\n 15.15 Right to Lease……………………………………. 40<\/p>\n 15.16 Force Majeure…………………………………….. 40<\/p>\n
15.17 Exculpation………………………………………. 40<\/p>\n
15.18 No Discrimination…………………………………. 40<\/p>\n
15.19 Counterparts……………………………………… 41<\/p>\n
15.20 Roof Rights………………………………………. 41<\/p>\n
15.21 Signage………………………………………….. 41<\/p>\n
15.22 Consent\/Duty to Act Reasonably……………………… 41<\/p>\n
ARTICLE 16 Arbitration………………………………………. 42<\/p>\n
16.1 Exclusive Remedy\/Payment Under Protest………………. 42
\n<\/c><\/s><\/caption>\n<\/table>\n
-iv-<\/p>\n
LEASE
\n —–<\/p>\n
This Lease (together with the Basic Lease Information and Exhibits A
\n ———-
\nthrough M which are incorporated into the Lease by this reference, collectively,
\n———
\nthe “Lease”) is made as of the date specified in the Basic Lease Information, by
\nand between WESTLAKE NORTH ASSOCIATES, LLC, a Delaware limited liability company
\n(“Landlord”), and the tenant specified in the Basic Lease Information
\n(“Tenant”), who hereby agree as follows:<\/p>\n
ARTICLE 1
\n ———<\/p>\n
Premises
\n ——–<\/p>\n
1.1 Lease of Premises. (a) Landlord hereby leases to Tenant, and Tenant
\n —————–
\nhereby leases from Landlord, for the term and subject to the covenants
\nhereinafter set forth, to all of which Landlord and Tenant hereby agree, the
\nspace(s) described on Exhibit A-1 (the “Premises”) in the Building described on
\n ———–
\nExhibit A-1 (the “Building”) specified in the Basic Lease Information located on
\n———–
\nthe real property specified in the Basic Lease Information and described more
\nspecifically on Exhibit A-2 (the “Project”). The Project includes the land and
\n ———–
\nthe Building in which the Premises are located. Subject to the effect of
\nSection 1.2, Landlord and Tenant stipulate that, for purposes of this Lease, the
\n———–
\nPremises and the Building contain the number of RSF and USF specified in the
\nBasic Lease Information, and Tenant’s Percentage Share specified in the Basic
\nLease Information is the ratio of such RSF of the Premises to the RSF in the
\nBuilding (i.e., 100% because Tenant is leasing the entire building). During the
\nterm of this Lease, Tenant shall have the parking rights described in Section
\n ——-
\n15.8 and, in addition, the nonexclusive right, in common with other tenants of
\n—-
\nthe Project, to use only for their intended purposes the common areas (such as
\ndriveways, sidewalks, parking areas, loading areas and access roads) in the
\nProject that are designated by Landlord as common areas and not leased to or
\nallocated for the exclusive use of another tenant of the Project. Landlord
\nshall have the right from time to time to change the size, location,
\nconfiguration, character or use of any such common areas, construct additional
\nimprovements or facilities in any such common areas, or close any such common
\nareas; provided, that no such change, construction or closing shall materially
\nand adversely affect Tenant’s access to or use of the Premises or the exclusive
\nparking areas described in Section 15.8, except as provided in such Section.
\n ————
\nTenant shall not interfere with the rights of Landlord and other tenants of the
\nProject to use such common areas.<\/p>\n
(b) Common Area. Landlord and Tenant acknowledge that on the date hereof
\n ———–
\nthere is no “common area”, as that term is used in this Lease. Landlord shall
\nhave the absolute right to designate, improve and operate “common area” within
\nthe Project from time to time in its sole discretion, although without Tenant’s
\nwritten consent no CAM Expense, Capital Costs, depreciation, Property Taxes or
\nInsurance Costs related thereto shall be charged to Tenant. Tenant acknowledges
\nthat it shall not have the right to utilize any such common area unless it
\nagrees in writing, in a form satisfactory to Landlord, to bear a reasonable
\nshare of the costs related to such common area.<\/p>\n
-1-<\/p>\n
1.2 Remeasurement.
\n ————- <\/p>\n
(a) Landlord has caused its architect to measure the RSF and USF in the
\nBuilding and the Premises in accordance with the standards set forth in ANSI
\nZ65.1-1996, as promulgated by the Building Owners and Managers Association
\n(“BOMA Standard”), and the results of such measurement are contained in the
\nBasic Lease Information. Tenant shall have the right, exercisable within
\nfifteen (15) days after the date hereof, to elect to cause its architect to
\nremeasure the Premises and the Building in accordance with the BOMA Standard.
\nIf it so elects, Tenant shall deliver its architect’s certification of the RSF
\nand USF of the Premises and the Building to Landlord within fifteen (15) days
\nafter Tenant’s election. If Tenant’s architect certifies that the RSF or USF in
\nthe Premises or the Building is less than ninety-eight percent (98%) or more
\nthan one hundred two percent (102%) of the RSF or USF set forth in the Basic
\nLease Information, Landlord and Tenant shall meet within fifteen (15) days after
\nLandlord’s receipt of Tenant’s architect’s certification to attempt to resolve
\nthe discrepancy. If they agree to change the RSF or USF in the Premises and the
\nBuilding, they shall reduce their agreement to writing and paragraph (b) shall
\n ————-
\napply. Otherwise, either Landlord or Tenant may submit the matter to
\narbitration pursuant to Article 16 within thirty (30) days after the delivery to
\n ———-
\nLandlord of Tenant’s architect’s certification, but if neither does so, the
\nmeasurements expressed in the Basic Lease Information shall bind both Landlord
\nand Tenant. Only a discrepancy (i.e., in RSF or USF) which is outside the 98%-
\n102% parameters set forth above may be disputed or arbitrated. If Tenant’s
\narchitect certifies that the RSF or USF of the Premises and the Building are
\nmore than ninety-eight percent (98%) but less than one hundred two percent
\n(102%) of the RSF or USF set forth in the Basic Lease Information, no adjustment
\nto the RSF or USF of the Premises or the Building shall be made.<\/p>\n
(b) If, by agreement of the parties or through arbitration, the RSF or USF
\nof the Premises and the Building are determined to be different than as stated
\nin the Basic Lease Information, then (i) all payments due from Tenant to
\nLandlord or from Landlord to Tenant based upon RSF or USF (including Base Rent
\nand Additional Monthly Rent) shall be proportionately, retroactively and
\nprospectively reduced or increased, as the case may be, to reflect the number of
\nRSF or USF or both as determined by agreement or arbitration, and (ii) Landlord
\nand Tenant shall promptly execute and deliver an amendment to this Lease which
\nmemorializes the new RSF, USF or both and the revised payments.<\/p>\n
ARTICLE 2
\n ———<\/p>\n
Term
\n —-<\/p>\n
2.1 Term of Lease. The term of this Lease ( the “Term”) shall be the term
\n ————-
\nspecified in the Basic Lease Information, which shall commence on August 1,
\n2000, as such date is extended by Landlord Delays and Tenant Force Majeure
\nDelays, if any (the “Commencement Date”).<\/p>\n
(a) “Landlord Delays” are the actual periods of delay, if any, suffered by
\nTenant in the construction of its Tenant Improvements or the installation of its
\ntrade fixtures and personal property in the Premises on account of any of the
\nfollowing: (i) the failure of the Entry Date <\/p>\n
-2-<\/p>\n
(defined in Section 2.4(a)) to occur by March 31, 2000; (ii) the failure of the
\n ————–
\nDelivery Date (defined below) to occur by May 1, 2000; provided, that after the
\nDelivery Date Landlord and its contractors and agents may remain in the Premises
\nfor the purpose of completing the Base Building Improvements and for the other
\npurposes permitted in this Lease. However, during such period such Landlord
\npresence shall not interfere with or delay Tenant in the construction of its
\nTenant Improvements. If such presence is interfering with or delaying Tenant,
\nTenant shall notify Landlord in writing, and if Landlord does not within one (1)
\nbusiness day thereafter correct the conduct which caused the interference or
\ndelay, then Landlord Delay shall be deemed to have occurred to the extent of the
\nactual delay suffered thereby by Tenant; (iii) Tenant’s failure or inability to
\nobtain a certificate of occupancy or temporary certificate of occupancy (either,
\na “C of O”) for the Building on account of a failure of Landlord to perform in a
\ntimely manner its obligations in the Work Letter Agreement, including, without
\nlimitation, Tenant’s inability to obtain a C of O because Russell Ranch Road has
\nnot been completed; and any other delay caused by Landlord; provided, that (A)
\nno reasonable exercise of its rights under this Lease shall be deemed to be a
\ndelay by Landlord; and (B) no act, conduct or omission shall be deemed to be a
\nLandlord Delay if Landlord discontinues such act or conduct (or remedies an
\nomission) within one (1) business day after receiving written notice from Tenant
\nof the same (but Landlord shall be entitled to only five (5) such notices — for
\nany delays after such five (5) notices have been given, the period of delay
\nshall begin on receipt by Landlord from Tenant of written notice of the act,
\nconduct or omission constituting the delay. Notwithstanding the foregoing, none
\nof the foregoing shall constitute a Landlord Delay, and the Commencement Date
\nshall not be postponed beyond August 1, 2000, to the extent that the reason for
\nthe Landlord Delay was due to any Tenant Delay or any other action of Tenant
\nother than the normal construction of the Tenant’s Improvements in the Premises.
\nFor example, there shall be no Landlord Delay, and no postponement of the
\nCommencement Date beyond August 1, 2000, for the failure to obtain a C of O for
\nthe Premises if the reason for the failure was the inability of Tenant to
\ncomplete portions of its work (e.g., restrooms) necessary to obtain the C of O
\n(assuming that such failure was not caused by another Landlord Delay).<\/p>\n
(b) A “Tenant Force Majeure Delay” means any delay suffered by Tenant in
\nthe completion of its Tenant Improvements on account of acts of God, strikes or
\nmoratoriums on occupancy or the completion of the Tenant Improvements imposed by
\nany governmental agency, but only to the extent of the actual delay thereby
\ncaused. However, unless such moratorium affects occupancy by tenants or the
\ncompletion of tenant improvements in the entire Project or a larger geographical
\narea (whether caused by the City of Westlake Village or the County of Los
\nAngeles), such as a moratorium on the granting of building permits within such
\nareas, such moratorium shall not be deemed to be a moratorium for purposes of
\nthe preceding sentence.<\/p>\n
(c) No act or circumstance shall constitute a Landlord Delay or a Tenant
\nForce Majeure Delay unless within three (3) business days after Tenant first
\nbecame aware of the alleged delay Tenant notifies Landlord of the occurrence of
\nthe same and thereafter keeps Landlord reasonably informed of the continuance,
\nseverity and likely end of the same. Tenant shall have the obligation to take
\ncommercially reasonable actions, though not to spend significant amounts of
\nmoney, in order to shorten, terminate and otherwise avoid the effects of a
\nLandlord Delay and a Tenant Force Majeure Delay.<\/p>\n
The Term shall end on the Expiration Date which shall be ninety (90)
\ncalendar months following the Commencement Date. However, should the
\nCommencement Date occur <\/p>\n
-3-<\/p>\n
on other than the first day of a month, then the Term shall begin on the
\nCommencement Date and the Expiration Date shall be ninety (90) calendar months
\nfollowing the end of the month in which the Commencement Date occurs. If the
\nDelivery Date does not occur on or before May 1, 2000, this Lease shall not be
\nvoid or voidable and Landlord shall not be liable to Tenant for any loss or
\ndamage resulting therefrom. Tenant acknowledges that (i) Tenant has inspected
\nthe Premises and the Building (in their current state of completion) or has had
\nthem inspected by professional consultants retained by Tenant, (ii) Tenant is
\nfamiliar with the plans for and condition of the Premises and the Building,
\n(iii) when completed in accordance with the plans therefor delivered to Tenant
\nand described in Schedule 1 to Exhibit B, the Premises and the Building will be
\n ———-
\nsuitable for Tenant’s purposes, (iv) except for the Base Building Improvements
\nto be constructed or installed by Landlord pursuant to Exhibit B, the condition
\n ———
\nof the Premises and the Building is acceptable to Tenant. Except for the Base
\nBuilding Improvements, Landlord shall have no obligation to construct or install
\nany improvements in the Premises or the Project or to remodel, renovate,
\nrecondition, alter or improve the Premises or the Building in any manner, and
\nTenant shall accept the Premises “as is” on the Delivery Date, subject to (i)
\nLandlord’s completion of minor aspects of and punch list items relating to the
\nBase Building Improvements, and (ii) completion by Landlord of the Base Building
\nImprovements in substantial accordance with the plans therefor and in compliance
\nwith the applicable law. Tenant shall be deemed to have accepted the Premises,
\nhowever, subject to all matters reasonably discoverable or observable by Tenant
\nin the course of a standard punch list review.<\/p>\n
2.2 Landlord to Construct Base Building Improvements. Landlord shall
\n ————————————————
\nconstruct or install the Base Building Improvements to be constructed or
\ninstalled by Landlord pursuant to terms and conditions of the Work Letter
\nAgreement attached as Exhibit B. Landlord shall deliver possession of the
\n ———
\nPremises to Tenant on the Delivery Date, and Tenant shall accept such delivery
\nof the Premises, subject to the completion of minor items to be completed and
\nLandlord’s punch list items described in the Work Letter Agreement attached
\nhereto as Exhibit B. The “Delivery Date” shall be the date on which
\n ———
\nconstruction of the Base Building Improvements (less any portion thereof which
\nLandlord is not required to construct on account of Tenant exercising its right,
\nunder Section 4.2 of the Work Letter Agreement, to redesign the common areas
\n ———–
\n(lobbies and restrooms) of the Building and the second floor of the Building) is
\nin Landlord’s reasonable judgment sufficiently complete, substantially in
\naccordance with the plans and specifications therefor and water tight, so that
\nTenant may take possession of the Premises for the purpose of completing its
\nTenant Improvements. Landlord shall give Tenant at least thirty (30) days’
\nnotice of the anticipated Delivery Date and shall thereafter keep Tenant
\ninformed of any changes in that schedule. Landlord shall in all cases give
\nTenant at least ten (10) days’ prior notice of the actual Delivery Date.<\/p>\n
2.3 Tenant to Construct Tenant Improvements. Tenant shall construct the
\n —————————————
\nTenant Improvements pursuant to the terms and conditions of the Work Letter
\nAgreement attached as Exhibit B.
\n ——— <\/p>\n
2.4 Entry Into Premises.
\n ——————- <\/p>\n
(a) Landlord shall permit Tenant early entrance to the Premises in order
\nto commence construction of the Tenants Improvements; provided, that the same
\n ——–
\ncan be accomplished by Tenant in a manner which not interfere with, or delay
\nLandlord in the completion of, the Base Building Improvements. Any such delay
\nshall constitute a Tenant Delay and shall not be a<\/p>\n
-4-<\/p>\n
reason for the extension of or the postponement of the Commencement Date.
\nLandlord shall give Tenant five (5) business days prior notice of such date (the
\n“Entry Date”). If the Entry Date does not occur on or before September 1, 2000
\nfor any reason other than damage described in Section 11.1 (in which case such
\n ————
\nSection shall control), Tenant shall have the right to terminate this Lease upon
\nwritten notice given to Landlord within thirty (30) days after September 1,
\n2000. In the event of such termination, Tenant shall have the right to recover
\nfrom Landlord its costs incurred in designing and building its Tenant
\nImprovements (but no other damages) but shall have no further obligation to
\nLandlord other than obligations arising prior to the date of termination.<\/p>\n
(b) Landlord shall not be responsible for, and Tenant is required to
\nobtain insurance covering, any loss (including theft), damage or destruction to
\nany work or material installed or stored by Tenant or Landlord, or by any
\ncontractor or individual involved in the construction of the Tenant
\nImprovements, or for any injury to Tenant or Tenant’s employees, agents,
\ncontractors, licensees, directors, officers, partners, trustees, visitors or
\ninvitees or to any other person. Landlord shall have the right to post the
\nappropriate notices of non-responsibility and to require Tenant to provide
\nLandlord with evidence that Tenant has fulfilled its obligation to provide
\ninsurance pursuant to this Lease. Such insurance shall be commercially
\nreasonable in coverage and amount, including deductibles (which shall be paid by
\nTenant in the event of a covered loss). All terms and conditions of this Lease
\nshall apply to Tenant’s early entry into the Premises except for the payment of
\nBase Rent, CAM Expenses, Property Taxes and Insurance pursuant to Section 3.1
\n ———–
\nbelow, which will not occur until the time described in such Section.
\n ——- <\/p>\n
(c) Following the Delivery Date, Tenant shall have the right to enter the
\nPremises for the purposes of completing Tenant Improvements and in order to
\ninstall its furniture, fixtures and equipment. Tenant’s occupancy prior to the
\nCommencement Date shall be on all of the terms set forth in Section 2.4(a).
\n ————– <\/p>\n
2.5 Memorandum Confirming Term. Landlord and Tenant each shall, promptly
\n ————————–
\nafter the Commencement Date has been determined, execute and deliver to the
\nother a Memorandum Confirming Term in the form of Exhibit C attached hereto,
\n ———
\nwhich shall set forth the actual Commencement Date and the Expiration Date for
\nthis Lease, but the term of this Lease shall commence and end in accordance with
\nthis Lease whether or not the Memorandum Confirming Term is executed.<\/p>\n
2.6 Holding Over. If, with the written consent of Landlord, Tenant holds
\n ————
\npossession of the Premises after expiration of the term of this Lease, Tenant
\nshall become a tenant from month to month under this Lease, but the Base Rent
\nduring such month to month tenancy shall be equal to one hundred twenty-five
\npercent (125%) of the Base Rent in effect at the expiration of the term of this
\nLease. Landlord and Tenant each shall have the right to terminate such month to
\nmonth tenancy by giving at least thirty (30) days’ written notice of termination
\nto the other at any time, in which event such tenancy shall terminate on the
\ntermination date set forth in such termination notice. If Tenant, without the
\nwritten consent of Landlord, holds possession of the Premises without the
\nwritten consent of Landlord, Tenant shall pay rent as set forth in the first
\nsentence of this Section 2.6 and shall be responsible to Landlord for all
\n ———–
\ndamages incurred by Landlord as a result of such holdover and reasonable
\nattorneys’ fees and costs pursuant to Section 15.3 of this Lease. Nothing in
\n ————
\nthis Lease shall be deemed to expressly, or by implication, grant Tenant the
\nright to hold over in the Premises, and Landlord’s consent to any <\/p>\n
-5-<\/p>\n
holdover shall occur only if Landlord, in the exercise of its sole and absolute
\ndiscretion, agrees to such holdover pursuant to a separate written agreement
\nsigned by both Landlord and Tenant.<\/p>\n
2.7 Building II and Building III. Building II contains or will contain
\n —————————-
\n65,517 rentable square feet and Building III contains or will contain 133,405
\nrentable square feet.<\/p>\n
ARTICLE 3
\n ———<\/p>\n
Rent
\n —-<\/p>\n
3.1 Base Rent and Additional Rent. Tenant shall pay to Landlord the
\n —————————–
\nfollowing amounts as rent for the Premises, subject to adjustment pursuant to
\nSection 1.2:
\n———–<\/p>\n
(a) During the Term beginning with the Commencement Date, Tenant shall pay
\nto Landlord, as Base Rent each month the amount of Monthly Base Rent specified
\nbelow:<\/p>\n
Monthly Base Rent Monthly Periods Following
\n Commencement Date<\/p>\n
$108,143.17 Months 1-6<\/p>\n
$216,286.34 Months 7-12<\/p>\n
$224,937.79 Months 13-24<\/p>\n
$233,935.31 Months 25-36<\/p>\n
$243,292.72 Months 37-48<\/p>\n
$253,024.43 Months 49-60<\/p>\n
$263,145.40 Months 61-72<\/p>\n
$273,671.22 Months 73-84<\/p>\n
$284,618.07 Months 85-90<\/p>\n
Notwithstanding the foregoing, if at any time during the first six (6)
\nmonths of the Term an Event of Default occurs with respect to a material
\nprovision of this Lease, then the Monthly Base Rent for each of the first six
\nmonths of the Term shall be the same as the Monthly Base Rent for the second six
\n(6) months of the Term, and Tenant shall immediately pay to Landlord an amount
\nnecessary so that the total amount paid as Monthly Base Rent to that point in
\ntime is equal to the amount which would have been paid had Monthly Base Rent
\nbeen payable at the rate of $216,286.34 per month. In addition, Tenant shall
\npay Monthly Base Rent for the balance of the first six (6) months of the Term at
\nsuch monthly rate. Should the Commencement Date occur other than on the first
\nday of a month, then the Monthly Base Rent for the partial <\/p>\n
-6-<\/p>\n
month shall be at the rate of $216,286.34 prorated for such partial month, which
\nshall be paid on the Commencement Date.<\/p>\n
(b) During each calendar year (or part thereof) during the Term, Tenant
\nshall pay to Landlord, as additional monthly rent (“Additional Monthly Rent”):<\/p>\n
(i) Tenant’s Percentage Share specified in the Basic Lease
\n Information of all CAM Expenses paid or incurred by Landlord in such year;<\/p>\n
(ii) Tenant’s Percentage Share specified in the Basic Lease
\n Information of the total dollar amount of all Property Taxes paid or
\n incurred by Landlord in such year; and<\/p>\n
(iii) Tenant’s Percentage Share specified in the Basic Lease
\n Information of the total dollar amount of all Insurance Costs paid or
\n incurred by Landlord in such year.<\/p>\n
In addition, if prior to the Commencement Date Tenant occupies the Premises for
\nthe conduct of regular business and the Tenant Improvements are substantially
\ncompleted, Tenant shall pay Landlord Additional Monthly Rent for the period
\nbetween the date of such occupation and the Commencement Date, upon receipt of
\nan invoice therefor from Landlord.<\/p>\n
(c) Throughout the Term, Tenant shall pay, as additional rent, all other
\namounts of money and charges required to be paid by Tenant under this Lease
\n(“Additional Rent”), whether or not such amounts of money or charges are
\ndesignated Additional Rent. As used in this Lease, “rent” and “Rent” shall mean
\nand include all Base Rent, Additional Monthly Rent and Additional Rent payable
\nby Tenant in accordance with this Lease.<\/p>\n
3.2 Procedures. The Additional Monthly Rent payable by Tenant pursuant to
\n ———-
\nSection 3.1(b) hereof (CAM Expenses, Property Taxes and Insurance Costs) shall
\n————–
\nbe calculated and paid in accordance with the following procedures:<\/p>\n
(a) On or before the Commencement Date, or as soon thereafter as
\npracticable, and on or before the first day of each subsequent calendar year
\nduring the term of this Lease, or as soon thereafter as practicable, Landlord
\nshall give Tenant written notice of Landlord’s estimate of the amounts payable
\nunder Section 3.1(b) hereof for the balance of the first calendar year after the
\n ————–
\nCommencement Date or for the ensuing calendar year, as the case may be. Tenant
\nshall pay such estimated amounts to Landlord in equal monthly installments, in
\nadvance, on or before the Commencement Date and on or before the first day of
\neach month during such balance of the first calendar year after the Commencement
\nDate or during such ensuing calendar year, as the case may be. If such notice
\nis not given for any calendar year, Tenant shall continue to pay on the basis of
\nthe prior year’s estimate until the month after such notice is given, and
\nsubsequent payments by Tenant shall be based on Landlord’s current estimate.
\nIf, at any time, Landlord determines that the amounts payable under Section
\n ——-
\n3.1(b) hereof for the current calendar year will vary from Landlord’s estimate,
\n——
\nLandlord may, by giving written notice to Tenant, revise Landlord’s estimate for
\nsuch year, and subsequent payments by Tenant for such year shall be based on
\nsuch revised estimate.<\/p>\n
(b) By each April 1 during the Term, or a reasonable time thereafter,
\nLandlord shall give Tenant a written statement of the amounts payable by Tenant
\nunder Section 3.1(b) hereof for the prior such calendar year certified by
\n ————–
\nLandlord. If such statement shows a total amount <\/p>\n
-7-<\/p>\n
owing by Tenant that is less than the estimated payments for such calendar year
\npreviously made by Tenant, Landlord shall credit the excess to the next
\ninstallment(s) of Rent payable by Tenant (or, if the Term has ended, Landlord
\nshall refund the excess to Tenant with such statement). If such statement shows
\na total amount owing by Tenant that is more than the estimated payments for such
\ncalendar year previously made by Tenant, Tenant shall pay the deficiency to
\nLandlord within ten (10) days after delivery of such statement. Failure by
\nLandlord to give any notice or statement to Tenant under this Section 3.2 shall
\n ———–
\nnot waive Landlord’s right to receive, or Tenant’s obligation to pay, the
\namounts payable by Tenant under Section 3.1(b) hereof, unless the expense was
\n ————–
\nincurred more than two (2) years prior to the date it was assessed to Tenant.<\/p>\n
(c) In the event that Tenant disputes the amount of CAM Expenses, Property
\nTaxes and Insurance Costs (collectively, “Operating Costs”) set forth in any
\nannual statement delivered by Landlord, then subject to the terms and conditions
\nbelow, Tenant shall have the right to provide notice to Landlord that it intends
\nto inspect and copy Landlord’s accounting records for the calendar year covered
\nby such statement during normal business hours (“Tenant Review”) and shall sign
\nan agreement with Landlord whereby Tenant agrees not to disclose the results of
\nsuch (and the information obtained in connection with such) Tenant Review to
\nanyone other than Tenant’s employees and\/or attorneys and\/or accountants or
\nother professionals who shall also sign an agreement to keep such information
\nconfidential. If Tenant retains a third party to inspect Landlord’s accounting
\nrecords (a “Third Party Auditor”), then as a condition precedent to any such
\ninspection, Tenant shall deliver to Landlord a copy of Tenant’s written
\nagreement with such Third Party Auditor, which agreement shall include
\nprovisions which state that (i) Landlord is an intended third-party beneficiary
\nof such agreement, (ii) such Third Party Auditor will not in any manner solicit
\nor agree to represent any other tenant of the Project with respect to an audit
\nor other review of Landlord’s accounting records at the Building or Project, and
\n(iii) such Third Party Auditor shall maintain in strict confidence any and all
\ninformation obtained in connection with the Tenant Review and shall not disclose
\nsuch information to any person or entity other than to the management personnel
\nof Tenant and its attorneys. Any Tenant Review shall take place in Landlord’s
\noffice at the Project or at such other location as Landlord may reasonably
\ndesignate in Southern California, and Landlord will provide Tenant with
\nreasonable accommodations for such Tenant Review and reasonable use of such
\navailable office equipment, but may charge Tenant for telephone calls, faxes,
\nand photocopies. Tenant shall provide Landlord with not less than two (2)
\nweeks’ prior written notice of its desire to conduct such Tenant Review. In
\nconnection with the foregoing review, Landlord shall furnish Tenant with such
\nreasonable supporting documentation relating to the subject statement as Tenant
\nmay reasonably request. In no event shall Tenant have the right to conduct such
\nTenant Review if (a) an Event of Default by Tenant is then in existence under
\nthis Lease with respect to any of Tenant’s monetary obligations, including,
\nwithout limitation, the payment by Tenant of Tenant’s Percentage Share of
\nOperating Costs described in the statement which is the subject of Tenant’s
\nReview, which payment, at Tenant’s election, may be made under dispute or (b) if
\nany amount invoiced by Landlord to Tenant remains unpaid, but Tenant may make
\nsuch payment to Landlord under protest. In the event that following Tenant’s
\nReview, Tenant and Landlord continue to dispute the amount of Operating Costs
\nshown on Landlord’s statement and Landlord and Tenant are unable to resolve such
\ndispute, then subject to the last paragraph of this clause (c), either Landlord
\nor Tenant may submit the matter to arbitration pursuant to Article 16 of this
\n ———-
\nLease and the proper amount of the disputed items and\/or categories of Operating
\nCosts shown on such statement shall be determined by such proceeding producing
\nan arbitration award. The <\/p>\n
-8-<\/p>\n
arbitration award shall be conclusive and binding upon both Landlord and Tenant.
\nIf the resolution of the parties’ dispute with regard to Tenant’s Percentage
\nShare of Operating Costs shown on the statement, pursuant to the arbitration
\naward, reveals an error in the calculation of Tenant’s Percentage Share of those
\nOperating Costs to be paid for such calendar year, the parties’ sole remedy
\nshall be for the parties to make appropriate payments or reimbursements, as the
\ncase may be, to each other as are determined to be owing. Any such payments
\nshall be made within thirty (30) days following the resolution of such dispute.
\nTenant shall be responsible for all costs and expenses associated with Tenant’s
\nReview, and Tenant shall be responsible for all reasonable audit fees,
\nattorney’s fees and related costs of Tenant relating to an Arbitration Award
\n(collectively, the “Costs”), provided that if the parties’ final resolution of
\nthe dispute involves the overstatement by Landlord for such calendar year in
\nexcess of five percent (5%), then Landlord shall be responsible for all Costs.
