LEASE
by and between
NORTH CRESCENT REALTY V, LLC,
a Delaware limited liability company
AS LANDLORD
and
GLOBAL CROSSING DEVELOPMENT COMPANY,
a Delaware corporation
AS TENANT
Dated: October 1, 1999
TABLE OF CONTENTS
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1. Lease of Premises........................................................................................1
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1.1 Lease. ........................................................................................1
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1.2 Common Areas, Project and Building Size.........................................................1
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1.3 Construction and Operation of Project...........................................................2
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2. Purpose..................................................................................................2
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2.1 Use.............................................................................................2
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2.2 Limitation on Uses..............................................................................3
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2.3 Compliance with Permits.........................................................................4
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2.4 Payment of Additional Premium...................................................................4
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3. Term.....................................................................................................4
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3.1 Commencement Date...............................................................................4
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3.2 Acceptance of Premises..........................................................................5
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3.3 Commencement Prior to Project Completion........................................................6
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3.4 Renewal Terms...................................................................................6
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3.5 First Floor Cancellation Option.................................................................8
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4. Basic Rent; Security Deposit.............................................................................8
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4.1 Basic Rent......................................................................................8
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4.2 Partial Months..................................................................................9
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4.3 No Offset.......................................................................................9
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4.4 Security Deposit................................................................................9
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4.5 Rental Escalations.............................................................................10
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5. Rent Adjustments........................................................................................10
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5.1 Operating Expenses and Real Property Taxes.....................................................10
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5.2 Real Property Taxes............................................................................16
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5.3 Payment........................................................................................17
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5.4 Lease Year; Proration..........................................................................18
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6. Parking Rights..........................................................................................18
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6.1 Tenant's Parking Rights........................................................................18
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6.2 Off-Site Parking...............................................................................20
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7. Utilities and Services..................................................................................20
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7.1 Landlord Obligations...........................................................................20
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7.2 Access.........................................................................................23
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7.3 Extraordinary Services.........................................................................24
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7.4 Interruption in Utility Services...............................................................24
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8. Alterations.............................................................................................26
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8.1 Restriction on Alterations.....................................................................26
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8.2 Removal and Surrender of Fixtures and Tenant...................................................29
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8.3 Standard Window Covering.......................................................................30
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8.4 Arbitration of Disputes........................................................................30
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9. Maintenance and Repairs.................................................................................30
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9.1 Tenant's Obligations...........................................................................30
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9.2 Landlord's Obligations.........................................................................30
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9.3 Failure to Repair..............................................................................31
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10. Tax on Tenant's Personal Property and Tenant Improvements...............................................31
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10.1 Personal Property Taxes........................................................................31
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10.2 Tax on Leasehold Improvements..................................................................31
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10.3 Exclusion from Real Property Taxes.............................................................32
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11. Insurance; Waiver of Subrogation........................................................................32
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11.1 Liability Insurance............................................................................32
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11.2 Property Insurance.............................................................................32
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11.3 Policy Requirements............................................................................33
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11.4 Landlord's Requirements........................................................................33
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11.5 Waiver of Subrogation..........................................................................34
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12. Damage or Destruction...................................................................................34
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12.1 Damage to Premises.............................................................................34
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12.2 Damage to Project..............................................................................35
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12.3 Abatement; Termination.........................................................................36
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12.4 Limitations....................................................................................37
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12.5 Damage During Last Years.......................................................................37
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12.6 Agreement Governs..............................................................................38
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13. Eminent Domain..........................................................................................38
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13.1 Taking.........................................................................................38
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13.2 Temporary Taking...............................................................................40
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14. Assignment/Subleasing...................................................................................40
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14.1 Limitation.....................................................................................40
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14.2 Notice of Intent to Assign or Sublet...........................................................41
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14.3 Landlord's Options.............................................................................41
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14.4 Conditions for Landlord's Consent to Subleases.................................................41
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14.5 Transfer Premium...............................................................................42
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14.6 No Release of Tenant's Obligations.............................................................43
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14.7 Transfer is Assignment.........................................................................43
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14.8 Assumption of Obligations......................................................................43
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14.9 Recapture Rights...............................................................................43
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14.10 Related Entities...............................................................................44
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14.11 Preapproved Sublease...........................................................................44
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15. Landlord's Reserved Rights..............................................................................44
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15.1 Right of Entry.................................................................................44
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15.2 Building and Common Areas......................................................................45
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15.3 Intentionally Omitted..........................................................................45
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15.4 Excavation.....................................................................................45
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15.5 Development of Other Improvements..............................................................46
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15.6 Incorporation of Other Improvements............................................................46
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16. Indemnification and Limitation on Liability.............................................................47
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16.1 Indemnity of Landlord..........................................................................47
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16.2 Tenant's Assumption of Risk and Waiver.........................................................48
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16.3 Survival; No Release of Insurers...............................................................48
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17. Definitions of Landlord.................................................................................48
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18. Subordination...........................................................................................49
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18.1 Subordination..................................................................................49
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18.2 Attornment.....................................................................................49
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18.3 Notice from Tenant.............................................................................50
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19. Estoppel Certificates...................................................................................50
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20. Surrender of Premises and Removal of Property...........................................................51
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20.1 No Merger......................................................................................51
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20.2 Surrender of Premises..........................................................................51
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20.3 Disposal of Property...........................................................................51
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20.4 Fixtures and Improvements......................................................................51
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21. Holding Over............................................................................................52
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22. Defaults and Remedies...................................................................................52
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22.1 Defaults by Tenant.............................................................................52
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22.2 Landlord's Remedies............................................................................54
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Re-Entry Not Termination.......................................................................56
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22.4 Right of Landlord to Injunction; Cumulative Remedies...........................................56
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22.5 Definition of Tenant...........................................................................56
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22.6 Defaults by Landlord...........................................................................57
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23. Bankruptcy..............................................................................................57
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24. Interest on Tenant's Obligations; Late Charges..........................................................57
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24.1 Interest.......................................................................................57
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24.2 Late Charge....................................................................................58
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25. Quiet Enjoyment.........................................................................................58
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26. Rentable Area...........................................................................................59
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26.1 Computation of Rentable Area...................................................................59
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26.2 Building Common Areas..........................................................................59
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26.3 Premises and Project Rentable Area.............................................................59
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27. Examination of Lease....................................................................................59
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28. Rules and Regulations...................................................................................59
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29. No Directory Board; Signage; Project Identity...........................................................60
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29.1 Directory Board....................................................................................60
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29.2 Signage; Projection Identification.................................................................60
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30. Fair Market Rental Rate Arbitration; Definition.........................................................61
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30.1 Arbitration of Rate............................................................................61
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30.2 Fair Market Rental Rate.......................................................................612
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31. Covenant Against Liens..................................................................................63
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32. Consents; Good Faith....................................................................................63
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32.1 Consents.......................................................................................63
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32.2 Good Faith.....................................................................................64
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33. General Provisions......................................................................................64
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33.1 No Waiver......................................................................................64
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33.2 Landlord's Right to Perform....................................................................65
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33.3 Terms; Headings................................................................................65
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33.4 Entire Agreement...............................................................................65
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33.5 Successors and Assigns.........................................................................65
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33.6 Notices........................................................................................65
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33.7 Severability...................................................................................66
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33.8 Time of Essence................................................................................66
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33.9 Governing Law..................................................................................66
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33.10 Attorneys' Fees................................................................................66
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33.11 Light and Air..................................................................................67
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33.12 Execution by Corporation.......................................................................67
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33.13 Force Majeure..................................................................................67
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33.14 Limitation on Liability........................................................................67
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33.15 Development of Project.........................................................................68
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34. Arbitration.............................................................................................68
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35. Guaranty................................................................................................70
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36. No Brokers..............................................................................................70
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37. Gym and Cafeteria.......................................................................................70
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38. Storage Space; Equipment Room...........................................................................71
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TABLE OF EXHIBITS
Exhibit A Description of Premises
Exhibit B Description of Project
Exhibit C Memorandum of Commencement Date
Exhibit D Intentionally Omitted
Exhibit E Cleaning Specifications
Exhibit F Security Specifications
Exhibit G Non-Disturbance, Attornment and Subordination Agreement
Exhibit H Building and Project Rules and Regulations
Exhibit I Parking Garage Rules and Regulations
Exhibit J Guaranty of Lease
THIS LEASE is made and entered into as of October 1, 1999, by and between
NORTH CRESCENT REALTY V, LLC, a Delaware limited liability company ("Landlord")
and GLOBAL CROSSING DEVELOPMENT COMPANY, a Delaware corporation ("Tenant").
1. Lease of Premises.
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0.1 Lease. Landlord hereby leases to Tenant, and Tenant
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hereby leases from Landlord, those certain premises (the "Premises") shown on
Exhibit "A" attached hereto in Building B at 360 North Crescent Drive, Beverly
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Hills, California (the "Building"). The Building is part of an office campus on
that certain land (the "Land") at 360 North Crescent Drive and 9370 Santa Monica
Boulevard, as more specifically described on Exhibit "B" attached hereto.
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Exhibit "A" attached hereto includes a floor plan for each floor of the Premises
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setting forth the Rentable Area on each floor of the Premises. The parties
estimate that the square footage of the Rentable Area of the Premises is 86,408
square feet. Such estimate is subject to final adjustment pursuant to Article
26. The Land, the Building, a subterranean parking garage located on the Land
and a parking garage located at 375 North Crescent Drive, Beverly Hills,
California (the "Garage"), (the parking facilities on levels B-1 and B-2, and
the Garage, are collectively referred to as the "Parking Garages"), all other
improvements and plazas now or hereafter constructed on the Land, except
improvements which tenants may remove therefrom pursuant to the terms of their
respective leases, and all rights and easements appurtenant to and benefitting
the Land, the Building, the Parking Garages, and the plazas and improvements
constructed on the land, are collectively referred to herein as the "Project."
0.2 Common Areas, Project and Building Size.
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(a) Tenant shall have the non-exclusive right, in common with others,
to use the "Common Areas" (defined in Section 1.2(b) below) in and adjacent to
the Project, subject to subsection (c) below and to such rules and regulations
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as may from time to time be adopted by Landlord in accordance with and subject
to the Rules Requirements. Landlord may, from time to time, increase, decrease,
or change the elements, portions, location and dimension of the Common Areas,
the Project, and/or the Rentable Area of the Project, the Building or any other
structure located within the Project subject to the limitations of Sections 15.5
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and 15.6, provided, however, that Landlord shall maintain the Project at all
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times during the Term in accordance with the highest category of premiere,
first-class office building projects in the Golden Triangle area and on Maple
Drive in Beverly Hills, California.
(b) The term "Common Areas" as used herein shall be deemed to mean and
refer to all portions of the Project and the Land which have been improved or
made available by Landlord for
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the use or benefit of more than one tenant of the Project, as may be changed by
Landlord in its sole discretion from time to time subject to Section 1.2(a)
above, and shall include, without limitation, parking areas, ramps and driveways
(including those designated for the exclusive use of tenants of the Project),
courtyards, sidewalks, service corridors, landscaped areas, drinking fountains,
interior public lobbies and corridors, public restrooms, elevators and
stairways, and other similar facilities and areas. Furthermore, the Common Areas
shall include, without limitation, the first floor lobby of the Building, the
freight elevator located on Level B-1 of the Building and the path of travel to
such freight elevator, the path of travel to the gym described in Article 37
hereof and the path of travel to the cafeteria described in Article 37 hereof.
"Common Areas" shall not include any restrooms located on a floor that is not
occupied by Tenant. Further and notwithstanding any of the foregoing, the term
"Common Areas" shall not be deemed to include any of the foregoing described
areas if any such areas are within the Premises as shown on the floor plans
attached hereto as Exhibit "A" or any other tenant's premises.
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(c) Notwithstanding any other provision of this Lease, the term
"Premises" shall not include the exterior faces of exterior walls, elevators and
elevator wells or shafts, Building stairwells, fan rooms, mechanical rooms,
pipes, ducts, conduits, wires and appurtenant fixtures servicing other parts of
the Project either exclusively or in common with the Premises or the roof of any
Building or any access to such roof.
0.3 Construction and Operation of Project. Landlord shall have the sole
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judgment and discretion to determine the architecture, design, appearance,
construction, workmanship, materials and equipment with respect to the
construction and methods of operation of the Project; provided, however, that
Landlord shall operate and maintain the Project at all times during the Term as
a first-class office project in accordance with the standards for the highest
category of premiere, first-class office building projects in the Golden
Triangle area and on Maple Drive in Beverly Hills, California.
1. Purpose
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1.1 Use. Subject to the limitations set forth in Section 2.2, the
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Premises shall be used by Tenant only for general office uses, and services and
storage incidental to such uses, for a network operating center installed and
operated in accordance with the provisions of this Lease, and, to the extent
reflected on the final architectural plans for the Premises prepared by Gensler
& Associates (the "Final Plans"), for computer rooms, all in keeping with the
character of the highest category of premiere first-class office building
projects in the Golden Triangle area and on Maple Drive in Beverly Hills,
California, and for no other purpose without the prior written consent of
Landlord. The Premises shall not be used for filming or production of motion
pictures or television programs, a
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medical practice, modeling, print or film advertising, personnel or counseling
agency (other than firms engaged in high-level executive placement), training
center (except for training of Tenant's employees and customers necessarily
incidental to Tenant's business), retail sales operation, showroom, classroom,
testing center or non-incidental storage.
1.2 Limitation on Uses. Tenant shall not use or occupy the Premises, or
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permit the use or occupancy of the Premises, in any manner or for any purpose
which: (a) would violate any provision of this Lease, or any applicable federal,
state or local law, statute, rule, regulation or ordinance of any governmental
authority, including, without limitation, those with respect to hazardous or
toxic materials ("Laws"); (b) would violate the provisions of any applicable
governmental permit or currently recorded document; (c) except for uses
expressly permitted by Section 2.1, would materially adversely affect or render
more expensive any fire or other insurance maintained by Landlord for the
Building or any of its contents, or cause a cancellation of any insurance
policy; (d) exceeds the floor load capacity of the floor on which the Premises
are located; (e) might impair or interfere with any of the services and systems
of the Building, including without limitation, the Building's electrical,
mechanical, structural, plumbing, sprinkler, fire, life safety, vertical
transportation, security, heating, ventilating and air conditioning systems
(collectively, the "Building Systems and Service Facilities"); (f) would injure
or annoy, or obstruct or materially interfere with the rights of, other tenants
or occupants of the Project or impair the appearance of the Building and/or
Project or be materially prejudicial to the business or reputation of Landlord
or the Project; or (g) is not compatible with a first-class office building.
Further, Tenant's business machines and mechanical equipment shall be installed,
maintained and used by Tenant so as to eliminate unreasonable or unusual
vibration and noise that may be transmitted to the Building structure or beyond
the Premises. If reasonably necessary, Landlord may prescribe the weight and
position of all safes, files and heavy equipment in the Premises or on the
floors of the Premises so as to distribute properly their weight. Tenant shall
reimburse Landlord for the reasonable cost of any structural engineering
required to determine whether the load capacity of each floor accommodates
Tenant's requirements. Tenant covenants and agrees not to suffer, permit,
introduce or maintain in, on or about any portion of the Premises, any asbestos,
polycholorinated biphenyls, or any other hazardous or toxic materials, wastes
and substances which are defined, determined or identified as such (including
petroleum products if they are defined, determined or identified as such) in any
Laws (whether now existing or hereafter enacted or promulgated) or any judicial
or administrative interpretation of any thereof, including any judicial or
administrative orders or judgments, except that Tenant shall be permitted to use
any such regulated substances which are typically and customarily used in the
highest category of premiere, first-class office building projects during the
Term or so long as such use by Tenant is in compliance with all Laws
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and is in compliance with all other provisions of this Lease. The uses of the
Premises expressly permitted under this Lease do not violate any currently
recorded document affecting the Project.
1.3 Compliance with Permits. If any governmental license or permit is
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required by Tenant for the lawful conduct of any business or other activity
carried on by Tenant in the Premises, or the use by Tenant of any balconies, and
if the failure by Tenant to have such license or permit would interfere with
Tenant's right to occupy the Premises or any part thereof, or otherwise
adversely affect Landlord, Tenant shall procure and maintain such license or
permit, and submit a copy of such license or permit for inspection by Landlord,
and comply at all times with all terms and conditions thereof. This Lease shall
be subject to all Laws from time to time governing or regulating the use,
occupancy or possession of the Premises. Without limiting the generality of the
foregoing, Tenant shall be solely responsible for determining whether Tenant's
intended use of the Premises will comply with Laws, including, but not limited
to, those Laws relating to use, occupancy and zoning. Without limiting Tenant's
obligation to pay all business license taxes or fees imposed on Tenant, Landlord
shall reasonably assist Tenant, without having to incur any out-of-pocket costs,
in minimizing any such business license taxes or fees first assessed against
Tenant following the Commencement Date.
1.4 Payment of Additional Premium. Tenant shall, within thirty (30) days
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following demand by Landlord, reimburse Landlord for any additional premium
charged for any insurance policy maintained by Landlord by reason of Tenant's
installation and/or operation of a network operating center or Tenant's failure
to comply with the provisions of Sections 2.2 and 2.3 and for any other costs
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and expenses reasonably incurred by Landlord in enforcing the provisions of this
Article 2; provided, however, that before demanding such reimbursement for
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additional insurance premiums, Landlord shall first give Tenant notice of the
activity by Tenant which violates either Section 2.2 or 2.3 and which may cause
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Landlord to incur such increased insurance premiums, and Tenant shall not be
liable for the payment of such increased insurance premiums if it ceases such
specified activity within thirty (30) days after such notice from Landlord.
Other than possible increases in connection with the installation and/or
operation of a network operating center, Landlord does not presently anticipate
that the uses of the Premises expressly permitted under this Lease will cause
any significant increase in the insurance premiums currently paid by Landlord
for the Project on a per square foot of Rentable Area basis.
2. Term.
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2.1 Commencement Date. The term of this Lease (the "Term") shall
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commence on the date (the "Commencement Date") which is the later of: (a)
October 4, 1999, or (b) the date of issuance of a temporary certificate of
occupancy for the Premises by the City
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of Beverly Hills, and shall terminate one hundred twenty (120) months after the
Commencement Date, unless sooner terminated pursuant hereto or extended pursuant
to Section 3.4. Promptly following the Commencement Date, Landlord and Tenant
shall confirm the Commencement Date and the expiration date of the Term by
executing and delivering a Memorandum of Commencement Date ("Memorandum")
substantially in the form attached hereto as Exhibit "C".
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2.2 Acceptance of Premises.
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(a) By entering into possession of the Premises or any part thereof
and except for such matters as Tenant shall specify to Landlord in writing
within sixty (60) days thereafter, Tenant shall be conclusively deemed to have
accepted the Premises and to have agreed that the Premises are in satisfactory
condition and in full compliance with the requirements of this Lease as of the
date of such possession, except for (i) latent defects and (ii) minor details of
construction, decoration and mechanical adjustments. Landlord shall, promptly
upon receiving notice from Tenant of any defects or deficiencies in the work
conducted pursuant to the Final Plans, repair or correct the same in such manner
as shall not cause unreasonable interference to Tenant in its use of the
Premises, provided that (except in the case of latent defects) Tenant gives such
notice to Landlord within sixty (60) days following Tenant entering into
occupancy. Landlord (a) shall have no responsibility to correct, or liability
with respect to, any defects in any portion of any tenant improvements installed
by a contractor of Tenant, and (b) shall be responsible for repair of and liable
for latent defects in the improvements to the Premises installed by Landlord's
contractors, subject to applicable statutes of limitation. Landlord
acknowledges that Landlord shall pay Tenant the balance of a tenant improvement
allowance in the amount of $40.00 per rentable square foot of Floors 1, 2 and 3
of the Premises and $20.00 per rentable square foot of Level B-1 of the
Premises, a portion of which allowance has been funded by Landlord prior to the
date of this Lease.
(b) If Landlord and Tenant disagree as to the Commencement Date of
this Lease, the date maintained by Landlord to be the Commencement Date shall be
binding on the parties unless and until the matter is resolved by arbitration
pursuant to Article 34. Tenant acknowledges that neither Landlord nor any agent
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of Landlord has made any representation or warranty, except as otherwise
expressly provided in this Lease, with respect to the Project (including the
Premises and the Building), including without limitation, any representation or
warranty with respect to the suitability or fitness of the Project (including
the Premises and the Building), or any portion thereof, for the conduct of
Tenant's business.
(c) To Landlord's knowledge, as of the date of this Lease, the
Premises are in compliance in all material respects with all existing laws,
rules, regulations, ordinances and orders of all applicable federal, state, city
and other governmental
5
authorities in effect as of the date of this Lease (collectively, "Laws"),
including, without limitation, (i) the Americans' with Disabilities Act, 42
U.S.C. 12102 et seq. and (ii) all Laws with respect to building, fire and health
codes, environmental protection and sanitation and pollution control. Landlord
has received no notice of, and has no knowledge of, any condition currently or
previously existing on the Premises or any portion thereof which may give rise
to any violation of any existing law applicable to the Premises if it were
disclosed to the authorities having jurisdiction over the Premises.
(d) Landlord has not received any communication (written or oral),
whether from a governmental authority or third party that alleges that Landlord
is not in full compliance with any applicable environmental law. To Landlord's
knowledge, there is no environmental claim pending or threatened with regard to
the Premises or the Project.
2.3 Commencement Prior to Project Completion. Tenant agrees that the
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Commencement Date may occur prior to the completion of portions of the Project,
including without limitation, Building A, the plazas and landscaping, prior to
the completion of those portions of the Parking Garages which are not necessary
in order to provide parking rights to Tenant in accordance with Section 6.1, and
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prior to completion of any other portion of the Project.
2.4 Renewal Terms.
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(a) Provided (i) Tenant is not in material default under this Lease
(after any applicable notice and lapse of applicable cure periods), and (ii)
Tenant has not assigned this Lease or subleased any portion of the Premises
(other than to a Related Entity), as of the date of exercise or the commencement
of the renewal term ("Renewal Term Commencement Date"), Tenant shall have the
option to renew this Lease ("Renewal Option") for the entire Premises then
leased by Tenant (but not for a portion of the Premises), for two (2) successive
periods of five (5) years each ("Renewal Terms"), exercisable as follows:
(1) If Tenant is interested in renewing this Lease, Tenant may
deliver written notice thereof ("Renewal Interest Notice") to Landlord at
least twelve (12) months prior to the expiration of the initial Term of
this Lease as to the first Renewal Term or at least twelve (12) months
prior to the expiration of the prior Renewal Term, as to a subsequent
Renewal Option.
(2) Within thirty (30) days following receipt of Tenant's Renewal
Interest Notice, Landlord shall give Tenant notice (the "Rental Notice") of
its determination of the Fair Market Rental Rate for the Premises to be
effective as of the Renewal Term Commencement Date.
(3) (A) If Tenant desires to renew the Lease at
6
the Fair Market Rental Rate set forth in Landlord's Rental Notice,
Tenant shall give Landlord written notice thereof (an "Undisputed
Renewal Notice") before the date (the "Outside Date") that is the
later of: (i) thirty (30) days after the date of Landlord's Rental
Notice, and (ii) ten (10) months prior to the expiration of the Term.
If Tenant timely delivers the Undisputed Renewal Notice, the Term
shall be extended for the period equal to the Renewal Term and as of
the Renewal Term Commencement Date, the rental payable hereunder shall
be the Fair Market Rental Rate set forth in the Rental Notice.
(B) If Tenant desires to renew the Lease but disputes
Landlord's determination of the Fair Market Rental Rate for the
Premises, then Tenant shall give Landlord written notice thereof (a
"Disputed Renewal Notice") before the Outside Date. If Tenant timely
delivers the Disputed Renewal Notice, the Term shall be extended for
the period equal to the Renewal Term and the Fair Market Rental Rate
shall be determined pursuant to the appraisal procedure set forth in
Section 30.1 hereof. In the event that such appraisal procedure has
not resulted in a final determination of the Fair Market Rental Rate
on or before the Renewal Term Commencement Date, then Tenant shall
continue to pay the rent as in effect on the day prior to the Renewal
Term Commencement Date (adjusted in accordance with Section 4.5) until
such final determination is made. Within thirty (30) days after such
final determination, Tenant shall pay to Landlord the positive
difference, or Landlord shall refund to Tenant the negative
difference, between the amount of rent Tenant has actually paid and
the final determination of the Fair Market Rental Rate as applicable
to the period retroactive to the Renewal Term Commencement Date.
(C) If Tenant does not deliver an Undisputed Renewal Notice
or a Disputed Renewal Notice within thirty (30) days after the date of
Landlord's Rental Notice, then Tenant's Renewal Option (and any
subsequent Renewal Options) shall automatically expire as of such
thirtieth day.
Notwithstanding the foregoing subsections (1), (2) and (3), if Tenant fails to
timely deliver the Renewal Interest Notice, Tenant shall have the right,
exercisable at any time prior to the Outside Date for the initial Term or for
the first Renewal Term, as the case may be, to deliver written notice to
Landlord that Tenant desires to renew the Lease for the succeeding Renewal Term.
If Tenant timely delivers such notice, then within thirty (30) days thereafter,
Landlord shall deliver to Tenant Landlord's determination of the Fair Market
Rental Rate for the Premises to be effective as of the Renewal Term Commencement
Date. Upon the expiration of the Term, the Lease shall then be automatically
7
extended for the period equal to the Renewal Term and as of the Renewal Term
Commencement Date, the rental payable hereunder shall automatically be adjusted
to the Fair Market Rental Rate determined by Landlord pursuant to the preceding
sentence.
(b) It is expressly understood that Landlord has the right to commence
marketing and, subject to Section 15.1, showing the Premises or any portion
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thereof to prospective tenants, subject to Section 15.1 hereof, up to twelve
(12) months prior to the expiration of the initial Term of this Lease or twelve
(12) months prior to the expiration of any Renewal Term as to which Tenant has
exercised the Renewal Option (provided that Landlord shall not commit to lease
any portion of the Premises to a third party until the last date for Tenant to
give the Renewal Notice).
(c) The Basic Rent during each Renewal Term shall be adjusted in
accordance with the provisions of Article 5 (subject to any adjustment of the
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Base Operating Expenses and Real Property Taxes as set forth in Landlord's
notice of the Notice Date Rental).
(d) The Renewal Option set forth in this Section 3.4 is personal to
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Tenant and may not be assigned, transferred or conveyed to any party, except in
connection with an assignment of the Lease in its entirety to a Related Entity
of Tenant (as defined in Section 14.10). Nothing in this Section 3.4(d) shall
------------- --------------
require Tenant to be in occupancy of the Premises as a condition to the exercise
of the Renewal Option.
2.5 First Floor Cancellation Option. At any time between the
-------------------------------
Commencement Date and that date which is six (6) months therefrom, provided that
Tenant is not in material default hereunder, Tenant shall have the option (the
"First Floor Cancellation Option") to terminate this Lease with respect to Floor
1 of Building B (the "First Floor") by providing Landlord written notice (the
"First Floor Cancellation Notice") of Tenant's election so to do. Provided that
Tenant properly and timely exercises the First Floor Cancellation Option, then
from and after that date which is thirty (30) days from Landlord's receipt of
the First Floor Cancellation Notice, this Lease shall be deemed amended to
exclude from the definition of Premises the First Floor. From and after such
date, Basic Rent and Tenant's pro rata share of Operating Expenses and Real
Property Taxes and Tenant's share of parking spaces in the Garage and on Level
B-2 of the Building shall be proportionately reduced. Thereafter, Tenant shall
reimburse Landlord, within fifteen (15) days of Tenant's receipt from Landlord
of a statement therefor (the "Cancellation Cost Statement"), for all of the
costs and expenses reasonably incurred by Landlord to prepare the First Floor
for multi-tenant use (the "Cancellation Costs"). Tenant's obligation promptly to
pay the Cancellation Costs shall be deemed rent for all purposes under this
Lease.
30 Basic Rent; Security Deposit.
----------------------------
8
3.1 Basic Rent. Subject to adjustment in accordance with Section 4.5
---------- -----------
hereof, Tenant shall pay to Landlord Basic Rent for the Premises in the
following amounts per square foot of Rentable Area per month, without limiting
the Additional Rent payable by Tenant:
For Floor B-1: $2.00
----
For Floors 1, 2 and 3: $3.50
----
3.2 Partial Months. If the Term begins on a day other than the first
--------------
day of a calendar month, or ends on a day other than the last day of a calendar
month, Basic Rent for such beginning or ending month shall be prorated based
upon a fraction, the numerator of which fraction shall be the number of days in
such month occurring during, or before or after, the Term, and the denominator
of which shall be thirty (30).
3.3 No Offset. The Basic Rent, together with any rent adjustments
---------
pursuant to Article 5 and all other adjustments made or sums due from Tenant
---------
hereunder ("Additional Rent"), shall be paid to Landlord, on the first day of
every month of the Term, without deduction or offset of any kind, in advance and
without demand (except as otherwise herein expressly provided) in lawful money
of the United States of America at the Office of the Building at the Project or
to such other person and/or location as Landlord may from time to time designate
in writing. The Basic Rent and Additional Rent and other amounts due and payable
by Tenant hereunder are sometimes referred to herein collectively as the "rent."
The obligation to pay rent shall commence on the Commencement Date and the first
month's rent, together with the Security Deposit, shall be payable on such date.
