraisers', accountants' and attorneys' fees.
Further, Tenant's agreement to indemnify Landlord pursuant to this Section 10.1
------------
is not intended and shall not relieve any insurance carrier of its obligations
under policies required to be carried by Tenant pursuant to the provisions of
this Lease, to the extent such policies cover the matters subject to Tenant's
indemnification obligations; nor shall they supersede any inconsistent agreement
of the parties set forth in any other provision of this Lease. The provisions
of this Section 10.1 shall survive the expiration or sooner termination of this
------------
Lease with respect to any claims or liability arising in connection with any
event occurring prior to such expiration or termination.
10.1.2 Exclusion from Tenant's Indemnity; Landlord's Indemnification
-------------------------------------------------------------
of Tenant. The terms of the assumption of risk, waiver, release and
- ---------
indemnification by Tenant of Landlord set forth in Section 10.1.1 above shall
--------------
not, however, include any Claims to the extent resulting from (i) the negligence
or willful misconduct of the Landlord Parties in connection with the Landlord
Parties' activities in the Building and/or breach by Landlord of the Landlord's
obligations under this Lease (except for damage to the Tenant Improvements, and
all Alterations and leasehold improvements in the Premises, and Tenant's
personal property, fixtures, furniture and equipment in the Premises, to the
extent such Claims are covered by insurance maintained by Tenant pursuant to
this Lease or would have been covered had Tenant maintained the insurance
required pursuant to this Lease), or (ii) damage to any portion of the Building
or Common Areas located outside the Premises to the extent such Claims are
covered by Landlord's insurance pursuant to Section 10.2 of this Lease (or would
------------
have been covered had Landlord maintained such insurance), even if resulting
from the negligence or willful misconduct of the Tenant Parties, and, subject to
the limitations in Section 10.1.3 below, Landlord shall indemnify, defend,
--------------
protect and hold Tenant and Tenant's partners, subpartners, and their respective
officers, agents, employees and independent contractors, harmless from and
against any and all such excluded Claims.
10.1.3 Limitation on Consequential Damages. Notwithstanding anything
-----------------------------------
to the contrary contained in the foregoing provisions of this Article 10 or
----------
elsewhere in this Lease, nothing in this Article 10 or this Lease shall impose
----------
any obligations on Tenant or Landlord to be responsible or liable for, and each
hereby releases the other from all liability for, consequential damages other
than those consequential damages (i) permitted to be recovered by Landlord
following a termination of this Lease after a default by Tenant pursuant to
Section 19.2.1 above, (ii) incurred by Landlord in connection with a holdover of
- --------------
the Premises by Tenant after the expiration or earlier termination of this
Lease, or (iii) incurred by Landlord in connection with any repair, physical
construction or improvement work performed by or on behalf of Tenant in the
Project.
10.1.4 Survival. The provisions of this Section 10.1 shall survive
-------- ------------
the expiration or sooner termination of this Lease with respect to any claims or
liability occurring prior to such expiration or termination.
10.2 Landlord's Insurance.
---------------------
-12-
10.2.1 Property Damage. Landlord shall, from and after the date
---------------
hereof until the expiration of the Lease Term, maintain "All Risk" or "Special
Causes of Loss" Physical Damage covering the Building (including the Building
Structure and Building Systems, but excluding the Tenant Improvements,
Alterations, and leasehold improvements in the Premises, Tenant's personal
property, the Supplemental Equipment and other property Tenant is required to
insure pursuant to Section 10.3.2 below). Such insurance shall be in an amount
--------------
not less than one hundred percent (100%) of the full replacement cost of the
property insured, exclusive of architectural and engineering fees, excavation,
footing and foundations, and in amounts that meet any co-insurance clauses of
the policy. Landlord shall also have the right, but not the obligation, to
maintain earthquake and/or flood insurance, and insurance against such other
risks and perils as Landlord may from time to time determine.
10.2.2 Liability Insurance. Landlord shall, from and after the date
-------------------
hereof until the expiration of the Lease Term, also maintain Commercial General
Liability Insurance covering Landlord's liability for all claims or losses for
bodily injury and property damage arising out of Landlord's operations or use of
the Real Property.
10.2.3 Tenant's Compliance With Landlord's Fire and Casualty
-----------------------------------------------------
Insurance. Tenant shall, at Tenant's expense, comply with all customary
- ---------
insurance company requirements pertaining to the use of the Premises, provided
that such insurance requirements shall not unreasonably interfere with Tenant's
use and occupancy of the Premises. If Tenant's conduct or use of the Premises
other than for normal office purposes causes any increase in the premium for any
insurance policies carried by Landlord, then Tenant shall reimburse Landlord for
any such increase. Tenant, at Tenant's expense, shall comply with all rules,
orders, regulations or requirements of the American Insurance Association
(formerly the National Board of Fire Underwriters) and with any similar body.
10.3 Tenant's Insurance. Tenant shall maintain the following coverages in
------------------
the following amounts.
10.3.1 Commercial General Liability Insurance covering the insured
against claims of bodily injury, personal injury and property damage (including
loss of use thereof) arising out of Tenant's operations (and the operations of
any Customers (defined in Section 14.6 below) of Tenant), and contractual
------------
liabilities (covering the performance by Tenant of its indemnity agreements)
including a Broad Form endorsement covering the insuring provisions of this
Lease and the performance by Tenant of the indemnity agreements set forth in
Section 10.1 of this Lease, for limits of liability not less than:
- ------------
Bodily Injury and $5,000,000 each occurrence
Property Damage Liability $5,000,000 annual aggregate
Personal Injury Liability $5,000,000 each occurrence
$5,000,000 annual aggregate
0% Insured's participation
10.3.2 Physical Damage Insurance covering (i) all office furniture,
business and trade fixtures, office equipment, free-standing cabinet work,
movable partitions, merchandise and all other items of Tenant's property on the
Premises installed by, for, or at the expense of Tenant, (ii) the "Base, Shell
and Core," as that term is defined in the Tenant Work Letter, attached hereto as
Exhibit B and incorporated by this reference, and any other improvements which
- ---------
exist in the Premises as of the Lease Commencement Date (excluding the Base
Building), (iii) the Supplemental Equipment, and (iv) the "Tenant Improvements,"
as that term is defined in the Tenant Work Letter attached hereto as Exhibit B
---------
and incorporated herein by this reference, and all other improvements,
alterations and additions to the Premises. Such insurance shall be written on
an "all risks" of physical loss or damage basis, for the full replacement cost
value (subject to reasonable deductible amounts) new without deduction for
depreciation of the covered items and in amounts that meet any co-insurance
clauses of the policies of insurance and shall include coverage for damage or
other loss caused by fire or other peril including, but not limited to,
vandalism and malicious mischief, theft, water damage of any type, including
sprinkler leakage, bursting or stoppage of pipes, and explosion, and providing
business interruption coverage for a period of one year.
10.3.3 Worker's Compensation and Employer's Liability or other
similar insurance pursuant to all applicable state and local statutes and
regulations.
10.4 Form of Policies. The minimum limits of policies of insurance
----------------
required of Tenant under this Lease shall in no event limit the liability of
Tenant under this Lease. Such insurance shall (i) with respect to the coverages
required under Sections 10.3.2(ii) and (iv) above, name Landlord, and any other
------------------- ----
party the Landlord so specifies, as an additional insured, including Landlord's
managing agent, if any; (ii) specifically cover the liability assumed by Tenant
under this Lease, including, but not limited to, Tenant's obligations under
Section 10.1 of this Lease; (iii) be issued by an insurance company having a
- ------------
rating of not less than A-X in Best's Insurance Guide or which is otherwise
acceptable to Landlord and
-13-
licensed to do business in the State of California; (iv) be primary insurance as
to all claims thereunder and provide that any insurance carried by Landlord is
excess and is non-contributing with any insurance requirement of Tenant; (v) be
in form and content reasonably acceptable to Landlord; and (vi) provide that
said insurance shall not be canceled or coverage changed unless thirty (30)
days' prior written notice shall have been given to Landlord and any mortgagee
of Landlord. Tenant shall deliver said policy or policies or certificates
thereof to Landlord on or before the Lease Commencement Date and at least thirty
(30) days before the expiration dates thereof. In the event Tenant shall fail to
procure such insurance, or to deliver such policies or certificate, Landlord
may, at its option, procure such policies for the account of Tenant, and the
cost thereof shall be paid to Landlord within five (5) days after delivery to
Tenant of bills therefor.
10.5 Subrogation. Landlord and Tenant intend that their respective
-----------
property loss risks shall be borne by reasonable insurance carriers to the
extent above provided, and Landlord and Tenant hereby agree to look solely to,
and seek recovery only from, their respective insurance carriers in the event of
a property loss to the extent that such coverage is agreed to be provided
hereunder. The parties each hereby waive all rights and claims against each
other for such losses, and waive all rights of subrogation of their respective
insurers, provided such waiver of subrogation shall not affect the right to the
insured to recover thereunder. The parties agree that their respective
insurance policies are now, or shall be, endorsed such that the waiver of
subrogation shall not affect the right of the insured to recover thereunder, so
long as no material additional premium is charged therefor. Landlord or Tenant
shall immediately notify the other if such party is unable to obtain the above
required waiver of subrogation.
10.6 Additional Insurance Obligations. Tenant shall carry and maintain
--------------------------------
during the entire Lease Term, at Tenant's sole cost and expense, increased
amounts of the insurance required to be carried by Tenant pursuant to this
Article 10 and such other reasonable types of insurance coverage and in such
- ----------
reasonable amounts covering the Premises and Tenant's operations therein, as may
be reasonably requested by Landlord provided that Landlord shall not require
Tenant to change its insurance requirements more than one time in any Lease
Year.
ARTICLE 11
----------
DAMAGE AND DESTRUCTION
----------------------
11.1 Repair of Damage to Premises by Landlord. Tenant shall promptly
----------------------------------------
notify Landlord of any damage to the Premises resulting from fire or any other
casualty. If the Premises or any Common Areas serving or providing access to
the Premises shall be damaged by fire or other casualty, Landlord shall promptly
and diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord's reasonable control, and subject to all other terms of
this Article 11, restore the Base Building and such Common Areas. Such
----------
restoration shall be to substantially the same condition of the Base Building
and the Common Areas prior to the casualty, except for modifications required by
zoning and building codes and other laws or by the holder of a mortgage on the
Building or Project or any other modifications to the Common Areas deemed
desirable by Landlord, provided that access to the Premises and any common
restrooms serving the Premises shall not be materially impaired. Upon the
occurrence of any damage to the Premises, upon notice (the "Landlord Repair
Notice") to Tenant from Landlord, Tenant shall assign to Landlord (or to any
party designated by Landlord) all insurance proceeds payable to Tenant under
Tenant's insurance required under Sections 10.3.2(ii) and (iv) of this Lease,
----------------------------
and Landlord shall repair any injury or damage to tenant improvements and
Alterations in the Premises (but not any Supplemental Equipment or any of
Tenant's personal property which shall be promptly and with due diligence
repaired and restored by Tenant at Tenant's sole cost and expenses, unless and
to the extent Landlord elects in its sole discretion to restore all or a part of
the Supplemental Equipment) installed in the Premises and shall return the Base,
Shell and Core, Tenant's Work and any such tenant improvements and Alterations
in the Premises (and any Supplemental Equipment Landlord elects to repair in its
sole discretion) to their original condition; provided that if the cost of such
repair by Landlord exceeds the amount of insurance proceeds received by Landlord
from Tenant's insurance carrier, as assigned by Tenant, the cost of such repairs
shall be paid by Tenant to Landlord prior to Landlord's commencement of repair
of the damage. Except as otherwise set forth in Section 7.1, in the event that
-----------
Landlord does not deliver the Landlord Repair Notice within sixty (60) days
following the date the casualty becomes known to Landlord, Tenant shall, at its
sole cost and expense, repair any injury or damage to the Tenant's Work and the
Base, Shell and Core installed in the Premises and shall return such Tenant's
Work and Base, Shell and Core to their original condition. In the event
Landlord delivers a Landlord Repair Notice, prior to the commencement of
construction, Tenant shall submit to Landlord, for Landlord's review and
approval, all plans, specifications and working drawings relating thereto, and
Landlord shall select and Tenant shall reasonably approve the contractors to
perform such improvement work. Landlord shall not be liable for any
inconvenience or annoyance to Tenant or its visitors, or injury to Tenant's
business resulting in any way from such damage or the repair thereof; provided
however, that if such fire or other casualty shall have damaged the Premises or
Common Areas necessary to Tenant's occupancy, Landlord shall allow Tenant a
proportionate abatement of Base Rent, during the time and to the extent the
Premises are unfit for occupancy for the purposes permitted under this Lease,
and not occupied by Tenant as a
-14-
result thereof; provided, further, however, that if the damage or destruction is
due to the negligence or willful misconduct of Tenant or any of its agents,
employees, contractors, invitees or guests, Tenant shall be responsible for any
reasonable, applicable insurance deductible (which shall be payable to Landlord
upon demand) and there shall be no rent abatement. In the event that Landlord
shall not deliver the Landlord Repair Notice, Tenant's right to rent abatement
pursuant to the preceding sentence shall terminate as of the date which is
reasonably determined by Landlord to be the date Tenant should have completed
repairs to the Premises assuming Tenant used reasonable due diligence in
connection therewith.
11.2 Landlord's Option to Repair. Notwithstanding the terms of Section
--------------------------- -------
11.1 of this Lease, Landlord may elect not to rebuild and/or restore the
- ----
Premises, Building and/or Project, and instead terminate this Lease, by
notifying Tenant in writing of such termination within sixty (60) days after the
date of damage, such notice to include a termination date giving Tenant sixty
(60) days to vacate the Premises, but Landlord may so elect only if the Building
or Project shall be damaged by fire, earthquake or other casualty or cause,
whether or not the Premises are affected, and one or more of the following
conditions is present: (i) in Landlord's reasonable judgment, repairs cannot
reasonably be completed within one hundred eighty (180) days after the date of
discovery of the damage (when such repairs are made without the payment of
overtime or other premiums); or (ii) the damage is not fully covered by
Landlord's insurance policies; provided, however, that (A) if Landlord does not
elect to terminate this Lease pursuant to Landlord's termination right as
provided above, (B) the damage constitutes a "Tenant Damage Event" (as defined
below), and (C) repair of such damage cannot, in the reasonable judgment of an
architect or contractor selected by Landlord, be substantially completed within
two hundred seventy (270) days after the date of the damage, then Tenant may
elect, not later than ninety (90) days after nor earlier then thirty (30) days
after the date Tenant receives notice from the architect or contractor that the
repairs cannot be completed within such two hundred seventy (270) day period, to
terminate this Lease by written notice to Landlord effective as of the date
specified in the notice, which date shall not be less than thirty (30) days nor
more than sixty (60) days after the date such notice is given by Tenant. As
used herein, a "Tenant Damage Event" shall mean damage by fire or other
casualty, to all or any part of the Premises, the Building or of the Common
Areas providing access to the Premises, which damage is not the result of the
negligence or willful misconduct of Tenant or any of Tenant's employees, agents,
contractors, licensees or invitees, and which damage substantially interferes
with Tenant's use of or access to the Premises and would entitle Tenant to an
abatement of Base Rent pursuant to Section 11.1 above. Furthermore, if neither
------------
Landlord nor Tenant has terminated this Lease, and the repairs of a Tenant
Damage Event are not actually completed within the later of the Estimated Repair
Period or two hundred seventy (270) days after the date of the damage, Tenant
shall have the right (but only on the initial occasion of Tenant sending the
Damage Termination Notice) to terminate this Lease within five (5) business days
of the end of such period and thereafter during the first five (5) business days
of each calendar month following the end of such period until such time as the
repairs are substantially complete, by notice to Landlord (the "Damage
Termination Notice"), effective as of a date set forth in the Damage Termination
Notice (the "Damage Termination Date"), which Damage Termination Date shall not
be less than five (5) business days following the end of such period or each
such month, as the case may be, and not later than ninety (90) days after the
end of such period or each such month, as the case may be. Notwithstanding the
foregoing, if Tenant delivers a Damage Termination Notice to Landlord, then
Landlord shall have the right to suspend the occurrence of the Damage
Termination Date for a period ending thirty (30) days after the Damage
Termination Date set forth in the Damage Termination Notice by delivering to
Tenant, within five (5) business days of Landlord's receipt of the Damage
Termination Notice, a certificate of Landlord's contractor responsible for the
repair of the damage certifying that it is such contractor's good faith judgment
that the repairs shall be substantially completed within thirty (30) days after
the Damage Termination Date. If repairs shall be substantially completed prior
to the expiration of such thirty (30) day period, then the Damage Termination
Notice shall be of no force or effect, but if the repairs shall not be
substantially completed within such thirty-day period, then this Lease shall
terminate upon the expiration of such thirty-day period.
11.3 Waiver of Statutory Provisions. The provisions of this Lease,
------------------------------
including this Article 11, constitute an express agreement between Landlord and
----------
Tenant with respect to any and all damage to, or destruction of, all or any part
of the Premises, the Building or the Project, and any statute or regulation of
the State of California, including, without limitation, Sections 1932(2) and
1933(4) of the California Civil Code, with respect to any rights or obligations
concerning damage or destruction in the absence of an express agreement between
the parties, and any other statute or regulation, now or hereafter in effect,
shall have no application to this Lease or any damage or destruction to all or
any part of the Premises, the Building or the Project.
ARTICLE 12
----------
NONWAIVER
---------
No provision of this Lease shall be deemed waived by either party hereto
unless expressly waived in a writing signed thereby. The waiver by either party
hereto of any breach of any term, covenant or
-15-
condition herein contained shall not be deemed to be a waiver of any subsequent
breach of same or any other term, covenant or condition herein contained. The
subsequent acceptance of Rent hereunder by Landlord shall not be deemed to be a
waiver of any preceding breach by Tenant of any term, covenant or condition of
this Lease, other than the failure of Tenant to pay the particular Rent so
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance of such Rent. No acceptance of a lesser amount than the Rent
herein stipulated shall be deemed a waiver of Landlord's right to receive the
full amount due, nor shall any endorsement or statement on any check or payment
or any letter accompanying such check or payment be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the full amount due. No receipt of monies by
Landlord from Tenant after the termination of this Lease shall in any way alter
the length of the Lease Term or of Tenant's right of possession hereunder, or
after the giving of any notice shall reinstate, continue or extend the Lease
Term or affect any notice given Tenant prior to the receipt of such monies, it
being agreed that after the service of notice or the commencement of a suit, or
after final judgment for possession of the Premises, Landlord may receive and
collect any Rent due, and the payment of said Rent shall not waive or affect
said notice, suit or judgment.
ARTICLE 13
----------
CONDEMNATION
------------
If the twenty-five percent (25%) or more of the Premises, Building or
Project shall be taken by power of eminent domain or condemned by any competent
authority for any public or quasi-public use or purpose, or if any adjacent
property or street shall be so taken or condemned, or reconfigured or vacated by
such authority in such manner as to require the use, reconstruction or
remodeling of any part of the Premises, Building or Project, or if Landlord
shall grant a deed or other instrument in lieu of such taking by eminent domain
or condemnation, Landlord shall have the option to terminate this Lease
effective as of the date possession is required to be surrendered to the
authority. If more than twenty-five percent (25%) of the rentable square feet
of the Premises is taken, or if access to the Premises is substantially
impaired, in each case for a period in excess of one hundred eighty (180) days,
Tenant shall have the option to terminate this Lease effective as of the date
possession is required to be surrendered to the authority. Tenant shall not
because of such taking assert any claim against Landlord or the authority for
any compensation because of such taking and Landlord shall be entitled to the
entire award or payment in connection therewith, except that Tenant shall have
the right to file any separate claim available to Tenant for any taking of
Tenant's personal property and fixtures belonging to Tenant and removable by
Tenant upon expiration of the Lease Term pursuant to the terms of this Lease,
and for moving expenses, so long as such claims do not diminish the award
available to Landlord, its ground lessor with respect to the Building or Project
or its mortgagee, and such claim is payable separately to Tenant. All Base Rent
shall be apportioned as of the date Tenant is physically dispossessed of the
Premises. If any part of the Premises shall be taken, and this Lease shall not
be so terminated, the Rent shall be proportionately abated. Tenant hereby
waives any and all rights it might otherwise have pursuant to Section 1265.130
of The California Code of Civil Procedure. Notwithstanding anything to the
contrary contained in this Article 13, in the event of a temporary taking of all
----------
or any portion of the Premises for a period of one hundred and eighty (180) days
or less, then this Lease shall not terminate but the Base Rent and the
Additional Rent shall be abated for the period of such taking in proportion to
the ratio that the amount of rentable square feet of the Premises taken bears to
the total rentable square feet of the Premises. Landlord shall be entitled to
receive the entire award made in connection with any such temporary taking.
