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ALBANY STREET PLAZA
OFFICE LEASE
ALBANY STREET PLAZA REAL ESTATE MANAGEMENT COMPANY
LANDLORD
AND
Arbinet-thexchange, Inc.
TENANT
DATED: February 6, 2003
<PAGE>
TABLE OF CONTENTS
Page
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Article 1.00 Basic Lease Information 7-8
Article 2.00 Demised Premises
2.01 Agreement And Description 9
2.02 Warranty Of Title/Quiet Enjoyment 9
2.03 Estoppel 9
2.04 Delivery Condition of Premises 9
2.05 Use Of The Premises 9
Article 3.00 Term, Commencement, Occupancy 10
3.01 Term
3.02 Commencement 10
3.03 No Notice For Termination 10
3.04 Holdover 10
10
10
Article 4.00 Rent 11
4.01 General 11
4.02 Unspecified Costs 11
4.03 Due Date 12
4.04 Rental Years 12
4.05 Covenant To Pay Rent; Place Of Payment 12
4.06 No Waiver Upon Receipt 12
4.07 Late Charge 12
Article 5.00 Abatement 12
13
Article 6.00 Acceptance Of Premises 13
Article 7.00 Subordination 13
7.01 To Mortgages And Leases in General 13
7.02 To The Master Lease 13
Article 8.00 Tenant's Improvements, Fixtures And Mechanic's Liens 13
8.01 Improvements 13
8.02 Landlord's Right To Enter 14
8.03 Mechanic's Liens 14
8.04 Fixtures 14
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Article 9.00 Prompt Occupancy And Use 14
9.01 Continuous Occupancy 14
9.02 Operations In Good Faith 14
9.03 Hours And Days Of Operation 14
9.04 Overtime HVAC 14
Article 10.00 Operation By Tenant 15
10.01 Tenant's Maintenance Obligations 15
10.02 Prohibitions 15
10.03 Manner of Operation 16
Article 11.00 Structural Repairs 16
Article 12.00 Interior Repairs 16
12.01 Tenant's Repairs 16
12.02 Tenant's Indemnification 17
Article 13.00 Damage To Premises 17
Article 14.00 Alterations 17
14.01 Tenant's Improvements 17
14.02 Exterior And Structural Improvements 18
14.03 Signs And Advertising 18
14.04 Painting/Decorations 18
14.05 Approval By Landlord 18
Article 15.00 Roof And Walls 18
Article 16.00 Common Facilities 19
16.01 General 19
16.02 Operation And Maintenance 19
16.03 Landlord's Right To Alter 19
Article 17.00 Expense Of Common Facilities 19
17.01 Landlord's Operating Costs 19
17.02 Tenant's Share 20
17.03 Payment And Adjustment Of Tenant's Share 20
Article 18.00 Payment Of Utility Charges, Etc. 20
18.01 Installment Of Meters 20
18.02 Payment Of Charges 21
18.03 Interruption In Service 21
18.04 Alteration Of Service 21
Article 19.00 Insurance 21
Insurance Required 21
19.02 Compliance With Landlord's Policies 22
19.03 Waiver Of Subrogation 22
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Article 20.00 Indemnity 22
Article 21.00 Fire Or Other Casualty 23
21.01 Repair, Rent Abatement 23
21.02 Termination By Landlord 23
21.03 Demolition 23
Article 22.00 Condemnation 23
Article 23.00 Inspections By Landlord 24
Article 24.00 No Assignment, Etc. 24
24.01 General 24
24.02 Any Assignment Void 24
24.03 Limitation On Remedies 25
Article 25.00 Default 25
25.01 Events Of Default 25
25.02 Landlord's Remedies 26
25.03 Certain Damages 27
25.04 Continuing Liability After Termination 27
25.05 Cumulative Remedies 28
Article 26.00 Default By Landlord 28
Article 27.00 Successors And Assigns 28
Article 28.00 Governing Law 28
Article 29.00 Captions 29
Article 30.00 Brokers 29
Article 31.00 Written Modification 29
Article 32.00 Severability 29
Article 33.00 Notices 29
Article 34.00 Option To Renew 30
34.01 Term, Notice 30
34.02 Rent 30
Article 35.00 Joint And Several Liability 30
Article 36.00 Not A Joint Venture 30
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Article 37.00 No Option 31
Article 38.00 Third Party Beneficiary 31
Article 39.00 Compliance With All Laws 31
Article 40.00 Limitation On Recourse 31
Article 41.00 Force Majeure 31
Article 42.00 No Recordation 32
Article 43.00 Effect Of Sale 32
Article 44.00 Tenant's Ecra Warranty 32
Article 45.00 Use Of Asbestos 32
Article 46.00 Corporate Tenancy 32
Article 47.00 Parking 33
5
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TABLE OF EXHIBITS
The following exhibits are attached to this Lease and are made part of this
Lease Agreement:
Page
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EXHIBIT A The Premises 34
EXHIBIT B Rent Schedule 35
EXHIBIT C Work Letter/Tenant's Plans 37
EXHIBIT D Master Lease 38
EXHIBIT E Cleaning Schedule 47
EXHIBIT F Rules and Regulations 48
<PAGE>
This Lease Agreement dated, February 6, 2003, is made by and between Albany
Street Plaza Real Estate Management Company having an address c/o Boraie
Development LLC., 120 Albany Street, Suite 305, New Brunswick, New Jersey 08901
(Landlord) and Arbinet-thexchange, Inc. having an address at 75 Broad Street,
20th Floor, New York, New York 10004 (Tenant).
WITNESSETH:
Landlord and Tenant, intending to be legally bound, hereby covenant and agree as
follows:
ARTICLE 1.00 BASIC LEASE INFORMATION
In addition to the terms used in the Article which are defined elsewhere in this
Lease, the following defined terms may be used in this Lease:
a) Tenant's Trade Name: Arbinet-thexchange, Inc.
b) Tenant's Address: 120 Albany Street, Tower II
Suite 400
New Brunswick, NJ 08901
c) Landlord: Albany Street Plaza Real Estate Management
Company
d) Landlord's Address: c/o Boraie Development LLC.
120 Albany Street, Suite 305
New Brunswick, New Jersey 08901
Albany Street Plaza 120 Albany Street
Address: New Brunswick, New Jersey 08901
Commencement Date: April 15, 2003
g) Termination Date: April 30, 2008
h) Security Deposit: $24,841.66
i) Annual Basic Rent: Year 1 = $22.00 per rentable square foot.
Year 2 = $22.50 per rentable square foot
Year 3 = $23.00 per rentable square foot
Year 4 = $23.50 per rentable square foot
Year 5 = $24.00 per rentable square foot
<PAGE>
j) Parking: Fifteen (15) parking spaces at eighty-five ($85.00)
dollars per space per month.
k) Monthly Basic Rent: $12,420.83 per month commencing on the Commencement
Date subject to adjustments for the first and last
months rent pursuant to Sections 4.02 and 4.03 as
well as Exhibit B.
l) Leaseable Area of the Approximately 6,775 Rentable Square Feet
Premises: located on the 4th floor of Tower II
m) Leaseable Area of 200,000 Rentable Square Feet.
Albany Street
Plaza:
n) Prorata Share: 3.4%
o) Permitted Use: General, executive and administrative office
space & ancillary uses thereto.
p) Broker: For Landlord: Boraie Realty
257 Livingston Avenue
New Brunswick, New Jersey 08901
For Tenant: CB Richard Ellis
560 Lexington Avenue
New York, NY 10022
q) Additional Rent: Any and all amounts (including without limitation
Tenant's prorata share of Landlord's Operating Costs)
which this Lease requires Tenant to pay in addition
to Annual Basic Rent.
r) Premises: The portion of the 4th floor shown on Exhibit A to
this Lease and known as Tower II - Suite 400.
s) Albany Street Plaza: The Shopping Center and Office Development consisting
of the Land and all Improvements built on the land,
including without limitation, Walkways, Driveways,
Fences and Landscaping, located at 120 Albany Street,
New Brunswick, New Jersey 08901.
t) Building: The office and retail building which is part of
Albany Street Plaza.
u) Rent: The Annual Basic Rent and Additional Rent.
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ARTICLE 2.00 DEMISED PREMISES
Section 2.01 Agreement and Description
Landlord, for and in consideration of the terms, covenants and conditions herein
contained, does hereby demise, lease and let to Tenant, and Tenant does hereby
hire and take from Landlord for the term hereof subject to the terms, covenants
and conditions herein contained 6,775 rentable square feet on the fourth floor
of the building commonly known and designated as Albany Street Plaza, 120 Albany
Street, Tower II, New Brunswick, New Jersey 08901 as more specifically described
on the sketch attached as Exhibit A (the "Premises").