3.4 Security Deposit. Tenant will pay Landlord, upon execution of this
----------------
Lease by Tenant, cash or wired funds or in the form of a stand-by letter of
credit, in form and substance reasonably satisfactory to Landlord, in the amount
of Six Hundred Thousand Dollars ($600,000) ("Security Deposit") as security for
the full and faithful performance of each of the terms hereof by Tenant.
Landlord shall keep the Security Deposit separate from its general funds.
Provided that Tenant does not commit a default under this Lease, Tenant shall be
entitled to interest, to the extent actually earned, on the Security Deposit. If
Tenant defaults with respect to any provision of this Lease, including but not
limited to the provisions relating to the payment of rent, Landlord may, but
shall not be required to, following notice thereof to Tenant, use, apply or
retain all or any part of the Security Deposit for the payment of any rent or
any other sum in default, or for the payment of any other amount which Landlord
may spend or become obligated to spend by reason of Tenant's default or to
compensate Landlord for any other loss or damage which Landlord may suffer by
reason of Tenant's default, including without limitation, reasonable costs and
reasonable attorneys' fees incurred by Landlord to recover possession of the
Premises upon a default by Tenant hereunder. If any portion of said Security
Deposit is so used or applied,
9
Tenant shall, within fifteen (15) days after demand therefor, deposit cash with
Landlord in an amount sufficient to restore the Security Deposit to its original
amount and Tenant's failure to do so shall constitute a default hereunder by
Tenant. If Tenant shall fully and faithfully perform every provision of this
Lease to be performed by it, the Security Deposit or any balance thereof shall
be returned to Tenant (or, at Landlord's option, to the last assignee of
Tenant's interest hereunder) within thirty (30) days following the later of
expiration of the original Term (or earlier termination of the Term, other than
as a result of Tenant's default), and surrender of possession of the Premises to
Landlord.
3.5 Rental Escalations. Commencing on the first (1st) anniversary of
------------------
the Commencement Date, and every annual anniversary thereafter, the Basic Rent
shall be increased pursuant to the provisions of this Section 4.5 by the lesser
-----------
of (i) the CPI Increase (as hereinafter defined) or (ii) four percent (4%). The
CPI Increase shall mean the percentage by which the CPI Index as of August 1 in
the year the adjustment is made exceeds the CPI Index as of August 1 in the
immediately preceding year. The CPI Index shall mean the Consumer Price Index
for All Urban Consumers for the Los Angeles-Riverside-Orange County Area (1982
to 1984 = 100) as published by the United States Department of Labor, Bureau of
Labor Statistics.
40 Rent Adjustments.
----------------
4.1 Operating Expenses and Real Property Taxes.
------------------------------------------
(a) Tenant shall pay as Additional Rent for each Lease Year (as
defined in Section 5.5) during the Term an amount equal to Tenant's "pro rata
-----------
share" of the excess of the amount of Operating Expenses and Real Property Taxes
for such Lease Year over the Operating Expenses and Real Property Taxes for
calendar year 2000 ("Base Year Amount"). Tenant's "pro rata share" share shall
be determined by a fraction, the numerator of which is the number of square feet
of Rentable Area in the Premises as set forth in Section 26.3 and the
denominator of which is the number of square feet of Rentable Area in the
Project as set forth in Section 26.3, unless otherwise expressly set forth
herein. "Operating Expenses and Real Property Taxes" means the sum of the
Operating Expenses and Real Property Taxes for the relevant Lease Year, as each
such term is defined in this Article 5.
---------
(b) Any costs or expenses for services or utilities in excess of
those required by this Lease to be supplied by Landlord, not otherwise included
in Operating Expenses, and which are attributable directly to Tenant's use or
occupancy of the Premises, shall be paid in full by Tenant as Additional Rent on
the next date for payment of Basic Rent which is at least twenty (20) days after
the date Landlord bills Tenant therefor.
10
(c) "Operating Expenses" shall mean the total of all costs, expenses
and disbursements incurred or paid by Landlord (other than Real Property Taxes)
in connection with the ownership, management, operation, maintenance (including
cleaning, protecting and servicing the Project) and repair, replacement and
restoration of the Project (including, without limitation, the Common Areas and
the Parking Garages). Landlord shall, to the extent Landlord deems necessary or
appropriate, allocate Operating Expenses for the entire Project to different
buildings in the Project in such a manner as Landlord may reasonably determine
to reasonably reflect the actual utilization of utilities, services, and
materials by the tenants in the Project. Operating Expenses shall include,
without limitation, (i) the cost of providing, managing, operating, maintaining
and repairing air conditioning, sprinkler, fire and life safety, electrical,
water, steam, heating, mechanical, ventilation, elevator systems and all
utilities and the cost of supplies, tools and equipment purchased and
maintenance and service contracts entered into in connection therewith; (ii) the
cost of repairs (including but not limited to roof repairs; provided that the
replacement of all or substantially all of the roof shall be a capital
expenditure and not an Operating Expense), general maintenance, cleaning,
landscaping, gardening, trash removal, telephone service and equipment, light
bulbs, tube and ballast replacement, supplies, security and other protection
services; (iii) the cost of fire, extended coverage, boiler, sprinkler,
apparatus, public liability, property damage, rent, earthquake and other
insurance customarily carried by landlords of the highest category of premiere,
first-class office building projects in the Golden Triangle area and on Maple
Drive in Beverly Hills, California; (iv) wages, salaries and other labor costs
including taxes, insurance, retirement, medical and other employment benefits,
including, without limitation, such costs for a parking system manager for the
Project (if any) (provided that if a parking system manager is not employed at
the Project during calendar year 2000 but is employed thereafter, then, with
respect to any year in which the parking system manager is employed at the
Project, the Base Year Amount used for the calculation of Tenant's pro rata
share of Operating Expenses shall be equitably adjusted as if such parking
manager had worked for a comparable period during calendar year 2000); (v) fees,
charges and other costs, including management fees (including the management fee
payable to the Project manager not to exceed three percent (3%) of the gross
receipts of the Project on an annual basis), reasonable consulting fees,
reasonable legal fees and reasonable accounting fees of all independent
contractors engaged by Landlord or reasonably charged by Landlord (at a rate no
higher than that which would be charged by an independent contractor) if
Landlord performs such management services in connection with the Project; (vi)
the cost of supplying, replacing and cleaning employee uniforms; (vii) the fair
market rental value of Landlord's and the property manager's offices and storage
areas in the Building, provided said offices and storage areas are devoted to
the management, operation, maintenance or repair of the Project and shall not
exceed 1,000 square feet of
11
Rentable Area; (viii) the cost of business taxes and licenses relating solely to
the operation of the Project; (ix) fees, charges or assessments imposed by any
federal, state or local government for fire and police protection, trash
removal, community services, or other similar services (whether directly or
through a special assessment district) which do not constitute Real Property
Taxes; (x) any charges which are payable by Landlord pursuant to a service
agreement with the City of Beverly Hills under a special assessment district or
pursuant to any other lawful means; (xi) the costs of contesting the validity or
applicability of any governmental enactment which would increase Operating
Expenses; (xii) depreciation of the cost of acquiring or the rental expense of
personal property used in the maintenance, operation and repair of the Project;
(xiii) all costs of management, operation, maintenance and repair of the Parking
Garages; (xiv) the costs of providing janitorial and life safety alarm services;
and (xv) any other expenses of any kind whatsoever reasonably incurred for
managing, operating, maintaining and repairing the Project. Operating Expenses
shall also include "Capital Improvement Amortization." "Capital Improvement
Amortization" shall mean the amount determined by multiplying the actual cost,
including actual financing costs, of each Capital Improvement acquired by
Landlord by the constant annual percentage required to fully amortize such cost
over the useful life of the Capital Improvement (as reasonably determined by
Landlord at the time of acquisition). The Capital Improvement Amortization shall
be allocated and included in Operating Expenses in accordance with generally
accepted accounting and management practices; provided that the amount of
Capital Improvement Amortization charged to Tenant for Cost Saving Capital
Improvements shall not exceed the amount by which the Operating Expenses
otherwise allocable to Tenant are reduced as a result of such Cost Saving
Capital Improvements. "Capital Improvements" shall mean any equipment, device or
other improvement acquired or installed subsequent to the date of this Lease (i)
to achieve economies in the operation, maintenance and repair of the Building or
such relevant portion of the Project ("Cost Saving Capital Improvement"), (ii)
to comply with any Laws, controls or (to the extent generally complied with by
landlords in comparable projects) guidelines, as more particularly described in
Section 7.4, or (iii) to comply with any other governmental requirement with
-----------
respect to the Buildings or any such relevant portion of the Project, including
without limitation, fire, health, safety or construction requirements, if the
cost thereof is capitalized on the books of Landlord in accordance with
generally accepted accounting and management practices.
For purposes of computing rent adjustments pursuant to this Section 5.1,
-----------
Operating Expenses for the entire Project shall be allocated and charged to
Tenant in accordance with generally accepted accounting and management
practices. Operating Expenses shall be adjusted, including for calendar year
2000, to reflect one hundred percent (100%) occupancy of the Project during any
period in which the Project is not one hundred percent (100%)
12
occupied. Operating Expenses for calendar year 2000 shall be adjusted to reflect
the cost of any repair warranty that is incurred in calendar year 2001 that (A)
was not incurred in calendar year 2000, and (B) would have been incurred in
calendar year 2000 but for contractor's warranties obtained by Landlord in
connection with the buildout of the Project. Landlord shall have the right, from
time to time, to allocate some or all of the Operating Expenses for the Project
among different portions, such as office or retail portions or separate
buildings, of the Project ("Cost Pools"), in accordance with generally accepted
accounting and management practices. The Operating Expenses within each such
Cost Pool shall be allocated and charged to the tenants within such Cost Pool as
an amount per square foot of Rentable Area, based on the total Rentable Area
within such Cost Pool. The Operating Expenses for the Project (or only those
Operating Expenses allocable to the Cost Pool of the Project which includes the
tenants of such space, if such an allocation is made) shall be allocated and
charged to tenants based on the Rentable Area of the Project (or based on the
Rentable Area of such Cost Pool if such an allocation of Operating Expenses is
made). No specific item of expense shall be included more than once in Operating
Expenses, Real Property Taxes, or Capital Improvement Amortization.
Notwithstanding any other provision hereof, Operating Expenses shall not
include the following:
(1) The cost of repair to the Buildings, including the Premises, to
the extent Landlord is entitled to be, and is, reimbursed for the cost of the
repairs by insurance carried by Landlord or any third party or by a warranty or
service contract;
(2) Marketing costs including leasing commissions, attorneys' fees in
connection with the negotiation and preparation of letters, deal memos, letters
of intent, leases, subleases and/or assignments, space planning costs, and other
costs and expenses incurred in connection with the lease, sublease and/or
assignment negotiations and transactions with present or prospective tenants
(including Tenant) or other occupants of the Buildings;
(3) Costs, including permit, license and inspection costs, incurred
with respect to the installation of improvements made for other tenants or
occupants in the Buildings or incurred in renovating or otherwise improving,
decorating, painting or redecorating vacant space for other tenants or occupants
of the Buildings;
(4) The cost of utilities charged directly to individual tenants
(including Tenant) and costs of other services charged to tenants (including
Tenant);
13
(5) The cost of painting and decorating or otherwise improving the
Premises, any vacant space, or premises of other tenants;
(6) Except as specifically provided otherwise in this Article 5,
---------
amortization and depreciation of the Buildings and other real property
structures in the Project;
(7) Interest, points and fees on debt or amortization payments on any
real property mortgages or deeds of trust and ground lease payments;
(8) Legal and other related expenses associated with the enforcement
of leases or the securing or defense of Landlord's title to the Land, the
Buildings or other portions of the Project;
(9) Advertising and public relations costs (such as promotional
events) incurred directly for leasing individual space in the Buildings or other
portions of the Project;
(10) Landlord's general corporate overhead and general administrative
expenses not related to the operation of the Project (such as fees and costs in
connection with the sale or refinancing of the Project) and all compensation to
executives, officers or partners of Landlord or to persons who are executives or
officers of partners of Landlord or to any other person at or above the level of
building manager, other than the building manager of the Buildings or Project;
(11) Any compensation paid to clerks, attendants or other persons in
commercial concessions operated by Landlord or by others;
(12) All items and services for which Tenant or any other tenant in
the Buildings is obligated to reimburse Landlord and all items and services
supplied selectively to any tenant without reimbursement, provided that, any
item or service supplied selectively to Tenant at Tenant's request shall be paid
for by Tenant;
(13) The costs of (i) payroll for clerks, attendants and other
persons, (ii) bookkeeping, (iii) parking insurance, (iv) parking management
fees, (v) Parking Garage restriping, (vi) tickets, and (vii) uniforms, for the
Parking Garages and any off-site parking facility made a part of the Project
pursuant to Section 6.2;
-----------
(14) Costs of capital improvements to the Buildings and other portions
of the Project in excess of $5,000 or other capital expenditures in excess of
$5,000 other than the Capital Improvement Amortization;
(15) Costs of repairs or modifications to the Buildings or Premises
due to Landlord's failure, if any, to
14
construct the Buildings and Premises in full compliance with all governmental
regulations, ordinance and laws effective at the time of construction;
(16) The cost of any political or charitable donations or
contributions, and trade association dues and Landlord's convention costs;
(17) Interest, fines or penalties assessed as a result of Landlord's
failure to make payments in a timely manner, unless such failure is reasonable
under the circumstances except to the extent any such payment is deferred by
Landlord to avoid being paid in 2000 as part of the Base Year Amount;
(18) Costs of complying with Laws in effect on the date hereof
relating to hazardous materials or substances ("Hazardous Materials") which are
incurred (A) to remove or remediate Hazardous Materials used or released on the
Project in the course of the original construction of the Project, or (B) as a
result of the presence of Hazardous Materials in the soil or groundwater under
the Project on or before the date of execution of this Lease or (C) as a result
of the violation of any such Laws by any other tenant in the Project. All other
costs and expenses associated with the compliance with Laws relating to all
Hazardous Materials shall be included as Operating Expenses, or to the extent
that such compliance constitutes a Capital Improvement, such costs shall be
payable by Tenant to Landlord as Capital Improvement Amortization under this
Lease, amortized over the remaining useful life of the Building;
(19) Costs of purchasing, installing and replacing art work in the
Building or elsewhere in the Project;
(20) Except for making repairs or keeping permanent systems in
operation while repairs are being made, rentals and other related expenses
incurred in leasing air conditioning systems, elevators or other equipment
ordinarily considered to be of a capital nature, except equipment not affixed to
the Buildings which is used in providing janitorial or similar services;
(21) Any bad debt loss, rent loss or reserves for bad debts or rent
loss;
(22) Except to the extent specifically provided otherwise in the
Lease, and except as to the management fees payable to Landlord or its
subdivisions or affiliates, the overhead and profit increments paid to Landlord,
or to any subdivision or affiliate of Landlord, for goods and/or services in the
Building, to the extent such overhead and profit increments exceed the costs of
comparable, first-class, high quality goods and/or services, delivered or
rendered by unaffiliated third parties of comparable reputation, stature,
experience and quality to Landlord, on a competitive basis;
15
(23) Costs for which Landlord has been compensated by a management
fee;
(24) Increase in premiums for insurance carried by Landlord pursuant
to this Lease, which such increase is caused by use of the Project by Landlord
or any other tenant of Landlord which is hazardous on account of fire or
otherwise or premiums for any insurance carried by Landlord which is not
customarily carried by other reasonably prudent landlords in comparable first-
class office buildings;
(25) Any costs, fines or penalties incurred directly as a result of
violations by Landlord of any Laws or other requirement of any governmental
authority.
In light of the fact that a portion of the Base Operating Expense and Real
Property Taxes is the Base Year Amount, Landlord shall not reduce insurance
coverages in 2000 (to the extent the costs thereof are charged to Tenant as
Operating Expenses) for the purpose of reducing the insurance costs included in
the Operating Expenses for calendar year 2000 below the amount that such
expenses are projected by Landlord to be in 2001. Furthermore, Landlord shall
not intentionally or knowingly reduce any Operating Expenses in calendar year
2000 for the purpose of artificially inflating Tenant's pro rata share of
Operating Expense increases in subsequent years.
4.2 Real Property Taxes. "Real Property Taxes" means all taxes,
-------------------
assessments (special or otherwise) and charges levied upon or with respect to
the Project and ad valorem taxes on personal property used in connection
-- -------
therewith. Real Property Taxes shall include, without limitation, any tax, fee
or excise on the act of entering into this Lease or any other lease of space in
the Project, on the occupancy of Tenant or any other tenant of the Project, the
rent hereunder or in connection with the business of owning and/or renting space
in the Project which are now or hereafter levied, assessed or imposed against
Landlord by the United States of America, the State of California or any
political subdivision, public corporation, district or other political or public
entity, and shall also include any other tax, assessment, fee or excise, however
described (whether general or special, ordinary or extraordinary, foreseen or
unforeseen), to the extent it may be levied, assessed or imposed in lieu of, as
a substitute, in whole or in part, for or as an addition to, any other Real
Property Taxes. Landlord may pay any such special assessments in installments
when allowed by law, in which case Real Property Taxes shall include any
interest charged thereon. In recognition of the decrease in the level and
quality of governmental services and amenities as a result of Proposition 13,
Real Property Taxes shall also include any private assessments or the Building's
contribution towards a private cost-sharing agreement for the purpose of
augmenting or improving the quality of service and amenities normally provided
by governmental agencies, provided that Tenant shall not be responsible for any
share of any such assessments or contribution
16
voluntarily assumed by Landlord unless Tenant has given its prior approval
thereof, such approval not to be unreasonably withheld in light of Landlord's
obligation and desire to operate the Project in a manner consistent with the
highest category of premiere, first class office building projects in the Golden
Triangle area and on Maple Drive in Beverly Hills, California. Real Property
Taxes shall also include reasonable legal fees, costs and disbursements incurred
in connection with proceedings to contest, determine or reduce Real Property
Taxes, but shall exclude any such costs otherwise included in Operating
Expenses, any taxes paid directly by Tenant pursuant to Sections 10.1 and 10.2
----------------------
and any penalties assessed against the Project or Landlord as a result of
Landlord's failure to timely pay any installment of Real Property Taxes when due
(except where such failure is caused by the failure of Tenant to pay timely its
share of such Real Property Taxes in accordance with this Lease). Real Property
Taxes shall not include income, franchise, transfer, inheritance, estate, or
capital stock taxes, unless and, to the extent, due to a change in the method of
taxation, any of such taxes are levied, assessed or imposed against Landlord in
lieu of, as a substitute, in whole or in part, for or as an addition to, any
other tax which would otherwise constitute a Real Property Tax. At all times
(including calendar year 2000 if applicable) prior to the assessment of the
Project on a fully completed basis, Real Property Taxes shall be adjusted to
reflect the amount which Real Property Taxes would be if the Project were
assessed on a fully completed and occupied basis. For purposes of computing
rent adjustments pursuant to this Article 5, Real Property Taxes shall be
---------
allocated and charged to Tenant in accordance with generally accepted accounting
and management practices and expressed as an amount per square foot of Rentable
Area, provided that at all times all Real Property Taxes are allocated to all
portions of the Rentable Area of the Project. Notwithstanding any other
provision hereof, parking revenue taxes shall not be included in Real Property
Taxes or Operating Expenses.
4.3 Payment. Prior to the commencement of each Lease Year, or as soon
-------
thereafter as possible (except for the first Lease Year), Landlord shall furnish
to Tenant a statement ("Landlord's Statement") containing Landlord's reasonable
estimate of the Operating Expenses and Real Property Taxes and Capital
Improvement Amortization (collectively, "Project Expenses") for such Lease Year
and a calculation of the Additional Rent, if any, payable by Tenant for such
Lease Year pursuant to this Article 5 on the basis of such estimate. If the
---------
Lease Year is a full year, Tenant shall pay to Landlord one-twelfth (1/12th) of
the amount of said Additional Rent on each monthly rent payment date during such
year (commencing on January 1) until further adjustment pursuant to this Section
-------
5.3. If the Lease Year is a partial year, Tenant shall pay to Landlord on each
---
monthly rent payment date in such partial year an amount equal to said
Additional Rent (for such partial Lease Year) divided by the number of months in
said partial Lease Year. If Landlord's Statement is furnished after the start of
the Lease Year, then on the next monthly rent
17
payment date which is at least thirty (30) days after Tenant's receipt of
Landlord's Statement, Tenant shall pay the entire portion of the Additional Rent
attributable to portions of the Lease Year prior to such date. Landlord may
reasonably adjust Tenant's monthly rent payments under this Article 5 up to one
---------
time during the Lease Year to reflect the then current or estimated Project
Expenses and actual expenditures made during the elapsed portion of the Lease
Year. Within 180 days following each Lease Year, Landlord shall furnish to
Tenant a statement prepared or attested by an independent public accountant
selected by Landlord showing the actual Project Expenses during the previous
Lease Year, and Landlord shall compute any charge or credit to Tenant necessary
to adjust rent previously paid by Tenant to reflect the actual Project Expenses.
If such statement and computation reveal an underpayment, Tenant shall pay to
Landlord an amount equal to such underpayment (whether or not this Lease has
expired or been terminated) on the next date for payment of Basic Rent which is
at least twenty (20) days after Landlord's Statement, and if such statement and
computation show an overpayment, Landlord shall credit the next monthly rental
payment of Tenant, or, if the Term has expired, refund the overpayment to Tenant
within thirty (30) days after expiration of the Term. Tenant shall have the
right, at its expense, to cause a firm of certified public accountants or a firm
that provides operating expense review services selected by Tenant (or Tenant's
own in-house certified public accountant, who may be assisted by other advisors
of Tenant) (provided that in no event may any such firm or advisor be
compensated on any basis determined by a percentage of the savings effectuated
by such accountant or advisor) to conduct an audit of Landlord's Statement of
Project Expenses and the calculation of Tenant's Additional Rent for each Lease
Year provided that such audit must be commenced within two (2) years after
receipt of Landlord's reconciliation statement for the relevant Lease Year; if
such audit reveals that the Project Expenses were overstated in Landlord's
Statement, Landlord shall promptly refund the overcharge revealed by the audit
to Tenant and if the audit reveals an overstatement of Project Expenses in
Landlord's Statement by more than three percent (3%), then Landlord shall also
reimburse Tenant for the actual reasonable out-of-pocket costs of the audit paid
by Tenant within thirty (30) days after presentation of a statement therefor by
Tenant.
4.4 Lease Year; Proration. "Lease Year" shall mean the whole or partial
---------------------
calendar year commencing on the Commencement Date and ending on December 31 of
the year in which the Commencement Date occurs, and all subsequent calendar
years within the Term. The amount of Additional Rent payable by Tenant under
this Article 5 for any partial month shall be prorated on a daily basis within
that month.
50 Parking Rights.
--------------
5.1 Tenant's Parking Rights.
-----------------------
18
(a) Tenant shall be provided with and shall rent, subject to Section
-------
6.1(b), for the entire Term of this Lease, ten (10) passes for parking spaces on
------
level B-1 of the Building and Tenant's pro rata share of the parking spaces on
level B-2 of the Building. Further, Tenant shall be entitled to rent passes for
its pro rata share of the parking spaces in the Garage. The services of any
parking attendant or valet requested by Tenant in connection with such parking
and reasonable direct enforcement costs (including costs of barriers and signs
and any changes thereto caused by Tenant's election under subsection (b) to
increase or decrease the number of parking passes it rents) shall be paid for
directly by Tenant as Additional Rent and not as part of Operating Expenses.
(b) Upon giving at least sixty (60) days prior notice to Landlord at
any time during the Term, Tenant shall have the option to adjust upward (up to
the limits set forth in Paragraph 6.1(a) above) or downward the number of
----------------
parking passes it rents hereunder. In no event shall Landlord be required to
make any modifications to the Parking Garage or other portions of the Project as
a result of the existence of any Laws governing Tenant or its use of the Project
or the parking rights of Tenant's employees.
(c) Initially, Tenant shall pay as Additional Rent for the parking
passes the following amounts:
(i) For parking spaces on level B-1: One Hundred Seventy-Five
Dollars ($175.00) per month;
(ii) For parking spaces on level B-2, as well as reserved spaces
in the Garage: One Hundred Fifty-Five Dollars ($155.00) per month;
(iii) For unreserved parking spaces in the Garage: One Hundred
Twenty-Five Dollars ($125.00) per month;
From and after the first anniversary of the Commencement Date, Landlord may
increase the monthly rental rate for the parking passes, no more frequently than
once a year, so that such rate is consistent with prevailing market rates in the
area. At Tenant's written request, Landlord shall provide Tenant with what
Landlord in good faith believes to be substantiation for such rate increases.
(d) To the extent available, Tenant shall have the right to validate
parking for Tenant's invitees upon reasonable, nondiscriminatory terms and
conditions and subject to reasonable, nondiscriminatory rules and regulations
established from time to time by Landlord or Landlord's operator or licensee
subject to and in accordance with the Rules Requirements. Tenant shall pay the
current prevailing rate charged by Landlord to other tenants in the Project for
validation parking.
19
(e) The parking passes rented by Tenant pursuant to this Article 6 are
---------
provided to Tenant solely for use by Tenant's own personnel and visitors, and
such passes may not be transferred, assigned, subleased or otherwise alienated
by Tenant without Landlord's prior approval except to a Permitted Transferee or
to a permitted Sublessee or Assignee.
(f) Landlord may, at Landlord's option, rent parking passes (or
parking spaces) in the Garage to individuals or entities who or which are not
tenants of the Project. Landlord agrees to implement a system reasonably
designed to ensure that tenants of the Project have a preference over non-
tenants for the more desirable (i.e. covered) parking spaces. Landlord further
agrees that at all times during the Term, Landlord shall make available to
Tenant, on the terms and conditions set forth above, no less than the number of
parking spaces indicated in Section 6.1(a), subject to adjustment as provided in
Section 15.2. If adjusted pursuant to Section 15.2, in no event shall the total
number of parking spaces made available to Tenant be less than 3.5 spaces per
each 1,000 square feet of Rentable Area of the Premises.
5.2 Off-Site Parking. Without changing or reducing Tenant's parking
----------------
rights under Section 6.1, Landlord shall have the right to provide parking for
-----------
tenants of the Project other than Tenant at off-site locations other than the
Parking Garage, in which event, said off-site locations other than the Parking
Garage shall be deemed part of the Project for purposes of this Lease provided
that such parking at off-site locations shall not increase the Operating
Expenses, Real Property Taxes or Capital Improvement Amortization otherwise
allocable to Tenant hereunder. Nothing in this Lease shall be deemed to prohibit
or limit Landlord's right to change, delete or modify any such off-site parking
areas.
60 Utilities and Services.
----------------------
6.1 Landlord Obligations. Landlord shall furnish the services and
--------------------
utilities described in this Section 7.1 to the Premises during the periods from
8:00 a.m. to 6:00 p.m., Monday through Friday and 9:00 a.m. to 12:00 Noon
Saturday, except on New Year's Day, Martin Luther King Day, President's Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day and
other holidays on which the New York Stock Exchange is closed, and subject to
rules and regulations from time to time established by Landlord in compliance
with the Rules Requirements (such hours and days of operation are herein called
"Normal Working Hours"). The cost of providing such services and utilities shall
be included in Operating Expenses except as specifically provided otherwise
herein.
(a) HVAC. Landlord shall furnish heating, ventilation and air
----
conditioning ("HVAC") in amounts required for the use and occupancy of the
Premises for normal office purposes consistent with the highest category of
premiere, first-class office
20
building projects in the Golden Triangle area and on Maple Drive in Beverly
Hills, California. Tenant shall not, without Landlord's prior written consent,
use heat-generating machines (other than normal fractional horsepower office
machines) or other machinery or equipment (including but not limited to "space
heaters") which may affect the temperature otherwise maintained in any portion
of the Premises by the HVAC system, and if such temperature is affected as a
result of: (i) any lights, machines or equipment (including without limitation,
computers, telephone switches, photocopiers and electronic data processing
machines) used by Tenant in the Premises in excess of normal office use; (ii)
the occupancy of the Premises by more than one person per one hundred fifty
(150) square feet of Rentable Area therein; or (iii) an electrical demand in
excess of four and one-half (4.5) watts (connected load) per square foot of
Rentable Area of the Premises, Landlord shall have the right to install, after
notice to Tenant and a thirty (30) day opportunity for Tenant to restore the
required temperature balance in the Premises, any supplemental machinery or
equipment which Landlord reasonably deems necessary to restore temperature
balance, including without limitation, modifications or additions to the
standard air conditioning equipment, and the cost thereof including the
reasonable cost of equipment and installation and any additional reasonable cost
of operation and maintenance incurred thereby, shall be paid by Tenant to
Landlord within thirty (30) days following demand therefor by Landlord. Landlord
makes no representation with respect to the adequacy or fitness of the HVAC
system or equipment in the Building to maintain temperatures which may be
required for, or because of, any equipment of Tenant except with respect to the
equipment specifically shown on the Final Plans or which is typically used in
similar locations and densities by other tenants in first-class office buildings
comparable to the Building, and Landlord shall have no liability for loss or
damage in connection therewith. Tenant hereby agrees to indemnify, defend,
protect and hold Landlord harmless from and against any and all loss, damage,
claim, liability, expense or costs, including attorneys' fees, incurred by
Landlord to any other tenant in the Project as a material result of the use by
Tenant of electric current, HVAC or other services in excess of the capacity of
the Building Systems set forth in this subsection (a).