ARTICLE 14
----------
ASSIGNMENT AND SUBLETTING
-------------------------
14.1 Transfers. Except as otherwise provided herein, Tenant shall not,
---------
without the prior written consent of Landlord, assign, mortgage, pledge,
hypothecate, encumber, or permit any lien to attach to, or otherwise transfer,
this Lease or any interest hereunder, permit any assignment, or other transfer
of this Lease or any interest hereunder by operation of law, sublet the Premises
or any part thereof, or enter into any license, "co-location" or concession
agreements or otherwise permit the occupancy or use of the Premises or any part
thereof by any persons other than Tenant and its employees and contractors (all
of the foregoing are hereinafter sometimes referred to collectively as
"Transfers" and any person to whom any Transfer is made or sought to be made is
hereinafter sometimes referred to as a "Transferee"). If Tenant desires
Landlord's consent to any Transfer, Tenant shall notify Landlord in writing,
which notice (the "Transfer Notice") shall include (i) the proposed effective
date of the Transfer, which shall not be less than fifteen (15) days nor more
than one hundred eighty (180) days after the date of delivery of the Transfer
Notice, (ii) a description of the portion of the Premises to be transferred (the
"Subject Space"), (iii) all of the terms of the proposed Transfer and the
consideration therefor, including calculation of the "Transfer Premium", as that
term is defined in Section 14.3 below, in connection with such Transfer, the
------------
name and address of the proposed Transferee, and a copy of all existing executed
and/or proposed documentation pertaining to the proposed Transfer, including all
existing operative documents to be executed to evidence such Transfer or the
agreements incidental or related to such
-16-
Transfer, (iv) current financial statements of the proposed Transferee certified
by an officer, partner or owner thereof, business credit and personal references
and history of the proposed Transferee and any other information reasonably
required by Landlord which will enable Landlord to determine the financial
responsibility, character, and reputation of the proposed Transferee, nature of
such Transferee's business and proposed use of the Subject Space, and (v) an
executed estoppel certificate from Tenant in the form attached hereto as Exhibit
-------
E. Any Transfer made without Landlord's prior written consent shall, at
- --
Landlord's option, be null, void and of no effect, and shall, at Landlord's
option, constitute a default by Tenant under this Lease. Whether or not Landlord
consents to any proposed Transfer, Tenant shall pay Landlord's review and
processing fees, as well as any reasonable professional fees (including, without
limitation, attorneys', accountants', architects', engineers' and consultants'
fees) incurred by Landlord, within thirty (30) days after written request by
Landlord not to exceed $1,000 per Transfer.
14.2 Landlord's Consent. Landlord shall not unreasonably withhold its
------------------
consent to any proposed Transfer of the Subject Space to the Transferee on the
terms specified in the Transfer Notice. Without limitation as to other
reasonable grounds for withholding consent, the parties hereby agree that it
shall be reasonable under this Lease and under any applicable law for Landlord
to withhold consent to any proposed Transfer where one or more of the following
apply:
14.2.1 The Transferee is of a character or reputation or engaged in a
business which is not consistent with the quality of the Building or the
Project, or would be a significantly less prestigious occupant of the Building
than Tenant;
14.2.2 The Transferee intends to use the Subject Space for purposes
which are not permitted under this Lease;
14.2.3 The Transferee is either a governmental agency or
instrumentality thereof;
14.2.4 The Transfer occurs during the period from the Lease
Commencement Date until the earlier of (i) the fourth anniversary of the Lease
Commencement Date or (ii) the date at least ninety-five percent (95%) of the
rentable square feet of the Building is leased, and the rent charged by Tenant
to such Transferee during the term of such Transfer (the "Transferee's Rent"),
calculated using a net present value analysis, is less than ninety-five percent
(95%) of the rent being quoted by Landlord at the time of such Transfer for
comparable space in the Building for a comparable term (the "Quoted Rent"),
calculated using a present value analysis;
14.2.5 The Transferee is not a party of reasonable financial worth
and/or financial stability in light of the responsibilities to be undertaken in
connection with the Transfer on the date consent is requested;
14.2.6 The proposed Transfer would cause a violation of another lease
for space in the Project, or would give an occupant of the Project a right to
cancel its lease;
14.2.7 Either the proposed Transferee, or any person or entity which
directly or indirectly, controls, is controlled by, or is under common control
with, the proposed Transferee, (i) occupies space in the Project at the time of
the request for consent, or (ii) is negotiating or has negotiated with Landlord
to lease space in the Project.
If Landlord consents to any Transfer pursuant to the terms of this Section
-------
14.2 (and does not exercise any recapture rights Landlord may have under Section
- ---- -------
14.4 of this Lease), Tenant may within six (6) months after Landlord's consent,
- ----
but not later than the expiration of said six-month period, enter into such
Transfer of the Premises or portion thereof, upon substantially the same terms
and conditions as are set forth in the Transfer Notice furnished by Tenant to
Landlord pursuant to Section 14.1 of this Lease, provided that if there are any
------------
changes in the terms and conditions from those specified in the Transfer Notice
(i) such that Landlord would initially have been entitled to refuse its consent
to such Transfer under this Section 14.2, or (ii) which would cause the proposed
------------
Transfer to materially be more favorable to the Transferee than the terms set
forth in Tenant's original Transfer Notice, Tenant shall again submit the
Transfer to Landlord for its approval and other action under this Article 14
----------
(including Landlord's right of recapture, if any, under Section 14.4 of this
------------
Lease). Notwithstanding anything to the contrary in this Lease, if Tenant or
any proposed Transferee claims that Landlord has unreasonably withheld or
delayed its consent under Section 14.2 or otherwise has breached or acted
------------
unreasonably under this Article 14, their sole remedies shall be a declaratory
----------
judgment and an injunction for the relief sought without any monetary damages
(other than reasonable attorneys fees), and Tenant hereby waives all other
remedies, including, without limitation, any right at law or equity to terminate
this Lease, on its own behalf and, to the extent permitted under all applicable
laws, on behalf of the proposed Transferee. Tenant shall indemnify, defend and
hold harmless Landlord from any and all liability, losses, claims, damages,
costs, expenses, causes of action and proceedings involving any third party or
parties (including without limitation Tenant's proposed subtenant or assignee)
who claim they were damaged by Landlord's wrongful withholding or conditioning
of Landlord's consent.
-17-
14.3 Transfer Premium. If Landlord consents to a Transfer (not including
----------------
any Collocation Agreement pursuant to Section 14.6 below), as a condition
------------
thereto which the parties hereby agree is reasonable, Tenant shall pay to
Landlord fifty percent (50%) of any "Transfer Premium," as that term is defined
in this Section 14.3, received by Tenant from such Transferee. "Transfer
------------
Premium" shall mean all rent, additional rent or other consideration payable by
such Transferee in connection with the Transfer in excess of the Rent and
Additional Rent payable by Tenant under this Lease during the term of the
Transfer on a per rentable square foot basis if less than all of the Premises is
transferred, after deducting the reasonable expenses incurred by Tenant for (i)
any changes, alterations and improvements to the Premises in connection with the
Transfer, (ii) any free base rent reasonably provided to the Transferee, (iii)
any brokerage commissions in connection with the Transfer, (iv) any reasonable
attorneys fees incurred by Tenant in conjunction with documenting such Transfer.
"Transfer Premium" shall also include, but not be limited to, key money, bonus
money or other cash consideration paid by Transferee to Tenant in connection
with such Transfer, and any payment in excess of fair market value for services
rendered by Tenant to Transferee or for assets, fixtures, inventory, equipment,
or furniture transferred by Tenant to Transferee in connection with such
Transfer.
14.4 Landlord's Option as to Subject Space. Notwithstanding anything to
-------------------------------------
the contrary contained in this Article 14, and except with respect to
----------
"Collocation Agreements" and "Non-Transfers," as those terms are defined in
Sections 14.6 and 14.7, below, Landlord shall have the option, by giving written
- ------------- ----
notice to Tenant within thirty (30) days after receipt of any Transfer Notice
involving more than fifty percent (50%) of the Premises, to recapture the
Subject Space. Such recapture notice shall cancel and terminate this Lease with
respect to the Subject Space as of the date stated in the Transfer Notice as the
effective date of the proposed Transfer until the last day of the term of the
Transfer as set forth in the Transfer Notice (or at Landlord's option, shall
cause the Transfer to be made to Landlord or its agent, in which case the
parties shall execute the Transfer documentation promptly thereafter). In the
event of a recapture by Landlord, if this Lease shall be canceled with respect
to less than the entire Premises, the Rent reserved herein shall be prorated on
the basis of the number of rentable square feet retained by Tenant in proportion
to the number of rentable square feet contained in the Premises, and this Lease
as so amended shall continue thereafter in full force and effect, and upon
request of either party, the parties shall execute written confirmation of the
same. If Landlord declines, or fails to elect in a timely manner to recapture
the Subject Space under this Section 14.4, then, provided Landlord has consented
------------
to the proposed Transfer, Tenant shall be entitled to proceed to transfer the
Subject Space to the proposed Transferee, subject to provisions of this Article
-------
14. Landlord shall be responsible for the cost of installing any demising walls
- --
to be used to separate any Subject Space recaptured pursuant to this Section
14.4 from the remaining portion of the Premises.
14.5 Effect of Transfer. If Landlord consents to a Transfer, (i) the terms
------------------
and conditions of this Lease shall in no way be deemed to have been waived or
modified, (ii) such consent shall not be deemed consent to any further Transfer
by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord,
promptly after execution, an original executed copy of all documentation
pertaining to the Transfer in form reasonably acceptable to Landlord, (iv)
Tenant shall furnish upon Landlord's request a complete statement, certified by
an independent certified public accountant, or Tenant's chief financial officer,
setting forth in detail the computation of any Transfer Premium Tenant has
derived and shall derive from such Transfer, and (v) no Transfer relating to
this Lease or agreement entered into with respect thereto, whether with or
without Landlord's consent, shall relieve Tenant or any guarantor of the Lease
from any liability under this Lease, including, without limitation, in
connection with the Subject Space. Landlord or its authorized representatives
shall have the right at all reasonable times to audit the books, records and
papers of Tenant relating to any Transfer, and shall have the right to make
copies thereof. If the Transfer Premium respecting any Transfer shall be found
understated, Tenant shall, within thirty (30) days after demand, pay the
deficiency, and if understated by more than two percent (2%), Tenant shall pay
Landlord's costs of such audit.
14.6 Collocation Agreements. Landlord acknowledges that Tenant's business
----------------------
to be conducted on the Premises requires the installation on the Premises of
certain communications equipment by telecommunications customers of Tenant
("Customers") in order for such Customers to interconnect with Tenant's terminal
facilities or to permit Tenant to manage or operate their equipment. Tenant
represents to Landlord that such arrangements will require access by each
Customer to the Premises only on an infrequent basis, and only when accompanied
by a representative of Tenant. Notwithstanding anything contained elsewhere in
this Article 14, Landlord hereby consents in advance to any sublease, license
----------
agreement, "Co-Location Agreement" or like agreement (collectively, "Collocation
Agreements") between Tenant and such a Customer for the limited purpose of
permitting such an arrangement as is described in this Section 14.6. The
------------
effectiveness of such advance consent as to a particular Customer Sublease is
conditioned on (a) Tenant not giving such Customer any rights not given Tenant
under this Lease, and (b) Tenant providing Landlord with same-day advance
facsimile notice of all Customers authorized to enter the Premises and Project
during Business Hours, and same-day advance verbal authorization to and approval
by the Project manager for any authorized entry of the Premises and Project
during hours other than the Business Hours. Tenant shall be liable to Landlord
for any violation by its Customers of any provisions of this Lease.
-18-
14.7 Additional Transfers. For purposes of this Lease, the term "Transfer"
--------------------
shall also include (i) if Tenant is a partnership, the withdrawal or change,
voluntary, involuntary or by operation of law, of fifty percent (50%) or more of
the partners, or transfer of twenty-five percent or more of partnership
interests, within a twelve (12)-month period, or the dissolution of the
partnership without immediate reconstitution thereof, and (ii) if Tenant is a
closely held corporation (i.e., whose stock is not publicly held and not traded
----
through an exchange or over the counter), (A) the dissolution, merger,
consolidation or other reorganization of Tenant, or (B) the sale or other
transfer of more than an aggregate of fifty percent (50%) of the voting shares
of Tenant (other than the original issuance of voting shares by Tenant and/or
the transfer of voting shares to immediate family members by reason of gift or
death), within a twelve (12)-month period.
14.8 Non-Transfers. Notwithstanding anything to the contrary contained in
-------------
this Lease, neither (i) the sale or exchange of any capital stock of Tenant on
a public exchange, (ii) an assignment of this Lease to a transferee of all or
substantially all of the assets of Tenant, (iii) an assignment of this Lease or
sublease of the Premises to a transferee which is either (A) the resulting
entity of a merger or consolidation of Tenant with another entity or (B)
acquiring all or substantially all of the assets of Tenant, (iv) subject to
Landlord's reasonable approval of any leasehold mortgage documentation, the
mortgage, pledge or hypothecation of Tenant's interest under the Lease to any
institutional lender, nor (v) an assignment or subletting of all or a portion of
the Premises to an affiliate of Tenant (an entity which is controlled by,
controls, or is under common control with, Tenant), shall be deemed a Transfer
under Article 14 of this Lease (and thus shall not be subject to Landlord's
----------
prior consent or recapture rights pursuant to Section 14.1 and 14.4 or rights to
------------ ----
receive any Transfer Premium pursuant to Section 14.3), provided that (1) Tenant
------------
notifies Landlord of any such assignment or sublease at least five (5) days
prior to the effective thereof, and thereafter promptly supplies Landlord with
any documents or information reasonably requested by Landlord regarding such
transfer or transferee, (2) such assignment or sublease is not a subterfuge by
Tenant to avoid its obligations under this Lease, (3) such transferee or
affiliate (which for purposes of this Lease shall be referred to as a "Permitted
Affiliate") shall have a tangible net worth (not including goodwill as an asset)
computed in accordance with generally accepted accounting principles (the "Net
Worth") sufficient to satisfy the obligations and responsibilities to be
undertaken in connection with such assignment or sublease, (4) such transferee
or affiliate, shall with respect to an Assignment of this Lease, deliver to
Landlord an agreement assuming all the obligations of Tenant under this Lease
arising after the effective date of such assignment, and (5) with respective to
any mortgage, pledge or hypothecation of Tenant's leasehold interest in the
Premises, Landlord reasonably approves any financing or mortgage documentation.
14.9 Occurrence of Default. Any Transfer hereunder shall be subordinate
---------------------
and subject to the provisions of this Lease, and if this Lease shall be
terminated during the term of any Transfer, Landlord shall have the right to:
(i) treat such Transfer as canceled and repossess the Subject Space by any
lawful means, or (ii) require that such Transferee (not including any Customer
under a Collocation Agreement) attorn to and recognize Landlord as its landlord
under any such Transfer. If Tenant shall be in default under this Lease,
Landlord is hereby irrevocably authorized, as Tenant's agent and attorney-in-
fact, to direct any Transferee (not including any Customer under a Collocation
Agreement) to make all payments under or in connection with the Transfer
directly to Landlord (which Landlord shall apply towards Tenant's obligations
under this Lease) until such default is cured. Such Transferee shall rely on
any representation by Landlord that Tenant is in default hereunder, without any
need for confirmation thereof by Tenant. Upon any assignment, the assignee
shall assume in writing all obligations and covenants of Tenant thereafter to be
performed or observed under this Lease. No collection or acceptance of rent by
Landlord from any Transferee shall be deemed a waiver of any provision of this
Article 14 or the approval of any Transferee or a release of Tenant from any
- ----------
obligation under this Lease, whether theretofore or thereafter accruing. In no
event shall Landlord's enforcement of any provision of this Lease against any
Transferee be deemed a waiver of Landlord's right to enforce any term of this
Lease against Tenant or any other person. If Tenant's obligations hereunder
have been guaranteed, Landlord's consent to any Transfer shall not be effective
unless the guarantor also consents to such Transfer.
ARTICLE 15
----------
SURRENDER OF PREMISES; OWNERSHIP AND
------------------------------------
REMOVAL OF TRADE FIXTURES
-------------------------
15.1 Surrender of Premises. No act or thing done by Landlord or any agent
---------------------
or employee of Landlord during the Lease Term shall be deemed to constitute an
acceptance by Landlord of a surrender of the Premises unless such intent is
specifically acknowledged in writing 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,
-19-
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
or terminate any or all such sublessees or subtenancies.
15.2 Removal of Tenant Property by Tenant. Upon the expiration of the
------------------------------------
Lease Term, or upon any earlier termination of this Lease, Tenant shall, subject
to the provisions of this Article 15, quit and surrender possession of the
----------
Premises to Landlord in as good order and condition as when Tenant took
possession and as thereafter improved by Landlord and/or Tenant, reasonable wear
and tear and repairs which are specifically made the responsibility of Landlord
hereunder excepted. Upon such expiration or termination, Tenant shall, without
expense to Landlord, remove or cause to be removed from the Premises all debris
and rubbish, and such items of furniture, equipment, business and trade
fixtures, 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; provided that Tenant shall not be
permitted to remove any of the Supplemental Equipment other than Tenant's Trade
Fixtures such Supplemental Equipment becoming the sole property of Landlord upon
expiration of the Lease Term.
ARTICLE 16
----------
HOLDING OVER
------------
If Tenant holds over after the expiration of the Lease Term or earlier
termination thereof, with or without the express or implied consent of Landlord,
such tenancy shall be from month-to-month only, and shall not constitute a
renewal hereof or an extension for any further term, and in such case Base Rent
shall be payable at a monthly rate equal to one hundred twenty-five percent
(125%) (the "Percentage Rate") of the Base Rent applicable during the last
rental period of the applicable Lease or Option Term for the first ninety (90)
days of such holdover tenancy, provided that the Percentage Rate shall be
increased to two hundred percent (200%) for any holdover tenancy by Tenant in
excess of ninety (90) days. Such month-to-month tenancy shall be subject to
every other applicable term, covenant and agreement contained herein. Nothing
contained in this Article 16 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. The provisions of
this Article 16 shall not be deemed to limit or constitute a waiver of any other
----------
rights or remedies of Landlord provided herein or at law. If Tenant fails to
surrender the Premises upon the termination or expiration of this Lease, in
addition to any other liabilities to Landlord accruing therefrom, Tenant shall
protect, defend, indemnify and hold Landlord harmless from all loss, costs
(including reasonable attorneys' fees) and liability resulting from such
failure, including, without limiting the generality of the foregoing, any claims
made by any succeeding tenant founded upon such failure to surrender and any
lost profits to Landlord resulting therefrom.
ARTICLE 17
----------
ESTOPPEL CERTIFICATES
---------------------
Within ten (10) days following a request in writing by Landlord or Tenant,
the non-requesting party shall execute, acknowledge and deliver to the
Requesting Party an estoppel certificate, which, as submitted by the Requesting
Party , shall be substantially in the form of Exhibit E, attached hereto (or
---------
such other form as may be required by any prospective mortgagee or purchaser of
the Project, or any portion thereof), indicating therein any exceptions thereto
that may exist at that time, and shall also contain any other information
reasonably requested by the Requesting Party or The requesting Party's mortgagee
or prospective mortgagee. Any such certificate may be relied upon by any
prospective mortgagee or purchaser of all or any portion of the Project. The
non-requesting party shall execute and deliver whatever other instruments may be
reasonably required for such purposes. At any time during the Lease Term,
Landlord may require Tenant to provide Landlord with a current financial
statement and financial statements of the two (2) years prior to the current
year provided that Landlord shall keep such information confidential pursuant to
the requirements of Section 29.28 below. Such statements shall be prepared in
-------------
accordance with generally accepted accounting principles and, if such is the
normal practice of Tenant, shall be audited by an independent certified public
accountant. Failure of Tenant to timely execute, acknowledge and deliver such
estoppel certificate or other instruments shall constitute an acceptance of the
Premises and an acknowledgment by Tenant that statements included in the
estoppel certificate are true and correct, without exception.