Section 2.02 Warranty of Title/Quiet Enjoyment
Landlord hereby represents that it and no other person, entity or corporation
has the right to lease the Premises hereby demised except with respect to
Article 24. Landlord covenants and agrees that the Tenant shall have peaceful
and quiet use and possession of the Premises without hindrance on the part of
Landlord. Tenant acknowledges that neither Landlord nor its agents have made any
representations or warranties as to the suitability or fitness of the Premises
for the conduct of Tenant's business or for any other purpose.
Section 2.03 Estoppel
Tenant agrees that at any time, and from time to time, at reasonable intervals,
within twenty (20) days after receipt of written request from Landlord to
Tenant, Tenant will execute, acknowledge and deliver to Landlord and/or to such
assignee or secured party as may be designated by Landlord, a certificate
stating:
that the Lease is unmodified and in full force and effect (or if there have
been modifications, that the Lease is in full force and effect as modified,
and identifying the modification agreements, or if the Lease is not in full
force and effect the certificate shall so state);
the date to which rental has been paid under the Lease;
whether or not there is any existing default by Tenant in the payment of
any rent or other sum of money under the Lease, and whether or not there is
any other existing default by either party under the Lease with respect to
which a notice of default has been served, and if there is any such
default, specifying the nature and extent thereof;
whether or not there are any setoffs, defenses or counterclaims against
enforcemen of the obligations to be performed by Tenant under the Lease;
and
such other matters relating to this Lease as may be reasonably requested by
Landlord or any of its aforesaid designees.
Section 2.04 Delivery Condition of Premises
Landlord, at its sole cost and expense, shall construct the leasehold
improvements in the Premises per the approved plans and specifications attached
hereto as Exhibit D.
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Landlord shall deliver the Premises to Tenant upon the substantial completion of
the leasehold improvements. During the Landlord's performance of the work
outlined in Exhibit D., Tenant shall have the right to perform certain work in
the Premises, such as installation of a telephone and data equipment and
cabling, provided said work does not interfere with Landlord's work.
Section 2.05 Use of the Premises
Tenant shall use the Premises for general, executive and administrative offices
and related purposes incidental to Tenants business, and in accordance with
applicable law (the "Permitted Use").
ARTICLE 3.00 TERM; COMMENCEMENT; OCCUPANCY
Section 3.01 Term
This Lease shall be for a term of five (5) years (the Term"), commencing on the
"Commencement Date" (as hereinafter defined) and expiring at the close of
business on the later of April 30, 2008 or the last day of the sixtieth full
month following the Commencement Date (the "Termination Date"), subject to any
option rights which may be contained in Article 34.00 hereof. In the event,
Landlord has not substantially completed the leasehold improvements by April 15,
2003, then Landlord will give Tenant one day free rent for each day of delay. In
the event Leasehold improvements are not substantially completed by September
30, 2003, Tenant shall have the right to cancel this lease.
Section 3.02 Commencement
The Commencement Date shall be defined as the earlier of April 15, 2003 or:
1.) The date of Tenant's substantial occupancy of the Premises; or
2.) The date Landlord delivers premises to Tenant substantially complete.
Section 3.03 No Notice for Termination
This Lease shall terminate on the Termination Date set forth in Section 3.01, or
any extension or renewal thereof, without the necessity of any notice from
either Landlord or Tenant to terminate the same. For the period of six (6)
months prior to the Termination Date, or any renewal or extension thereof,
Landlord may show the Premises to prospective tenants during normal business
hours.
Section 3.04 Holdover
If Tenant shall be in possession of the Premises after the Termination Date set
forth in section 3.01, in the absence of any agreement extending the term
hereof, the tenancy under this Lease shall become one from month to month, which
either party may terminate on thirty (30) days prior written notice. During such
occupancy subsequent to the termination date, Tenant shall pay a rental rate
equal to 120% of the then current rental rate.
ARTICLE 4.00 RENT
Section 4.01 General
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Tenant covenants and agrees to pay the Landlord, as rental during the Term for
the Premises, an annual basic rent as set forth on Exhibit B ("Annual Basic
Rent") payable in equal monthly installments as set forth on Exhibit B ("Monthly
Basic Rent"). Tenant covenants and agrees to pay, when due, any and all
Additional Rent as hereinafter set forth in this Lease.
Section 4.02 Unspecified Costs
Any reasonable costs specified in this Lease and attributable to the operation,
maintenance, alteration or improvement of the Premises shall, at the option of
the Landlord, if not paid when due, be deemed Additional Rent and collectible as
such with the next installment of Monthly Basic Rent. Nothing herein contained
shall be deemed to suspend or delay the payment of any sum at the time the same
becomes due and payable hereunder, or limit any other remedy of the Landlord.
Section 4.03 Due Date
Monthly Basic Rent shall be payable in advance on the first business day of each
full calendar month during the Term, the first such payment, to be paid on the
Commencement Date, shall include any prorated Annual Basic Rent for the period
from the Commencement Date to the first day of the first full calendar month in
the Term.
Section 4.04 Rental Years
The first "Rental Year" shall begin on the Commencement Date and shall end at
the close of the twelfth full calendar month following the Commencement date or
following the schedule set in Exhibit B of the Lease; thereafter a Rental Year
shall consist of successive periods of twelve calendar months. Any portion of
the Term remaining at the end of the last full Rental Year shall constitute the
final Rental Year and rentals and all other charges shall be apportioned
therefore and promptly paid as provided herein on the basis of the number of
days in such final Rental Year divided by 365 days.
Section 4.05 Covenant to Pay Rent; Place of Payment
Tenant covenants to pay all Rent when due without any setoff, deduction or
demand whatsoever, unless otherwise mutually agreed. Any monies paid or
reasonable expenses incurred by Landlord to correct violations of any of the
Tenant's obligations hereunder shall be payable to Landlord as Additional Rent.
Any Additional Rent provided for in this Lease shall be due with the next
installment of Annual Basic Rent due after receipt of notice of such Additional
Rent from Landlord. Rent and statements required of Tenant shall be paid or
delivered to Landlord at such place as Landlord may from time to time designate
in writing to Tenant.
Section 4.06 No Waiver Upon Receipt
Receipt and acceptance by Landlord of any rentals, additional rentals and
charges with knowledge of the breach of any covenant or condition of this lease
by Tenant shall not be deemed a waiver of such breach.
Section 4.07 Late Charge
Notwithstanding anything to the contrary herein contained, in order to cover the
extra expense involved in handling delinquent payments, Tenant shall pay a late
charge of five percent (5%) of the overdue payment when any payment of Rent
hereunder is paid
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more than ten (10) days after the due date thereof. It is understood and agreed
that this charge is for additional expense incurred by Landlord and shall not be
considered interest.
ARTICLE 5.00 TAX
Section 5.00 Abatement
Landlord anticipates having a property tax abatement for 30 years, whereby
Landlord will make certain payments in lieu of real estate taxes. The Tenant is
responsible for Tenant's Prorata Share of said in lieu of tax payments, which
are incorporated into Annual Basic Rent. If at any future time Landlord becomes
obligated to pay taxes, Tenant shall be obligated to pay Tenant's Prorata Share
of such tax after said in lieu tax amounts are deducted from the Annual Basic
Rent. If at any future time said property tax or in lieu of property tax payment
shall increase, Tenant shall pay Tenant's Prorata Share of the increase.
ARTICLE 6.00 ACCEPTANCE OF PREMISES
Upon Tenant possession of the Premises for the conduct of it business, Tenant
shall be deemed to have accepted the Premises, acknowledged that the same are in
the condition called for hereunder and agreed that the obligations of the
Landlord imposed hereunder have been fully performed.
ARTICLE 7.00 SUBORDINATION
Section 7.01 To Mortgages and Leases in General
This Lease shall not be a lien against the Premises in respect to any mortgages,
or ground or master leases, that are, now or may hereafter be placed upon the
Premises. All such mortgages, or ground or master leases shall have preference
and precedence, and be superior and prior in lien, to this Lease, irrespective
of the date of recording. This provision shall be self-operative and no further
instrument of subordination shall be required. Nevertheless, Tenant agrees to
execute without cost any instruments which Landlord may deem reasonably
necessary or desirable to confirm the subordination of this Lease. Landlord to
provide written notice to Tenant and Tenant will have five (5) business days to
comply. A refusal by the Tenant to execute such instruments shall constitute a
default under this Lease.
Section 7.02 To the Master Lease
This lease is subordinate to the Master Lease Agreement ("Master Lease") for the
Albany Street Plaza, between Albany Street Plaza Urban Renewal LLC., as master
lessor and Albany Street Plaza Reaf Estate Management Company as master lessee.
The terms and conditions of the Master Lease are incorporated herein and are
binding upon the parties hereto as if set forth fully herein. Where the
provisions of the Master Lease and this Lease are conflicting, the Master Lease
shall be controlling.