21
(b) Electricity. Landlord shall furnish sufficient electric power at
-----------
277 volts, single phase, to supply tenant lighting load permitted by the State
of California, Title 24 energy code (1.5 watts per square foot of Usable Area)
and sufficient power at 120/208 volts, three phase, four wire, for 3 watts
connected load per square foot of Usable Area for office power. If specifically
approved by Landlord, either pursuant to Article 8 or otherwise, additional
---------
power may be made available at 480 volts, three phase, for additional power
and/or air-conditioning requirements up to the limit of available building power
taking into account potential needs of other tenants and a reasonable safety
factor. The cost of equipment and installation for transformers, panel boards,
bus duct taps, feeders, and other items required for the utilization of such
additional power shall be paid by Tenant. Tenant shall not install or operate
in the Premises any electrically operated machinery, appliances or equipment
(including without limitation, computers, telephone switches, electronic data
processing machines, word processors, photocopiers, and punch card machines, and
machines using in excess of 110 volts) which would exceed the capacity of the
Building Systems as determined by Landlord, except as specifically shown on the
Final Plans. Without the prior written consent of Landlord, which Landlord may
refuse in its reasonable discretion, Tenant shall not install or operate any
apparatus, device, machinery, appliances or equipment in the Premises, which
will in any way increase the amount of electricity usually furnished or supplied
for use of the Premises as general office space; nor connect any apparatus,
device, machinery, appliances or equipment (except through existing electrical
outlets in the Premises), for the purpose of using electric current.
Notwithstanding the above, Tenant may install computers, word processing and
duplicating machines and office equipment typically found in buildings in the
highest category of premiere, first-class office building projects in the Golden
Triangle area and on Maple Drive in Beverly Hills, California as long as the
electrical capacity limits set forth above are not exceeded. Tenant agrees to
pay Landlord directly (instead of as part of Operating Expenses and in addition
to Operating Expense payments pursuant to Section 5.1) for the cost of
-----------
electrical power (at rates no higher than the applicable rates charged to the
Project by the public utility providing similar service) used by Tenant which
exceeds the amount of such power typically used by other tenants in the Project
such that the allocation of electricity costs to all tenants in the Project
through Operating Expenses would otherwise be distorted or unfair (and Landlord
shall not enforce this sentence in a discriminatory manner as to Tenant). If
Landlord determines at any time during the Term that Tenant is using such excess
amount of electric power, Landlord shall have the right to install a submeter on
any floor or floors, or portion of any floor or floors, of the Premises to
determine the actual amount of electric power which Tenant is utilizing from
time to time. If such submeter indicates that Tenant's usage of electric power
exceeds the amount of such electric power typically used by other tenants in the
Project and that the allocation of electricity costs to all tenants in the
22
Project through Operating Expenses is, therefore, materially distorted or
unfair, then Tenant shall pay Landlord the actual cost of equipment and
installation for such submeter and shall pay directly (instead of as part of
Operating Expenses) for the actual cost of such excess electric power usage plus
any additional expense incurred in keeping account of the electric power so
consumed. Landlord shall have the right to install such submeter at any time and
from time to time during the Term or any Renewal Term, after notice to Tenant
and without unreasonable interference with Tenant's conduct of its business.
(c) Elevators. Subject to the requirements of Building security,
---------
Landlord shall furnish freight and passenger elevator services to the Premises
twenty-four hours per day. Landlord's actual, out of pocket costs for Tenant's
use of non-standard freight elevator service, including elevator service
requiring the use of the top of the "cab" of the elevator, shall be paid by
Tenant within ten (10) days after receipt of an invoice. In addition, if Tenant
requires extended and uninterrupted use of the freight elevator for other than
normal deliveries to the Premises (such as for a special move or alterations),
then Landlord shall provide such freight elevator service by prior arrangement
with the manager of the Building the cost of which shall be charged to Tenant in
accordance with Section 7.3.
-----------
(d) Water. Landlord shall make available water for lavatory and
-----
drinking purposes in the Premises and in the cafeteria and gym on a seven (7)
day, twenty-four (24) hour per day basis to be drawn from the public lavatory in
the core of the floors on which the Premises are located. Tenant shall not make
any use of the Premises which would increase the amount of water typically
furnished for office use, nor connect any appliance directly to the water pipes
other than in connection with kitchens, pantries and similar uses expressly
shown on the Final Plans. If unreasonable or unusual amounts of water are
consumed by Tenant, then, at Landlord's option, water meters shall be installed
at Tenant's sole cost and expense and Tenant shall pay for its additional
consumption at the Building's average cost.
(e) Janitorial. Landlord shall provide janitorial service consistent
----------
with the standards of the highest category of premiere, first-class office
building projects in the Golden Triangle area and on Maple Drive in Beverly
Hills, California and in accordance with the Cleaning Specifications set forth
on Exhibit "E" attached hereto. Landlord shall not be required to provide
-----------
janitorial services for portions of the Premises used for storage, storage room
or similar purposes, preparing or consuming food or beverages (except for floors
and counters where food and dishes are not present and such cleaning is
practical), or areas secured, obstructed or locked by Tenant. Any and all
additional or specialized janitorial services not described on Exhibit "E" which
-----------
are required by Tenant shall, at Tenant's request, be contracted for by Landlord
with Landlord's janitorial agent on behalf of Tenant, in which case Tenant shall
pay, as Additional
23
Rent hereunder, all costs and expenses of such additional or specialized
janitorial services within fifteen (15) days after delivery of the statement
therefor by Landlord.
(f) Building Security. Landlord and Tenant shall provide building
-----------------
security equipment, procedures and personnel for the Project (but not within the
Premises) twenty-four (24) hours per day, seven (7) days per week in accordance
with the Security Specifications set forth on Exhibit "F" attached hereto;
-----------
provided, however, Landlord does not guaranty or make any warranty with respect
to the safety of Tenant's personnel or property. The cost of such security
service shall be allocated between Landlord and Tenant as set forth in Exhibit
F. Tenant shall have the right, at Tenant's expense, to provide additional
security equipment or personnel in the Premises, provided that Landlord is given
reasonable access to the Premises (subject to Tenant's right to maintain secured
areas) and that any such security system installed by Tenant complies with all
applicable codes and shall not create any security risk to the Project, or
adversely impact Landlord's security system or adversely affect the rights of
other tenants to the Project.
6.2 Access. Landlord shall furnish to Tenant's employees and agents
------
access to the Premises and the Parking Garage on a seven (7) day per week,
twenty-four (24) hour per day basis, subject to compliance with such security
measures as shall from time to time be in effect for the Building and/or the
Project, subject to interruptions in access required by applicable Laws or
governmental authorities or as reasonably required for Landlord in the case of
emergencies or to perform its obligations of repair and maintenance under this
Lease or to make required or permitted alterations in the Project, and subject
to the Rules and Regulations and any future rules and regulations from time to
time established by Landlord subject to and in compliance with the Rules
Requirements.
6.3 Extraordinary Services. Freight and passenger elevator services,
----------------------
HVAC, electricity, and access to and use of the loading dock facilities (if any)
will be available twenty-four (24) hours a day, subject to the provisions of
this Article 7. Landlord may impose a reasonable direct charge and establish
---------
reasonable rules and regulations for any of the following:
(a) The use of any HVAC or electricity by Tenant at any time other
than during Normal Working Hours. Such usage shall be charged to Tenant at the
standard rates for the Project, which initially shall be $35.00 per hour and
shall be subject to adjustment from time to time based on Landlord's reasonable
estimate of actual costs;
(b) The usage of any services provided to Tenant (including without
limitation, freight elevator service, or use of the loading dock facilities by
Tenant) at any time other than during Normal Working Hours. Such usage shall be
charged to Tenant at the standard rates for the Project which shall be based
24
upon Landlord's reasonable estimate of actual costs. Nothing contained in this
subsection (b) shall limit subsections (a), (c) or (d). Notwithstanding the
foregoing, provided Tenant obtains the appropriate permits therefor, Tenant
shall be entitled to use the freight elevators in the Building in connection
with Tenant's initial moves into each floor of the Premises without charge to
Tenant;
(c) Additional or unusual janitorial services required because of any
non-building standard improvements in the Premises, the carelessness of Tenant,
the nature of Tenant's business (including the extensive operation of Tenant's
business other than during Normal Working Hours);
(d) The removal of any refuse and rubbish from the Premises except
for discarded material placed in wastepaper baskets and left for emptying as is
customary in the highest category of premiere, first class office building
projects located in the Golden Triangle area and on Maple Drive in Beverly
Hills, California. Landlord will cause the Premises to be cleaned after
Tenant's initial move into the Premises (excluding removal of large packing
cartons or moving materials, the breakdown and disposal of which shall be the
responsibility of Tenant) without charge to Tenant.
The foregoing direct charges shall be payable by Tenant as Additional Rent
on the next rent payment date at least twenty (20) days following submission of
an invoice therefor by Landlord.
6.4 Interruption in Utility Services. Landlord shall not be liable for
--------------------------------
damages or otherwise for failure, stoppage or interruption of any services or
utilities, nor shall the same be construed either as an eviction of Tenant, or
result in an abatement of rent, when such failure is caused by acts of God,
accidents, breakage, strikes, lockouts, other reasonably unavoidable labor
disputes, or by the making of repairs, alterations or improvements to the
Premises or the Building, or the limitation, curtailment, rationing or
restriction on supply of natural gas, water, electricity, labor or other
supplies or for any other condition beyond Landlord's reasonable control,
including without limitation, any mandatory governmental energy conservation
program or legal requirement; provided, however, that Tenant shall have the
right to an abatement of any rent paid in proportion to the portion of the
Premises which is rendered untenantable and unusable by Tenant if such portion
of the Premises is determined to be untenantable and is not used by Tenant for a
period of more than three (3) consecutive business days as a result of a failure
in the services or utilities to be provided by Landlord described in Section
-------
7.1, other than any such failure caused by the negligent or willful acts of
---
Tenant or its contractors, employees, licensees or invitees (acting within the
scope of their relationship with Tenant). Notwithstanding any abatement of rent
under this Lease, Tenant shall remain obligated to pay Landlord for all
Additional Rent owed under
25
Article 5 for services and utilities provided to and used by Tenant during the
---------
period of such rent abatement. If any governmental entity imposes mandatory
controls or guidelines on Landlord or the Project relating to the services
provided by Landlord, or the reduction of automobile or other emissions,
Landlord may make such alterations to the Buildings or any other part of the
Project related thereto and take such other steps as are necessary to comply
with such controls and guidelines, the cost of such compliance and alterations
shall be included in Operating Expenses or deemed to be a Capital Improvement,
and Landlord shall not be liable therefor, for damages or otherwise, nor shall
the same be construed either as an eviction of Tenant, or result in an abatement
of rent except to the extent abatement of rent is otherwise provided for in this
Lease; provided that if the Premises as a whole are untenantable and unusable by
Tenant and are not used by Tenant, as a result of such alterations by Landlord,
for a period of over 180 consecutive days (other than a de minimus number of
days during which such services and utilities are restored to the Premises),
then Tenant shall have the right to cancel this Lease by giving notice thereof
to Landlord within ten (10) days after the expiration of said 180-day period and
this Lease shall terminate ten (10) days after delivery of such notice if the
Premises are not again made tenantable and usable for Tenant within said second
ten (10) day period. The foregoing 180-day period shall be extended on a day for
day basis by the number of days of any delay in providing such utilities and
services which is caused by force majeure events which also affect other owners
----- -------
of real estate projects in the greater Los Angeles metropolitan area. Landlord
will minimize the interference with Tenant's use and occupancy of the Premises
and restore all services and utilities to the Premises as soon as possible.
Nothing contained in this Section 7.4 shall limit any provision of Article 12.
7. Alterations.
-----------
7.1 Restriction on Alterations.
--------------------------
(a) Tenant may make alterations, additions or improvements to the
Premises after the Commencement Date (collectively, "Tenant Alterations") which
do not, individually or cumulatively, materially and adversely affect the
Building Systems or Service Facilities provided Tenant submits its plans,
including floor load calculations in the event heavy equipment is part of such
plans, for such alterations to Landlord at least thirty (30) days prior to
commencement of construction of such Tenant Alterations (except as to decorative
items, minor repairs or installations of trade fixtures and furniture for which
plans are not required). Without limiting the foregoing, any Tenant Alterations
which increase the floor load, electrical, plumbing or HVAC requirements over
the capacities of such Building Systems
26
provided as of the Commencement Date shall be deemed to materially and adversely
affect the Building Systems for purposes of this Article 8 only, and such Tenant
---------
Alterations shall only be made, if at all, by Tenant if Tenant complies with
the requirements of Section 8.1(b). Within fifteen (15) days after receipt of
--------------
the plans for alterations, Landlord shall inform Tenant, in good faith, whether
such Tenant Alterations will (for purposes of this Article 8) materially and
---------
adversely affect the Building Systems or Service Facilities. If Landlord
indicates that such Tenant Alterations will so affect the Building Systems or
Service Facilities, Landlord will have five (5) additional business days to
inform Tenant of its approval or disapproval thereof, and if disapproved,
Landlord will detail specific conditions of Landlord's disapproval.
(b) Tenant shall make no Tenant Alterations which, individually or
cumulatively, may have a material and adverse effect on the Building Systems or
Service Facilities without the prior written consent of Landlord, and Landlord
may impose as a condition to such consent such requirements as Landlord, in its
reasonable discretion, may deem necessary or desirable, including without
limitation, (i) the right to approve the plans and specifications for any work
to insure, among other things, that such work will not materially and adversely
affect the Building Systems, (ii) the right to require supplemental insurance
reasonably satisfactory to Landlord and naming Landlord as an additional
insured, (iii) the right to require reasonable security (including assurance of
the availability of sufficient funds of Tenant) for the full payment for any
work which costs in excess of $100,000, and (iv) reasonable requirements as to
the manner in which or the time or times at which work may be performed. Tenant
acknowledges that Landlord shall have the sole right to perform all Tenant
Alterations required to be approved by Landlord. In the event that Landlord
acts as general contractor, Tenant shall pay Landlord a fee equal to ten percent
(10%) of the construction costs of such Tenant Alterations. In the event that
Landlord does not act as general contractor, Tenant shall pay Landlord a
supervisory fee equal to three percent (3%) of the construction costs of such
Tenant Alterations. Landlord agrees that all contracts for Tenant Alterations
shall be subject to a reasonably implemented competitive bidding process. All
Tenant Alterations shall be compatible with a first-class office building
complex and completed in accordance with Landlord's requirements as set forth
herein and all applicable rules, regulations and requirements of governmental
authorities and insurance carriers. In addition to general contractor or
supervisory fees, Tenant shall pay to Landlord all out-of-pocket costs and fees
reasonably incurred by Landlord together with reasonable allocations of in-house
staff costs for reviewing and inspecting all Tenant Alterations to assure full
compliance with all of Landlord's requirements, which charges shall not, in the
aggregate, exceed three percent (3%) of the total design and construction costs
of the Tenant Alterations being reviewed (provided that such limitation on
Landlord's charges shall apply only if the plans for such Tenant Alterations
27
submitted by Tenant are reasonably precise and suitable for final review for
both engineering and design). Landlord does not expressly or implicitly
covenant or warrant that any plans or specifications submitted by Tenant are
safe or that the same comply with any applicable laws, ordinances, codes, rules
or regulations. Further, Tenant shall indemnify, protect, defend and hold
Landlord harmless from any loss, cost or expense, including attorneys' fees and
costs, incurred by Landlord as a result of any defects in design, materials or
workmanship resulting from Tenant Alterations, except to the extent such defects
are caused by Landlord, its agents, contractors, servants or employees. If
Tenant desires to install any rooftop equipment, Tenant may submit, and the
parties shall process, such request as a Tenant Alteration requiring Landlord
consent pursuant to this Article 8.
(c) Landlord shall provide Tenant with copies of all material
contracts, receipts, paid vouchers, and any other documentation (including,
without limitation, "as-built" drawings to the extent such drawings are
reasonably available to Landlord, air/water balancing reports, permits and
inspection certificates) in connection with the construction of such Tenant
Alterations. Tenant shall promptly pay all costs incurred in connection with
all Tenant Alterations and shall not permit the filing of any mechanic's lien or
other lien in connection with any Tenant Alterations. Tenant shall be
responsible for paying the general contractor's overhead and fee in connection
with the work performed pursuant to this Article 8. If a mechanic's lien or
---------
other lien is filed against the Building or the Project as a result of Tenant
Alterations made by or on behalf of Tenant, Tenant shall discharge or cause to
be discharged (by bond or otherwise) such lien within ten (10) days after Tenant
receives notice of the filing thereof and shall not allow any such lien to be
foreclosed upon, although Tenant shall otherwise be entitled to contest the
validity of any such lien. If a mechanic's lien or other lien is filed against
the Land, the Building or the Project as a result of Tenant Alterations made by
or on behalf of Tenant and Tenant fails to timely discharge such lien, Landlord
may, without waiving its rights and remedies based on such breach of Tenant and
without releasing Tenant from any of its obligations, cause such liens to be
released by any means it shall deem proper, including payment in satisfaction of
the claim giving rise to such lien. Tenant shall pay to Landlord within fifteen
(15) days following notice by Landlord, any sum paid by Landlord to remove such
liens, together with interest at Landlord's cost of money from the date of such
payment by Landlord. The parties acknowledge that the filing of a preliminary
notice is not in and of itself the filing of a mechanic's lien. Notwithstanding
the foregoing, if Tenant has made payment to Landlord for the cost of any Tenant
Alterations or portion thereof, and Landlord fails to forward such payment to a
contractor or subcontractor, Landlord shall be solely responsible for a
mechanics' lien filed as a result of such nonpayment. Any increase in any tax,
assessment or charge levied
28
or assessed as a result of any Tenant Alterations shall be payable by Tenant in
accordance with Article 10.
----------
(d) Notwithstanding anything in the foregoing to the contrary (i) the
outside appearance, character or use of the Building shall not be adversely
affected by any Tenant Alteration, and no Tenant Alteration shall materially
weaken or impair the structural strength or, in the reasonable opinion of
Landlord, materially lessen the value of the Building or create the potential
for unusual expenses to be incurred upon the removal of the Tenant Alterations
and the restoration of the Premises upon the termination of this Lease (unless
Tenant agrees to pay therefor); (ii) no part of the Building outside of the
Premises shall be materially, adversely, physically affected by any Tenant
Alteration; and (iii) the proper functioning of the Building Systems and Service
Facilities shall not be materially, adversely affected by any Tenant Alteration
and there shall be no Tenant Alteration which materially, adversely interferes
with Landlord's free access to the Building Systems or materially, adversely
interferes with the moving of Landlord's equipment to or from the enclosures
containing the Building Systems; (iv) in performing the work involved in making
such Tenant Alterations, Tenant shall be bound by and observe all of the
conditions and covenants contained in this Article 8; (v) all work shall be done
---------
at such times and in such manner as Landlord from time to time may reasonably
designate; and (vi) Tenant shall not be permitted to install and make part of
the Premises any materials, fixtures or articles which are subject to liens,
conditional sales contracts or chattel mortgages other than trade fixtures,
furniture and equipment. In connection with Landlord's approval of any Tenant
Alteration, Landlord shall have the right to advise Tenant that such Tenant
Alteration must be removed by Tenant upon the expiration or termination of this
Lease, provided that Landlord agrees not to impose such requirement if Landlord
determines that such Tenant Alterations do not impair the functionality of the
Premises or the portion thereof affected. If Tenant proceeds to implement such
Tenant Alteration, Tenant shall be obligation to remove such Tenant Alteration
in accordance with Section 8.2 below.
(e) Tenant acknowledges that the exterior rooftop areas on the third
floor of the Premises are not intended to be used as balconies. Should Tenant
desire to use such areas as balconies, Tenant shall be solely responsible for
seeking and obtaining all necessary permits and approvals. Any Tenant
Alterations in connection with converting such areas to usable balconies shall
be subject to the provisions of this Article 8. The completion of any such
conversion shall not cause an increase in Basic Rent or in Tenant's share of
Operating Expenses.
7.2 Removal and Surrender of Fixtures and Tenant Alterations. All
--------------------------------------------------------
Tenant Alterations and tenant improvements installed in the Premises by Landlord
which are attached to, or built into, the Premises, including without
limitation, floor coverings, window coverings, wall coverings, paneling,
molding,
29
doors, vaults (excluding vault doors), plumbing systems, electrical systems,
mechanical systems, structural systems, lighting systems, sound equipment,
communication systems and outlets for the systems mentioned above and for all
telephone, computer, radio, telegraph and television purposes, and any special
flooring or ceiling installations, shall become the property of Landlord and
shall be surrendered with the Premises, as a part thereof, at the end of the
Term; provided, however, (i) Landlord may, by notice to Tenant at least thirty
(30) days prior to the end of the Term, require Tenant to remove any Tenant
Alterations designated by Landlord to be removed at the time of Landlord's
approval thereof (with respect to such Tenant Alterations as to which Landlord
has a right of approval hereunder) or designated in such notice (for all Tenant
Alterations as to which Landlord does not have a right of approval hereunder) if
such improvements are not generally found in the highest category of premiere,
first-class office building in the Golden Triangle area and on Maple Drive in
Beverly Hills, California, and to repair any damage to the Premises, the
Building and any other part of the Project caused by such removal, all at
Tenant's sole expense and to the reasonable satisfaction of Landlord and (ii)
Tenant shall promptly remove from the Premises all signs and graphics and any
other items containing Tenant's name and/or logo and shall repair any damage to
the Premises or the Project caused by such removal, all at Tenant's sole expense
and to the reasonable satisfaction of Landlord. Any articles of Tenant's
personal property including business and trade fixtures not attached to, or
built into, the Premises, machinery and equipment, free-standing cabinet work,
and movable partitions as well as all equipment for Tenant's network operating
center, if any, shall be and remain the property of Tenant and may be removed by
Tenant at any time during the Term as long as Tenant is not in default hereunder
and provided that Tenant repairs to Landlord's satisfaction any damage to the
Premises, the Building and any other part of the Project caused by such removal.
For purposes of the insurance requirements of Section 11.2, Tenant shall be
------------
deemed to have an insurable interest in all of the tenant improvements and
Tenant Alterations in the Premises, as between Landlord and Tenant, but the same
shall be surrendered with the Premises on termination of this Lease, as set
forth above.
7.3 Standard Window Covering. Tenant shall use the Building standard
------------------------
window covering as specified by Landlord and Landlord reserves the right to
approve or disapprove of interior improvements visible from outside the Building
on wholly aesthetic grounds, which approval shall not be unreasonably withheld
in light of the quality and reputation of the Project. Such improvements must be
submitted for Landlord's written approval prior to installation, or Landlord may
remove or replace such items at Tenant's sole expense.
7.4 Arbitration of Disputes. Any dispute concerning whether the
-----------------------
provisions of Sections 8.1 through 8.3 have been
------------------------
30
properly interpreted or complied with shall be submitted to arbitration pursuant
to Article 34.
8. Maintenance and Repairs.
-----------------------
8.1 Tenant's Obligations. Except for Landlord's obligations
--------------------
specifically set forth in this Lease, Tenant shall, at Tenant's sole expense,
keep the Premises and the Building and every part thereof clean and in good and
sanitary condition and repair and Landlord shall have no obligation to alter,
remodel, improve, repair, decorate or paint the Premises or the Building or any
part thereof. Subject to the provisions of Section 11.5 and Article 12, Tenant
------------ ----------
shall reimburse Landlord for all repairs to the Premises, the Building or any
other portion of the Project which are required as a result of any misuse or
neglect of the same by Tenant or any of its officers, agents, employees,
contractors, licensees or invitees while in or about the Premises, the Building
or any other portion of the Project.
8.2 Landlord's Obligations. The improvements to the Premises
----------------------
constructed by or on behalf of Landlord shall be in full compliance with all
applicable Laws in effect at the time of such construction. Subject to Article
-------
12, Landlord shall repair and maintain with reasonable diligence and in a first-
--
class manner after written notice thereof from Tenant, defects in, and damage
to, the Building's plumbing, HVAC and electrical systems and structural systems
installed by or on behalf of Landlord and serving or located on the Premises. If
and to the extent such maintenance and repair is required in part or in whole by
the act, neglect, misuse, fault or omission of any duty of Tenant, its agents,
employees, contractors, licensees or invitees (acting within the scope of their
relationship with Tenant), Tenant shall pay to Landlord the cost of such
maintenance and repairs, except to the extent Tenant has been relieved of such
liability under Section 11.5. Except as provided in Article 12, there shall be
------------ ----------
no abatement of rent with respect to, and Landlord shall not be liable for, any
injury to or interference with Tenant's business arising from any repairs,
maintenance, alteration or improvement in or to any portion of the Project or
the Building, including the Premises, or in or to the fixtures, appurtenances
and equipment therein. Further, neither Landlord nor any partner, director,
officer, agent or employee of Landlord shall be liable (a) for any damage caused
by other lessees or persons in or about the Project; or (b) for any
consequential damages arising out of any loss of use of the Premises or any
equipment or facilities therein by Tenant or any person claiming through or
under Tenant. Subject to Section 9.3, as a material inducement to Landlord
entering into this Lease, Tenant waives and releases its right to make repairs
at Landlord's expense under Sections 1932(1) or 1942 of the California Civil
Code or under any other law, statute or ordinance now or hereafter in effect.
9.3 Failure to Repair. If Landlord refuses or neglects to repair any
-----------------
condition causing an interruption in the reasonably necessary operation of the
Building Systems or Service Facilities, then if such failure shall continue for
a period of
31
thirty (30) days following written notice from Tenant demanding that Landlord
make such repair, Tenant shall have the right, but not the obligation, to make
such repair. If Tenant performs such repair, it shall invoice Landlord for the
reasonable cost thereof, which invoice shall be supported by reasonable
documentation substantiating the cost of repair. Tenant's invoice shall be
payable by Landlord within thirty (30) days after receipt. If payment is not
received within such 30-day period, Tenant shall have the right to deduct the
amount of such invoice from the rent payable hereunder.
9. Tax on Tenant's Personal Property and Tenant Improvements.
---------------------------------------------------------
9.1 Personal Property Taxes. At least ten (10) days prior to
-----------------------
delinquency, Tenant shall pay all taxes levied or assessed upon Tenant's
equipment, furniture, fixtures and other personal property located in or about
the Premises. If the assessed value of Landlord's property is increased by the
inclusion therein of a value placed upon Tenant's equipment, furniture, fixtures
or other personal property, Tenant shall pay to Landlord, within thirty (30)
days following written demand therefor, together with copies of documentation
reasonably demonstrating that such taxes are applicable to Tenant's personal
property, the taxes so levied against Landlord, or the proportion thereof
resulting from said increase in assessment. Landlord will cooperate at Tenant's
expense in causing the tax assessor to properly allocate taxes between personal
property and real property and to directly assess Tenant for any personal
property taxes; provided, however, that nothing contained in this Section 10.1
------------
shall obligate Landlord to contest, in any manner whatsoever, whether by
judicial action or otherwise, any assessment of Tenant's personal property by
the tax assessor.
9.2 Tax on Leasehold Improvements. Tenant shall pay Landlord, within
-----------------------------
fifteen (15) days after demand, such portion of all real estate taxes levied or
assessed against the Building or any other portion of, or all of, the Project
which are attributable to the value of the leasehold improvements installed in
the Premises, including but not limited to, all tenant improvements and Tenant
Alterations, regardless whether constructed by or on behalf of Landlord or
Tenant. If the assessing authority allocates a specific value to said leasehold
improvements, the amount payable by Tenant shall be the tax attributable to such
specific value. If the assessing authority does not allocate a specific value to
said leasehold improvements, the amount payable by Tenant pursuant to this
Section 10.2 shall be the amount determined by multiplying the total cost of
------------
leasehold improvements installed in the Premises by the Building's full assessed
rate, or, if different, the assessed rate for all leasehold improvements in the
Building, as determined by the applicable assessing authority. Following
Tenant's request, Landlord shall provide Tenant with a copy of the property tax
bill for the Project, or the portion of the Project that includes the Buildings.
32
9.3 Exclusion from Real Property Taxes. The portion of real estate
----------------------------------
taxes payable by Tenant pursuant to Sections 10.1 and 10.2 and by other tenants
----------------------
of the Project, as if all such other tenants had provisions comparable to
Sections 10.1 and 10.2 in their leases, shall be excluded from Real Property
----------------------
Taxes for purposes of rent adjustments under Article 5.
---------
10. Insurance; Waiver of Subrogation.
--------------------------------
10.1 Liability Insurance. Tenant shall at all times during the Term
-------------------
(and prior to the Term with respect to any activity of Tenant hereunder at the
Project) and at its own cost and expense procure and continue in force workers'
compensation insurance, Employer's Liability Insurance, and Commercial General
Liability insurance adequate to protect Tenant and Landlord against liability
for injury to or death of any person or damage to property in connection with
the use, operation or condition of the Premises. The limits of liability under
the workers' compensation insurance policy shall be equal to the statutory
requirements therefor and the limits of liability under the Employer's Liability
Insurance policy carried by Tenant shall be at least $1,000,000. The Commercial
General Liability insurance for injuries to non-employees and for damage to
property at all times shall be in an amount of not less than Five Million
Dollars ($5,000,000) per occurrence and Five Million Dollars ($5,000,000)
general aggregate, Combined Single Limit.
10.2 Property Insurance. Tenant shall at all times during the Term
------------------
maintain in effect policies of insurance covering (a) all leasehold improvements
(including, but not limited to, all tenant improvements and Tenant Alterations),
trade fixtures, merchandise and other personal property from time to time in, on
or upon the Premises, in an amount not less than their actual replacement cost
providing "All Risk Coverage" (excluding plate glass on the perimeter walls of
the Building). The proceeds of such insurance, so long as this Lease remains in
effect, shall be used for the repair or replacement of the property so insured.