-20-
ARTICLE 18
----------
SUBORDINATION
-------------
18.1 Subordination. This Lease is subject and subordinate to all present
-------------
and future ground or underlying leases of the Building or Project and to the
lien of any mortgage, trust deed or other encumbrances now or hereafter in force
against the Building or Project or any part thereof, if any, and to all
renewals, extensions, modifications, consolidations and replacements thereof,
and to all advances made or hereafter to be made upon the security of such
mortgages or trust deeds, unless the holders of such mortgages, trust deeds or
other encumbrances, or the lessors under such ground lease or underlying leases,
require in writing that this Lease be superior thereto. Notwithstanding the
foregoing to the contrary, Landlord agrees to provide Tenant with commercially
reasonable non-disturbance agreement(s) in favor of Tenant from any ground
lessors, mortgage holders or deed of trust beneficiaries under any ground lease,
mortgage or deed of trust affecting the Project which comes into existence at
any time after the date of execution of this Lease but prior to the expiration
of the Lease Term ("Future Mortgage") in consideration of, and as a condition
precedent to, Tenant's agreement to be bound by the terms of this Article 18
----------
with respect to such Future Mortgage. Tenant covenants and agrees in the event
any proceedings are brought for the foreclosure of any such mortgage or deed in
lieu thereof (or if any ground lease is terminated), to attorn, without any
deductions or set-offs whatsoever except as expressly provided for in this
Lease, to the lienholder or purchaser or any successors thereto upon any such
foreclosure sale or deed in lieu thereof (or to the ground lessor), if so
requested to do so by such purchaser or lienholder or ground lessor, and to
recognize such purchaser or lienholder or ground lessor as the lessor under this
Lease, provided such lienholder or purchaser or ground lessor shall agree to
accept this Lease and not disturb Tenant's occupancy, so long as Tenant timely
pays the rent and observes and performs the terms, covenants and conditions of
this Lease to be observed and performed by Tenant. Landlord's interest herein
may be assigned as security at any time to any lienholder. Tenant shall, within
ten (10 ) days of request by Landlord, execute such further instruments or
assurances as Landlord may reasonably deem necessary to evidence or confirm the
subordination or superiority of this Lease to any such mortgages, trust deeds,
ground leases or underlying leases, provided Tenant has received or will receive
a commercially reasonable nondisturbance agreement in favor of Tenant from any
such party requesting such further instruments or assurances. Tenant hereby
irrevocably authorizes Landlord to execute and deliver in the name of Tenant any
such instrument or instruments if Tenant fails to do so in accordance with the
requirements with this Lease; provided that such authorization shall in no way
relieve Tenant from the obligation of executing such instruments of
subordination or superiority. Tenant waives the provisions of any current or
future statute, rule or law which may give or purport to give Tenant any right
or election to terminate or otherwise adversely affect this Lease and the
obligations of Tenant hereunder in the event of any foreclosure proceeding or
sale.
18.2 Non-Disturbance Agreement From Existing Lender. In the event that as
----------------------------------------------
of the date of execution of this Lease, there exists any deed of trust or ground
lease encumbering the Project which is not terminated, released or reconveyed
within sixty (60) days thereafter, then Landlord shall obtain and deliver to
Tenant a commercially reasonable non-disturbance agreement from the beneficiary
under such deed of trust a form of which is attached hereto as Exhibit F.
---------
Tenant shall execute and return such non-disturbance agreement to Landlord
within thirty (30) days after Tenant's receipt thereof.
ARTICLE 19
----------
DEFAULTS; REMEDIES
------------------
19.1 Events of Default. The occurrence of any of the following shall
-----------------
constitute a default of this Lease by Tenant:
19.1.1 Any failure by Tenant to pay any Rent or any other charge
required to be paid under this Lease, or any part thereof, when due unless such
failure is cured within five (5) days after receipt of written notice by Tenant;
provided, however, that any such notice shall be in lieu of, and not in addition
to, any notice required under California Code of Civil Procedure section 1161 or
any similar successor law, or
19.1.2 Except where a specific time period is otherwise set forth for
Tenant's performance in this Lease, in which event the failure to perform by
Tenant within such time period shall be a default by Tenant under this Section
-------
19.1.2, any failure by Tenant to observe or perform any other provision,
- ------
covenant or condition of this Lease to be observed or performed by Tenant where
such failure continues for ten (10) days after written notice thereof from
Landlord to Tenant; provided that if the nature of such default is such that the
same cannot reasonably be cured within a ten (10) day period, Tenant shall not
be deemed to be in default if it diligently commences such cure within such
period and thereafter diligently proceeds to rectify and cure such default, but
in no event exceeding a period of time in excess of sixty (60 ) days after
written notice thereof from Landlord to Tenant; or
-21-
19.1.3 To the extent permitted by law, a general assignment by Tenant
or any guarantor of the Lease for the benefit of creditors, or the taking of any
corporate action in furtherance of bankruptcy or dissolution whether or not
there exists any proceeding under an insolvency or bankruptcy law, or the filing
by or against Tenant or any guarantor of any proceeding under an insolvency or
bankruptcy law, unless in the case of a proceeding filed against Tenant or any
guarantor the same is dismissed within sixty (60) days, or the appointment of a
trustee or receiver to take possession of all or substantially all of the assets
of Tenant or any guarantor, unless possession is restored to Tenant or such
guarantor within thirty (30) days, or any execution or other judicially
authorized seizure of all or substantially all of Tenant's assets located upon
the Premises or of Tenant's interest in this Lease, unless such seizure is
discharged within thirty (30) days; or
19.1.4 Abandonment of all or a substantial portion of the Premises by
Tenant; or
19.1.5 The failure by Tenant to observe or perform according to the
provisions of Articles 5, 14, 17 or 18 of this Lease where such failure
---------- -- -- --
continues for more than two (2) business days after notice from Landlord; or
The notice periods provided herein are in lieu of, and not in addition to,
any notice periods provided by law.
19.2 Remedies Upon Default. 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 (all of which remedies shall be distinct, separate
and cumulative), the option to pursue any one or more of the following remedies,
each and all of which shall be cumulative and nonexclusive, without any notice
or demand whatsoever.
19.2.1 Terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may,
without prejudice to any other remedy which it may have for possession or
arrearages in rent, enter upon and take possession of the Premises and expel or
remove Tenant and any other person who may be occupying the Premises or any part
thereof, without being liable for prosecution or any claim or damages therefor;
and Landlord may recover from Tenant the following:
(i) The worth at the time of any unpaid rent which has been
earned at the time of such termination; plus
(ii) The worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time
of award exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided; plus
(iii) The worth at the time of award of the amount by which the
unpaid rent for the balance of the Lease Term after the time of award
exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(iv) Any other amount necessary to compensate Landlord for all
the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things
would be likely to result therefrom, specifically including but not limited
to, brokerage commissions and advertising expenses incurred, expenses of
remodeling the Premises or any portion thereof for a new tenant, whether
for the same or a different use, and any special concessions made to obtain
a new tenant; and
(v) At Landlord's election, such other amounts in addition to
or in lieu of the foregoing as may be permitted from time to time by
applicable law.
The term "rent" as used in this Section 19.2 shall be deemed to be and to
------------
mean all sums of every nature required to be paid by Tenant pursuant to the
terms of this Lease, whether to Landlord or to others. As used in Paragraphs
19.2.1(i) and (ii), above, the "worth at the time of award" shall be computed by
allowing interest at the rate set forth in Article 25 of this Lease, but in no
----------
case greater than the maximum amount of such interest permitted by law. As used
in Paragraph 19.2.1(iii) above, the "worth at the time of award" shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus two percent (2%).
19.2.2 Landlord shall have the remedy described in California Civil
Code Section 1951.4 (lessor may continue lease in effect after lessee's breach
and abandonment and recover rent as it becomes due, if lessee has the right to
sublet or assign, subject only to reasonable limitations). Accordingly, if
Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all rent as it becomes due.
-22-
19.2.3 Landlord shall at all times have the rights and remedies
(which shall be cumulative with each other and cumulative and in addition to
those rights and remedies available under Sections 19.2.1 and 19.2.2, above, or
--------------- ------
any law or other provision of this Lease), without prior demand or notice except
as required by applicable law, to seek any declaratory, injunctive or other
equitable relief, and specifically enforce this Lease, or restrain or enjoin a
violation or breach of any provision hereof.
19.3 Subleases of Tenant. Whether or not Landlord elects to terminate this
-------------------
Lease on account of any default by Tenant, as set forth in this Article 19,
----------
Landlord shall have the right to terminate any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by
Tenant and affecting the Premises or may, in Landlord's sole discretion, succeed
to Tenant's interest in such subleases, licenses, concessions or arrangements.
In the event of Landlord's election to succeed to Tenant's interest in any such
subleases, licenses, concessions or arrangements, Tenant shall, as of the date
of notice by Landlord of such election, have no further right to or interest in
the rent or other consideration receivable thereunder.
19.4 Form of Payment After Default. Following the occurrence of two (2) or
-----------------------------
more events of monetary default in any twelve (12) month period by Tenant,
Landlord shall have the right to require that any or all subsequent amounts paid
by Tenant to Landlord hereunder, whether to cure 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.
19.5 Efforts to Relet. No re-entry or repossession, repairs, maintenance,
----------------
changes, alterations and additions, reletting, appointment of a receiver to
protect Landlord's interests hereunder, or any other action or omission by
Landlord shall be construed as an election by Landlord to terminate this Lease
or Tenant's right to possession, or to accept a surrender of the Premises, nor
shall same operate to release Tenant in whole or in part from any of Tenant's
obligations hereunder, unless express written notice of such intention is sent
by Landlord to Tenant. Tenant hereby irrevocably waives any right otherwise
available under any law to redeem or reinstate this Lease.
ARTICLE 20
----------
COVENANT OF QUIET ENJOYMENT
---------------------------
Landlord covenants that Tenant, on paying the Rent, charges for services
and other payments herein reserved and on keeping, observing and performing all
the other terms, covenants, conditions, provisions and agreements herein
contained on the part of Tenant to be kept, observed and performed, shall,
during the Lease Term, peaceably and quietly have, hold and enjoy the Premises
subject to the terms, covenants, conditions, provisions and agreements hereof
without interference by any persons lawfully claiming by or through Landlord.
The foregoing covenant is in lieu of any other covenant express or implied.
ARTICLE 21
----------
SECURITY DEPOSIT
----------------
Concurrent with Tenant's execution of this Lease, Tenant shall deposit with
Landlord a security deposit (the "Security Deposit") in the amount set forth in
Section 8 of the Summary, as security for the faithful performance by Tenant of
- ---------
all of its obligations under this Lease. If Tenant defaults with respect to any
provisions of this Lease, including, but not limited to, the provisions relating
to the payment of Rent, the removal of property and the repair of resultant
damage, Landlord may, without notice to Tenant, but shall not be required to
apply all or any part of the Security Deposit for the payment of any Rent or any
other sum in default and Tenant shall, upon demand therefor, restore the
Security Deposit to its original amount. Any unapplied portion of the Security
Deposit shall be returned to Tenant, or, at Landlord's option, to the last
assignee of Tenant's interest hereunder, within forty-five (45) days following
the expiration of the Lease Term. Tenant shall not be entitled to any interest
on the Security Deposit. Tenant hereby waives the provisions of Section 1950.7
(excluding 1950.7(b)) of the California Civil Code, or any successor statute.
ARTICLE 22
----------
SUPPLEMENTAL EQUIPMENT
----------------------
22.1 Supplemental Equipment. Landlord hereby grants to Tenant and Tenant
----------------------
hereby accepts from Landlord, on the terms and conditions set forth herein, a
license (the "License") coupled with Tenant's leasehold interest granting Tenant
the right (but with respect to Tenant's HVAC Equipment and Electrical Equipment
in the Premises, Tenant shall have the obligation), to install, at Tenant's sole
cost and expense and subject to the provisions of this Article 22, the
----------
following:
-23-
22.1.1 Subject to the satisfactory completion of the Roof Systems
Support Pad (as defined in Section 2.4 of the Tenant work letter), a heating,
ventilating and air conditioning system and related connections to the Premises
(the "Tenant's HVAC Equipment") on the portion of the Roof System Support Pad
shown as "Area A". on Exhibit A-2 attached hereto;
-----------
22.1.2 A dry-pipe, FM 200 or gas-based fire suppression system (the
"Fire-Suppression System") in the Premises in a location designated in writing
by Landlord. In connection with Tenant's installation of the Fire Suppression
System, Tenant shall have the right to disconnect and cap, if necessary, in
compliance with applicable law, and in accordance with the terms of Section 22.3
------------
below, any existing fire-suppression system in the Premises.;
22.1.3 Subject to the satisfactory completion of the Roof Systems
Support Pad (as defined in Section 2.4 of the Tenant Work Letter), four (4)
1,500 Kilowatt emergency generators ("Tenant's Generators") on that portion of
the Roof System Support Pad shown as "Area A" on Exhibit A-2 attached hereto.
-----------
Tenant shall install Tenant's Generators in compliance with all applicable law,
and in accordance with the terms and conditions of this Section 22, and shall be
----------
solely responsible for (i) all costs and expenses incurred in connection with
the installation, maintenance and operation of Tenant's Generator, and (ii) all
permits and other governmental approvals required to install, operate and
maintain Tenant's Generator. Tenant shall conduct all testing of Tenant's
Generators in accordance with Landlord's testing rules during non-business hours
and shall give Landlord not less than forty-eight (48) hours advance written
notice of any such tests.
In addition, from and after the Must Take Space Commencement Date
(defined in Section 1.2 above) Landlord shall permit Tenant to install, at
-----------
Tenant's sole cost and expense one (1) additional 1500-kilowatt emergency
generator (the "Expansion Generator") in an area of Landlord's designated
project generator room (the "Project Generator Room)" approved by Landlord;
provided that, if Tenant elects to install the Expansion Generator Tenant shall
reimburse Landlord for its proportionate share (to be determined by dividing the
number of generator pads used by Tenant by the total number of generator pads in
the Project Generator Room) of all reasonable costs incurred by Landlord in
constructing the Project Generator Room.
22.1.4 Tenant shall be entitled to utilize up to, but not exceeding
10,000 gallons of Landlord's designated generator stand-by fuel storage tank
(the "Generator Fuel Tank") in the Project's fuel storage area to provide fuel
for Tenant's Generators. Notwithstanding anything to the contrary contained in
this Article 22, Landlord shall acquire and install (i) the Generator Fuel Tank
(ii) reasonably sufficient fuel piping from the Generator Fuel Tank to Tenant's
fuel tank header in the basement of the Building and to Tenant's Generators, and
(iii) a fuel usage meter to measure and record Tenant's fuel consumption from
the Generator Fuel Tank, provided that Tenant shall pay Landlord for all costs
and expenses (which cost and expenses shall be deducted from the Tenant
Improvement Allowance pursuant to the Tenant Work Letter attached hereto),
incurred as a result of Landlord's installation and acquisition of the fuel
piping, any metering equipment and Tenant's prorata share of the Generator Fuel
Tank. Tenant's Generators, the Expansion Generators (if added pursuant to
Section 22.1.3 above), shall sometimes herein be collectively referred to as
- --------------
"Tenant's Generator Equipment."
22.1.5 The Electrical Equipment described in Section 6.1.2 above;
-------------
22.1.6 Subject to available capacity of the Building, such connection
equipment, such as conduits, cables, risers, feeders and materials
(collectively, the "Connecting Equipment") in the shafts, ducts, conduits,
chases, utility closets and other facilities of the Building as is reasonably
necessary to connect Tenant's HVAC Equipment, Tenant's Generator Equipment, the
Generator Fuel Tank, the Electrical Equipment and the Fire-Suppression System to
Tenant's other machinery and equipment in the Premises, subject however, to the
provisions of Section 22.3 below and subject to the availability of vertical
------------
riser and feeder excess capacity;
22.1.7 Up to (i) eight (8) four inch (4.0") aluminum conduits running
from the Premises to the seventh (7th) floor and basement of the Building, in
each of the two (2) main telecommunications riser of the Building (the "Main
Telecom Risers") in locations designated or approved in writing by Landlord and
in the basement from the main telecommunication riser to the two (2) minimum
points of entry in the basement of the Building to connect with the fiberoptic
network of Tenant's chosen fiber optic service providers, and (ii) eight (8)
four inch (4.0") aluminum conduits in the interconnect riser of the Building
(the "Interconnect Riser") running from the second (2nd) floor to the seventh
(7th) floor of the Building (collectively "Tenant's Conduit"). Notwithstanding
anything in this Lease to the contrary, commencing on the earlier to occur of
(i) the date occurring thirty-six (36) months following the Effective Date And
(ii) the date upon which Tenant has placed ninety percent (90%) of its
collocation Customers in the Premises, Landlord shall have the right to
recapture from Tenant up to seventy five
-24-
percent of any of the Tenant's Conduit allocated to Tenant pursuant to this
Section 22.1.7, which Landlord reasonably determines is not actually being used
to carry Tenant's or Tenant's Customers fiber throughout the Project;
22.1.8 New telecommunications lines and related equipment
(collectively the "Lines") in the Tenant's Conduit described in Section 22.1.7
--------------
above. Tenant shall install its Lines in the Building and Project in a
"backbone" configuration with horizontal Lines on applicable floors of the
Building being connected to a single Line in a vertical riser. Once the
backbone configuration is constructed, any and all new Lines installed by Tenant
pursuant to the terms of this Section 22 shall be attached to such backbone
----------
configuration. Notwithstanding anything to the contrary contained in this
Lease, Tenant shall only use Tenant's Lines in the Interconnect Riser to make
direct connections with other tenants in the Project.
22.1.9 Tenant's HVAC Equipment, the Fire Suppression System, Tenant's
Generator Equipment, the Electrical Equipment, the Connecting Equipment,
Tenant's Conduit and the Lines are sometimes collectively referred to as the
"Supplemental Equipment."
22.2 License Areas. The areas within the Building and Project which are
-------------
outside the Premises and are occupied by the Supplemental Equipment (including
without limitation, Tenant's non-exclusive use, in common with one or more other
tenants of the Project and Landlord, the vertical shafts and horizontal raceways
of the Building to the extent Tenant's use of such areas are approved in writing
by Landlord) are referred to herein collectively as the "License Areas". The
precise amount and location of the License Areas shall be designated by
Landlord. It is expressly understood that Landlord retains the right to use the
License Areas for any purpose whatsoever provided that Tenant shall have
reasonable access to, and Landlord shall not unduly interfere with the use of,
the Supplemental Equipment therein.
22.3 Installation. Except for the Project Radiators and Generator Fuel
------------
Tank which are to be installed by Landlord pursuant to Section 22.1.4, the
--------------
installation of the Supplemental Equipment shall constitute Alterations and
shall be performed in accordance with and subject to the provisions of Article 8
---------
of this Lease.
22.4 Tenant's Obligations. For the purposes of determining Tenant's
--------------------
obligations with respect to the License Areas, the License Areas shall be deemed
to be a portion of the Premises; consequently, unless otherwise provided in this
Article 22, all of the provisions of this Lease with respect to Tenant's
- ----------
obligations hereunder shall apply to the installation, use and maintenance of
the License Areas and the Supplemental Equipment, including without limitation,
provisions relating to compliance with requirements as to insurance, indemnity,
janitorial services, repairs, maintenance and compliance with law, except that
unless otherwise provided herein Tenant shall have no obligation to pay Base
Rent for the License Areas.
22.5 Tenant's Compliance with HVAC Sound/Vibration Specifications.
------------------------------------------------------------
Notwithstanding anything to the contrary contained herein, in addition to the
complying with the other requirements set forth in this Article 22, Tenant shall
----------
comply with Landlord's "Project Sound Requirements and Specifications" set forth
on Exhibit G attached hereto and all requirements of the City of Los Angeles
---------
(including without limitation, sound attenuation and vibration mitigation) in
the installation and operation of Tenant's HVAC Equipment and Tenant's Generator
Equipment. Provided that Tenant is not in default in any of its obligations
under this Lease, Tenant shall be allocated a proportionate share of Landlord's
sound budget for the Project.
22.6 Indemnity. Tenant shall install, use, maintain and repair the
---------
Supplemental Equipment, and use the License Areas, so as not to damage or
interfere with the operation of the Building, the Building systems or with the
occupancy or activities of any other tenant of the Building; and Tenant hereby
agrees to indemnify and hold harmless the Landlord Parties 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 Supplemental Equipment and use of
the License Areas. Similarly, Tenant shall pay upon demand by Landlord the
costs to repair any physical damage to the Building and the License Areas caused
by such installation, operation, use, maintenance or removal. Tenant hereby
waives and releases the Landlord Parties 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, and/or removal of the Supplemental Equipment and/or use of the
License Areas. Such waiver and release shall not apply to Claims to the extent
caused by Landlord's gross negligence or willful misconduct and not insured or
required to be insured by Tenant under this Lease.
-25-
However, in no event shall Landlord or any member of the Landlord Parties be
liable to Tenant for lost profits or consequential or incidental damages of any
kind.
22.7 Tenant Waiver. Landlord shall not have any obligations with respect
-------------
to the Supplemental Equipment or License Areas or compliance with any
requirements relating thereto, nor shall Landlord be responsible for any damage
that may be caused to the Supplemental Equipment or License Areas except to the
extent caused by the gross negligence or willful misconduct of Landlord and not
insured or required to be insured by Tenant under this Lease. Landlord makes no
representation that the Supplemental Equipment or License Areas will be able to
operate without interference or disturbance and Tenant agrees that Landlord
shall not be liable to Tenant therefor.