ARTICLE 8.00 TENANT'S IMPROVEMENTS, FIXTURES AND MECHANIC'S LIENS
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Section 8.01 Improvements
On or before the Commencement Date, Landlord shall substantially complete all
work to the Premises for Tenant in accordance with the description set forth in
Exhibit D (Work Letter/Tenant's Plans) and Section 2.04 of this agreement. All
improvements to the Premises other than those specified in Exhibit D shall be
the obligation of the Tenant.
Section 8.02 Landlord's Right to Enter
Notwithstanding the Commencement Date, Landlord shall have the right to enter
the Premises as reasonably necessary with reasonable advance notice. Landlord
must give reasonable advance notice, except in an emergency, to enter the
Premises after normal business hours.
Section 8.03 Mechanic's Liens
In the event any mechanic's lien shall at any time, whether before, during or
after the Term, be filed against any part of Albany Street Plaza by reason of
work, labor, services or materials performed or furnished to Tenant or to anyone
holding the Premises through or under Tenant (except for work performed by
Landlord including initial leasehold improvements), Tenant shall forthwith cause
the same to be discharged of record or bonded to the reasonable satisfaction of
Landlord. If Tenant shall fail to cause such lien to be so discharged or bonded
within twenty (20) days after being notified in writing of the filing thereof,
then, in addition to any other right or remedy of Landlord, Landlord may
discharge the same by paying the amount claimed to be due, and the amount so
paid by Landlord shall be due and payable by Tenant to Landlord as Additional
Rent upon demand.
Section 8.04 Fixtures
All trade fixtures and apparatus (as distinguished from leasehold improvements)
owned by the Tenant and installed in the Premises shall remain the property of
Tenant and shall be removable at any time, including the expiration of the Term.
After the termination of this Lease including the renewal or extension thereof,
all erections, alterations, additions and improvements, whether temporary or
permanent in character, which may be made upon the Premises by any person,
except furniture, workstations, movable cabinets, shelves or movable machinery
or equipment of the Tenant, shall become the property of the Landlord and shall
remain upon and be surrendered with the Premises as a part thereof without
compensation to the Tenant or to anyone else.
ARTICLE 9.00 PROMPT OCCUPANCY AND USE
Section 9.01 Continuous Occupancy
Tenant shall occupy the Premises on the Commencement Date and thereafter will
continuously conduct its business in the Premises in accordance with the
Permitted Use.
Section 9.02 Operations in Good Faith
Tenant shall cause said business to be conducted and operated in good faith.
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Section 9.03 Hours and Days of Operation
The Building is accessible 365 days a year, 24 hours per day.
Section 9.04 Overtime HVAC
The Building will be responsible for supplying HVAC from 7:00am through 7:00pm
Monday - Friday, and 9:00am through 5:00pm on Saturday, including holidays. Any
additional Tenant requirements will be supplied at an additional cost of $75.00
per hour. 24-hour notice is required by Landlord.
ARTICLE 10.00 OPERATION BY TENANT
Section 10.01 Tenant's Maintenance Obligations
In regard to use and occupancy of the Premises, at Tenant's expense, Tenant
shall:
Replace promptly any cracked or broken glass of the Premises with glass of
like kind and quality if breakage is due to the negligence of Tenant, its
agents or employees;
Maintain the Premises in a clean, orderly and sanitary condition;
Keep any garbage, trash, rubbish or refuse in containers within the
interior of the Premises until removed by Landlord to dumpster. Tenant will
comply with all recycling rules and regulations set forth by the City of
New Brunswick;
Keep all mechanical apparatus free of vibration and noise which may be
transmitted beyond the Premises;
Comply with all laws and ordinances, rules and regulations of governmental
authorities and all recommendations of the Fire Underwriters Rating Bureau
now or hereafter in effect in regard to Tenant's business;
Conduct its business in all respects in a dignified manner in accordance
with high standards of professionalism consistent with the quality of
operation of the Albany Street Plaza as reasonably determined by Landlord;
and
Comply with all rules and regulations as Landlord shall reasonably
implement from time to time.
Section 10.02 Prohibitions
In regard to use and occupancy of the Premises and common facilities, Tenant
shall not:
Place or maintain any merchandise, trash, refuse or other articles in any
vestibule or entry of the Premises, on the sidewalks or corridors adjacent
thereto or elsewhere on the exterior of the Premises so as to partially
obstruct any driveway, sidewalk, parking area, mall or any other common
facility;
Use or permit the use of any objectionable advertising medium such as,
without limitation, loudspeakers, phonographs, public address systems,
sound amplifiers, reception of radio or television broadcasts within or
outside of the Albany Street Plaza which is in any manner audible or
visible outside of the Premises;
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Permit unreasonable accumulations of garbage, trash, rubbish or other
refuse within or without the Premises;
Cause or permit objectionable odors to emanate or be dispelled from the
Premises;
Solicit business in the parking area or other common facilities;
Distribute handbills or other advertising matter to, in or upon any
automobiles parked in the parking areas or in any other common facility;
Permit the parking of delivery vehicles so as to unreasonably interfere
with the use of any driveway, sidewalk, parking area, lobby or other common
facility in the Albany Street Plaza;
Receive or ship articles of any kind except through service facilities
provided by the Landlord between 6:00 AM and 7:00 PM through the back
alleyway leading to Church Street; (and Landlord should at all times be
required to provide reasonable facilities for shipping or receiving
articles)
(i) Use the Albany Street Plaza, sidewalk or any other common area
facility adjacent to the Premises for the sale or display of any
merchandise or for any other business, occupation or undertaking;
(j) Conduct or permit to be conducted any auction, fire, going out of
business, bankruptcy, or other similar type sale in or connected with
the Premises;
(k) Use or permit the use of any portion of the Premises for any unlawful
purpose; or
(l) Place a load upon any floor which exceeds the floor load for which the
floor was designed to carry or allowed by law.
Section 10.03 Manner of Operation
Tenant acknowledges that it is Landlord's intent that the Albany Street Plaza be
operated and therefore, agrees to operate in a manner which is consistent with
the highest standards of decency and morals prevailing in the community which it
serves. Toward that end, Tenant agrees that it shall also operate in a manner
which is consistent with the highest standards of decency and morals.
ARTICLE 11.00 STRUCTURAL REPAIRS
Landlord shall make all structural repairs to the Premises and will keep in good
order or repair the roof and the exterior of the Premises, except any doors, or
door frames, storefronts, windows, and glass; provided Tenant shall give
Landlord reasonable written notice of the necessity for such repairs, and
provided that the damage thereto shall not have been caused by negligence of
Tenant, its concessionaires, officers, employees, licensees, contractors or
agents, in which event Tenant shall be responsible therefore.
ARTICLE 12.00 INTERIOR REPAIRS
Section 12.01 Tenant's Repairs
Excluding utilities not exclusively serving the Premises and the sprinkler,
Tenant shall keep all non-structural elements and the interior of the Premises,
together with all electrical, plumbing and other mechanical installations
therein, in good order and repair
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and make all replacements thereto at its expense, if repair and/or replacement
is necessary due to the gross negligence of Tenant, its agents or employees.
Tenant shall surrender the Premises at the expiration of the Term or at such
other time as it may vacate the Premises in as good condition as when received,
except for ordinary wear and tear. Tenant shall not overload the electrical
wiring or other services or utilities serving the Premises or within the
Premises, and shall install at its expense, subject to the provisions of Article
14 herein, any additional electrical wiring or service which may be required in
connection with Tenant's Permitted Use.
Section 12.02 Tenant's Indemnification
Any damage sustained by any party caused by mechanical, electrical, plumbing or
any other equipment or installations, whose maintenance and repair is the
responsibility of the Tenant shall be paid by Tenant, and Tenant shall indemnify
and hold Landlord harmless from and against any and all claims, actions, damages
and liability in connection therewith, including, but not limited to attorney's
and other professional fees, which fees shall be reasonable, and any other cost
which Landlord might reasonably incur.
ARTICLE 13.00 DAMAGE TO PREMISES
Tenant shall repair at its expense any damage to the Premises, or the building
in which the Premises are located, caused by bringing into the Premises any
property for Tenant's use, or by the installation or removal of such property,
unless caused by Landlord, its agents, employees or contractors; and in default
of such repairs by Tenant, at the expiration of fifteen (15) days after
delivery, except in case of emergency, of written notice to Tenant, Landlord may
make the same and Tenant agrees to pay to Landlord promptly upon Landlord's
demand, as Additional Rent, the cost thereof with interest at the rate of the
lesser of ten percent (10%) per annum or prime rate plus 2%.