Upon termination of this Lease due to any casualty, the proceeds of insurance
shall be paid to Landlord and Tenant, as their interests appear in the insured
property.
10.3 Policy Requirements.
-------------------
(a) All insurance required to be carried by Tenant hereunder
shall be issued by financially responsible insurance companies.
(b) Each policy shall be written on an "occurrence" basis and
shall have a deductible or deductibles, if any, which do not exceed the
deductible amount(s) maintained for similar insurance by similarly situated
tenants in the highest category
33
of premiere, first-class office building projects in the Golden Triangle area
and on Maple Drive in Beverly Hills, California. Each policy shall name
Landlord, Landlord's Project manager and Landlord's lender as additional
insureds, as their interests may appear. Certificates evidencing the existence
and amounts of such insurance, shall be delivered to Landlord by Tenant prior to
Tenant's occupancy of any portion of the Premises, and in any event, prior to
any activity of Tenant hereunder at the Project. All such policies shall provide
that they are not cancelable, except after thirty (30) days written notice to
Landlord. Tenant shall furnish Landlord with appropriate renewal certificates
when due. Should Tenant at any time neglect or refuse to provide the insurance
certification required by this Lease, or should such insurance be canceled,
Landlord shall have the right, but not the duty, to procure the same and Tenant
shall pay Landlord for the cost thereof as Additional Rent promptly upon
Landlord's demand.
(c) The policies of insurance required to be carried by Tenant
shall be primary and non-contributing with, and not in excess of, any other
insurance available to Landlord. Tenant shall use its best efforts immediately
to report to Landlord the occurrence of any injury, loss or damage incurred by
Tenant, or Tenant's receipt of notice or knowledge of any claim by a third party
or any occurrence that might give rise to such claims in connection with
Tenant's use or occupancy of the Premises. It shall be the responsibility of
Tenant not to violate nor knowingly permit to be violated any condition of the
policies required under this Lease.
10.4 Landlord's Requirements. Landlord shall, at all times during the
-----------------------
Term hereof, at its sole cost and expense (subject to reimbursement in
accordance with Article 5) procure and maintain in force insurance of the type
commonly referred to as an "all risk of physical loss" policy, including
earthquake insurance to the extent required by any Underlying Mortgage or deemed
commercially practicable by Landlord, and general public liability insurance
insuring the Land, the Building and the Project against all risks and all other
hazards as are customarily insured against, in Landlord's reasonable judgment,
by others similarly situated and operating like properties. Landlord shall
procure and maintain in force (subject to reimbursement in accordance with
Article 5) a commercially reasonable amount (or an amount as required by any
Underlying Mortgage) of rental loss insurance during the Term of this Lease.
Each policy shall name Tenant and Tenant's lenders, if required, as additional
insureds as their interests may appear. Landlord's policies shall be primary and
non-contributing with other insurance carried by Tenant. Certification of
coverage shall provide 30 days notice or cancellation or material change.
10.5 Waiver of Subrogation. To the extent permitted by their insurance
---------------------
carriers, Landlord and Tenant each hereby waives its respective right of
recovery against the other to the extent damage or liability is insured against
under a policy or policies of insurance maintained by the waiving party, whether
or not such
34
damage or liability may be attributable to the negligence or other act of either
party or its respective agents, invitees, contractors, servants or employees.
11. Damage or Destruction.
---------------------
11.1 Damage to Premises.
------------------
(a) If the Premises are damaged by fire or other casualty
during the Term, as renewed, and such damage, in Landlord's reasonable opinion,
can be fully repaired within one (1) year after notice to Landlord of the
occurrence of such damage ("Damage Notice") Landlord shall so notify Tenant
within sixty (60) days after the Damage Notice and Landlord shall repair such
damage with reasonable diligence and in a manner consistent with the provisions
of any Underlying Mortgage and this Section 12.1. Tenant shall promptly pay to
------------
Landlord all property insurance proceeds (other than for loss to Tenant's
personal property) received by Tenant as a result of such damage and Landlord
shall use such proceeds in the repair of such damage.
(b) If the Premises are damaged by fire or other casualty so
that the repair of the Premises cannot, in Landlord's reasonable opinion, be
completed within one (1) year after the Damage Notice, Landlord shall so notify
Tenant ("Repair Period Notice") within sixty (60) days after the Damage Notice
and Landlord and/or Tenant shall have the option ("First Termination Option"),
to be exercised by written notice to the other within sixty (60) days after
Landlord gives Tenant the Repair Period Notice to terminate this Lease as of the
date the notice of the exercise of the right to terminate this Lease is received
by the other party (the "Effective Date"). The First Termination Option may be
exercised by either Landlord or Tenant as to only portions of the Premises which
are damaged, provided that such portions are in full floor increments (or in
increments of 25,000 square feet of Rentable Area, if less than a full floor of
the Premises is damaged).
(c) If neither party timely exercises the First Termination
Option, or if the damage can be repaired in less than one (1) year after the
Damage Notice, in Landlord's reasonable opinion, Landlord shall repair the
entire Premises, including all tenant improvements and Tenant Alterations, to
their condition immediately prior to such damage as soon as reasonably possible
utilizing the insurance proceeds Landlord is entitled to receive pursuant to
Article 11. Landlord and Tenant shall each use commercially reasonable efforts
----------
to obtain any insurance proceeds to which such party is entitled; however, if
Landlord does not receive proceeds from Tenant's property insurance policies
required to be carried by Tenant under Section 11.2 which are adequate to repair
------------
completely the Premises to such condition, then Landlord shall only be required
to repair the Premises to the extent that Landlord has received proceeds from
such insurance policies and/or additional funds from Tenant. Nothing
35
in this Section 12.1 shall be construed to limit Tenant's right to the
------------
applicable rent abatement pursuant to Section 12.3.
------------
11.2 Damage to Project. If the Building or any portion of the Project
-----------------
is totally destroyed or is so extensively damaged that it renders the Premises
inaccessible or economically unviable for its use as presently intended and the
repair thereof cannot, in Landlord's reasonable opinion, be completed within one
(1) year after the Damage Notice, or if substantial alteration or reconstruction
of the Building or any other portion of the Project is required, in Landlord's
reasonable opinion, as a result of the damage, then Landlord shall give Tenant
the Repair Period Notice specifying such period of repair or that such
substantial alteration or reconstruction is required as a result of the damage
and Landlord and/or Tenant shall have the option ("Second Termination Option"),
to be exercised by written notice to the other within sixty (60) days after
Landlord gives Tenant the Repair Period Notice, to terminate this Lease as of
the Effective Date. If neither party so elects to terminate this Lease, then
Landlord shall repair and rebuild the Building or other damaged portion of the
Project as soon as reasonably possible, in which event this Lease shall continue
in full force and effect (subject to the applicable rent abatement pursuant to
Section 12.3) unless terminated earlier as provided herein. Notwithstanding the
------------
foregoing, neither party shall have the right to exercise the Second Termination
Option if such damage to the Building or the Project can, in Landlord's
reasonable opinion, be fully completed within eighteen (18) months after the
Damage Notice and can be completed to the extent necessary (a) to make the
Premises viable for their use as presently intended, and (b) to provide Tenant
with access to and use of the Premises, within one (1) year after the Damage
Notice.
11.3 Abatement; Termination.
----------------------
(a) If any part of the Premises is rendered untenantable as a
result of damage by fire or other casualty to any part of the Premises or the
Project, and is not used for the conduct of Tenant's business, rent shall be
reduced and abated from the date of such casualty in proportion to the part of
the Premises which is so rendered untenantable and unusable until the damaged
portion of the Premises has been made tenantable or are used for the conduct of
Tenant's business or until this Lease expires or terminates, whichever occurs
first; provided that, (i) there shall be no abatement of rent with respect to
any portion of the Premises which is rendered unusable for a period of three (3)
consecutive business days or less (except to the extent Landlord is entitled to
receive and does receive the proceeds from the rent loss insurance carried by
Landlord, the costs of which is included in Operating Expenses, for the period
prior to the fourth (4th) day after damage by any casualty), (ii) there shall be
no abatement of rent after the fifth (5th) business day after Landlord provides
other space in the Building or the Project to Tenant which is reasonably
comparable and substantially similar in size and quality to the Premises and
36
reasonably suited for the temporary conduct of Tenant's business, (iii) there
shall be no abatement of rent whatsoever with respect to any damage caused in
whole or in part by the gross negligence or willful act of Tenant, its agents,
employees, contractors, licensees or invitees, except to the extent such
abatement is covered by rent loss insurance carried by Landlord, the premiums
for which are included in Operating Expenses. For purposes of this Section 12.3,
------------
the Premises shall be deemed to have been made tenantable when Landlord has
repaired or restored the Premises to substantially the same (or better)
condition as the Premises were in immediately prior to such casualty, and
Landlord has given Tenant sufficient time (but in no event more than two (2)
weeks) and access to reinstall and reconnect Tenant's personal property,
furniture, fixtures and equipment in the Premises. Subject to the foregoing
clauses (i), (ii) and (iii), if any part of the Premises which is necessary for
the operation of Tenant's business is rendered untenantable by fire or other
casualty and as a result thereof the entire Premises are not used for the
operation of Tenant's business, rent for the entire Premises shall be abated
until such damaged portion has been made tenantable, or is used by Tenant for
the operation of its business or becomes unnecessary for the operation of
Tenant's business. Notwithstanding the foregoing, during any rent abatement
under this Lease, Tenant shall continue to be obligated to pay Landlord
Additional Rent under Article 5 for all services and utilities provided to and
---------
used by Tenant during the period of rent abatement.
(b) If Landlord or Tenant terminates this Lease in its
entirety by exercising the First Termination Option, Second Termination Option
or Third Termination Option, pursuant to Sections 12.1, 12.2, or 12.5, then (1)
----------------------------
this Lease and the estate and interest of Tenant in the Premises shall terminate
and expire on the Effective Date and the rent payable hereunder shall be pro
rated and paid through such date, subject to rent abatement, if any, to the
extent provided in Section 12.3(a), and (2) Tenant shall retain the proceeds of
---------------
insurance received from its insurance carriers with respect to the damage to the
tenant improvements and Tenant Alterations in the Premises. If the First
Termination Option is exercised as to only a portion of the Premises in
accordance with Section 12.1, then (3) this Lease and the estate and interest of
------------
Tenant in the portion of the Premises in question shall terminate and expire on
the Effective Date and the rent payable hereunder with respect to the terminated
portion of the Premises shall be prorated as of such date, subject to rent
abatement, if any, to the extent provided in Section 12.3(a) and (4) Tenant
---------------
shall retain the proceeds of insurance received from its insurance carriers with
respect to the damage to the tenant improvements and Tenant Alterations in the
portion of the Premises as to which this Lease is terminated.
11.4 Limitations. Nothing contained in this Article 12 shall relieve,
----------- ----------
discharge or in any way affect Tenant's liability to Landlord in connection with
any damage or destruction of or to the Premises, the Building or any other
portion of the Project
37
arising out of the gross negligence or willful acts or omissions of Tenant, its
agents, employees, contractors, licensees and invitees (acting within the scope
of their relationship with Tenant). Nothing contained in this Article 12 shall
----------
relieve, discharge or in any way affect Landlord's liability to Tenant in
connection with any damage or destruction of or to the Premises arising out of
the negligent or willful acts or omissions of Landlord, its agents, employees or
contractors (acting within the scope of their relationship with Landlord).
Landlord shall not be liable for any loss of business, inconvenience or
annoyance arising from any repair or restoration of any portion of the Premises,
the Building or other portions of the Project as a result of any damage from
fire or other casualty; provided, however, that Landlord shall use reasonable
efforts to avoid interfering with or adversely affecting the conduct of Tenant's
business from the Premises. Furthermore, in the event of such damage from fire
or other casualty, Landlord shall have no obligation (i) to repair any
equipment, furniture and fixtures (collectively, "FF&E"), paneling, ceilings,
carpets or other floor coverings, partitions, drapes or any personal property
installed in or about the Premises by Landlord or Tenant or (ii) to expend any
amount for the repair of the Premises and the FF&E in excess of Twenty Dollars
($20.00) per square foot of Usable Area in the Premises; provided, however, that
to the extent that Landlord is entitled to receive and does receive from Tenant
or an insurance company, sufficient money to repair the Premises and the FF&E
(and Landlord and Tenant shall use commercially reasonable efforts to obtain any
insurance proceeds to which each such party is entitled), Landlord shall repair
the Premises and the FF&E in the Premises except to the extent that this Lease
is terminated due to a casualty in accordance with this Article 12.
----------
11.5 Damage During Last Years. If the Premises are damaged by fire or
------------------------
other casualty during the last two (2) years of the Term (including any Renewal
Term) so that the repair of the Premises cannot, in Landlord's reasonable
opinion, be completed within a period after the Damage Notice, equal to one-half
(1/2) of the remaining Term ("Repair Period"), Landlord and/or Tenant shall have
the option to terminate this Lease ("Third Termination Option") under this
Section 12.5. Landlord shall give Tenant the Repair Period Notice within sixty
------------
(60) days after Landlord's receipt of the Damage Notice. If Landlord determines
that all or a substantial portion of the Premises cannot be repaired within the
Repair Period, Landlord and/or Tenant shall have thirty (30) days after Tenant's
receipt of the Repair Notice to exercise the Third Termination Option by notice
to the other; provided that if Landlord exercises the Third Termination Option,
Tenant shall have the right, by notice to Landlord within fifteen (15) days
after such exercise of the option, to extend the Term by exercising any
available Renewal Option in accordance with Section 3.4 and thereby prevent the
-----------
effectiveness of Landlord's exercise of such Third Termination Option as to the
specific damage in question (and without affecting either party's rights to
subsequently exercise the Third Termination Option as to subsequent damage). If
neither party timely exercises the Third
38
Termination Option by notice to the other, then Landlord shall repair the
Premises, including all tenant improvements and Tenant Alterations, to the
extent and subject to the limitations set forth in Section 12.1(c). Nothing in
---------------
this Section 12.5 shall be construed to limit Tenant's right to the applicable
------------
rent abatement pursuant to Section 12.3. If either party timely exercises the
------------
Third Termination Option, this Lease shall terminate as of the Effective Date.
11.6 Agreement Governs. The provisions of this Lease, including this
-----------------
Article 12, 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 any other portion of the Project and no statute or
regulation which is inconsistent with this Article 12, now or hereafter in
----------
effect, including without limitation, Sections 1932(2) and 1933(4) of the
California Civil Code, shall have any application to this Lease with respect to
any damage or destruction to all or any part of the Premises, the Building or
any other portion of the Project.
12. Eminent Domain.
--------------
12.1 Taking.
------
(a) In case the whole of the Premises, or such part thereof as
shall substantially interfere with Tenant's use and occupancy of the remainder
of the Premises not so taken, shall be taken by any lawful power or authority by
exercise of the right of eminent domain, or sold to prevent such taking, within
sixty (60) days of receipt of notice of such taking, either Tenant or Landlord
may terminate this Lease effective as of the date possession is required to be
surrendered to said authority. If such portion of the Building or the Project is
so taken or sold so as to require, in the opinion of Landlord, a substantial
alteration or reconstruction of the remaining portions thereof, or which renders
the Building or the Project economically unviable for its use as presently
intended, or requires cancellation of substantially all tenant leases in the
Building, this Lease may be terminated by Landlord, as of the date of the
vesting of title under such taking or sale, by written notice to Tenant within
sixty (60) days following notice to Landlord of the date on which said vesting
will occur. Except as provided herein, Tenant shall not because of such taking
assert any claim against Landlord or the taking authority for any compensation
because of such taking, and Landlord shall be entitled to receive the entire
amount of any award without deduction for any estate or interest of Tenant. In
the event that the amount of property or the type of estate taken shall not
substantially interfere with Tenant's use of the Premises, Landlord shall be
entitled to the entire amount of the award without deduction for any estate or
interest of Tenant. Subject to Section 13.2, in the event of a taking of a
------------
portion of the Premises which does not result in the termination of this Lease,
Landlord shall promptly proceed to restore the Premises substantially to their
condition prior to
39
such taking, and the Rent shall be abated in proportion to
the time during which, and to the part of the Premises of which, Tenant shall be
so deprived on account of such taking and restoration (including the restoration
of tenant improvements to the extent that funds are available from the
condemning authority or Tenant) in accordance with Section 12.3. For purposes of
------------
this Section 13.1, the Premises shall be deemed to have been restored to
------------
substantially their condition prior to such partial taking when Landlord has
repaired or restored the Premises to substantially the same (or better)
condition as the Premises were in immediately prior to such casualty, and
Landlord has given Tenant sufficient time (but in no event more than two (2)
weeks) and access to reinstall and reconnect Tenant's personal property,
furniture, fixtures and equipment in the Premises. Notwithstanding the
foregoing, during any rent abatement under this Lease, Tenant shall continue to
be obligated to pay Landlord Additional Rent (including, without limitation,
Additional Rent under Article 5) for all services and utilities provided to and
used by Tenant during the period of the rent abatement. Nothing contained in
this Article 13 shall be deemed to give Landlord any interest in, or prevent
----------
Tenant from seeking any award against the taking authority for, the taking of
personal property, tenant improvements and Tenant Alterations and FF&E belonging
to Tenant or for relocation or business interruption expenses recoverable from
the taking authority.
(b) If this Lease is terminated as to all or any portion of
the Premises pursuant to this Section 13.1, the award (including but not limited
------------
to compensation, damages and interest) shall be divided between Landlord and
Tenant so that Tenant shall receive from the award:
(1 the amount, if any, awarded for Tenant's
FF&E, personal property and Tenant's interest in tenant improvements and Tenant
Alterations which have been taken; plus
(2 the amount, if any, awarded for Tenant's
relocation or business interruption expenses. Landlord shall receive the
remaining balance of the award.
(c) If less than all the Premises is taken and this entire
Lease is not terminated pursuant to this Section 13.1, the award (including but
------------
not limited to compensation, damage and interest) shall be divided between
Landlord and Tenant in the same proportions as provided above for an entire
taking. In addition to the reduction in rent provided for in Section 13.1(a),
---------------
the rent for the remainder of the Premises shall be abated in proportion to the
portion of the Premises rendered untenantable and actually unused by Tenant
during the period for any restoration.
12.2 Temporary Taking. If all or any portion of the Premises are
----------------
condemned or otherwise taken for public or quasi-
40
public use for a limited period of time, this Lease shall remain in full force
and effect and Tenant shall continue to perform all of the terms, conditions and
covenants of this Lease, including without limitation, the payment of rent and
all other amounts required hereunder. Tenant shall be entitled to receive the
entire award made in connection with any temporary condemnation or other taking
attributable to any period within the Term. Landlord shall be entitled to the
entire award for any such temporary condemnation or other taking which relates
to a period after the expiration of the Term or which is allocable to the cost
of restoration of the Premises. Any portion of such award relating to any period
during an unexercised Renewal Term shall be held in escrow until the earlier of
(i) the date on which Tenant exercises the Renewal Option (in which case such
portion of the award shall be paid to Tenant); or (ii) the date on which the
Renewal Option expires (in which case such portion of the award shall be paid to
Landlord). If any such temporary condemnation or other taking terminates prior
to the expiration of the Term, Tenant shall restore the Premises as nearly as
possible to the condition prior to the condemnation or other taking, at Tenant's
sole cost and expense; provided that, Tenant shall receive the portion of the
award attributable to such restoration.
13.3 As of the date of this Lease, Landlord has no knowledge of any
threatened, contemplated or pending special assessments or eminent domain
proceedings that would affect the Premises or any part thereof in any way
whatsoever.
13. Assignment/Subleasing
---------------------
13.1 Limitation.
----------
(a) Tenant shall not directly or indirectly, voluntarily or
involuntarily assign, mortgage or otherwise encumber all or any portion of its
interest in this Lease or in the Premises (collectively, "Assignment") or permit
the Premises to be occupied by anyone other than Tenant or Tenant's employees,
or sublet the Premises (collectively, "Sublease"), or any portion thereof,
without obtaining the prior written consent of Landlord, which consent may be
granted or withheld by Landlord in its sole and absolute discretion, and any
such attempted assignment, subletting, mortgage or other encumbrance without
such consent shall be null and void and of no effect.
(b) Notwithstanding the foregoing, provided that Tenant is not
in material default hereunder, from and after the first anniversary of the
Commencement Date, Tenant may assign this Lease or sublease the Premises (but in
no event less than a full floor of the Premises), with the prior written
approval of Landlord, which approval shall not be unreasonably withheld or
delayed, provided that (i) in no event shall there be more than one tenant or
occupant per floor and (ii) Tenant shall have no right to enter into any
Assignment or Sublease for any floor of
41
the Premises which relates to less than the entirety of such floor.
13.2 Notice of Intent to Assign or Sublet. If Tenant desires at any
------------------------------------
time to enter into an Assignment or to Sublease the Premises or any portion
thereof, it shall first notify Landlord of its desire to do so and shall submit
in writing to Landlord (i) the proposed effective date of the Assignment or
Sublease, which shall be not less than thirty (30) days after nor more than one
hundred eighty (180) days after the date of the delivery of such notice; (ii)
the name of the proposed assignee, subtenant, transferee or occupant
("Transferee"); (iii) the nature of the proposed Transferee's business to be
carried on in the Premises; (iv) the material terms and provisions of the
proposed Sublease or Assignment; and (v) such financial information as Landlord
may reasonably request concerning the proposed Transferee (collectively, the
"Transfer Notice").
13.3 Landlord's Options. At any time within twenty (20) days after
------------------
Landlord's receipt of all of the information required in the Transfer Notice,
Landlord may by written notice to Tenant elect to (a) approve the proposed
sublease or assignment or (b) reasonably disapprove the proposed sublease or
assignment, in which event the notice shall state the reasons for such
disapproval. In the event Landlord wrongfully withholds consent to a proposed
Assignment or Sublease, Tenant's remedy shall be limited to (i) injunctive
relief or (ii) an action to recover the actual damages incurred by Tenant in
connection with such withholding of consent, provided that Tenant shall be
affirmatively obligated to mitigate its damages (including without limitation by
continuing to seek an acceptable Transferee).
13.4 Conditions for Landlord's Consent to Subleases.
----------------------------------------------
(a) If Landlord is required pursuant to Section 14.1(b) above
---------------
not to unreasonably withhold or delay its consent to any proposed Assignment or
Sublease, without limitation as to the other reasonable grounds for withholding
consent, Landlord's refusal to consent to any such proposed Assignment or
Sublease shall be deemed reasonable under this Lease and applicable law if:
(1) The Transferee, in Landlord's reasonable
opinion, is not a tenant which would be located in a first-class office building
project, or is of a character or reputation or engaged in a business which is
not consistent with the quality of the Project;
(2) The purposes for which the Transferee
intends to use the Premises are, in Landlord's reasonable judgment, incompatible
with the uses of a first-class office building project comparable to the
Project;
42
(3) In the reasonable judgment of Landlord, the
purpose for which the Transferee intends to use the Premises is in violation of
the terms of any other lease in the Project of which Landlord has given Tenant
written notice, or would give an occupant of the Project a right to cancel its
lease or bring an action against Landlord;
(4) The Transferee has been involved in bona
fide negotiations with Landlord within the preceding six (6) months for space in
the Project which is comparable in size, lease term, and if relevant, contiguous
to the existing Premises of the Transferee in the Building;
(5) The effective rent for the Sublease is less
than the effective Fair Market Rental Rate in the sublease market (ignoring the
parenthetical in the first sentence of Section 30.2 which excludes subleases,
and considering exclusively subleases) with appropriate adjustments in the
procedures for determining Fair Market Rental Rate in order to make such
determination for sublease space) for comparable space in the Project at the
time of such Sublease;
(6) The portion of the Premises to be sublet is
not regular in shape with appropriate means of ingress and egress and suitable
for normal renting purposes in conformity with all applicable building and
safety codes;
(7) The Transferee is either a government (or
subdivision or agency thereof) or an occupant of the Project;
(8) The Transferee is engaged in the same or a
substantially similar business as that of Landlord or its affiliates or of
another tenant in the Project; or
(9) Tenant is in default under this Lease,
following receipt of notice and expiration of Tenant's cure rights pursuant to
Article 22.
(b) If Landlord consents to any Assignment or Sublease under
this Section 14.4, Tenant may thereafter within one hundred twenty (120) days
after Landlord's consent, but not later than the expiration of said one hundred
twenty (120) days, enter into such Assignment or Sublease, upon substantially
the same terms and conditions as are set forth in the applicable Transfer Notice
furnished by Tenant to Landlord pursuant to Section 14.2 above.
(c) As a condition to Landlord's consent to any Sublease, such
Sublease shall provide that it is subject and subordinate to this Lease and to
all Underlying Mortgages.
13.5 Transfer Premium. If Landlord consents to an Assignment or
----------------
Sublease, 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 14.5, as and when received by Tenant from
------------
such
43
Transferee. "Transfer Premium" shall mean all rent, additional rent and
other consideration payable by or on behalf of such Transferee, net of
reasonable and reasonably documented subleasing costs actually incurred by
Tenant, in excess of the rent and additional rent payable under this Lease by
Tenant on a per rentable square foot basis. "Transfer Premium" shall also
include, but not be limited to, key money and bonus money paid by the Transferee
to Tenant in connection with such Assignment or Sublease, 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 in
connection with such Assignment or Sublease.
13.6 No Release of Tenant's Obligations. No Assignment or Sublease
----------------------------------
shall relieve Tenant of its obligation to pay the rent and to perform all of the
other obligations to be performed by Tenant hereunder. The acceptance of rent by
Landlord from any other person shall not be deemed to be a waiver by Landlord of
any provision of this Lease or to be a consent to any Assignment or Sublease.
Consent to one Sublease or Assignment shall not be deemed to constitute consent
to any subsequent Sublease or Assignment. Tenant agrees to promptly pay as
Additional Rent Landlord's reasonable costs and attorneys' fees incurred in
connection with the processing and documentation of any requested Assignment or
Sublease whether or not Landlord consents to the Assignment or Sublease or the
same is finally consummated.
13.7 Transfer is Assignment. If Tenant is a corporation which under the
----------------------
then current guidelines published by the Commissioner of Corporations of the
State of California is not deemed a public corporation, or is an unincorporated
association or partnership, the transfer, assignment or hypothecation of any
stock or ownership interest in such corporation, association or partnership in
the aggregate in excess of twenty-five percent (25%) shall be deemed an
Assignment hereunder.
13.8 Assumption of Obligations. Each Transferee shall assume all
-------------------------
obligations of Tenant under this Lease and shall be and remain liable jointly
and severally with Tenant for the payment of the rent, and for the performance
of all of the terms, covenants, conditions and agreements herein contained on
Tenant's part to be performed for the term of this Lease with respect to the
portion of the Premises subject to the assignment or sublease. No Assignment
shall be binding on Landlord unless the Transferee or Tenant shall deliver to
Landlord a counterpart of the Assignment and, if so requested by Landlord, an
instrument in recordable form which contains a covenant of assumption by the
Transferee satisfactory in substance and form to Landlord consistent with the
requirements of this Section 14.8, but the failure or refusal of the Transferee
------------
to execute such instrument or assumption shall not release or discharge the
Transferee from its liability as set forth above.
13.9 Recapture Rights. Notwithstanding anything to the contrary
----------------
contained in this Article 14, Landlord shall have the
44
option, by giving notice to Tenant within twenty (20) days after receipt of
Tenant's notice of any proposed Assignment or Sublease, to recapture the portion
of the Premises which is the subject of Tenant's notice. Such recapture notice
shall cancel and terminate this Lease with respect to such portion of the
Premises as of the date stated in Tenant's notice as of the effective date of
the proposed Assignment or Sublease, unless Tenant revokes Tenant's notice of
proposed Assignment or Sublease by notice to Landlord within ten (10) days after
Landlord's notice of recapture.
14.10 Related Entities. Notwithstanding the provisions of this
----------------
Article 14, Tenant, without the consent of Landlord, may assign or sublet all or
any portion of this Lease to any "Related Entity" (as hereinafter defined), or
to any corporation with which Tenant may merge or consolidate or which may
acquire substantially all of the assets of Tenant. As used herein, the term
"Related Entity" shall mean and refer to any parent, subsidiary or affiliate of
Tenant which controls or is controlled by Tenant or by persons controlling or
controlled by Tenant. For the purposes of this paragraph, control refers to the
record and beneficial ownership of at least fifty-one percent (51%) of the
voting interests of the entity in question.
14.11 Preapproved Sublease. Notwithstanding any other
--------------------
provision of this Article 14, Landlord acknowledges that Landlord approves of
the sublease of approximately 10,000 square feet located on the first floor of
the Premises to Pacific Capital Group, Inc.