22.8 Protective Installations. Tenant, at Tenant's sole cost and expense,
------------------------
shall install such fencing and other protective equipment on or about the
Supplemental Equipment and License Areas as Landlord may determine.
22.9 Damage to Supplemental Equipment/Taxes on Supplemental Equipment.
----------------------------------------------------------------
Notwithstanding anything in Article 11 to the contrary, Tenant shall (i) be
----------
solely responsible for any damage caused as a result of and/or to the
Supplemental Equipment except to the extent such damage arises out of the gross
negligence or willful misconduct of Landlord and is not insured or required to
be insured by Tenant under this Lease, (ii) promptly pay any tax, license or
permit fees charged pursuant to any requirements in connection with the
installation, maintenance or use of the Supplemental Equipment and comply with
all precautions and safeguards recommended by all governmental authorities, and
(iii) make necessary repairs, replacements or to maintenance of the Supplemental
Equipment and License Areas (unless and to the extent Landlord has elected in
Section 11.1 to repair the Supplemental Equipment) or License Areas.
- ------------
22.10 Landlord's Rights. If any of the conditions set forth in this
-----------------
Article 22 are not complied with by Tenant, or if Tenant's use of the
- ----------
Supplemental Equipment is interfering with the activity or occupancy of any
other tenant in the Building, then without limiting Landlord's rights and
remedies it may otherwise have under this Lease, Tenant shall, upon written
notice from Landlord, have the option either to (i) immediately discontinue its
use of the Supplemental Equipment and License Areas, remove the same, and make
such repairs and restoration as required under Section 22.10 below, (ii)
-------------
reposition any Supplemental Equipment to a location designated by Landlord if
Landlord elects to permit such repositioning, and make such repairs and
restorations as required under Section 22.10 below, or (iii) correct such
-------------
noncompliance within thirty (30) days after receipt of notice. If Tenant fails
to correct noncompliance within thirty (30) days after receipt of notice, then,
subject to Section 22.10 below, Tenant shall immediately discontinue its use of
-------------
the applicable Supplemental Equipment and remove the same and discontinue use of
the related License Areas. Tenant acknowledges and agrees that any exercise by
Landlord of its rights under this Section 22.9 shall not relieve Tenant of any
------------
of its obligations under the Lease.
22.11 Removal of Supplemental Equipment. Notwithstanding anything in this
---------------------------------
Lease to the contrary (including without limitation Article 15), upon the
----------
expiration of the Lease Term or upon any earlier termination of this Lease,
Landlord shall have the option, but not the obligation, of requiring that
Tenant, subject to the control of and direction from Landlord, remove all or any
portion of the Supplemental Equipment, repair any damage caused thereby, and
restore the License Areas and other facilities of the Building and Project to
their condition existing prior to the installation of the Supplemental
Equipment; provided that Tenant shall be permitted to remove Tenant's Trade
Fixtures upon the expiration of the Lease Term so long as it meets the repair
and restoration requirements set forth hereinabove.
ARTICLE 23
----------
SIGNS
-----
23.1 Full Floors. Subject to Landlord's prior written approval, in its
-----------
reasonable discretion, and provided all signs are in keeping with the quality,
design and style of the Building and Project, Tenant, if the Premises comprise
an entire floor of the Building, at its sole cost and expense, may install
identification signage anywhere in the Premises including in the elevator lobby
of the Premises, provided that such signs must not be visible from the exterior
of the Building.
23.2 Multi-Tenant Floors. If other tenants occupy space on the floor on
-------------------
which the Premises is located, Tenant's identifying signage shall be provided by
Landlord, at Tenant's cost, and such signage shall be comparable to that used by
Landlord for other similar floors in the Building and shall comply with
Landlord's Building standard signage program.
-26-
23.3 Prohibited Signage and Other Items. Any signs, notices, logos,
----------------------------------
pictures, names or advertisements which are installed and that have not been
separately approved by Landlord may be removed without notice by Landlord at the
sole expense of Tenant. Tenant may not install any signs on the exterior or
roof of the Project or the Common Areas. Any signs, window coverings, or blinds
(even if the same are located behind the Landlord-approved window coverings for
the Building), or other items visible from the exterior of the Premises or
Building, shall be subject to the prior approval of Landlord, in its sole
discretion.
ARTICLE 24
----------
COMPLIANCE WITH LAW
-------------------
Tenant shall not do anything or suffer anything to be done in or about the
Premises or the Project which will in any way conflict with any law, statute,
ordinance or other governmental rule, regulation or requirement now in force or
which may hereafter be enacted or promulgated. At its sole cost and expense,
Tenant shall promptly comply with all such governmental measures. Should any
standard or regulation now or hereafter be imposed on Landlord or Tenant by a
state, federal or local governmental body charged with the establishment,
regulation and enforcement of occupational, health or safety standards for
employers, employees, landlords or tenants, then Tenant agrees, at its sole cost
and expense, to comply promptly with such standards or regulations; provided
that Landlord shall comply with any standards or regulations which relate to the
Common Areas, Building Structure and those portion of the Building Systems
located outside the Premises, unless such compliance obligations are directly
related to and result from Tenant's particular manner of use of the Premises or
the tenant improvements (including the initial Tenant Improvements constructed
pursuant to the Tenant Work Letter) or the Alterations installed in or to the
Premises after the date hereof, in which event such compliance obligations shall
be at Tenant's sole cost and expense. Tenant shall be responsible, at its sole
cost and expense, to make all alterations to the Premises as are required to
comply with the governmental rules, regulations, requirements or standards
described in this Article 24. The judgment of any court of competent
----------
jurisdiction or the admission of Tenant in any judicial action, regardless of
whether Landlord is a party thereto, that Tenant has violated any of said
governmental measures, shall be conclusive of that fact as between Landlord and
Tenant.
ARTICLE 25
----------
LATE CHARGES
------------
If any installment of Rent or any other sum due from Tenant shall not be
received by Landlord or Landlord's designee within five (5) days after said
amount is due, then Tenant shall pay to Landlord a late charge equal to five
percent (5%) of the overdue amount plus any reasonable attorneys' fees incurred
by Landlord by reason of Tenant's failure to pay Rent and/or other charges when
due hereunder. The late charge shall be deemed Additional Rent and the right to
require it shall be in addition to all of Landlord's other rights and remedies
hereunder or at law and shall not be construed as liquidated damages or as
limiting Landlord's remedies in any manner. In addition to the late charge
described above, any Rent or other amounts owing hereunder which are not paid
within ten (10) days after the date they are due shall bear interest from the
date when due until paid at a rate per annum equal to the lesser of (i) the
Interest Rate, and (ii) the highest rate permitted by applicable law.
ARTICLE 26
----------
LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT
----------------------------------------------------
26.1 Landlord's Cure. All covenants and agreements to be kept or performed
---------------
by Tenant under this Lease shall be performed by Tenant at Tenant's sole cost
and expense and without any reduction of Rent, except to the extent, if any,
otherwise expressly provided herein. If Tenant shall fail to perform any
obligation under this Lease, and such failure shall continue in excess of the
time allowed under Section 19.1.2, above, unless a specific time period is
--------------
otherwise stated in this Lease, Landlord may, but shall not be obligated to,
make any such payment or perform any such act on Tenant's part without waiving
its rights based upon any default of Tenant and without releasing Tenant from
any obligations hereunder.
26.2 Tenant's Reimbursement. Except as may be specifically provided to the
----------------------
contrary in this Lease, Tenant shall pay to Landlord, within five (5) days after
delivery by Landlord to Tenant of statements therefor: (i) sums equal to
expenditures reasonably made and obligations incurred by Landlord in connection
with the remedying by Landlord of Tenant's defaults pursuant to the provisions
of Section 26.1; and (ii) sums equal to all losses, costs, liabilities, damages
------------
and expenses referred to in Article 10 of this Lease. Tenant's obligations
----------
under this Section 26.2 shall survive the expiration or sooner termination of
------------
the Lease Term.
-27-
ARTICLE 27
----------
ENTRY BY LANDLORD
-----------------
Landlord reserves the right at all reasonable times and upon reasonable
notice to Tenant (except in the case of an emergency) to enter the Premises with
a representative of Tenant made reasonably available by Tenant to (i) inspect
them; (ii) show the Premises to (x) prospective purchasers, mortgagees, (y)
tenants during the last twelve (12) months of Lease Term, or to (z) current or
prospective mortgagees, ground or underlying lessors or insurers; (iii) post
notices of nonresponsibility; or (iv) alter, improve or repair the Premises or
the Building, or for structural alterations, repairs or improvements to the
Building or the Building's systems and equipment. Notwithstanding anything to
the contrary contained in this Article 27, Landlord may enter the Premises at
----------
any time to (A) take possession due to any breach of this Lease in the manner
provided herein; and (B) perform any covenants of Tenant which Tenant fails to
perform after any applicable notice and cure period. Landlord may make any such
entries without the abatement of Rent and may take such reasonable steps as
required to accomplish the stated purposes. Except as provided in Section 6.3
----------
above, Tenant hereby waives any claims for damages or for any injuries or
inconvenience to or interference with Tenant's business, lost profits, any loss
of occupancy or quiet enjoyment of the Premises, and any other loss occasioned
thereby. For each of the above purposes, Landlord shall at all times have a key
with which to unlock all the doors in the Premises, excluding Tenant's vaults,
safes and special security areas designated in advance by Tenant. In an
emergency, Landlord shall have the right to use any means that Landlord may deem
proper to open the doors in and to the Premises. Any entry into the Premises by
Landlord in the manner hereinbefore described shall not be deemed to be a
forcible or unlawful entry into, or a detainer of, the Premises, or an actual or
constructive eviction of Tenant from any portion of the Premises. No provision
of this Lease shall be construed as obligating Landlord to perform any repairs,
alterations or decorations except as otherwise expressly agreed to be performed
by Landlord herein.
ARTICLE 28
----------
PARKING
-------
For so long as Landlord owns the Parking Structure, Tenant shall, subject
to availability, be permitted to rent up to the number of parking passes set
forth in Section 11 of the Summary for parking in the Parking Structure. Tenant
----------
shall pay to Landlord for said parking passes on a monthly basis the prevailing
rate charged by Landlord from time to time for parking passes at the location of
such passes, plus all applicable parking taxes. Landlord specifically reserves
the right to sell the Parking Structure, to change the location, size,
configuration, design, layout and all other aspects of the Parking Structure at
any time and Tenant acknowledges and agrees that Landlord may, without incurring
any liability to Tenant and without any abatement of Rent under this Lease, from
time to time, close-off or restrict access to the Parking Structure for purposes
of permitting or facilitating any such construction, alteration or improvements.
The parking passes provided to Tenant pursuant to this Article 28 are provided
----------
solely for use by Tenant's own personnel and such passes may not be transferred,
assigned, subleased or otherwise alienated by Tenant without Landlord's prior
approval. Landlord may delegate its responsibilities hereunder to a parking
operator in which case such parking operator shall have all the rights of
control attributed hereby to Landlord.
ARTICLE 29
----------
MISCELLANEOUS PROVISIONS
------------------------
29.1 Terms; Captions. The words "Landlord" and "Tenant" as used herein
---------------
shall include the plural as well as the singular. The necessary grammatical
changes required to make the provisions hereof apply either to corporations or
partnerships or individuals, men or women, as the case may require, shall in all
cases be assumed as though in each case fully expressed. The captions of
Articles and Sections are for convenience only and shall not be deemed to limit,
construe, affect or alter the meaning of such Articles and Sections.
29.2 Binding Effect. Subject to all other provisions of this Lease, each
--------------
of the covenants, conditions and provisions of this Lease shall extend to and
shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective heirs, personal
representatives, successors or assigns, provided this clause shall not permit
any assignment by Tenant contrary to the provisions of Article 14 of this Lease.
----------
29.3 No Air Rights. No rights to any view or to light or air over any
-------------
property, whether belonging to Landlord or any other person, are granted to
Tenant by this Lease. If at any time any windows of the Premises are
temporarily darkened or the light or view therefrom is obstructed by reason of
any repairs, improvements, maintenance or cleaning in or about the Project, the
same shall be without liability to Landlord and without any reduction or
diminution of Tenant's obligations under this Lease.
-28-
29.4 Modification of Lease. Should any current or prospective mortgagee or
---------------------
ground lessor for the Building or Project require a modification of this Lease,
which modification will not cause an increased cost or expense to Tenant or in
any other way unreasonably or adversely change the rights and obligations of
Tenant hereunder, then and in such event, Tenant agrees that this Lease may be
so modified and agrees to execute whatever documents are reasonably required
therefor and to deliver the same to Landlord within ten (10) days following a
request therefor. At the request of Landlord or any mortgagee or ground lessor,
Tenant agrees to execute a short form of Lease and deliver the same to Landlord
within ten (10) days following the request therefor. Landlord and Tenant agree
that within thirty (30) days of the Lease Commencement Date, Landlord and Tenant
shall execute a memorandum of Lease in the form of Exhibit I attached hereto.
---------
29.5 Transfer of Landlord's Interest. Tenant acknowledges that Landlord
-------------------------------
has the right to transfer all or any portion of its interest in the Project or
Building and in this Lease, and Tenant agrees that in the event of any such
transfer, Landlord shall automatically be released from all liability under this
Lease arising after the date of such transfer and Tenant agrees to look solely
to such transferee for the performance of Landlord's obligations hereunder after
the date of transfer and such transferee shall be deemed to have fully assumed
and be liable for all obligations of this Lease to be performed by Landlord,
including the return of any Security Deposit, and Tenant shall attorn to such
transferee. Tenant further acknowledges that Landlord may assign its interest
in this Lease to a mortgage lender as additional security and agrees that such
an assignment shall not release Landlord from its obligations hereunder and that
Tenant shall continue to look to Landlord for the performance of its obligations
hereunder. Landlord agrees that any unapplied portion of the Security Deposit
held pursuant to Article 21 herein, shall be transferred or credited to any
----------
purchaser of the Project from Landlord.
29.6 Prohibition Against Recording. Except as provided in Section 29.4 of
----------------------------- ------------
this Lease, neither this Lease, nor any memorandum, affidavit or other writing
with respect thereto, shall be recorded by Tenant or by anyone acting through,
under or on behalf of Tenant.
29.7 Landlord's Title. Landlord's title is and always shall be paramount
----------------
to the title of Tenant. Nothing herein contained shall empower Tenant to do any
act which can, shall or may encumber the title of Landlord.
29.8 Relationship of Parties. Nothing contained in this Lease shall be
-----------------------
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant.
29.9 Application of Payments. Landlord shall have the right to apply
-----------------------
payments received from Tenant pursuant to this Lease, regardless of Tenant's
designation of such payments, to satisfy any obligations of Tenant hereunder, in
such order and amounts as Landlord, in its sole discretion, may elect.
29.10 Time of Essence. Time is of the essence with respect to the
---------------
performance of every provision of this Lease in which time of performance is a
factor.
29.11 Partial Invalidity. If any term, provision or condition contained in
------------------
in this Lease shall, to any extent, be invalid or unenforceable, the remainder
of this Lease, or the application of such term, provision or condition to
persons or circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.
29.12 No Warranty. In executing and delivering this Lease, Tenant has not
-----------
relied on any representations, including, but not limited to, any representation
as to the amount of any item comprising Additional Rent or the amount of the
Additional Rent in the aggregate or that Landlord is furnishing the same
services to other tenants, at all, on the same level or on the same basis, or
any warranty or any statement of Landlord which is not set forth herein or in
one or more of the exhibits attached hereto.
29.13 Landlord Exculpation. The liability of Landlord or the Landlord
--------------------
Parties to Tenant for any default by Landlord under this Lease or arising in
connection herewith or with Landlord's operation, management, leasing, repair,
renovation, alteration or any other matter relating to the Project or the
Premises shall be limited solely and exclusively to an amount which is equal to
the equity interest Landlord would have in the Building if the Building were
encumbered by third-party debt in an amount equal to eighty percent (80%) of the
value of the Building (as such value is determined by Landlord), provided that
in no event shall such liability extend to any insurance proceeds received by
Landlord or the Landlord Parties in connection with the Project, Building or
Premises. Neither Landlord, nor any of the Landlord Parties shall have any
personal liability therefor, and Tenant hereby expressly waives and releases
such personal liability on behalf of itself and all persons claiming by, through
or under Tenant. The limitations of liability contained in this Section 29.13
-------------
shall inure to the benefit of Landlord's and the Landlord Parties' present and
future partners, beneficiaries, officers, directors, trustees, shareholders,
agents and employees, and their respective partners, heirs, successors and
assigns. Under no
-29-
circumstances shall any present or future partner of Landlord (if Landlord is a
partnership), or trustee or beneficiary (if Landlord or any partner of Landlord
is a trust), have any liability for the performance of Landlord's obligations
under this Lease. Notwithstanding any contrary provision herein, neither
Landlord nor the Landlord Parties shall be liable under any circumstances for
injury or damage to, or interference with, Tenant's business, including but not
limited to, loss of profits, loss of rents or other revenues, loss of business
opportunity, loss of goodwill or loss of use, in each case, however occurring.
29.14 Entire Agreement. It is understood and acknowledged that there are
----------------
no oral agreements between the parties hereto affecting this Lease and this
Lease and the Exhibits hereto, constitute the parties' entire agreement with
respect to the leasing of the Premises and supersedes and cancels any and all
previous negotiations, arrangements, brochures, agreements and understandings,
if any, between the parties hereto or displayed by Landlord to Tenant with
respect to the subject matter thereof, and none thereof shall be used to
interpret or construe this Lease. None of the terms, covenants, conditions or
provisions of this Lease can be modified, deleted or added to except in writing
signed by the parties hereto.
29.15 Right to Lease. Landlord reserves the absolute right to effect such
--------------
other tenancies in the Project as Landlord in the exercise of its sole business
judgment shall determine to best promote the interests of the Building or
Project. Tenant does not rely on the fact, nor does Landlord represent, that
any specific tenant or type or number of tenants shall, during the Lease Term,
occupy any space in the Building or Project.
29.16 Force Majeure. Any prevention, delay or stoppage due to strikes,
-------------
lockouts, labor disputes, acts of God, inability to obtain services, labor, or
materials or reasonable substitutes therefor, governmental actions, civil
commotions, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent except as otherwise provided for in this
Lease and other charges to be paid by Tenant pursuant to this Lease and except
as to Tenant's obligations under Articles 5 and 24 (except for Alterations
---------- --
required to be constructed by Tenant pursuant to Article 24 of this Lease)
--------
(collectively, a "Force Majeure"), notwithstanding anything to the contrary
contained in this Lease, shall excuse the performance of such party for a period
equal to any such prevention, delay or stoppage and, therefore, if this Lease
specifies a time period for performance of an obligation of either party, that
time period shall be extended by the period of any delay in such party's
performance caused by a Force Majeure.
29.17 Waiver of Redemption by Tenant. Tenant hereby waives, for Tenant and
------------------------------
for all those claiming under Tenant, any and all rights now or hereafter
existing to redeem by order or judgment of any court or by any legal process or
writ, Tenant's right of occupancy of the Premises after any termination of this
Lease.
29.18 Notices. All notices, demands, statements, designations, approvals
-------
or other communications (collectively, "Notices") given or required to be given
by either party to the other hereunder or by law shall be in writing, shall be
(A) transmitted by telecopy, if such telecopy is promptly followed by a Notice
sent by Overnight Courier, (B) delivered by a nationally recognized overnight
courier ("Overnight Courier"), or (D) delivered personally. Any Notice shall be
sent, transmitted, or delivered, as the case may be, to Tenant at the
appropriate address set forth in Section 10 of the Summary, or to such other
----------
place as Tenant may from time to time designate in a Notice to Landlord, or to
Landlord at the addresses set forth below, or to such other places as Landlord
may from time to time designate in a Notice to Tenant. Any Notice will be
deemed given (i) the date the telecopy is transmitted, (ii) the date the
overnight courier delivery is made or attempted to be made, or (iii) the date
personal delivery is made or attempted to be made. If Tenant is notified of the
identity and address of Landlord's mortgagee or ground or underlying lessor,
Tenant shall give to such mortgagee or ground or underlying lessor written
notice of any default by Landlord under the terms of this Lease by registered or
certified mail, and such mortgagee or ground or underlying lessor shall be given
a reasonable opportunity to cure such default prior to Tenant's exercising any
remedy available to Tenant. As of the date of this Lease, any Notices to
Landlord must be sent, transmitted, or delivered, as the case may be, to the
following addresses:
600 W. 7th Street Associates, Inc.
c/o Telecom Real Estate Services, Inc.