ARTICLE 14.00 ALTERATIONS BY TENANT
Section 14.01 Tenant's Improvements
Tenant agrees that it shall not substantially improve or substantially alter the
Premises in any way without prior written approval of Landlord, which approval
shall not be unreasonably withheld, conditioned or delayed as to non-structural
or cosmetic alterations. Any improvements made by Tenant which have been
approved by Landlord shall be at the sole cost and expense of Tenant. Tenant
agrees that any improvements or alterations approved by Landlord shall be
constructed in a good and workmanlike manner. During the Term of the Lease,
Tenant shall maintain such improvements and alterations in good condition.
Tenant agrees that any additions, alterations and improvements made by it to the
Premises (leasehold improvements) shall upon termination of the Lease
automatically become the property of Landlord and shall remain upon the Premises
in the absence of written agreement to the contrary. Tenant further shall not
cut or drill into or secure any fixture, apparatus, or equipment of any kind to
any part of the Premises without Landlord's prior written consent, which consent
shall not be unreasonably withheld or delayed.
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Section 14.02 Exterior and Structural Improvements
Tenant shall not alter the exterior of the Premises (including but not limited
to the facade and/or signs) and will not make any structural alterations to the
Premises or any part thereof without Landlord's prior written approval of such
alterations, which approval shall not be reasonably withheld or delayed.
Section 14.03 Signs and Advertising
Tenant shall not place or suffer to be placed or maintained on the exterior of
the Premises any sign, advertising matter or any other thing of any kind, and
shall not place or maintain any decoration, lettering or advertising matter on
the glass of any window or door of the Premises without Landlord's prior written
approval which approval shall not be unreasonably withheld or delayed. Tenant
shall maintain any such sign, decoration, lettering, advertising matter or other
thing as may be approved by Landlord in good condition and repair at all times.
Section 14.04 Painting/Decorations
Tenant will not paint or decorate any part of the exterior of the Premises
without Landlord's prior written approval.
Section 14.05 Approval by Landlord
No alterations, renovations, improvements, other installation to be made in or
on the Premises (including, but not limited to, electrical, plumbing, and
mechanical installation and storefront or facade construction) shall be
commenced until plans and specifications therefor have been submitted to
Landlord and Landlord has approved same in writing. The plans and specifications
required hereunder and the improvements to be made pursuant thereto shall be
certified and performed by a person duly qualified to do the work described in
said plans and specifications in the jurisdiction wherein the Premises are
situated, and same shall comply with all applicable codes, rules, regulations
and ordinances.
ARTICLE 15.00 ROOF AND WALLS
Landlord shall have the exclusive right to use all or any part of the roof of
the Premises for any purpose; to erect additional stores or other structures
over all or any part of the Premises; to erect in connection with the
construction thereof temporary scaffolds and other aids to construction of the
exterior of the Premises, provided that access to the Premises shall not be
denied; and to install, maintain, use, repair and replace within the Premises
pipes, ducts, conduits, wires and other mechanical equipment serving other parts
of the Albany Street Plaza, the same to be in locations within the Premises as
will not deny Tenant's use thereof, and which will not be visible from Tenant's
customer area. Landlord may make any use it desires of the side or rear walls of
the Premises, provided that such use shall not encroach on the interior of the
Premises or interfere with Tenant's signage.
ARTICLE 16.00 COMMON FACILITIES
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Section 16.01 General
The common facilities which may be furnished by Landlord in or near the Albany
Street Plaza for the general common use of tenants, their officers, agents,
employees and invitees, including without limitation, loading docks and areas,
delivery passages, package pickup stations, pedestrian sidewalks, malls,
lobbies, courts and ramps, landscaped and planted areas, retaining walls,
stairways, bus stops, lighting facilities, heating, ventilation and
air-conditioning equipment and system, comfort stations and other areas and
improvements, shall at all times be subject to the exclusive control and
management of Landlord. Landlord shall have the right to establish, modify and
enforce reasonable rules and regulations with respect to the common facilities.
Section 16.02 Operation and Maintenance
Landlord shall operate and maintain the common facilities provided pursuant to
this Article.
Section 16.03 Landlord's Right to Alter
Landlord reserves the right in its sole discretion to change, rearrange, alter,
modify, diminish or add to any or all of the common facilities so long as there
is no unreasonable degradation to such facilities.
ARTICLE 17.00 EXPENSE OF COMMON FACILITIES
Section 17.01 Landlord's Operating Costs
The "Landlord's Operating Costs" shall be the cost and expense of operating and
maintaining the common facilities which may be provided pursuant to Article 16
(whether located on land within the Albany Street Plaza or adjacent thereto) in
a manner deemed by Landlord to be reasonable and appropriate and for the best
interests of the Albany Street Plaza, including, without limitation: all
reasonable costs and expense of operating, repairing, lighting, cleaning,
painting, striping, reasonable policing and security (including cost of
uniforms, equipment and all employment taxes); insurance, including liability
insurance for personal injury, death and property damage, insurance against
fire, extended coverage, theft or other casualties, worker's compensation
insurance covering personnel, fidelity bonds for personnel, insurance against
liability for defamation and claims of false arrest occurring in or about the
area in which the common facilities are from time to time located; plate glass
insurance for glass exclusively serving the area in which the common facilities
are from time to time located; removal of snow, ice, and debris; costs and
expense of inspection and depreciation of machinery and equipment used in the
operation and maintenance of the common facilities and personal property taxes
and other charges incurred in connection with such equipment; costs and expense
of repair and/or replacement of curbs, walkways, landscaping, drainage, pipes,
ducts, conduits and similar items, and lighting facilities; costs and expense of
planting, replanting and replacing flowers, shrubbery and planters; costs of
elevator service contracts; cost and expense for the rental of music program
services and loud speakers systems, including furnishing electricity therefore;
cost attributed by Landlord for providing energy to heat, ventilate and air-
condition areas in which the common facilities are, from time to time located;
maintenance costs related to furnishing heat, air conditioning and ventilation;
utility costs including but not limited to electric, gas, water and sewer
services; services, if
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any, furnished by the Landlord for non-exclusive use of all tenants, including
parcel pick-up and delivery services and shuttle bus service; garbage
collection; and customary building management fees for operating and maintaining
the common facilities.
Section 17.02 Tenant's Share
In each Rental Year Tenant will pay Landlord, as Additional Rent, Tenant's
Prorata Share of Landlord's Operating Costs over base year 2003.
Section 17.03 Payment and Adjustment of Tenant's Share
Tenant's share shall be paid by Tenant in monthly installments in such amounts
as are from time to time estimated and billed by Landlord during each twelve
(12) month period commencing and ending on dates designated by Landlord, each
installment being due on the first day of each month next following the sending
of the bill by Landlord. Within one hundred twenty (120) days after the end of
each Rental Year Landlord shall deliver to Tenant a statement of Landlord's
Operating Costs for such Rental Year and the monthly installments paid or
payable shall be adjusted between Landlord and Tenant, each party hereby
agreeing to pay to the other within thirty (30) days of receipt of such
statement, such amount (without interest) as may be necessary to effect
adjustment to the agreed Tenant's Share for the preceding Rental Year. Tenant's
share of Landlord's Operating Costs as provided in Landlord's yearly statement
to Tenant shall only be increased in any given year by the lesser of (a) ten
percent (10%) of the preceding year's share of Operating Costs, or (b) actual
cost. Upon reasonable notice, Landlord shall make available for Tenant's
inspection, during normal business hours, Landlord's records relating to
Landlord's Operating Costs for such preceding period. Failure of Landlord to
provide the statement called for hereunder within the time prescribed shall not
relieve Tenant from its obligations hereunder. Landlord will notify Tenant in
writing of any such charges.
ARTICLE 18.00 PAYMENT OF UTILITY CHARGES, ETC.
Section 18.01 Installation of Meters
Landlord shall install an electric meter to the Tenant's floor measuring the use
of the utilities by Tenant in the operation of the Premises. Tenant will be
charged Tenant's prorata share of the 4th floor which is 60%, of electrical
charges to the 4th floor. In the event Tenant's electrical charges deviate
substantially from their actual usage then Landlord shall install an additional
submeter, at Landlord's expense.
Section 18.02 Payment of Charges
Landlord shall pay and discharge all charges for all public and private utility
services furnished to or for the benefit of the Building during the Term, except
Tenant shall pay and discharge all charges for all utility services furnished to
or for the benefit of the Premises. Tenant shall make said payment directly to
the Landlord.
Section 18.03 Interruption in Service
Unless caused by the gross negligence of Landlord, its agents or employees,
Landlord shall under no circumstances be liable to Tenant in damages or
otherwise for any
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interruption in service of water, electricity, heating, air conditioning or
other utilities and services caused by the making of any necessary repairs or
improvements or by any cause beyond Landlord's reasonable control, and the same
shall not constitute a termination of this Lease or eviction from the Premises
(constructive or otherwise). However, in the event that such services are not
provided for more than two consecutive business days or five days in a calendar
month, then in that event the Monthly Rental will be reduced proportionately
from the date the interruption in services began until the services are
restored.