14. Landlord's Reserved Rights.
--------------------------
14.1 Right of Entry. Landlord and its agents and representatives shall
--------------
have the right, at all reasonable times, but in such manner as to cause as
little disturbance to Tenant as reasonably practicable, to enter the Premises
for purposes of inspection, to post notices of non-responsibility, to protect
the interest of Landlord in the Premises, to supply janitorial service and any
other services to be provided by Landlord hereunder, to perform all required or
permitted work therein, including the erection of scaffolding, props and other
mechanical devices for the purpose of making alterations, repairs or additions
to the Premises or the Building which are provided for in this Lease or required
by Laws, provided that except in the case of emergencies or for janitorial
services, Landlord's entry into the Premises shall either be following notice
given at least one (1) business day in advance or be accompanied by one or more
qualified representatives of Tenant (who Tenant shall make reasonably available
for such purposes during Normal Working Hours). Locks to the Premises, including
interior areas, shall be keyed consistent with the keying system for the
Building. Tenant may designate certain areas within the Premises as "Secured
Areas" for the purpose of securing certain valuable property or confidential
information. Except in emergencies and to provide janitorial services (unless
Tenant advises Landlord
45
that it does not desire janitorial services for such Secured Areas), Landlord
may not enter said Secured Areas unless Landlord provides Tenant at least five
(5) business days prior written notice of the date and time of such entry, and
any such entry shall be subject to escort by a Tenant representative. Upon
reasonable prior notice, Landlord and its agents and representatives shall also
have the right, during normal business hours, to show the Premises to
prospective tenants (during the last eighteen (18) months of the Term), lessors
of superior leases, mortgagees, prospective mortgagees or prospective purchasers
of the Building, subject to Landlord's obligation to cause as little disturbance
to Tenant as reasonably practicable. No such reasonable entry shall be construed
under any circumstances as a forcible or unlawful entry into, or a detainer of,
the Premises, or an eviction of Tenant, and Tenant hereby waives any claim
against Landlord or its agents or representatives for damages for any injury or
inconvenience to or interference with, Tenant's business or quiet enjoyment of
the Premises.
14.2 Building and Common Areas. Provided Landlord does not unreasonably
-------------------------
interfere with Tenant's use of the Premises and the Common Areas, Landlord may:
(a) install, repair, replace or relocate pipes, ducts, conduits, wires and
appurtenant meters and equipment for service to other parts of the Building
above the ceiling surfaces, below the floor surfaces, within the walls and in
the central core areas of the Premises or the rest of the Building; (b) repair,
renovate, alter, expand or improve the Building; (c) make changes to the Common
Areas, including without limitation, changes in the location, size, shape and
number of street entrances, driveways, ramps, entrances, exits, parking spaces
(subject to Section 6.1(f) above), parking areas, loading and unloading areas,
halls, passages, stairways and other means of ingress and egress, and direction
of traffic, landscaped areas and walkways; (d) close temporarily (and only so
long as necessary) any of the Common Areas for maintenance purposes so long as
reasonable access to the Premises remains available; (e) designate other land
outside the boundaries of the Building to be part of the Common Areas; (f) add
additional buildings and improvements to the Common Areas, subject to the
limitations in Section 15.5; (g) use the Common Areas while engaged in making
------------
additional improvements, repairs or alterations to the Building, or any portion
thereof; and (h) do and perform such other acts and make such other changes in,
to or with respect to the Common Areas and Building and other portions of the
Project as Landlord may deem appropriate.
14.3 Intentionally Omitted.
---------------------
14.4 Excavation. Landlord shall have the right to utilize the Land for
----------
purposes of excavation and shall have the right to authorize the use of, and
grant licenses and easements over, the Land to owners of adjacent property or
governmental authorities for excavation purposes. If an excavation is made upon
any of the Land adjacent to the Building by Landlord or said owner of
46
adjacent property, Tenant shall license and authorize Landlord or said owner to
enter on to the Premises for the purpose of performing such work in connection
with the excavation as may be necessary or prudent to preserve the Building and
other portions of the Project from injury or damage. Except as specifically
provided otherwise in this Lease, Tenant shall have no claim for damages or
indemnity against Landlord or any right to abatement of rent in connection
therewith, except to the extent Landlord acts unreasonably and unreasonably
interferes with Tenant's use and occupancy of the Premises.
14.5 Development of Other Improvements. Any other adjacent property
---------------------------------
which may be acquired by Landlord, or any portion thereof, may be developed by
Landlord, or by any successor-in-interest to Landlord, or by any entity
controlling, controlled by or under common control with Landlord, for office,
retail and/or other purposes deemed appropriate in Landlord's discretion
(individually or collectively, the "Other Improvements"). If the Other
Improvements are owned by an entity other than Landlord, Landlord shall have the
right, but not the obligation (unless Landlord is obligated to comply with
zoning or other governmental requirements), to enter into an agreement with the
owner of any or all of the Other Improvements to provide (a) for reciprocal
rights of access, use and enjoyment of the Project and the Other Improvements
(without unreasonably impairing Tenant's access to and use of the Common Areas
in the Project), (b) for the common management, operation, maintenance,
improvement and repair of all or any portion of the Project and all or any
portion of the Other Improvements, or (c) for the allocation of all or any
portion of the Operating Expenses, Real Property Taxes and Capital Improvement
Amortization for the Project to the Other Improvements and the allocation of the
Operating Expenses, Real Property Taxes and Capital Improvement Amortization for
the Other Improvements to the Project in order to provide for the efficient
management, operation, maintenance, improvement and repair of the Project and
the Other Improvements provided that the total Operating Expenses, Real Property
Taxes and Capital Improvement Amortization otherwise allocable to Tenant shall
not be increased as a result of such allocation. Landlord agrees that it will
use reasonable efforts to cause the Other Improvements to be taxed and assessed
separately from the Project for Real Property Taxes. If the Other Improvements
and the Project are taxed together, Landlord shall allocate the Real Property
Taxes between the Project and the Other Improvements in order to equitably
allocate such Taxes between the Project and the Other Improvements.
14.6 Incorporation of Other Improvements. In the event Landlord (a) is
-----------------------------------
the owner of any or all of the Other Improvements and the property on which they
are located, or (b) conveys the Project to the owner of the Other Improvements
or to any other person or entity which will become the owner of both the Project
and the Other Improvements, Landlord, or its successors or assigns, shall have
the right, but not the obligation (unless Landlord is obligated to comply with
zoning or other governmental requirements), to incorporate the Other
Improvements into the
47
Project and to provide for the common management, operation, maintenance and
repair of the Project and the Other Improvements provided that such
incorporation of the Other Improvements shall not increase the total Operating
Expenses, Real Property Taxes and Capital Improvement Amortization otherwise
allocable to Tenant under this Lease or unreasonably impair Tenant's access to
and use of the Common Areas of the Project as they existed prior to such
incorporation into the Project. In the event the Other Improvements are so
incorporated into the Project, all references to the Project contained in this
Lease shall be deemed and construed to include the Other Improvements. Landlord
agrees that it will use reasonable efforts to cause the Other Improvements to be
taxed and assessed separately from the Project for Real Property Taxes. If the
Other Improvements and the Project are taxed together, Landlord shall allocate
the Real Property Taxes between the Project and the Other Improvements in order
to equitably allocate such Taxes between the Project and Other Improvements.
Nothing contained in this Article 15 shall be deemed or construed to limit or
----------
otherwise affect Landlord's right to sell the Project or any other rights
described in this Lease.
15. Indemnification and Limitation on Liability.
-------------------------------------------
15.1 Indemnity of Landlord. Tenant shall be liable for, and shall
---------------------
indemnify, protect, defend and hold harmless Landlord and Landlord's partners,
officers, directors, agents, successors and assigns (collectively, "Landlord
Indemnified Parties"), from and against, any and all claims, damages, judgments,
suits, causes of action, losses, liabilities and expenses, including reasonable
attorneys' fees and court costs (collectively, "Indemnified Claims"), arising or
resulting from (i) any act or omission of Tenant or any of Tenant's agents,
employees, contractors, subtenants, assignees, licensees or invitees (acting
within the scope of their relationship with Tenant) (collectively, "Tenant
Parties"); (ii) the use of the Premises and Common Areas and conduct of Tenant's
business by Tenant or any Tenant Parties, or any other activity, work or thing
done, permitted or suffered by Tenant or any Tenant Parties (acting within the
scope of their relationship with Tenant), in or about the Premises, the Building
or elsewhere within the Project; and/or (iii) any default by Tenant of any
obligations on Tenant's part to be performed under the terms of this Lease;
exclusive of any Indemnified Claims (A) arising out of or in connection with the
negligence or willful misconduct by Landlord or its employees, contractors, or
agents (acting within the scope of their relationship with Landlord), or breach
by Landlord under any agreement between Landlord and a third party; or (B)
extending to any such damage or injury which is covered by any insurance
maintained by Landlord or any Landlord Indemnified Parties (or which would have
been covered had Landlord obtained the insurance required under the provisions
of this Lease) (collectively, "Landlord-Related Claims"). In case any action or
proceeding is brought against Landlord or any Landlord Indemnified Parties by
reason of any such Indemnified Claims, Tenant, upon notice from Landlord, shall
defend the same
48
at Tenant's expense by counsel approved in writing by Landlord, which approval
Landlord shall not unreasonably withhold. Landlord shall indemnify, defend and
hold Tenant harmless from and against any and all Landlord-Related Claims. In
case any action or proceeding is brought against Tenant by reason of any such
Landlord-Related Claims, Landlord, upon notice from Tenant, shall defend the
same at Landlord's expense by counsel approved in writing by Tenant, which
approval Tenant shall not unreasonably withhold.
15.2 Tenant's Assumption of Risk and Waiver. Except to the extent
--------------------------------------
specifically included in Landlord's indemnification obligations set forth in
Section 16.1 above, Tenant, as a material part of the consideration to Landlord,
------------
hereby agrees that neither Landlord nor any Landlord Indemnified Parties shall
be liable to Tenant for, and Tenant expressly assumes the risk of and waives any
and all claims it may have against Landlord or any Landlord Indemnified Parties
with respect to, any and all damage to property or injury to persons in, upon or
about the Premises, the Building of the Project resulting from any act or
omission of Landlord or of any Landlord Indemnified Party (whether or not
negligent) or from any other cause whatsoever, including without limitation, (i)
any such damage caused by other tenants or persons in or about the Building or
the Project, or caused by quasi-public work, (ii) any damage to property
entrusted to employees of the Building, (iii) any loss of or damage to property
by theft or otherwise, or (iv) any injury or damage to persons or property
resulting from any casualty, explosion, falling plaster or other masonry or
glass, steam, gas, electricity, water or rain which may leak from any part of
the Building or any other portion of the Project or from the pipes, appliances
or plumbing works therein or from the roof, street or subsurface or from any
other place, or resulting from dampness, or any other cause whatsoever.
Notwithstanding anything to the contrary contained in this Lease, neither
Landlord nor any Landlord Indemnified Parties shall be liable for consequential
damages arising out of any loss of the use of the Premises or any equipment or
facilities therein by Tenant or any Tenant Parties or for interference with
light or other incorporeal hereditaments. Tenant shall use its best efforts to
give prompt notice to Landlord in case of fire or accidents in the Premises, or
of defects therein or in the fixtures or equipment therein.
15.3 Survival; No Release of Insurers. Tenant's and Landlord's
--------------------------------
indemnification obligations under Section 16.1, respectively, shall survive the
------------
expiration or earlier termination of this Lease. Tenant's covenants, agreements
and indemnification in Section 16.1, and Landlord's indemnification in Section
------------ -------
16.1, are not intended to and shall not relieve any insurance carrier of its
----
obligations under policies required to be carried by Landlord or Tenant,
respectively, pursuant to the provisions of this Lease.
16. Definitions of Landlord.
-----------------------
49
The term "Landlord" as used in this Lease, so far as covenants or
obligations on the part of Landlord are concerned, shall be limited to mean and
include only the owner or owners, at the time in question, of the fee title of
the Premises or the lessees under any ground lease, if any. In the event of any
transfer, assignment or other conveyance or transfers of any such title,
Landlord herein named (and in case of any subsequent transfers or conveyances,
the then grantor) shall be automatically freed and relieved from and after the
date of such transfer, assignment or conveyance of all liability as respects the
performance of any covenants or obligations on the part of Landlord contained in
this Lease thereafter to be performed; provided, however, that within thirty
(30) days of any such transfer, assignment or conveyance, Landlord shall notify
Tenant of same in writing, including the names, addresses and telephone numbers
of such successors and Landlord shall be relieved of any obligation in
connection with the return of the Security Deposit upon the unconditional
written assumption of such obligation by the Landlord's successor for the
benefit of Tenant and the delivery to Tenant of a notice by Landlord in
accordance with California Civil Code Section 1950.7. Without further agreement,
the transferee of such title shall be deemed to have assumed and agreed to
observe and perform any and all obligations of Landlord hereunder, during its
ownership of the Premises. Landlord may transfer its interest in the Premises
without the consent of Tenant and such transfer or subsequent transfer shall not
be deemed a violation on Landlord's part of any of the terms and conditions of
this Lease.
17. Subordination.
-------------
17.1 Subordination. This Lease shall not be subordinate to any
-------------
mortgage, trust deed, ground lease or other encumbrance which may hereafter be
executed affecting the Land, the Building and/or the Project but shall be
subordinate to the existing deed of trust in favor of The Union Labor Life
Insurance Company ("Ullico") (the existing deed of trust together with all
future deeds of trust, mortgages, ground leases or other encumbrances are
referred to collectively as the "Underlying Mortgage"). Notwithstanding the
preceding sentence, this Lease shall be subordinate to the liens of any future
Underlying Mortgages in the event such subordination is required by the holder
of any such Underlying Mortgage, provided that any such subordination shall be
subject to the execution by such holder of a commercially reasonable
non-disturbance and attornment agreement ("Non-Disturbance Agreement") in a
commercially reasonable form. Landlord shall also cause Ullico to execute and
deliver to Tenant a Non-Disturbance Agreement substantially in the form of "G"
concurrently with the execution and delivery of this Lease by Landlord.
17.2 Attornment. If Landlord's interest in the Land, the Building or
----------
the Project is sold or conveyed upon the exercise of any remedy provided for in
any Underlying Mortgage, or otherwise by operation of law, this Lease will not
be affected, subject to
50
and in accordance with the applicable Non-Disturbance Agreement, and Tenant will
attorn to and recognize the new owner as Tenant's Landlord under this Lease,
subject to and in accordance with the applicable Non-Disturbance Agreement.
Tenant will confirm such attornment in writing within twenty (20) days after
request (Tenant's failure to do so will constitute a default under this Lease).
17.3 Notice from Tenant. Tenant shall give written notice to the holder
------------------
of any Underlying Mortgage whose name and address have been previously furnished
to Tenant, together with a request that such holder receive copies of such
notices, of any act or omission by Landlord which Tenant asserts as giving
Tenant the right to terminate this Lease or to claim a partial or total eviction
or any other right or remedy under this Lease or provided by law (including
without limitation any notice of default pursuant to Section 22.6 hereof).
Tenant further agrees that the holder of any Underlying Mortgage shall have the
right to cure any default by Landlord on the same terms and conditions set forth
in Section 22.6, with such holder's cure period running the date of receipt of
written notice by such holder.
18. Estoppel Certificates.
---------------------
Each party ("Certifying Party") shall, at any time and from time to
time upon not less than twenty (20) days prior notice by the other party
("Requesting Party") execute, acknowledge and deliver to the Requesting Party a
statement in writing, certifying (a) the Commencement Date of this Lease, (b)
that this Lease is unmodified and in full force and effect (or if there have
been modifications, that the same is in full force and effect as so modified and
stating such modifications), (c) the dates to which the Basic Rent, Additional
Rent and other charges have been paid in advance, if any, (d) whether or not to
the best knowledge of the Certifying Party, the Requesting Party is in default
in the performance of any covenant, agreement or condition contained in this
Lease and, if so, specifying each such default of which the Certifying Party may
have knowledge, (e) the balance of the Security Deposit (including any accrued
interest thereon) and (f) any other information which reasonably may be
requested by the Requesting Party or the beneficiary under any Underlying
Mortgage. Any such statement delivered pursuant to this Article 19 may be relied
----------
upon by any prospective purchaser of the fee of the Building, the Project or the
Land or any mortgage or any mortgagee, ground lessor or other like encumbrancer
thereof or any assignee of any such encumbrancer of the Land, the Building or
the Project or any proposed assignee, sublessee or lender of Tenant. If such
statement is not delivered with twenty (20) days, the requesting party shall
give the other party an additional written request for such statement. If such
statement is not delivered within an additional ten (10) day cure period, then
the information contained in the requested statement shall be conclusively
deemed to be true and may be relied upon as such by the requesting party. In the
event that
51
in any calendar year either party requests more than two (2) estoppel
certificates from the other party, in connection with the third and each
subsequent estoppel certificate, the requesting party shall pay the other party
a fee equal to Five Hundred Dollars ($500.00) to compensate such party for its
costs.
52
19. Surrender of Premises and Removal of Property.
---------------------------------------------
19.1 No Merger. The voluntary or other surrender of this Lease by
---------
Tenant, a mutual cancellation or a termination hereof, shall not constitute a
merger, and shall, at the option of Landlord, terminate all or any exiting
subleases or shall operate as an assignment to Landlord of any or all subleases
affecting the Premises.
19.2 Surrender of Premises. Upon the expiration of the Term, or upon
---------------------
any earlier termination hereof, Tenant shall quit and surrender possession of
the Premises to Landlord in as good order and condition as the Premises are now
or hereafter may be improved by Landlord or Tenant, reasonable wear and tear and
repairs which are Landlord's obligation excepted, and shall, without expense to
Landlord, remove or cause to be removed from the Premises, all debris and
rubbish, all FF&E, 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 (including without limitation any equipment for
Tenant's network operating center, if any), and all similar articles of any
other persons claiming under Tenant unless Landlord exercises its option to have
any subleases or subtenancies assigned to Landlord, and Tenant shall repair all
damage (other than reasonable wear and tear) to the Premises or the Project
resulting from such removal.
19.3 Disposal of Property. In the event of the expiration of this Lease
--------------------
or other re-entry of the Premises by Landlord as provided in this Lease, any
personal property of Tenant not removed by Tenant upon the expiration of the
Term of this Lease, or within seven (7) days after a termination by reason of
Tenant's default, shall be considered abandoned and Landlord may remove any or
all of such property and dispose of the same in any manner or store the same in
a public warehouse or elsewhere for the account of, and at the expense and risk
of, Tenant. If Tenant shall fail to pay the costs of storing any such property
after it has been stored for a period of thirty (30) days or more, Landlord may
sell any or all of such property at public or private sale, in such manner and
at such places as Landlord, in its sole discretion, may deem proper, without
notice to or demand upon Tenant. In the event of such sale, Landlord shall apply
the proceeds thereof, first, to the cost and expense of sale, including
reasonable attorneys' fees; second, to the repayment of the cost of removal and
storage; third, to the repayment of any other sums which may then or thereafter
be due to Landlord from Tenant under any of the terms of this Lease; and fourth,
the balance, if any, to Tenant.
19.4 Fixtures and Improvements. All FF&E, alterations, additions,
-------------------------
improvements and/or appurtenances attached to or built into the Premises
(excluding trade fixtures, such as audio-visual equipment and theatrical
equipment, and any equipment for Tenant's network operating center, if any)
prior to or during the Term hereof, whether by Landlord at its expense or at the
expense
53
of Tenant, or both, as further described in Section 8.2, 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 such removal is required by Landlord or permitted pursuant
to the provisions of Article 8.
---------
20. Holding Over.
------------
In the event Tenant holds over after the expiration of the Term, with
the express or implied consent of Landlord, such tenancy shall be from
month-to-month only, and not a renewal hereof or an extension for any further
term, and such month-to-month tenancy shall be subject to each and every term,
covenant and agreement contained herein; provided, however, that Tenant shall
pay as Basic Rent during any holding over period, an amount equal to one hundred
fifty percent (150%) of the rent for the Premises in effect on the last day of
the Term. Nothing in this Article 21 shall be construed as a consent by Landlord
----------
to any holding over by Tenant and Landlord expressly reserves the right to
require Tenant to surrender possession of the Premises upon the expiration of
the Term or upon the earlier termination hereof and to assert any remedy at law
or in equity to evict Tenant and/or collect damages in connection with such
holding over.
21. Defaults and Remedies.
---------------------
21.1 Defaults by Tenant. The occurrence of any of the following
------------------
shall constitute a default under this Lease by Tenant:
(a) The failure by Tenant to pay the rent or make any other
payment required to be made by Tenant under this Lease and the exhibits hereto
as and when due where such failure continues for ten (10) days after written
notice thereof by Landlord to Tenant; provided, however, that such notice shall
be in lieu of and not in addition to any notice required under Section 1161 of
the California Code of Civil Procedure.
(b) The abandonment of the Premises by Tenant in accordance
with California Civil Code '1951.3. Further, if Tenant (i) vacates the Premises,
(ii) is not actively marketing the Premises for a Sublease, (iii) is not holding
such space for its own use, and Landlord requests Tenant to execute an agreement
terminating this Lease ("Lease Termination Agreement"), Tenant shall execute the
Lease Termination Agreement and this Lease shall thereupon terminate. If Tenant
fails to execute the Lease Termination Agreement within ten (10) days after
Landlord's request to do so, which request references this Section 22.1(b),
---------------
Tenant shall be in default under this Lease.
(c) The failure by Tenant to observe or perform the provisions
of Article 2 where such failure continues and is not remedied within three (3)
---------
business days after notice thereof from Landlord to Tenant; provided, however
that such notice shall be in lieu of and not in addition to any notice required
under Section 1161 of the California Code of Civil Procedure; provided,
54
however, if Tenant cannot remedy such failure by cessation of its own action
within such time period or if Tenant's violation of Article 2 does not cause
---------
loss or injury to Landlord or the Building or Project, Tenant shall not be in
default if Tenant commences to cure such failure within such period and
thereafter diligently prosecutes the same to completion. Notwithstanding the
foregoing, Landlord shall have the absolute right, but not the obligation, to
cure such failure on Tenant's behalf. If Landlord exercises its right to cure
any such failure on Tenant's behalf, Landlord shall notify Tenant of Landlord's
reasonable estimate of the cost to effect such cure and Tenant shall promptly
deposit such sum with Landlord within five (5) business days after receipt of
Landlord's estimate. If Tenant (i) timely deposits the estimated cost of cure
with Landlord, and (ii) within five (5) business days after receipt of an
invoice for the actual cost of cure, reimburses Landlord for such actual costs
to the extent that they exceed the estimated costs previously paid to Landlord
by Tenant, Landlord shall not be entitled to exercise its right to terminate
this Lease pursuant to Section 22.2(a) as a result of Tenant's failure under
this Section 22.1(c), without limiting any other rights which Landlord may have
---------------
under this Lease or at law or in equity as a result of such failure.
(d) The failure by Tenant to observe or perform the provisions
of Article 8 where such failure continues and is not remedied within three (3)
---------
business days after notice thereof from Landlord to Tenant; provided, however,
that such notice shall be in lieu of and not in addition to any notice required
under Section 1161 of the California Code of Civil Procedure. If such failure
cannot reasonably be cured within such three (3) business day period, Landlord
shall not be entitled to exercise its right to terminate this Lease under
Section 22.2(a) if within three (3) business days after notice from Landlord,
---------------
Tenant ceases all work on the Tenant Alterations and immediately commences
repairing any damages and diligently prosecutes such repairs to completion
provided Tenant does not commence any further work on the Tenant Alterations
until Landlord has fully approved the same in writing. If the nature of such
failure under this Section 22.1(d) is such that it adversely affects the
---------------
Building Systems, Service Facilities, access to or safety of any premises in the
Building or the quiet enjoyment of any other tenant in the Building, then
Landlord shall have the absolute right, but not the obligation, to cure such
failure on Tenant's behalf. If Landlord exercises its right to cure any such
failure on Tenant's behalf, Landlord shall notify Tenant of Landlord's
reasonable estimate of the cost to effect such cure and Tenant shall promptly
deposit such sum with Landlord within forty-eight (48) hours after receipt of
Landlord's estimate. If Tenant (x) timely deposits the estimated cost of cure
with Landlord, and (y) within three (3) business days after receipt of an
invoice for the actual cost of cure reimburses Landlord for such actual costs to
the extent that they exceed the estimated costs previously paid to Landlord by
Tenant, Landlord shall not be entitled to exercise its right to terminate this
Lease pursuant to this Section 22.1(d), without limiting any other rights which
---------------
Landlord may
55
have under this Lease or at law or in equity as a result of such failure.
(e) The failure by Tenant to observe or perform any other
provision of this Lease and the exhibits hereto, including the Rules and
Regulations and Parking Garage Rules and Regulations referred to in Article 28,
to be observed or performed by Tenant, where such failure continues for thirty
(30) days after notice thereof by Landlord to Tenant; provided, however, that if
the nature of such default is such that the same cannot reasonably be cured
within such thirty (30) day period, Tenant shall not be deemed to be in default
if Tenant shall within such period commence such cure and thereafter diligently
prosecute the same to completion. Such thirty (30) day notice shall be in lieu
of and not in addition to any notice required under Section 1161 of the
California Code of Civil Procedure.
(f) Any action taken by or against Tenant pursuant to any
statute pertaining to bankruptcy or insolvency or the reorganization of Tenant
(but, in the case of a petition filed against Tenant only if Tenant is
adjudicated to be bankrupt); the making by Tenant of any general assignment for
the benefit of creditors; the appointment of a trustee or receiver to take
possession of all or any portion of Tenant's assets located at the Premises or
of Tenant's interest in this Lease, where possession is not restored to Tenant
within ninety (90) days; or the attachment, execution, or other judicial seizure
of all or any portion of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within ninety (90)
days.
(g) Tenant's failure to vacate and surrender the Premises as
required by this Lease upon the expiration of the Term or termination of this
Lease.
21.2 Landlord's Remedies.
-------------------
(a) In the event of any such default by Tenant, then, in
addition to any other remedies available to Landlord at law or in equity,
Landlord shall have the immediate option to terminate this Lease and all rights
of Tenant hereunder by giving Tenant five (5) days' written notice of such
election to terminate. In the event Landlord shall elect to so terminate this
Lease, Landlord may recover from Tenant:
(i) the worth at the time of award of any unpaid
rent which has been earned at the time of such termination; plus
(ii) the worth at the time of award of any 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
56
(iii) the worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of the award
exceeds the amount of such rental loss that Tenant proves could be 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; 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.
(b) All "rent" (as defined in Section 4.1) shall be computed
-----------
on the basis of the monthly amounts thereof payable on the date of Tenant's
default, as the same are to be adjusted thereafter as contemplated by this
Lease. As used in Paragraphs 22.2(a)(i) and (ii), the "worth at the time of
------------------------------
award" is computed by allowing interest in the per annum amount equal to the
prime rate of interest or other equivalent reference rate from time to time
announced by the Bank of America National Trust and Savings Association (the
"Reference Rate") plus two percent (2%), but in no event in excess of the
maximum interest rate permitted by law. As used in Paragraph 22.2(a)(iii) above,
----------------------
the "worth at the time of award" is computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of award
plus one percent (1%).
(c) In the event of any such default by Tenant, Landlord shall
also have the right, with or without terminating this Lease, to re-enter the
Premises and remove all persons and property therefrom by summary proceedings or
otherwise; such property may be removed and stored in a public warehouse or
elsewhere at the cost of and for the account of Tenant.
(d) In the event of the abandonment of the Premises by Tenant,
a vacation of the Premises and subsequent refusal or failure to execute a Lease
Termination Agreement if required in Section 22.1(b), or in the event that
---------------
Landlord elects to re-enter as provided in Paragraph (c) above or takes
-------------
possession of the Premises pursuant to legal proceeding or pursuant to any
notice provided by law, and, in any event, if Landlord does not elect to
terminate this Lease, then Landlord may from time to time, without terminating
this Lease, either recover all rent as it becomes due or relet the Premises or
any part thereof for such term or terms and at such rent and upon such other
terms and conditions as Landlord, in its reasonable discretion, may deem
advisable, with the right to make alterations and repairs to the Premises.
(e) If Landlord elects to so relet as provided in Paragraph
---------
(d) above, then rentals received by Landlord from such reletting shall be
---
applied: First, to the payment of any
57
indebtedness other than rent due hereunder from Tenant to Landlord; second, to
the payment of any cost of such reletting (including, but not limited to,
leasing commissions, tenant improvement costs, and rent concessions such as free
rent); third, to the payment of the cost of any alterations and repairs to the
Premises; fourth, to the payment of rent due and unpaid hereunder; and the
remainder, if any, shall be held by Landlord and applied in payment of future
rent as the same may become due and payable hereunder. Should that portion of
such rentals received from such reletting during any month, which is applied to
the payment of rent hereunder, be less than the rent payable during that month
by Tenant hereunder, then Tenant shall pay such deficiency to Landlord. Such
deficiency shall be calculated and paid monthly. Tenant shall also pay to
Landlord, as soon as ascertained, any costs and expenses incurred by Landlord in
such reletting or in making such alterations and repairs not covered by the
rentals received from such reletting.
(f) If Landlord elects to terminate this Lease as a result of
Tenant's default, on the expiration of the time stated in Landlord's notice to
Tenant given under Paragraph 22.2(a) above, this Lease and the Term hereof, as
-----------------
well as all of the right, title and interest of Tenant hereunder, shall wholly
cease and expire and become void in the same manner and with the same force and
effect (except as to Tenant's liability) as if the date fixed in such notice
were the date herein specified for expiration of the term of this Lease.
Thereupon, Tenant shall immediately quit and surrender to Landlord the Premises,
and Landlord may enter into and repossess the Premises by summary proceedings,
detainer, ejectment or otherwise, and remove all occupants thereof and, at
Landlord's option, any property thereon without being liable for any damages
therefor.