617 South Olive Street, Suite 810
Los Angeles, CA 90014
Attention: Kevin Keating
-30-
With copy to:
Allen, Matkins, Leck, Gamble & Mallory LLP
333 Bush Street, 17th Floor
San Francisco, California 94104-2806
Attention: Todd A. Chapman, Esq.
Fax: (415) 837-1516
Phone: (415) 837-1515
29.19 Joint and Several. If there is more than one Tenant, the obligations
-----------------
imposed upon Tenant under this Lease shall be joint and several.
29.20 Authority. If Tenant is a corporation, trust or partnership, each
---------
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in California and that Tenant has full right and authority to execute
and deliver this Lease and that each person signing on behalf of Tenant is
authorized to do so. In such event, Tenant shall, within ten (10) days after
execution of this Lease, deliver to Landlord satisfactory evidence of such
authority and, if a corporation, upon demand by Landlord, also deliver to
Landlord satisfactory evidence of (i) good standing in Tenant's state of
incorporation and (ii) qualification to do business in California.
29.21 Attorneys' Fees. In the event that either Landlord or Tenant should
---------------
bring suit for the possession of the Premises, for the recovery of any sum due
under this Lease, or because of the breach of any provision of this Lease or for
any other relief against the other, then all costs and expenses, including
reasonable attorneys' fees, incurred by the prevailing party therein shall be
paid by the other party, which obligation on the part of the other party shall
be deemed to have accrued on the date of the commencement of such action and
shall be enforceable whether or not the action is prosecuted to judgment.
29.22 Governing Law; WAIVER OF TRIAL BY JURY. This Lease shall be
--------------------------------------
construed and enforced in accordance with the laws of the State of California.
IN ANY ACTION OR PROCEEDING ARISING HEREFROM, LANDLORD AND TENANT HEREBY CONSENT
TO (I) THE JURISDICTION OF ANY COMPETENT COURT WITHIN THE STATE OF CALIFORNIA,
(II) SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY CALIFORNIA LAW, AND (III) IN
THE INTEREST OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE
OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN
CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S
USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY
EMERGENCY OR STATUTORY REMEDY. IN THE EVENT LANDLORD COMMENCES ANY SUMMARY
PROCEEDINGS OR ACTION FOR NONPAYMENT OF BASE RENT OR ADDITIONAL RENT, TENANT
SHALL NOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR DESCRIPTION (UNLESS SUCH
COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH PROCEEDING OR ACTION, BUT SHALL BE
RELEGATED TO AN INDEPENDENT ACTION AT LAW.
29.23 Submission of Lease. Submission of this instrument for examination
-------------------
or signature by Tenant does not constitute a reservation of, option for or
option to lease, and it is not effective as a lease or otherwise until execution
and delivery by both Landlord and Tenant.
29.24 Brokers. Landlord and Tenant hereby warrant to each other that they
-------
have had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the real estate brokers or agents
specified in Section 12 of the Summary (the "Brokers"), and that they know of no
----------
other real estate broker or agent who is entitled to a commission in connection
with this Lease. Each party agrees to indemnify and defend the other party
against and hold the other party harmless from any and all claims, demands,
losses, liabilities, lawsuits, judgments, costs and expenses (including without
limitation reasonable attorneys' fees) with respect to any leasing commission or
equivalent compensation alleged to be owing on account of any dealings with any
real estate broker or agent, other than the Brokers, occurring by, through, or
under the indemnifying party.
29.25 Independent Covenants. This Lease shall be construed as though the
---------------------
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord's expense or to any setoff of the Rent or other amounts owing
hereunder against Landlord.
29.26 Project or Building Name and Signage. Landlord shall have the right
------------------------------------
at any time to change the name of the Project or Building and to install, affix
and maintain any and all signs on the
exterior and on the interior of the Project or Building as Landlord may, in
Landlord's sole discretion, desire. Tenant shall not use the name of the Project
or Building or use pictures or illustrations of the Project or Building in
advertising or other publicity or for any purpose other than as the address of
the business to be conducted by Tenant in the Premises, without the prior
written consent of Landlord.
29.27 Counterparts. This Lease may be executed in counterparts with the
------------
same effect as if both parties hereto had executed the same document. Both
counterparts shall be construed together and shall constitute a single lease.
29.28 Confidentiality. Tenant acknowledges that the content of this Lease
---------------
and any related documents are confidential information. Tenant shall keep such
confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than Tenant's financial,
legal, space planning consultants and prospective sublessees, transferees or
assignees of Tenant.
29.29 Transportation Management. Tenant shall fully comply with all
-------------------------
present or future programs intended to manage parking, transportation or traffic
in and around the Building, and in connection therewith, Tenant shall take
responsible action for the transportation planning and management of all
employees located at the Premises by working directly with Landlord, any
governmental transportation management organization or any other transportation-
related committees or entities.
29.30 Building Renovations. It is specifically understood and agreed that
--------------------
Landlord has made no representation or warranty to Tenant and has no obligation
and has made no promises to alter, remodel, improve, renovate, repair or
decorate the Premises, Building, the Project or any part thereof and that no
representations respecting the condition of the Premises, the Building, the
Project or any part thereof have been made by Landlord to Tenant except as
specifically set forth herein or in the Tenant Work Letter. However, Tenant
hereby acknowledges that Landlord is currently renovating or may during the
Lease Term renovate, improve, alter, or modify (collectively, the "Renovations")
the Project, the Building and/or the Premises including without limitation the
parking structure, common areas, systems and equipment, roof, and structural
portions of the same, which Renovations may include, without limitation, (i)
installing sprinklers in the Building common areas and tenant spaces, (ii)
modifying the common areas and tenant spaces to comply with applicable laws and
regulations, including regulations relating to the physically disabled, seismic
conditions, and building safety and security, and (iii) installing new floor
covering, lighting, and wall coverings in the Building common areas, and in
connection with any Renovations, Landlord may, among other things, erect
scaffolding or other necessary structures in the Building, limit or eliminate
access to portions of the Project, including portions of the common areas, or
perform work in the Building, which work may create noise, dust or leave debris
in the Building. Tenant hereby agrees that such Renovations and Landlord's
actions in connection with such Renovations shall in no way constitute a
constructive eviction of Tenant nor entitle Tenant to any abatement of Rent.
Landlord shall have no responsibility or for any reason be liable to Tenant for
any direct or indirect injury to or interference with Tenant's business arising
from the Renovations, nor shall Tenant be entitled to any compensation or
damages from Landlord for loss of the use of the whole or any part of the
Premises or the License Areas or of Tenant's personal property or improvements
(including the Supplemental Equipment) resulting from the Renovations or
Landlord's actions in connection with such Renovations, or for any inconvenience
or annoyance occasioned by such Renovations or Landlord's actions; provided,
however, that Landlord shall use commercially reasonable efforts to minimize any
unreasonable interference such construction may have on Tenant's use and occupy
of the Premises.
29.31 No Violation. Tenant hereby warrants and represents that neither its
------------
execution of nor performance under this Lease shall cause Tenant to be in
violation of any agreement, instrument, contract, law, rule or regulation by
which Tenant is bound, and Tenant shall protect, defend, indemnify and hold
Landlord harmless against any claims, demands, losses, damages, liabilities,
costs and expenses, including, without limitation, reasonable attorneys' fees
and costs, arising from Tenant's breach of this warranty and representation.
29.32 Construction of Project and Other Improvements. Tenant acknowledges
----------------------------------------------
that portions of the Project may be under construction following Tenant's
occupancy of the Premises, and that such construction may result in levels of
noise, dust, obstruction of access, etc. which are in excess of that present in
a fully constructed project. Tenant hereby waives any and all rent offsets or
claims of constructive eviction which may arise in connection with such
construction; provided, however, that Landlord shall use commercially reasonable
efforts to minimize any unreasonable interference such construction may have on
Tenant's use and occupy of the Premises.
[Signatures on following page]
-32-
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
executed the day and date first above written.
"Landlord":
600 SEVENTH STREET ASSOCIATES, INC., a California
corporation
By: /s/ [signature illegible]
-----------------------------------------------
Name:_______________________________________
Title:______________________________________
"Tenant":
EQUINIX, INC., a Delaware corporation
By: /s/ [signature illegible]
-----------------------------------------------
Name:_______________________________________
Title:______________________________________
By: ____________________________________________
Name:_______________________________________
Title:______________________________________
-33-
EXHIBIT A-1
-----------
CARRIER CENTER LOS ANGELES
--------------------------
OUTLINE OF SUITE 600
--------------------
[GRAPHIC OF SUITE 600 FLOOR PLAN]
EXHIBIT A-1 - Page 1
EXHIBIT A-2
-----------
CARRIER CENTER LOS ANGELES
--------------------------
OUTLINE OF ROOF SPACE AND ROOF SYSTEMS SUPPORT PAD
--------------------------------------------------
[GRAPHIC OF ROOF SPACE AND ROOF SYSTEMS SUPPORT PAD FLOOR PLAN]
EXHIBIT A-2 - Page 1
EXHIBIT A-3
-----------
CARRIER CENTER LOS ANGELES
--------------------------
OUTLINE OF MUST TAKE SPACE
--------------------------
[GRAPHIC OF MUST TAKE SPACE FLOOR PLAN]
EXHIBIT A-3 - Page 1
EXHIBIT B
---------
CARRIER CENTER LOS ANGELES
--------------------------
TENANT WORK LETTER
------------------
This Tenant Work Letter ("Work Letter") shall set forth the terms and
conditions relating to the construction of improvements for the Premises. All
references in this Work Letter to "the Lease" shall mean the relevant portions
of the Lease to which this Work Letter is attached as Exhibit B.
---------
SECTION 1
---------
GENERAL CONSTRUCTION OF THE PREMISES
------------------------------------
1.1 Base, Shell and Core. Landlord shall deliver the base, shell, and
--------------------
core (i) of the Premises and (ii) of the floor of the Building on which the
Premises is located (collectively, the "Base, Shell, and Core") in its current
"AS-IS" condition existing as of the date of the Lease, and except as expressly
set forth in this Work Letter, Landlord shall have no obligation to construct or
pay for any alterations or improvements to, or repairs of equipment in, the
Premises, the Building or the Real Property. For purposes hereof, the Base,
Shell and Core shall include and Landlord shall construct in the Premises at its
cost: (A) concrete floors of the Premises; (B) Building structure and perimeter
walls, including windows, and existing window coverings "AS IS"; (C) new
building standard restroom facilities servicing the Premises; (D) new building
standard electrical panels and closets, with service and distribution power
boards and transformers; (E) new building standard telephone closets; (F)
drywall on core walls; (G) HVAC to the utilized Common Areas; (H) abatement of
all exposed or assessable friable asbestos in the Premises, (I) fire/life-safety
and alarm system(s), on an unoccupied basis; (J) passenger and freight elevator
lobbies on multi-tenant floors; (K) fire exit stairs; (L) Building standard
elevators in their "AS-IS" condition and (M) the demolition of all existing
HVAC, lighting, partitions and vinyl flooring in the Premises. Notwithstanding
any of the foregoing provisions of this Section 1 to the contrary, in the event
that any portions of the Base, Shell and Core are not in compliance with
applicable ordinances and codes, including the Americans With Disabilities Act
and Title 24, as of the date the Premises are delivered to Tenant (as such
compliance shall be determined (1) with respect to any portion of the Building
located outside the Premises and the restrooms within the Premises, on an
occupied basis assuming the Premises will be occupied for general office use
with standard office improvements, and (2) with respect to any portion of the
Premises, including the areas above the ceiling, and any portion of the HVAC,
electrical, fire/life-safety and mechanical systems and equipment of the
Building located within the Premises, on an unoccupied basis and without regard
to any Tenant Improvements or Alterations which Tenant proposes to construct
pursuant to this Work Letter or the Lease), then Landlord shall be responsible
for correcting any such non-compliance (the "Compliance Work"). Such Compliance
Work, if any, shall be constructed by Landlord in a reasonable and diligent
manner after Landlord's receipt of notice of the need for such Compliance Work.
If any such Compliance Work is discovered during Tenant's design and/or
construction of the Tenant Improvements, Landlord may elect to have the
Contractor selected by Tenant to perform the Tenant Improvements perform such
Compliance Work, at Landlord's cost, during the construction of the Tenant
Improvements in order to obtain efficiencies and expedite construction of such
Compliance Work and the Tenant Improvements. Notwithstanding the foregoing to
the contrary, Tenant may elect to construct Item (C) hereinabove, as part of the
Tenant Improvements and receive the corresponding amount which Landlord
anticipated expending to construct Item (C) of the Base, Shell and Core.
1.2 Substantial Completion. For purposes of the Lease and this Work
----------------------
Letter, Landlord's obligations under this Section 1 shall be satisfied upon (i)
the substantial completion of construction of items (A) through (L) listed in
Section 1.2 above, with the exception of (x) any minor or decorative punch list
---
items or Compliance Work which do not or will not materially interfere with
Tenant's commencement of construction of the Tenant Improvement Work (which
punch list and Compliance Work shall be completed by Landlord in a diligent
manner), and (y) any Base, Shell and Core items which Tenant has agreed to
complete as part of Tenant's construction of the Tenant Improvements.
SECTION 2
---------
TENANT IMPROVEMENTS
-------------------
2.1 Improvement Allowances.
----------------------
2.1.1 Tenant Improvement Allowance. Tenant shall be entitled to a
----------------------------
one-time tenant improvement allowance (the "Tenant Improvement Allowance") in an
amount up to, but not exceeding, the product of (i) $20.00 and (ii) the number
of rentable square feet of the Suite 600 Space as of the Lease Commencement
Date, to be used to help Tenant pay for the costs of design and construction of
Tenant's
EXHIBIT B - Page 1
improvements set forth in the approved Final Drawings (as defined herein) which
are permanently affixed to the Premises (collectively, the "Tenant
Improvements") and the other Tenant Improvement Allowance Items (as such term is
defined below). In no event shall Landlord be obligated to make disbursements
pursuant to this Tenant Work Letter in a total amount which exceeds the Tenant
Improvement Allowance. Tenant shall not be entitled to receive any cash payment
or credit against Rent or otherwise for any portion of the Tenant Improvement
Allowance which is not used to pay for the Tenant Improvement Allowance Items;
provided, however, to the extent there remains any unused portion of the Tenant
Improvement Allowance and thus Landlord is not providing any Additional
Allowance, Tenant may use such excess to help Tenant pay for any Alterations
Tenant installs in the Premises pursuant to Article 8 of the Lease after
substantial completion of the Tenant Improvements. Such excess amount shall be
disbursed by Landlord after Tenant has completed the Alterations and has
delivered to Landlord appropriate invoices, paid receipts, lien releases and
other information reasonably requested by Landlord.
2.2 Disbursement of the Tenant Improvement Allowance. Except as otherwise
------------------------------------------------
set forth in this Tenant Work Letter, the Tenant Improvement Allowance shall be
disbursed by Landlord only for the following items and costs and in the order
provided below (collectively, the "Tenant Improvement Allowance Items"):
2.2.1 the cost of engineering, acquiring, and installing Tenant's
Generator Fuel Tank and connecting equipment thereto (to be installed pursuant
to Section 22.1.4 of the Lease);
2.2.2 the cost of engineering, acquisition and installation of the
Roof Systems Support Pad (as defined in Section 2.4 hereinbelow);
-----------------------
2.2.3 any and all seismic or structural support added to the Project
by Landlord as a result of the installation of the Roof Systems Support Pad;
2.2.4 payment of the fees of the "Architect" and the "Engineers," as
those terms are defined in Section 3.1 of this Work Letter and payment of the
-----------
out-of-pocket costs and fees paid by Landlord to Landlord's consultants in
connection with the preparation and review of the "Construction Drawings", as
that term is defined in Section 3.1 of this Work Letter;
-----------
2.2.5 the payment of plan check, permit and license fees relating to
construction of the Tenant Improvements;
2.2.6 the cost of construction of the Tenant Improvements, including,
without limitation, cost of labor and materials contractors' fees and general
conditions, testing and inspection costs, and costs of trash removal and hoists
(but during the construction of the Tenant Improvements and Tenant's initial
move-in to the Premises, Tenant shall not be charged for the use of any
utilities, or for use of the freight elevators);
2.2.7 the cost of any changes in the Base, Shell and Core required by
the Construction Drawings, except to the extent such changes constitute
Compliance Work which is Landlord's responsibility to perform pursuant to
Section 1 above; such cost to include all direct architectural and/or
- --------
engineering fees and expenses incurred in connection therewith;
2.2.8 the cost of any changes to the Construction Drawings or Tenant
Improvements required by applicable laws and building codes (collectively,
"Code");
2.2.9 sales and use taxes and Title 24 fees;
2.2.10 all other costs to be expended by Tenant in connection with
the construction of the Tenant Improvements such as, but not limited to
demolition of any existing improvements so designated for demolition in the
Premises, construction management fees, and voice and data cabling; and
2.2.11 Disbursement of Tenant Improvement Allowance. During the
--------------------------------------------
construction of the Tenant Improvements, Landlord shall make disbursements of
the Tenant Improvement Allowance once per month (or on a more frequent basis as
Landlord may determine) to pay for the Tenant Improvement Allowance Items
following Landlord's receipt of: (i) a request for payment of the Contractor,
Architect and/or Engineers, as applicable (as such terms are defined below),
approved by Tenant, showing the schedule, by trade, of percentage of completion
of the design and/or construction of the Tenant Improvements in the Premises;
(ii) invoices for labor rendered and materials delivered to the Premises; and
(iii) executed mechanic's lien releases from all of Tenant's Agents (as that
term is defined in Section 4.1.2 below) which shall comply with the appropriate
-------------
provisions of California Civil Code Section 3262(d). Landlord may make such
disbursements of the Tenant Improvement Allowance jointly to Tenant and the
Contractor or jointly to the Tenant and the Architect, Engineers or other
vendors to whom direct payment is to be made, and may provide for up to a ten
percent (10%) retention (so long as such retention is not duplicative of any
retention already provided in Tenant's payment request or
EXHIBIT B - Page 2
specified in the applicable contractor's contract) for each such disbursement
(but such retention shall not apply to payment of the fees of the Architect
and/or Engineers unless expressly provided in the contracts with such entities).
Landlord's payment of such amounts shall not be deemed Landlord's approval or
acceptance of the work furnished or materials supplied as set forth in Tenant's
payment request. Landlord shall disburse all retentions following the completion
of construction of the Premises and Landlord's receipt of properly executed
mechanics lien releases in compliance with both California Civil Code Section
3262(d)(2) and either Section 3262(d)(3) or Section 3262(d)(4).
2.3 Tenant Special Requirements. Tenant has established specifications
---------------------------
(the "Specifications") for the Premises standard components to be used in the
construction of the Tenant Improvements in the Premises (collectively, the
"Tenant's Special Requirements"), a copy of which Specifications is attached
hereto as Schedule 2.
----------
2.4 Notwithstanding anything to the contrary continued herein or in the
Lease, Tenant shall be required to install as part of the Tenant Improvements, a
steel support pad in a designated location on the roof of the Building more
particularly shown on Exhibit A-2 attached to the Lease (the "Roof Systems
-----------
Support Pad") which Roof Systems Support Pad shall be designed and installed in
accordance with design standards and specifications approved by Landlord in its
reasonable discretion.
SECTION 3
---------
CONSTRUCTION DRAWINGS
---------------------
3.1 Architect and Construction Drawings. Tenant has retained Western
-----------------------------------
Carlson Design and Construction (or other Carlson entity reasonably approved by
Landlord) as its architect/space planner (the "Architect") to prepare the
Construction Drawings (as hereinafter defined in this Section 3.1). Tenant
-----------
shall retain engineering consultants as approved by Landlord, which approval
shall not be unreasonably withheld or delayed, to prepare plans and engineering
working drawings relating to the structural, mechanical, electrical, plumbing,
HVAC, life-safety, and sprinkler work in the Premises (the "Specialty Work") or,
at Tenant's option, the Specialty Work may be constructed under a "design/build"
contract where each respective subcontractor, reasonably approved by Landlord,
shall prepare plans and engineering working drawings relating to the Specialty
Work. For purposes of this Work Letter, any of the aforementioned parties who
shall provide such plans and engineering working drawings shall be referred to
herein as the "Engineers". The plans and drawings to be prepared by the
Architect and the Engineers hereunder shall be known collectively as the
"Construction Drawings". All Construction Drawings shall be subject to
Landlord's approval, which shall not be unreasonably withheld or conditioned,
and which disapproval shall only be for the following factors (collectively,
"Design Problems"): (i) design defects in or incompleteness of the Construction
Drawings; (ii) failure of the Construction Drawings to comply with Code; (iii)
failure of the Construction Drawings to comply with Section 2.4 above; (iv)
-----------
adverse effect of the Tenant Improvements on the exterior appearance of the
Building or Common Areas and/or on Building's systems or equipment; (v) changes
to the Base, Shell and Core required by or in connection with the Construction
Drawings or Tenant Improvements; (vi) failure of the Construction Drawings to
substantially comply with the base building plans for the Building previously
delivered to Tenant; and/or (vii) any material inconsistencies in the portion of
the Construction Drawings then subject to review as compared to any prior
version thereof approved by Landlord. Landlord shall advise Tenant within ten
(10) days after Landlord's receipt of the applicable portion of the Construction
Drawings if they are approved or if there are any Design Problems therewith, as
reasonably determined by Landlord. If Tenant is so advised of any Design
Problems, Tenant shall promptly (A) revise the portion of the Construction
Drawings to correct the Design Problems in accordance with such disapproval of
Landlord, and (B) deliver such revised Construction Drawings to Landlord. The
Construction Drawings shall be approved by Landlord prior to commencement of
construction of the Tenant Improvements for the Premises. Once the final
Construction Drawings have been approved by Landlord, the same shall be referred
to hereinafter as the "Final Drawings." Tenant and the Architect shall verify,
in the field, the dimensions and conditions as shown on the relevant portions of
the base building plans, and Tenant and Architect shall be solely responsible
for the same, and Landlord shall have no responsibility in connection therewith
(subject, however, to the Landlord Delay provisions of Section 5(v) below).