\nAn overcharge by Landlord of Operating Costs shall not entitle Tenant to
\nterminate this Lease. Landlord shall not be obligated to make a refund to Tenant
\nuntil thirty (30) days after the issuance of a final arbitration award. Subject
\nto the terms set forth below, this provision shall survive the termination of
\nthis Lease to allow the parties to enforce their respective rights hereunder.<\/p>\n
Tenant shall have no further right to conduct a Tenant Review with respect
\nto any statement submitted by Landlord, or to dispute the amount of Tenant’s
\nPercentage Share of Operating Costs set forth in the applicable statement,
\nunless Tenant (i) notifies Landlord within six (6) months after receipt of the
\nstatement that Tenant disputes or wishes to audit the same, (ii) Tenant
\ncompletes its audit within twelve (12) months after receipt of such statement,
\nif an audit is performed, and (iii) unless the matter has otherwise been
\nresolved by Landlord and Tenant, commences arbitration with respect to such
\ndispute within twelve (12) months after receipt of such statement.<\/p>\n
(d) If the term of this Lease commences or ends on a day other than the
\nfirst or last day of a calendar year, respectively, the amounts payable by
\nTenant under Section 3.1(b) hereof applicable to the calendar year in which such
\n ————–
\nterm commences or ends shall be prorated according to the ratio which the number
\nof days during the term of this Lease in such calendar year bears to three
\nhundred sixty-five (365). Termination of this Lease shall not affect the
\nobligations of Landlord and Tenant pursuant to Section 3.2(b) hereof to be
\n ————–
\nperformed after such termination.<\/p>\n
3.3 Letter of Credit, Security Deposit and First Month’s Rent. Upon
\n ———————————————————
\nsigning this Lease, Tenant shall deliver to Landlord a letter of credit in the
\nform and amount required by Exhibit L and an amount equal to the Base Rent for
\n ———
\nthe first two (2) months of the term of this Lease for which the Base Rent is to
\nbe paid, which amount Landlord shall apply to the Base Rent for such first two
\n(2) months. Upon the expiration of such letter of credit, Tenant shall pay to
\nLandlord an amount equal to the monthly Base Rent and Additional Rent then
\napplicable under this Lease (the “Security Deposit”). The Security Deposit
\nshall be held by Landlord as security for the performance by Tenant of all of
\nthe covenants of this Lease to be performed by Tenant, and Tenant shall not be
\nentitled to interest thereon. If Tenant fails to perform any of the covenants
\nof this Lease to be performed by Tenant, then Landlord shall have the right, but
\nno obligation, to apply the proceeds of the Security Deposit, or so much thereof
\nas may be necessary, or to call on the letter of credit and utilize the proceeds
\nthereof to cure any such failure by Tenant, without prior notice to Tenant. If
\nLandlord applies the proceeds of the letter of credit or the Security Deposit or
\nany part thereof to cure any such failure by Tenant, then <\/p>\n
-9-<\/p>\n
Tenant shall immediately restore the letter of credit to its amount immediately
\nprior to such application and pay to Landlord the sum necessary to restore the
\nSecurity Deposit to the full amount required by this Section 3.3. Landlord shall
\n ———–
\nreturn any remaining portion of the Security Deposit to Tenant as soon after
\ntermination of this Lease as Landlord is able to determine, acting reasonably,
\nwhether Tenant owes any further obligation to Landlord under this Lease, but in
\nany event no later than ninety (90) days after termination of the Lease. Tenant
\nacknowledges that in the event this Lease is terminated following an Event of
\nDefault by Tenant, Landlord shall have the right to utilize the proceeds of the
\nletter of credit, if any then remain, or the amount of the Security Deposit to
\npay or reimburse Landlord for amounts due to Landlord under the terms of this
\nLease. Upon termination of the original Landlord’s or any successor owner’s
\ninterest in the Premises, the original Landlord or such successor owner shall be
\nreleased from further liability with respect to the letter of credit or Security
\nDeposit upon the original Landlord’s or such successor owner’s transferring the
\nletter of credit or Security Deposit to the new owner.<\/p>\n
3.4 Late Payment. Tenant acknowledges that the late payment by Tenant of
\n ————
\nany monthly installment of Base Rent or Additional Monthly Rent will cause
\nLandlord to incur costs and expenses, the exact amount of which is extremely
\ndifficult and impractical to fix. Such costs and expenses will include
\nadministration and collection costs and processing and accounting expenses.
\nTherefore, if any monthly installment of Base Rent or Additional Monthly Rent is
\nnot received by Landlord within five (5) days after such installment is due, or
\nthree (3) days after Landlord notifies Tenant that such installment is due,
\nwhichever is later, Tenant shall immediately pay to Landlord a late charge equal
\nto three percent (3%) of such delinquent installment; provided, that no late
\n ——–
\ncharge shall be due with respect to the first delinquent installment within any
\ntwenty-four (24) month period. Landlord and Tenant agree that such late charge
\nrepresents a reasonable estimate of such costs and expenses and is fair
\nreimbursement to Landlord. In no event shall such late charge be deemed to
\ngrant to Tenant a grace period or extension of time within which to pay any
\nmonthly rent or prevent Landlord from exercising any right or enforcing any
\nremedy available to Landlord upon Tenant’s failure to pay each installment of
\nmonthly rent due under this Lease when due, including the right to terminate
\nthis Lease and recover all damages from Tenant. All amounts of money payable by
\nTenant to Landlord hereunder, if not paid when due, shall bear interest from the
\ndue date (and disregarding the five (5) day period applicable to late charges)
\nuntil paid at the lower of the highest rate permitted by law and two percent
\n(2%) over the rate designated in the Wall Street Journal as the Prime Rate at
\nthe time such amounts first become due, adjusted monthly (“Interest Rate”) and
\nTenant shall pay such interest to Landlord on written demand in addition to the
\nlate charge, which late charge (as contrasted with interest) will not be due
\nunless Tenant is late in making such payment by more than five (5) days.<\/p>\n
3.5 Other Taxes Payable by Tenant. Tenant shall reimburse Landlord upon
\n —————————–
\nwritten demand for all taxes, assessments, excises, levies, fees and charges,
\nincluding all payments related to the cost of providing facilities or services,
\nwhether or not now customary or within the contemplation of Landlord and Tenant,
\nthat are payable by Landlord and levied, assessed, charged, confirmed or imposed
\nby any public or government authority upon, or measured by, or reasonably
\nattributable to (a) the cost or value of Tenant’s furniture, fixtures, equipment
\nand other personal property located in the Premises or the cost or value of any
\nimprovements made in or to the Premises by or for Tenant, regardless of whether
\ntitle to such improvements is vested in Tenant or Landlord, but only to the
\nextent not included in Property Taxes, (b) any rent payable under this Lease,
\nincluding any gross income tax or excise tax levied by any public or <\/p>\n
-10-<\/p>\n
government authority with respect to the receipt of any such rent so long as
\nsuch tax is a tax on rent, (c) the possession, leasing, operation, management,
\nmaintenance, alteration, repair, use or occupancy by Tenant of the Premises, or
\n(d) this transaction or any document to which Tenant is a party creating or
\ntransferring Tenant’s interest or Tenant’s estate in the Premises. Such taxes,
\nassessments, excises, levies, fees and charges shall not include net income
\n(measured by the income of Landlord from all sources or from sources other than
\nsolely rent) or franchise taxes of Landlord, unless levied or assessed against
\nLandlord in whole or in part in lieu of, as a substitute for, or as an addition
\nto any such taxes, assessments, excises, levies, fees and charges. All taxes,
\nassessments, excises, levies, fees and charges payable by Tenant under this
\nSection 3.5 shall be deemed to be, and shall be paid as, additional rent.
\n———– <\/p>\n
3.6 Certain Definitions. As used in this Lease, certain words are defined
\n ——————-
\nas follows:<\/p>\n
(a) “CAM Expenses” shall mean all direct and indirect costs and expenses
\npaid or incurred by Landlord in connection with the ownership, management,
\noperation, maintenance or repair of the Premises, the Building, the parking
\nareas described in Section 15.8, any portion of the Project which is located
\n ————
\nEast of Russell Ranch Road and (subject to Section 1.1(b)) the common areas in
\n ————–
\nthe Project or providing services in accordance with this Lease, including but
\nnot limited to the following, to the extent that each relates to the ownership,
\nmanagement, operation, maintenance and repair of the Premises, the Building,
\nsuch common areas and parking areas and such portion of the Project: permit and
\ninspection fees; electricity, gas, fuel, steam, heat, light, power, water, sewer
\nand other utilities; the Management Fees (defined below); security and guard
\nservice (which shall be supplied in the sole discretion of Landlord);
\nextermination, water treatment, garbage and waste disposal, rubbish removal,
\njanitorial services, plumbing and other services; maintenance of the fire
\nsuppression systems; landscape maintenance; supplies, tools, materials and
\nequipment; accounting and other professional fees and expenses; painting the
\nexterior of the Building; maintaining and repairing the foundations, the
\nexterior walls and roof, the parking and loading areas, the sidewalks,
\nlandscaping and common areas, and the other parts of the Project East of Russell
\nRanch Road; amounts paid to Tenant pursuant to Section 6.1(b), other than
\n ————–
\ninterest costs; costs and expenses required by or resulting from compliance with
\nany laws, ordinances, rules, regulations or orders applicable to the Project,
\nother than Buildings II and III, regardless of whether they are Capital Costs,
\nother than those costs and expenses which are Landlord’s responsibility under
\nExhibit B; and costs and expenses of contesting by appropriate proceedings any
\n———
\nmatter concerning managing, operating, maintaining or repairing the Project,
\nother than Buildings II and III, or the validity or applicability of any law,
\nordinance, rule, regulation or order relating to the Project, or the amount or
\nvalidity of any Property Taxes with respect to the Premises. CAM Expenses shall
\nnot include Property Taxes, Insurance Costs, charges payable by Tenant pursuant
\n—
\nto Section 3.5 hereof, depreciation on the Project, costs of tenants’
\n ———–
\nimprovements, real estate brokers’ commissions, the cost of repair or
\nrestoration work necessitated by fire or other casualty damage to the extent of
\nnet insurance proceeds received by Landlord with respect thereto; provided, that
\nthe amount of such cost which is not covered by such net insurance proceeds
\n(other than the deductible amount) and thus is included in CAM Expenses shall
\nnot exceed One Million Dollars ($1,000,000) and shall be amortized, with
\ninterest at a reasonable rate, over the then remaining term of the Lease. The
\ndeductible amounts under any casualty (including earthquake) insurance policies
\nmaintained by Landlord with reference to the Premises and the Building shall be
\nCAM Expenses; provided, that the deductible amount under a policy of earthquake
\n ——–
\ninsurance shall be amortized (with interest) over the useful life of the
\nImprovements built or repaired by Landlord <\/p>\n
-11-<\/p>\n
following an earthquake; and provided further, that any such deductible amount
\n —————-
\nunder a casualty insurance policy shall be amortized and included in CAM Expense
\n(with interest) in equal monthly installments over the balance of the Term of
\nthe Lease. Notwithstanding the foregoing, if any of the foregoing CAM Expenses
\nare Capital Costs, then except as otherwise provided above Landlord shall
\ninclude in CAM Expenses for any particular year only that portion of such CAM
\nExpenses (together with a reasonable interest component) which is properly
\nallocable to such year in accordance with an amortization schedule permitted
\nunder general accepted accounting principles. The costs which may be included in
\nCAM Expenses are further limited by the provisions of Exhibit M.
\n ——— <\/p>\n
(b) “Property Taxes” shall mean all taxes, assessments, excises, levies,
\nfees and charges (and any tax, assessment, excise, levy, fee or charge levied
\nwholly or partly in lieu thereof or as a substitute therefor or as an addition
\nthereto) of every kind and description, general or special, ordinary or
\nextraordinary, foreseen or unforeseen, secured or unsecured, whether or not now
\ncustomary or within the contemplation of Landlord and Tenant, that are levied,
\nassessed, charged, confirmed or imposed by any public or government authority on
\nor against, or otherwise with respect to, the Premises or any part thereof or
\nany real property which is part of the Project East of Russell Ranch Road or any
\npersonal property used in connection with the Premises. Property Taxes shall
\ninclude any gross receipts tax but shall not include net income (measured by the
\nincome of Landlord from all sources or from sources other than solely rent) or
\nfranchise taxes of Landlord, unless levied or assessed against Landlord in whole
\nor in part in lieu of, as a substitute for, or as an addition to any Property
\nTaxes. Property Taxes shall not include charges payable by Tenant pursuant to
\nSection 3.5 hereof.
\n———– <\/p>\n
(c) “Insurance Costs” shall mean all premiums and other charges for all
\nproperty, earthquake, flood, loss of rental income, business interruption,
\nliability and other insurance carried by Landlord relating to the Premises or
\nany real property which is part of the Project East of Russell Ranch Road.<\/p>\n
(d) “Capital Costs” refers to costs which are required to be capitalized,
\nrather than expensed, in accordance with the generally accepted accounting
\nprinciples.<\/p>\n
(e) To the extent Landlord is providing services or incurring costs
\nincluded within the categories of CAM Expenses and\/or Insurance Costs or
\nincurring Property Taxes that pertain to Buildings I, II and III or the Project
\nas a whole as contrasted to CAM Expenses, Insurance Costs and Property Taxes
\nthat pertain solely to Building I, the parking areas described in Section 15.8
\n ————
\nand that portion of the Project which is East of Russell Ranch Road (for
\nexample, if such buildings are all covered by the same insurance policy or
\nsecurity contract), such costs shall be allocated by Landlord to Building I and
\nincluded in CAM Expenses, Insurance Costs and Property Taxes allocable to
\nBuilding I on a pro rata basis based on the RSF in Building I (137,762 RSF) to
\nthe RSF in all three Buildings (336,684 RSF), which pro rata share is 40.92%.
\nThese percentages shall be applicable beginning with the Commencement Date
\nregardless of whether Buildings II and III have been started or completed on the
\ndate thereof.<\/p>\n
(f) In the event that the Premises, the Building, the parking areas
\ndescribed in Section 15.8 and any other portion of the Project East of Russell
\n ————
\nRanch Road ever become a single parcel for real property tax assessment purposes
\n(and Landlord agrees to use commercially reasonable efforts to cause them to
\nbe), Landlord shall not unreasonably withhold or delay its consent to a <\/p>\n
-12-<\/p>\n
request by Tenant to cause Tenant to be responsible only for CAM Expenses,
\nProperty Taxes and Insurance Costs which relate to such single parcel alone,
\nsubject to paragraph (e) above, plus Tenant’s share which relates to common
\n ————-
\nareas within the Project, if any, permitted by Section 1.1(b).
\n ————– <\/p>\n
(g) “Management Fees” mean an amount equal to Eight Thousand Eight Hundred
\nEighty-Five and 65\/100 dollars ($8,885.65) for each of the first twelve (12)
\nmonths following the Commencement Date, increased by three percent (3%) per
\nyear, compounded, for each subsequent twelve (12) consecutive month period
\nduring the Term, and prorated for any partial calendar month at the beginning of
\nthe Term. The Management Fees are attributed to and applicable only to the
\nPremises and will not be allocated to any other portion of the Project.<\/p>\n
3.7 Rent Payment Address. Tenant shall pay all Base Rent and Additional
\n ——————–
\nMonthly Rent under Section 3.1 hereof to Landlord, in advance, on or before the
\n ———–
\nfirst day of each and every calendar month during the term of this Lease.
\nTenant shall pay all rent to Landlord without notice, demand, deduction,
\nabatement or offset, except as otherwise set forth in the Lease, in lawful money
\nof the United States of America, at the address for the payment of rent
\nspecified in the Basic Lease Information, or to such other person or at such
\nother place as Landlord may from time to time designate in writing.<\/p>\n
3.8 Management Oriented Services. Landlord agrees that it will not
\n —————————-
\nprovide to any other tenant in the Project management oriented services (such as
\ncleaning or repair services) on a basis which is more favorable to such tenant
\nthan Landlord is willing to provide the same services to Tenant.<\/p>\n
ARTICLE 4
\n ———<\/p>\n
Use of the Premises
\n ——————-<\/p>\n
4.1 Permitted Use. Tenant shall use the Premises only for the Permitted
\n ————-
\nUse of the Premises specified in the Basic Lease Information and for lawful
\npurposes incidental thereto, and no other purpose whatsoever. Tenant shall not
\ndo or permit to be done in, on or about the Premises, nor bring or keep or
\npermit to be brought or kept therein, anything which is prohibited by or will in
\nany way conflict with any law, ordinance, rule, regulation or order now in force
\nor which may hereafter be enacted, or which is prohibited by any insurance
\npolicy carried by Landlord for the Project, or will in any way increase the
\nexisting rate of (except to the extent Tenant pays the cost of any such
\nincrease), or disallow any fire rating or sprinkler credit, or cause a
\ncancellation of, or affect any insurance for the Project. If Tenant causes any
\nincrease in the premium for any insurance covering the Project carried by
\nLandlord, Tenant shall pay to Landlord, on written demand as Additional Rent,
\nthe entire amount of such increase. Tenant shall not do or permit anything to
\nbe done in or about the Premises which will in any way unreasonably obstruct or
\ninterfere with the rights of Landlord or other tenants of the Project, or injure
\nor annoy them. Tenant shall not use or allow the Premises to be used for any
\nimproper, immoral, unlawful or objectionable activity, nor shall Tenant cause,
\nmaintain or permit any nuisance in, on or about the Premises or commit or suffer
\nto be committed any waste in, on or about the Premises. Tenant shall not store
\nany materials, equipment or vehicles outside the <\/p>\n
-13-<\/p>\n
Premises and agrees that no washing of any type (including washing vehicles)
\nshall take place in or outside the Premises. Tenant shall not receive, store or
\notherwise handle any product or material that is explosive or highly
\ninflammable. Tenant shall not install any signs on the Premises except as
\npermitted in the Work Letter Agreement. Tenant shall, at Tenant’s expense,
\nremove all such signs prior to or upon termination of this Lease, repair any
\ndamage caused by the installation or removal of such signs, and restore the
\nPremises to the condition that existed before installation of such signs.<\/p>\n
4.2 Environmental Definitions. As used in this Lease, “Hazardous
\n ————————-
\nMaterial” shall mean any substance that is (a) defined under any Environmental
\nLaw as a hazardous substance, hazardous waste, hazardous material, pollutant or
\ncontaminant, (b) a petroleum hydrocarbon, including crude oil or any fraction or
\nmixture thereof, (c) hazardous, toxic, corrosive, flammable, explosive,
\ninfectious, radioactive, carcinogenic or a reproductive toxicant, or (d)
\notherwise regulated pursuant to any Environmental Law. As used in this Lease,
\n“Environmental Law” shall mean all federal, state and local laws, statutes,
\nordinances, regulations, rules, judicial and administrative orders and decrees,
\npermits, licenses, approvals, authorizations and similar requirements of all
\nfederal, state and local governmental agencies or other governmental authorities
\npertaining to the protection of human health and safety or the environment, now
\nexisting or later adopted during the term of this Lease. As used in this Lease,
\n“Permitted Activities” shall mean the lawful activities of Tenant that are part
\nof the ordinary course of Tenant’s business in accordance with the Permitted Use
\nspecified in the Basic Lease Information. As used in this Lease, “Permitted
\nMaterials” shall mean the materials that do not constitute Hazardous Materials
\nand which are otherwise handled by Tenant in the ordinary course of conducting
\nPermitted Activities.<\/p>\n
4.3 Environmental Requirements. Tenant hereby agrees that: (a) Tenant
\n ————————–
\nshall conduct, or permit to be conducted, on the Premises only activities which
\nare Permitted Activities; (b) Tenant shall not use, store or otherwise handle,
\nor permit any use, storage or other handling of, any Hazardous Material except
\nfor small amounts of office supplies for the photocopy machine, white-out and
\nthe like, on or about the Premises, and except for a diesel generator and fuel
\ntherefor which are part of the Tenant Improvements, and which Tenant agrees to
\ninstall and operate in accordance with Environmental Law; (c) Tenant shall
\nobtain and maintain in effect all permits and licenses required pursuant to any
\nEnvironmental Law for Tenant’s activities on the Premises, and Tenant shall at
\nall times comply with all applicable Environmental Laws; (d) Tenant shall not
\nengage in the storage, treatment or disposal on or about the Premises of any
\nHazardous Material except for any temporary accumulation of waste generated in
\nthe course of Permitted Activities; (e) Tenant shall not install any aboveground
\nor underground storage tank or any subsurface lines for the storage or transfer
\nof any Hazardous Material; (f) Tenant shall not cause or permit to occur any
\nrelease of any Hazardous Material or any condition of pollution or nuisance on
\nor about the Premises, whether affecting surface water or groundwater, air, the
\nland or the subsurface environment; (g) Tenant shall promptly remove from the
\nPremises any Hazardous Material introduced, or permitted to be introduced, onto
\nthe Premises by Tenant; and (h) if any release of a Hazardous Material to the
\nenvironment, or any condition of pollution or nuisance, occurs on or about or
\nbeneath the Premises as a result of any act or omission of Tenant or its agents,
\nofficers, employees, contractors, invitees or licensees, Tenant shall, at
\nTenant’s sole cost and expense, promptly undertake all remedial measures
\nrequired to clean up and abate or otherwise respond to the release, pollution or
\nnuisance in accordance with all applicable Environmental Laws. Landlord and
\nLandlord’s representatives <\/p>\n
-14-<\/p>\n
shall have the right, but not the obligation, to enter the Premises at any
\nreasonable time and upon reasonable notice for the purpose of inspecting the
\nPremises in order to determine Tenant’s compliance with the requirements of this
\nLease and applicable Environmental Law. If Landlord gives written notice to
\nTenant that Tenant’s use, storage or handling of any Hazardous Material on the
\nPremises may not comply with this Lease or applicable Environmental Law, Tenant
\nshall correct any such violation within five (5) days after Tenant’s receipt of
\nsuch notice from Landlord, but nothing herein shall be construed to allow Tenant
\nto use, store or handle Hazardous Materials in the Premises. Tenant shall
\nindemnify and defend Landlord against and hold Landlord harmless from all
\nclaims, demands, actions, judgments, liabilities, costs, expenses, losses,
\ndamages, penalties, fines and obligations of any nature (including reasonable
\nattorneys’ fees and disbursements incurred in the investigation, defense or
\nsettlement of claims) that Landlord may incur as a result of, or in connection
\nwith, claims arising from the presence, use, storage, transportation, treatment,
\ndisposal, release or other handling, on or about or beneath the Premises, of any
\nHazardous Material introduced or permitted on or about or beneath the Premises
\nby any act or omission of Tenant or its agents, officers, employees,
\ncontractors, invitees or licensees. The liability of Tenant under this Section
\n ——-
\n4.3 shall survive the termination of this Lease with respect to acts or
\n—
\nomissions that occur before such termination.<\/p>\n
Notwithstanding the foregoing, but without limiting Tenant’s liability
\nunder this Section 4.3, Tenant shall be entitled to use at the Premises office
\n ———–
\nsupplies regularly used in the conduct of Tenant’s business so long as the same
\nare purchased, used, stored and disposed of in accordance with applicable
\nEnvironmental Laws. From time to time at Landlord’s request Tenant shall advise
\nLandlord which, if any, of these supplies constitute Hazardous Material. Tenant
\nacknowledges that (i) Landlord has delivered to Tenant a copy of the most
\nrecent Phase I environmental report pertaining to the Premises which is in
\nLandlord’s possession, and (ii) Tenant has read and is satisfied with the same.<\/p>\n
4.4 Compliance With Law. Tenant shall, at Tenant’s sole cost and expense,
\n ——————-
\npromptly comply with all laws, ordinances, rules, regulations, orders and other
\nrequirements of any government or public authority now in force or which may
\nhereafter be in force, with all requirements of any board of fire underwriters
\nor other similar body now or hereafter constituted, and with all directions and
\ncertificates of occupancy issued pursuant to any law by any governmental agency
\nor officer, insofar as any thereof relate to or are required by the condition,
\nuse or occupancy of the Premises or the operation, use or maintenance of any
\npersonal property, trade fixtures, machinery, equipment or improvements in the
\nPremises, but Tenant shall not be required to make structural changes or changes
\nto the systems included in Base Building Improvements unless such changes are
\nrelated to or required by Tenant’s acts or use of the Premises or by
\nimprovements made by or for Tenant or are otherwise specifically made the
\nresponsibility of Tenant in this Lease.<\/p>\n
4.5 Rules and Regulations. Tenant shall faithfully observe and fully
\n ———————
\ncomply with all reasonable rules and regulations (the “Rules and Regulations”)
\nfrom time to time made in writing and delivered to Tenant by Landlord for the
\nsafety, care, use and cleanliness of the Project or the common areas of the
\nProject and the preservation of good order therein. If there is any conflict,
\nthis Lease shall prevail over the Rules and Regulations.<\/p>\n
4.6 Entry by Landlord. Landlord shall have the right to enter the
\n —————–
\nPremises at any reasonable time and upon reasonable prior notice (except in the
\nevent of an emergency) to (a) <\/p>\n
-15-<\/p>\n
inspect the Premises, (b) exhibit the Premises to prospective purchasers,
\nlenders or tenants, (c) determine whether Tenant is performing all of Tenant’s
\nobligations, (d) supply any service to be provided by Landlord, (e) post notices
\nof nonresponsibility, and (f) make any repairs to the Premises, or make any
\nrepairs to any adjoining space or utility services, or make any repairs,
\nalterations or improvements to any other portion of the Project, provided all
\nsuch work shall be done as promptly as reasonably practicable and so as to cause
\nas little interference to Tenant as reasonably practicable. Tenant waives all
\nclaims for damages for any injury or inconvenience to or interference with
\nTenant’s business, any loss of occupancy or quiet enjoyment of the Premises or
\nany other loss occasioned by such entry, except to the extent caused by
\nLandlord’s gross negligence or willful misconduct. Tenant shall provide Landlord
\nat all times, without request, with a key or keys to all locks for all doors in,
\non or about the Premises (excluding Tenant’s vaults, safes and similar special
\nsecurity areas designated in writing by Tenant). Landlord shall have the right
\nto use any and all means which Landlord may deem proper to open such doors in an
\nemergency to obtain entry to the Premises. Any entry to the Premises obtained by
\nLandlord by any of such means shall not under any circumstances be construed or
\ndeemed to be a forcible or unlawful entry into or a detainer of the Premises or
\nan eviction, actual or constructive, of Tenant from the Premises or any portion
\nthereof.<\/p>\n
ARTICLE 5
\n ———<\/p>\n
Utilities and Services
\n ———————-<\/p>\n
5.1 Tenant’s Responsibilities. Tenant shall pay, directly to the
\n ————————-
\nappropriate supplier before delinquency, for all telephone services supplied to
\nthe Premises (and with any other service or utility that Landlord, in the
\nexercise of its reasonable discretion, agrees that Tenant may provide directly
\nto itself rather than through Landlord, collectively “Exempt S&U”) together with
\nall taxes, assessments, surcharges and similar expenses relating to such
\nutilities and services. If any such utilities or services are jointly metered
\nwith the Premises and another part of the Project, Landlord shall reasonably
\ndetermine Tenant’s share of the cost of such jointly metered utilities and
\nservices based on Landlord’s estimate of usage, and Tenant shall pay as
\nadditional rent Tenant’s share of the cost of such jointly metered utilities and
\nservices to Landlord within ten (10) days after receipt of Landlord’s written
\nstatement for such cost. Landlord shall not be in default under this Lease or
\nbe liable for any damage or loss directly or indirectly resulting from, nor
\nshall the rent be abated (except as provided in Section 5.2(i)) or a
\n ————–
\nconstructive or other eviction be deemed to have occurred by reason of, any
\ninterruption of or failure to supply or delay in supplying any such utilities
\nand services, including those described in Section 5.2 below, or any limitation,
\n ———–
\ncurtailment, rationing or restriction on use of water, electricity, gas or any
\nresource or form of energy or other service serving the Premises or the Project,
\nwhether such results from mandatory restrictions or voluntary compliance with
\nguidelines. To the extent Tenant is permitted by Landlord to provide an Exempt
\nS&U, there shall be excluded from CAM Expenses any service or utility supplied
\nto the Building by the Exempt S&U.<\/p>\n
5.2 Landlord’s Responsibilities. Landlord shall provide the following
\n —————————
\nutilities and services to the Building:<\/p>\n
-16-<\/p>\n
(a) HVAC. Landlord shall, on Monday through Friday, from 8:00 A.M. to 6:00
\n —-
\nP.M. and Saturday, from 9:00 A.M. to 1:00 P.M. (“Normal Hours”) except for the
\nfollowing holidays: New Year’s Day, Martin Luther King Day, Presidents’ Day,
\nMemorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
\n(“Normal Holidays”), provide to the Premises heating, ventilation, and air
\nconditioning (“HVAC”) for the comfortable occupancy of the Premises in
\naccordance with the capacity of the HVAC system furnished by Landlord as part of
\nthe Base Building Improvements (as described on Schedule 1 to Exhibit B). With
\n ———
\nrespect to Tenant’s computer room, Tenant will provide, at its sole cost and
\nexpense (except as may be reimbursed from the Tenant Improvement Allowance), any
\nsupplemental HVAC unit required to provide air conditioning to such computer
\nroom on a twenty-four (24) hour basis.<\/p>\n
(b) Electricity. Landlord shall provide to the Premises, twenty-four (24)
\n ———–
\nhours a day, seven (7) days a week, every day of the year, a minimum of five (5)
\nwatts consumed load per USF of the Premises of electric power (in addition to
\nthe electrical power required for lighting) for the operation of Tenant’s
\ncomputers, equipment and machines for the conduct of business offices (“General
\nUse”), not to exceed the reasonable capacity of the Base Building.<\/p>\n
(c) Water. Landlord shall provide at all times reasonably necessary
\n —–
\namounts of water for restrooms and drinking fountains furnished by Landlord.<\/p>\n
(d) Janitorial. Landlord shall provide janitorial services to the Premises
\n ———-
\neach evening, five days per week (except for normal holidays) which shall at
\nleast include the services on the attached Exhibit J. Such services may be
\n ———
\nexpanded, or provided by Tenant rather than Landlord, to the extent provided in
\nExhibit J.