21.3 Re-Entry Not Termination. No re-entry or taking possession of the
------------------------
Premises by Landlord pursuant to this Article 22 shall be construed as an
----------
election to terminate this Lease unless a written notice of such intention be
given to Tenant or unless the termination thereof be decreed by a court of
competent jurisdiction. Notwithstanding any reletting without termination by
Landlord because of any default of Tenant, Landlord may at any time after such
reletting elect to terminate this Lease for any such default.
21.4 Right of Landlord to Injunction; Cumulative Remedies. In the event
----------------------------------------------------
of a breach by Tenant of any of the agreements, conditions, covenants or terms
hereof, Landlord shall have the right of injunction to restrain the same and the
right to invoke any remedy allowed by law or in equity whether or not other
remedies, indemnity or reimbursements are herein provided. The rights and
remedies given to Landlord in this Lease are distinct, separate and cumulative
remedies, and no one of them, whether or not exercised by Landlord, shall be
deemed to be in exclusion of any of the others.
58
21.5 Definition of Tenant. As used in this Article 22 and in Article
-------------------- ---------- -------
24, the term "Tenant" shall be deemed to include all persons or entities named
--
as Tenant under this Lease, or each and every one of them, jointly and
severally. If any of the obligations of Tenant hereunder is guaranteed by
another person or entity, the term "Tenant" shall be deemed to include all of
such guarantors and any one or more of such guarantors. If this Lease has been
assigned, the term "Tenant," as used in this Article 22 and in Article 23 shall
---------- ----------
be deemed to include both the assignee and the assignor.
21.6 Defaults by Landlord. Landlord shall be in default in the
--------------------
performance of any material obligation required to be performed by Landlord
under this Lease if Landlord has failed to perform such material obligation,
subject to force majeure events, within thirty (30) days after the receipt of
----- -------
notice thereof from Tenant (or, in the case of a failure by Landlord to provide
the services described in Article 7, within fifteen (15) days after the receipt
---------
of the notice thereof from Tenant); provided, however that if the nature of such
material default is such that the same cannot reasonably be cured within such
thirty (30) day period (or 15 day period, as the case may be), Landlord shall
not be deemed to be in default if Landlord shall within such period commence
such cure and thereafter diligently prosecute the same to completion. Upon any
such material default by Landlord ("Landlord Default"), Tenant may exercise any
of its rights provided at law or in equity (including without limitation any
right to terminate this Lease) but nothing herein shall be deemed to give Tenant
the right to offset against rent or other sums due pursuant to this Lease,
except as otherwise expressly set forth herein.
22. Bankruptcy.
----------
If, at any time prior to the Commencement Date, any action is taken by
or against Tenant (and not dismissed within ninety (90) days) in any court
pursuant to any statute pertaining to bankruptcy or insolvency or the
reorganization of Tenant, Tenant makes any general assignment for the benefit of
creditors, a trustee or receiver is appointed to take possession of
substantially all of Tenant's assets or of Tenant's interest in this Lease, or
there is an attachment (not dismissed within sixty (60) days), execution or
other judicial seizure of substantially all of Tenant's assets or of Tenant's
interest in this Lease, then this Lease shall ipso facto be canceled and
---- -----
terminated and of no further force or effect. In such event, neither Tenant nor
any person claiming through or under Tenant or by virtue of any statute or of
any order of any court shall be entitled to possession of the Premises or any
interest in this Lease and Landlord shall, in addition to any other rights and
remedies under this Lease, be entitled to retain any rent, Security Deposit or
other monies received by Landlord from Tenant as liquidated damages.
23. Interest on Tenant's Obligations; Late Charges.
----------------------------------------------
59
23.1 Interest. Any amount due from Tenant to Landlord which is not paid
--------
when due shall bear interest at the lesser of two percent (2%) in excess of the
Reference Rate or the maximum rate per annum which Landlord is permitted by law
to charge, from the day after the date such payment is due until paid, but the
payment of such interest shall not excuse or cure any default by Tenant under
this Lease.
23.2 Late Charge. In the event Tenant is more than five (5) days late
-----------
in paying any amount of rent due under this Lease, Tenant shall pay Landlord a
late charge equal to three percent (3%)of each delinquent amount of rent and any
subsequent delinquent amount of rent; provided, however, that such late charge
shall not be payable with respect to the first two (2) late payments of rent in
each of the first two (2) Lease Years of the Term unless Tenant fails to pay the
delinquent amount of rent within five (5) days after notice of such delinquency
by Landlord. Notwithstanding the previous sentence, no late charge shall be
payable by Tenant with respect to any delinquent payment of rent which is late
as a result of Landlord's failure to notify Tenant of a new address for the
payment of rent at least five (5) days prior to the date on which such payment
of rent was due. The parties agree that the amount of the late charge set forth
in the first sentence of this Section 24.2 represents a reasonable estimate of
------------
the cost and expense that would be incurred by Landlord in processing each
delinquent payment of rent by Tenant and that such late charge shall be paid to
Landlord as liquidated damages for each delinquent payment pursuant to Section
1671 of the California Civil Code, but the payment of such late charge shall not
excuse or cure any default by Tenant under this Lease. The parties further agree
that the payment of late charges and the payment of interest provided for in
Section 24.1 are distinct and separate from one another in that the payment of
------------
interest is to compensate Landlord for the use of Landlord's money by Tenant,
while the payment of a late charge is to compensate Landlord for the additional
administrative expense incurred by Landlord in handling and processing
delinquent payments, but excluding attorneys' fees and costs incurred with
respect to such delinquent payments.
24. Quiet Enjoyment.
---------------
Tenant, upon the paying of all rent hereunder and performing each of
the covenants, agreements and conditions of this Lease required to be performed
by Tenant, shall lawfully and quietly hold, occupy and enjoy the Premises during
the Term without hindrance or molestation of anyone lawfully claiming by,
through or under Landlord, subject, however, to the provisions of this Lease and
subject to any Underlying Mortgage (to the extent this Lease is subordinate
thereto, and subject to the terms of any non-disturbance agreement by the holder
of such Underlying Mortgage in favor of Tenant).
25. Rentable Area.
-------------
60
25.1 Computation of Rentable Area. For all purposes under this Lease,
----------------------------
the Rentable Area of the Project or any portion thereof (including without
limitation the Premises) shall be determined by Landlord in accordance with the
standard method for measuring floor area in office buildings established by the
Building Owners and Managers Association in American National Standard ANSI
Z65.1-1980 (reaffirmed 1996).
25.2 Building Common Areas. All enclosed floor areas in the Building
---------------------
have been constructed for the benefit of Tenant and the other tenants in the
Building. All tenants in the Building must equitably share the cost of those
areas in the Building which contribute to the access, comfort, use and enjoyment
of the premises of each tenant, and for that purpose, each tenant in the
Building, including Tenant, shall bear its "proportionate share of the Building
Common Areas," as defined herein. "Building Common Areas" is defined as the
mechanical areas in the sub-basement and basement, fire response room,
mechanical penthouse, telephone closets, electrical closets, common toilet areas
throughout the Building (which are not part of the premises of any tenant),
janitor's toilet area in the basement, elevator lobbies (which are not part of
the premises of any tenant) and ground floor lobbies in the Building.
Notwithstanding the foregoing, it is specifically agreed that the restrooms and
corridor area on any multi-tenant floor shall not be part of the Building Common
Areas and shall be allocated solely to the tenants on said multi-tenant floor.
Tenant's "proportionate share of the Building Common Areas" shall be determined
by multiplying the total square footage of the Building Common Areas by a
fraction, the numerator of which is the number of square feet of Rentable Area
in Tenant's Premises and the denominator of which is the total number of square
feet of Rentable Area in the Building.
25.3 Premises and Project Rentable Area. The total Rentable Area of the
----------------------------------
Premises is estimated to be 86,408 square feet. The total Rentable Area of
office space in the Project is estimated to be 109,861 square feet. The final
numbers shall be determined by Landlord's interior surveyors promptly following
the Commencement Date, at which time Landlord shall provide written notice
thereof to Tenant, accompanied by reasonable written back-up material. If Tenant
objects to any aspect of such determination, Tenant must deliver written notice
thereof with fifteen days following receipt of such notice, and any error shall
be corrected as mutually agreed by the parties. The final amount of Rentable
Area for the Premises shall be the "numerator" and the final amount of Rentable
Area of office space in the Project shall be the "denominator" for purposes of
Section 5.1 above with respect to the determination of Tenant's pro rata share
of Operating Expenses and Real Estate Taxes.
26. Examination of Lease.
--------------------
The submission of this instrument for examination or signature by Tenant,
Tenant's agents or attorneys, does not
61
constitute a reservation of, or an option to lease, and this instrument shall
not be effective or binding as a lease or otherwise until its execution and
delivery by both Landlord and Tenant.
27. Rules and Regulations.
---------------------
The Rules and Regulations for the Building and Project and the Parking
Garage Rules and Regulations attached hereto as Exhibits "H" and "I",
------------ ---
respectively, are hereby incorporated herein and made a part of this Lease.
Tenant agrees to abide by and comply with each and every one of said rules and
regulations and any amendments, modifications and/or additions thereto as may
hereafter be adopted by Landlord for the safety, care, security, good order and
cleanliness of the Premises, the Building, the Parking Garage and the Project.
Landlord shall use its reasonable best efforts to enforce the Rules and
Regulations in a non-discriminatory manner; provided Landlord shall not be
liable to Tenant for any violation of any of the said rules and regulations by
any other tenant, contractor or invitee or for the failure of Landlord to
enforce any of the Rules and Regulations. Notwithstanding anything above to the
contrary, Landlord agrees that (i) the Rules and Regulations shall not be
amended or modified in a way that unreasonably and adversely affects Tenant's
commercially reasonable use of the Premises as a business office and (ii) that
in the event of any inconsistency between the Rules and Regulations and a
provision of this Lease, the provisions of this Lease shall control. Other rules
and regulations promulgated by Landlord under this Lease and changes to the
Rules and Regulations and the Parking Rules and Regulations shall be subject to
the following (the "Rules Requirements"): (a) they shall be effective after
twenty (20) days prior notice to Tenant, (b) they shall not discriminate against
Tenant, and (c) they shall not unreasonably and adversely affect Tenant's use of
the Premises.
28. No Directory Board; Signage; Project Identity
---------------------------------------------
28.1 Directory Board. The Building shall not have a directory board.
---------------
28.2 Signage; Project Identity. Tenant shall be permitted to install
-------------------------
appropriate signage containing Tenant's name and/or logo on the wall immediately
adjacent to entrance doors to the Premises within the floors of the Premises,
and, provided that at all times Tenant leases all of the Rentable Area on
individual floors of the Premises, on the walls of the elevator lobbies on each
floor of the Premises leased solely by Tenant. Tenant shall also have the right
to reasonable exterior identification signage at the entrance to the Building
(with the exclusive right to have such identification signage on the exterior of
the Building) and directional signage at the entrance to the Garage, to the
parking levels in the Building and other entrances to the Project, but not the
Project as a whole. Any such signage will be designed and constructed in a
manner compatible with Building standard
62
signage and graphics criteria and shall be subject to Landlord's prior approval,
which approval shall not be unreasonably withheld or delayed. Tenant shall be
solely responsible for obtaining any governmental permits and approvals required
for any of Tenant's signage (including without limitation, approvals from the
City of Beverly Hills). If, at any time, Tenant does not lease all of the
Rentable Area on any floor of the Premises hereunder, Tenant's rights under this
Section 29.2 to install and maintain signage on the walls of the elevator
------------
lobbies within such floor shall thereupon terminate, and Tenant shall promptly
remove all such signage and repair and restore the walls to their prior
condition, at Tenant's expense. Similarly, if Tenant exercises its First Floor
Cancellation Option pursuant to Section 3.5 above, Tenant shall share the
signage described in the second sentence of this Section 29.2 (except for
Tenant's identification signage at the entrance to the Building) with any
subsequent first floor tenant of the Building on a reasonable basis taking into
account the relative square footage leased by the parties. Landlord, at
Landlord's sole and absolute discretion, may designate a name for the Project
(the "Project Name"), which Project Name may be changed from time to time by
Landlord. Tenant shall not have any intellectual property rights in or to the
Project Name.
29. Fair Market Rental Rate Arbitration; Definition.
-----------------------------------------------
29.1 Arbitration of Rate. If Tenant objects to the Fair Market Rental
-------------------
Rate as defined in Section 30.2 determined by Landlord for the Renewal Term as
------------
provided in Section 3.4(a)(3)(B), then the Fair Market Rental Rate shall be
--------------------
determined pursuant to the following procedure. Within thirty (30) days after
delivery of Tenant's Disputed Renewal Notice, Landlord and Tenant shall each, by
written notice to the other, appoint an appraiser. If either party fails to
appoint an appraiser within the required time period, then the appraiser
appointed by the other party shall be the sole appraiser for the purpose of
determining the Fair Market Rental Rate and shall deliver a written
determination thereof within sixty (60) days. If both parties timely appoint
appraisers, then within thirty days after the appointment of the second
appraiser, the two appraisers shall mutually agree upon a third appraiser to
participate in the determination of Fair Market Rental Rate. All appraisers
appointed hereunder shall be members of the American Institute of Real Estate
Appraisers (or any successor organization thereof) and shall have had at least
five years of recent experience in appraising office space in the Beverly Hills
market. If the two appraisers appointed by Landlord and Tenant fail to timely
agree upon a third appraiser, then a petition may be made by either Landlord or
Tenant to the presiding judge of the Superior Court for the County of Los
Angeles for such selection. Within sixty (60) days after the appointment of the
third appraiser, each appraiser shall deliver to both Landlord and Tenant a
written appraisal setting forth his or her determination of the Fair Market
Rental Rate. The average of the three appraisals shall be the final Fair Market
Rental Rate.
63
Landlord and Tenant shall each separately bear the fees of the
appraiser whom they appoint and shall divide equally the fees of the third
appraiser.
29.2 Fair Market Rental Rate. The phrase "Fair Market Rental Rate" as
-----------------------
used in Sections 3.4 and 30.1 shall mean the fair market value annual rental
---------------------
rate for which Landlord, at or about the time that such Fair Market Rental Rate
is deemed to take effect, has entered into a lease or leases (excluding any
subleases by any tenant, including Tenant, in the Project) with a tenant or
tenants for any general office use of comparable space in the Project (without
extenuating circumstances, such as the fact that a tenant is exercising a
renewal option), or if any such lease transaction is not available for purposes
of comparison, which Landlord, or other landlords leasing space of comparable
type, size, quality and floor height in the highest category of premiere,
first-class office building projects comparably located would obtain from any
prospective tenant for any general office use of such space. The Fair Market
Rental Rate shall take into account the value of any rent or equivalent economic
concessions ("Concessions") then usually and customarily given in connection
with the leasing of such comparable space in the Building or the Project, as the
case may be for a comparable lease term including, for illustrative purposes
only and not necessarily for purposes of designating necessary Concessions to
take into account unless such Concessions are then actually being given, such
items as tenant improvements, tenant improvement allowances, free rent
(including initial build-out periods granted to tenants without charge), a
maximum or minimum amount limitation on the annual rent, and the level of any
escalation base or "stop" for such comparable space, and saved brokerage
commission obligations. The Fair Market Rental Rate shall also take into account
the manner in which Rentable Area and Usable Area are computed and, to the
extent applicable, that (i) a tenant may lease the Premises on an "as-is" basis
without Landlord granting Concessions such as tenant improvement allowances;
(ii) the Premises, in their then existing condition, may be partially suitable
to a tenant, without the necessity of additional improvements or the granting of
any Concessions such as tenant improvement allowances; (iii) the Premises, in
their then existing condition, may exceed the quality of available space in the
marketplace for the operation of a tenant's business, and (iv) the improvements
in the Premises, in their then existing condition, may need to be demolished and
rebuilt to be suitable for use by a tenant. For purposes of this Section 30.2,
------------
on a renewal of the Term hereof, all of the Premises shall be deemed to be
satisfactory to Tenant and suitable for the conduct of Tenant's business, except
to the extent such space may need to be refurbished. Solely as an example to
illustrate the operation of this Section 30.2, if comparable leases in the
Building or in comparable buildings for similar space, lease space to a tenant
for $50.00 annual gross rent per square foot of Rentable Area, with a $10.00 tax
and operating expense base amount per square foot of Rentable Area, give four
(4) months free rent, a three (3) month build-out period prior to the
64
occupancy of such space, and an allowance of $10.00 per square foot of Usable
Area for tenant improvements, and require the landlord to take over the tenant's
obligations under its former lease, the Fair Market Rental Rate shall not be
$50.00 annual gross rent per square foot of Rentable Area only, but shall be a
net effective rent which, after taking into account any of such Concessions to
which Tenant is entitled under this Lease, shall account for the value of the
$10.00 tax and operating expense base amount per square foot of Rentable Area,
the four (4) months free rent, the three (3) month build-out period prior to the
occupancy of such space, the allowance of $10.00 per square foot of Usable Area
for tenant improvements and the lease takeover obligation (i.e., the actual cost
to a landlord of assuming such lease takeover obligation, after taking into
account any reduction in the obligation, such as rent received from subleasing
such space).
30. Covenant Against Liens.
----------------------
Tenant has no authority or power to cause or permit any lien or
encumbrance of any kind whatsoever, whether created by act of Tenant, operation
of law or otherwise, to attach to or be placed upon the Project or Premises, and
any and all liens and encumbrances created by Tenant shall attach to Tenant's
interest only. Landlord shall have the right at all times to post and keep
posted on the Premises any notice which it deems necessary for protection from
such liens. Tenant covenants and agrees not to suffer or permit any lien of
mechanics or materialmen or others to be placed against the Project, the
Building or the Premises, or any portion thereof, with respect to work or
services claimed to have been performed for or materials claimed to have been
furnished to Tenant or the Premises (including, without limitation, in
connection with any Alterations) and, in case of any such lien attaching or
notice of any lien, Tenant covenants and agrees to cause it to be released and
removed of record, or bonded over, within ten (10) days. Notwithstanding
anything to the contrary set forth in this Lease, in the event that such lien is
not released and removed, or bonded over, within ten (10) days after notice of
such lien is delivered by Landlord to Tenant, Landlord may, without waiving its
rights and remedies based upon such breach by Tenant and without releasing
Tenant from any of its obligations, immediately take all action necessary to
release and remove such lien, without any duty to investigate the validity
thereof, and all sums, costs and expenses, including reasonable attorneys' fees
and costs, incurred by Landlord in connection with such lien shall be deemed
Additional Rent under this Lease and shall immediately be due and payable by
Tenant. Notwithstanding the foregoing, if Tenant has made payment to Landlord
for the cost of any Tenant Alterations or portion thereof, and Landlord fails to
forward such payment to a contractor or subcontractor, Landlord shall be solely
responsible for a mechanics' lien filed as a result of such nonpayment.
31. Consents; Good Faith.
--------------------
65
31.1 Consents. Any time this Lease requires a consent or approval of
--------
Landlord or Tenant, such consent or approval shall not be unreasonably withheld
or delayed; provided, however, that nothing in this Section 32.1 shall require
------------
Landlord to consent to (i) any use of the Premises for purposes other than those
described in Article 2, (ii) any Tenant Alterations which would adversely affect
---------
the Building Systems or Service Facilities, or unreasonably affect the exterior
appearance of the Building, or (iii) any proposed assignment of or subletting
under this Lease to which Landlord is not otherwise required to consent under
Article 14.
----------
31.2 Good Faith. Whenever this Lease grants Landlord or Tenant a right
----------
to take action, exercise discretion, or make an allocation, judgment or other
determination (collectively, an "Act"), Landlord or Tenant shall act reasonably
and in good faith (meaning that no action will be taken which would materially
contravene the reasonable expectations of a sophisticated landlord operating the
highest category of premiere, first-class office building and a sophisticated
tenant in the highest category of premiere, first-class office buildings
concerning the benefits, rights and obligations under this Lease but not
contravening the plain and clear intent of the specific language of this Lease
governing the specific issue in question), provided, however, that:
(a) Wherever this Lease elsewhere provides another standard
which specifically defines or limits Landlord's or Tenant's discretion with
respect to any Act, such other standard and not this Section 32.2 shall then
------------
control as to such Act;
(b) Except for an obligation to act in good faith, this
Section 32.2 shall not apply to (i) an election by Landlord to terminate the
------------
Lease under Sections 12.2, 12.3 or 13.1; or (ii) an election by Landlord under
---------------------------
Section 33.2 to cure any default of Tenant hereunder;
------------
(c) This Section 32.2 shall not apply to an Act taken by
------------
Landlord pursuant to Article 22 of the Lease; and
----------
(d) Nothing contained in this Section 32.2 shall be deemed to
------------
limit the discretion of Landlord or Tenant with respect to any matter
(including, without limitation, a proposal to amend or otherwise modify the
Lease) which is not otherwise within the contemplation of the Lease.
32. General Provisions.
------------------
32.1 No Waiver. The waiver by Landlord of any breach of any term,
---------
covenant or condition herein contained shall not be deemed to be a waiver of any
subsequent breach of the same or any other term, covenant or condition herein
contained, nor shall any custom or practice which may grow up between the
parties in the administration of the terms hereof be deemed a waiver of or in
any way affect the right of Landlord to insist upon the
66
performance by Tenant in strict accordance with said terms. 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 by Landlord of a lesser sum than the
Basic Rent and Additional Rent or other sum then due shall be deemed to be other
than on account of the earliest installment of such rent or other amount due,
nor shall any endorsement or statement on any check or any letter accompanying
any check be deemed an accord and satisfaction, and Landlord may accept such
check or payment without prejudice to Landlord's right to recover the balance of
such installment or other amount or pursue any other remedy in this Lease
provided.
32.2 Landlord's Right to Perform. All covenants and agreements to be
---------------------------
performed by Tenant under any of the terms of this Lease shall be performed by
Tenant at Tenant's sole expense and without abatement of rent, except as
otherwise expressly provided in this Lease. If Tenant shall fail to observe and
perform any covenant, condition, provision or agreement contained in this Lease
or shall fail to perform any other act required to be performed by Tenant,
Landlord may, upon notice to Tenant, without obligation, and without waiving or
releasing Tenant from any default or obligations of Tenant, make any such
payment or perform any such obligation on Tenant's part to be performed. All
sums so paid by Landlord and all costs incurred by Landlord, including
attorneys' fees, together with interest thereon in a per annum amount equal to
two percent (2%) in excess of the Reference Rate but not in excess of the
maximum rate permitted by law, shall be payable to Landlord on demand and Tenant
covenants to pay any such sums, and Landlord shall have (in addition to any
other right or remedy hereunder) the same rights and remedies in the event of
the non-payment thereof by Tenant as in the case of default by Tenant in the
payment of rent.
32.3 Terms; Headings. The words "Landlord" and "Tenant" as used herein
---------------
shall include the plural, as well as the singular. The words used in neuter
gender include the masculine and feminine and words in the masculine or feminine
gender include the neuter. If there is more than one tenant, the obligations
hereunder imposed upon Tenant shall be joint and several. The headings or titles
of this Lease shall have no effect upon the construction or interpretation of
any part hereof.
32.4 Entire Agreement. This Lease, along with any exhibits referred to
----------------
herein and attached hereto and referenced herein, or other documents expressly
incorporated by reference herein, constitute the entire and exclusive agreement
between Landlord and Tenant with respect to the Premises and the estate and
interest leased to Tenant hereunder. This Lease and said exhibits and other
documents may be altered, amended, modified or revoked only by an instrument in
writing signed by both Landlord and Tenant. Landlord and Tenant hereby agree
that all prior or
67
contemporaneous oral understandings, agreements or negotiations relative to the
leasing of the Premises are merged into and revoked by this instrument.
32.5 Successors and Assigns. Subject to the provisions of Article 14
---------------------- ----------
relating to Assignment and Sublease, this Lease is intended to and does bind the
heirs, executors, administrators and assigns of any and all of the parties
hereto.
32.6 Notices. Any notice, consent, approval, request, demand and other
-------
communication ("Notice") which Landlord or Tenant is required or desires to
serve upon, or deliver to, the other shall be in writing and mailed postage
prepaid by certified or registered mail, return receipt requested, or by
personal delivery, to the appropriate address indicated below, or at such other
place or places as either Landlord or Tenant may, from time to time, designate
in a written notice given to the other. If the term "Tenant" in this Lease
refers to more than one person or entity, Landlord shall be required to make
service or delivery, as aforesaid, to any one of the said persons or entities
only. Notices shall be deemed sufficiently served or given at the time of
personal delivery or three (3) days after the date of mailing thereof; provided,
however, that any notice of default to Tenant under Article 22 shall be
----------
hand-delivered to the Premises (without affecting the required manner of
delivery of any copy of any such notice of default). Any notice, request,
communication or demand by Tenant to Landlord shall be addressed to Landlord at
the Office of the Building with a copy to Mitchell Evall, Esq., Weissmann,
Wolff, Bergman, Coleman & Silverman, LLP, 9665 Wilshire Boulevard, Suite 900,
Beverly Hills, California 90212, and, if requested in writing by the Landlord,
given or served simultaneously to the Landlord's mortgagee at the address
specified in such request. Any notice, request, communication or demand by
Landlord to Tenant shall be addressed to Tenant at the Premises, Attention:
General Counsel, with a copy to:
Munger, Tolles & Olson, LLP
355 South Grand Avenue, Thirty-Fifth Floor
Los Angeles, California 90071-1560
Attention: O'Malley Miller, Esq.
and a copy to Global Crossing Holdings, Ltd., at the Premises, Attention:
General Counsel. Rejection or other refusal to accept a Notice or the inability
to deliver the same because of a changed address of which no Notice was given
shall be deemed to be receipt of the Notice sent.
32.7 Severability. If any term or provision of this Lease, the deletion
------------
of which would not adversely affect the receipt of any material benefit by
either party hereunder, shall be held invalid or unenforceable to any extent,
the remaining terms, conditions and covenants of this Lease shall not be
affected thereby and each of said terms, covenants and conditions shall be valid
and enforceable to the fullest extent permitted by law.
68
32.8 Time of Essence. Time is of the essence of this Lease and each
---------------
provision hereof in which time of performance is established.
32.9 Governing Law. This Lease shall be governed by, interpreted and
-------------
construed in accordance with the laws of the State of California.
32.10 Attorneys' Fees. If Landlord retains the services of attorneys
---------------
and successfully recovers possession of the Premises whether or not suit is
filed, then all such reasonable costs and expenses, including reasonable
attorneys' fees and costs, incurred by Landlord shall be paid by Tenant. If any
action or proceeding (including any appeal thereof) is brought by Landlord or
Tenant (whether or not such action is prosecuted to judgment) to enforce its
respective rights under this Lease or to enforce a judgment ("Action"), (1) the
unsuccessful party therein shall pay all costs incurred by the prevailing party
therein, including reasonable attorneys' fees and costs to be fixed by the
court, and (2) as a separate right, severable from any other rights set forth in
this Lease, the prevailing party therein shall be entitled to recover its
reasonable attorneys' fees and costs incurred in enforcing any judgment against
the unsuccessful party therein, which right to recover post-judgment attorneys'
fees and costs shall be included in any such judgment. The right to recover
post-judgment attorneys' fees and costs shall (i) not be deemed waived if not
included in any judgment, (ii) survive the final judgment in any Action, and
(iii) not be deemed merged into such judgment. The rights and obligations of the
parties under this Section 33.10 shall survive the termination of this Lease.
-------------
32.11 Light and Air. Any diminution or shutting off of light, air or
-------------
view by any structure which may be erected on lands adjacent to the Building or
any other portion of the Project shall in no manner affect this Lease or impose
any liability whatsoever on Landlord.
32.12 Execution by Corporation. The persons executing this Lease on
------------------------
behalf of Tenant represent and warrant to Landlord that they are duly authorized
to execute and deliver this Lease on Tenant's behalf in accordance with a duly
adopted resolution of the board of directors of Tenant, a copy of which is to be
delivered to Landlord on execution hereof, and in accordance with the bylaws of
Tenant, and that this Lease is binding upon Tenant in accordance with its terms.
The persons executing this Lease on behalf of Landlord represent and warrant to
Tenant that they are duly authorized to execute and deliver this Lease on behalf
of Landlord and that this Lease is binding upon Landlord in accordance with its
terms.
32.13 Force Majeure. Neither Landlord nor Tenant shall be liable for
-------------
any failure to comply or delay in complying with its obligations hereunder if
such failure or delay is due to acts of God, inability to obtain labor, strikes,
lockouts, lack of materials, governmental restrictions, enemy actions, civil
69
commotion, riots, insurrection, war, fire, earthquake, unavoidable casualty or
other similar causes beyond such party's reasonable control (all of which events
are herein referred to as force majeure events). It is expressly agreed that
----- -------
Landlord shall not be obliged to settle any strike to avoid a force majeure
----- -------
event from continuing. Payment of money hereunder by one party to the other
shall never be subject to force majeure conditions.
----- -------
32.14 Limitation on Liability. Tenant agrees that, in any action by
-----------------------
Tenant arising out of or relating to the performance of this Lease, Tenant will
proceed only against the interest of Landlord, or its successors and assigns, in
the Project and not against any other assets of Landlord or against any partner
in Landlord (or in any limited or general partnership to which Landlord may
assign this Lease), or against any of such partner's directors, officers,
employees, agents, shareholders, partners or affiliates.
32.15 Development of Project. Landlord shall have sole and absolute
----------------------
discretion in the present and future development of the Project and the leasing
of any space to any tenants, subject to all of the other terms of this Lease.