Section 18.04 Alteration of Service
Landlord reserves and shall at all times have the light in its sole discretion
to alter the utilities serving the Albany Street Plaza without disrupting
service to Tenant, and Tenant agrees to execute and deliver to Landlord without
delay such documentation as may be required to effect such alteration.
ARTICLE 19.00 INSURANCE
Section 19.01 Insurance Required
Tenant will keep in force at its expense as long as this Lease remains in effect
and during such other time as Tenant occupies the Premises or any part thereof,
public liability insurance, including contractual liability, with respect to the
Premises with carriers Landlord has approved in writing with minimum limits of
One Million ($1,000,000.00) Dollars on account of bodily injuries to or death of
one person, and Three Million ($3,000,000.00) dollars on account of bodily
injuries to or death of more than one person as the result of any one accident
or disaster; property damage insurance with minimum limits of One Million
Dollars ($1,000,000.00) and all risks perils insurance at replacement cost value
on Tenant's personal property, including inventory, trade fixtures, wall and
floor coverings, furniture and other property removable by Tenant and leasehold
improvements either existing within the Premises on the Commencement Date or
installed by Tenant during the Term of this lease; provided, however, that
Tenant's insuring of said leasehold improvements used by it shall in no way
confer on Tenant any property rights to same except as otherwise provided in
this Lease. Tenant may self-insure for glass breakage. All policies shall name
Landlord or its designee as additional named insured, and shall contain a
provision stating that such policy or policies shall not be canceled or modified
except after thirty (30) days prior written notice to Landlord. At least thirty
(30) days prior to expiration of any insurance policies required hereunder,
Tenant shall deliver to Landlord a premium bill marked paid for the full year
subsequent to the year covered by the expiring policy. If the nature of Tenant's
operation is such as to place any or all of its employees under the coverage of
local worker's compensation or similar statutes, Tenant shall also keep in
force, at its expense, so long as this Lease remains in effect and during such
other times as Tenant occupies the Premises or any part thereof, worker's
compensation or similar insurance affording statutory coverage and containing
statutory limits. If Tenant shall not comply with its covenants made in this
Article 19.00, Landlord may immediately cause insurance as aforesaid to be
issued, and in such event Tenant agrees to pay, as Additional Rent, the premium
for such insurance upon Landlord's demand. It is understood and agreed to by
Landlord that Tenant is insured and as such
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shall not be required to provide Landlord with policies of insurance. However,
Tenant shall provide Landlord with evidence of Tenant's insurance.
Section 19.02 Compliance with Landlord's Policies
Tenant shall not do or suffer to be done, or keep or suffer to be kept, anything
in, upon or about the Premises which will contravene Landlord's policies
insuring against loss or damage by fire or other hazards (including, without
limitation, public liability) or which shall prevent Landlord from procuring
such policies in companies acceptable to Landlord. If anything done, omitted to
be done or caused by Tenant to be kept in, upon or about the Premises shall
cause the rate of fire or other insurance on the Premises or on other property
of Landlord or of others within the Albany Street Plaza to be increased beyond
the minimum rate from time to time applicable to the Premises for the Permitted
Use or to any other property for the use or uses made thereof, Tenant shall pay,
as Additional Rent, the amount of any such increase upon Landlord's demand.
Section 19.03 Waiver of Subrogation
Neither the Tenant nor the Landlord, nor their respective agents or employees,
shall be liable to the other (or to anyone claiming through or under them by way
of subrogation or otherwise) for loss or damage of type normally covered by
comprehensive liability, workers compensation, fire and 'ALL-RISK" insurance
covering buildings, contents or personal injury or disability. Landlord and
Tenant shall each cause their insurance policies to contain clauses or
endorsements that the aforesaid releases shall not adversely affect or impair a
party's rights to recover under said insurance policies. In addition, it is
understood and agreed that if any such liability shall exceed the amount of the
effective and collectible insurance in question, the Tenant shall be liable for
such excess. It is understood and agreed to by Landlord that Tenant is insured.
ARTICLE 20.00 INDEMNITY
Both Parties agree to and shall save, hold and keep harmless and indemnify each
other from and for any and all payments, expenses, costs, attorney fees and from
and for any and all claims and liability for losses or damage to property or
injuries to persons occasioned wholly or in part by or resulting from any
negligent acts or omissions by the other parties or its agents, employees,
guests, licensees, invitees, subtenants, assignees or successors; or for any
cause or reason whatsoever arising out of or by reason of the occupancy by the
Tenant and the conduct of the Tenant's business.
ARTICLE 21.00 FIRE OR OTHER CASUALTY
Section 21.01 Repair; Rent Abatement
If the Premises shall be damaged by fire, the elements, accident or other
casualty 1("Casualty"), but the Premises are not thereby rendered inaccessible
or untenantable in whole or in part, Landlord shall at its expense cause such
damage to be repaired, without abatement of rent. If, as the result of casualty,
the Premises are rendered inaccessible or untenantable in part, Landlord shall
at its expense cause such damage to be repaired, and the Annual Basic Rent and
other charges shall be abated proportionately as to the portion of the Premises
rendered untenantable from the date
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of such Casualty until the Premises are rendered accessible and tenantable. If,
as the result of Casualty, the Premises are rendered wholly untenantable or
wholly inaccessible, Landlord may, subject to Section 21.02 at its expense cause
such damage to be repaired and the Annual Basic Rent and other charges shall be
abated from the date of such Casualty until the Premises, or any portion
thereof, have been rendered accessible and tenantable. In no event shall
Landlord be liable for interruption to Tenant's business or for damage to or
replacement or repair of Tenant's personal property, including inventory, trade
fixtures, floor coverings, furniture, supplies, records and other property
removable by Tenant under the provisions of this Lease. Landlord will have
thirty (30) days to notify Tenant as to whether or not Tenant space will be
repaired. Tenant will have the option to terminate Lease if the premises are not
substantially repaired within 120 days of Landlord's notice.
Section 21.02 Termination By Landlord
If the Premises are a) rendered substantially untenantable, made inaccessible or
b) damaged as a result of any cause which is not covered by Landlord's
insurance, or c) damaged in whole or in part during the last two years of the
Term (or of a renewal term, if any) or if Building is damaged to the extent of
fifty (50%) percent or more of the rentable floor area thereof, then in any such
event, Landlord may terminate this Lease by giving to Tenant notice within
ninety (90) days after the occurrence of such event. Annual Basic Rental and
other charges shall be adjusted as of the date of such cancellation. In the
event of a Lease cancellation, security deposit will be returned to Tenant
within 15 business days.
Section 21.03 Demolition
If the Building is so substantially damaged that it is reasonably necessary, in
Landlord's judgment, to demolish such Building for the purpose of reconstruction
or otherwise, Landlord may demolish the same in which event the rent shall be
abated and the lease terminated as if the Premises were rendered untenantable by
a Casualty. In no event, however, shall Landlord be required to reconstruct any
building demolished pursuant to this Section. Upon notice by Landlord to Tenant
of its intention not to reconstruct, this Lease shall terminate. In the event of
a Lease cancellation, security deposit will be returned to Tenant within five
(5) business days.
ARTICLE 22.00 CONDEMNATION
If the whole or any part of the Premises shall be taken under the power of
eminent domain, this Lease shall terminate as to the part so taken on the date
Tenant is required to yield possession thereof to the condemning authority.
Landlord shall make such repairs and alterations as may be practicable in order
to restore the part not taken to useful condition and the Annual Basic Rental
shall be reduced proportionately as to the portion of the Premises so taken. If
the portion of the Premises so taken renders the Premises unusable for the
purpose set forth in Section 2.05, either party may terminate this Lease as of
the date when Tenant is required to yield possession. Tenant shall not be
entitled to any portion of the award for the fee or leasehold of any element
hereof, and the entire award shall belong to Landlord. However, Tenant may apply
for reimbursement from the condemning authority for moving expenses and the
value of trade fixtures, if permitted. In addition, Tenant shall be able to
claim any award
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which is granted to Tenant based solely on the undepreciated value of its
leasehold improvements. Notwithstanding any provision in this Article to the
contrary, in no event shall Tenant be able to claim any award that will
adversely affect Landlord.
ARTICLE 23.00 INSPECTIONS BY LANDLORD
Tenant will, upon reasonable advance notice (including when possible in writing)
from Landlord, permit Landlord, its agents, employees and contractors to enter
all parts of the Premises during Tenant's business hours except in case of
emergency when Landlord can enter any time, to sufficiently inspect 'the same
and to enforce or carry out any provisions of this Lease.