\n——— <\/p>\n
(e) Lights. Landlord shall replace all electric light bulbs, tubes and
\n ——
\nballasts in the Premises throughout the Term promptly following notice from
\nTenant and shall charge Tenant separately for the actual costs incurred by
\nLandlord in connection therewith. Landlord may, at Landlord’s reasonable
\ndiscretion and following prior notice to Tenant, adopt a system of relamping and
\nreballasting periodically on a group basis in accordance with good practice and
\nshall charge Tenant separately for the actual costs incurred by Landlord in
\nconnection therewith.<\/p>\n
(f) Window Washing\/Window Washing Equipment. Landlord shall furnish as a
\n —————————————
\nservice for the Building window washing of all windows in the Premises, both
\ninside and out, at such times as shall be required in Landlord’s reasonable
\njudgment, but all exterior windows shall be washed at least twice each year and
\nthe interior side of such exterior windows shall be washed one (1) time per
\nyear.<\/p>\n
(g) Separate Metering. Landlord anticipates that all utilities it provides
\n —————–
\nto the Premises will be separately metered to measure only Tenant’s use.<\/p>\n
(h) Excess Usage. In the event Tenant utilizes the HVAC at other than
\n ————
\nNormal Hours, Landlord shall have the right to charge Tenant for each
\nutilization by imposing a fee of ten dollars forty-two cents ($10.42) per hour
\n(increased by 4% per year, compounded, on each anniversary of the Commencement
\nDate). Such hourly amount is the charge for HVAC for the entire Building – if
\nTenant utilizes the HVAC for less than the entire Building, the hourly fee
\ncharged shall be an appropriate pro rata portion of $10.42 per hour. Tenant
\nagrees to install, at <\/p>\n
-17-<\/p>\n
Tenant’s expense, monitoring equipment reasonably acceptable to Landlord, which
\nwill measure and report HVAC after hours use. Such fee shall be additional rent.
\nIn the event Tenant utilizes at the Premises a second or third shift of
\npersonnel or its equivalent, Tenant acknowledges that there will be wear and
\ntear on the Base Building Improvements, including non-HVAC and other systems,
\nwhich exceed that contemplated by Landlord on the date hereof, and that Landlord
\nshall have the right to recover for the cost of the excess wear and tear in one
\nor both of the following ways, although Landlord may not recover twice for the
\nsame cost: (i) by imposing a periodic change on Tenant which Landlord reasonably
\ndetermines is proportionate to the excess wear and tear caused by Tenant and to
\nthe shortened economic life of the components of the Base Building Improvements
\nor any of them (other than HVAC); and (ii) should any of such Base Building
\nImprovements (other than HVAC) require replacement or repairs which are Capital
\nExpenses during the Lease Term, by amortizing the cost of such replacement or
\nrepair over a period of time permitted by generally accepted accounting
\nprinciples and including such amortization during the Lease Term as part of
\nAdditional Monthly Rent. For these purposes, (a) Landlord’s cost may include
\nactual or anticipated interest expense and a fee of five percent (5%) of such
\ncost for management, (b) this paragraph (h) shall control over anything to the
\ncontrary in Section 3.6 or Exhibit M and (c) nothing in this paragraph (h) shall
\n ———– ———
\nrelieve Landlord of its responsibilities in Exhibit B with respect to the
\n ———
\nconstruction of the Base Building Improvements.<\/p>\n
(i) In the event that Tenant is prevented from using, and does not use,
\nthe Premises or any significant portion thereof for three (3) consecutive
\nbusiness days or ten (10) business days in any twelve (12) month period (the
\n“Eligibility Period”) as a result the failure of Landlord to provide the
\nservices described above in this Section 5.2, then the Base Rent and Additional
\n ———–
\nRent shall be abated or reduced, as the case may be, after expiration of the
\nEligibility Period for such time that Tenant continues to be so prevented from
\nusing, and does not use, the Premises or any substantial portion thereof, in the
\nproportion that the rentable area of the portion of the Premises Tenant is
\nprevented from using, and does not use, bears to the total rentable area of the
\nPremises, but only to the extent that the foregoing is caused by Landlord’s
\nnegligence or willful misconduct or that of its agents, employees or contractors
\n(other than the suppliers of utilities). If Tenant’s non use is not caused by
\nLandlord’s negligence or willful misconduct but Landlord receives proceeds of
\nrent or other insurance to compensate it for any abatement afforded to Tenant,
\nthen Base Rent and Additional Rent shall be abated to the extent that Landlord
\nactually receives such rent or other insurance.<\/p>\n
ARTICLE 6
\n ———<\/p>\n
Maintenance and Repairs
\n ———————–<\/p>\n
6.1 Obligations of Landlord.
\n ———————– <\/p>\n
(a) Landlord shall maintain, and keep in good repair and operating
\ncondition, reasonable wear and tear excepted, the Building, the Premises (other
\nthan the Tenant Improvements and Tenant’s furniture, trade fixtures and
\nequipment which shall be the responsibility of Tenant to keep in good repair and
\noperating condition), the roof and other structural components of the Premises
\nand the common areas of the Project. Tenant shall give Landlord written notice
\nof the need for any maintenance or repair for which Landlord is <\/p>\n
-18-<\/p>\n
responsible, after which Landlord shall have a reasonable opportunity to perform
\nthe maintenance or make the repair, and Landlord shall not be liable for any
\nfailure to do so unless such failure continues for an unreasonable time after
\nTenant gives such written notice to Landlord. Tenant waives any right to perform
\nmaintenance or make repairs for which Landlord is responsible at Landlord’s
\nexpense, except as provided in paragraph (b) below. Landlord’s liability with
\nrespect to any maintenance or repair for which Landlord is responsible shall be
\nlimited to the cost of the maintenance or repair. Any damage to any part of the
\nProject for which Landlord is responsible that is caused by Tenant or any agent,
\nofficer, employee, contractor, licensee or invitee of Tenant shall be repaired
\nby Landlord at Tenant’s expense and Tenant shall pay to Landlord, upon billing
\nby Landlord, as Additional Rent, the cost of such repairs incurred by Landlord
\nto the extent such repairs are not covered by insurance carried by Landlord
\npursuant to this Lease.<\/p>\n
(b) Tenant’s Right to Make Repairs. Notwithstanding paragraph (a) above,
\n ——————————
\nif Tenant provides written notice to Landlord of Landlord’s failure to repair or
\nreplace any portion of the Building or the Premises which Landlord is required
\nto repair or replace hereunder and Landlord fails to repair within a reasonable
\nperiod of time, given the circumstances, after the receipt of such notice, but
\nin any event not later than twenty-one (21) days after receipt of such notice
\n(plus such additional time as is reasonably required under the circumstances,
\nassuming that Landlord began work within such twenty-one (21) day period), then
\nTenant may proceed to make the repair or replacement upon delivery of an
\nadditional ten (10) business days’ notice to Landlord specifying that Tenant is
\ndoing so if such repairs or replacement was not made by Landlord within such ten
\n(10) business day period (or commenced to be made and thereafter pursued
\ndiligently to completion). If Tenant makes such repair or replacement following
\nLandlord’s refusal to do so, Tenant shall be entitled to prompt reimbursement by
\nLandlord of Tenant’s reasonable costs and expenses in doing so plus interest
\nthereon at the Interest Rate as defined in Section 3.4 of the Lease. In the
\n ———–
\nevent Tenant makes the repair or replacement, and such work will affect the
\nstructure of the Building and\/or the Building systems, Tenant shall use only
\nthose contractors used by Landlord in the Building for work on such structure of
\nthe Building or Building systems unless such contractors are unwilling or unable
\nto perform, or timely and competitively perform, such work, in which event
\nTenant may utilize the services of any other qualified contractor which normally
\nand regularly performs similar work in comparable buildings. Furthermore, if
\nLandlord does not deliver a detailed written objection to Tenant within thirty
\n(30) days after receipt of an invoice by Tenant of its costs of taking action
\nwhich Tenant claims should have been taken by Landlord, and if such invoice from
\nTenant sets forth a reasonably particularized breakdown of its costs and
\nexpenses in connection with taking such action on behalf of Landlord, then
\nTenant shall be entitled to deduct, from Rent payable by Tenant under the Lease,
\nthe amount set forth in such invoice. If, however, Landlord delivers to Tenant,
\nwithin thirty (30) days after receipt of Tenant’s invoice, a written objection
\nto the payment of such invoice, setting forth with reasonable particularity
\nLandlord’s reasons for its claim that such action did not have to be taken by
\nLandlord pursuant to the terms of the Lease or that the charges are excessive
\n(in which case Landlord shall pay the amount it contends would not have been
\nexcessive), then Tenant shall not then be entitled to such deduction from Rent,
\nbut as Tenant’s sole remedy, Tenant may proceed to claim a default by Landlord
\nor, if elected by either Landlord or Tenant, the matter shall proceed to
\nresolution by the selection of an arbitrator to resolve the dispute, which
\narbitrator shall be selected and qualified pursuant to the procedures set forth
\nin Section 16 (Arbitration) of the Lease, and whose costs shall be paid for by
\n ———-
\nthe losing <\/p>\n
-19-<\/p>\n
party, unless it is not clear that there is a “losing party,” in which event the
\ncosts of arbitration shall be shared equally. If Tenant prevails in the
\narbitration, the amount of the award (which shall include interest at the
\nInterest Rate from the time of each expenditure by Tenant until the date Tenant
\nreceives such amount by payment or offset and attorneys’ fees and related costs)
\nmay be deducted by Tenant from the rents next due and owing under the Lease.<\/p>\n
Notwithstanding the foregoing, Tenant shall have the right to make repairs
\nor replacements which Landlord is otherwise required to make hereunder, and to
\nrecover up to $25,000 of the cost thereof as provided in the preceding
\nparagraph, without written notice to Landlord, if each of the following
\nconditions is met: (i) such repairs or replacements must be made immediately in
\norder to avoid imminent danger to life or significant property damage, (ii) the
\nneed for such repairs or replacements became known to Tenant in such a time
\nframe that written notice to Landlord is not practical and (iii) Tenant gives
\nsuch notice to Landlord as is practical in the circumstances.<\/p>\n
6.2 Obligations of Tenant. Tenant shall, at all times during the term of
\n ———————
\nthis Lease and at Tenant’s sole cost and expense, maintain and repair the
\nPremises and every part thereof (except only the parts for which Landlord is
\nexpressly made responsible under this Lease) and all equipment, fixtures and
\nimprovements therein and keep all of the foregoing clean and in good order and
\noperating condition, ordinary wear and tear excepted. Tenant shall not damage
\nthe Premises or disturb the integrity and support provided by the floor and
\nceiling slabs and each wall within the Premises. Tenant shall, at Tenant’s
\nexpense (to the extent such repairs are not covered by insurance carried by
\nLandlord pursuant to this Lease), repair any damage to the Premises caused by
\nTenant or any agent, officer, employee, contractor, licensee or invitee of
\nTenant. Tenant shall take good care of the Premises and keep the Premises free
\nfrom dirt, rubbish, waste and debris at all times. Tenant shall not overload
\nthe floors in the Premises or exceed the load-bearing capacity of the floors in
\nthe Premises. Tenant hereby waives the benefit of California Civil Code
\nSections 1932, 1941 and 1942 or under any similar law, statute or ordinance now
\n—————————-
\nor hereafter in effect.<\/p>\n
6.3 Tenant’s Obligations at the End of the Term.
\n ——————————————- <\/p>\n
(a) Tenant shall, at the end of the Term, surrender to Landlord the
\nPremises and all alterations, additions, fixtures (other than trade fixtures)
\nand improvements therein or thereto in the same condition as when received,
\nordinary wear and tear and casualty damage excepted. In the event of any damage
\nto the Premises on account of the removal of any movable furniture, equipment,
\ntrade fixtures, computers, office machines or other personal property, as
\npermitted by Section 7.2, Tenant shall repair such damage at its expense prior
\n ———–
\nto the end of the Term.<\/p>\n
(b) Under the circumstances specified in the Work Letter Agreement, Tenant
\nmay alter certain major components of the Building (such as the second floor,
\nlobbies and restrooms). If Tenant elects to do so:<\/p>\n
(i) before commencing such alteration and after Landlord’s approval
\n of the plans therefor, Tenant shall deliver to Landlord a letter of credit
\n issued by a financial institution, and in form and substance, satisfactory
\n to Landlord. The face amount of the letter of credit shall be for such
\n amount as Landlord reasonably determines would be necessary to restore the
\n major components of the Building so altered by Tenant to their<\/p>\n
-20-<\/p>\n
design and condition as described in the plans therefor contained in
\n Schedule 1 to Exhibit B hereto, increased by four percent (4%) per year.
\n ———
\n Such letter of credit shall be held as security for Tenant’s obligation to
\n reimburse to Landlord all of its Restoration Costs described below. The
\n expiration date on such letter of credit shall be at least one year after
\n the Commencement Date and shall be renewed by Tenant for at least one year
\n at a time no later than thirty (30) days prior to each scheduled
\n expiration. In the event that Tenant does not deliver to Landlord written
\n evidence of such renewal prior to the beginning of each of such thirty (30)
\n day periods, Landlord may call the letter of credit in full and hold the
\n proceeds thereof, without paying interest, as security for the obligations
\n of Tenant under clauses (ii) and (iii) below;<\/p>\n
(ii) in the event Landlord determines, in the exercise of its
\n reasonable judgment, that it is desirable at the end of the Term to restore
\n the major components of the Building which were altered by Tenant to the
\n design and condition contemplated by the plans therefor, which are
\n described in Schedule 1 to Exhibit B hereto, then Landlord shall have the
\n ———
\n right to so restore such major components to such design and condition (A)
\n after the end of the Term or (B) if in Landlord’s reasonable judgment it is
\n necessary to complete the work of such restoration before the end of the
\n Term in order to avoid an economic hardship to Landlord on account of a
\n then active lease negotiation, then before the end of the Term (provided,
\n that Landlord shall in all cases have the right to commence and complete
\n such restoration so that it will be complete no later than sixty (60) days
\n after the end of the Term). Landlord shall give Tenant notice at the time
\n Landlord approves Tenant’s space plan pursuant to Exhibit B of Landlord’s
\n ———
\n determination of whether such major components must be removed at the end
\n of the Term. Under no circumstances shall an open ceiling plan be deemed a
\n “major component” for this purpose. All of the reasonable costs and
\n expenses of Landlord in prosecuting and completing such restoration
\n (including the fees of architects, contractors and others, the costs of
\n permits and approvals and a fee of five percent (5%) to Landlord for
\n supervision) (“Restoration Costs”) shall be paid by Tenant or reimbursed to
\n Landlord within ten (10) days after receipt of an invoice from Landlord
\n itemizing such costs and requesting payment or reimbursement. Landlord
\n shall bid competitively the hard costs of the Restoration Work. Landlord
\n shall have the right to call on the letter of credit described above in the
\n event any such payment by Tenant is not made when due. At Landlord’s
\n election, it may design and construct such restoration in a way which is
\n different from the plans described in Schedule I of Exhibit B; however,
\n ———
\n Tenant shall not be obligated to reimburse Landlord for any sum which
\n exceeds what the Restoration Cost would have been had the restoration been
\n in accordance with such plans;<\/p>\n
(iii) Tenant shall grant Landlord full access to the Building for the
\n purpose of designing and carrying out the restoration described above, and
\n no interruption or disturbance by Landlord or its agents or contractors of
\n Tenant’s operations in the conduct of such restoration shall constitute a
\n default by Landlord hereunder or grant Tenant the right to damages or to
\n terminate this Lease; and<\/p>\n
(iv) Landlord shall use commercially reasonable efforts in conducting
\n the restoration described above to coordinate with Tenant in order to
\n mitigate disruption to and interference with Tenant’s business operations.<\/p>\n
-21-<\/p>\n
ARTICLE 7
\n ———<\/p>\n
Alteration of the Premises
\n ————————–<\/p>\n
7.1 No Alterations by Tenant. Tenant shall not make any alterations,
\n ————————
\nadditions or improvements in or to the Premises or any part thereof
\n(collectively, “Alterations”), including attaching any fixtures or equipment
\nthereto, without Landlord’s prior written consent which shall not be withheld
\nunreasonably. However, Tenant may make Alterations without Landlord’s consent if
\nthe total cost of such Alterations in any calendar year is fifty thousand
\ndollars ($50,000) or less and such Alterations do not affect Building systems,
\nthe structure or roof of the Building or the exterior aesthetics of the
\nBuilding. Tenant shall give Landlord at least ten (10) days prior written
\nnotice before commencing any such Alterations. All Alterations (except
\nimprovements made by Landlord pursuant to Exhibit B, if any) in or to the
\n ———
\nPremises shall be made by Tenant at Tenant’s sole cost and expense as follows:<\/p>\n
(a) Tenant shall submit to Landlord, for Landlord’s written approval if it
\nis required, complete plans and specifications for all Alterations to be done by
\nTenant. If it is usual and customary for similarly situated tenants to prepare
\nless than complete plans and specifications before commencing comparable work,
\nthen Tenant may deliver to Landlord what is usual and customary. Such plans and
\nspecifications shall be prepared by responsible interior designers and
\nengineer(s), shall comply with all applicable codes, laws, ordinances, rules and
\nregulations, shall demonstrate that the exterior appearance of the Building will
\nnot be affected by such Alterations, shall be in a form sufficient to secure the
\napproval of all government authorities with jurisdiction over the Project, and
\nshall not propose Alterations which will adversely affect the structure or the
\nstructural integrity of the Building or any systems, components or elements of
\nthe Building or Project, unreasonably interfere with any other tenant’s normal
\nand customary business office operations, or affect the aesthetics of the
\nexterior of the Building (individually and collectively, the “Design Criteria”).<\/p>\n
(b) Tenant shall obtain all required permits for the Alterations. Tenant
\nshall engage responsible licensed contractor(s) and subcontractor(s) to perform
\nall work. The contractor(s) shall be subject to Landlord’s consent, which shall
\nnot be withheld unreasonably. Tenant shall perform all work in accordance with
\nthe plans and specifications approved by Landlord, in a good and workmanlike
\nmanner, in full compliance with all applicable laws, codes, ordinances, rules
\nand regulations, and free and clear of any mechanics’ liens and in full
\ncompliance with the construction rules and regulations included as part of the
\nTenant Improvement Manual identified in Section 4.1 of the Work Letter
\n ———–
\nAgreement. Tenant shall pay for all work (including the cost of all utilities,
\npermits, fees, taxes, and property and liability insurance premiums in
\nconnection therewith) required to make the Alterations. In addition, Tenant
\nshall pay Landlord a construction management fee of three (3%) percent of the
\ntotal cost of the Alterations, additions and\/or improvements, such fee to be
\npaid in installments as the work progresses. Under no circumstances shall
\nLandlord be liable to Tenant for any damage, loss, cost or expense incurred by
\nTenant on account of design of any work, construction of any work, or delay in
\ncompletion of any work. All work of the Alterations, regardless of whether
\nLandlord’s consent is required, shall be scheduled through and be subject to the
\nreasonable supervision of Landlord and shall be performed in accordance with any
\nreasonable conditions or regulations imposed by Landlord. In this regard,
\nLandlord’s construction manager shall safeguard the interests of Tenant as well
\nas <\/p>\n
-22-<\/p>\n
represent Landlord. All work of Alterations shall be in compliance with the
\nUnion Requirement described in Section 13 of the Work Letter Agreement.
\n ———– <\/p>\n
(c) Tenant shall give written notice to Landlord of the date on which
\nconstruction of any work will be commenced at least ten (10) business days prior
\nto such date. Tenant shall keep the Premises and the Project free from
\nmechanics’, materialmen’s and all other liens arising out of any work performed,
\nlabor supplied, materials furnished or other obligations incurred by Tenant.
\nTenant shall promptly and fully pay and discharge all claims on which any such
\nlien could be based. Tenant shall have the right to contest the amount or
\nvalidity of any such lien, provided Tenant gives prior written notice of such
\ncontest to Landlord, prosecutes such contest by appropriate proceedings in good
\nfaith and with diligence, and, upon request by Landlord, furnishes such bond as
\nmay be required by law or such security as Landlord may require to protect the
\nPremises and the Project from such lien. Landlord shall have the right to post
\nand keep posted on the Premises any notices that may be provided by law or which
\nLandlord may deem to be proper for the protection of Landlord, the Premises and
\nthe Project from such liens, and to take any other action Landlord deems
\nnecessary to remove or discharge liens or encumbrances at the expense of Tenant.<\/p>\n
(d) In connection with any work performed by Tenant in accordance with
\nthis Section 7.1, upon completion of any such work, at Landlord’s request,
\n ———–
\nTenant agrees to prepare and Landlord shall execute if factually correct, and
\nTenant shall cause a Notice of Completion to be recorded in the County
\nRecorder’s Office in accordance with Section 3093 of the Civil Code of the State
\n ————
\nof California or any successor statute. On completion of the work, Tenant shall
\ndeliver to Landlord both a hard copy and copy on CAD Diskette of the “as built”
\nplan and specifications (including working drawings) for all Alterations.
\nPromptly following the completion of any Alterations, Tenant shall deliver to
\nLandlord a copy of any signed-off permits, inspection cards or other
\ndocumentation, if any is required and available given the nature of the
\nAlteration, evidencing governmental approval of completion of the work. Any
\nsupervision by Landlord of Alteration shall in no event constitute Landlord’s
\napproval of the work so performed.<\/p>\n
7.2 Landlord’s Property; Removal at End of Term. All Alterations,
\n ——————————————-
\nincluding Alterations made pursuant to Exhibit B, whether temporary or permanent
\n ———
\nin character, made in or to the Premises by Landlord or Tenant shall become part
\nof the Project and Landlord’s property. Upon expiration or earlier termination
\nof this Lease, Landlord shall have the right, at Landlord’s option, by giving
\nwritten notice to Tenant at any time before or within sixty (60) days after such
\nexpiration or termination, to retain all such Alterations in the Premises,
\nwithout compensation to Tenant. Under the circumstances described below,
\nLandlord may on expiration or termination remove some or all of such
\nAlterations, repair all damage caused by any such removal, restore the Premises
\nto the condition in which the Premises existed before such Alterations were made
\nand charge the cost thereof to Tenant. The circumstances are these: (i) in the
\ncase of the Alterations described in Exhibit B (i.e., the original Tenant
\n ———
\nImprovements), Landlord may remove at Tenant’s expense only nonstandard
\nimprovements which it identifies to Tenant in writing at the time of Landlord’s
\napproval of Tenant’s plans therefor, as provided in Exhibit B; and (ii) in the
\n ———
\ncase of other Alterations, Landlord may remove those which in Landlord’s
\nreasonable judgment would not have significant value in connection with
\nreletting the Premises; provided, that if Tenant requests Landlord’s approval to
\n ——–
\nmake such Alterations, Landlord will advise Tenant at that time whether Landlord
\nwill require removal. Where Tenant <\/p>\n
-23-<\/p>\n
is responsible for the cost of removal, repair and restoration, it shall pay to
\nLandlord, upon billing by Landlord, the cost of such removal, repair and
\nrestoration (including a reasonable charge for Landlord’s overhead and profit).
\nLandlord shall have the hard costs of removal, repair and restoration
\ncompetitively bid. All movable furniture, equipment, trade fixtures, computers,
\noffice machines and other personal property shall remain the property of Tenant.
\nUpon termination of this Lease, Tenant shall, at Tenant’s expense, remove all
\nsuch movable furniture, equipment, trade fixtures, computers, office machines
\nand other personal property from the Project and repair all damage caused by any
\nsuch removal. Termination of this Lease shall not affect the obligations of
\nTenant pursuant to this Section 7.2 to be performed after such termination.
\n ———– <\/p>\n
ARTICLE 8
\n ———<\/p>\n
Indemnification and Insurance
\n —————————–<\/p>\n
8.1 Damage or Injury. Landlord shall not be liable to Tenant, and Tenant
\n —————-
\nhereby waives all claims against Landlord, for any damage to or loss or theft of
\nany property or for any bodily or personal injury, illness or death of any
\nperson in, on or about the Premises or the Building or the Project arising at
\nany time and from any cause whatsoever, except to the extent caused by the gross
\nnegligence or willful misconduct of Landlord, its agents, employees or
\ncontractors. Tenant shall indemnify and defend Landlord against and hold
\nLandlord harmless from all claims, demands, liabilities, damages, losses, costs
\nand expenses, including reasonable attorneys’ fees and disbursements, arising
\nfrom or related to (i) any use or occupancy of the Premises or any condition of
\nthe Premises (provided, that Tenant shall have no responsibility for Hazardous
\nMaterials existing on or in the Premises or the Project on the date hereof or
\nhereafter brought onto the Project by Landlord), (ii) any default in the
\nperformance of Tenant’s obligations under this Lease, (iii) any damage to any
\nproperty (including property of employees and invitees of Tenant), or (iv) any
\nbodily or personal injury, illness or death of any person (including employees
\nand invitees of Tenant), in each case which occurs in, on or about the Premises
\nor any part thereof arising at any time and from any cause whatsoever (except to
\nthe extent caused by the gross negligence or willful misconduct of Landlord its
\nagents, employees or contractors), or which occurs in, on or about any other
\npart of the Project to the extent caused by any act or omission of Tenant or its
\nagents, officers, employees, contractors, invitees or licensees. This Section
\n ——-
\n8.1 shall survive the termination of this Lease with respect to any damage,
\n—
\nbodily or personal injury, illness or death occurring prior to such termination.
\nUnder no circumstances shall Landlord or Tenant be liable to the other, or to
\nthe officers, directors, members, agents or employees of the other, for
\nconsequential or exemplary damages arising from or relating to a breach by
\nLandlord or Tenant of its obligations under this Lease.<\/p>\n
8.2 Insurance Coverages and Amounts. Tenant shall, at all times during
\n ——————————-
\nthe term of this Lease and at Tenant’s sole cost and expense, obtain and keep in
\nforce the insurance coverages and amounts set forth in this Section 8.2. Tenant
\n ———–
\nshall maintain commercial general liability insurance, including contractual
\nliability for the obligations of Tenant in this Lease, broad form property
\ndamage liability, fire, legal liability, premises and completed operations, and
\nmedical payments, with limits not less than three million dollars ($3,000,000)
\nper occurrence and aggregate, insuring against claims for bodily injury,
\npersonal injury and property damage <\/p>\n
-24-<\/p>\n
arising from the use, occupancy or maintenance of the Premises and the Project.
\nThe policy shall contain an exception to any pollution exclusion which insures
\ndamage or injury arising out of heat, smoke or fumes from a hostile fire. Any
\ngeneral aggregate shall apply on a per location basis. Tenant shall maintain
\nbusiness auto liability insurance with limits not less than two million dollars
\n($2,000,000) per accident covering owned, hired and non-owned vehicles used by
\nTenant. Tenant shall maintain umbrella excess liability insurance on a following
\nform basis in excess of the required commercial general liability, business auto
\nand employers liability insurance with limits not less than five million dollars
\n($5,000,000) per occurrence and aggregate. Tenant shall carry workers’
\ncompensation insurance for all of its employees in statutory limits in the state
\nin which the Project is located and employers liability insurance which affords
\nnot less than five hundred thousand dollars ($500,000) for each coverage. Tenant
\nshall maintain all risk property insurance for all personal property of Tenant
\nand improvements, fixtures and equipment constructed or installed by Tenant or
\nLandlord (including Tenant Improvements and subsequent Alterations) in the
\nPremises in an amount not less than the full replacement cost. If required by
\nLandlord, Tenant shall maintain boiler and machinery insurance against loss or
\ndamage from an accident from the equipment in the Premises in an amount
\ndetermined by Landlord and plate glass insurance coverage against breakage of
\nplate glass in the Premises. Any deductibles selected by Tenant shall be the
\nsole responsibility of Tenant.<\/p>\n
8.3 Insurance Requirements. All insurance and all renewals thereof shall
\n ———————-
\nbe issued by companies with a rating of at least “A-” “VIII” or better in the
\ncurrent edition of Best’s Insurance Reports and be licensed to do and doing
\nbusiness in the state in which the Project is located. Each policy shall
\nexpressly provide that the policy shall not be canceled or materially altered
\nwithout thirty (30) days’ prior written notice to Landlord and shall remain in
\neffect notwithstanding any such cancellation or alteration until such notice
\nshall have been given to Landlord and such period of thirty (30) days shall have
\nexpired. All liability insurance (except employers’ liability) shall name
\nLandlord and any other parties designated by Landlord (including any investment
\nmanager, asset manager or property manager) as an additional insured, shall be
\nprimary and noncontributing with any insurance which may be carried by Landlord,
\nshall afford coverage for all claims based on any act, omission, event or
\ncondition that occurred or arose (or the onset of which occurred or arose)
\nduring the policy period and in any way pertaining to this Lease or Tenant’s
\noccupancy of the Premises, and shall expressly provide that Landlord, although
\nnamed as an insured, shall nevertheless be entitled to recover under the policy
\nfor any loss, injury or damage to Landlord. All property insurance shall name
\nLandlord as loss payee as respects Landlord’s interest in any improvements and
\nbetterments. Tenant shall deliver certificates of insurance, acceptable to
\nLandlord, to Landlord at least ten (10) days before the Commencement Date and at
\nleast ten (10) days before expiration of each policy. If Tenant fails to insure
\nor fails to furnish any such insurance certificate, Landlord shall have the
\nright from time to time to effect such insurance for the benefit of Tenant or
\nLandlord or both of them, and Tenant shall pay to Landlord on written demand, as
\nadditional rent, all premiums paid by Landlord.<\/p>\n
8.4 Subrogation. Tenant waives on behalf of all insurers under all
\n ———–
\npolicies of property insurance now or hereafter carried by Tenant insuring or
\ncovering the Premises, or any portion or any contents thereof, or any operations
\ntherein, all rights of subrogation which any such insurer might otherwise, if at
\nall, have to any claims of Tenant against Landlord. Landlord waives on behalf
\nof all insurers under all policies of property insurance now or hereafter
\ncarried by Landlord insuring or covering the Project, or any portion or any
\ncontents thereof, or any <\/p>\n
-25-<\/p>\n
operations therein, all rights of subrogation which any such insurer might
\notherwise, if at all, have to any claims of Landlord against Tenant. Landlord
\nand Tenant shall procure from each of the insurers under all policies of
\nproperty insurance now or hereafter carried by Tenant insuring or covering the
\nPremises, or any portion or any contents thereof, or any operations therein, a
\nwaiver of all rights of subrogation which the insurer might otherwise, if at
\nall, have to any claims of Tenant against Landlord as required by this Section
\n ——-
\n8.4.