------------
Landlord's review and/or approval of the Construction Drawings, as set forth in
this Section 3, shall be for its sole purpose and shall not imply Landlord's
---------
review of the same, or obligate Landlord to review the same, for quality,
design, Code compliance or other like matters. Accordingly, notwithstanding
that any Construction Drawings are reviewed and approved by Landlord or its
space planner, architect, engineers and consultants, and notwithstanding any
advice or assistance which may be rendered to Tenant by Landlord or Landlord's
space planner, architect, engineers, and consultants, Landlord shall have no
liability whatsoever in connection therewith and shall not be responsible for
any omissions or errors contained in the Construction Drawings.
EXHIBIT B - Page 3
3.2 Permits. After approval by Landlord of the Final Drawings, Tenant
-------
shall promptly submit the same to the appropriate governmental authorities for
all applicable building permits. Tenant hereby agrees that neither Landlord nor
Landlord's consultants shall be responsible for obtaining any building permit or
certificate of occupancy for the Premises and that the obtaining of the same, as
is required by any governmental agencies having jurisdiction over the Building,
shall be Tenant's responsibility; provided, however, that Landlord shall, in any
event, cooperate with Tenant in executing permit applications and performing
other ministerial acts reasonably necessary to enable Tenant to obtain any such
permit or certificate of occupancy. No changes, modifications or alterations in
any portion of the Construction Drawings as approved by Landlord may be made
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned, or delayed.
SECTION 4
---------
CONSTRUCTION OF THE TENANT IMPROVEMENTS
---------------------------------------
4.1 Tenant's Selection of Contractor and Tenant's Agents.
----------------------------------------------------
4.1.1 Contractor. The contractor which will construct the Tenant
----------
Improvements ("Contractor") shall be Carlson Group, Inc. (or other Carlson
entity reasonably approved by Landlord).
4.1.2 Tenant's Agents. All subcontractors, laborers, materialmen,
---------------
and suppliers used by Tenant to install or construct items other than Tenant's
computers in the Premises, and specifically excluding movers (such
subcontractors, laborers, materialmen, and suppliers, and the Contractor to be
known collectively as "Tenant's Agents") must be approved in writing by
Landlord, which approval shall not be unreasonably withheld or delayed.
4.2 Construction of Tenant Improvements by Tenant's Agents.
------------------------------------------------------
Construction Contract; Cost Budget. Prior to Tenant's execution of
----------------------------------
the construction contract and general conditions with Contractor (the
"Contract"), Tenant shall submit the Contract to Landlord for its approval,
which approval shall not be unreasonably withheld or delayed. Prior to the
commencement of the construction of the Tenant Improvements, and after Tenant
has accepted all bids for the Tenant Improvements, Tenant shall provide Landlord
with a detailed breakdown, by trade, of the final costs to be incurred, or which
have been incurred, as set forth more particularly in Sections 2.2.1.1 through
----------------
2.2.1.8 above, in connection with the design and construction of the Tenant
- -------
Improvements to be performed by or at the direction of Tenant or the Contractor
(which costs form a basis for the amount of the Contract, if any (the "Final
Costs"). Prior to the commencement of construction of the Tenant Improvements,
Tenant shall supply Landlord with a completion bond in an amount equal to the
Final Costs to ensure Landlord of the completion of the Tenant Improvements.
4.2.2 Tenant's Agents. Tenant's and Tenant's Agents' construction of
---------------
the Tenant Improvements shall comply with the following: (i) the Tenant
Improvements shall be constructed in accordance with the Final Drawings; (ii)
Tenant and Tenant's Agents shall not, in any way, unreasonably interfere with,
obstruct, or delay, the work of Landlord's contractor and subcontractors in the
Building; and (iii) Tenant shall abide by all reasonable rules made by
Landlord's Building contractor or Landlord's Building manager with respect to
the use of freight, loading dock and service elevators, storage of materials,
coordination of work with the contractors of other tenants, and any other matter
in connection with this Work Letter, including, without limitation, the
construction of the Tenant Improvements.
4.2.3 Indemnity. Tenant shall indemnify, protect, defend and hold
---------
Landlord harmless from and against any and all losses, claims, damages and
expenses arising from the actions or omissions of the Architect, the Engineers
and Tenant's Agents on the Premises or in the Building.
4.2.4 Insurance Requirements. All of Tenant's Agents shall carry
----------------------
worker's compensation insurance covering all of their respective employees, and
shall also carry public liability insurance, including property damage, all with
limits, in form and with companies as are required to be carried by Tenant as
set forth in the Lease. In addition, Tenant shall carry "Builder's All Risk"
insurance (excluding earthquake and flood insurance) in an amount reasonably
specified by Landlord prior to commencement of construction of the Tenant
Improvements, covering the construction of the Tenant Improvements, and such
other insurance (excluding earthquake and flood insurance) as Landlord may
reasonably require. Such insurance shall be in amounts and shall include such
extended coverage endorsements as may be reasonably required by Landlord, and in
form and with companies as are required to be carried by Tenant as set forth in
the Lease. Certificates for all insurance carried pursuant to this Section
-------
4.2.4 shall be delivered to Landlord before the commencement of construction of
- -----
the Tenant Improvements and before the Contractor's equipment is moved onto the
site. All such policies of insurance must contain a provision that the company
writing said policy will give Landlord thirty (30) days prior written notice of
any cancellation or lapse of the effective date or any reduction in the amounts
of such insurance. All policies carried under this Section 4.2.4 shall insure
-------------
Landlord and Tenant, as their
EXHIBIT B - Page 4
interests may appear, as well as Contractor and Tenant's Agents, and shall name
as additional insureds Landlord's property manager, and all mortgagees and
ground lessors of the Building. All insurance, except Workers' Compensation,
maintained by Tenant's Agents shall preclude subrogation claims by the insurer
against anyone insured thereunder. Such insurance shall provide that it is
primary insurance as respects the owner and that any other insurance maintained
by owner is excess and noncontributing with the insurance required hereunder.
The requirements for the foregoing insurance shall not derogate from the
provisions for indemnification of Landlord by Tenant under Section 4.2.3 of this
-------------
Work Letter.
4.2.5 Governmental Compliance. Tenant shall cause the Tenant
-----------------------
Improvements to be constructed by Contractor in compliance in all respects with
all applicable laws, codes, ordinances and regulations, including, without
limitation, the Code and the Americans With Disabilities Act.
4.3 Inspection by Landlord. Landlord shall have the right to inspect the
----------------------
Tenant Improvements at all times, provided however, that (i) Landlord shall not
unreasonably interfere with Tenant's construction of the Tenant Improvements in
connection with any such inspection, and (ii) Landlord's failure to inspect the
Tenant Improvements shall in no event constitute a waiver of any of Landlord's
rights hereunder nor shall Landlord's inspection of the Tenant Improvements
constitute Landlord's approval of the same. Should Landlord reasonably
disapprove any portion of the Tenant Improvements, Landlord shall notify Tenant
in writing of such reasonable disapproval and shall specify the items
disapproved. Any defects or deviations in, and/or disapproval by Landlord of,
the Tenant Improvements shall be rectified by Tenant at no expense to Landlord.
4.4 Notice of Completion; Copy of "As Built" Plans. Within ten (10) days
----------------------------------------------
after completion of construction of the Tenant Improvements, Tenant shall cause
a Notice of Completion to be recorded in the office of the Recorder of the
County in which the Building is located in accordance with Section 3093 of the
Civil Code of the State of California or any successor statute, and shall
furnish a copy thereof to Landlord upon such recordation. If Tenant fails to do
so, Landlord may execute and file the same on behalf of Tenant as Tenant's agent
for such purpose, at Tenant's sole cost and expense. In addition, within thirty
(30) days after the substantial completion of the Premises, Tenant shall deliver
to the Building management office a copy of the "record set" of mylar as-built
drawings for the Tenant Improvements.
SECTION 5
---------
MISCELLANEOUS
-------------
5.1 Tenant's Representative. Tenant has designated Art Chinn as its sole
-----------------------
representative with respect to the matters set forth in this Tenant Work Letter,
who until further notice to Landlord, shall have full authority and
responsibility to act on behalf of the Tenant as required in this Tenant Work
Letter.
5.2 Landlord's Representative. Landlord has designated Eric Berman as its
-------------------------
sole representative with respect to the matters set forth in this Tenant Work
Letter, who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Tenant Work
Letter.
5.3 Arbitration. Any dispute concerning whether any term of this Work
-----------
Letter has been breached or properly interpreted or complied with shall be
submitted to arbitration as provided in this Section 5.3. The arbitration shall
-----------
be conducted in Los Angeles, California. The party desiring such arbitration
shall give written notice thereof to the other specifying the Work Letter
dispute to be arbitrated. Within ten (10) business days after the date on which
the arbitration procedure is invoked as provided in this Section 5.3, each party
-----------
shall appoint an experienced arbitrator qualified to arbitrate such dispute
(e.g., the arbitrator shall be an architect if the dispute involves
architectural/design issues, or a contractor if such dispute involves
construction/contractor issues) and notify the other party of the arbitrator's
name and address. The two arbitrators so appointed shall appoint a third
qualified experienced arbitrator.. If the three arbitrators to be so appointed
are not appointed within fifteen (15) business days after the date the
arbitration procedure is invoked, then the arbitrator or arbitrators, if any,
who have been selected shall proceed to carry out the arbitration. The
arbitrator or arbitrators so selected shall furnish Landlord and Tenant with a
written decision within fifteen (15) business days after the date of selection
of the last of the arbitrators to be so selected. Any decision so submitted
shall be signed by a majority of the arbitrators if more than two have been
selected. If only two arbitrators have been selected and they are unable to
agree, then either or both Landlord and Tenant shall be entitled to apply to the
presiding Judge of the Superior Court of the County of Los Angeles, California
for the selection of a third arbitrator who shall be selected from a list of
names of experienced qualified arbitrators submitted by either or both parties,
as the case may be. In designating arbitrators and deciding the dispute, the
arbitrators shall act in accordance with the Commercial Rules of Arbitration
then in force of the American Arbitration Association, subject, however, to such
limitations as may be placed upon them by the provisions of this Lease. The
decision of the arbitrators shall be final and binding upon the parties, and
judgment on the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. Neither party
EXHIBIT B - Page 5
shall be in default under this Work Letter with respect to any dispute under any
provision hereof during the time period commencing as of the date the
arbitration procedure is invoked with regard to said dispute and ending on the
date of resolution by the arbitrators; provided, however, that during said
period, each party shall continue to make all payments of money required by this
Work Letter and the Lease and to otherwise perform all duties and obligations
required to be performed by such party under this Work Letter and the Lease and,
with respect to the issue under arbitration, shall maintain the status quo.
EXHIBIT B - Page 6
SCHEDULE 1 TO EXHIBIT B
-----------------------
BUILDING CONSTRUCTION RULES
---------------------------
The following are general rules and regulations governing all work in the
Building, including Tenant's Work and any Alterations (collectively, "Tenant's
work"). The manager for the Building ("Building Manager") will be Landlord's
representative in coordinating and supervising Tenant's work. Nothing contained
in these Construction Rules shall (i) create any contractual obligations for
Landlord or Building Manager in connection with Tenant's work or (ii) in any way
affect, modify or supersede any of the terms set forth in this Lease. The
Construction Rules may be modified and supplemented from time to time as
Landlord may reasonably require for the proper monitoring and control of
construction at the Building.
1. Neither Building Manager nor Landlord will be responsible for any
material, equipment, tools or other property belonging to Tenant's general
contractor for Tenant's work, or any subcontractors, employees, agents or others
associated in any way with Tenant's work.
2. The Building is equipped with a freight elevator serving all floors.
The contractor and all construction personnel must use only the freight elevator
for transportation of workers, materials and equipment. No contractor or any
construction personnel, nor any materials or equipment, are permitted in, nor
shall any of the foregoing be transported in, the passenger elevators. If the
contractor or any construction personnel are found in the passenger elevators,
the contractor or subcontractor may be removed from the job and the elevators
will be immediately inspected for damage. All damage resulting from such use
shall be corrected by Building Manager at Tenant's expense.
3. The contractor shall furnish Building Manager with a list of
subcontractors prior to commencement of Tenant's work. This list will include
phone numbers and contacts for the contractor and each subcontractor, including
home and emergency telephone numbers. Any persons not on the approved
contractor list will be denied access to the Premises. NO EXCEPTIONS. Access
badges, authorizing access to the Premises, will be issued by Building Manager
to all personnel designated by the contractor on such list. The contractor and
all construction personnel working over the weekend and after the normal hours
shall provide Building Manager with a list of workers 24 hours prior to the
worker being on site or they will be denied access. The list should also
include an estimated time the contractor and all construction personnel will be
working, the location of the work to be done, the number of employees and the
working supervisor who will be present in the Building during the performance of
the work. Any deviation will require Building Manager's approval.
4. Unless Building Manager requires otherwise, all contractors and other
construction personnel shall enter and exit through the loading dock or main
lobby at all times. Additionally, all contractors and subcontractors shall sign
in and sign out at the security desk. Building security personnel have the
right to inspect all tool boxes of any and all construction personnel upon
departure from the Building. Loading dock and freight elevator procedures and
hours will be provided by Building Manager.
5. When working on a tenant-occupied floor, all deliveries are to be
accepted, moved and delivered to the contracted suite by 7:30 a.m. All
equipment and material deliveries shall be made at the loading dock or service
entry between the hours of 6:00 p.m. and 6:00 a.m. Monday through Friday or all
day Saturday and Sunday via a freight reservation. If deliveries are to be made
at other times, prior approval must be obtained from Building Manager. At no
other time will material be transported through the Building lobby or public
areas unless specifically authorized in writing. When making deliveries,
reinforced, non-staining masonite board acceptable to Building Manager must be
installed by the contractor (in a manner approved by Building Manager) to
protect all wall and floor finishes, including the freight elevator. The
contractor and subcontractors shall consult with Building Manager for complete
rules and procedures relating to corridor, elevator and public area protection.
All contractors and other construction personnel shall leave the Building lobby
and other public areas in a neat and clean condition consistent with other
Comparable Buildings (including, without limitation, sweeping and mopping the
lobby floors, dusting all furniture in the lobby and otherwise removing all
debris and dust) and otherwise in a condition satisfactory to Building Manager
and Landlord. Tenant shall be responsible for all costs incurred by Building
Manager if this clean-up work is not performed satisfactorily.
6. The contractor must notify Building Manager prior to conducting any of
Tenant's work that will require ceiling access, specifying the areas that will
be worked on and the length of time needed to complete or perform work in the
space.
SCHEDULE 1 TO EXHIBIT B - Page 1
7. No drilling, hammering, loud noise, vibrations or disturbances of any
nature will be allowed during the business day (i.e., from 8:00 a.m. to 7:00
p.m., Monday through Friday, and from 9:00 a.m. to 2:00 p.m. on Saturday).
8. The contractor shall keep all spaces affected by Tenant's work clean
at all times, including all public areas such as corridors, restrooms, janitor's
closets, etc. The contractor shall erect and maintain dust barriers at all exit
areas of construction and proper dust covers (including walk-off mats) on the
floors at exit areas of construction and at the doors to the freight elevator.
The contractor is responsible for taking all extra precautions to safeguard the
floors, walls and/or elevators from damage which may be caused by the movement
of materials, equipment or debris.
9. Sprinkler shut down and construction procedures:
a. The contractor or the subcontractor requiring the shutdown
and draining of the fire sprinkler system on any floor must follow the
Building's procedures for this process.
b. All work performed on fire sprinklers and/or fire standpipes
must be scheduled with The Building Chief Engineer at least 24 hours in advance.
c. Isolation and draining of the sprinkler system must be done
by the Building Engineering Department.
d. Prior to start of work, the contractor must report to
Building Manager on the loading dock, and the contractor will be given
instructions and assistance. Building supplied shut- off tags are to be placed
on all closed valves.
10. Construction personnel shall at all times maintain the highest level
of project cleanliness. All construction waste and debris shall be removed via
the freight elevator or stairs to the loading dock on a daily basis and shall
not be allowed to accumulate or produce a fire hazard. No construction waste or
debris may be placed in the Building dumpster/compactor. The contractor and all
construction personnel shall provide for removal of waste and debris from the
Building at their own expense, and shall dispose of all waste and debris in an
environmentally safe manner and in full compliance with all laws and ordinances.
If a dumpster is required (space allowing), the location must be approved by
Building Manager. If the contractor fails or refuses to keep such spaces free
of accumulated waste, debris, dust, etc., Building Manager reserves the right to
enter such spaces (including the Premises) and to clean and remove the debris,
dust, etc. at Tenant's expense. In addition, all public areas, i.e., corridors,
restrooms, janitor's closets, etc. shall be maintained and kept free of
construction debris, dust, etc.
11. Removal of combustible objects such as cardboard, empty paint cans,
paint rags and other combustible materials shall occur on a daily basis; such
objects shall be disposed of in an approved receptacle and in an environmentally
safe manner in full compliance with all laws and ordinances. The storage of all
flammable liquids (paint, lacquer thinners, paint thinners, etc.) shall be in UL
approved fire rated (for flammable liquids) storage cabinets or the liquids are
to be removed from the Building daily. If such liquids are to be stored in the
proper storage cabinets, Building Manager shall be notified of their existence,
location and quantity. Upon completion of Tenant's work, all remaining
flammable liquids shall be removed from the Building and disposed of in an
environmentally safe manner in full compliance with all laws and ordinances.
Any flammable or hazardous materials (i.e. paint) may only be stored on the
Premises with permission of Building Manager who shall designate an area for
such storage. No gasoline operated devices (e.g., concrete saws, coring
machines, welding machines, etc.) shall be permitted within the Building. All
work requiring such devices shall be performed by means of electrically operated
substitutes. All approved gas and oxygen canisters shall be properly chained
and supported to eliminate all potential hazards. At the completion of use,
said containers shall be promptly removed from the Building.
12. All electrical and telephone rooms on construction floors are to be
kept clean and orderly at all times and must be locked at the end of each
workday. These rooms cannot be used as storage for tools or supplies. At the
end of each day, all garbage and wire remnants are to be removed and a clear
pathway maintained to all panels. Initial access to electrical and telephone
equipment rooms must be arranged through Building Manager. Keys will be issued
by Building security. Doors to electrical and telephone equipment rooms may not
be propped or blocked open in any way. Tenant equipment may not be installed in
electrical rooms. All panels are to be replaced and properly labeled upon
completion of work. All penetrations through floors, walls and ceilings shall
be properly fire rated upon completion.
13. Upon completion and termination of all electrical circuits, and before
energizing, the contractor must notify the Building's engineer so that a neutral
to ground bonding test can be performed.
SCHEDULE 1 TO EXHIBIT B - Page 2
14. Specific restrooms will be designated for use by construction
personnel. The contractor is responsible for maintenance while using such
designated restrooms. Upon completion of Tenant's work, the contractor will be
responsible for restoring all designated restrooms to their original state.
Anyone found using restrooms other than those specified, or anyone using the
janitorial closets, will be subject to dismissal. No one is permitted to use
the janitorial closets without Building Manager permission. Janitors' slop
sinks cannot be used for disposal of flammable material, hazardous waste or
drywall.
15. Any use of telephone room chase way must be approved in advance by the
Building's engineer.
16. Construction personnel are not permitted to block open stairway doors
and electrical room doors. These doors provide the fire protection required by
code. Continued violation of this provision shall be subject to a $300 fine.