ARTICLE 24.00 NO ASSIGNMENT, ETC.
Section 24.01 General
Tenant, for itself, its heirs, distributees, executors, administrators, legal
representatives, successors and assigns, covenants that it will not assign,
mortgage or encumber this Lease, nor sublease, or permit the Premises or any
part of the Premises to be used or occupied by others, without the prior written
consent of Landlord in each instance, which consent shall not be unreasonably
conditioned, withheld or delayed. The transfer of control, or of a majority of
the issued and outstanding capital stock, of any corporate tenant or subtenant
of this Lease or a majority interest in any partnership or other entity Tenant
or subtenant, however accomplished, and whether in a single transaction or in a
series of transactions, shall constitute an assignment of this Lease or of such
sublease requiring Landlord's prior written consent in each instance which
consent shall not be unreasonably withheld or delayed. The transfer of
outstanding capital stock of any corporate tenant, for purposes of this Article
24.00, will not include any sale of such stock by persons other than those
deemed "insiders" within the meaning of the Securities Exchange Act of 1934 as
amended, and which sale is effected through "over-the-counter-market" or through
any recognized stock exchange.
Section 24.02 Any Assignment Void
Any assignment or sublease in violation of Section 24.01 is void, and shall
constitute a default. If this Lease is assigned, or if the Premises or any part
of the Premises are subleased or occupied by anyone other than Tenant, Landlord
may, after default by Tenant, collect rent from the assignee, subtenant or
occupant, and apply the net amount collected to Rent. No assignment, sublease,
occupancy or collection shall be deemed a) a Waiver of the provisions of this
Article 24.00, or b) the acceptance of the assignee, subtenant or occupant as
Tenant; or c) release tenant from the further performance by Tenant of covenants
on the part of Tenant contained in this Lease. The consent by Landlord to an
assignment or sublease shall not be construed to relieve Tenant from obtaining
Landlord's prior written consent in writing to any further assignment or
sublease. No permitted subtenant shall assign or encumber its sublease or
further sublease all or any portion of its subleased space, or otherwise permit
the subleased space or any part of its subleased space to be used or occupied by
others, without Landlord's prior written consent in each instance, which consent
shall not be unreasonably conditioned, withheld or delayed. Landlord will
respond to Tenants
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request for consent within 10 business days from the date that all required
financial, background and whatever other information that Landlord reasonably
requires is presented to the Landlord by the Tenant. Landlord shall be entitled
to receive 100% of all excess rents received by sublandlord but sublandlord
shall be entitled to deduct such reasonable expenses related to securing the
sublease.
Section 24.03 Limitation on Remedies
Tenant shall not be entitled to make, nor shall Tenant make, any claim, and
Tenant by this Section waives any claim, for money damages (nor shall Tenant
claim any money damages by way of set-off, counterclaim or defense) based upon
any claim or assertion by Tenant that Landlord has unreasonably withheld or
unreasonably delayed its consent or approval to a proposed assignment or
subletting as provided for in this Article 24.00. Tenant's sole remedy shall be
an action or proceeding to enforce any such provision, or for specific
performance, injunction, or declaratory judgment.
ARTICLE 25.00 DEFAULT
Section 25.01 Events of Default
The following events are referred to collectively as "Events of Default", or
individually as an "Event of Default":
If default shall be made by Tenant in the due and punctual payment of any
rent when the same shall become due and payable, and such default shall
continue for a period of ten (10) business days after written notice from
Landlord stating that this Lease and the Term shall expire and terminate on
the date specified in such notice, which shall be at least ten (10)
business days after the giving of such notice, and upon the date specified
in such notice, this Lease and the Term and all rights of Tenant under this
Lease shall expire and terminate;
This Lease or the Premises or any part of the Premises are taken upon
execution or by other process of law directed against Tenant, or are taken
upon or subject to any attachment at the instance of any creditor or
claimant against Tenant, and the attachment is not discharged or disposed
of within fifteen business (15) days after its levy;
Tenant files a petition in bankruptcy or insolvency or for reorganization
or arrangement under the bankruptcy laws of the United State or under any
insolvency act of any state, or admits the material allegations of any such
petition by answer or otherwise, or is dissolved or makes an assignment for
the benefit of creditors;
Involuntary proceedings under any such bankruptcy law or insolvency act or
for the dissolution of Tenant are instituted against Tenant, or a receiver
or trustee is appointed for all or substantially all of the property of
Tenant, and such proceeding is not dismissed or such receivership or
trusteeship vacated within sixty (60) days after such institution or
appointment;
Tenant fails to take possession of the Premises on the Commencement date of
the Term; and such default shall continue for a period of ten (10) business
days after written notice from Landlord stating that this Lease and the
Term shall expire and terminate on the date specified in such notice, which
shall be at least ten (10) business days after the giving of such notice,
and upon the
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date specified in such notice, this Lease and the Term and all rights of
Tenant under this Lease shall expire and terminate;
(f) Tenant materially breaches any of the other agreements, terms,
covenants or conditions which this Lease requires Tenant to perform,
and such breach continues for a period of thirty (30) days after
written notice from Landlord to Tenant.
Section 25,02 Landlord's Remedies
If any one or more Events of Default set forth in Section 25.01 occurs (subject
to the notice provision in Section 25.01), then Landlord has the right, at its
election:
to give Tenant written notice of Landlord's intention to terminate this
Lease on the earliest date permitted by law or on any later date specified
in such notice, in which case Tenant's right to possession of the Premises
will cease and this Lease will be terminated, except as to Tenant's
liability, as if the expiration of the term fixed in such notices were the
end of the Term; or
without further demand or notice, to reenter and take possession of the
Premises or any part of the Premises, repossess the same, expel Tenant and
those claiming through or under Tenant, and remove the effects of both or
either, using such force for such purposes as may be necessary, without
being liable for prosecution, without being deemed guilty of any manner of
trespass, and without prejudice to any remedies for arrears of Monthly
Basic Rent or other amounts payable under this Lease or as a result of any
preceding breach of covenants or conditions; or
in addition to all other remedies specified in this Lease, Landlord can,
without further demand or notice, cure any Event of Default and charge
Tenant for the cost of effecting such cure, including, without limitation,
reasonable attorneys' fees and interest on the amount so advanced at a rate
equal to the Citibank Prime Rate as that rate may change from time to time
plus five (5%) percent provided that Landlord will have no obligation to
cure any such Event of Default of Tenant.
Should Landlord elect to reenter as provided in subsection (b), or should
Landlord take possession pursuant to legal proceedings or pursuant to any notice
provided by law, Landlord may, from time to time, without terminating this
Lease, relet the Premises or any part of the Premises in Landlord's or Tenant's
name, but for the account of Tenant, for such term or terms (which may be
greater or less than the period which would otherwise have constituted the
balance of the Term) and on such conditions and upon such other terms (which may
include concessions of free rent and alteration and repair of the Premises) as
Landlord, in its sole discretion, may determine, and Landlord may collect and
receive the rent. Landlord will make best efforts to mitigate Tenants liability
under this Lease but will in no way be responsible or liable for any failure to
relet the Premises or any part of the Premises, or for any failure to collect
any rent due upon such reletting. No such reentry or taking possession of the
Premises by Landlord will be construed as an election on Landlord's part to
terminate this Lease unless a written notice of such intention is given to
Tenant. No notice from Landlord under this section or under a forcible or
unlawful entry and detainer statute or similar law will constitute an election
by Landlord to terminate this Lease unless such notice specifically so states.
Landlord reserves the right following any such reentry or reletting to exercise
its right to
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terminate this Lease by giving Tenant such written notice, in which event this
Lease will terminate as specified in such notice.
Section 25.03 Certain Damages
If Landlord does not elect to terminate this Lease as permitted in subsection
(a) of section 25.02, but on the contrary elects to take possession as provided
in subsection (b) of Section 25.02, Tenant will pay to Landlord; (a) Monthly
Basic Rent and other sums as provided in this Lease, which would be payable
under this Lease if such repossession had not occurred, less (b) the net
proceeds, if any, of any reletting of the Premises after deducting all
Landlord's reasonable and customary expenses in connection with such reletting,
including, without limitation, all repossession costs, brokerage commissions,
attorney1 fees, expenses of employees, alteration and repair costs and expenses
of preparation for such reletting. If, in connection with any reletting, the new
lease term extends beyond the existing Term, or the premises covered by such new
lease include other premises not part of the Premises, a fair apportionment of
the rent received from such reletting and the expenses incurred in connection
with such reletting as provided in this Section will be made in determining the
net proceeds from such reletting, and any rent concessions will be equally
apportioned over the term of the new lease. Tenant will pay such rent and other
sums to Landlord monthly on the day on which the Monthly Basic Rent would have
been payable under this Lease if possession had not been retaken, and Landlord
will be entitled to receive such rent and other sums from Tenant on each such
day.