\n—<\/p>\n
8.5 Landlord’s Fire and Casualty Insurance. Landlord shall insure the
\n ————————————–
\nBuilding and the Project against loss or damage due to fire and other casualties
\ncovered within the classification of fire and extended coverage, vandalism
\ncoverage and malicious mischief, sprinkler leakage, water damage and special
\nextended coverage. Such coverage shall be in such amounts, from such companies,
\nand on such other terms and conditions, as Landlord may from time to time
\nreasonably determine, provided that such coverage shall (i) be for full
\nreplacement of the Building and the Project in compliance with all then existing
\napplicable laws, (ii) provide for rent continuation insurance equal to not less
\nthan twelve (12) months rent; and (iii) be with companies and have policies
\nmeeting the criteria set forth in Section 8.3 in this Lease. However, if Tenant
\n ———–
\nat any time determines that the proceeds of such insurance would not be adequate
\nto cover all or substantially all of the repair and restoration costs for which
\nLandlord would be responsible under Section 11.2 should a casualty covered
\n ————
\nthereby occur (“repair costs”), it may require Landlord to increase the amount
\nor coverage of the insurance required to be obtained by Landlord under this
\nSection 8.5 in order that such insurance will cover all or substantially all of
\n———–
\nthe repair costs, but only if such insurance is readily available from insurers
\nmeeting the requirements of Section 8.3; any increased cost of such insurance
\n ———–
\nshall be an Operating Cost. Landlord shall not be obligated to insure the
\nTenant Improvements or Tenant’s Alterations, moveable furniture, equipment,
\ntrade fixtures, or personal property. Additionally, at the sole option of
\nLandlord, such insurance coverage may include the risks of earthquakes and\/or
\nflood damage and additional hazards, a rental loss endorsement and one or more
\nloss payee endorsements in favor of the holders or any mortgages or deeds of
\ntrust encumbering the interest of Landlord in the Building or the Project.<\/p>\n
ARTICLE 9
\n ———<\/p>\n
Assignment or Sublease
\n ———————-<\/p>\n
9.1 Prohibition. (a) Tenant shall not, directly or indirectly, without
\n ———–
\nthe prior written consent of Landlord (which consent shall not be unreasonably
\nwithheld, conditioned or delayed), assign this Lease or any interest herein or
\nsublease the Premises or any part thereof, or permit the use or occupancy of the
\nPremises by any person or entity other than Tenant. Tenant shall not, directly
\nor indirectly, without the prior written consent of Landlord, pledge, mortgage
\nor hypothecate this Lease or any interest herein. This Lease shall not, nor
\nshall any interest herein, be assignable as to the interest of Tenant
\ninvoluntarily or by operation of law without the prior written consent of
\nLandlord. For purposes of this Lease, any of the following transfers on a
\ncumulative basis shall constitute an assignment of this Lease that requires the
\nprior written consent of Landlord: if Tenant is a corporation, the transfer of
\nmore than forty-nine percent (49%) of the stock of the corporation; if Tenant is
\na partnership, the transfer of more than forty-nine percent (49%) of the capital
\nor profits interest in the partnership; and if Tenant is a trust, the<\/p>\n
-26-<\/p>\n
transfer of more than forty-nine (49%) of the beneficial interest under the
\ntrust. However, if Tenant is a corporation with equity securities registered
\nunder Section 12 of the Securities Exchange Act of 1934, then a transfer of such
\nsecurities shall not be deemed an assignment of this Lease for which Landlord’s
\nconsent is required. Any of the foregoing acts without such prior written
\nconsent of Landlord shall be void and shall, at the option of Landlord,
\nconstitute a default that entitles Landlord to terminate this Lease. Tenant
\nagrees that the instrument by which any assignment or sublease to which Landlord
\nconsents is accomplished shall expressly provide that the assignee or subtenant
\nwill perform all of the covenants to be performed by Tenant under this Lease (in
\nthe case of a sublease, only insofar as such covenants relate to the portion of
\nthe Premises subject to such sublease) as and when performance is due after the
\neffective date of the assignment or sublease and that Landlord will have the
\nright to enforce such covenants directly against such assignee or subtenant. Any
\npurported assignment or sublease without an instrument containing the foregoing
\nprovisions shall be void. Tenant shall in all cases remain liable for the
\nperformance by any assignee or subtenant of all such covenants.<\/p>\n
(b) Notwithstanding paragraph (a) above, without obtaining Landlord’s
\nprior written consent, Tenant shall have the right: (i) to sublease not more
\nthan fifty percent (50%) of the Premises to affiliates of Tenant (meaning
\nentities in which Tenant owns 50% or more of the outstanding voting interests)
\nprovided that Tenant notifies Landlord in advance of such subletting and
\ndelivers to Landlord (x) the names and addresses of such affiliates, (y) the
\npart of the Premises which they will occupy and (z) a written commitment of such
\naffiliates to observe all of the terms of this Lease which pertain to such part;
\n(ii) to permit suppliers to Tenant to occupy no more than twenty percent (20%)
\nof the Premises upon satisfying the foregoing requirements as to such suppliers,
\nand so long as the presence of such suppliers is permitted by the Permitted
\nUses; (iii) to assign this Lease, after notice to Landlord, to any entity which
\nacquires all or substantially all of Tenant (assets or voting stock) so long as
\nsuch entity agrees to assume and perform all of the obligations of Tenant
\nhereunder in a form reasonably acceptable to Landlord on or before the date of
\nassignment; and (iv) to assign this Lease or to sublet 50% or more of the
\nPremises to an affiliate of Tenant, as defined above, upon prior notice to
\nLandlord; provided, that no right to assign or sublet to an affiliate hereunder
\n ——–
\nshall be used as a subterfuge to avoid Landlord’s rights to consent to transfers
\nor to recapture the Premises, and Landlord’s consent shall be required with
\nrespect to all proposed assignments of this Lease or subletting of 50% or more
\nof the Premises to affiliates of Tenant or its successors in interest after an
\naggregate of two (2) such assignments or sublettings have been made.<\/p>\n
9.2 Landlord’s Consent or Termination. If Tenant wishes to assign this
\n ———————————
\nLease or sublease all or any part of the Premises, Tenant shall give written
\nnotice to Landlord identifying the intended assignee or subtenant by name and
\naddress and specifying all of the terms of the intended assignment or sublease.
\nTenant shall simultaneously give Landlord such additional information concerning
\nthe intended assignee or subtenant (including complete financial statements and
\na business history) and the intended assignment or sublease (including true
\ncopies thereof) as Landlord requests. For a period of thirty (30) days after
\nsuch written notice is given by Tenant, Landlord shall have the right, by giving
\nwritten notice to Tenant, (a) to consent in writing to the intended assignment
\nor sublease, (b) in the case of an assignment of this Lease or a sublease of
\nsubstantially the entire Premises for substantially the balance of the term of
\nthis Lease when Landlord’s consent is required, to terminate this Lease, which
\ntermination shall be effective as of the date on which the intended assignment
\nor sublease would have been effective if Landlord had not exercised such
\ntermination right or (c) to withhold its consent, provided such <\/p>\n
-27-<\/p>\n
consent is not unreasonably withheld. If Landlord fails to notify Tenant of its
\nelection within such thirty (30) day period, Landlord will be deemed to have
\nconsented to the proposed assignment or, when appropriate, the proposed
\nsublease.<\/p>\n
9.3 Completion. If Landlord consents in writing, Tenant may complete the
\n ———-
\nintended assignment or sublease subject to the following covenants: (a) the
\nassignment or sublease shall be on substantially the same terms (and at the
\nrent) as set forth in the written notice given by Tenant to Landlord, (b) no
\nassignment or sublease shall be valid and no assignee or subtenant shall take
\npossession of the Premises or any part thereof until an executed duplicate
\noriginal of such assignment or sublease or photocopy thereof, in compliance with
\nSection 9.1 hereof, has been delivered to Landlord, (c) no assignee or subtenant
\n———–
\nshall have a right further to assign or sublease except in accordance with the
\nprovisions contained in this Lease, including the termination right granted to
\nLandlord, and (d) one half (1\/2) of the “excess rent” (as hereinafter defined)
\nderived from such assignment or sublease shall be paid to Landlord. Such excess
\nrent shall be deemed to be, and shall be paid by Tenant to Landlord as,
\nadditional rent. Tenant shall pay such excess rent to Landlord immediately as
\nand when such excess rent becomes due and payable to Tenant. As used in this
\nSection 9.3, “excess rent” shall mean the amount by which the total money and
\n———–
\nother economic consideration to be paid by the assignee or subtenant for the
\nassignment or sublease, whether denominated rent or otherwise, exceeds, in the
\naggregate, the total amount of rent which Tenant is obligated to pay to Landlord
\nunder this Lease (prorated to reflect the rent allocable to the portion of the
\nPremises subject to such assignment or sublease and for that portion of the Term
\nhereof covered), less only (i) the reasonable costs paid by Tenant for
\nadditional improvements installed in the portion of the Premises subject to such
\nassignment or sublease by Tenant at Tenant’s sole cost and expense for the
\nspecific assignee or subtenant in question, (ii) reasonable leasing commissions
\npaid by Tenant in connection with such assignment or sublease, if any, without
\ndeduction for carrying costs due to vacancy or otherwise, and (iii) any
\nimprovement allowance or other economic concession (planning allowance, moving
\nexpenses, etc.) paid by Tenant to its sublessee or assignee and pertaining
\ndirectly to the sublease or assignment in question. For this purpose, Tenant
\nshall allocate to such assignment or sublet a fair amount of the economic
\nconsideration received by Tenant in a related transaction if the assignment or
\nsublet is part of the related transaction involving Tenant and the proposed
\nassignee or subtenant. No part of the economic consideration being paid for any
\nof the following shall be included in “excess rent”: good will related to the
\noperating business of Tenant as opposed to the Premises, moveable furniture,
\nequipment, trade fixtures, computers, office machines and other personal
\nproperty.<\/p>\n
9.4 Tenant Not Released. No assignment or sublease whatsoever shall
\n ——————-
\nrelease Tenant from Tenant’s obligations and liabilities under this Lease or
\nalter the primary liability of Tenant to pay all rent and to perform all
\nobligations to be paid and performed by Tenant. No assignment or sublease shall
\namend or modify this Lease in any respect, and every assignment and sublease
\nshall be subject and subordinate to this Lease. The acceptance of rent by
\nLandlord from any other person or entity shall not be deemed to be a waiver by
\nLandlord of any provision of this Lease. Consent to one assignment or sublease
\nshall not be deemed consent to any subsequent assignment or sublease. Tenant
\nshall pay to Landlord all direct costs and shall reimburse Landlord for all
\nexpenses incurred by Landlord in connection with any assignment or sublease
\nrequested by Tenant. If any assignee, subtenant or successor of Tenant defaults
\nin the performance of any obligation to be performed by Tenant under this Lease,
\nLandlord may proceed directly against Tenant without the necessity of exhausting
\nremedies against such <\/p>\n
-28-<\/p>\n
assignee, subtenant or successor. Landlord may consent to subsequent assignments
\nor subleases or amendments or modifications to this Lease with assignees,
\nsubtenants or successors of Tenant, without notifying Tenant or any successor of
\nTenant and without obtaining any consent thereto from Tenant or any successor of
\nTenant, and such action shall not release Tenant from liability under this
\nLease.<\/p>\n
9.5 Landlord’s Consent. If Landlord does not elect to terminate the
\n ——————
\nLease, Landlord shall not unreasonably withhold, condition or delay its consent
\nto any proposed assignment and\/or subletting. The parties hereby agree that the
\nreasons under this Lease and under any Applicable Law for Landlord to withhold
\nconsent to any proposed assignment or subleasing shall include, but not be
\nlimited to, one or more of the following:<\/p>\n
(a) The assignee or sublessee is of a character or reputation or engaged
\nin a business which is not consistent with the quality of the Building or the
\nProject as reflected by the then existing tenants of the Project with respect to
\ncomparable space;<\/p>\n
(b) The assignee or sublessee intends to use the Premises for purposes
\nwhich are not permitted under this Lease;<\/p>\n
(c) The assignee or sublessee is either a governmental agency or
\ninstrumentality thereof unless Landlord, with respect to the Building, has
\nleased space to, or approved subleases with, comparable (in terms of use,
\nsecurity issues, express or implied power of eminent domain, reputation,
\ncharacter and size of space in the Project) governmental agencies or
\ninstrumentalities thereof;<\/p>\n
(d) The assignee or sublessee is not a party of reasonable financial worth
\nand\/or financial stability in light of the responsibilities to be undertaken in
\nconnection with the assignment or sublease on the date consent is requested;<\/p>\n
(e) The proposed assignment or sublease would cause a violation of an
\nexclusive right granted by Landlord in good faith in another lease for space in
\nthe Project, or would give an occupant of the Project a right to cancel its
\nlease as a result of the proposed use to be made of the space by the sublessee
\nor assignee, provided that upon request from Tenant, Landlord shall provide
\nNotice of all applicable exclusive rights;<\/p>\n
(f) The proposed assignee or sublessee, or any person or entity which
\ndirectly or indirectly, controls, is controlled by, or is under common control
\nwith, the proposed assignee or sublessee, has been in negotiation with Landlord
\nto lease space in the Project within the prior six (6) months or is a tenant in
\nthe Project; provided, that this paragraph (f) shall not be applicable if
\n ————-
\nLandlord does not have comparably sized space available in the Project which is
\navailable for rent by such proposed assignee or sublessee.<\/p>\n
9.6 Remedies. If Tenant assigns or sublets without Landlord’s consent,
\n ——–
\nsuch an assignment or subleasing shall be null and void and Landlord may
\nexercise its rights and remedies under this Lease. If Landlord unreasonably
\nwithholds its consent to a proposed sublease or assignment, Tenant may institute
\narbitration proceedings seeking specific performance and\/or damages under
\nArticle 16.
\n———- <\/p>\n
-29-<\/p>\n
ARTICLE 10
\n ———-<\/p>\n
Events of Default and Remedies
\n ——————————<\/p>\n
10.1 Default by Tenant. The occurrence of any one or more of the following
\n —————–
\nevents (“Event of Default”) shall constitute a breach of this Lease by Tenant:<\/p>\n
(a) Tenant fails to pay any Base Rent, or any Additional Monthly Rent, or
\nany Additional Rent or other amount of money or charge payable by Tenant
\nhereunder as and when such rent becomes due and payable and such failure
\ncontinues for more than three (3) business days after Landlord gives written
\nnotice thereof to Tenant; provided that any such notice shall be in lieu of, and
\nnot in addition to, any notice required under California Code of Civil Procedure
\nSection 1161; or
\n———— <\/p>\n
(b) Tenant fails to perform or breaches any other agreement or covenant of
\nthis Lease to be performed or observed by Tenant as and when performance or
\nobservance is due and such failure or breach continues for more than twenty (20)
\ndays after Landlord gives written notice thereof to Tenant; provided, however,
\nthat if, by the nature of such agreement or covenant, such failure or breach
\ncannot reasonably be cured within such period of twenty (20) days, an Event of
\nDefault shall not exist as long as Tenant commences with due diligence and
\ndispatch the curing of such failure or breach within such period of twenty (20)
\ndays and, having so commenced, thereafter prosecutes with diligence and dispatch
\nand completes the curing of such failure or breach within a period of forty-five
\n(45) days after Landlord’s notice; and provided further that any such notice
\nshall be in lieu of, and not in addition to, any notice required under
\nCalifornia Code of Civil Procedure Section 1161; or
\n ———— <\/p>\n
(c) Tenant (i) files, or consents by answer or otherwise to the filing
\nagainst it of, a petition for relief or reorganization or arrangement or any
\nother petition in bankruptcy or for liquidation or to take advantage of any
\nbankruptcy, insolvency or other debtors’ relief law of any jurisdiction, (ii)
\nmakes an assignment for the benefit of its creditors, or (iii) consents to the
\nappointment of a custodian, receiver, trustee or other officer with similar
\npowers of Tenant or of any substantial part of Tenant’s property; or<\/p>\n
(d) Without consent by Tenant, a court or government authority enters an
\norder, and such order is not vacated within thirty (30) days, (i) appointing a
\ncustodian, receiver, trustee or other officer with similar powers with respect
\nto Tenant or with respect to any substantial part of Tenant’s property, or (ii)
\nconstituting an order for relief or approving a petition for relief or
\nreorganization or arrangement or any other petition in bankruptcy or for
\nliquidation or to take advantage of any bankruptcy, insolvency or other debtors’
\nrelief law of any jurisdiction, or (iii) ordering the dissolution, winding-up or
\nliquidation of Tenant; or<\/p>\n
(e) This Lease or any estate of Tenant hereunder is levied upon under any
\nattachment or execution and such attachment or execution is not vacated within
\nthirty (30) days; or<\/p>\n
(f) Tenant abandons the Premises within the meaning of California Civil
\nCode Section 1951.3.
\n ————– <\/p>\n
-30-<\/p>\n
10.2 Termination. In the event of any such Event of Default by Tenant, in
\n ———–
\naddition to any other remedies available to Landlord at law or in equity,
\nLandlord shall have the immediate option to terminate this Lease and all rights
\nof Tenant hereunder and to remove Tenant from the Premises. In the event that
\nLandlord shall elect to so terminate this Lease then Landlord may recover from
\nTenant:<\/p>\n
(a) the worth at the time of award of any unpaid rent which had been
\nearned at the time of such termination; plus<\/p>\n
(b) the worth at the time of award of the amount by which the unpaid rent
\nwhich would have been earned after termination until the time of award exceeds
\nthe amount of such rental loss that Tenant proves could have been reasonably
\navoided; plus<\/p>\n
(c) the worth at the time of award of the amount by which the unpaid rent
\nfor the balance of the term after the time of award exceeds the amount of such
\nrental loss that Tenant proves could be reasonably avoided; plus<\/p>\n
(d) any other amount necessary to compensate Landlord for all the
\ndetriment proximately caused by Tenant’s failure to perform his obligations
\nunder this Lease or which in the ordinary course of things would be likely to
\nresult therefrom.<\/p>\n
As used in Subsection 10.2(a) and (b) above, the “worth at the time of award” is
\n ————————–
\ncomputed by allowing interest at the maximum rate permitted by law per annum.
\nAs used in Subsection 10.2(c) above, the “worth at the time of award” is
\n ——————
\ncomputed by discounting such amount at the discount rate of the Federal Reserve
\nBank of San Francisco at the time of award plus one percent (1%).<\/p>\n
10.3 Continuation. In the event of any such Event of Default by Tenant,
\n ————
\nLandlord shall also have the right, with or without terminating this Lease, to
\nre-enter the Premises and remove all persons and property from the Premises;
\nsuch property may be removed and stored in a public warehouse or elsewhere at
\nthe cost of and for the account of Tenant for such period of time as may be
\nrequired by applicable law after which time Landlord may dispose of such
\nproperty in accordance with applicable law. No re-entry or taking possession of
\nthe Premises by Landlord pursuant to this Section 10.3 shall be construed as an
\n ————
\nelection to terminate this Lease unless a written notice of such intention be
\ngiven to Tenant or unless the termination thereof be decreed by a court of
\ncompetent jurisdiction. In addition to its other rights under this Lease,
\nLandlord has the remedy described in California Civil Code Section 1951.4
\n ————–
\n(Landlord may continue the Lease in effect after Tenant’s breach and abandonment
\nand recover the rent as it becomes due, if Tenant has the right to sublet or
\nassign, subject only to reasonable limitations).<\/p>\n
10.4 Remedies Cumulative. Upon the occurrence of an Event of Default,
\n ——————-
\nLandlord shall have the right to exercise and enforce all rights and remedies
\ngranted or permitted by law. The remedies provided for in this Lease are
\ncumulative and in addition to all other remedies available to Landlord at law or
\nin equity by statute or otherwise. Exercise by Landlord of any remedy shall not
\nbe deemed to be an acceptance of surrender of the Premises by Tenant, either by
\nagreement or by operation of law. Surrender of the Premises can be effected
\nonly by the written agreement of Landlord and Tenant.<\/p>\n
-31-<\/p>\n
10.5 Tenant’s Primary Duty. All agreements and covenants to be performed
\n ———————
\nor observed by Tenant under this Lease shall be at Tenant’s sole cost and
\nexpense and without any abatement of rent, except as otherwise expressly set
\nforth in this Lease. If Tenant fails to pay any sum of money to be paid by
\nTenant or to perform any other act to be performed by Tenant under this Lease
\nbeyond any applicable notice and cure period, Landlord shall have the right, but
\nshall not be obligated, and without waiving or releasing Tenant from any
\nobligations of Tenant, to make any such payment or to perform any such other act
\non behalf of Tenant in accordance with this Lease. All sums so paid by Landlord
\nand all costs incurred or paid by Landlord shall be deemed additional rent
\nhereunder and Tenant shall pay the same to Landlord on written demand, together
\nwith interest on all such sums and costs from the date of expenditure by
\nLandlord to the date of repayment by Tenant at the rate of ten percent (10%) per
\nannum.<\/p>\n
10.6 Abandoned Property. If Tenant vacates the Premises, or is
\n ——————
\ndispossessed by process of law or otherwise, any movable furniture, equipment,
\ntrade fixtures or personal property belonging to Tenant and left in the Premises
\nshall, at the option of the Landlord, be deemed to be abandoned, and Landlord
\nshall have the right to use, sell or otherwise dispose of such personal property
\nin any commercially reasonable manner.<\/p>\n
10.7 Landlord Default. If Landlord defaults under this Lease, Tenant shall
\n —————-
\ngive written notice to Landlord specifying such default with particularity, and
\nLandlord shall have thirty (30) days after receipt of such notice within which
\nto cure such default; provided, that if by the nature of the obligation of which
\nLandlord is in default the default cannot reasonably be cured within such period
\nof thirty (30) days, Landlord shall not be deemed in default hereunder so long
\nas it commences with due diligence and dispatch the curing of such default
\nwithin such period of thirty (30) days and, having so commenced, thereafter
\nprosecutes with diligence and dispatch and completes the curing of such default
\nwithin a period of sixty (60) days after Tenant’s notice. In the event of any
\ndefault by Landlord, Tenant’s exclusive remedy shall be an action for damages
\nand the provisions of Section 15.17 shall apply.
\n ————- <\/p>\n
ARTICLE 11
\n ———-<\/p>\n
Damage or Destruction
\n ———————<\/p>\n
11.1 Restoration; Rent Abatement. If the Building or the Premises, or any
\n —————————
\npart thereof, is damaged by fire or other casualty before the Commencement Date
\nor during the term of this Lease, and this Lease is not terminated pursuant to
\nSection 11.2 hereof, Landlord shall repair such damage and restore the Building
\n————
\nand the Premises (but not the Tenant Improvements, Alterations or any of
\nTenant’s trade fixtures or personal property) to substantially the same
\ncondition in which the Building and the Premises existed before the occurrence
\nof such fire or other casualty and this Lease shall, subject to this Section
\n ——-
\n11.1, remain in full force and effect. If such fire or other casualty damages
\n—-
\nthe Premises or common areas of the Building necessary for Tenant’s use and
\noccupancy of the Premises then, during the period the Premises are rendered
\nunusable by such damage, including a reasonable time for Tenant to repair or
\nreplace its Tenant Improvements, Alterations, equipment, trade fixtures and
\npersonal property, Tenant shall be entitled to a reduction in Base Rent and
\nAdditional Rent in the proportion that the area of the Premises rendered
\nunusable by such damage bears to the total area of the Premises, and to the<\/p>\n
-32-<\/p>\n
extent that such portion damaged is rendered unusable. Landlord shall not be
\nobligated to repair any damage to, or to make any replacement of, any Tenant
\nImprovements, Alterations, movable furniture, equipment, trade fixtures or
\npersonal property in the Premises. Tenant shall, at Tenant’s sole cost and
\nexpense, promptly repair and replace all such Tenant Improvements, Alterations,
\nmovable furniture, equipment, trade fixtures and personal property in accordance
\nwith the rules and procedures applicable to Alterations and shall coordinate
\nwith Landlord and its work in order to complete the same in an expeditious and
\ncommercially reasonable manner.<\/p>\n
11.2 Termination of Lease. If the Building or the Premises, or any part
\n ——————–
\nthereof, is damaged by fire or other casualty before the Commencement Date or
\nduring the term of this Lease and (a) such fire or other casualty occurs during
\nthe last twelve (12) months of the term of this Lease, Tenant has not exercised
\nan option to extend the Lease Term and the repair and restoration work to be
\nperformed by Landlord and Tenant in accordance with Section 11.1 hereof would
\n ————
\ncost, as reasonably estimated by Landlord, fifty (50%) percent or more of the
\ncost to replace the entire Premises, or (b) the insurance proceeds received by
\nLandlord in respect of such damage are, together with an additional One Million
\nDollars ($1,000,000) not adequate to pay the entire cost (excluding the
\ndeductible amount), as reasonably estimated by Landlord, of the repair and
\nrestoration work to be performed by Landlord in accordance with Section 11.1
\n ————
\nhereof, or (c) the repair and restoration work to be performed by Landlord in
\naccordance with Section 11.1 hereof cannot, as reasonably estimated by Landlord,
\n ————
\nbe completed within one (1) year after the occurrence of such fire or other
\ncasualty, then, in any such event, Landlord shall have the right, by giving
\nwritten notice within sixty (60) days after the occurrence of such fire or other
\ncasualty, to terminate this Lease as of the date of such notice. In addition, in
\neach of the circumstances described in clauses (a) and (c) above, Tenant shall
\nhave the right, by giving Landlord written notice to Tenant within sixty (60)
\ndays after the occurrence of such fire or other casualty, to terminate this
\nLease as of the date of such notice. In addition, Tenant shall have the right
\nto terminate this Lease in the circumstance described in clause (b) above when
\nLandlord notifies Tenant, within sixty (60) days after the occurrence of such
\nfire or other casualty, of Landlord’s election to perform the restoration work
\nto be performed by Landlord in accordance with Section 11.1 and to bear the cost
\n ————
\nthereof to the extent it exceeds the insurance proceeds in respect of such fire
\nor other casualty plus One Million Dollars ($1,000,000). If neither Landlord
\nnor Tenant exercises its right to terminate this Lease in accordance with this
\nSection 11.2, Landlord shall repair such damage and restore the Building and the
\n————
\nPremises in accordance with Section 11.1 hereof, Tenant shall repair its Tenant
\n ————
\nImprovements, Alterations, movable furniture, equipment, trade fixtures and
\npersonal property and this Lease shall, subject to Section 11.1 hereof, remain
\n ————
\nin full force and effect.<\/p>\n
11.3 Exclusive Remedy. This Article 11 shall be Tenant’s sole and
\n —————- ———-
\nexclusive remedy in the event of damage or destruction to the Premises or the
\nBuilding, and Tenant, as a material inducement to Landlord entering into this
\nLease, irrevocably waives and releases Tenant’s rights under California Civil
\nCode Sections 1932(2) and 1933(4). No damages, compensation or claim shall be
\n —————- ——-
\npayable by Landlord for any inconvenience, any interruption or cessation of
\nTenant’s business, or any annoyance, arising from any damage to or destruction
\nof all or any portion of the Premises or the Building.<\/p>\n
-33-<\/p>\n
ARTICLE 12
\n ———-<\/p>\n
Eminent Domain
\n ————–<\/p>\n
12.1 Condemnation. Landlord shall have the right to terminate this Lease
\n ————
\nif all or any substantial part of the Premises is taken by exercise of the power
\nof eminent domain before the Commencement Date or during the term of this Lease.