Tenant has not relied, and shall not rely, on any proposed or potential
development of the Project or any portion thereof, or any other area, and Tenant
acknowledges that Landlord has no obligation to lease, market or develop the
Project in any manner or to any degree. Landlord has no obligation, nor has
Landlord represented that (a) any facilities or amenities in or about the
Project will be any different than as specifically identified in this Lease; (b)
Landlord will develop, expand or complete the Project in any particular way or
to any particular degree; (c) any occupancy levels in the Project, or in
portions thereof, will be reached; or (d) only certain kinds of tenants will
occupy any portion of the Project. Tenant therefore accepts the Project in its
current condition, subject only to the specific express obligations of Landlord
to repair and maintain the Project as may be provided in this Lease.
33. Arbitration.
-----------
(a) Whenever in this Lease it is provided that a dispute shall
be resolved by arbitration, the arbitration shall be conducted in Los Angeles
County, California, as provided in this Article 34. The party desiring such
----------
arbitration shall give written notice thereof to the other specifying the
dispute to be arbitrated. Within ten (10) days after the date on which the
arbitration procedure is invoked as provided in this Lease, each party shall
appoint an experienced arbitrator and notify the other party of the arbitrator's
name and address. For purposes of this Article 34 an "experienced arbitrator"
----------
shall be a licensed lawyer actively engaged in the full-time practice of law in
the County of Los Angeles for a continuous period, immediately preceding the
date on which the arbitration procedure is invoked, of not less than ten (10)
years, but who has at no time ever
70
represented or acted on behalf of any of the parties. The party who selects the
experienced arbitrator may not consult with such experienced arbitrator,
directly or indirectly, to determine such experienced arbitrator's position on
the issue which is the subject of the dispute. If any party fails to so appoint
an experienced arbitrator and notify the other party of such arbitrator's name
and address, an arbitrator shall be appointed pursuant to the same procedure
that is followed when agreement cannot be reached as to the third arbitrator.
Within ten (10) days after the appointment of the second experienced arbitrator
and notice to the other party of such arbitrator's name and address, the two
arbitrators so appointed shall appoint a third experienced arbitrator who shall
notify both parties of the third arbitrator's name and address. If the three
arbitrators to be so appointed are not appointed within thirty (30) days after
the date the arbitration procedure is invoked as provided in this Lease, 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 thirty (30) 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 Landlord or 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 select from a list
of names of experienced arbitrators submitted by Landlord or from a list of
names submitted by Tenant, as the case may be, unless both Landlord and Tenant
submit lists of names, in which case the Court, in it sole discretion, shall
select the third arbitrator from the lists. In the event of any subsequent
vacancies or inabilities to perform among the arbitrators appointed, the
arbitrator or arbitrators involved shall be replaced in accordance with the
provisions of this Article 34 as if such replacement was an initial appointment
----------
to be made under this Article 34 within the time constraints set forth in this
----------
Article 34, measured from the date of notice of such vacancy or inability to the
----------
person or persons required to make such appointment, with all the attendant
consequences of failure to act timely if such appointment person is a party
hereto. In designating arbitrators and in deciding the dispute, the arbitrators
shall utilize their utmost skill and act diligently 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.
(b) The arbitrators appointed pursuant to this Article 34
----------
shall (i) enforce and interpret the rights and obligations set forth in the
Lease to the extent not prohibited by law, (ii) fix and establish any and all
rules as it shall consider appropriate in its sole and absolute discretion to
govern the proceedings before it, including any and all rules of discovery,
procedure and/or evidence, and (iii) make and issue
71
any and all orders, final or otherwise, and any and all awards, as a court of
competent jurisdiction sitting at law or in equity could make and issue and as
it shall consider appropriate in its sole and absolute discretion, including the
awarding of monetary damages (but shall not award consequential damages or
punitive damages to either party), and the awarding of reasonable attorneys'
fees and costs to the prevailing party as determined by the arbitrators in their
sole discretion, and the issuance of injunctive relief. If the party against
whom the award is issued complies with the award within the time period
established by the arbitrators, then no default will be deemed to have occurred,
unless the default pertained to the non-payment of money by either party, and
such party failed to make such payment under protest within the time period
required by this Lease.
(c) The decision of the arbitrators shall be final and
binding, may be confirmed and entered by any court of competent jurisdiction at
the request of any party and may not be appealed to any court of competent
jurisdiction or otherwise except upon a claim of fraud on the part of the
arbitrators, or on the basis of a mistake as to the applicable law. The
arbitrators shall retain jurisdiction over any dispute until its award has been
implemented, and judgment on any such award may be entered in any court having
appropriate jurisdiction.
(d) The obligation of Landlord and Tenant to submit a dispute
to arbitration is limited to disputes arising under those articles of this Lease
which specifically provide for arbitration. Neither party shall be in default
hereunder with respect to any provision hereof during the time period commencing
as of the initial notice of desire to arbitrate 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 Lease and
shall otherwise perform all duties and obligations required to be performed by
such party under this Lease and, with respect to the issue under arbitration,
shall maintain the status quo.
34. Guaranty.
--------
Concurrently with the execution of this Lease by Tenant, and as a
condition precedent to its effectiveness, Tenant shall deliver to Landlord a
Guaranty of Lease in the form of Exhibit J attached hereto, executed by Global
Crossing Holdings, Ltd., a Bermuda corporation.
35. No Brokers.
----------
Landlord and Tenant each hereby represent and warrant to the other, and
shall indemnify and defend the other for any breach hereof by such warranting
party, that no brokers' or finders' fees or commissions will be owed arising out
of the entering into of this Lease as a result of the warranting party's actions
or inactions.
72
36. Gym and Cafeteria.
-----------------
Tenant acknowledges that Landlord intends to operate in the Building a
gym and cafeteria for the benefit of the Project, including the Premises. Such
gym and cafeteria shall be operated in a first-class manner with a quality of
operations commensurate with gyms and cafeterias, respectively, in the highest
category of premiere, first-class office building projects in the Golden
Triangle area and on Maple Drive in Beverly Hills, California. Without
derogating from the foregoing, with Landlord shall maintain the highest
standards of cleanliness with respect to comparable facilities in comparable
buildings. Both Landlord and Tenant acknowledge that the cafeteria is an amenity
for the Project which is not intended to be a profit center. The cost of food at
the cafeteria shall be at reasonable market prices in comparison to comparable
facilities in comparable buildings. Landlord shall pay the costs of initial
buildout of the gym and cafeteria, subject to reimbursement as set forth herein.
Tenant agrees that Tenant shall be responsible to reimburse Landlord for the
entire cost of operation of such gym and cafeteria (including (A) Basic Rent in
the amounts of $2.00 per square foot, which $2.00 shall be increased during the
Term in accordance with the CPI adjustments to Basic Rent made pursuant to
Section 4.5 hereof, and (B) Landlord's total costs of the initial buildout of
the cafeteria and gym (less an allowance of $20 per square foot), which buildout
costs shall be amortized on a straight line basis over ten years). Such costs
shall be paid within fifteen (15) days after receipt of Landlord's invoice.
Notwithstanding the foregoing, in the event that Tenant exercises its First
Floor Cancellation Option pursuant to Section 3.5 above, following the earlier
to occur of (i) Landlord's execution of a lease with a new tenant for the first
floor of the Building or (ii) twelve (12) months after possession of the First
Floor is returned to Landlord pursuant to Section 3.5, Tenant shall only be
responsible for its pro rata share of the costs of such gym and cafeteria
(including the aforementioned amortization of the buildout costs) (based on the
ratio of the square footage of Rentable Area in the remaining Premises to the
square footage of Rentable Area of office space in the Building), and Landlord
or the first floor occupant shall be responsible for the remaining costs.
37. Storage Space; Equipment Room.
-----------------------------
In the event that Landlord wishes to enter into a lease for all or any
portion of the Storage Space and/or Equipment Rooms on levels B-1 and B-2 of the
Building (the "Storage Space"), Landlord shall deliver to Tenant written notice
of Landlord's desire to enter into such a lease (the "Landlord's Storage Space
Notice"). Within twenty (20) days of Tenant's receipt of the Landlord's Storage
Space Notice, Tenant shall deliver to Landlord a written notice (the "Tenant's
Storage Space Notice") setting forth Tenant's election to lease (or not to
lease) all or any portion of the Storage Space. In the event that Tenant fails
to timely elect (through the timely delivery of the Tenant's Storage
73
Space Notice so stating) to lease all or a portion of the Storage Space, then,
for a period of ninety (90) days thereafter, Landlord may enter into a lease for
all or any portion of the Storage Space with any third party on any terms and
conditions. With respect to any portion of the Storage Space which Landlord does
not lease to a third party within such 90-day period, the provisions of this
Article 38 shall thereafter apply again to any future leasing of such space.
Should Tenant timely notify Landlord within the Tenant's Storage Space Notice
that Tenant wishes to lease all or a portion of the Storage Space, then this
Lease shall be amended to include within the definition of Premises the
appropriate portion of the Storage Space. The initial base rental rate for the
Storage Space shall be $1.00 per square foot per month, as such sum may be
increased from and after the first anniversary of the Commencement Date in
accordance with the CPI mechanism set forth in Paragraph 4.5 above (as
increased, the "Storage Space Rent"). Tenant's obligation to promptly pay the
Storage Space Rent shall be deemed rent for all purposes under this Lease.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the date set forth in the first paragraph above.
LANDLORD:
NORTH CRESCENT REALTY V, LLC,
a Delaware limited liability company
By:
By: _____________________________
Name: ___________________________
Title: __________________________
TENANT:
GLOBAL CROSSING DEVELOPMENT COMPANY,
a Delaware corporation
By: ___________________________
Name: _________________________
Title: ________________________
74
Exhibit A
Description of Premises
-----------------------
North Crescent Realty V, LLC
The Plaza
Rentable Square Feet
Building B
Rentable
Square Feet
-----------
B-1 Level 16,081.1
Floor 1 24,006.1
Floor 2 24,012.6
Floor 3 22,308.3
-----------
Rented to Global Crossing 86,408.1
===========
Exhibit B
DESCRIPTION
PARCEL 1:
LOTS 21, 22, 23 AND 24 OF BLOCK 5 OF BEVERLY, IN THE CITY OF BEVERLY HILLS,
COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 11 PAGE
94 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
PARCEL 2:
LOT 3 IN BLOCK 16 OF BEVERLY, IN THE CITY OF BEVERLY HILLS, COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 11 PAGE 94 OF MAPS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THE SOUTHEASTERLY 20 FEET OF SAID LOT.
PARCEL 3:
LOTS 1 AND 2 OF BLOCK 16 OF BEVERLY, IN THE CITY OF BEVERLY HILLS, COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 11 PAGE 94 OF MAPS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT FROM THE SOUTHEASTERLY 20 FEET OF SAID LOT 2, ANY INTEREST IN AND TO ALL
OIL, GAS AND OTHER MINERALS LYING BELOW A DEPTH OF 500 FEET FROM THE SURFACE
THEREOF, WITHOUT, HOWEVER, THE RIGHT OF SURFACE ENTRY, EXCEPTED BY THE CITY OF
BEVERLY HILLS, A MUNICIPAL CORPORATION, IN QUITCLAIM DEED RECORDED NOVEMBER 7,
1967, AS INSTRUMENT NO. 114, OFFICIAL RECORDS.
PARCEL 4:
LOTS 23 AND 24 OF BLOCK 16 OF BEVERLY, IN THE CITY OF BEVERLY HILLS, COUNTY OF
LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 13 PAGE 62 OF
MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT FROM THE SOUTHEASTERLY 20 FEET OF SAID LOT 23, ANY INTEREST IN AND TO ALL
OIL, GAS AND OTHER MINERALS LYING BELOW A DEPTH OF 500 FEET AND FROM THE SURFACE
THEREOF, WITHOUT, HOWEVER, THE RIGHT OF SURFACE ENTRY, EXCEPTED BY THE CITY OF
BEVERLY HILLS, A MUNICIPAL CORPORATION, IN QUITCLAIM DEED RECORDED NOVEMBER 7,
1967, AS INSTRUMENT NO. 114, OFFICIAL RECORDS.
PARCEL 5:
THE NORTHWESTERLY 80 FEET OF THAT CERTAIN 20 FOOT ALLEY ADJOINING LOT 1 AND 2 OF
BLOCK 16 OF BEVERLY, IN THE CITY OF BEVERLY HILLS, COUNTY OF LOS ANGELES, STATE
OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 11 PAGE 94 OF MAPS, IN THE OFFICE OF
THE COUNTY RECORDER OF SAID COUNTY, ON THE NORTHEAST, VACATED IN ORDINANCE NO.
1037, ADOPTED BY THE CITY OF BEVERLY HILLS ON JULY 22, 1958, VACATING AND
ABANDONING FOR PUBLIC ALLEY PURPOSES, A CERTIFIED COPY THEREOF BEING RECORDED IN
THE OFFICE OF THE COUNTY RECORDER ON AUGUST 1, 1958 AS DOCUMENT NO. 3452 IN BOOK
D-174 PAGE 687, OFFICIAL RECORDS.
Page 1 of 3
DESCRIPTION
PARCEL 6:
BLOCK 17 OF BEVERLY, IN THE CITY OF BEVERLY HILLS, COUNTY OF LOS ANGELES, STATE
OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 11 PAGE 94 OF MAPS, IN THE OFFICE OF
THE COUNTY RECORDER OF SAID COUNTY.
PARCEL 7:
THOSE PORTIONS OF BRIGHTON WAY, 60 FEET WIDE, SHOWN ON THE MAP OF "BEVERLY", IN
THE CITY OF BEVERLY HILLS, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER
MAP RECORDED IN BOOK 11 PAGE 94 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY AND SHOWN ON THE MAP OF "BEVERLY", IN SAID COUNTY AND STATE,
RECORDED IN BOOK 13 PAGES 62 AND 63 OF MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY, AND A PORTION OF SANTA MONICA BOULEVARD, FORMERLY
BURTON WAY, SHOWN ON SAID MAP OF BEVERLY, VACATED IN ORDINANCE NO. 1018 ADOPTED
BY THE CITY OF BEVERLY HILLS ON DECEMBER 17, 1957, VACATING AND ABANDONING FOR
PUBLIC STREET PURPOSES, PORTIONS OF SAID STREETS A CERTIFIED COPY THEREOF BEING
RECORDED IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY ON JANUARY 2, 1958
AS INSTRUMENT NO. 2716 IN BOOK 56344 PAGE 47, OFFICIAL RECORDS, SAID PORTIONS
BEING DESCRIBED AS FOLLOWS:
BEGINNING AT THE MOST NORTHERLY CORNER OF LOT 24, BLOCK 16, BEVERLY, AS RECORDED
IN MAP BOOK 13 PAGE 52, RECORDS OF LOS ANGELES COUNTY, CALIFORNIA; THENCE SOUTH
50 DEGREES 28 MINUTES 30 SECONDS WEST 151 FEET ALONG THE NORTHWESTERLY PROPERTY
LINE OF SAID LOT 24, ALSO BEING THE SOUTHEASTERLY LINE OF BRIGHTON WAY, AS SHOWN
ON THE MAP OF SAID BEVERLY, TO THE MOST WESTERLY CORNER OF SAID LOT 24; THENCE
CONTINUING IN A STRAIGHT LINE FOR A DISTANCE OF 20 FEET TO THE MOST NORTHERLY
CORNER OF LOT 1 OF SAID BLOCK 16, BEVERLY, AS SAID LOT 1 IS SHOWN ON THE MAP OF
SAID BEVERLY, RECORDED IN MAP BOOK 11 PAGE 94, RECORDS OF SAID LOS ANGELES
COUNTY, CALIFORNIA; THENCE SOUTH 50 DEGREES 28 MINUTES 30 SECONDS WEST 151 FEET
ALONG THE NORTHWESTERLY PROPERTY LINE OF SAID LOT 1, ALSO BEING THE
SOUTHEASTERLY LINE OF BRIGHTON WAY, TO THE MOST WESTERLY CORNER OF SAID LOT 1;
THENCE NORTH 39 DEGREES 31 MINUTES 30 SECONDS WEST 60 FEET TO THE MOST
SOUTHEASTERLY CORNER OF BLOCK 17 OF SAID BEVERLY; THENCE NORTH 50 DEGREES 28
MINUTES 30 SECONDS EAST 227.35 FEET ALONG THE SOUTHEASTERLY LINE OF SAID BLOCK
17, ALSO BEING THE NORTHWESTERLY LINE OF SAID BRIGHTON WAY TO THE MOST EASTERLY
CORNER OF SAID BLOCK 17; THENCE NORTHEASTERLY ALONG A STRAIGHT LINE TO A POINT,
SAID POINT BEING LOCATED AT THE INTERSECTION OF SAID LINE WITH THE NORTHWESTERLY
PROLONGATION OF THE WESTERLY LINE OF REXFORD DRIVE, AS SAID REXFORD DRIVE IS
ALSO SHOWN ON THE MAP OF BEVERLY, RECORDED IN MAP BOOK 13 PAGE 62, RECORDS OF
SAID LOS ANGELES COUNTY AND BEING DISTANT 30.5 FEET, MEASURED ALONG SAID
NORTHWESTERLY PROLONGATION FROM THE BEFORE MENTIONED MOST NORTHERLY CORNER OF
LOT 24; THENCE SOUTHEASTERLY ALONG SAID NORTHWESTERLY PROLONGATION TO THE POINT
OF BEGINNING.
Page 2 of 3
PARCEL 8:
THAT CERTAIN PARCEL OF LAND, IN THE CITY OF BEVERLY HILLS, COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, THE SOUTHEASTERLY 50 FEET OF THE NORTHWESTERLY 130
FEET OF THE FIRST ALLEY WESTERLY OF REXFORD DRIVE BETWEEN DAYTON WAY AND THE
NORTHEASTERLY PROLONGATION OF THE NORTHWESTERLY LINE OF LOT 1, BLOCK 16, BEVERLY
TRACT, THE SOUTHEASTERLY LIMIT OF SAID SOUTHEASTERLY 50 FEET BEING A LINE 20
FEET NORTHWESTERLY OF AND PARALLEL TO THE NORTHEASTERLY PROLONGATION OF THE
SOUTHEASTERLY LINE OF LOT 3, BLOCK 16, BEVERLY TRACT, AS SAID LOTS ARE SHOWN ON
THE MAPS OF SAID BEVERLY TRACT, AS RECORDED IN MAP BOOK 11 PAGE 94 AND MAP BOOK
13 PAGE 62, RECORDS OF THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA.
EXCEPT THEREFROM ANY INTEREST IN AND TO ALL OIL, GAS AND OTHER MINERALS LYING
BELOW A DEPTH OF 500 FEET FROM THE SURFACE THEREOF, WITHOUT, HOWEVER, THE RIGHT
OF SURFACE ENTRY, EXCEPTED BY THE CITY OF BEVERLY HILLS, A MUNICIPAL
CORPORATION, IN QUITCLAIM DEED RECORDED NOVEMBER 7, 1967, AS INSTRUMENT NO. 114,
OFFICIAL RECORDS.
PARCEL 9:
LOT 22 IN BLOCK 16 OF BEVERLY TRACT, IN THE CITY OF BEVERLY HILLS, COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 13 PAGES 62 AND 63 OF
MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THE SOUTHEASTERLY 20 FEET OF SAID LOT.
Page 3 of 3
EXHIBIT "C"
MEMORANDUM OF COMMENCEMENT DATE
Dated as of ____________
Landlord:
Tenant:
Tenant's Address:
Date of Lease and
Amendments, if any:
Premises:
Property:
Pursuant to Section 3.1 of the Lease, Landlord and Tenant hereby
confirm and verify the following information:
Commencement Date:
-------------------------------------
Expiration Date of the Term:
-------------------------------------
TENANT:
[Company]
By:__________________________________
Name:______________________________
Title:_____________________________
LANDLORD:
[Company]
By:__________________________________
Name:______________________________
Title:_____________________________
C-1
Exhibit D
Intentionally Omitted
EXHIBIT "E"
CLEANING SPECIFICATIONS
A. OFFICE AREAS:
-------------
Daily: (Five days each week, including Monday through Friday, and
excluding the holidays set forth in Section 7.1 of the Lease):
1. Empty and clean all waste receptacles and ash trays; remove
waste materials from the Premises; wash receptacles as
necessary.
2. Dry-mop all uncarpeted areas.
3. Vacuum all rugs and carpet areas in offices, lobbies and
corridors.
4. Hand-dust all office furniture, fixtures and all other
horizontal surfaces (but only to the extent surfaces are
cleared of all materials such as papers, documents and files).
5. Sweep all private stairways, vacuum if carpeted.
6. Police all stairwells throughout the entire Building and keep
in clean condition.
7. Spot-clean carpeting as reasonably required.
8. Spot-clean spill marks on resilient floor tile.
9. It is understood that Landlord shall have no obligation (a) to
wash or otherwise clean dishes, glasses and other utensils
used for preparing food or beverages or (b) to remove or store
such dishes, glasses and other utensils in order to clean any
area, fixture or surface of the Premises.
Weekly:
-------
1. Hand dust all door louvers and other ventilating louvers.
2. Dust and/or wash all directory boards and display glass;
remove fingerprints and smudges.
3. Wipe clean and polish all metal and bright work.
4. Damp-mop and polish all resilient flooring in the Premises and
public corridors and elevator lobbies; more often if
necessary.
5. Wash, clean and polish all water coolers and fountains.
6. Dust in place all picture frames, charts, graphs, and similar
wall hangings.
7. Spot-clean all wall marks.
Monthly:
--------
1. Wash and polish all resilient floors.
2. Dust all paneled walls and doors and other similar surfaces
not reached in nightly or weekly cleaning.
3. Vacuum all ventilating and air-conditioned louvers, high
moldings, and other areas not reached in nightly or weekly
cleaning.
4. Remove all finger marks and smudges from doors, door frames,
around light switches, private entrance glass and partitions.
Quarterly:
----------
1. Dust exterior of lighting fixtures.
B. LAVATORIES:
-----------
Daily: (Five days each week, including Monday through Friday, and
------ excluding the holidays set forth in Section 7.1 of the Lease):
1. Clean and damp-mop floors.
2. Wash and polish all mirrors, bright work and enameled
surfaces.
3. Wash and sanitize all sinks, bowls and urinals.
4. Wash and sanitize toilet seats.
5. Dust, and clean, wash where necessary, all partitions, tile
walls and all dispensers and receptacles.
6. Empty and sanitize all receptacles and sanitary disposals.
7. Provide materials and fill tissue-holders, toilet seat
dispensers, towel, sanitary napkin and soap dispensers.
E-2
Monthly:
--------
1. Machine-scrub lavatory floors, apply floor finishing where
applicable.
2. Wash and polish all partitions, tile walls and enamel
surfaces.
Every Ninety Days:
------------------
1. Vacuum all louvers, ventilating grilles and dust light
fixtures.
C. MISCELLANEOUS SERVICES.
-----------------------
1. Maintain building lobby, corridors and other public areas in a
clean and orderly condition.
2. Police all lavatories; refill dispensers; clean and polish all
mirrors and fixtures.
3. Damp-mop spillage in office and public areas as required.
D. GLASS CLEANING.
---------------
1. Windows will be washed every 90 days, except when rendered
impracticable by inclement weather.
This cleaning specification may be changed or altered from time to time
to facilitate the inclusion of the latest methods of maintenance and
cleaning technology generally recognized as acceptable for a
first-class office building.
E-3
EXHIBIT "F"
SECURITY SPECIFICATIONS
A. Project and Building.
---------------------
1. Project management staff shall be reasonably educated and trained to
handle security and emergency procedures for fire, explosion, earthquake, power
failure, bomb threat, evacuation and similar matters. All tenants of the Project
upon notice from Landlord or public authorities shall be obligated to evacuate
all buildings in the Project in the event of life-threatening emergencies which
necessitate a general evacuation of any building or the entire Project or to
comply with any fire or similar drills required by applicable statutes or codes.
2. Landlord's security system shall be so designed that, when
activated, it shall not allow persons to gain elevator access or other access to
the Premises after Business Hours unless such persons are admitted or authorized
by Tenant. Landlord shall cause security access cards for the Building elevators
to be issued to each employee of Tenant, as designated by Tenant to Landlord.
3. Subject to applicable ordinances, rules and/or regulations of any
federal, state or local governmental authority, the freight elevators shall be
manned and available after Business Hours, when required for Tenant, provided
that Tenant shall pay Landlord for such use in accordance with the Lease, and
Tenant gives reasonable advance notice to the Building personnel of such a
requirement for scheduling of the elevator. All elevator personnel shall be
instructed to comply with security procedures.
4. Landlord's standard security procedures shall require all of
Tenant's stairwell doors to be locked from the stairwell side so long as such
procedures do not violate any ordinance or law of any governmental authority
having jurisdiction.
5. Landlord shall develop a system and procedures for monitoring all
Building entrance and exit doors and the loading dock for security purposes.
Tenant shall pay for after hours access to loading dock in accordance with the
Lease.
6. Landlord's security system shall include an adequate emergency
communications system, "GROUP ALERT" or other system capable of notifying Tenant
of an emergency.
7. Landlord shall have the right to modify or add to these security
specifications if, in the reasonable opinion of Landlord, it is necessary in
order to assist in the protection of the Building or other parts of the Project,
or persons or property therein, consistent with a first-class office building
complex, provided Tenant's rights under the Lease are not materially diminished
thereby. Tenant is solely responsible for security within its Premises.
F-1
B. Parking Garage.
---------------
1. Various mechanical and electrical security devices and procedures
will be maintained within the Parking Garage to assist Landlord and the garage
operator, if any, with the security of these facilities. The number, location
and operation of these devices and procedures will be at the reasonable
discretion of Landlord. Such devices may include but are not limited to:
(a) roving guards;
(b) cameras and video tape devices;
(c) telephones in the elevator lobby;
(d) officer(s) at the loading dock;
(e) on stairwell doors;
(f) doors at the various entrances and exits from the
various facilities; and
(g) command center at the garage level.
2. Landlord shall have the right to modify or add to these security
specifications if, in the reasonable opinion of Landlord, it is necessary in
order to assist in the protection of the Parking Garage, the Building, or other
parts of the Project, or persons or property therein; provided Tenant's rights
under the Lease are not materially diminished thereby.
C. Costs.
------
The costs of security for the Project shall be allocated as follows:
(i) Landlord shall pay the security costs applicable to the entire Project,
subject to reimbursement pursuant to Section 5.1. (ii) Tenant shall pay the
entire amount of any security measures provided solely for Tenant's benefit.
F-2
EXHIBIT "G"
NON-DISTURBANCE, ATTORNMENT AND
-------------------------------
SUBORDINATION AGREEMENT
-----------------------
Dated as of ____________
Landlord:
Tenant:
Tenant's Address:
Date of Lease and
Amendments, if any:
Premises:
Property:
_______________________________________________ ("Mortgagee") having an
office at ___________________________________________________________, holder of
a mortgage or deed of trust (together with any increased, future or consolidated
mortgages or deeds of trust held by Mortgagee, the "Mortgage") of the Property
and Tenant, holder of a lease ("Lease") of a portion thereof ("Premises"), and
Landlord hereby agree as follows:
1. Provided Tenant is not in default under the terms of and as defined
in the Lease, the right of possession of Tenant to the Premises and all rights
of Tenant under the Lease and exhibits thereto (including the Landlord's
Improvement Letter), including, without limitation, the right to exercise and
enjoy any expansion, right of first offer and renewal options under the Lease,
shall not be affected or disturbed by Mortgagee in the exercise of any of its
rights under the Mortgage or any note secured thereby and any sale of the
Property pursuant to the exercise of any rights and remedies under the Mortgage
or otherwise shall be made subject to Tenant's right of possession and other
rights under the Lease.
2. Tenant shall attorn to Mortgagee or any purchaser of the Property,
and the Lease shall continue in effect, in accordance with its terms, between
Tenant and Mortgagee or such purchaser (Mortgagee or such purchaser being
hereinafter sometimes called "Successor Landlord"), except that Paragraphs 3,
-------------
9 and 10 hereof shall modify the Lease.
---------------
G-1
3. The Lease and all amendments thereto shall be subject and
subordinate to the lien of the Mortgage and to all the terms, conditions and
provisions thereof, to all advances made or to be made thereunder, and to any
renewals, extensions, modifications or replacements thereof, including any
increases therein or supplements thereto, subject to and without limiting the
other provision of this Agreement.
4. The foregoing provisions shall be self-operative. However, Tenant
agrees to execute and deliver to Mortgagee or to any person to whom Tenant
herein agrees to attorn such other instrument as either shall reasonably request
in order to effectuate said provisions.
5. Tenant certifies that, upon the full execution and delivery hereof,
there are no known defaults on the part of Landlord, that the Lease is a
complete statement of the agreement of the parties thereto with respect to the
letting of the Premises, that the Lease is in full force and effect and that all
conditions to the effectiveness or continuing effectiveness thereof required to
be satisfied at the date hereof have been satisfied except as otherwise set
forth herein.
6. Tenant will notify Mortgagee at the aforesaid address, by registered
or certified mail, return receipt requested, of any default of Landlord which
would entitle Tenant to cancel the Lease or abate the rent payable thereunder.
Tenant's failure to so notify Mortgagee, however, shall not constitute a waiver
by Tenant of any such default.
7. Tenant and Landlord agree that notice from Mortgagee shall have the
same effect under the Lease as notice to Tenant from Landlord thereunder, and
Tenant agrees to be bound by such notice notwithstanding the existence or
nonexistence of a default under the Mortgage or any dispute with respect thereto
between the mortgagor under the Mortgage and Mortgagee or any contrary notice
from Landlord to Tenant.