Section 25.04 Continuing Liability After Termination
If this Lease is terminated on account of the occurrence of an Event of Default,
Tenant will remain liable to Landlord for damages in an amount equal to Monthly
Basic Rent and other amounts which would have been owing by Tenant for the
balance of the Term, had this Lease not been terminated, less the net proceeds,
if any, of any reletting of the Premises by Landlord subsequent to such
termination, after deducting all Landlord's expenses in connection with such
reletting, including, but without limitation, the expenses enumerated in section
25.03. Landlord will be entitled to collect such damages from Tenant monthly on
the day on which Monthly Basic Rent and other amounts would have been payable
under this Lease if this Lease had not been terminated, and Landlord will be
entitled to receive such Monthly Basic Rent and other amounts from Tenant on
each such day. Alternatively, at the option of Landlord, in the event this Lease
is so terminated, Landlord will be entitled to recover against Tenant, as
damages for loss of the bargain and not as a penalty, an aggregate rent which,
at the time of such termination of this Lease, represents the excess of the
aggregate of Monthly Base Rent and all other Rent payable by Tenant that would
have accrued for the balance of the of the Term over the aggregate rental value
of the Premises (such rental value to be computed on the basis of a tenant
paying not only a rent to Landlord for the use and occupation of the Premises,
but also such other charges as are required to be paid by Tenant under the terms
of this Lease) for the balance of such Term, both discounted to present value at
the lesser of eight (8%) percent or the discount rate of the New York Federal
Reserve Bank on the date of the Event of Default.
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Section 25.05 Cumulative Remedies
Any suit or suits for the recovery of the amounts and damages set forth in
Sections 25.03 and 25.04 may be brought by Landlord, from time to time, at
Landlord's election, and nothing in this Lease will be deemed to require
Landlord to await the date upon which this Lease or the Term would have expired
had there occurred no Event of Default. Each right and remedy provided for in
this Lease is cumulative and is in addition to every other right or remedy
provided for in this Lease or now or after the Commencement date existing at law
or in equity or by statute or otherwise, and the exercise or beginning of the
exercise by Landlord of any one or more of the rights or remedies provided for
in this Lease or now or after the Commencement Date existing at law or in equity
or by statute or otherwise will not preclude the simultaneous or later exercise
by Landlord of any or all other rights or remedies provided for in this Lease or
now or after the Commencement Date existing at law or in equity or by statute or
otherwise. All costs incurred by Landlord in collecting any amounts and damages
owing by Tenant pursuant to the provisions of this Lease or to enforce any
provision of this Lease, including reasonable attorneys' fees whether or not one
or more actions are commenced by Landlord, will also be recoverable by Landlord
from Tenant.
ARTICLE 26.00 DEFAULT BY LANDLORD
If Landlord fails to fulfill any of the agreements or provisions of this Lease
and such failure is not corrected within ten (10) business days or mutually
agreed upon by Landlord and Tenant after having received written notice from
Tenant, then, in that event, in addition to all rights, powers or remedies
available to Tenant by law, Tenant may upon prior written notice to Landlord:
(I) correct Landlord's defaults and deduct the cost from monies due to Landlord;
(II) withhold payments of rent and other amounts (if any) due to Landlord, until
such default has been corrected; or (III) terminate this Lease and all
obligations hereunder if the specified default is not corrected within sixty
(60) days after having received notice from Tenant.
ARTICLE 27.00 SUCCESSORS AND ASSIGNS
This Lease and the covenants and conditions therein contained shall inure to the
benefit of and be binding upon Landlord, its successors and assigns, and shall
be binding upon Tenant, its successors and assigns, and shall inure to the
benefit of Tenant and only such assigns of Tenant to whom the assignment by
Tenant has been consented to by Landlord in writing.
ARTICLE 28.00 GOVERNING LAW
This Lease shall be governed by the laws of the State of New Jersey.
ARTICLE 29.00 CAPTIONS
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Captions and headings are for convenience and reference only.
ARTICLE 30.00 BROKERS
CB Richard Ellis is the Broker of record and Landlord will be responsible to pay
any fees or commissions due the broker as mutually agreed to by Landlord and
Broker.
ARTICLE 31.00 WRITTEN MODIFICATION
This writing is intended by the parties as a final expression of their agreement
and as a complete and exclusive statement of the terms thereof, all
negotiations, considerations and representations between the parties having been
incorporated herein. No representations, understandings, or agreements have been
made or relied upon in the making of this Lease other than those specifically
set forth herein. This Lease may only be modified by a writing signed by all of
the parties hereto or their duly authorized agents.
ARTICLE 32.00 SEVERABILITY
If any term or provision, or any portion thereof, of this Lease, or the
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Lease, or the application of
such term or provision to persons or circumstance other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
other term and provision of this Lease shall be valid and be enforced to the
fullest extent permitted by law.
ARTICLE 33.00 NOTICES
Any notices required or authorized to be sent pursuant to the provisions hereof
shall be sent to the parties as follows:
a) to Landlord at: Albany Street
Plaza Real Estate Management Company
c/o Boraie Development LLC.
120 Albany Street, Suite 305
New Brunswick, New Jersey 08901
b) to Tenant at: Arbinet-thexchange, Inc.
120 Albany Street, Tower II
Suite 400
New Brunswick, NJ 08901
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or such other addresses as shall be designated by the parties hereto upon
written notice. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when sent by prepaid,
registered, overnight carrier, (i.e. Federal Express) or certified mail, return
receipt requested.
ARTICLE 34.00 OPTION TO RENEW
Section 34.01 Term; Notice
Tenant is hereby granted an option to extend this term of this Lease for one (1)
successive period of three (3) or five (5) years either commencing upon
expiration of the term (the "Option Period"), provided Tenant is not in default
under the Lease and gives to Landlord at least six months written notice prior
to the expiration of the Term of Tenant's exercise of such option. The Annual
Basic Rent during the extended term shall be ninety-five (95%) percent of the
fair market value of the Premises, but not less than $26.00 per rentable square
foot
Section 34.02 Rent
All the terms and conditions of this Lease shall be in effect during the Option
Period except that the Annual Basic Rent for the Option Period (see Exhibit B)
which was mutually agreed upon by Landlord and Tenant at the execution of this
Lease.
ARTICLE 35.00 JOINT AND SEVERAL LIABILITY
If two or more individuals, corporations, partnerships or other business
associations (or any combination of two or more thereof) shall sign this lease
as Tenant, the liability of each such individual, corporation, partnership or
other business association to pay rent and perform all other obligations
hereunder shall be deemed to be joint and several. In like manner, if the Tenant
named in this lease shall be a partnership or other business association, the
members of which are, by virtue or statue or general law, subject to personal
liability, the liability of each such member shall be joint and several.
ARTICLE 36.00 NOT A JOINT VENTURE
Any intention to create a joint venture or partnership relationship between the
parties hereto is hereby expressly disclaimed.
ARTICLE 37.00 NO OPTION
The submission of this lease for examination does not constitute a reservation
of or option for the Premises, and this Lease becomes effective only upon
execution and delivery thereof by Landlord and Tenant.
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ARTICLE 38.00 THIRD PARTY BENEFICIARY
Nothing contained in this lease shall be construed so as to confer upon any
other party the rights of a third party beneficiary as to any provision
contained herein.
ARTICLE 39.00 COMPLIANCE WITH ALL LAWS
The Tenant shall promptly comply with all laws, ordinances, rules, regulations,
requirements and directives of the Federal, State and Municipal Governments or
Public Authorities and of all their departments, bureaus and subdivisions,
applicable to and affecting the Premises, their use and occupancy, for the
correction, prevention and abatement of nuisances, violations or other
grievances in, upon or connected with the Premises, during the Term, provided
the offense is not due to Tenant's particular manner of use (as opposed to mere
office use); and shall promptly comply with all orders, regulations,
requirements and directives of the Board of Fire Underwriters or similar
authority and of any insurance companies which have issued or are about to issue
policies of insurance covering the Premises and its contents for the prevention
of fire or other casualty, damage or injury, at the Tenant's own cost and
expense. Tenant shall be allowed to pursue any relief allowed by law.
ARTICLE 40.00 LIMITATION ON RECOURSE
Tenant specifically agrees to look solely to Landlord's interest in Albany
Street Plaza for the recovery of any judgments from Landlord, it being agreed
that Landlord (and its shareholders, venturers, and partners, and their
shareholders, venturers and partners and all of their officers, directors and
employees) shall not be personally liable for any such judgments.