\nTenant shall have the right to terminate this Lease if a substantial portion of
\nthe Premises is taken by exercise of the power of eminent domain before the
\nCommencement Date or during the term of this Lease and the remaining portion of
\nthe Premises is not reasonably suitable for Tenant’s purposes. In each such
\ncase, Landlord or Tenant shall exercise such termination right by giving written
\nnotice to the other within thirty (30) days after the date of such taking. If
\neither Landlord or Tenant exercises such right to terminate this Lease in
\naccordance with this Section 12.1, this Lease shall terminate as of the date of
\n ————
\nsuch taking. If neither Landlord nor Tenant exercises such right to terminate
\nthis Lease in accordance with this Section 12.1, this Lease shall terminate as
\n ————
\nto the portion of the Premises so taken as of the date of such taking and shall
\nremain in full force and effect as to the portion of the Premises not so taken,
\nand the Base Rent and Tenant’s Percentage Share shall be reduced as of the date
\nof such taking in the proportion that the area of the Premises so taken bears to
\nthe total area of the Premises and an appropriate adjustment shall be made to
\nTenant’s share of CAM Expenses, Property Taxes and Insurance Costs incurred with
\nrespect to the Project as a whole. If all of the Premises are taken by exercise
\nof the power of eminent domain before the Commencement Date or during the term
\nof this Lease, this Lease shall terminate as of the date of such taking.<\/p>\n
12.2 Award. If all or any part of the Premises is taken by exercise of the
\n —–
\npower of eminent domain, all awards, compensation, damages, income, rent and
\ninterest payable in connection with such taking shall, except as expressly set
\nforth in this Section 12.2, be paid to and become the property of Landlord, and
\n ————
\nTenant hereby assigns to Landlord all of the foregoing. Without limiting the
\ngenerality of the foregoing, Tenant shall have no claim against Landlord or the
\nentity exercising the power of eminent domain for the value of the leasehold
\nestate created by this Lease or any unexpired term of this Lease. Tenant shall
\nhave the right to claim and receive directly from the entity exercising the
\npower of eminent domain only the share of any award determined to be owing to
\nTenant for the taking of improvements installed in the portion of the Premises
\nso taken by Tenant at Tenant’s sole cost and expense based on the unamortized
\ncost actually paid by Tenant for such improvements, for the taking of Tenant’s
\nmovable furniture, equipment, trade fixtures and personal property, for loss of
\ngoodwill, for interference with or interruption of Tenant’s business, or for
\nremoval and relocation expenses.<\/p>\n
12.3 Temporary Use. Notwithstanding Sections 12.1 and 12.2 hereof to the
\n ————- ———————-
\ncontrary, if the use of all or any part of the Premises is taken by exercise of
\nthe power of eminent domain during the term of this Lease on a temporary basis
\nfor a period of less than one (1) year, this Lease shall continue in full force
\nand effect, Tenant shall continue to pay all of the rent and to perform all of
\nthe covenants of Tenant in accordance with this Lease, to the extent reasonably
\npracticable under the circumstances, and the condemnation proceeds in respect of
\nsuch temporary taking shall be paid to Tenant.<\/p>\n
-34-<\/p>\n
12.4 Definition of Taking. As used herein, a “taking” means the
\n ——————–
\nacquisition of all or part of the Building for a public use by exercise of the
\npower of eminent domain or voluntary conveyance in lieu thereof and the taking
\nshall be considered to occur as of the earlier of the date on which possession
\nof the Building (or part so taken) by the entity exercising the power of eminent
\ndomain is authorized as stated in an order for possession or the date on which
\ntitle to the Building (or part so taken) vests in the entity exercising the
\npower of eminent domain.<\/p>\n
12.5 Exclusive Remedy. This Article 12 shall be Tenant’s sole and
\n —————- ———-
\nexclusive remedy in the event of a taking or condemnation. Tenant hereby waives
\nthe benefit of California Code of Civil Procedure Section 1265.130.
\n —————- <\/p>\n
ARTICLE 13
\n ———-<\/p>\n
Subordination and Sale
\n ———————-<\/p>\n
13.1 Subordination. This Lease shall be subject and subordinate at all
\n ————-
\ntimes to the lien of all deeds of trust securing any amount or amounts
\nwhatsoever which may now exist or hereafter be placed on or against the Building
\nor the Project or on or against Landlord’s interest or estate therein, all
\nwithout the necessity of having further instruments executed by Tenant to effect
\nsuch subordination. Notwithstanding the foregoing, in the event of a
\nforeclosure of any such deed of trust or of any other action or proceeding for
\nthe enforcement thereof, or of any sale thereunder, this Lease shall not be
\nterminated or extinguished, nor shall the rights and possession of Tenant
\nhereunder be disturbed, if no Event of Default then exists under this Lease, and
\nTenant shall attorn to the person who acquires Landlord’s interest hereunder
\nthrough any such deed of trust. In the event Landlord elects to place a deed of
\ntrust on its interest in the Building or the Project, it shall obtain for the
\nbenefit of its Lender and Tenant a subordination, nondisturbance and attornment
\nagreement in a commercially reasonable form, reasonably acceptable to its
\nLender, and Tenant agrees to execute, acknowledge and deliver upon demand such
\nagreement and further instruments evidencing such subordination of this Lease to
\nthe lien of all such deeds of trust as may reasonably be required by Landlord or
\nits lender. Landlord agrees that if the existing deed of trust affecting the
\nBuilding has not been reconveyed by January 31, 2001, at Tenant’s request
\nLandlord shall obtain such a subordination, non-disturbance and attornment
\nagreement with respect thereto.<\/p>\n
13.2 Sale of the Project. If the original Landlord hereunder, or any
\n ——————-
\nsuccessor owner of the Project, sells or conveys the Project, all liabilities
\nand obligations on the part of the original Landlord, or such successor owner,
\nunder this Lease accruing after such sale or conveyance shall terminate and the
\noriginal Landlord, or such successor owner, shall automatically be released
\ntherefrom, and thereupon all such liabilities and obligations shall be binding
\nupon the new owner. Tenant agrees to attorn to such new owner.<\/p>\n
13.3 Estoppel Certificate. At any time and from time to time, Tenant
\n ——————–
\nshall, within ten (10) days after written request by Landlord, execute,
\nacknowledge and deliver to Landlord a certificate certifying: (a) that this
\nLease is unmodified and in full force and effect (or, if there have been
\nmodifications, that this Lease is in full force and effect as modified, and
\nstating the date and nature of each modification); (b) the Commencement Date and
\nthe Expiration Date <\/p>\n
-35-<\/p>\n
determined in accordance with Article 2 hereof and the date, if any, to which
\n ———
\nall rent and other sums payable hereunder have been paid; (c) that no notice has
\nbeen received by Tenant of any default by Tenant hereunder which has not been
\ncured, except as to defaults specified in such certificate; (d) that to the best
\nof Tenant’s knowledge Landlord is not in default under this Lease, except as to
\ndefaults specified in such certificate; and (e) such other matters as may be
\nreasonably requested by Landlord or any actual or prospective purchaser or
\nmortgage lender. Any such certificate may be relied upon by Landlord and any
\nactual or prospective purchaser or mortgage lender of the Project or any part
\nthereof. At any time and from time to time, Tenant shall, within ten (10) days
\nafter written request by Landlord, deliver to Landlord copies of all current
\nfinancial statements (including a balance sheet, an income statement, and an
\naccumulated retained earnings statement), annual reports, and other financial
\nand operating information and data of Tenant prepared by Tenant in the course of
\nTenant’s business. In the event Tenant has securities registered under Section
\n12 of the Securities Exchange Act of 1934, Tenant shall be required to furnish
\nonly those financial statements and operating information which are available to
\nthe public. Unless available to the public, Landlord shall disclose such
\nfinancial statements, annual reports and other information or data only to
\nactual or prospective purchasers or mortgage lenders or partners of the Project
\nor any part thereof, and otherwise keep them confidential unless other
\ndisclosure is required by law. Landlord agrees that within ten (10) days of the
\nwritten request of Tenant given not more than two (2) times in any calendar
\nyear, Landlord will furnish to Tenant a certificate certifying to the
\ninformation contained in clauses (a), (b), (c) and (d) (except that such
\ninformation shall be with respect to notices received by Landlord and defaults
\nof Tenant) above, and any such certificate may be relied upon by Tenant and its
\nlenders, assignees and subtenants to the same extent as Landlord is entitled to
\nrely upon a similar certificate given by Tenant.<\/p>\n
ARTICLE 14
\n ———-<\/p>\n
Notices
\n ——-<\/p>\n
14.1 Method. All requests, approvals, consents, notices and other
\n ——
\ncommunications given by Landlord or Tenant under this Lease shall be properly
\ngiven only if made in writing and either deposited in the United States mail,
\npostage prepaid, certified with return receipt requested, or delivered by hand
\n(which may be through a messenger or recognized delivery, courier or air express
\nservice) and addressed as follows: To Landlord, c\/o Investment Development
\nServices, Inc., 888 West 6\/th\/ Street, 9\/th\/ Floor, Los Angeles, California
\n90017, Attn.: David G. Mgrublian, with a copy to: Paul, Hastings, Janofsky & Walker LLP, 345 California Street, Twenty-Ninth Floor, San Francisco, California
\n94104, Attn: Charles V. Thornton, or at such other place as Landlord may from
\ntime to time designate in a written notice to Tenant; to Tenant at the address
\nof Tenant specified in the Basic Lease Information, or at such other place as
\nTenant may from time to time designate in a written notice to Landlord; and to
\nGuarantor (if any) at the address of Guarantor specified in the Basic Lease
\nInformation, or at such other place as Guarantor may from time to time designate
\nin a written notice to Landlord. Such requests, approvals, consents, notices
\nand other communications shall be effective on the date of receipt (evidenced by
\nthe certified mail receipt) if mailed or on the date of hand delivery if hand
\ndelivered. If any such request, approval, consent, notice or other
\ncommunication is not received or cannot be delivered due to a change in the
\naddress of the receiving party of which notice was <\/p>\n
-36-<\/p>\n
not previously given to the sending party or due to a refusal to accept by the
\nreceiving party, such request, approval, consent, notice or other communication
\nshall be effective on the date delivery is attempted. Any request, approval,
\nconsent, notice or other communication under this Lease may be given on behalf
\nof a party by the attorney for such party.<\/p>\n
ARTICLE 15
\n ———-<\/p>\n
Miscellaneous
\n ————-<\/p>\n
15.1 General. The words “Landlord” and “Tenant” as used herein shall
\n ——-
\ninclude the plural as well as the singular. The words “include,” “includes” and
\n“including” shall be deemed to be followed by the phrase “without limitation.”
\nIf there is more than one Tenant, the obligations hereunder imposed upon Tenant
\nshall be joint and several. Time is of the essence of this Lease and each and
\nall of its provisions. This Lease shall benefit and bind Landlord and Tenant
\nand the permitted personal representatives, heirs, successors and assigns of
\nLandlord and Tenant. If any provision of this Lease is determined to be illegal
\nor unenforceable, such determination shall not affect any other provision of
\nthis Lease and all such other provisions shall remain in full force and effect.
\nTenant shall not record this Lease or any memorandum or short form of it. This
\nLease shall be governed by and construed in accordance with the laws of the
\nstate in which the Project is located.<\/p>\n
15.2 No Waiver. The waiver by Landlord or Tenant of any breach of any
\n ———
\ncovenant in this Lease shall not be deemed to be a waiver of any subsequent
\nbreach of the same or any other covenant in this Lease, nor shall any custom or
\npractice which may grow up between Landlord and Tenant in the administration of
\nthis Lease be construed to waive or to lessen the right of Landlord or Tenant to
\ninsist upon the performance by Landlord or Tenant in strict accordance with this
\nLease. The subsequent acceptance of rent hereunder by Landlord or the payment
\nof rent by Tenant shall not waive any preceding breach by Tenant of any covenant
\nin this Lease, nor cure any Event of Default, nor waive any forfeiture of this
\nLease or unlawful detainer action, other than the failure of Tenant to pay the
\nparticular rent so accepted, regardless of Landlord’s or Tenant’s knowledge of
\nsuch preceding breach at the time of acceptance or payment of such rent.<\/p>\n
15.3 Attorneys’ Fees. If there is any legal action or proceeding between
\n —————
\nLandlord and Tenant to enforce this Lease or to protect or establish any right
\nor remedy under this Lease, the unsuccessful party to such action or proceeding
\nshall pay to the prevailing party all costs and expenses, including reasonable
\nattorneys’ fees and disbursements, incurred by such prevailing party in such
\naction or proceeding and in any appeal in connection therewith. If such
\nprevailing party recovers a judgment in any such action, proceeding or appeal,
\nsuch costs, expenses and attorneys’ fees and disbursements shall be included in
\nand as a part of such judgment.<\/p>\n
15.4 Exhibits. Exhibit A (Plan(s) Outlining the Premises and the Project),
\n ——– ———
\nExhibit B (Work Letter Agreement), Exhibit C (Form of Memorandum Confirming
\n——— ———
\nTerm), Exhibit E (Rules and Regulations), Exhibit F (Option to Extend\/Fair
\n ——— ———
\nMarket Rental Rate), Exhibit I (Right of First Offer), Exhibit J (Janitorial
\n ——— ———
\nServices), Exhibit K (Parking Rules and Regulations), Exhibit L (Letter of
\n ——— ———
\nCredit Information), Exhibit M (Certain Limitations on CAM Expenses) and
\n ——— <\/p>\n
-37-<\/p>\n
any other attachments specified in the Basic Lease Information, are attached to
\nand made a part of this Lease and once again incorporated into this Lease by
\nthis reference.<\/p>\n
15.5 Broker(s). Landlord and Tenant warrant and represent to one another
\n ———
\nthat the representing party has negotiated this Lease directly with the real
\nestate broker(s) specified in the Basic Lease Information and has not authorized
\nor employed, or acted by implication to authorize or to employ, any other real
\nestate broker to act for the representing party in connection with this Lease.<\/p>\n
15.6 Waivers of Jury Trial and Certain Damages. Landlord and Tenant each
\n —————————————–
\nhereby expressly, irrevocably, fully and forever releases, waives and
\nrelinquishes any and all right to trial by jury and any and all right to receive
\npunitive, exemplary and consequential damages from the other (or any past,
\npresent or future board member, trustee, director, officer, employee, agent,
\nrepresentative, or advisor of the other) in any claim, demand, action, suit,
\nproceeding or cause of action in which Landlord and Tenant are parties, which in
\nany way (directly or indirectly) arises out of, results from or relates to any
\nof the following, in each case whether now existing or hereafter arising and
\nwhether based on contract or tort or any other legal basis: this Lease; any
\npast, present or future act, omission, conduct or activity with respect to this
\nLease; any transaction, event or occurrence contemplated by this Lease; the
\nperformance of any obligation or the exercise of any right under this Lease; or
\nthe enforcement of this Lease. Landlord and Tenant reserve the right to recover
\nactual or compensatory damages, with interest, attorneys’ fees, costs and
\nexpenses as provided in this Lease, for any breach of this Lease.<\/p>\n
15.7 Entire Agreement. There are no oral agreements between Landlord and
\n —————-
\nTenant affecting this Lease, and this Lease supersedes and cancels any and all
\nprevious negotiations, arrangements, term sheets, brochures, videos, CD ROMS,
\nWeb site info, offers, agreements and understandings, oral or written, if any,
\nbetween Landlord and Tenant or displayed by Landlord to Tenant with respect to
\nthe subject matter of this Lease, the Premises or the Project. There are no
\ncommitments, representations or assurances between Landlord and Tenant or
\nbetween any real estate broker and Tenant other than those expressly set forth
\nin this Lease and all reliance with respect to any commitments, representations
\nor assurances is solely upon commitments, representations and assurances
\nexpressly set forth in this Lease. This Lease may not be amended or modified in
\nany respect whatsoever except by an agreement in writing signed by Landlord and
\nTenant.<\/p>\n
15.8 Parking.
\n ——- <\/p>\n
(a) Tenant shall be entitled to the exclusive use of the number of
\nunreserved parking spaces designated in the Basic Lease Information free of
\ncharge (except that the costs incurred by Landlord with respect to such parking
\nshall be included in Operating Costs) for the initial term of this Lease except
\nfor any charges imposed by governmental agencies beyond Landlord’s control.
\nTenant shall not use more parking spaces than said number and shall comply with
\nthe Parking Rules and Regulations attached as Exhibit K.
\n ——— <\/p>\n
(b) The “Edison Easement” is shown on Exhibit A-1, and Landlord has the
\n ———–
\nright to use the same subject to the rights of Southern California Edison
\nCompany (“SCE”). Subject to the rights of SCE, Tenant shall have the exclusive
\nright to use the area covered by the Edison Easement to the same extent and
\nsubject to the same conditions applicable to Landlord. <\/p>\n
-38-<\/p>\n
However, in the event Landlord wishes to utilize part or all of the Edison
\nEasement for other purposes related to the Project or for the benefit of other
\ntenants in the Project, it may so notify Tenant. If within five (5) business
\ndays after receiving such notice Tenant notifies Landlord that Tenant intends to
\nuse the Edison Easement area, Tenant shall be obligated to spend at least one
\nhundred seventy-five thousand dollars ($175,000) to improve the Edison Easement
\narea within a period of ninety (90) days thereafter, to Landlord’s reasonable
\nsatisfaction and in accordance with applicable law. If Tenant does not give such
\nnotice, Tenant shall have no further rights to the Edison Easement area. In such
\nevent Landlord shall have the right to permit the Edison Easement area to be
\nused by other tenants in the Project, and for that purpose shall have the right
\nto permit such other tenants free and unencumbered access across Tenant’s
\nparking area in order to gain access to the Edison Easement area. Such access
\nshall not reduce below five hundred thirty-eight (538) the number of parking
\nspaces to which Tenant is entitled, and Tenant and Landlord shall cooperate in
\norder to ensure that the users of the Edison Easement area do not also utilize
\nany of Tenant’s exclusive parking spaces.<\/p>\n
15.9 Choice of Law. This Lease shall be governed by and construed
\n ————-
\npursuant to the laws of the State of California.<\/p>\n
15.10 No Air Rights. No rights to any view or to light or air over any
\n ————-
\nproperty, whether belonging to Landlord or any other person, are granted to
\nTenant by this Lease. If at any time the light or view from windows is
\nobstructed by reason of any repairs, improvements, maintenance or cleaning in or
\nabout the Project, the same shall be without liability to Landlord and without
\nany reduction or diminution of Tenant’s obligations under this Lease.<\/p>\n
15.11 Modification of Lease. Should any current or prospective mortgagee
\n ———————
\nor ground lessor for the Building or Project require a modification of this
\nLease, which modification will not cause an increased cost or expense to Tenant
\nor (other than in a de minimus manner) or adversely change the rights or
\nobligations of Tenant hereunder, then and in such event, Tenant agrees that this
\nLease may be so modified and agrees to execute whatever documents are reasonably
\nrequired therefor and to deliver the same to Landlord within twenty (20) days
\nfollowing a request therefor. At the request of Landlord or Tenant or any
\nmortgagee or ground lessor, Tenant and Landlord agree to execute a short form of
\nLease memorandum and deliver the same to the requesting party within twenty (20)
\ndays following the request therefor, the recordation of which shall be at the
\nsole cost and expense of the party seeking recordation. Landlord shall pay for
\nTenant’s reasonable costs (not to exceed two thousand five hundred dollars
\n($2,500)) in reviewing and negotiating any such modification.<\/p>\n
15.12 Landlord’s Title. Landlord’s title is and always shall be paramount
\n —————-
\nto the title of Tenant.<\/p>\n
15.13 Application of Payments. Unless Tenant, by Notice to Landlord,
\n ———————–
\nspecifically restricts how such payment is to be applied, Landlord shall have
\nthe right to apply payments received from Tenant pursuant to this Lease,
\nregardless of Tenant’s designation of such payments, to satisfy any obligations
\nof Tenant hereunder, in such order and amounts as Landlord, in its sole
\ndiscretion, may elect. However, while Landlord must accept payments made under
\nprotest, Landlord is not obligated to accept a payment made with other
\nrestrictions, and such payment, if not accepted by Landlord, shall be returned
\nto Tenant within five (5) business days of demand by Tenant.<\/p>\n
-39-<\/p>\n
15.14 Time of Essence. Time is of the essence with respect to the
\n —————
\nperformance of every term, covenant and condition of this Lease in which time of
\nperformance is a factor. Whenever in the Lease a payment is required to be made
\nby one party to the other, but a specific date for payment is not set forth or a
\nspecific number of days within which payment is to be made is not set forth, or
\nthe words “immediately,” “promptly,” and\/or “on demand,” or their equivalent,
\nare used to specify when such payment is due, then such payment shall be due
\nthirty (30) days after the date that the party which is entitled to such payment
\nsends Notice to the other party demanding such payment.<\/p>\n
15.15 Right to Lease. Landlord reserves the absolute right to effect such
\n ————–
\nother tenancies in the Project as Landlord in the exercise of its sole business
\njudgment and shall determine to best promote the interests of the Building or
\nProject.<\/p>\n
15.16 Force Majeure. Any prevention, delay or stoppage due to strikes,
\n ————-
\nlockouts, labor disputes, acts of God, inability to obtain services, labor, or
\nmaterials or reasonable substitutes therefor, governmental actions, civil
\ncommotions, fire, earthquake or other casualty, and other causes beyond the
\nreasonable control of the party obligated to perform, except with respect to the
\nobligations imposed with regard to rent and other charges to be paid by Tenant
\npursuant to this Lease (collectively, a “Force Majeure Event”), shall excuse the
\nperformance of such party for a period equal to any such prevention, delay or
\nstoppage notwithstanding anything to the contrary contained in this Lease.
\nTherefore, if this Lease specifies a time period for performance of an
\nobligation of either party, that time period shall be extended by the period of
\nany delay in such party’s performance caused by a Force Majeure Event.<\/p>\n
15.17 Exculpation. The liability of Landlord to Tenant for any default by
\n ———–
\nLandlord under this Lease or arising in connection herewith or with Landlord’s
\noperation, management, leasing, repair, renovation, alteration or any other
\nmatter relating to the Project or the Premises shall be limited solely and
\nexclusively to an amount which is equal to the interest of Landlord in the
\nBuilding (including any insurance proceeds which Landlord receives). Landlord
\nshall have no personal liability therefor, and Tenant hereby expressly waives
\nand releases such personal liability on behalf of itself and all persons
\nclaiming by, through or under Tenant. Under no circumstances shall Tenant seek
\nor obtain a personal money judgment against Landlord. The limitations of
\nliability contained in this Section 15.17 shall inure to the benefit of
\n ————-
\nLandlord’s present and future partners, beneficiaries, officers, directors,
\ntrustees, shareholders, agents and employees, and their respective partners,
\nheirs, successors and assigns. Under no circumstances shall any present or
\nfuture partner or member of Landlord (if Landlord is a partnership or limited
\nliability company), or trustee or beneficiary (if Landlord or any partner of
\nLandlord is a trust), have any liability for the performance of Landlord’s
\nobligations under this Lease. Notwithstanding any contrary provision herein,
\nneither Landlord nor Tenant shall be liable under any circumstances for injury
\nor damage to, or interference with, Tenant’s or Landlord’s business, including
\nbut not limited to, loss of profits, loss of rents or other revenues, loss of
\nbusiness opportunity, loss of goodwill or loss of use, in each case, however
\noccurring.<\/p>\n
15.18 No Discrimination. Tenant covenants by and for itself and Tenant’s
\n —————–
\nofficers, executives, administrators, assigns and all persons claiming under or
\nthrough Tenant, that this Lease is made and accepted upon and subject to the
\nfollowing conditions: there shall be no discrimination against or segregation
\nof any person or group of persons, on account of race, color, creed, religion,
\nsex, marital status, national origin or ancestry in the leasing, subleasing,<\/p>\n
-40-<\/p>\n
transferring, use, occupancy, tenure or enjoyment of the Premises hereby leased,
\nnor shall Tenant itself, or any person claiming under or through Tenant,
\nestablish or permit any such practice or practices of discrimination or
\nsegregation with reference to the selection, location, number, use or occupancy
\nof subtenants, sublessees or vendees in the Premises.<\/p>\n
15.19 Counterparts. This Lease may be executed in any number of
\n ————
\ncounterparts, each of which shall be deemed to be an original and all of which,
\ntaken together, shall constitute one and the same instrument.<\/p>\n
15.20 Roof Rights. As part of its Tenant Improvements, Tenant shall have
\n ———–
\nthe right, at its expense but without the payment of additional rent, to
\ninstall telecommunications equipment on the roof of the Building for its own use
\nand that of its affiliates who are subleasing space in the Premises from Tenant,
\nalthough it shall not have the right to utilize such equipment for the use of
\nothers, with or without compensation. The installation of such
\ntelecommunications equipment shall be subject to the Design Criteria and all of
\nthe provisions of the Work Letter Agreement, and shall not prohibit the use of
\nthe roof for equipment of Landlord, so long as such equipment of Landlord does
\nnot unreasonably interfere with equipment installed by Tenant. Under no
\ncircumstances shall Tenant’s use of its telecommunications equipment interfere
\nwith the ability of Landlord or other tenants of the Project to utilize
\ntelecommunications equipment, and the installation of such equipment shall be
\nconsistent with Landlord’s plan regarding the aesthetics of the Building. All
\nof such telecommunications equipment, if installed, shall be removed by Tenant
\nat its expense on the expiration or earlier termination of the Lease, and all
\ndamages caused by such removal shall be paid upon demand by Tenant to Landlord.<\/p>\n
15.21 Signage. Subject to obtaining Landlord’s consent, which shall not
\n ——-
\nbe withheld unreasonably, and consistent with the Design Criteria, Tenant shall
\nhave the right to install, at its sole cost and expense, signage on the top of
\nthe Building (which shall be an exclusive right), at the entry to the Building
\nand monument signage in front of the Building, all of which identifies Tenant.
\nThe location, size, design and material of each of these signs shall be subject
\nto Landlord’s consent. In addition, subject to compliance with the Design
\nCriteria, Tenant may incorporate its logo and signage on the walls of the
\nelevator lobbies of the Building and on the entrance doors of the Building. At
\nthe expiration or earlier termination of the Lease, all of such signage shall be
\nremoved by Tenant at its sole cost and expense, and Tenant shall repair any
\ndamages caused by such removal. Landlord shall have the right to install
\nmonument signs identifying the Westlake North Business Park and, so long as they
\ndo not unreasonably interfere with Tenant’s identification of the Premises,
\nother signs identifying the management of the Premises by Landlord.<\/p>\n
15.22 Consent\/Duty to Act Reasonably. Except for any reference to the
\n ——————————
\nwords “sole”, “absolute” or in “the sole discretion” (and except for matters
\nwhich (a) might have an adverse effect on the structural integrity of the
\nBuilding, (b) might have an adverse effect on the systems of the Building, or
\n(c) might have an effect on the aesthetics of the Building or the Project,
\nincluding the exterior appearance of the Building), any time the consent of
\nLandlord or Tenant is required, such consent shall not be unreasonably withheld,
\nconditioned or delayed. Whenever the Lease grants Landlord or Tenant the right
\nto take action, exercise discretion, establish rules and regulations or make
\nallocations or other determinations (other than decisions to exercise expansion,
\ncontraction, cancellation, termination or renewal options and decisions with
\nrespect to <\/p>\n
-41-<\/p>\n
Rent), Landlord and Tenant shall act reasonably and in good faith.<\/p>\n
Arbitration
\n ———– <\/p>\n
16.1 Exclusive Remedy\/Payment Under Protest. The provisions of this
\n ————————————–
\nArticle 16 contain the sole and exclusive method, means and procedure to resolve
\n———-
\nany and all disputes or disagreements, including whether any particular matter
\nconstitutes, or with the passage of time would constitute, an Event of Default.
\nThe parties hereby irrevocably waive any and all rights to the contrary and
\nshall at all times conduct themselves in strict, full, complete and timely
\naccordance with the provisions of this Article 16. Any and all attempts to
\n ———-
\ncircumvent the provisions of this Article 16 shall be absolutely null and void
\n ———-
\nand of no force or effect whatsoever. As to any matter submitted to arbitration
\nto determine whether it would, with the passage of time, constitute an Event of
\nDefault, such passage of time shall not commence to run until any such
\naffirmative determination, so long as it is simultaneously determined that the
\nchallenge of such matter as a potential Event of Default was made in good faith,
\nexcept with respect to the payment of money. With respect to the payment of
\nmoney, such passage of time shall not commence to run only if the party which is
\nobligated to make the payment does in fact make the payment to the other party.