Janitorial doors shall be kept closed at all times on occupied tenant floors.
During construction of Tenant's work, stairwells and fire doors leading to
stairwells may not be blocked with materials, equipment, trash or debris of any
kind. Fire doors may not be propped or blocked open in any fashion or in any
way. Keys will be issued by Building security. Stairwells may not be used for
the storage of any equipment, materials, trash or debris of any kind and are to
be kept clear at all times. During construction of Tenant's work, air
conditioning smoke dampers may not be propped open.
17. All smoke detectors in the construction areas are to be protected
during construction, demolition, sweeping, clean-up or other operations that may
cause considerable dust or smoke. At the end of each work day, after the dust
has settled, each smoke detector that has been protected during the day is to be
uncovered to ensure proper operation.
18. Each contractor and all construction personnel are to take adequate
precautions to prevent the accidental tripping of the fire alarm system. False
alarms shall be fined at $400 per offense. All management and other costs
connected with resetting false alarms initiated by the contractor or any
construction personnel will be charged to the Tenant's account. At completion
of every work day, the fire-life-safety system shall be left trouble and alarm
free. The contractor must notify the Building's engineer of said status before
leaving the job site.
19. The contractor must provide and keep available at least four currently
certified 10 pound ABC fire extinguishers on each floor during construction.
They are to be placed inside the controlled area, and all workers are to be
informed as to their location and proper use. In addition, construction
personnel shall be informed by their supervisors of the means of egress from the
floor in case of an emergency, location of fire pull stations and locations of
wet stand pipes.
20. All "J" boxes and fire-life-safety conduits that are installed during
the construction of Tenant's work must be marked with red spray paint. All
fire-life-safety wiring must be done strictly in accordance with Building
specifications (contact the Building's engineer for such wire specifications).
Failure to adhere to the required color code may result in costly, time-
consuming rewiring. Only life-safety contractors designated or approved by
Building Manager will be allowed to install and/or connect life-safety devices
(i.e., speakers, pull stations and smoke detectors).
21. Prior to core drilling, the contractor must inform Building Manager of
the locations of the core drill for the review and approval of the Building's
engineer. All core drills are to be located from the underside to prevent
damage to any of the exposed fire-life- safety conduits on the underside of the
decking. If cores are to be wet-drilled, slurry run-off shall be contained and
must not be allowed to reach tenant areas below the construction. Any slurry
that does migrate to the floor below shall be cleaned by the contractor at its
expense. Coring hours will be 8:00 p.m. to 7:00 a.m. Any penetrations made in
steel structural beams are to be approved in advance by the Building's engineer
and permitted by government authorities, if applicable.
22. Any damage sustained during construction of Tenant's work to
electrical rooms, telephone rooms, storage closets, janitor closets, restrooms,
or freight lobbies is the responsibility of the Tenant. A list of pre-existing
damage to these areas should be submitted to Building Manager, and should be
acknowledged by Building Manager, prior to commencement of Tenant's work.
23. The contractor must notify Building Manager at least 24 hours prior to
commencing any painting or varnishing. Any spray painting with solvent based
paints must be preapproved by the Los Angeles Fire Department. Painting of
elevator doors is to be supervised by the elevator maintenance company
appropriate to the Building.
SCHEDULE 1 TO EXHIBIT B - Page 3
24. Building Manager shall at all time have access to the areas in which
Tenant's work is ongoing regardless of its state, preparation and progress.
Building Manager reserves the right to inspect work, stop work and/or have a
worker removed from the job at any time during Tenant's work if these Rules and
Regulations are not being followed.
25. The Building shall provide electrical service consisting of 120V
outlets with 15A/20A capacity. Any power requirements in excess of that listed
per the Lease shall be the responsibility of the contractor. The contractor
shall provide temporary electrical devices within the Premises for its
subcontractors' use. The contractor will not be permitted to run extension
cords through public space. The contractor shall use reasonable measures to
minimize energy consumption in the construction area when possible. The
Building shall pay for normal electrical consumption during the construction
process. All lights and equipment must be turned off at the end of the
contractor's business day. If the contractor or any construction personnel
leave lights or equipment on during off hours, Building Manager reserves the
right to receive from Tenant just compensation for excessive electrical
consumption.
26. The contractor and each subcontractor shall implement and maintain an
accident prevention program and an employee safety training program. Proof of
compliance with CAL-OSHA Rule SB198 must be submitted to Building Manager. All
persons on the job, regardless of whose direct payroll they are on, are required
to respond to safety instructions from the contractor's supervisor. Persons who
do not respond shall be removed from the job.
27. The contractor shall cover all return air transfers when working next
to a tenant-occupied space to control the transmission of dust and dirt.
Covering must be removed at the completion of daily construction. The
contractor shall keep all tenant entrance and exit doors closed to restrict the
movement of dust or dirt and shall close-off temporary openings with
polyurethane approved by the Los Angeles Fire Department. Due to local fire
codes, no openings may be made on a tenant-occupied floor to the corridor unless
materials are being delivered. All HVAC filters in fan rooms shall also be
delivered in operable condition at time of completion (thus temporary filter
should be added to the existing filter). Pre-filters should be installed over
all return air openings until finished floors are installed. If Building
filters or equipment require replacement or cleaning due to construction dust,
the contractor will be charged. The contractor shall verify with the Building's
engineer prior to installation of pre-filters.
28. Upon completion of Tenant's work, the contractor shall submit complete
sets of marked-up as-built drawings and record documents to the architect (or
space planner) for approval. Upon approval, these shall be forwarded to
Building Manager. In addition, Building Manager shall be allowed to obtain, at
no cost to Tenant or the contractor, copies of manuals for each item of
equipment and apparatus furnished in connection with the Tenant's work.
29. At the completion of Tenant's work, the contractor and each
subcontractor, along with Building Manager's Building maintenance personnel,
shall direct the checkout of utilities, operation systems and equipment for
readiness, shall assist in their initial start-up and testing by subcontractors
and shall provide general familiarization training for Building Manager
personnel during the checkout and startup period.
30. No tobacco smoking or chewing will be permitted in occupied or public
areas. Smoking is allowed only in designated areas approved by Building
Manager. It is understood that Building Manager, in its sole discretion, may
choose not to designate any approved areas in the Building for smoking.
31. No radios or other non-functional sound producing equipment will be
permitted on any floor (unless required by code).
32. Respect must be shown to the Building tenants at all times. Rude and
obscene behavior, including foul and abusive language, will be not be tolerated.
Offenders will be asked to remove themselves from the Premises and shall not be
permitted to return.
33. All work performed within the Building's conduits, risers and pathways
(including, without limitation, cabling or wiring to the rooftop of the
Building), work on the rooftop and work which affects or may reasonably be
expected to affect Building systems (such as plumbing, electrical, HVAC,
fire-life-safety, emergency power or the like) must be performed by bonded
contractors or subcontractors specifically approved in advance by Landlord. Upon
request, the Building Manager will provide Tenant with a list of approved
contractors or subcontractors for certain types of projects. Access to the
rooftop shall be scheduled in advance with the Building Manager. A Building
engineer shall accompany all persons performing work or inspecting equipment on
the rooftop, including in the case of emergency,
SCHEDULE 1 TO EXHIBIT B - Page 4
except as otherwise agreed in Tenant's Lease. If rooftop access is required
during other than Building Hours, Tenant shall pay the cost of the Building's
engineer for the time spent accompanying Tenant's contractor or other agent to
the rooftop.
34. No one shall be allowed to endanger the Building, its premises or its
occupants in any manner whatsoever. If such a situation occurs, the contractor,
any subcontractor, supplier, etc., shall immediately take steps to correct and
eliminate the hazardous condition. In the event that the contractor's personnel
fail to perform in a satisfactory manner, the Building Manager reserves the
right to immediately take steps to remedy the hazard at the contractor's
expense.
35. All corrective work or work performed in occupied spaces at any time
must be scheduled and approved by Building Manager and must be immediately
cleaned up by the workmen prior to their leaving the job or at the end of the
business day if the project is on-going. The contractor shall be responsible
for all costs incurred by Building Manager if this clean-up work is not
performed satisfactorily.
36. All traffic control, flagmen, barricades, etc., as may be necessary or
required by any agency having jurisdiction shall be the sole responsibility of
and at the expense of the contractor.
37. Tenant shall contact the Building Manager to schedule work on the
following Building systems: (Any disruption of services will be scheduled at
Building Manager's discretion.)
A. Domestic water.
B. Fire alarm or speaker.
C. Electrical tie-ins to Base Building or the addition of
equipment to any suite other than the Tenant suite except subpanels located
within the Tenant premises.
D. Sprinkler system.
E. Any work that will take place outside the demised Premises.
F. Any tie-ins that may affect other Tenant spaces.
If a Building alarm is turned off for the contractor's work, the contractor
must notify Building Manager upon completion so the system can be tuned back on
as soon as possible.
38. No graffiti or vandalism will be tolerated. Any individual caught in
the act shall be immediately removed from the Premises and will not be allowed
to return. In addition, all repairs will be at the contractor's expense.
39. Wet paint signs must be posted in all public areas when appropriate.
40. The contractor/subcontractors may park in designated spaces only. Any
vehicles found in unauthorized spaces will be subject to towing.
41. No contractor shall be allowed to start any work in the Building
without having a current certificate of insurance on file with Building Manager.
The contractor must keep current insurance certificates on all subcontractors.
Any contractor or subcontractor performing work found not to have current
insurance will be immediately ordered off the Premises. General contractors
shall list the following as additionally insured:
600 W. Seventh Street Associates, Inc.
_________________
42. The contractor/subcontractors shall obtain and pay for a City of Los
Angeles business license.
43. The contractor/subcontractors shall obtain at their expense, all
permits and licenses necessary to perform the work and shall obtain at their
expense, all permits and licenses necessary to perform the work and shall comply
will all laws, ordinances, State and Federal government regulations, and all
rules or regulations of any board or commission or other duly qualified body.
SCHEDULE 1 TO EXHIBIT B - Page 5
44. All work shall be performed in accordance with all applicable laws and
the rules and regulations of all City, State and Federal agencies having
jurisdiction over the work.
45. No work is to be performed, nor materials stored in public areas. No
staging of trucks or materials will be allowed in areas which may affect traffic
flow to the surrounding properties or ingress and egress to Building entrances,
fire lanes, reserved parking areas, etc.
46. Rubber wheels are required on all vehicles transporting materials in
the Building.
47. All equipment and material will be designed and attached for seismic
loading in accordance with governmental agencies having jurisdiction over the
work.
48. Material storage shall be limited to the Premises.
49. The contractor, or its agent, shall provide safety barricades or
cables at floor penetrations.
50. Tenant shall take such action as is necessary to confirm that all
contractors, subcontractors and other construction personnel are aware of these
construction rules, including, if necessary, requiring each to sign a copy
hereof.
SCHEDULE 1 TO EXHIBIT B - Page 6
SCHEDULE 2 TO EXHIBIT B
-----------------------
SPECIAL TENANT REQUIREMENTS
1st Floor
- ---------
1. Landlord to supply access to the Standby Power Riser from the roof to the
Premises to accommodate a total of 3-3" conduits and 1-2" conduit for each
of the installed Tenant generators.
Mechanical
----------
. Tenant shall have the right to replace the existing windows with louvers
subject to the review and approval of Landlord, the city of Los Angeles and
historical agencies of the Federal and State governments.
Tenant shall provide such sound and vibration attenuation as may be required by
Landlord and public agencies having jurisdiction over the Project and shall at
all times comply with Landlord's Project Sound Requirements and Specifications.
1. Tenant shall have access to and provision of the freight elevator to the
Premises to transfer Equinix mechanical equipment.
2. Tenant shall have the right to connect to the Fire protection sprinkler
system and connection to building fire alarms for the ground floor generator
room.
3. Tenant shall be allocated its proportionate share of the total allowable day
tank storage in the Building
6th Floor
- ---------
Mechanical
----------
1. Landlord allows preaction fire protection sprinkler system in the Premises.
Tenant shall be responsible for all costs of removal of the existing wet
pipe sprinkler fire protection system.
2. Tenant shall be permitted to install a combined total of eight (8), eight
inch (8")" pipes in the Tenant Condenser water risers. Tenant shall also be
permitted to run the equivalent of 1-4" conduit to each of the installed
Tenant chillers on the roof through a chase designated by Landlord.
3. Landlord shall provide a pathway for exhaust and ventilation shafts and duct
to the roof or to an exterior wall louver for battery room ventilation and
purge, assuming lead-acid type batteries; two locations at 4000 cfm each.
Tenant shall comply with regulations of the City of Los Angeles Fire
Department and other public agencies having jurisdiction , with respect to
the allowable quantities of batteries in the Premises and the Building.
4. Landlord shall provide a pathway for toilet room exhaust connection to a
building exhaust riser.
5. Landlord shall allow general area ventilation air from a vent shaft to the
roof or from an outside wall louver subject to the review and approval of
city, state and federal historical authorities.
6. Landlord shall allow installation of office area air handling systems
including air handler and distribution overhead ductwork to spaces.
7. Landlord shall allow connection to the building domestic water source at
this floor for use in connection to room humidification equipment.
8. Landlord shall allow Tenant to install a direct digital control (DDC)
facility monitoring system as required to monitor and control the
environmental systems within the Premises, monitored within the Premises.
9. Landlord shall permit Tenant to reconfigure the toilet room fixtures on the
floor, provided that Tenant shall comply with the drainage stacking for the
Building.
SCHEDULE 2 TO EXHIBIT B - Page 1
7th Floor
- ---------
Electrical
----------
1. The administrative offices of Owner located on the 7/th/ floor shall have a
preaction fire protection system installed at the cost of Equinix.
SCHEDULE 2 TO EXHIBIT B - Page 2
EXHIBIT C
---------
CARRIER CENTER LOS ANGELES
--------------------------
NOTICE OF LEASE TERM DATES
--------------------------
To: _______________________
_______________________
_______________________
_______________________
Re: Office Lease dated ____________, 19__ between 600 SEVENTH STREET
ASSOCIATES, INC., a California corporation ("Landlord"), and
_____________________, a _______________________ ("Tenant") concerning
Suite ______ on floor(s) __________ of the office building located at
[*], Los Angeles, California.
Gentlemen:
In accordance with the Office Lease (the "Lease"), we wish to advise you
and/or confirm as follows:
1. The Lease Term shall commence on or has commenced on ______________
for a term of __________________ ending on __________________.
2. Rent commenced to accrue on __________________, in the amount of
________________.
3. If the Lease Commencement Date is other than the first day of the
month, the first billing will contain a pro rata adjustment. Each
billing thereafter, with the exception of the final billing, shall be
for the full amount of the monthly installment as provided for in the
Lease.
4. Your rent checks should be made payable to __________________ at
___________________.
5. The exact number of rentable square feet within the Premises is
____________ square feet.
6. Tenant's Share as adjusted based upon the exact number of rentable
square feet within the Premises is ________%.
"Landlord":
600 SEVENTH STREET ASSOCIATES, INC.,
a California corporation
By: _________________________
Name: ___________________
Title: __________________
Agreed to and Accepted
as of ____________, 19___.
"Tenant":
By: ____________________________
Its:
*CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
EXHIBIT C - Page 1
EXHIBIT D
---------
CARRIER CENTER LOS ANGELES
--------------------------
RULES AND REGULATIONS
---------------------
Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Project. In the event of any
conflict between the Rules and Regulations and the other provisions of this
Lease, the latter shall control.
1. Tenant shall not alter any lock or install any new or additional locks
or bolts on any doors or windows of the Premises without obtaining Landlord's
prior written consent. Tenant shall bear the cost of any lock changes or
repairs required by Tenant. Two keys will be furnished by Landlord for the
Premises, and any additional keys required by Tenant must be obtained from
Landlord at a reasonable cost to be established by Landlord. Upon the
termination of this Lease, Tenant shall restore to Landlord all keys of stores,
offices, and toilet rooms, either furnished to, or otherwise procured by, Tenant
and in the event of the loss of keys so furnished, Tenant shall pay to Landlord
the cost of replacing same or of changing the lock or locks opened by such lost
key if Landlord shall deem it necessary to make such changes.
2. All doors opening to public corridors shall be kept closed at all times
except for normal ingress and egress to the Premises.
3. Landlord reserves the right to close and keep locked all entrance and
exit doors of the Building during such hours as are customary for comparable
buildings in the vicinity of the Building. Tenant, its employees and agents
must be sure that the doors to the Building are securely closed and locked when
leaving the Premises if it is after the normal hours of business for the
Building. Any tenant, its employees, agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time when it is
considered to be after normal business hours for the Building, may be required
to sign the Building register. Access to the Building may be refused unless the
person seeking access has proper identification or has a previously arranged
pass for access to the Building. Landlord will furnish passes to persons for
whom Tenant requests same in writing. Tenant shall be responsible for all
persons for whom Tenant requests passes and shall be liable to Landlord for all
acts of such persons. The Landlord and his agents shall in no case be liable
for damages for any error with regard to the admission to or exclusion from the
Building of any person. In case of invasion, mob, riot, public excitement, or
other commotion, Landlord reserves the right to prevent access to the Building
or the Project during the continuance thereof by any means it deems appropriate
for the safety and protection of life and property.
4. No furniture, freight or equipment of any kind shall be brought into
the Building without prior notice to Landlord. All moving activity into or out
of the Building shall be scheduled with Landlord and done only at such time and
in such manner as Landlord designates. Landlord shall have the right to
prescribe the weight, size and position of all safes and other heavy property
brought into the Building and also the times and manner of moving the same in
and out of the Building. Safes and other heavy objects shall, if considered
necessary by Landlord, stand on supports of such thickness as is necessary to
properly distribute the weight. Landlord will not be responsible for loss of or
damage to any such safe or property in any case. Any damage to any part of the
Building, its contents, occupants or visitors by moving or maintaining any such
safe or other property shall be the sole responsibility and expense of Tenant.
5. No furniture, packages, supplies, equipment or merchandise will be
received in the Building or carried up or down in the elevators, except between
such hours, in such specific elevator and by such personnel as shall be
designated by Landlord.
6. The requirements of Tenant will be attended to only upon application at
the management office for the Project or at such office location designated by
Landlord. Employees of Landlord shall not perform any work or do anything
outside their regular duties unless under special instructions from Landlord.
7. No sign, advertisement, notice or handbill shall be exhibited,
distributed, painted or affixed by Tenant on any part of the Premises or the
Building without the prior written consent of the Landlord. Tenant shall not
disturb, solicit, peddle, or canvass any occupant of the Project and shall
cooperate with Landlord and its agents of Landlord to prevent same.
8. The toilet rooms, urinals, wash bowls and other apparatus shall not be
used for any purpose other than that for which they were constructed, and no
foreign substance of any kind whatsoever
EXHIBIT D - Page 1
shall be thrown therein. The expense of any breakage, stoppage or damage
resulting from the violation of this rule shall be borne by the tenant who, or
whose servants, employees, agents, visitors or licensees shall have caused same.
9. Tenant shall not overload the floor of the Premises without Landlord's
prior written consent.
10. Except for vending machines intended for the sole use of Tenant's
employees and invitees, no vending machine or machines other than fractional
horsepower office machines shall be installed, maintained or operated upon the
Premises without the written consent of Landlord.
11. Tenant shall not use or keep in or on the Premises, the Building, or
the Project any kerosene, gasoline, explosive material, corrosive material,
material capable of emitting toxic fumes, or other inflammable or combustible
fluid chemical, substitute or material except for (i) dry or gel cell batteries
and (ii) the fuel stored in the Generator Fuel Tanks (defined in Article 22 of
the Lease and any reasonable "belly" fuel storage tanks installed on Tenant's
Generators. Tenant shall provide material safety data sheets for any Hazardous
Material used or kept on the Premises.
12. Tenant shall not use, keep or permit to be used or kept, any foul or
noxious gas or substance in or on the Premises, or permit or allow the Premises
to be occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Project by reason of noise, odors, or vibrations, or
interfere with other tenants or those having business therein, whether by the
use of any musical instrument, radio, phonograph, or in any other way. Tenant
shall not throw anything out of doors, windows or skylights or down passageways.
13. Tenant shall not bring into or keep within the Project, the Building
or the Premises any animals, birds, aquariums, or, except in areas designated by
Landlord, bicycles or other vehicles.
14. No cooking shall be done or permitted on the Premises, nor shall the
Premises be used for the storage of merchandise, for lodging or for any
improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters' laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages for employees and visitors, provided that such use is in accordance
with all applicable federal, state, county and city laws, codes, ordinances,
rules and regulations.