8. If the Property or any portion thereof which includes the Premises
shall be transferred to and owned by Mortgagee or any assignee of Mortgagee, or
any purchaser at judicial sale or any transferee under an action in lieu
thereof, by reason of foreclosure or other remedial proceedings brought by
Mortgagee or any assignee of Mortgagee, or by any transferee or purchaser, or by
any other similar manner, or if the interest of Landlord is terminated or
assigned by any action of the Mortgagee, and Tenant is not in default in the
payment of rent or in the performance of any of the other terms, covenants or
conditions of the Lease requiring performance on the part of Tenant, Tenant's
rights shall not be terminated thereby; rather, Tenant shall be bound to
Mortgagee or any such assignee, purchaser or transferee under all of the terms,
covenants and conditions of the Lease for the balance of the term thereof
remaining, with the same force and effect as if the Successor Landlord were the
lessor under the Lease with the Lease remaining in full force and effect,
provided, however, that the Successor Landlord shall not be:
G-2
(a) liable for any act or omission of any prior landlord,
or for the return of any security deposit unless actually received by Successor
Landlord; or
(b) subject to any offsets or defenses which Tenant may
have against any prior landlord; or
(c) bound by any payment of rent which Tenant may have
paid for more than the then current month to any prior landlord, or bound by any
amendment, modification, extension or supplement of the Lease made without the
written consent of Mortgagee; or
(d) obligated to repair, replace, rebuild or restore the
Premises, or any part thereof, in the event of total or substantially total
damage or destruction beyond such repair, replacement, rebuilding or restoration
of the Premises as can reasonably be accomplished from the net proceeds of
insurance actually received by, or made available to, Successor Landlord for
such purposes; or
(e) obligated to repair, replace, rebuild or restore the
Premises, or any part thereof, in the event of partial condemnation beyond such
repair, replacement, rebuilding or restoration of the Premises as can be
reasonably accomplished from the net proceeds of any award actually received by,
or made available to, Successor Landlord, as consequential damages allocable to
the part of the Premises not taken; or
(f) obligated to make any capital improvements to the
Premises, or to construct, erect or complete any construction or renovation of
all or any portion of the improvements at the Premises, which Lessor may have
agreed to make but has not commenced or completed.
9. Anything herein or in the Lease to the contrary notwithstanding, in
the event that Mortgagee or a purchaser shall acquire title to the Property,
Mortgagee and such purchaser shall have no obligation, nor incur any liability,
beyond Mortgagee's or purchaser's then interest, if any, in the Property and
Tenant shall look exclusively to such interest, if any, of Mortgagee or such
purchaser in the Property for the payment and discharge of any obligation
imposed upon Mortgagee hereunder or under the Lease, and Mortgagee and such
purchaser are hereby released or relieved of any other liability hereunder and
under the Lease. Tenant agrees that, with respect to any money judgment which
may be obtained or secured by Tenant against Mortgagee or such purchaser, Tenant
shall look solely to the estate or interest owned by Mortgagee or such purchaser
in the Property, and Tenant will not collect or attempt to collect any such
judgment out or any other assets of Mortgagee or such purchaser.
G-3
10. This Agreement shall inure to the benefit of and be binding upon
Tenant and any successor or assignee of Tenant which pursuant to the provisions
of the Lease are entitled to succeed to Tenant's interest therein without
consent of Landlord.
11. If any action or proceeding (including any appeal thereof) is
brought by either party (whether or not such action is prosecuted to judgment)
to enforce its respective rights under this Agreement or to enforce a judgment
("Action"), (1) the unsuccessful party therein shall pay all costs incurred by
the prevailing party therein, including reasonable attorneys' fees and costs to
be fixed by the court, and (2) as a separate right, severable from any other
rights set forth in the Agreement, the prevailing party therein shall be
entitled to recover its reasonable attorneys' fees and costs incurred in
enforcing any judgment against the unsuccessful party therein, which right to
recover post-judgment attorneys's fees and costs shall be included in any such
judgment. The right to recover post-judgment attorneys' fees and costs shall (i)
not be deemed waived if not included in any judgment, (ii) survive the final
judgment in any Action, and (iii) not be deemed merged into such judgment. The
rights and obligations of the parties under this Section 11 shall survive the
termination of this Agreement.
[Signatures on next page]
G-4
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
MORTGAGEE:
[company]
By:_______________________________________
Name:__________________________________
Title:_________________________________
TENANT:
[company]
By:_______________________________________
Name:___________________________________
Title:__________________________________
LANDLORD:
[company]
By:_______________________________________
Name:__________________________________
Title:_________________________________
G-5
EXHIBIT "H"
RULES AND REGULATIONS FOR THE BUILDING AND PROJECT
1. Except as otherwise provided in the Lease or any other exhibits
thereto or as otherwise approved by Landlord:
1.1 No sign, placard, picture, advertisement, name or
notice shall be inscribed, displayed or printed or affixed on or to any part of
the outside or inside of the Building (other than inside the Premises) without
the written consent of Landlord first had and obtained. Landlord shall have the
right to remove any such sign, placard, picture, advertisement, name or notice,
unless Landlord has given written consent, without notice to and at the expense
of Tenant. Landlord shall not be liable in damages for such removal unless the
written consent of Landlord has been obtained.
1.2 All approved signs or lettering on doors and walls to
the Premises which are visible from outside the Premises or the elevator lobbies
on any floor of the Building shall be printed, painted, affixed or inscribed at
the expense of Tenant by Landlord or by a person approved by Landlord in a
manner and style acceptable to Landlord.
1.3 Tenant shall not use any blinds, shades, awnings, or
screens in connection with any window or door of the Premises unless approved in
writing by Landlord. Tenant shall not use any drape or window covering facing
any exterior glass surface other than the standard window covering established
by Landlord. The windows and doors that reflect or admit light and air into the
halls, passageways or other public places in the Project shall not be covered or
obstructed by any tenant, nor shall any bottles, parcels or other articles be
placed on the windowsills.
2. Except as otherwise provided in the Lease or any exhibits thereto,
Tenant shall not obtain for use upon the Premises, food, milk, soft drinks,
bottled water, plant maintenance and all other services, except from persons
reasonably authorized by Landlord and at the hours and under regulations fixed
by Landlord. No vending machines or machines of any description shall be
installed, maintained or operated upon the Premises, except at locations shown
on the Final Plans, without the prior written consent of Landlord.
3. The sidewalks, halls, passages, exits, entrances, elevators and
stairways and Common Areas of the Project shall not be obstructed by any tenants
or used by them for any purpose other than for ingress to and egress from their
respective premises. The halls, passages, exits, entrances, elevators, stairways
and roof are not for the use of the general public, and Landlord shall in all
cases retain the right to control and prevent access thereto by all persons
whose presence in the reasonable judgment of Landlord shall be prejudicial to
the safety, character, reputation and interests of the Project and its tenants,
provided that nothing herein contained shall be construed to prevent such access
to persons with whom Tenant normally deals in the ordinary course of Tenant's
business unless such persons are engaged in illegal activities. No tenant and no
employees or invitees of any tenant shall go upon the roof of the Building. No
tenant shall throw anything out of the doors or windows or balconies or down the
passageways or in any of the passageways. Landlord shall have the right to
control and operate all Common
H-1
Areas of the Project (including, without limitation, the Parking Garage, ramps,
stairs, plazas, balconies and park) in the best interests of tenants generally.
Tenant shall have the right, upon prior notice to Landlord and approval by
Landlord, which shall not be unreasonably withheld, to use portions of the
Common Areas for parties and other similar events open to Tenant's invitees and
guests, so long as (i) Tenant pays for all reasonable costs associated with such
use of the Common Areas and any additional cleanup or janitorial expenses caused
by use, and (ii) such use by Tenant does not unreasonably interfere with the use
and enjoyment of the Project by other tenants and their invitees and licensees
or unreasonably annoy such other tenants. Landlord shall have the right to
approve or disapprove in its sole discretion any fixtures, furnishings, plants
or other items proposed to be placed on the balconies by Tenant.
Tenant shall not display any signs or insignia on the balconies.
4. Tenant, upon the termination of its tenancy, shall deliver to
Landlord the parking and security access cards issued to Tenant and all keys of
offices, rooms and toilet rooms which shall have been furnished to Tenant or
which Tenant shall have made, and in the event of loss of any access cards or
keys so furnished, shall pay Landlord therefor. Tenant shall not alter any lock
or install any new or additional locks or any bolts other than the standard lock
set of the Building on any door of the Premises without the written consent of
Landlord.
5. The toilet rooms, toilets, 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 shall be thrown
therein and the expense of any breakage, stoppage, or damage resulting from the
violation of this rule shall be borne by Tenant who, or whose employees or
invitees, shall have caused it.
6. Tenant shall not overload any floor of the Premises. Tenant shall
not permanently deface or damage the partitions, woodwork or drywall or in any
way deface the Premises or any part thereof, ordinary wear and tear excepted,
without Landlord's prior written consent. Tenant shall not purchase spring
water, ice, towel, linen, maintenance or other like services from any person or
persons not approved by Landlord.
7. No furniture, bulky packages, supplies, merchandise, freight or
equipment of any kind shall be brought into the Building without the consent of
Landlord. All moving of the same into or out of the Building shall be via the
Building's freight handling facilities, unless otherwise directed by Landlord,
at such time and in such manner as Landlord shall prescribe. No hand trucks or
vehicles (other than a wheelchair for an individual) shall be used in passenger
elevators. All hand trucks permitted in the Building must be equipped with soft
rubber tires and side guards.
8. Landlord shall have the right to prescribe the weight, size and
position of heavy equipment brought into the Building and also the times and
manner of moving the same in and out of the Building. Safes or other heavy
objects shall, if considered necessary by Landlord, stand on a platform 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 from any
cause, and all damage done to the Building by moving or maintaining any such
safe or other property shall be repaired by the expense of Tenant.
H-2
9. Tenant shall not employ any person or persons other than the
janitorial contractor of Landlord for the purpose of cleaning the Premises,
other than day-maids or butlers for Tenant's exclusive use, unless otherwise
agreed to by Landlord. Except with the written consent of Landlord, no person or
persons other than those approved by Landlord shall be permitted to enter the
Building for the purpose of cleaning the same. Janitor service will not be
furnished to any room while such room is occupied after Normal Working Hours.
Interior and exterior window cleaning shall be done only by Landlord. 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.
10. Tenant shall not use, keep or permit to be used or kept any foul or
noxious gas or substance in the Premises, or permit or suffer the Premises to be
occupied or used in any manner offensive or objectionable to Landlord or other
occupants of the Building by reason of noise, odors and/or vibrations, or
interfere in any way with other tenant or those having business therein, nor
shall any animals (other than as required for disabled persons) or birds be
brought in or kept in or about the Premises or the Building. No bicycles shall
be brought into or kept in or about the Premises.
11. No cooking shall be done or permitted by any tenant on Premises,
nor shall any premises be used for the manufacture or storage of merchandise
(unless incidental to the use of such premises for normal office purposes), for
washing clothes, for lodging, or for any improper, objectionable or immoral
purpose. Notwithstanding the foregoing, Tenant shall have the right to use
microwave ovens for heating food in the kitchen and pantry areas.
12. Neither Tenant nor any of Tenant's servants, employees, agents,
visitors or licensees shall at any time use or keep in the Premises or the
Building any kerosene, gasoline or other inflammable, explosive or combustible
fluid, chemical, gas or substance, or any hazardous or toxic substance which
would be in violation of the Environmental Acts (as defined below), except
normal office products typically found in a first-class office building, or use
any method of heating or air-conditioning other than that supplied by Landlord.
"Environmental Acts" shall mean all federal, state and local environmental
statues and regulations, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. Sec. 9061 et seq.), the Hazardous Materials Transportation Act (49 U.S.C.
Sec. 1802 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. 6901
et seq.), the Federal Water Pollution Control Act, the Federal Safe Water
Drinking Act, the Federal Clean Air Act, the Federal Solid Waste Disposal Act,
the Federal Toxic Substance Control Act, the Federal Emergency Planning and
Community Right-to-Know Act, the Federal Radon and Indoor Air Quality Research
Act, and the counterparts of such statutes as enacted by state and local
governments with jurisdiction over the Project and any regulations promulgated
under any of the aforementioned laws, together with any and all federal, state
and local environmental laws, rules or regulations presently in existence, or
hereafter enacted affecting the Project.
13. Landlord will direct electricians as to where and how telephone and
telegraph wires are to be introduced into the Premises. No boring or cutting for
wires or stringing of wires will be allowed without written consent of Landlord,
except as part of permitted Tenant
H-3
Alterations under the Lease. The location of telephones, call boxes and other
office equipment affixed to the Premises shall be subject to the approval of
Landlord.
14. No tenant shall lay linoleum, tile, carpet or other similar floor
covering so that the same shall be affixed to the floor of the Premises in any
manner except as approved by Landlord. The expenses of repairing any damage
resulting from a violation of this rule or removal of any floor covering shall
be borne by Tenant.
15. On Saturdays, Sundays and legal holidays, and on other days between
the hours of 6:00 p.m. and 8:00 a.m. the following day, access to the Project or
to the halls, corridors, elevators or stairways in the Project or to the
Premises, may be refused unless the person seeking access in known to the person
or employee of the Project in charge or has a pass or is properly identified.
Any person whose presence in the Building at any time shall, in the reasonable
judgment of Landlord, be prejudicial to the safety, character, reputation and
interests of the Building or its tenants may be denied access to the Building or
may be ejected therefrom. Landlord may require any person leaving the Building
with any package or other object to exhibit a pass from the tenant from whose
premises the package or object is being removed, but the establishment and
enforcement of such requirement shall not impose any responsibility on Landlord
for the protection of any tenant against the removal of property from the
premises of the tenant. The Landlord shall in no case be liable to Tenant for
damages for any error with regard to the admission to or exclusion from the
Project of any person. In case of invasion, mob, riot, public excitement, or
other commotion, Landlord reserves the right to prevent access to the Project
during the continuance of the same by closing of the doors or otherwise, for the
safety of the tenants and protection of property in the Project. Tenant may
employ security guards for its Premises provided that such security service and
personnel are approved in advance and are limited to the floors of the Premises
and are subject to the direction of the Building's security personnel in the
event of an emergency. Landlord shall not be liable for any actions of the
security service employed by Tenant.
16. Tenant shall see that the doors of the Premises are closed and
securely locked before leaving the Building and must observe strict care and
caution that all water apparatus are entirely shut off before Tenant or Tenant's
employees leave the Building, and that all electricity, gas or air shall
likewise be carefully shut off, so as to prevent waste or damage.
17. The requirements of Tenant shall be attended to only upon
application to the Building Manager at the office of the Building. Employees of
Landlord shall not perform any work or do anything outside of their regular
duties unless under special instructions from Landlord.
18. No person shall be allowed to transport or carry beverages, food,
food containers, etc. (other than in proper containers for personal
consumption), on any passenger elevators. The transportation of such items shall
be via the service elevators in such manner as prescribed by landlord.
19. Tenants shall cooperate with Landlord in obtaining maximum
effectiveness of the cooling system by closing the window coverings when the
sun's rays fall directly on windows of the Premises. Tenant shall not obstruct,
alter or in any way impair the efficient operation of
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Landlord's heating, ventilating and air-conditioning system and shall not place
bottles, machines, parcels or other articles on any induction unit enclosure,
intake or other vents so as to interfere with proper air flow. Tenant shall not
tamper with or change the setting of any thermostats or temperature control
valves.
20. Without the written consent of Landlord, which consent shall not be
unreasonably withheld, Tenant shall not use the name of Landlord or the Project
in connection with or in promoting or advertising the business of Tenant except
as Tenant's address in a manner which will denigrate or injure Landlord's
reputation or the reputation of the Project as a first-class office building
project, or imply any partnership or joint venture exists between Landlord and
Tenant.
21. Landlord shall have the right to prohibit any advertising by Tenant
which, in Landlord's reasonable opinion, tends to impair the reputation of the
Project as a first-class office building complex or its desirability as a
location for offices, and upon written notice from Landlord, Tenant shall
refrain from or discontinue such advertising.
22. Canvassing, soliciting and peddling within the entire Project are
prohibited and each tenant shall cooperate to prevent such activity.
23. The Premises shall not be used for manufacturing or the storage of
merchandise except as such storage may be incidental to the use of the Premises
for general office purpose. No tenant shall occupy nor permit any portion of its
premises to be occupied for the manufacture or sale of narcotics, liquor, or
tobacco in any form, or as a barber or manicure shop. No tenant shall 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 or
Project. The Premises shall not be used for lodging or sleeping or for any
immoral or illegal purposes.
24. Tenant shall not conduct any auction, fire, bankruptcy, going out
of business, liquidation or similar sales.
25. Tenant shall not place any radio or television antennae on the roof
of the Project or on any exterior part of the Premises or the Project.
26. 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.
27. All doors opening to public corridors shall be kept closed at all
times except for normal ingress and egress to the Premises.
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28. Landlord reserves the right to close and keep locked all entrance
and exit doors of the Building during such hours as re customary for comparable
buildings in the Beverly Hills, California area. 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 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. Notwithstanding anything contained in the Lease to the
contrary, 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 Real
Property during the continuance thereof by any means it deems appropriate for
the safety and protection of life and property.
29. 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.
30. Tenant shall not without the prior written consent of Landlord use
any method of heating or air conditioning other than that supplied by Landlord.
31. Landlord reserves the right to exclude or expel from the Real
Property 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.
32. 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.
33. 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 Beverly
Hills, 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.
34. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
35. Tenant must comply with requests by the Landlord concerning the
information of their employees of items of importance to the Landlord.
H-6
36. Tenant shall comply with any ordinance of the City of Beverly Hills
relating to smoking in or about the Premises, Building or Real Property. 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.
37. 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 Real Property. 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 Real Property 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.
38. All office equipment of any electrical or mechanical nature shall
be placed by Tenant in the Premises in settings approved by Landlord, to absorb
or prevent any vibration, noise and annoyance.
39. 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.
40. 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 reasonably necessary for the management, safety, care and cleanliness of the
Premises, Building, and the Common Areas, 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 Building. 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.
H-7
EXHIBIT "I"
PARKING GARAGE RULES AND REGULATIONS
1. Hours of Operation.
-------------------
The Parking Garage shall be operated seven (7) days per week, 24 hours
per day; provided, however, that Landlord reserves the right to establish a
schedule of operations commensurate with the type of patronage and volume of
business, which shall be determined by Landlord in its reasonable discretion.
2. No Obstruction; Controlled Access.
----------------------------------
The driveways, passages, exits, entrances, elevators and stairways
shall not be obstructed by anyone using the Parking Garage for any purpose other
than ingress to and egress from his or her parking location. Landlord shall in
all cases retain the right but shall not be obligated to control and prevent
access to the Parking Garage by all persons whose presence in the reasonable
judgment of Landlord shall be prejudicial to the safety, character, reputation
and interest of the Building, the Project, and their tenants. No person using
the Parking Garage shall go into any unauthorized location so designated within
the structure.
3. Payment by Customers/Transients.
--------------------------------
Each Parking Garage customer, upon termination of his or her stay in
the facility, shall deliver to the garage operators located at the exits of the
facility, the parking ticket and appropriate compensation for the use of the
facilities as designated by the rate structure.
4. Monthly Parking.
----------------
Parking pass rentals shall be paid by Tenant as part of rent under the
Lease, at the same time and in the same manner as the Basic Rent, subject to all
delinquency charges set forth in the Lease. Upon termination as a monthly
customer, the customer shall deliver to Landlord or garage operator all cards,
stickers, or other means of identification that allow access to the Parking
Garage.
5. No Freight in Parking Garage.
-----------------------------
No furniture, packages, supplies, merchandise, freight or equipment of
any kind shall be brought in the parking facilities without the consent of
Landlord or garage operator, which shall not be unreasonably withheld or
delayed. All moving of such items into or out of the Building shall be via the
Building's freight handling facilities unless otherwise directed by Landlord at
such reasonable time and in such reasonable manner as Landlord shall prescribe.
No hand trucks or vehicles (other than a wheelchair for an individual) shall be
used in the Parking Garage elevators. Any hand trucks permitted in the Parking
Garage must be equipped with soft rubber tires and side guards.
I-1
6. Right to Specify Equipment:
---------------------------
Landlord shall have the right to prescribe the weight, size and
position of all heavy equipment brought into the Parking Garage and also the
times and manner of moving the same in and out of the Parking Garage.
7. Limitations on Use.
-------------------
Parking Garage customers shall not use, keep or permit to be used or
kept any foul, noxious or dangerous substance in the Parking Garage or permit or
suffer the facilities to be occupied and/or used in any manner offensive or
objectionable to Landlord or other occupants of the Parking Garage by reason of
noise, odors, and/or vibrations, or unreasonably interfere in any way with other
garage customers or those having business therein, nor shall any animals or
birds be brought in or kept in or about the parking facilities (other than as
required for handicapped persons).
8. Right to Close Garage.
----------------------
Landlord and the garage operator reserve the right but shall not be
obligated to close and keep locked all entrance and exit doors and otherwise
regulate access of all persons to the Parking Garage on Sundays and legal
holidays and all other days between the hours of 7:00 p.m. and 7:00 a.m. and at
other times as Landlord may deem advisable for the adequate protection and
safety of the parking facilities, their occupants and property; provided that
bona fide holders of parking passes shall have access at all times to the
Parking Garage. Access to the Parking Garage may be refused unless the person
seeking access agrees to abide by the rules established and pay for his stay in
accordance with the rate structure. Landlord shall in no case be liable for
damage or any error with regard to the admission or exclusion from the Parking
Garage of any person.
9. Right to Refuse Admission.
--------------------------
Landlord or garage operator may refuse admission to the Parking Garage
outside of Normal Working Hours of any person not known to the attendant in
charge (or who does not possess adequate Building identification) or any person
whose presence in the Parking Garage shall in the reasonable judgment of
Landlord or Parking Garage operator be prejudicial to the safety, character,
reputation and interest of the Parking Garage or the Building. Landlord or
Parking Garage operator may require any person leaving the Parking Garage with
any package or any other object to exhibit a pass from the Building tenant from
whose premises the package or object is being removed, but the establishment and
enforcement of such requirement does not impose any responsibility on Landlord
for the protection of any Building tenant against removal of property from the
premises of the tenant.
10. No Food or Beverages.
---------------------
No person shall be allowed to transport or carry beverages, food, food
containers (other than in proper containers for personal consumption), smoking
objects, etc. on any of the parking
I-2
facility shuttle elevators. The transportation of such items shall be via the
service elevators in such manner as prescribed by Landlord or garage operator.
11. Own Risk.
---------
Except for the Parking Garage operator's or Landlord's negligence or
willful misconduct, it is understood that all vehicles and their occupants enter
the Parking Garage at their own risk. Under no circumstances whatsoever shall
Landlord be responsible for any damages in excess of Two Hundred Fifty Dollars
($250.00) with respect to any damage or injury to any vehicle, or the occupants
thereof, or any other person or property in the Parking Garage.
12. Speed Limit.
------------
In no case shall anyone operating a vehicle within the Parking Garage
do so at a speed greater than five (5) miles per hour. In addition, all vehicle
operators will drive in a safe and careful manner so as to preclude damaging the
Parking Garage or other vehicles and property in the Parking Garage, or injuring
persons in the Parking Garage or their general vicinity. All vehicle operators
must come to a complete stop at all posted stop signs.
13. Clearance.
----------
All vehicles shall have a maximum vertical clearance no greater than
the posted clearance heights in the facility as designated from location to
location. Landlord shall not be liable for any damage or injury due to any
failure to observe the posted clearance signs. Vehicles of a size larger than
posted clearances shall not enter the Parking Garage.
14. Lease Requirements.
-------------------
Tenant is obligated to pay for parking passes allocated to Tenant under
the Lease whether or not Tenant or its employees use the allocated passes.
15. Right to Change Markings.
-------------------------
Landlord reserves the right to change the location, size, shape and
number of driveways, entrances, exits, traffic lanes, parking spaces, parking
areas, loading and unloading areas, walkways and the boundaries and locations of
the Parking Garage subject to Tenant's parking rights under the Lease.
I-3
EXHIBIT "J"
GUARANTY OF LEASE
-----------------
This Guaranty of Lease ("Guaranty") is made and entered into as of
October __, 1999, by GLOBAL CROSSING HOLDINGS, LTD., a Bermuda corporation
("Guarantor") with reference to the following facts.
A. Global Crossing Development Company, a Delaware corporation
(ATenant"), and North Crescent Realty V, LLC, a Delaware limited liability
company ("Landlord"), are parties to that certain lease dated concurrently
herewith (the "Lease"), concerning certain premises (the "Premises") shown on
Exhibit "A" attached hereto in Building B at 360 North Crescent Drive, Beverly
Hills, California.
B. Guarantor is an affiliate of Tenant.
C. Landlord has conditioned the effectiveness of the Lease upon the
execution of this Guaranty by Guarantor.
NOW, THEREFORE, for and in consideration of the execution of the Lease
by Landlord, Guarantor hereby agrees as follows:
1. Guaranty. Guarantor hereby unconditionally and irrevocably
---------
guarantees the prompt payment by Tenant of all rentals and all other sums
payable by Tenant under said Lease and the faithful and prompt performance by
Tenant of each and every one of the terms, conditions and covenants of the Lease
to be kept and performed by Tenant.
2. Amendments. It is specifically agreed and understood that the terms
-----------
of the foregoing Lease may be altered, affected, modified, changed, extended or
renewed by agreement between Landlord and Tenant, or by a course of conduct,
including but not limited to Tenant holding over, and the Lease may be assigned
by Landlord or any assignee of Landlord, and the premises or any interest
therein may be assigned, subleased or otherwise transferred by Tenant, all
without consent of Guarantor and that this Guaranty shall thereupon and
thereafter guarantee the performance of the Lease as so changed, modified,
altered, assigned or otherwise impacted, except to the extent that such change,
modification, alteration, assignment or other action increases the potential
liability of Guarantor. Notwithstanding the foregoing, nothing contained herein
shall be interpreted as a consent by the Landlord to any such event or change;
the provisions under the Lease requiring the Landlord's consent to any such
event or change shall remain in full force and effect.
3. No Release. Subject to applicable statutes of limitation, this
-----------
Guaranty shall not be released, modified or affected by the failure or delay on
the part of Landlord to enforce any of the rights or remedies of the Landlord
under the Lease, whether pursuant to the terms thereof or at law or in equity,
or by the liquidation, dissolution or corporate reorganization of Tenant or any
guarantor or by rejection of the Lease
or the discharge, release or limitation of liability of Tenant in any bankruptcy
proceeding.
4. No Notice. No notice of default need be given to Guarantor, it being
----------
specifically agreed and understood that the guaranty of Guarantor is a
continuing guaranty under which Landlord may proceed forthwith and immediately
against Tenant or against Guarantor, subject to applicable cure periods under
the Lease, following any breach or default by Tenant or for the enforcement of
any rights which Landlord may have as against Tenant pursuant to or under the
terms of the Lease or at law or in equity. Landlord shall have the right to
proceed against Guarantor hereunder following any such default under the Lease
by Tenant without first proceeding against Tenant.
5. Waivers. Guarantor hereby waives (a) notice of acceptance of this
--------
Guaranty, (b) demand of payment, presentation and protest, (c) any right to
require the Landlord to proceed against Tenant or any other person or entity
liable to Landlord, (d) any right to require Landlord to apply to any default
any security deposit or other security it may hold under the Lease, (e) any
right to require Landlord to proceed under any other remedy Landlord may have
before proceeding against Guarantor, (g) any right of subrogation, and (f) all
suretyship defenses.
6. Estoppels. Any obligations of Tenant under the Lease to execute and
----------
deliver estoppel statements as therein provided, shall be deemed to also require
Guarantor hereunder to provide a certification that Guarantor has no defenses
hereunder or under the Lease.
7. Miscellaneous.
--------------
a. The term "Landlord" whenever hereinabove used refers to and
means the Landlord in the foregoing Lease specifically named and also any
assignee of the Landlord, whether by outright assignment or by assignment for
security, and also any successor to the interest of the Landlord or of any
assignee in such Lease or any part thereof, whether by assignment or otherwise.
b. The term "Tenant" whenever hereinabove used refers to and
means any assignee, sublessee or transferee of the Lease and also any successor
to the interests of any of the foregoing, whether by assignment, sublease,
transfer or otherwise.
c. In the event any action be brought by the Landlord against
Guarantor hereunder to enforce the obligation of Guarantor hereunder, the
unsuccessful party in such action shall pay to the prevailing party therein a
reasonable attorney's fee which shall be fixed by the court. Any such action may
be brought in Los Angeles County, California. This Guaranty shall be governed by
and construed in accordance with California law. This Guaranty shall inure to
the benefit of Landlord and the successors and assigns thereof and shall bind
Guarantor and the successors and assigns thereof. This document may be executed
in counterparts, which shall be construed together as a single document.
d. The persons executing this Guaranty on behalf of Guarantor
represent and warrant to Landlord that they are duly authorized to execute and
deliver this Guaranty on Guarantor's behalf, and that this Guaranty is binding
upon Guarantor in accordance with its terms.
This Guaranty has been made and entered into as of the day and year set
forth above.
GLOBAL CROSSING HOLDINGS, LTD.,
a Bermuda corporation
By:___________________________
Its:__________________________
360 North Crescent Drive (Beverly Hills, CA) Lease - North Crescent Realty V LLC and Global Crossing Development Co.
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