\nSuch payment can be made “under protest,” which shall occur when such payment is
\naccompanied by a good-faith notice stating why the party has elected to make a
\npayment under protest. Such protest will be deemed waived unless the subject
\nmatter identified in the protest is submitted to arbitration as set forth as
\nfollows:<\/p>\n
(a) Arbitration Panel. Within ninety (90) days after delivery of written
\n —————–
\nnotice (“Notice of Dispute”) of the existence and nature of any dispute given by
\nany party to the other party, and unless otherwise provided herein in any
\nspecific instance, the parties shall each: (i) appoint one (1) lawyer actively
\nengaged in the licensed and full-time practice of law, specializing in real
\nestate leasing matters, in Los Angeles County for a continuous period
\nimmediately preceding the date of delivery (“Dispute Date”) of the Notice of
\nDispute of not less than ten (10) years, but who has at no time ever represented
\nor acted on behalf of any of the parties, and (ii) deliver written notice of the
\nidentity of such lawyer and a copy of his or her written acceptance of such
\nappointment and acknowledgment of and agreement to be bound by the time
\nconstraints and other provisions of this Article 16 (“Acceptance”) to the other
\n ———-
\nparties hereto. The party who selects the lawyer may not consult with such
\nlawyer, directly or indirectly, to determine the lawyer’s position on the issue
\nwhich is the subject of the dispute. In the event that any party fails to so
\nact, such arbitrator shall be appointed pursuant to the same procedure that is
\nfollowed when agreement cannot be reached as to the third arbitrator. Within
\nten (10) days after such appointment and notice, such lawyers shall appoint a
\nthird lawyer (together with the first two (2) lawyers, “Arbitration Panel”) of
\nthe same qualification and background and shall deliver written notice of the
\nidentity of such lawyer and a copy of his or her written Acceptance of such
\nappointment to each of the parties. In the event that agreement cannot be
\nreached on the appointment of a third lawyer within such period, such
\nappointment and notification shall be made as quickly as possible by any court
\nof competent jurisdiction, by any licensing authority, agency or organization
\nhaving jurisdiction over such lawyers, by any professional association of
\nlawyers in existence for not less than ten (10) years at the time of such
\ndispute or disagreement and the geographical membership boundaries of which
\nextend to Los Angeles County or by any arbitration association or organization
\nin existence for not less than ten (10) years at the time of such dispute or
\ndisagreement and the geographical boundaries<\/p>\n
-42-<\/p>\n
of which extend to Los Angeles County, as determined by the party giving such
\nNotice of Dispute and simultaneously confirmed in writing delivered by such
\nparty to the other party. Any such court, authority, agency, association or
\norganization shall be entitled either to directly select such third lawyer or to
\ndesignate in writing, delivered to each of the parties, an individual who shall
\ndo so. In the event of any subsequent vacancies or inabilities to perform among
\nthe Arbitration Panel, the lawyer or lawyers involved shall be replaced in
\naccordance with the provisions of this Article 16 as if such replacement was an
\n ———-
\ninitial appointment to be made under this Article 16 within the time constraints
\n ———-
\nset forth in this Article 16, measured from the date of notice of such vacancy
\n ———-
\nor inability, to the person or persons required to make such appointment, with
\nall the attendant consequences of failure to act timely if such appointed person
\nis a party hereto.<\/p>\n
(b) Duty. Consistent with the provisions of this Article 16, the members
\n —- ———-
\nof the Arbitration Panel shall utilize their utmost skill and shall apply
\nthemselves diligently so as to hear and decide, by majority vote, the outcome
\nand resolution of any dispute or disagreement submitted to the Arbitration Panel
\nas promptly as possible, but in any event on or before the expiration of thirty
\n(30) days after the appointment of the members of the Arbitration Panel. None
\nof the members of the Arbitration Panel shall have any liability whatsoever for
\nany acts or omissions performed or omitted in good faith pursuant to the
\nprovisions of this Article 16.
\n ———- <\/p>\n
(c) Authority. The Arbitration Panel shall (i) enforce and interpret the
\n ———
\nrights and obligations set forth in this Lease to the extent not prohibited by
\nlaw, (ii) fix and establish any and all rules as it shall consider appropriate
\nin its sole and absolute discretion to govern the proceedings before it,
\nincluding any and all rules of discovery, procedure and\/or evidence, and (iii)
\nmake and issue any and all orders, final or otherwise, and any and all awards,
\nas a court of competent jurisdiction sitting at law or in equity could make and
\nissue, and as it shall consider appropriate in its sole and absolute discretion,
\nincluding the awarding of monetary damages (but shall not award consequential
\ndamages to either party and shall not award punitive damages except in
\nsituations involving knowing fraud or egregious conduct condoned by, or
\nperformed by, the person who, in essence, occupies the position which is the
\nequivalent of the chief executive officer of the party against whom damages are
\nto be awarded), the awarding of reasonable attorneys’ fees and costs to the
\nprevailing party as determined by the Arbitration Panel and the issuance of
\ninjunctive relief. If the party against whom the award is issued complies with
\nthe award, within the time period established by the Arbitration Panel, then no
\nEvent of Default will be deemed to have occurred, unless the Event of Default
\npertained to the non-payment of money by Tenant or Landlord, and Tenant or
\nLandlord failed to make such payment under protest.<\/p>\n
(d) Appeal. The decision of the Arbitration Panel shall be final and
\n ——
\nbinding, may be confirmed and entered by any court of competent jurisdiction at
\nthe request of any party and may not be appealed to any court of competent
\njurisdiction or otherwise except upon a claim of fraud on the part of the
\nArbitration Panel, or on the basis of a mistake as to the applicable law. The
\nArbitration Panel shall retain jurisdiction over any dispute until its award has
\nbeen implemented, and judgment on any such award may be entered in any court
\nhaving appropriate jurisdiction.<\/p>\n
(e) Compensation. Each member of the Arbitration Panel shall be
\n ————
\ncompensated for any and all services rendered under this Article 16 at a rate of
\n ———-
\ncompensation equal to the sum of (i) Two Hundred Fifty Dollars ($250.00) per
\nhour and (ii) the sum of Ten Dollars ($10.00) per<\/p>\n
-43-<\/p>\n
hour multiplied by the number of full years of the expired term under this
\nLease, plus reimbursement for any and all expenses incurred in connection with
\nthe rendering of such services, payable in full promptly upon conclusion of the
\nproceedings before the Arbitration Panel. Such compensation and reimbursement
\nshall be borne by the nonprevailing party as determined by the Arbitration Panel
\nin its sole and absolute discretion.<\/p>\n
(f) Exception. Notwithstanding the foregoing, Landlord shall have the
\n ———
\nright to exercise its remedy of unlawful detainer against Tenant following the
\nfailure of Tenant to pay any portion of the rent or other sums due hereunder,
\nand without regard to the other provisions of this Article 16. In addition,
\n ———-
\nLandlord and Tenant hereby waive trial by jury in any action, proceeding or
\ncounterclaim brought by either of them against the other or in connection with
\nany matter whatsoever arising out of or in connection with this Lease, the
\nrelationship of Landlord and Tenant, Tenant’s use or occupancy of the Premises
\nor any claim of injury or damage or the enforcement of any remedy under any
\nstatute, or otherwise.<\/p>\n
-44-<\/p>\n
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
\ndate specified in the Basic Lease Information.<\/p>\n
“Landlord” “Tenant” <\/p>\n
WESTLAKE NORTH ASSOCIATES, LLC, homestore.com, Inc.
\na Delaware limited liability company a Delaware corporation <\/p>\n
By: IDS Westlake North Associates,
\n LLC, a California limited liability By: \/s\/ John Giesecke
\n ———————-
\n company Name: John Giesecke
\n ———————
\n Its: EVP & CFO
\n ———————<\/p>\n
By: \/s\/ David Mgrublian By: \/s\/ Catherine Giffen
\n ————————- ———————–
\n Name: David Mgrublian Name: Catherine Giffen
\n ———————- ———————
\n Its: Managing Director Its: SVP HR & ADMIN
\n ———————- ——————— <\/p>\n
-45- <\/p>\n
EXHIBIT A-1
\n ———–<\/p>\n
PLAN(S) OUTLINING THE PREMISES AND THE BUILDING
\n ———————————————–<\/p>\n
This site plan is used solely for the purpose of identifying the approximate
\nlocation and size of the Premises.<\/p>\n
EXHIBIT A-1
\n -1-<\/p>\n
EXHIBIT A-2
\n ———–<\/p>\n
PLAN OUTLINING THE PROJECT
\n ————————–<\/p>\n
This Project plan is used solely for the purpose of identifying the approximate
\nlocation, size and scope of the of the Project. Building sizes, Project site
\ndimensions, access, common and parking areas, and existing tenants and locations
\nare subject to change at Landlord’s discretion.<\/p>\n
EXHIBIT A-2
\n -1-<\/p>\n
EXHIBIT B
\n ———
\n WORK LETTER AGREEMENT
\n ———————
\n (Tenant Constructs)<\/p>\n
This Work Letter Agreement (“Agreement”) is being entered into as of March
\n7, 2000, between Westlake North Associates, LLC, a Delaware limited liability
\ncompany (“Landlord”) and homestore.com, Inc., a Delaware corporation (“Tenant”),
\nin connection with the execution of the Lease (“Lease”) between Landlord and
\nTenant dated as of the date hereof and pertaining to space in Building I located
\nat 30700 Russell Ranch Road, Westlake Village, California (“Building”).
\nLandlord and Tenant hereby agree as follows:<\/p>\n
1. General.
\n ——- <\/p>\n
1.1 Purpose of Agreement. The purpose of this Agreement is to set forth
\n ——————–
\nhow certain interior improvements in the Building and in the Premises are to be
\nconstructed, who will do such construction, who will pay for such construction,
\nand the time schedule for completion of such construction.<\/p>\n
1.2 Defined Terms. Except as defined in this Agreement to the contrary,
\n ————-
\nall capitalized terms used in this Agreement shall have the same meaning as in
\nthe Lease.<\/p>\n
1.3 Lease Provisions. The provisions of the Lease, except where clearly
\n —————-
\ninconsistent or inapplicable to this Agreement, are incorporated into this
\nAgreement.<\/p>\n
2. Landlord’s Work. Landlord shall, at Landlord’s sole cost and expense
\n —————-
\nand without any deduction from the Tenant Improvement Allowance described below,
\nperform the work necessary to construct the Building, including Base Building
\nImprovements (“Landlord’s Work”), listed on the plans itemized on the attached
\nSchedule 1. Tenant acknowledges receipt of a copy of said plans. Landlord
\n———-
\nagrees to make no change to said plans which would reduce the size of the
\nPremises or reduce in any material way the quality of the Base Building
\nImprovements without Tenant’s written consent. Landlord agrees (i) to construct
\nthe Base Building Improvements in substantial accordance with the plans therefor
\nand in compliance with all applicable laws, and (ii) to obtain warranties of
\ncontractors and suppliers which are customary in the industry.<\/p>\n
3. Tenant’s Designer. Tenant has elected to retain, at Tenant’s sole
\n —————–
\ncost and expense, Wirt Design Group, Inc. as designer (“Tenant’s Designer”) to
\nprepare the Space Plan, Working Drawings and Final Plans (as defined in Sections
\n ——–
\n4.2, 4.3 and 4.5, respectively) for the Tenant Improvements (as defined in
\n—————-
\nSection 12.1). Tenant’s Designer shall be familiar with the Building and with
\n————-
\nall applicable laws, statutes, codes, rules or regulations, including
\nregulations and procedures promulgated by Landlord (collectively “Laws”)
\napplicable to tenant construction in the Building.<\/p>\n
EXHIBIT B
\n -1-<\/p>\n
4. Plans and Specifications.
\n ———————— <\/p>\n
4.1 Tenant Improvement Manual. On or before the effective date of the
\n ————————-
\nLease, Landlord shall deliver to Tenant the current instructions and
\nrequirements for performing tenant improvement work in the Building titled
\n“Tenant Improvement Manual” dated January, 2000 (“Tenant Improvement Manual”) to
\nallow Tenant’s Designer to complete a Space Plan, Working Drawings and Final
\nPlans.<\/p>\n
4.2 Preparation and Approval of Space Plan. Tenant shall submit to
\n ————————————–
\nLandlord a space plan prepared by Tenant’s Designer (“Space Plan”) showing all
\ndemising walls, corridors, entrances, exits, doors, stairwells, interior
\npartitions, and the locations of all offices, rooms and other spaces, including
\nany conference rooms, computer rooms, mini-service kitchens, and reception
\nareas. Landlord acknowledges that Tenant wishes to design creative space
\nemploying such features as exposed ceilings, limited private offices,
\npotentially removal of a portion of the second floor and an outdoor recreation
\narea. Landlord agrees to cooperate with Tenant and Tenant’s desire to achieve a
\ndistinctive work environment which will enhance productivity and aid Tenant’s
\nrecruiting and employee retention programs. As part of its efforts Tenant shall
\nhave the right, subject to Landlord’s consent, to redesign the common areas
\n(lobbies and restrooms) of the Building and the second floor of the Building,
\nsubject to Section 6.3 of the Lease.
\n ———– <\/p>\n
Within three (3) business days after Landlord receives the Space Plan,
\nLandlord shall by notice to Tenant either approve or disapprove the Space Plan,
\nsuch approval not to be withheld unreasonably. Tenant shall make any changes
\nnecessary to respond to any disapproval, including failure to comply with the
\nDesign Criteria, and shall return the revised Space Plan to Landlord, who shall
\napprove or disapprove it within two (2) business days after Landlord receives
\nit. This procedure shall be repeated until Landlord’s final written approval of
\nthe Space Plan has been delivered to Tenant. For purposes of approving the Space
\nPlan, Landlord shall not require that Tenant’s lighting plan be perceived as
\nuniform when viewed from the outside of the Building<\/p>\n
4.3 Preparation and Approval of Working Drawings. Following Landlord’s
\n ——————————————–
\nfinal approval of the Space Plan, Tenant shall submit to Landlord drawings
\nprepared by Tenant’s Designer (“Working Drawings”) which shall be compatible
\nwith the design, construction and equipment of the Building (subject to Section
\n ——-
\n4.2), comply with all Laws, be capable of logical measurement and construction,
\n—
\ncontain all information required for the preparation of the Engineering Drawings
\n(as defined in Section 4.4) and for the construction of the Tenant Improvements,
\n ———–
\nincluding but not limited to all architectural plans and specifications and all
\npartition locations, plumbing locations, special air-conditioning requirements,
\nreflected ceiling plans, office equipment locations, security systems and
\nlocations of electrical and computer outlets and all telephone switches and
\noutlets.<\/p>\n
Within five (5) business days after Landlord receives the Working Drawings
\n(or such portion as has from time to time been submitted), Landlord shall by
\nnotice to Tenant either approve them or designate the specific changes
\nreasonably required to comply with the Design Criteria (subject to Section 4.2).
\n ———–
\nTenant shall make any changes required and shall return the revised Working
\nDrawings to Landlord, who shall approve or disapprove them within three (3)<\/p>\n
EXHIBIT B
\n -2-<\/p>\n
business days after Landlord receives them. This procedure shall be repeated
\nuntil Landlord’s final written approval of all of the Working Drawings has been
\ndelivered to Tenant.<\/p>\n
4.4 Preparation and Approval of Engineering Drawings. Tenant shall submit
\n ————————————————
\nto Landlord for Landlord’s review and approval (a) engineering drawings prepared
\nby R.M. Byrd & Associates, Inc. showing all structural steel modifications to
\nthe base building within the Premises, (b) mechanical drawings prepared by an
\nengineer selected by Tenant and consented to by Landlord showing complete
\nmechanical, electrical and plumbing plans relating to the Tenant Improvements
\nand (c) telecommunications drawings prepared by an engineer or contractor
\nselected by Tenant and approved by Landlord showing all telecommunication and
\ncomputer cabling and all other engineering relating to the Tenant Improvements,
\nincluding any roof installation (collectively, “Engineering Drawings”).<\/p>\n
Within five (5) business days after Landlord receives the Engineering
\nDrawings (or such portion as has from time to time been submitted), Landlord
\nshall by notice to Tenant either approve them or designate the specific changes
\nreasonably required to be made to the Engineering Drawings to comply with the
\nDesign Criteria (subject to Section 4.2). Tenant shall make any necessary
\n ———–
\nchanges and shall return the revised Engineering Drawings to Landlord, who shall
\napprove or disapprove them within three (3) business days after Landlord
\nreceives them. This procedure shall be repeated until Landlord’s final written
\napproval of all of the Engineering Drawings has been delivered to Tenant.<\/p>\n
4.5 Integration of Working Drawings and Engineering Drawings into Final
\n ——————————————————————-
\nPlans. After Landlord has finally approved the Engineering Drawings, Tenant
\n—–
\nshall cause Tenant’s Designer to integrate the approved Working Drawings with
\nthe approved Engineering Drawings into final plans (collectively “Final Plans”)
\nand deliver the Final Plans to Landlord.<\/p>\n
Within three (3) business days after Landlord receives the Final Plans,
\nLandlord shall by notice to Tenant either approve them or designate the specific
\nchanges reasonably required to comply with the Design Criteria (subject to
\nSection 4.2) and prior approvals. Tenant shall make any required changes and
\n———–
\nshall return the revised Final Plans to Landlord, who shall approve or
\ndisapprove them within three (3) business days after Landlord receives them.
\nThis procedure shall be repeated until Landlord’s final written approval of the
\nFinal Plans has been delivered to Tenant.<\/p>\n
4.6 Cost of Design and Engineering. The cost of all architectural and
\n ——————————
\ndesign work, as well as the cost of all engineering and all permits, licenses
\nand fees relating to the development of the Tenant Improvements, shall be paid
\nby Tenant, but may be deducted from the Tenant Improvement Allowance.<\/p>\n
4.7 Landlord’s Review. Tenant agrees and understands that Landlord shall
\n —————–
\nnot be the guarantor of, or responsible for, the correctness or accuracy of the
\nFinal Plans or compliance of the Final Plans with any Laws or for the
\nperformance of Tenant’s Designer and or Tenant’s Contractor of the work related
\nto the design and construction of the Tenant Improvements. However, Landlord
\nshall be responsible for the accuracy of the Base Building Plans, and in the
\nevent of any delay in the time necessary for Tenant to obtain approval of the
\nFinal Plans caused <\/p>\n
EXHIBIT B
\n -3-<\/p>\n
by material inaccuracies in the Base Building Plans, (i) the Anticipated
\nCommencement Date shall be delayed by the period of the delay Tenant
\nexperiences, assuming that Tenant acts promptly to notify Landlord of any such
\ninaccuracy and does what it can reasonably do to avoid the consequences of the
\ndelay and (ii) Landlord shall reimburse Tenant for the reasonable, additional
\ncosts which it incurs and which are caused by such inaccuracies.<\/p>\n
4.8 Permits and Approvals. Tenant shall be solely responsible (although
\n ———————
\nLandlord agrees to cooperate at no cost to Landlord) for obtaining all
\ngovernmental approvals of the Final Plans to the full extent necessary for the
\nissuance of a building permit for the Tenant Improvements based on the Final
\nPlans. Thereafter, Tenant shall also be solely responsible for obtaining all
\nother necessary approvals and permits, including temporary and permanent
\ncertificates of occupancy, from all governmental agencies having authority over
\nthe construction and installation of the Tenant Improvements and shall undertake
\nall steps necessary to insure that the construction of the Tenant Improvements
\nis accomplished in compliance with the Final Plans, all Laws and the
\nrequirements and standards of any insurance underwriting board, inspection
\nbureau or insurance carrier insuring the Premises pursuant to the Lease.<\/p>\n
5. Contractors and Subcontractors. Contractors, subcontractors and other
\n ——————————
\nagents engaged by Tenant, Tenant’s Designer or Tenant’s Contractor (as defined
\nbelow) from time to time to perform services with respect to the Tenant
\nImprovements shall be subject to Landlord’s prior reasonable approval and shall
\nbe subject to the Union Requirement. Each of the contractors and subcontractors
\nlisted in the Tenant Improvement Manual, if selected by Tenant in accordance
\nwith the terms hereof, is deemed approved by Landlord for work in the Building.
\nAll fire life safety work shall be performed by the fire life safety
\nsubcontractor listed in the Tenant Improvement Manual.<\/p>\n
After Landlord has finally approved the Final Plans, Tenant shall then
\nsubmit the approved Final Plans for pricing to one or more licensed contractors
\nselected by Tenant and approved by Landlord. Tenant shall select the contractor
\n(“Tenant’s Contractor”) to construct the Tenant Improvements. Tenant’s
\nContractor shall be duly licensed in the State of California and shall be
\nexperienced in the construction of tenant improvements in similar office
\nbuildings.<\/p>\n
Each contractor which Tenant proposed to use shall be notified in the bid
\npackage that Landlord and Tenant require that such general contractor identify
\nall of the subcontractors it desires to use, which subcontractors shall be
\nmutually approved by Landlord and Tenant. Tenant shall enter into a
\nconstruction contract with Tenant’s Contractor, which contract shall provide for
\na ten percent (10%) retention of each periodic progress payment.<\/p>\n
6. Tenant’s Contractors To Work in Harmony with Landlord’s Contractors.
\n ——————————————————————-
\nTenant shall be solely responsible for the performance of all work performed by
\nTenant’s Contractor and any subcontractor, supplier and the like performing
\nservices with respect to the Tenant Improvements. At Landlord’s reasonable
\nrequest, Tenant shall immediately remove from the Building any contractor or
\nsubcontractor who causes conflict with any other contractor or subcontractor
\nacting under any union or other contract with Landlord or any other tenant, or
\nany contractor or subcontractor of Landlord or any other tenant, and in any
\nevent, Tenant shall be solely responsible for resolving any such conflict.<\/p>\n
EXHIBIT B
\n -4-<\/p>\n
7. Construction of the Tenant Improvements. Promptly following the
\n —————————————
\nexecution of the construction contract pursuant to Section 5, Tenant shall
\n ———
\ndirect Tenant’s Contractor immediately to commence and proceed to complete, in
\naccordance with industry custom and practice, construction of the Tenant
\nImprovements in accordance with the Final Plans. All Tenant Improvement work
\nshall be carried out in accordance with reasonable rules and regulations from
\ntime to time promulgated by Landlord and in such manner as to minimize, as much
\nas reasonably possible, interference with the use of common areas of the
\nBuilding and, prior to the Delivery Date, with Landlord work not yet completed.
\nSuch work shall be performed diligently in a first-class, workmanlike manner and
\nin accordance with all Laws. Prior to commencing such work, Tenant shall
\nfurnish Landlord with evidence satisfactory to Landlord that Tenant and Tenant’s
\nContractor are carrying workers’ compensation insurance in statutorily required
\namounts, comprehensive general liability insurance and all other insurance
\nrequired by the Lease. Landlord shall have the right at all times to enter the
\nPremises to post notices of nonresponsibility. Tenant shall ensure lien-free
\ncompletion of the Tenant Improvements, and Tenant shall comply with all
\nprovisions of the Lease regarding liens. The construction of the initial Tenants
\nImprovements shall be subject to the provisions of Section 2.4 of the Lease
\n ———–
\nregarding Tenant’s right to occupy the Premises for these purposes.<\/p>\n
Landlord or Landlord’s agents shall have the right at all reasonable times
\nto inspect the work, it being understood that Landlord shall be reasonable in
\nits inspection of the work and that Landlord shall recognize, to the extent
\ncommercially reasonable and practicable, the necessity of field changes based on
\nfield conditions. Such inspections shall not unduly interfere with the conduct
\nof Tenant’s work. If Landlord shall give notice of faulty construction or any
\nother deviation from the Final Plans, Tenant shall cause Tenant’s Contractor to
\nmake corrections promptly. However, neither the privilege herein granted to
\nLandlord to make such inspections nor the making of such inspections by Landlord
\nshall operate as a waiver of any rights of Landlord to require good and
\nworkmanlike construction of the Tenant Improvements in accordance with the Final
\nPlans.<\/p>\n
8. Tenant Improvement Allowance. Landlord will, for the initial premises
\n —————————-
\ndemised to Tenant under the Lease (“Initial Premises”), pay (i) $3,388,743 plus
\n(ii) an amount equal to the cost savings (determined reasonably by Landlord)
\nrealized by Landlord on account of Landlord not having to construct any lobby
\nand restrooms which are otherwise a part of the Base Building Improvements on
\naccount of a desire of Tenant to change the same as described in Subsection 4.2
\n ————–
\n(“Tenant Improvement Allowance”) toward the Total Cost (as defined in Section
\n ——-
\n12.2) of the design, engineering and construction of the Tenant Improvements in
\n—-
\nthe Initial Premises. Not more than ten (10%) percent of Tenant Improvement
\nAllowance may be utilized by Tenant towards the cost of programming, space
\nplanning, design and to construction documentation. Landlord will make payments
\nto Tenant’s Contractor from the Tenant Improvement Allowance not more frequently
\nthan once per month in an amount equal to ninety percent (90%) of the amount
\nrequested by Tenant. Landlord shall make each such payment to Tenant prior to
\nthe end of the first full month following the month in which the Request For
\nPayment is received by Landlord but each such Request For Payment must be
\nreceived before the twenty-first (21\/st\/) day of the prior month. Each Request
\nFor Payment shall consist of: (1) Tenant’s request for payment detailing the
\namounts requested, (2) supporting bills, invoices and such other information as
\nLandlord may reasonably require, and (3) conditional lien releases <\/p>\n
EXHIBIT B
\n -5-<\/p>\n
supporting the amounts requested in the current month’s application (in the form
\nspecified in Civil Code Section 3262(d)(1)), together with unconditional
\n ——————
\nreleases supporting the amounts requested in the previous month’s application
\n(in the form specified in Civil Code Section 3262(d)(2)), such releases to be
\n ——————
\nprovided at Landlord’s option, by subcontractors, suppliers and\/or materialmen,
\nin addition to Tenant’s Contractor. The remaining ten percent (10%) (“Retention
\nAmount”) shall be paid to Tenant prior to the end of the first full month
\nfollowing the month in which such final Request For Payment is received by
\nLandlord. Such final Request For Payment must be delivered before the 21\/st\/ day
\nof the prior month after the recording of a valid Notice of Completion of the
\nTenant Improvements and receipt of conditional lien releases (in the form
\nspecified in Civil Code Section 3262(d)(3)) from Tenant’s Contractor,
\n ——————
\nsubcontractors, suppliers, and materialmen, provided, however, that (i) no
\nRetention Amount shall be withheld where the request is for the payment of an
\ninvoice from a supplier who has no lien rights and (ii) the Retention Amount for
\nany given trade shall be paid by Landlord upon the satisfactory completion of
\nall of the work to be performed by that trade and Landlord’s receipt of all lien
\nreleases and any other supporting documentation reasonably requested by Landlord
\nwith respect thereto. In the event the Total Cost of the Tenant Improvements in
\nthe Initial Premises exceeds the Tenant Improvement Allowance, the difference
\nshall be paid by Tenant after the Tenant Improvement Allowance has been
\nexhausted. If the Total Cost of the Tenant Improvements is less than the Tenant
\nImprovement Allowance, the difference may be utilized by Tenant for its
\nfurniture, fixtures and equipment. The Tenant Improvements, whether or not the
\ncost thereof is covered by the Tenant Improvement Allowance, shall become the
\nproperty of Landlord upon expiration or earlier termination of the Lease and
\nshall remain on the Premises at all times during the Term of the Lease, except
\nas may be otherwise provided in the Lease.<\/p>\n
If Tenant notifies Landlord that it has failed to pay or reimburse in
\na timely manner any portion of the Tenant Improvement Allowance required to be
\npaid or reimbursed hereunder, and if such failure continues for fifteen (15)
\ndays after such notice, then (i) if within the fifteen (15) day period Landlord
\ndoes not dispute such failure by notice to Tenant or pay the disputed amount,
\nTenant shall have the right to offset the disputed amount from the rent
\notherwise payable to Landlord under the Lease, together with interest thereon at
\nthe Interest Rate from the date of Tenant’s notice until the date of offset, and
\n(ii) if Landlord disputes such failure by notice to Tenant within such fifteen
\n(15) day period, the dispute shall be resolved by arbitration pursuant to
\nSection 16 of the Lease. If Tenant prevails in the arbitration, Tenant shall
\n———-
\nhave the right to offset the amount of its judgment against the rent otherwise
\npayable to Landlord under the Lease. Except as provided above, Tenant shall
\nhave no right to offset payments or reimbursements due from Landlord under this
\nExhibit B against rent due under the Lease.