15. The Premises shall not be used for manufacturing or for the storage of
merchandise except as such storage may be incidental to the use of the Premises
provided for in the Summary. Tenant shall not occupy or permit any portion of
the Premises to be occupied as an office for a messenger-type operation or
dispatch office, public stenographer or typist, or for the manufacture or sale
of liquor, narcotics, or tobacco in any form, or as a medical office, or as a
barber or manicure shop, or as an employment bureau without the express prior
written consent of Landlord. Tenant shall not engage or pay any employees on
the Premises except those actually working for such tenant on the Premises nor
advertise for laborers giving an address at the Premises.
16. Landlord reserves the right to exclude or expel from the Project any
person who, in the judgment of Landlord, is intoxicated or under the influence
of liquor or drugs, or who shall in any manner do any act in violation of any of
these Rules and Regulations.
17. Tenant, its employees and agents shall not loiter in or on the
entrances, corridors, sidewalks, lobbies, courts, halls, stairways, elevators,
vestibules or any Common Areas for the purpose of smoking tobacco products or
for any other purpose, nor in any way obstruct such areas, and shall use them
only as a means of ingress and egress for the Premises.
18. Tenant shall use reasonable best efforts to participate in recycling
programs undertaken by Landlord.
19. Tenant shall store all its trash and garbage within the interior of
the Premises. No material shall be placed in the trash boxes or receptacles if
such material is of such nature that it may not be disposed of in the ordinary
and customary manner of removing and disposing of trash and garbage in Los
Angeles, California without violation of any law or ordinance governing such
disposal. All trash, garbage and refuse disposal shall be made only through
entry-ways and elevators provided for such purposes at such times as Landlord
shall designate. If the Premises is or becomes infested with vermin as a result
of the use or any misuse or neglect of the Premises by Tenant, its agents,
servants, employees, contractors, visitors or licensees, Tenant shall forthwith,
at Tenant's expense, cause the Premises to be exterminated from time to time to
the satisfaction of Landlord and shall employ such licensed exterminators as
shall be approved in writing in advance by Landlord.
EXHIBIT D - Page 2
20. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
21. Any persons employed by Tenant to do janitorial work shall be subject
to the prior written approval of Landlord, and while in the Building and outside
of the Premises, shall be subject to and under the control and direction of the
Building manager (but not as an agent or servant of such manager or of
Landlord), and Tenant shall be responsible for all acts of such persons.
22. No awnings or other projection shall be attached to the outside walls
of the Building without the prior written consent of Landlord. Neither the
interior nor exterior of any windows shall be coated or otherwise sunscreened
without the prior written consent of Landlord. Tenant shall be responsible for
any damage to the window film on the exterior windows of the Premises and shall
promptly repair any such damage at Tenant's sole cost and expense. Prior to
leaving the Premises for the day, Tenant shall draw or lower window coverings
and extinguish all lights.
23. Deleted.
24. Tenant must comply with requests by the Landlord concerning the
informing of their employees of items of importance to the Landlord.
25. Tenant must comply with the City of Los Angeles "NO-SMOKING" Ordinance
No. 159498. If Tenant is required under the ordinance to adopt a written
smoking policy, a copy of said policy shall be on file in the office of the
Building.
26. Tenant hereby acknowledges that Landlord shall have no obligation to
provide guard service or other security measures for the benefit of the
Premises, the Building or the Project. Tenant hereby assumes all responsibility
for the protection of Tenant and its agents, employees, contractors, invitees
and guests, and the property thereof, from acts of third parties, including
keeping doors locked and other means of entry to the Premises closed, whether or
not Landlord, at its option, elects to provide security protection for the
Project or any portion thereof. Tenant further assumes the risk that any safety
and security devices, services and programs which Landlord elects, in its sole
discretion, to provide may not be effective, or may malfunction or be
circumvented by an unauthorized third party, and Tenant shall, in addition to
its other insurance obligations under this Lease, obtain its own insurance
coverage to the extent Tenant desires protection against losses related to such
occurrences. Tenant shall cooperate in any reasonable safety or security
program developed by Landlord or required by law.
27. All office equipment of any electrical or mechanical nature shall be
placed by Tenant in the Premises in settings, to absorb or prevent any
vibration, noise and annoyance.
28. Tenant shall not use in any space or in the public halls of the
Building, any hand trucks except those equipped with rubber tires and rubber
side guards.
29. No auction, liquidation, fire sale, going-out-of-business or
bankruptcy sale shall be conducted in the Premises without the prior written
consent of Landlord.
30. No tenant shall use or permit the use of any portion of the Premises
for living quarters, sleeping apartments or lodging rooms.
31. Tenant shall not purchase spring water, towels, janitorial or
maintenance or other similar services from any company or persons not approved
by Landlord. Landlord shall approve a sufficient number of sources of such
services to provide Tenant with a reasonable selection, but only in such
instances and to such extent as Landlord in its judgment shall consider
consistent with the security and proper operation of the Building.
32. Tenant shall install and maintain, at Tenant's sole cost and expense,
an adequate, visibly marked and properly operational fire extinguisher next to
any duplicating or photocopying machines or similar heat producing equipment,
which may or may not contain combustible material, in the Premises.
Landlord reserves the right at any time to change or rescind any one or
more of these Rules and Regulations, or to make such other and further
reasonable Rules and Regulations as in Landlord's judgment may from time to time
be necessary for the management, safety, care and cleanliness of the Premises,
Building, the Common Areas and the Project, and for the preservation of good
order therein, as well as for the convenience of other occupants and tenants
therein. Landlord may waive any one or more of these Rules and Regulations for
the benefit of any particular tenants, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of any other
tenant, nor prevent Landlord from thereafter enforcing any such Rules or
Regulations against any or all tenants of the Project. Tenant shall be deemed
to have read these Rules and Regulations and to have agreed to abide by them as
a condition of its occupancy of the Premises.
EXHIBIT D - Page 3
EXHIBIT E
---------
CARRIER CENTER LOS ANGELES
--------------------------
FORM OF TENANT'S ESTOPPEL CERTIFICATE
-------------------------------------
The undersigned as Tenant under that certain Office Lease (the "Lease")
made and entered into as of ___________, 199__ by and between 600 SEVENTH STREET
ASSOCIATES, INC., a California corporation a California limited liability
company, and 717 SOUTH GRAND ASSOCIATES, INC., a California corporation,
collectively as Landlord, and the undersigned as Tenant, for Premises on the
______________ floor(s) of the office building located at [*], Los Angeles,
California ____________, certifies as follows:
1. Attached hereto as Exhibit A is a true and correct copy of the Lease
---------
and all amendments and modifications thereto. The documents contained in
Exhibit A represent the entire agreement between the parties as to the Premises
- ---------
and the project of which the Premises are a part.
2. The undersigned currently occupies the Premises described in the Lease,
the Lease Term commenced on __________, and the Lease Term expires on
___________, and the undersigned has no option to terminate or cancel the Lease
or to purchase all or any part of the Premises, the Building and/or the Project
except as otherwise set forth in the Lease.
3. Base Rent became payable on ____________.
4. The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Exhibit A.
---------
5. Tenant has not transferred, assigned, or sublet any portion of the
Premises nor entered into any license or concession agreements with respect
thereto except as follows:
6. Tenant shall not modify the documents contained in Exhibit A without
---------
the prior written consent of Landlord's mortgagee.
7. All monthly installments of Base Rent, all Additional Rent and all
monthly installments of estimated Additional Rent have been paid when due
through ___________. The current monthly installment of Base Rent is
$_____________________.
8. To the actual knowledge of Tenant, all conditions of the Lease to be
performed by Landlord necessary to the enforceability of the Lease have been
satisfied and Landlord is not in default thereunder. In addition, the
undersigned has not delivered any notice to Landlord regarding a default by
Landlord thereunder.
9. No rental has been paid more than thirty (30) days in advance and no
security has been deposited with Landlord except as provided in the Lease.
10. As of the date hereof, there are no existing defenses or offsets, to
the undersigned's knowledge, claims or any basis for a claim, that the
undersigned has against Landlord.
11. If Tenant is a corporation or partnership, each individual executing
this Estoppel Certificate on behalf of Tenant hereby represents and warrants
that Tenant is a duly formed and existing entity qualified to do business in
California and that Tenant has full right and authority to execute and deliver
this Estoppel Certificate and that each person signing on behalf of Tenant is
authorized to do so.
12. There are no actions pending against the undersigned or any guarantor
of the Lease under the bankruptcy or similar laws of the United States or any
state.
13. Other than in compliance with all applicable laws and incidental to
the ordinary course of the use of the Premises, the undersigned has not used or
stored any hazardous substances in the Premises.
14. To the undersigned's knowledge, all tenant improvement work to be
performed by Landlord under the Lease has been completed in accordance with the
Lease and has been accepted by the undersigned and all reimbursements and
allowances due to the undersigned under the Lease in connection with any tenant
improvement work have been paid in full.
*CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
EXHIBIT E - Page 1
The undersigned acknowledges that this Estoppel Certificate may be
delivered to Landlord or to a prospective mortgagee or prospective purchaser,
and acknowledges that said prospective mortgagee or prospective purchaser will
be relying upon the statements contained herein in making the loan or acquiring
the property of which the Premises are a part and that receipt by it of this
certificate is a condition of making such loan or acquiring such property.
Executed at ______________ on the ____ day of ___________, 19__.
"Tenant"
______________________________, a
______________________________
By: ________________________________
Name:___________________________
Title: _________________________
EXHIBIT E - Page 1
EXHIBIT F
---------
CARRIER CENTER LOS ANGELES
FORM OF NON-DISTURBANCE AGREEMENT
---------------------------------
[To be Provided by Landlord's Lender]
EXHIBIT F - Page 1
EXHIBIT G
CARRIER CENTER LOS ANGELES
PROJECT SOUND REQUIREMENTS AND SPECIFICATIONS
---------------------------------------------
Noise and Vibration Control Design Requirements
It is the responsibility of each Design Builder to ensure that all mechanical,
electrical, plumbing and elevator equipment and systems comply with the
following noise and vibration criteria. The means employed to satisfy the
criteria will include: selection of suitably quiet equipment, sound traps,
acoustical enclosures, vibration isolators and generator exhaust mufflers.
It is strongly recommended that each Design Builder retains the services of a
suitably qualified and experienced Acoustical Consultant to assist in designing
suitably quiet and low-vibration systems.
1. Noise Emissions to the Exterior
- ------------------------------------
Noise emissions to the exterior surroundings shall satisfy all requirements
of the Noise Regulations Chapter of the City of Los Angeles Municipal Code.
Full account shall be taken of:
The nature of the noise produced by source, including penalties for tonal
or impulsive characteristics.
a) The zone classification of the surrounding properties.
b) The operating times of the equipment.
c) The additive effects of multiple noise sources operating
simultaneously.
In addition, the total noise produced by mechanical, electrical, plumbing
and elevator equipment associated with the base building and each of the
tenancies shall be within the following "noise budget" limits when measured
at the neighboring properties:
- -------------------------------------------------------------------------------------------------------------
Noise Budget - Combined Effect of All Equipment
- -------------------------------------------------------------------------------------------------------------
Daytime (7am - 10pm) Nighttime (10pm - 7am)
- -------------------------------------------------------------------------------------------------------------
Base Building Equipment 60 dBA 55 dBA
- -------------------------------------------------------------------------------------------------------------
Equipment Provided by Each Tenant:
- -------------------------------------------------------------------------------------------------------------
Total Size of Less than 1/2 Floor 49 dBA 44 dBA
Tenancy
- ------------------------------------------------------------------------------------------------------------
1/2 - 1 Floor 52 dBA 47 dBA
- ------------------------------------------------------------------------------------------------------------
1 - 1 1/2 Floors 55 dBA 50 dBA
- ------------------------------------------------------------------------------------------------------------
1 1/2 - 2 Floors 57 dBA 52 dBA
- ------------------------------------------------------------------------------------------------------------
i. The noise budget values apply to all normally operating equipment -
such as fans, cooling towers, dry coolers, heat pumps, chillers,
transformers, pumps etc. - as well as the routine testing of
emergency equipment.
ii. Each Design Builder shall demonstrate - to the satisfaction of the
Owner - that the total effect of noise emitted by equipment within
their scope of work is within the appropriate noise budget value
under both day and night time operating conditions. During design,
community noise impact calculations, based on manufacturers'
certified noise data, shall be submitted for approval.
iii. All Design Builders should be aware of the proximity of existing
noise-sensitive properties around the project site and the
difficulties these adjacencies imply in terms of community noise
control.
The existing sensitive neighbors include the Hyatt Regency Hotel
and Christian Science Center on South Hope and the residential
buildings on South Olive.
EXHIBIT G - Page 1
iv. The possibility of future development on the vacant space (currently
an open parking lot) situated on the block between South Grand, South
Olive, 7th and 8th Streets be taken into account in the Design
Builders' noise impact analysis.
v. Certain items of equipment will produce noise that has either a tonal
or impulsive characteristic. Also, the combination of multiple
similar noise sources can exaggerate tonal noise effects and
"beating" (a type of impulsive noise) can occur when several very
similar noise sources operate simultaneously. Tonal, impulsive or
beating characteristics tend to make noise more annoying and this is
recognized by the City Noise Ordinance, which applies a 5dBA penalty
to such noise.
The noise budget values given in the above table must therefore be reduced
by 5dBA in any cases where either an individual item of equipment or the
combination of several items of equipment produces tonal or impulsive noise
(including beating).
2. Interior Background Noise Levels
--------------------------------
Background noise levels in the occupied areas of the building shall meet
the requirements of Table 2, Chapter 43 of the ASHRAE Handbook, HVAC
Applications I-P Edition.
3. Vibration
---------
Vibration levels in occupied areas, circulation and toilet rooms shall not
exceed the criteria recommended in the current version of ANSI S3.29 "Guide
to the Evaluation of Human Exposure to Vibration in Buildings."
In technical areas, vibration levels shall be limited to either: the
criteria recommended in ANSI S3.29, or vibration sensitivity criteria
applicable to the telecommunications industry - whichever are the more
stringent.
EXHIBIT G - Page 2
EXHIBIT H
---------
CARRIER CENTER LOS ANGELES
--------------------------
ANTENNA SPACE RIDER
-------------------
1. Lease of Antenna Space. Tenant wishes to install on the top roof of
----------------------
the Building (a) one GPS antenna as more particularly described below in this
section (collectively, the "Antennas "); and (b) one 2-inch conduit per each
Antenna connecting such Antenna to the Premises (collectively, the "Antenna
Conduits "). The Antennas to be installed by Tenant under this Rider shall be
installed in a one hundred square foot pad on the roof of the Building
designated by Landlord:
X
---
The space to be occupied by the Antennas and their exact location on the
top roof of the Building shall be designated by Landlord in its sole, reasonable
discretion and is hereby referred to as the "Antenna Space ." The exact
location of the Antenna Conduits and their precise route running from the
Antenna Space to the Premises shall be designated by Landlord in its sole,
reasonable discretion. The space within the Antenna Conduits is hereby referred
to as the "Antenna Conduit Space ." Effective as of the date Landlord tenders
possession of the Antenna Space and the Antenna Conduit Space to Tenant (the
"Antenna Space Effective Date "), the Premises shall be expanded to include the
Antenna Space and the Antenna Conduit Space.
2. Use of Antenna Space and Antenna Conduit Space. The Antenna Space
----------------------------------------------
shall be used by Tenant only for the installation and operation of the Antennas.
The Antenna Conduit Space shall be used by Tenant only for installing the
Antenna Conduits and running cable or connecting lines through the Antenna
Conduits to connect the Antennas to the Premises.
The installation of the Antennas, the Antenna Conduit, and cable and
connecting lines through the Antenna Conduits shall be performed by contractors
approved by Landlord in advance in writing and in accordance with Article 8 of
the Lease. Tenant shall pay all costs for such installation, including the cost
of the equipment and materials.
All ongoing operation and maintenance of the Antennas and the Antenna
Conduits shall be at the sole cost and expense of Tenant (including, but not
limited to, costs of any electrical supply, which, if Landlord so elects, shall
be metered separately to Tenant at Tenant's expense). Such ongoing operation
and maintenance of the Antennas and the Antenna Conduits shall be conducted by
Tenant in accordance with the Lease, all applicable laws (including but not
limited to any requirements for obtaining conditional use permits) and all
Landlord's building rules in effect from time to time. Without limiting the
foregoing, any installation activities by Tenant regarding the Antennas or the
Antenna Conduits, and Tenant's ongoing use of the Antennas and the Antenna
Conduits, shall require Landlord's prior written approval of (i) the plans and
specifications for any installation work; (ii) 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 and
credentials of all contractors and subcontractors who will perform such work as
selected from Landlord's list of contractors and subcontractors currently
approved by Landlord for work in the Building; (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 (including conditional use permits) required
for the work. Landlord's approval shall not be unreasonably withheld or
delayed.
Tenant represents and warrants to Landlord that the Antennas will not
interfere with the operation, transmissions or reception of any other antennas,
satellite dishes or equipment on the roof of the Building. In the event that
the Antennas do interfere with such operation, transmissions or reception, then
(without limiting any other remedy of Landlord) Tenant shall, promptly after
written notice from Landlord, cease operation of and remove the Antennas from
the Building at its sole cost and expense, and this Antenna Space Rider to the
Lease shall thereupon be deleted from the Lease with respect to the then
remaining Lease term.
3. Removal of Antennas, 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, the Antennas and all cable, connecting lines,
and other installations installed under this Rider (excepting the Antenna
Conduits 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
EXHIBIT H - Page 1
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.
4. 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. This Rider is part of and shall be
attached as an addendum to the Lease. All terms of the Lease which have not
been expressly altered by this Rider shall remain in full force and effect.
EXHIBIT H - Page 2
EXHIBIT I
---------
FORM OF MEMORANDUM OF LEASE
---------------------------
RECORDING REQUESTED
BY AND WHEN
RECORDED RETURN TO:
_____________________
_____________________
_____________________
_____________________
================================================================================
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE is entered into as of _____________________, by
and between 600 SEVENTH STREET ASSOCIATES, INC., a California corporation,
(hereinafter referred to as "Landlord"), and EQUINIX, INC., a Delaware
corporation (hereinafter referred to as "Tenant").
1. For valuable consideration, Landlord does hereby lease and demise to
Tenant and Tenant hereby leases from Landlord approximately _____________ square
feet in a building ("Building") containing approximately ________________ square
feet to be constructed on the land ("Land") described or depicted on Exhibit A
---------
attached to this Memorandum of Lease and made a part hereof by this reference
(collectively, the "Premises").
2. The terms and conditions of the leasing of the Premises are set
forth in a Lease dated _________________________ ("Lease"), between Landlord and
Tenant, which is incorporated herein by this reference as though fully set
forth. Without limiting the foregoing, the Lease contains provisions which give
effect to the following:
(a) The Term (as defined in the Lease) of the Lease will commence on
or about ______________________ (with the exact date of commencement to be
determined by the provisions of the Lease) and extend for a period of
__________________ years thereafter; and
(b) Tenant has the right and option to extend the Term of the Lease
for _________________ successive year renewal terms, in accordance with the
provisions of the Lease; and
(c) Tenant has the right and option to lease from Landlord from time
to time while the Lease remains in effect any portion of the Building which
is not subject to the Lease, subject to and in accordance with Section ____
of the Lease.
3. The Lease contains other terms and conditions pertinent to the legal
relationship among the Landlord, Tenant and mortgagees of Landlord, including,
without limitation, terms and conditions relating to the occupancy and use of,
and otherwise affecting, the Premises, public notice of the existence of the
same being hereby given.
EXHIBIT I
Executed the day and year first above written.
LANDLORD:
600 SEVENTH STREET ASSOCIATES, INC., a
California corporation
By: ___________________________________
Name: _________________
Title: __________________________
TENANT:
EQUINIX, INC., a Delaware corporation
By: ___________________________________
Name: _________________
Title: __________________________
EXHIBIT I- Page 2
STATE OF _______________________)
) Ss.
COUNTY OF ______________________)
On ________________________, before me, ________________________, a Notary
Public in and for said state, personally appeared _______________________ and
______________________, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the persons whose names are subscribed to the
within instrument and acknowledged to me that they executed the same in their
authorized capacities, and that by their signature on the instrument, the
persons, or the entity upon behalf of which the persons acted, executed the
instrument.
WITNESS my hand and official seal.
____________________________________________
Notary Public in and for said State
STATE OF _______________________)
) Ss.
COUNTY OF ______________________)
On ________________________, before me, ________________________, a Notary
Public in and for said state, personally appeared _______________________ and
______________________, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the persons whose names are subscribed to the
within instrument and acknowledged to me that they executed the same in their
authorized capacities, and that by their signature on the instrument, the
persons, or the entity upon behalf of which the persons acted, executed the
instrument.
WITNESS my hand and official seal.
____________________________________________
Notary Public in and for said State
EXHIBIT I - Page 3