\n——— <\/p>\n
9. Change Orders. Tenant may from time to time in writing request or
\n ————-
\napprove changes to the Final Plans (each, a “Change Order”). Except as set
\nforth below, no Change Order will be effective without Landlord’s prior written
\nconsent. Landlord shall only withhold its consent to any Change Order if the
\nChange Order does not comply with the Design Criteria. Tenant shall pay for
\neach Change Order out of the Tenant Improvement Allowance and, to the extent the
\nthen unallocated portion, if any, of the Tenant Improvement Allowance is not
\nsufficient, Tenant shall pay for each such Change Order from its own funds.<\/p>\n
EXHIBIT B
\n -6-<\/p>\n
Landlord shall respond to Tenant’s request for a Change Order within
\nthree (3) business days after all documentation reasonably required by Landlord
\nhas been delivered to those persons whom Landlord desires to consider the same –
\nin the absence of such response, the Change Order in question shall be deemed
\napproved. Furthermore, notwithstanding anything to the contrary set forth
\nherein, Tenant shall notify Landlord of, but not be required to obtain
\nLandlord’s prior written consent with respect to, any Change Order which does
\nnot affect the structure of the Building or the Building systems and does not
\ninvolve anything which can be seen from the exterior of the Building so long as
\nit does not cost in excess of $5,000.00.<\/p>\n
10. Default. Any default by Tenant under the terms of this Agreement
\n ——-
\nshall constitute a default under the Lease and shall entitle Landlord to
\nexercise all remedies set forth in the Lease. Tenant shall have any and all
\nrights to remedy such default pursuant to the provisions of the Lease.<\/p>\n
11. Landlord’s Oversight Fee. Landlord shall be paid a fee of $101,662.29
\n ————————
\nfor Landlord’s performance of its review obligation under this Agreement,
\npayable ratably as Tenant’s work progresses. In addition, Tenant shall
\nreimburse Landlord for up to ten thousand dollars ($10,000) of the cost of
\noutside consultants, including without limitation structural, mechanical and
\nelectrical engineers, required in connection with Tenant’s design and
\nconstruction of the Tenant Improvements. Landlord may deduct these amounts from
\nthe Tenant Improvement Allowance. Landlord’s construction manager shall
\nsafeguard the interests of Tenant as well as represent Landlord.<\/p>\n
12. Certain Definitions.
\n ——————- <\/p>\n
12.1 Tenant Improvements. “Tenant Improvements” means all improvements
\n ——————-
\nshown on the Final Plans as modified by any Change Order approved by Landlord,
\nbut Tenant Improvements shall not include any of Tenant’s furniture, telephone
\nsystems, computer systems or other personal property.<\/p>\n
12.2 Total Cost. “Total Cost” includes (a) all design and engineering fees
\n ———-
\nincurred in connection with the preparation of the Space Plan, Working Drawings,
\nEngineering Drawings and Final Plans (including the cost of Landlord’s
\nconsulting engineers and other consultants subject to the limitation set forth
\nin Section 11 above), (b) costs of permits, fees and taxes, (c) testing and
\n ———-
\ninspecting costs, (d) the actual costs and charges for material and labor,
\ncontractor’s profit and contractor’s general overhead incurred by Tenant in
\nhaving the Tenant Improvements constructed, (e) Landlord’s oversight fee under
\nSection 11 and (f) all other costs incurred in connection with the design and
\n———-
\nconstruction of the Tenant Improvements.<\/p>\n
13. Labor. All workers who perform work on the Project which is paid for,
\n —–
\nin whole or in part, with the proceeds of the Tenant Allowance must be members
\nin good standing of the union having jurisdiction over the trade work being
\nperformed, if applicable, and each contractor performing such work on the
\nProject must be a party to a union contract, if the type of work performed by
\nthe contractor is covered by the Union Requirement. The “Union Requirement” is
\nthe obligation to (a) be a party to or bound by a collective bargaining
\nagreement with a labor organization affiliated with Building and Construction
\nTrade Department of the AFL-CIO, if <\/p>\n
EXHIBIT B
\n -7-<\/p>\n
applicable, to the trade or activity in question which is paid for, in whole or
\nin part, with the proceeds of the Tenant Allowance, and (b) employ only workers
\nof such labor organizations to perform work within their respective
\njurisdictions.<\/p>\n
14. Reasonable Diligence. Both Landlord and Tenant agree to use
\n ——————–
\nreasonable diligence in performing all of their respective obligations and
\nduties under this Agreement and in proceeding with the construction and
\ncompletion of all Tenant Improvements in the Premises.<\/p>\n
15. Clean-Up Expenses. Landlord shall clean its work areas in the
\n —————–
\nPremises immediately prior to the Delivery Date for the continuation of the
\nconstruction of the Tenant Improvements.<\/p>\n
16. No Miscellaneous Charges. Neither Tenant nor its contractor shall be
\n ————————
\ncharged for, and Landlord shall provide, parking for Tenant’s architects,
\ndesigners, contractors and subcontractors (including those people working on the
\nTenant Improvements) or for the use of electricity, water, toilet facilities,
\nHVAC, security, elevators [and\/or hoists] during the construction period or the
\nmove-in period. All such equipment, areas, elevators and utilities shall be
\nmade reasonably available to Tenant’s contractor and the subcontractors during
\nthe construction period and the move-in period. In this connection the HVAC
\nsystems for the Premises shall be run prior to the Commencement Date only for
\ntesting and balancing purposes.<\/p>\n
EXHIBIT B
\n -8-<\/p>\n
IN WITNESS WHEREOF, the parties have executed this Work Letter Agreement as
\nof the date first written above.<\/p>\n
LANDLORD:<\/p>\n
WESTLAKE NORTH ASSOCIATES, LLC,
\n a Delaware limited liability company<\/p>\n
By: IDS Westlake North Associates, LLC, a
\n California limited liability company<\/p>\n
By: \/S\/ David Mgrublian
\n —————————
\n Name: David Mgrublian<\/p>\n
Its: \/S\/ Managing Director
\n —————————<\/p>\n
Date:
\n ————————— <\/p>\n
TENANT:<\/p>\n
homestore.com, Inc.
\n a Delaware corporation<\/p>\n
By: \/S\/ John Giesecke
\n —————————
\n Name: John Giesecke<\/p>\n
Its: EVP & CFO
\n —————————<\/p>\n
By: \/S\/ Catherine Giffen
\n —————————
\n Name: Catherine Giffen<\/p>\n
Its: SVP HR & ADMIN
\n —————————<\/p>\n
Date:
\n ————————— <\/p>\n
EXHIBIT B
\n -9-<\/p>\n
SCHEDULE 1
\n TO
\n WORKLETTER AGREEMENT<\/p>\n
Description of Base Building Improvements<\/p>\n
SCHEDULE 1
\n -1-<\/p>\n
EXHIBIT C
\n ———<\/p>\n
MEMORANDUM CONFIRMING TERM
\n ————————–<\/p>\n
THIS MEMORANDUM, made as of _______________, ____, by and between WESTLAKE
\nNORTH ASSOCIATES, LLC, a Delaware limited liability company (“Landlord”), and
\nhomstore.com, Inc. (“Tenant”).<\/p>\n
W I T N E S S E T H:<\/p>\n
Recital of Facts:
\n —————–<\/p>\n
Landlord and Tenant entered into the Lease (the “Lease”) dated _______,
\n2000. Words defined in the Lease have the same meanings in this Memorandum.<\/p>\n
NOW, THEREFORE, in consideration of the covenants in the Lease, Landlord
\nand Tenant agree as follows:<\/p>\n
1. Landlord and Tenant hereby confirm that:<\/p>\n
(a) The Commencement Date under the Lease is ______________________,
\n___________; <\/p>\n
(b) The Expiration Date under the Lease is ______________________,
\n___________; and<\/p>\n
(c) The date on which Tenant’s obligation to pay rent begins under the
\nLease is ______________________, ___________.<\/p>\n
2. Tenant hereby confirms that:<\/p>\n
(a) All commitments, representations and assurances made to induce Tenant
\nto enter into the Lease have been fully satisfied;<\/p>\n
(b) All improvements to the Project and in the Premises to be constructed
\nor installed by Landlord have been completed and furnished in accordance with
\nthe Lease to the satisfaction of Tenant other than minor punch list items of
\nwhich Tenant has notified Landlord, although Landlord shall not hereby be
\nreleased from its obligation to pay for latent defects in the Base Building
\nImprovements which are unknown to Tenant; and<\/p>\n
(c) Tenant has accepted and is in full and complete possession of the
\nPremises.<\/p>\n
3. This Memorandum shall be binding upon and inure to the benefit of
\nLandlord and Tenant and their permitted successors and assigns under the Lease.
\nThe Lease is in full force and effect.<\/p>\n
EXHIBIT C
\n -1-<\/p>\n
IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum as of
\n the date first hereinabove written.<\/p>\n
“Landlord” “Tenant”<\/p>\n
WESTLAKE NORTH ASSOCIATES, LLC, homestore.com, Inc.,
\na Delaware limited liability company a Delaware corporation <\/p>\n
By IDS Westlake North Associates, By: __________________________
\n LLC, a California limited liability Name: ________________________
\n company Its: _________________________ <\/p>\n
By: __________________________ By: __________________________
\n Name: ________________________ Name: ________________________
\n Its: _________________________ Its: _________________________<\/p>\n
EXHIBIT C
\n -2-<\/p>\n
EXHIBIT E<\/p>\n
RULES AND REGULATIONS
\n ———————<\/p>\n
1. The sidewalks, entrances, exits, passages, parking areas, courts,
\nelevators, vestibules, stairways, corridors, terraces, lobbies or halls shall
\nnot be obstructed or used for any purpose other than ingress and egress. No
\nTenant or Tenant’s Employee shall go up on the roof of the Building except as
\nspecifically permitted by the Lease.<\/p>\n
2. No curtains, blinds, shades or screens shall be attached to or hung
\nin, or used in connection with, any window of the Premises other than Landlord’s
\nstandard window covering without Landlord’s prior consent. All electric ceiling
\nfixtures hung in offices or spaces along the perimeter of the Building must be
\nconsistent with the initial plan for the Building, of a quality, type, and
\ndesign and bulb color approved by Landlord. Neither the interior nor exterior
\nof any windows shall be coated or otherwise sun-screened without consent of
\nLandlord.<\/p>\n
3. No signs, picture, placard, advertisement, notice, lettering,
\ndirection or handbill shall be exhibited, distributed, painted, installed,
\ndisplayed, inscribed, placed or affixed by any Tenant on any part of the
\nexterior of Premises or the interior of the Premises which is visible from the
\nexterior of the Premises, the Building or the Project without the prior consent
\nof Landlord. In the event of the violation of the foregoing by any Tenant,
\nLandlord may remove or dispose of same without any liability, and may charge the
\nexpense incurred in such removal to the Tenant violating this rule.<\/p>\n
4. Tenant shall not drill into, or in any way deface any part of the
\nPremises. No boring, cutting or stringing of wires or laying of linoleum or
\nother similar floor coverings shall be permitted, except with the prior consent
\nof the Landlord.<\/p>\n
5. No vehicles, birds or animals of any kind shall be brought into or
\nkept in or about the Premises or the Building. Tenant may operate a cafeteria in
\nthe Premises, subject to compliance with the Design Criteria.<\/p>\n
6. The Premises shall not be used for manufacturing or for the storage of
\nmerchandise except as such storage may be incidental to the use of the Premises
\nfor general office purposes. No Tenant shall occupy or permit any portion of
\nthe Premises to be occupied for the manufacture or sale of liquor, narcotics, or
\ntobacco in any form, or as a medical office, or as a barber or manicure shop, or
\nas an employment bureau, or as a travel agency, without the consent of Landlord.
\nTenant shall not sell or permit the sale of newspapers, magazines, periodicals,
\ntheater tickets or any other goods or merchandise in or on the Premises other
\nthan to its employees. The Premises shall not be used for lodging or sleeping
\nor for any illegal purposes.<\/p>\n
7. No Tenant shall make, or permit to be made, any unseemly noises which
\ndisturb other occupants of the Project, whether by the use of any musical
\ninstrument, radio, television, phonograph, screening room, loud, unusual or
\ndisruptive noise, or in any other way. No Tenant shall use, keep or permit to
\nbe used any foul or noxious gas or substance in, on or about the Premises.<\/p>\n
EXHIBIT E
\n -1-<\/p>\n
8. No Tenant nor any of Tenant’s Employees shall at any time bring or
\nkeep within the Premises or the Building any flammable, combustible or explosive
\nfluid, chemical substance, or material. Electric space heaters shall not be used
\nat any time by Tenant.<\/p>\n
9. Tenant must furnish Landlord with keys to all parts of the Premises
\nother than security areas. Tenant must, upon the termination of its tenancy,
\ngive, return, and restore to Landlord all keys of stores, offices, vaults, and
\ntoilet rooms, either furnished to, or otherwise procured by Tenant, and in the
\nevent at any time of any loss of keys so furnished, Tenant shall pay to Landlord
\nthe cost of replacing the same or of changing the lock or locks opened by such
\nlost key if Landlord shall deem it necessary to make such changes.<\/p>\n
10. No furniture shall be placed in front of the Building without the
\nprior written consent of Landlord. Landlord shall have the right to remove all
\nnon-permitted furniture, without notice to Tenant, and at the expense of Tenant.<\/p>\n
11. No Tenant shall purchase water, ice, towel, janitorial or maintenance,
\nor other like services, from any person or persons disapproved in writing by the
\nLandlord. No Tenant shall obtain or purchase food or beverages on the Project
\nfrom any vendor or supplier except at hours and under regulations fixed by
\nLandlord.<\/p>\n
12. The Building may not be contained in any advertising sponsored or
\npermitted by Tenant without Landlord’s prior approval, which it may condition or
\nwithhold for any reason.<\/p>\n
13. Tenant shall be responsible for all persons whom it causes to be
\npresent in the Building and shall be liable to Landlord for all acts of such
\npersons. In the case of invasion, riot, public excitement, act of God, or other
\ncircumstance rendering such action advisable in Landlord’s opinion, Landlord
\nreserves the right to prevent access of all persons, including Tenant, to the
\nBuilding during the continuance of the same by such actions as Landlord may deem
\nappropriate, including the closing and locking of doors.<\/p>\n
14. Any persons employed by Tenant to do any work in or about the Premises
\nshall, while in the Building and outside of the Premises, be subject to and
\nunder the control and direction of the superintendent of the Building (but shall
\nnot be deemed to be an agent or servant of said superintendent or of the
\nLandlord), and Tenant shall be responsible for all acts of such persons.<\/p>\n
15. Canvassing, soliciting and peddling in the Building are prohibited and
\neach Tenant shall cooperate to prevent the same.<\/p>\n
16. No air-conditioning unit or other similar apparatus shall be installed
\nor used by Tenant without the consent of Landlord.<\/p>\n
17. Tenant shall faithfully observe and comply with the terms of any and
\nall covenants, conditions and restrictions recorded against the Project.<\/p>\n
18. In the event the Building or the Premises is or later becomes equipped
\nat Landlord’s expense (including through use of the Tenant Allowance) with an
\nelectronic access control <\/p>\n
EXHIBIT E
\n -2-<\/p>\n
device, Tenant shall give Landlord the sum of twenty-five dollars ($25.00) for
\neach identification key or card issued to Tenant as a deposit against the return
\nof the identification key or card to Landlord.<\/p>\n
19. For all purposes of this Exhibit, the term “Tenant” shall include and
\nencompass Tenant’s Employees and Tenant’s contractors.<\/p>\n
EXHIBIT E
\n -3-<\/p>\n
EXHIBIT F<\/p>\n
OPTION TO EXTEND\/FAIR MARKET RENTAL RATE
\n —————————————-<\/p>\n
1. OPTION. Tenant shall have two options to extend the term of this
\n ——
\nLease (the “Renewal Options”) on all the provisions contained in this Lease
\nexcept as to the Rent, except as otherwise provided herein. The first Renewal
\nOption shall be for an additional five (5) year period (the “First Option Term”)
\nfollowing the expiration of the initial Term set forth in Section 2.1 of the
\n ———–
\nLease (the “Initial Term”). The second Renewal Option shall be for an additional
\nfive (5) year period (the “Second Option Term”) following expiration of the
\ninitial Term, as extended by the First Option Term. A Renewal Option shall be
\nsolely exercised by Tenant giving written notice of its exercise of the Renewal
\nOption (the “Option Notice”) to Landlord at least twelve (12) months, but not
\nmore than fifteen (15) months, before the expiration of the Initial Term (or, in
\nthe case of the Second Option Term, on or before twelve (12) months, but not
\nmore than fifteen (15) months, before the expiration of the First Option Term).
\nIf such Option Notice is not sent during such three (3) month period, such
\nRenewal Option shall be null and void and in no event shall Tenant have any
\nright to extend the Term or renew the Lease. Tenant may not exercise the Renewal
\nOption for the Second Term Option Term unless it has first exercised the Renewal
\nOption for the First Option Term. At Tenant’s request made at any time during
\nthe three (3) month period prior to the last date for exercise of each Renewal
\nOption, Landlord will negotiate with Tenant in good faith the Fair Market Rental
\nRate for the Option Term in question.<\/p>\n
2. OPTION PERSONAL. The Renewal Options are personal to Tenant and may
\n —————
\nnot be exercised or assigned, voluntarily or involuntarily, by, or to, any
\nperson or entity other than Tenant. The Renewal Options are not assignable
\nseparate and apart from this Lease. In the event that, at the time the Renewal
\nOption is exercisable by Tenant, this Lease has been assigned other than to an
\naffiliate, or a sublease or subleases exist as to thirty-five percent (35%) or
\nmore of the Premises other than to an affiliate, the Renewal Options shall be
\ndeemed null and void and none of Tenant, any assignee, or any sublessee shall
\nhave the right to exercise the Renewal Options.<\/p>\n
3. EFFECT OF DEFAULT ON RENEWAL OPTIONS. Tenant shall have no right to
\n ————————————
\nexercise a Renewal Option (a) if, at the time permitted for the exercise of such
\nRenewal Option, or at the commencement of an Option Term, an Event of Default
\nexists under any of the provisions of this Lease or a notice of default has been
\ngiven by Landlord and the default described in the notice is not cured by Tenant
\nwithin the time permitted in this Lease for cure, if any, or (b) in the event
\nthat Landlord has given to Tenant two (2) or more notices of default under this
\nLease during the twelve (12) month period prior to the time that Tenant attempts
\nto exercise the Renewal Option.<\/p>\n
4. BASIC RENT DURING THE OPTION TERM. Tenant shall pay to Landlord, as
\n ———————————
\nBase Rent for the Premises during each Option Term, the Fair Market Rental Rate,
\nwhich means the rental rate (including all applicable rental increases and
\ntenant concessions) being charged to tenants in new, direct lease, non-equity
\ntransactions as of six (6) months prior to the <\/p>\n
EXHIBIT F
\n -1-<\/p>\n
commencement of the Option Term in question for comparable, unencumbered space
\nby Landlord in the Project and for comparable, unencumbered space in similar
\nbuildings in the vicinity of the Project, with similar amenities, taking into
\nconsideration the size, location, floor level, the proposed term of the Option
\nTerm, the extent of the services to be provided, CAM Expenses and Property
\nTaxes, credit enhancements, the security deposit, the value of existing tenant
\nimprovements and any other relevant terms and conditions, in each instance
\ntaking into account any so-called “free rent” and any other “tenant concessions”
\nthen being offered to prospective new tenants in the Project or comparable
\nbuildings. For purposes of the foregoing determination, the parties and any
\narbitrator shall assume that (i) no free rent is granted in comparable
\ntransactions for any period prior to the date when the Tenant takes possession
\nof the premises after having completed its tenant improvements and (ii) the
\nspace in question has been built out for a general office use. All Rent payable
\nduring each Option Term shall be payable in the same manner and under the same
\nterms and conditions as Rent is paid during the Initial Term.<\/p>\n
5. DOCUMENTATION. Landlord and Tenant shall execute and deliver
\n ————-
\nappropriate documentation to evidence any renewal of the Lease and the terms and
\nconditions of the Lease during an Option Term. Landlord shall bear the cost of
\nits attorneys and personnel in documenting such renewal.<\/p>\n
6. TERMS. All terms used in this Exhibit, unless otherwise defined in
\n —–
\nthis Exhibit, shall have the same meaning as the terms defined in the Lease.<\/p>\n
7. FAIR MARKET RENTAL RATE. Landlord shall determine the Fair Market
\n ———————–
\nRental Rate using its good faith judgment. Landlord shall use its best efforts
\nto provide written notice of such amount within thirty (30) days (but in no
\nevent later than sixty (60) days) after Tenant sends the Option Notice to
\nLandlord exercising a Renewal Option. Tenant shall have fifteen (15) days (the
\n“Tenant’s Review Period”) after receipt of Landlord’s notice of the new rental
\nwithin which to accept such rental or to reasonably object thereto in writing.
\nIn the event Tenant objects, Landlord and Tenant shall attempt to agree upon
\nsuch Fair Market Rental Rate, using their best good faith efforts. If Landlord
\nand Tenant fail to reach agreement within fifteen (15) days following Tenant’s
\nReview Period (the “Outside Agreement Date”), then each party shall place in a
\nseparate sealed envelope their final proposal as to Fair Market Rental Rate and
\nsuch determination shall be submitted to arbitration in accordance with
\nsubsections (a) through (e) below. Failure of Tenant to so elect in writing
\nwithin Tenant’s Review Period shall conclusively be deemed its rejection of the
\nnew rental determined by Landlord. In the event that Landlord fails to timely
\ngenerate the initial written notice of Landlord’s opinion of the Fair Market
\nRental Rate which triggers the negotiation period of this provision, then Tenant
\nmay commence such negotiations by providing the initial notice, in which event
\nLandlord shall have fifteen (15) days (“Landlord’s Review Period”) after receipt
\nof Tenant’s notice of the new rental within which to accept such rental. In the
\nevent Landlord does not give its written consent to Tenant’s proposed rental in
\ntimely fashion, such proposed rental shall be deemed rejected and Landlord and
\nTenant shall attempt in good faith to agree upon such Fair Market Rental Rate,
\nusing their best good faith efforts. If Landlord and Tenant fail to reach
\nagreement within fifteen (15) days following Landlord’s Review Period (which
\nshall be, in such event, the “Outside Agreement Date” in lieu of the above
\ndefinition of such date), then each party shall <\/p>\n
EXHIBIT F
\n -2-<\/p>\n
place in a separate sealed envelope its final proposal as to Fair Market Rental
\nRate and such determination shall be submitted to arbitration in accordance with
\nsubsections (a) through (e) below.<\/p>\n
(a) Landlord and Tenant shall meet with each other within five (5)
\nbusiness days of the Outside Agreement Date and exchange the sealed envelopes
\nand then open such envelopes in each other’s presence. If Landlord and Tenant do
\nnot mutually agree upon the Fair Market Rental Rate within one (1) business day
\nof the exchange and opening of envelopes, then, within ten (10) business days of
\nthe exchange and opening of envelopes Landlord and Tenant shall agree upon and
\njointly appoint a single arbitrator who shall by profession be a real estate
\nbroker who shall have been active over the five (5) year period ending on the
\ndate of such appointment in the leasing of commercial properties in the vicinity
\nof the Building. Neither Landlord nor Tenant shall consult with such broker as
\nto his or her opinion as to Fair Market Rental Rate prior to the appointment.
\nThe determination of the arbitrator shall be limited solely to the issue of
\nwhether Landlord’s or Tenant’s submitted Fair Market Rental Rate for the
\nPremises is the closer to the actual Fair Market Rental Rate for the Premises as
\ndetermined by the arbitrator, taking into account the requirements of this
\nExhibit regarding same. Such arbitrator may hold such hearings and require such
\nbriefs as the arbitrator, in his or her sole discretion, determines is
\nnecessary.<\/p>\n
(b) The arbitrator shall, within thirty (30) days of his or her
\nappointment, reach a decision as to whether the parties shall use Landlord’s or
\nTenant’s submitted Fair Market Rental Rate, and shall notify Landlord and Tenant
\nthereof.<\/p>\n
(c) The decision of the arbitrator shall be binding upon Landlord and
\nTenant, except as provided below.<\/p>\n
(d) If Landlord and Tenant fail to agree upon and appoint an arbitrator,
\nthen the appointment of the arbitrator shall be made by the Presiding Judge of
\nthe Los Angeles Superior Court, or, if he or she refuses to act, by any judge
\nhaving jurisdiction over the parties.<\/p>\n
(e) The cost of arbitration shall be paid by Landlord and Tenant equally.<\/p>\n
(8) Exceptions. While the terms of this Lease (other than Rent) are
\n ———-
\napplicable to each Option Term, the provisions of the Work Letter Agreement are
\nnot, and the provisions of the Work Letter Agreement shall not apply during any
\nOption Term. In addition, there shall be no right to extend the Term of this
\nLease beyond the end of the Second Option Term.<\/p>\n
EXHIBIT F
\n -3-<\/p>\n
EXHIBIT I<\/p>\n
RIGHT OF FIRST OFFER
\n ——————–<\/p>\n
(Leasing and Sale of Project)<\/p>\n
1. Leasing.
\n ——- <\/p>\n
(a) After the Lease has been executed and delivered by Landlord and
\nTenant, Landlord shall notify Tenant if Landlord has a bona fide prospective
\ntenant for more than twenty percent (20%) of the space on the second floor of
\nBuilding II or any space in Building III (the “Lease Option Space”). The notice
\n(“Landlord’s Notice”) shall identify (i) the Lease Option Space together with
\nall other space then available for lease in the Building in which the Lease
\nOption Space is located (together with the Lease Option Space, the “Available
\nSpace”), (ii) the term of the proposed lease, which shall begin as provided
\nbelow and shall end two (2) years after the expiration of the Lease (with
\noptions comparable to those under the Lease, although the failure of Tenant to
\nexercise a Lease option shall void contemporaneous or future options under a
\nlease of the Lease Option Space or Available Space); (iii) the Base Rent it
\nproposes for the Lease Option Space and the Available Space; (iv) the Tenant
\nImprovement Allowance which it proposes to give for the Lease Option Space and
\nthe Available Space; (v) the date anticipated for delivery of the Lease Option
\nSpace and the Available Space to Tenant for the construction of its tenant
\nimprovements; (vi) the period anticipated for the construction of tenant
\nimprovements and the date for rent commencement, which in each case shall be
\ncommercially reasonable given when the Lease Option Space and the Available
\nSpace are scheduled for delivery; and (vii) any other terms it proposes to seek
\nfor the Lease Option Space and the Available Space which are different from the
\nterms of this Lease. Together with all of the terms of this Lease which are not
\ninconsistent with the foregoing [including, without limitation, a letter of
\ncredit and security deposit which are comparable and proportional to those in
\nthis Lease], the provisions in clauses (i) through (vii) are referred to herein,
\ncollectively, as the “Lease Option Terms”. Tenant shall have the right,
\nexercisable within five (5) business days after its receipt of Landlord’s
\nNotice, to notify Landlord that Tenant: (A) agrees to lease the Lease Option
\nSpace or the Available Space on the Lease Option Terms or (B) agrees to lease
\nthe Lease Option Space or the Available Space on “Negotiated Terms”, which means
\nall the Lease Option Terms other than those described in clauses (iii), (iv),
\n(vi) and (vii) thereof, which would be as negotiated between Landlord and Tenant
\nand, in the absence of agreement, determined by arbitration pursuant to Section
\n16. In its notice (if any), Tenant shall specify whether it wishes to lease just
\nthe Lease Option Space or the Available Space.<\/p>\n
(A) If Landlord’s Notice is as to Building II, Tenant shall have no
\n further rights under this Section 1 with respect to any Available Space in
\n ———
\n Building. II as to which it does not exercise its option.<\/p>\n
(B) If Landlord’s Notice is as to Building III, and the Lease Option
\n Space identified in Landlord’s Notice represents twenty percent (20%) or
\n more of the Available Space in Building III, Tenant shall have no further
\n rights under this Section 1 with
\n ——— <\/p>\n
EXHIBIT I
\n -1-<\/p>\n
respect to any Available Space in Building III as to which it did not
\n exercise its option. In such case, Landlord may lease any unleased
\n Available Space to any third party on such terms as it elects, without
\n reference to this Exhibit I. However, if the Lease Option Space identified
\n ———
\n in Landlord’s Notice is less than twenty percent (20%) of the Available
\n Space in Building III, then the provisions of this Section 1 shall continue
\n ———
\n to apply to any other space in Building III as to which Tenant does not
\n exercise its option and as to which Landlord has a bona fide prospective
\n tenant; provided, that if Tenant did not exercise its option as to the
\n Lease Option Space, Landlord may lease such space as provided in the
\n preceding sentence.<\/p>\n
In the event that Tenant exercises its option to lease the Lease Option
\nSpace, it shall deposit with Landlord an amount equal to twelve (12) months’
\nrent for the Lease Option Space, determined from the proposal in clause (iii)
\nabove. In the event that Tenant is required to enter into a lease of such space
\nbut does not do so within ten (10) days after the last date for execution of
\nsuch lease (which shall be the time set forth in paragraph (b) below, but in the
\nevent of an arbitration of a term of the new lease subject to arbitration, then
\nten (10) business days following the presentation to Tenant by Landlord of an
\nexecution copy of a lease which is consistent with the terms of the decision in
\nsuch arbitration), then Tenant shall be deemed in default hereunder and, among
\nits other remedies, Landlord shall have the right to terminate Tenant’s rights
\nwith respect to the Lease Option Space and any further rights of Tenant under
\nthis Section 1.
\n ——— <\/p>\n
(b) If Tenant notifies Landlord in timely fashion of its agreement to
\nlease the Lease Option Space on the Lease Option Terms, then Landlord shall
\ndeliver to Tenant within ten (10) business days a form of lease and related
\ndocuments in order to memorialize the lease of the Lease Option Space. The terms
\nof such lease shall be on the Lease Option Terms plus such additional terms (the
\n“implementing terms”) as are necessary to implement the new lease, in Landlord’s
\njudgment, in a fair and reasonable manner (for example, Tenant’s Percentage
\nunder the new lease shall be the RSF of the new premises divided by the RSF of
\nthe building in which the new premises are located.) The parties shall execute
\nand deliver the new lease and related documents (including delivery by Tenant of
\nthe required letter of credit) within fifteen (15) business days after Tenant’s
\nnotice to Landlord. Any disputes regarding the implementation of this paragraph
\n(b) shall be determined by arbitration in accordance with Section 16 of the
\n ———-
\nLease.<\/p>\n
(c) If Tenant notifies Landlord that it elects Negotiated Terms for the
\nnew lease, then the parties shall promptly negotiate in good faith those terms
\nof the new lease which are subject to negotiation (i.e., the terms in clauses
\n(iii), (iv), (vi) and (vii) of paragraph (a) above). If the parties have not
\nagreed on all of such terms within thirty (30) days after Tenant’s notice to
\nLandlord, at the election of either party such terms of the new lease shall be
\ndetermined by arbitration in accordance with Section 16. For this purpose, each
\n ———-
\nparty shall submit to the other, within ten (10) days after request of either of
\nthem, a comprehensive proposal for all of the terms subject to negotiation. Each
\nparty’s proposal shall then be submitted to arbitration, and the arbitrator
\nshall determine which party’s proposal, together with the provisions of the
\nLease Option Terms which are otherwise applicable, most nearly approximates the
\nFair Rental Value of the Lease Option Space. The Fair Rental Value of the Lease
\nOption Space means (1) the binding Lease Option Terms which are otherwise
\napplicable, (2) one hundred five percent (105%) of (x) the rental rate
\n(including all applicable rental increases and tenant concessions) being charged
\nto<\/p>\n
EXHIBIT I
\n -2-<\/p>\n
tenants in new, direct lease, non-equity transactions as of six (6) months prior
\nto the commencement of the Lease Option term in question for comparable,
\nunencumbered space by Landlord in the Project or, if not enough comparable
\ntransactions exist in the Project, then (y) the rental rate being charged to
\ntenants in new, direct lease, non-equity transactions as of the commencement of
\nthe Lease Option term in question for comparable, unencumbered space in similar
\nbuildings in the vicinity of the Project, with similar amenities, taking into
\nconsideration the size, location, floor level, the proposed term of the Option
\nTerm, the extent of the services to be provided, CAM Expenses and Property
\nTaxes, credit enhancements, the security deposit, the value of existing tenant
\nimprovements and any other relevant terms and conditions, in each instance
\ntaking into account any so-called “free rent” and any other “tenant concessions”
\nthen being offered to prospective new tenants in the Project or comparable
\nbuildings and (3) otherwise, on the implementing terms. Landlord’s judgment as
\nto the implementing terms shall control unless the arbitrator determines such
\njudgment to have been unreasonable.<\/p>\n
2. Sale. In the event Landlord desires to sell its interest in the
\n —-
\nProject or the Building, it shall first notify Tenant of such desire. If Tenant
\npromptly notifies Landlord of Tenant’s desire to purchase Landlord’s interest in
\nthe Project or the Building (whichever was the subject of Landlord’s notice),
\nthen for a period of thirty (30) days after Landlord’s notice to Tenant,
\nLandlord and Tenant shall negotiate in good faith the sale of Landlord’s
\ninterest in the Project to Tenant. If a fully binding, written agreement
\ncontaining all of the terms and provisions of a sale of Landlord’s interest in
\nthe Project or the Building to Tenant is not executed and delivered by Landlord
\nand Tenant within such thirty (30) day period, Landlord shall be free to sell
\nall or any portion of its interest in the Project or the Building at any price
\nand on any terms, regardless of whether such price or terms are similar or
\ndissimilar to those discussed by Landlord and Tenant. In addition, Tenant shall
\nhave no further rights under this Section 2. The right in this Section 2 is
\n ——— ———
\npersonal to Tenant and may not be assigned or otherwise transferred either with
\nor without a transfer of Tenant’s interest in this Lease.<\/p>\n
EXHIBIT I
\n -3-<\/p>\n
EXHIBIT J<\/p>\n
CLEANING SCHEDULE
\n —————–<\/p>\n
OFFICE AREAS:
\n———— <\/p>\n
NIGHTLY SERVICES – FIVE (5) NIGHTS PER WEEK
\n——————————————-<\/p>\n
. Empty wastebaskets, ashtrays and other trash receptacles. Ashtrays are
\n to be wiped clean. Trash is to be removed from building to designated
\n pick-up area.<\/p>\n
. All chairs and wastebaskets to be returned to proper position after
\n cleaning.<\/p>\n
. Dust mop all composition floors with specially treated dust mops.<\/p>\n
. Vacuum carpets.<\/p>\n
. Thoroughly dust desks, office furniture and office accessories. Desk-
\n —–
\n top papers, desk accessories are not to be moved.
\n ———————————————— <\/p>\n
. Remove fingerprints, soil smudges from doors, door frames and wall-
\n switch plates.<\/p>\n
. Spot-clean entrance door glass and all partition glass.<\/p>\n
. Clean glass desk tops. Desk tops must be completely cleared of all
\n ——————————————-
\n papers.
\n ——<\/p>\n
PUBLIC AREAS:
\n———— <\/p>\n
NIGHTLY SERVICES – FIVE (5) NIGHTS PER WEEK
\n——————————————-<\/p>\n
. Clean, polish and sanitize drinking fountains.<\/p>\n
. Dust-mop all composition floors with specially treated dust mop. Damp-
\n mop and buff, as necessary.<\/p>\n
. Thoroughly vacuum all corridor carpets.<\/p>\n
. Remove fingerprints, soil smudges from doors, door frames and wall-
\n switch plates.<\/p>\n
. Empty wastebaskets, ashtrays and other trash receptacles. Ashtrays are
\n to be wiped clean. Trash is to be removed from building to designated
\n pick-up area. (Trash removal from building to be provided by outside
\n trash-removal vendor.)<\/p>\n
. Spot-clean entrance door glass and all partition glass.<\/p>\n
EXHIBIT J
\n -1-<\/p>\n
. Clean and polish elevator doors and control panels. Thoroughly clean
\n inside of elevator cabs. Vacuum door tracks and saddles.<\/p>\n
. Sand jars to be wiped clean and fine-screened.<\/p>\n
. Spot-mop traffic areas for spillage.<\/p>\n
. Police all outside entrance-ways to building lobby.<\/p>\n
OFFICE AND PUBLIC AREAS:
\n———————– <\/p>\n
WEEKLY SERVICES – ONCE PER WEEK
\n——————————-<\/p>\n
. Completely dust all low-reach areas, chair rungs and inside of door
\n jambs.<\/p>\n
. Completely dust window sills, window ledges, door louvers and wood
\n paneling modeling, handrails and railings.<\/p>\n
. Dust levelor blinds where applicable.<\/p>\n
. Clean and polish entrance door metal and thresholds.<\/p>\n
. Clean fire extinguishers and\/or fire hose cabinets; dust and clean
\n cabinet glass.<\/p>\n
. Remove all spots, smudges, and marks from doors, partitions, walls,
\n woodwork, window frames, mullions and ledges, wall switches and outlet
\n plugs on floors and walls.<\/p>\n
. Police all stairways throughout building.<\/p>\n
. Clean all baseboards.<\/p>\n
. Clean and sanitize telephones.<\/p>\n
MONTHLY SERVICES – ONCE PER MONTH
\n———————————<\/p>\n
. Dust all high-reach areas; door frames, door tops and partitions.<\/p>\n
. Dust all picture moldings, frames and blinds.<\/p>\n
. Clean fire extinguishers and\/or fire hose cabinets; dust and clean
\n cabinet glass.<\/p>\n
EXHIBIT J
\n -2-<\/p>\n
RESTROOM SERVICE:
\n—————- <\/p>\n
NIGHTLY SERVICES – FIVE (5) NIGHTS PER WEEK
\n——————————————-<\/p>\n
. Empty wastebaskets and sanitary napkin receptacles.<\/p>\n
. Refill toilet tissue, paper towel, seat-cover, soap and sanitary
\n napkin dispensers.<\/p>\n
. Wash, rinse and wipe dry all lavatory and lavatory fixtures.<\/p>\n
. Clean and polish all metalwork.<\/p>\n
. Thoroughly clean and disinfect toilets; top and bottom.<\/p>\n
. Thoroughly clean toilet bowls and urinals; removing stains – keep free
\n of scale.<\/p>\n
. Mop floors with a germicidal solution.<\/p>\n
WEEKLY SERVICES
\n—————<\/p>\n
. Dust tops of partitions and wainscoting.<\/p>\n
. Wash down urinal screens and adjacent tile.<\/p>\n
MONTHLY SERVICES
\n—————-<\/p>\n
. Dust walls and ceiling vents.<\/p>\n
. Scrub floors with a special germicidal solution.<\/p>\n
. Thoroughly wipe down all the walls and partitions.<\/p>\n
. Spot-clean walls around lavatories.<\/p>\n
. De-scale toilets and urinals.<\/p>\n
QUARTERLY SERVICES – ONCE EVERY THREE MONTHS
\n——————————————–<\/p>\n
. Pour clean water down floor drains to prevent sewer gas from escaping.<\/p>\n
. Thoroughly clean all soap dispenser nozzles.<\/p>\n
FLOOR SERVICES:
\n————– <\/p>\n
. Damp mop hard-surface lobby floors – Nightly.<\/p>\n
. Clean and refinish all hard-surface floors – Monthly.<\/p>\n
EXHIBIT J
\n -3-<\/p>\n
MISCELLANEOUS SERVICES:
\n———————- <\/p>\n
. All cleaning personnel will be instructed to immediately report any
\n damages, plumbing problems, etc. which they encounter during cleaning
\n to the Crew Supervisor.<\/p>\n
. All designated lights will be turned off – Nightly.<\/p>\n
. Janitor’s storage closet and all building service areas will be kept
\n in a neat and orderly condition at all times.<\/p>\n
. Interior windows are cleaned once per year and exterior windows are
\n cleaned two (2) times per year.<\/p>\n
. Tenant may request that additional cleaning be performed by Landlord
\n on the Premises, and Landlord shall not unreasonably withhold its
\n consent thereto, provided that Tenant pays the reasonable cost
\n thereof. In addition, with Landlord’s consent and subject to such
\n reasonable conditions as Landlord shall impose, Tenant may elect to
\n perform its own cleaning of the Premises, or hire a third party to do
\n so, and in such case Landlord shall not include in CAM Expenses the
\n cost of cleaning the Premises.<\/p>\n
EXHIBIT J
\n -4-<\/p>\n
EXHIBIT “K”<\/p>\n
PARKING RULES AND REGULATIONS
\n —————————–<\/p>\n
1. When reasonably requested by Landlord in order to enforce the balance
\nof this Exhibit K, Tenant shall submit a written notice in a form specified by
\n ———
\nLandlord, containing the names, and office addresses and telephone numbers of
\nthose persons who are authorized by Tenant to use the parking privileges on a
\nmonthly basis (the “Authorized Users”) and shall identify each automobile to
\nwhich each such parking privilege shall be assigned by make, model and license
\nnumber. Such notice shall be given to Landlord prior to the beginning of the
\nLease Term (such notice, as amended from time to time, hereinafter referred to
\nas the “Parking Notice”). No officer, principal, employee, supplier, shipper,
\ncustomer, visitor, invitee or contractor of Tenant or any other party whose name
\nand address is not contained in the then current Parking Notice shall have any
\nright to park an automobile in the area of the Building parking facilities
\ndesignated for monthly parking. No person, whether or not his or her name is
\nincluded in the Parking Notice, shall have any right to park an automobile not
\nidentified in the Parking Notice without (in either case) except in the area
\ndesignated for visitor parking.<\/p>\n
2. Tenant and Authorized Users shall comply with all rules and
\nregulations as set forth in these Parking Rules and Regulations, as they may be
\namended by Landlord from time to time. Landlord reserves the right to modify,
\nadd to, or delete from time to time such Parking Rules and Regulations as it
\ndeems reasonably necessary for the operation of the Building parking facilities
\nwhich consist of paved surface outdoor parking within the Project. Landlord may
\nrefuse the issuance of monthly stickers or other identification devices, or to
\npermit to park in the Building parking facility any person who violates the
\nParking Rules and Regulations or any City, State or Federal ordinance or Law or
\nagreement, and any violation of the rules shall subject such person’s car to
\nremoval. Tenant shall acquaint all Authorized Users with the Parking Rules and
\nRegulations.<\/p>\n
3. Every Authorized User is requested to park and lock his or her own
\ncar. All responsibility for damage to cars is assumed by Authorized Users and
\nLandlord shall have no responsibility therefor. Tenant shall repair or cause to
\nbe repaired at its sole cost and expense any and all damage to the Building
\nparking facility or any part thereof caused by Tenant or its Authorized Users or
\nresulting from vehicles of Authorized Users.<\/p>\n
4. Parking stickers or any other device or form of identification
\nsupplied by Landlord, if any, shall remain the property of Landlord. Such
\nparking identification device must be displayed as requested and may not be
\nmutilated in any manner. The serial number of the parking identification device
\nmay not be obliterated. Devices are not transferable. Loss or theft of parking
\nidentification devices from automobiles must be reported immediately to Garage
\nManager. Any such device in the possession of an unauthorized holder will be
\nconfiscated. If a monthly parker automobile is found without its monthly
\nidentification device visible, the automobile is subject to being tagged and the
\nUser may lose future parking privileges. There will be a replacement charge to
\nthe Tenant or Authorized User of $50.00 for loss of any magnetic parking card or
\nother parking identification device. This charge is refundable in the event the
\nlost card is found.<\/p>\n
EXHIBIT K
\n -1-<\/p>\n
5. [Tenant and Authorized Users shall not park vehicles in any parking
\nareas designated by Landlord as areas for parking by visitors to the Building].
\nTenant and Authorized Users shall not leave vehicles in the Building parking
\nareas overnight without written permission from the Garage Manager or Property
\nManager, nor park any vehicles in the Building parking areas other than
\nautomobiles, motorcycles, motor driven or non-motor driven bicycles or four-
\nwheeled trucks and vans. Landlord may, in its sole discretion, designate
\nseparate areas for bicycles and motorcycles.<\/p>\n
6. All responsibility for damage to persons or their vehicles is assumed
\nby Authorized Users.<\/p>\n
7. Authorized Users shall not load or unload in areas other than those
\ndesignated by Landlord for such activities. Tenant shall not permit or allow
\nany vehicles that belong to or are controlled by Tenant or Tenant’s employees,
\nsuppliers, shippers, customers, visitors or invitees to be loaded, unloaded, or
\nparked in areas other than those designed by Landlord for such activities.<\/p>\n
8. Washing, waxing, cleaning or servicing of any vehicle by the
\nAuthorized User and\/or his agents is prohibited. Landlord or Landlord’s agent
\nmay provide such services to Tenants, visitors, and guests at fees to be set by
\nLandlord or such agent from time to time.<\/p>\n
9. Cars must be parked “head in only” and entirely within the stall lines
\npainted on the floor.<\/p>\n
10. All directional signs and arrows must be observed.<\/p>\n
11. The speed limit shall be 5 miles per hour.<\/p>\n
12. Spaces are for the express purpose of one automobile per space unless
\na parking attendant approved by Landlord directs otherwise.<\/p>\n
13. Parking is prohibited, unless a parking attendant employed by Landlord
\ndirects otherwise:<\/p>\n
a. in areas not striped for parking;<\/p>\n
b. in aisles;<\/p>\n
c. where No Parking or, unless the parker or passenger is
\n handicapped, where Handicap signs are posted;<\/p>\n
d. on ramps;<\/p>\n
e. in crosshatched areas; or<\/p>\n
f. in such other areas as may be designated by Landlord, its agent,
\n lessee or licensee.<\/p>\n
EXHIBIT K
\n -2-<\/p>\n
14. Landlord reserves the right at any time to relocate parking spaces and
\nto substitute an equivalent number of parking spaces in the Building’s parking
\nfacilities. In addition, Landlord reserves the right at any time to temporarily
\nrelocate parking spaces in a different parking facility within a reasonable
\ndistance of the Premises.<\/p>\n
15. If Tenant permits or allows any of the prohibited activities described
\nin these Rules and Regulations, then Landlord shall have the right, without
\nnotice, in addition to such other rights and remedies that it may have, to
\nremove or tow away the vehicle involved and charge the cost to Tenant, which
\ncost shall be immediately payable upon demand by Landlord.<\/p>\n
16. These Parking Rules and Regulations may not be modified except by
\nLandlord rendering a written notice to Tenant setting forth the new, modified or
\nchanged rules and regulations.<\/p>\n
EXHIBIT K
\n -3-<\/p>\n
EXHIBIT “L”<\/p>\n
LETTER OF CREDIT TERMS<\/p>\n
1. The letter of credit described in Section 3.3 of the Lease (the
\n ———–
\n“Letter of Credit”) shall be in form and substance, and issued by a financial
\ninstitution, acceptable to Landlord in the exercise of its sole discretion.<\/p>\n
2. The initial expiration date of the Letter of Credit shall be no sooner
\nthan one year after Anticipated Commencement Date. On or before thirty (30) days
\nprior to the expiration date of the Letter of Credit (both the initial
\nexpiration and each succeeding expiration date occurring during the Term of this
\nLease), Tenant shall extend the expiration of the term of the Letter of Credit
\nby one year. If, for any reason, Tenant has not delivered to Landlord on or
\nbefore the beginning of each of such thirty (30) day periods evidence
\nsatisfactory to Landlord in its sole discretion of such extension of the
\nexpiration date of the Letter of Credit, then Landlord shall have the absolute
\nright to call on the full amount of the Letter of Credit to obtain the proceeds
\nthereof and to hold such proceeds, without interest, as security for the
\nperformance by Tenant of its obligations under the Lease. In such case, such
\nproceeds shall be deemed to be part of the Security Deposit under the Lease.<\/p>\n
3. The initial face amount of the Letter of Credit shall be $8,329,856.<\/p>\n
4. If the conditions in this paragraph 4 are met, the face amount of the
\nLetter of Credit shall be reduced by $809,166 on each anniversary of the
\nAnticipated Commencement Date. This amount represents the amortization of
\nLandlord’s transaction costs of the Lease, including the Tenant Improvement
\nAllowance, leasing commissions, legal fees and free rent. The conditions as of
\neach scheduled date for reduction, are: (i) not more than one Event of Default
\nshall have occurred during the twelve (12) month period preceding said date; and
\n(ii) no notice of default under the Lease shall have been sent by Landlord and
\nremain uncured. The failure to meet the conditions to a particular annual
\nreduction shall not affect Tenant’s right to qualify for the next annual
\nreduction. The failure to qualify for a particular annual reduction shall not
\noperate to increase the amount of any future scheduled reduction.<\/p>\n
5. Landlord shall return the Letter of Credit to Tenant, and Tenant shall
\nhave no further obligation to provide this Letter of Credit to Landlord, upon
\nTenant’s satisfaction, in Landlord’s reasonable discretion, of the criteria in
\nparagraphs (a) and (c) or (b)and (c) below, as shown in the appropriate 10Q or
\n10K report filed by Tenant pursuant to the Securities Exchange Act of 1934: <\/p>\n
(a) The EBITDA of Tenant for each of four (4) consecutive fiscal quarters
\nof Tenant is $35,000,000 or more; or<\/p>\n
(b) (i) Tenant’s aggregate EBITDA for any of its four (4) consecutive
\nfiscal quarters is $80,000,000 or more, (ii) its EBITDA during such fiscal
\nquarter has increased over its EBITDA in each prior fiscal quarter, (iii) Tenant
\nhas maintained an average balance of cash and<\/p>\n
EXHIBIT L
\n -1-<\/p>\n
cash equivalents of $50,000,000 or more during such fiscal quarters, and (iv)
\nTenant’s balance of cash and cash equivalents is at least $50,000,000 for the
\nlast of the four (4) fiscal quarters referenced in clause (iii) above; and<\/p>\n
(c) The “shareholder equity” of Tenant at the time that the criteria in
\nparagraph (a) or paragraph (b) have been met is at least $200,000,000.
\n“Shareholder equity” means Tenant’s shareholder equity as shown on its 10Q or
\n10K report plus amortization of all non cash related expenses from inception,
\nincluding without limitation, stock based charges and the amortization of good
\nwill and any other acquisition related intangible assets (such as trademarks,
\ncustomer lists, contracts, etc.).<\/p>\n
Tenant shall have the obligation of demonstrating to the reasonable
\nsatisfaction of Landlord that the foregoing criteria have been met. Landlord
\nagrees that it will not unreasonably withhold its acknowledgement that such
\ncriteria have been met if Tenant presents audited financial statements of
\nTenant, or a written statement from Tenant’s auditors (which must be a
\nnationally recognized accounting firm) to the effect that such criteria have
\nbeen met. Any dispute regarding whether Tenant is entitled to the return of the
\nLetter of Credit shall be resolved by arbitration in accordance with Section 16
\n ———-
\nof the Lease.<\/p>\n
In the event Tenant has assigned its interest in the Lease as permitted
\ntherein, the foregoing criteria shall be deemed satisfied if they are satisfied
\nwith respect to Tenant or its successor in interest as Tenant under the Lease,
\nassuming for this purpose that each remains fully responsible for all of
\nTenant’s obligations under the Lease.<\/p>\n
EXHIBIT L
\n -2-<\/p>\n
EXHIBIT “M”<\/p>\n
CERTAIN CAM EXPENSE RESTRICTIONS<\/p>\n
(a) Notwithstanding anything to the contrary in the definition of CAM
\nExpenses, Cam Expenses shall not include the following, except to the extent
\nspecifically permitted by a specific exception to the following:<\/p>\n
(i) Any ground lease rental;<\/p>\n
(ii) Costs of items considered Capital Costs (other than repair of
\n the same) (“Capital Items”), except for (1) the annual amortization
\n (amortized over the useful life) of costs, including financing costs, if
\n any, incurred by Landlord after the Commencement Date for any capital
\n improvements installed or paid for by Landlord and required by any new (or
\n change in) laws, rules or regulations of any governmental or quasi-
\n governmental authority as of the date of approval by the City of Westlake
\n Village of the Plans for the Building; (2) the annual amortization
\n (amortized over the useful life) of costs, including financing costs, if or
\n any equipment, device or capital improvement purchased or incurred as a
\n labor-saving measure or to affect other economics in the operation or
\n maintenance of the Building; or (3) minor capital improvements, tools or
\n expenditures to the extent each such improvement or acquisition costs less
\n than Three Thousand Dollars ($3,000) and the total cost of same are not in
\n excess of Ten Thousand Dollars ($10,000) in any twelve (12) month period;<\/p>\n
(iii) Rentals for items (except when needed in connection with normal
\n repairs and maintenance of permanent systems) which if purchased, rather
\n than rented, would constitute a Capital Item which is specifically excluded
\n in Subsection (ii) above (excluding, however, equipment not affixed to the
\n Building which is used in providing janitorial or similar services);<\/p>\n
(iv) Costs incurred by Landlord for the repair of damage to the
\n Building or the Project, to the extent that Landlord is reimbursed by
\n insurance proceeds.<\/p>\n
(v) Costs, including permit, license and inspection costs, incurred
\n with respect to the installation of tenants’ or other occupants’
\n improvements in the Project, or incurred in renovating or otherwise
\n improving, decorating, painting or redecorating vacant space for tenants or
\n other occupants of the Project;<\/p>\n
(vi) Depreciation, amortization and interest payments, except as
\n provided herein and except on materials, tools, supplies and vendor-type
\n equipment purchased by Landlord to enable Landlord to supply services
\n Landlord might otherwise contract for with a third party where such
\n depreciation, amortization and interest payments would otherwise have been
\n included in the charge for such third party’s services, all as determined
\n in accordance with generally accepted accounting principles, consistently
\n applied, and when depreciation or amortization is permitted or required,
\n the item shall be amortized over its reasonably anticipated useful life;<\/p>\n
EXHIBIT M
\n -1-<\/p>\n
(vii) Marketing costs including, without limitation, leasing
\n commissions, attorneys’ fees in connection with the negotiation and
\n preparation of letters, deal memos, letters of intent, leases, subleases
\n and\/or assignments, space planning costs, and other costs and expenses
\n incurred in connection with lease, sublease and\/or assignment negotiations
\n and transactions with present or prospective tenants or other occupants of
\n the Project;<\/p>\n
(viii) Expenses in connection with services or other benefits which
\n are not offered to Tenant or for which Tenant is charged for directly but
\n which are provided to another tenant or occupant of the Project;<\/p>\n
(ix) Costs incurred by Landlord due to the violation by Landlord or
\n any tenant of the terms and conditions of any lease of space in the
\n Project;<\/p>\n
(x) Overhead and profit increment paid to Landlord or to
\n subsidiaries or affiliates of Landlord for goods and\/or services in or to
\n the Building or to the Project to the extent the same exceeds the costs of
\n such goods and\/or services rendered by unaffiliated third parties on a
\n competitive basis;<\/p>\n
(xi) Interest, principal, points and fees on debts or amortization
\n on any mortgage or mortgages or any other debt instrument encumbering the
\n Building or the Project (except as permitted in Subsection (ii) above);<\/p>\n
(xii) Landlord’s general corporate overhead and general and
\n administrative expenses; provided, that an onsite management office in the
\n ——–
\n Project may be included in CAM Expenses to the extent it is utilized for
\n matters pertaining to the Project;<\/p>\n
(xiii) Any compensation paid to clerks, attendants or other persons
\n in commercial concessions (meaning such operations as shoe shine parlors
\n and drug stores where the income therefrom is not netted with the related
\n expenses) operated by Landlord;<\/p>\n
(xiv) Advertising and promotional expenditures, and costs of signs
\n in or on the Building identifying the owner of the Building or other
\n tenants’ signs;<\/p>\n
(xv) The cost of any electric power, water, gas or other utility
\n used by any tenant in the Project;<\/p>\n
(xvi) Services and utilities provided, taxes attributable to, and
\n costs incurred in connection with the operation of any retail or restaurant
\n operations in the Project, except to the extent the square footage of such
\n operations are included in the rentable square feet of the Project and do
\n not exceed the services, utility and tax costs which would have been
\n incurred had the retail and\/or restaurant space been used for general
\n office purposes;<\/p>\n
(xvii) Costs incurred in connection with upgrading the Building or
\n the Project to comply with disability, life, fire and safety codes,
\n ordinances, statutes, or other laws in effect and required to be complied
\n with prior to the Commencement Date, including,<\/p>\n
EXHIBIT M
\n -2-<\/p>\n
without limitation, the ADA, including penalties or damages incurred due to
\n such non-compliance;<\/p>\n
(xviii) Tax penalties incurred as a result of Landlord’s negligence,
\n inability or unwillingness to make payments and\/or to file any tax or
\n informational returns when due;<\/p>\n
(xix) [intentionally omitted];<\/p>\n
(xx) Costs arising from the gross negligence or fault of other
\n tenants or Landlord or its agents, or any vendors, contractors, or
\n providers of materials or services selected, hired or engaged by Landlord
\n or its agents including, without limitation, the selection of Building
\n materials;<\/p>\n
(xxi) Notwithstanding any contrary provision of the Lease,
\n including, without limitation, any provision relating to capital
\n expenditures, any and all costs arising from the presence of hazardous
\n materials or substances (as defined by Applicable Laws in effect on the
\n date the Lease is executed) in or about the Premises, the Building or the
\n Project on the date of the Lease including, without limitation, hazardous
\n substances in the ground water or soil, not placed in the Premises, the
\n Building, or the Project by Tenant;<\/p>\n
(xxii) Costs arising from Landlord’s charitable or political
\n contributions;<\/p>\n
(xxiii) Costs arising from latent defects in the Base Building
\n Improvements installed by Landlord;<\/p>\n
(xxiv) Costs for sculpture, paintings or other objects of art;<\/p>\n
(xxv) Costs (including in connection therewith all attorneys’ fees
\n and costs of settlement judgments and payments in lieu thereof) arising
\n from claims, disputes or potential disputes pertaining to Landlord and
\n Tenant or another tenant of the Project;<\/p>\n
(xxvi) Costs associated with the operation of the business of the
\n partnership or entity which constitutes Landlord as the same are
\n distinguished from the costs of operation of the Building or the Project,
\n including partnership accounting and legal matters, costs of defending any
\n lawsuits with any mortgagee (except as the actions of Tenant may be in
\n issue), costs of selling, syndicating, financing, mortgaging or
\n hypothecating any of Landlord’s interest in the Building or the Project,
\n costs of any disputes between Landlord and its employees (if any) not
\n engaged in Building operation, disputes of Landlord with Building
\n management, or outside fees paid in connection with disputes with other
\n tenants;<\/p>\n
(xxvii) [intentionally omitted];<\/p>\n
(xxviii) Costs of any “tap fees” or any sewer or water connection fees
\n for the exclusive benefit of any particular tenant in the Project;<\/p>\n
EXHIBIT M
\n -3-<\/p>\n
(xxix) Costs incurred in connection with any environmental clean-
\n up, response action, or remediation on, in, under or about the Premises or
\n the Building, including but not limited to, costs and expenses associated
\n with the defense, administration, settlement, monitoring or management
\n thereof, but only to the extent the same are caused by Landlord or another
\n tenant of the Project;<\/p>\n
(xxx) Any commercially unreasonable expenses incurred by Landlord
\n for use of any portions of the Project to accommodate events including, but
\n not limited to shows, promotions, kiosks, displays, filming, photography,
\n private events or parties, ceremonies, and advertising, beyond the normal
\n expenses otherwise attributable to providing Building services, such as
\n lighting and HVAC to such public portions of the Project in normal Building
\n operations during standard Building hours of operation;<\/p>\n
(xxxi) Any unreasonable or uncustomary entertainment or dining
\n expenses;<\/p>\n
(xxxii) Any unreasonable flowers, gifts, balloons, etc. provided to
\n any entity whatsoever, to include, but not limited to, Tenant, other
\n tenants, employees, vendors, contractors, prospective tenants and agents;<\/p>\n
(xxxiii) Any “above-standard” cleaning, including, but not limited to
\n construction cleanup or special cleanings associated with parties\/events
\n and specific tenant requirements in excess of service provided to Tenant,
\n including related trash collection, removal, hauling and dumping;<\/p>\n
(xxxiv) The cost of any magazine, newspaper, trade or other
\n subscriptions;<\/p>\n
(xxxv) [Intentionally Omitted.]<\/p>\n
(xxxvi) The commercially unreasonable cost of any “tenant relations”
\n parties, events or promotion;<\/p>\n
(xxxvii) “In-house” legal and accounting fees; and<\/p>\n
(xxxviii) Any other expenses which, in accordance with generally
\n accepted accounting principles, consistently applied, would not normally be
\n treated as CAM Expenses by comparable landlords of Comparable Buildings.<\/p>\n
(b) In the event any facilities, services or utilities used in connection
\nwith the Building are provided from another building owned or operated by
\nLandlord or vice versa, the costs incurred by the Landlord in connection
\ntherewith shall be allocated to CAM Expenses by Landlord on or reasonably
\nequitable basis<\/p>\n
(c) Landlord agrees that since one of the purposes of CAM Expenses is to
\nrequire Tenant to pay for the costs attributable to its Premises, Landlord
\nagrees that Landlord will not collect or be entitled to collect CAM Expenses
\nfrom Tenant in an amount which is in excess of one hundred percent (100%) of the
\nCAM Expenses actually paid by Landlord in connection with the operation of the
\nBuilding plus Landlord’s Management Fee.<\/p>\n
EXHIBIT M
\n -4-<\/p>\n
(d) Landlord agrees that if it is permitted to pay real property taxes or
\nassessments in installments without penalty or interest, then for purposes of
\nincluding such amounts as Property Taxes it will either do so or include such
\namounts in Property Taxes as if it had done so.<\/p>\n
(e) [Intentionally Omitted].<\/p>\n
EXHIBIT M
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