ARTICLE 41.00 FORCE MAJEURE
Landlord shall have no liability to Tenant, nor will Tenant have any right to
Terminate this actual or constructive eviction, because of Landlord's failure to
perform any of its obligations in the Lease if the failure is due to reasons
beyond Landlord's reasonable control, including, without limitation, strikes or
other labor difficulties; inability to obtain necessary Governmental permits and
approvals (including building permits or Certificates of Occupancy);
unavailability or scarcity of materials; war; riot; civil insurrection;
accidents; acts of God; and governmental preemption in connection with a
national emergency. If Landlord fails to perform its obligations because of any
reasons beyond Landlord's reasonable control (including those enumerated above),
the period for Tenant's performance shall be extended day for day for the
duration of the cause of Landlord's failure.
ARTICLE 42,00 NO RECORDATION
Neither this Lease nor any short form or memorandum hereof shall be recorded by
the Tenant or Landlord. Such recordation shall be a default under this Lease,
and the
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Tenant or Landlord hereby irrevocably appoints the Tenant or Landlord its
attorney in fact for the limited purpose of causing the removal from the record
of any such recordation.
ARTICLE 43.00 EFFECT OF SALE
A sale, conveyance or assignment of Albany Street Plaza shall operate to release
Landlord from liability from and after the effective date of such sale,
conveyance or assignment upon all of the covenants, terms and conditions of this
Lease, express or implied, except those which arose prior to such effective
date, and, after the effective date of such safe, conveyance or assignment,
Tenant shall look solely to Landlord's successor in interest in and to this
Lease. This Lease shall not be affected by any such sale, conveyance or
assignment, and Tenant will attorn to Landlord's successor in interest in this
Lease.
ARTICLE 44.00 TENANT'S ECRA WARRANTY
Tenant represents and warrants that it is not an "Industrial Establishment" as
defined in the Environmental Cleanup Responsibility Act, N.J.S.A. 13:1K-6 et
seq. ("ECRA"). Tenant shall not do or suffer anything that will cause it to
become an Industrial Establishment under ECRA during the term of this Lease.
Landlord may from time to time require Tenant at Tenant's sole expense to
provide proof satisfactory to Landlord that Tenant is not an Industrial
Establishment. In the event that Tenant now is or hereafter becomes an
Industrial Establishment then, in addition to all of the Landlord's other rights
and remedies herein, at its sole expense Tenant shall comply with all
requirements of ECRA, howsoever arising, related directly or indirectly to the
Tenant and/or its operations and/or the Premises. This Article shall survive the
expiration or sooner termination of the Lease.
ARTICLE 45.00 USE OF ASBESTOS
Landlord will inform Tenant if asbestos has been used for fireproofing or other
purposes in the construction of the building. If asbestos has been used,
Landlord will give Tenant evidence that proper testing and/or monitoring of the
air within the building has or is being done to insure that a health hazard does
not now or will not as long as Tenant occupies the Premises, exist. Landlord
will be responsible for all Hazmat unless Tenant is responsible for the
installation of any such hazardous materials.
ARTICLE 46.00 CORPORATE TENANCY
If Tenant is a Corporation, the undersigned officers of Tenant hereby warrant
and certify to Landlord that tenant is a corporation in good standing and duly
organized under the laws of the State of New Jersey, or if chartered in a State
other than the State of New Jersey, is a Corporation in good standing and duly
organized under the laws of such State and is authorized to do business in the
State of New Jersey. The undersigned representatives of Tenant hereby further
warrant and certify to Landlord
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that they are officers of the Corporation and as such are authorized and
empowered to bind the Corporation to the terms of this Lease by their signatures
thereto.
ARTICLE 47.00 PARKING
For the term of this lease and including any extensions, Landlord will provide
to Tenant fifteen (15) parking spaces and Tenant will pay at $85 per month to
Tenant for the term of this Lease, if additional parking is needed, each parking
space will be at $85.00 per space per month or the then current rate. If the
additional parking is not available at the Albany Street Plaza Parking Deck,
Landlord will help secure spaces at the Ferren Mall Parking Deck at the current
market rate at no cost to Landlord. Two (2) spaces of the 15 initial spaces will
be reserved on the ground level and the remaining 13 will be in common with
others. If Landlord defaults in its obligation to provide any of the 13 spaces
in common in the Albany Street Plaza Parking Deck then Landlord shall provide
space in the Spring Street parking lot.
ATTEST: ALBANY STREET PLAZA REAL ESTATE MANAGEMENT COMPANY
FEB 7th, 2003 ----------------------------------------
Date Omar Boraie
Managing Partner
ATTEST: ARBINET-THEXCHANGE, Inc.
FEB 6th, 2003 ----------------------------------------
Date Peter P. Sach
CAO and Treasurer
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EXHIBIT A
FLOOR PLAN - LEASED PREMISES
(TO BE SUPPLIED BY TENANT)
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EXHIBIT B
Basic Rental Schedule - Article 4.00
Rental Year and Date Amount Per Annum Amount Per Month
-------------------- ---------------- ----------------
Year 1 $149,050.00 $12,420.83
Year 2 $152,437.50 $12,703.13
Year 3 $155,825.00 $12,985.42
Year 4 $159,212.50 $13,267.71
Year 5 $162,600.00 $13,550.00
OPTION 1
Years 6-8 $176,150.00 $14,679.17
Or
Years 6-10 $176,150.00 $14,679.17
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EXHIBIT C
WORK LETTER
Landlord, at Landlord's sole expense, shall deliver the Premises fully
constructed per architectural drawings and specifications to be mutually
approved by Landlord and Tenant. The architectural drawings shall be provided by
the Building's architect and included in the Landlord's Work. The materials used
by Landlord to construct the office space shall be of high quality typical of
executive office finishes. It is anticipated that the Tenant's layout will
include the following components:
1.) 10-12 private offices, 2 conferences rooms, reception area,
mail/copier room, kitchen, data closet, area for 10-20 moveable
workstations.
2.) Fully wired (with Category5e cabling) for voice and data.
3.) Fully operational HVAC system with thernostatic controls.
4.) Lighting and electrical plan.
5.) 2 means of access/eggress to the Premises from the common area on the
floor.
6.) Built-in shelving and cabinetry in the kitchen and mail/copier rooms.
7.) Glass side-lights for each private office.
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EXHIBIT D
MASTER LEASE
This Master Lease Agreement (hereinafter referred to as the "Lease") dated
December 1, 2002, is made by and between ALBANY STREET PLAZA URBAN RENEWAL LLC,
a New Jersey Partnership having an address c/o Boraie Realty, 120 Albany Street,
Suite 305, New Brunswick, New Jersey 08901 ("Landlord") and ALBANY STREET PLAZA
REAL ESTATE MANAGEMENT COMPANY, a New Jersey Partnership having an address c/o
Boraie Realty, 120 Albany Street, Suite 305, New Brunswick, New Jersey
("Tenant").
WITNESSETH
In consideration of Ten ($10.00) Dollars, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
the mutual covenants contained herein, Landlord and Tenant agree with each other
as follows:
ARTICLE I DEMISED PREMISES AND TERM OF LEASE
Section 1.01 Demised Premises
Landlord hereby leases and lets to Tenant, and Tenant hereby takes and hires
from Landlord, upon and subject to the terms, covenants, conditions and
provisions hereof, ail that certain plot, piece or parcel of land known and
designated on the Official Tax Map of the City of New Brunswick as Block 16,
Lots 12.02 and more commonly known as 120 Albany Street, Tower II, - 36 - New
Brunswick, New Jersey 08901 (the "Land") together with all buildings and other
improvements erected or about to be erected thereon with such items of personal
property, fixtures and equipment as are used in connection with the operation of
such buildings and improvements, excepting such items of personal property as
are owned by Tenants of Tenant (the "Sub-Tenants") under executed leases
(hereinafter collectively referred to as the "Improvements"). The Land and
Improvements comprise, collectively, a first class retail shopping and
commercial center.
Section 1.02 Term Commencement
The Term of this Lease shall commence (the "Commencement Date") upon the full
and complete execution of this Lease.
Section 1.03 Term Expiration
This Lease shall be effective for so long as Landlord and the Demised Premises
remain subject to the provisions of the Urban Renewal Corporation and
Association Law of 1961, N.J.S.A. 40:55C-40 et seq. (the "Law"), as the Law be
amended, supplemented or revised, from time to time. In no event, however, shall
this Lease extend beyond April 30, 2030 unless extended by the mutual written
agreement of Landlord and Tenant.
ARTICLE II RENT
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Section 2.01 Payment of Rent
All rent (the "Rent") payable to Landlord under this Lease shall be paid to
Landlord at the address specified in Article XV hereof, or as Landlord may
otherwise designate, in lawful money of the United States.
Section 2.02 Rent
Tenant shall pay annually to Landlord as Rent the sum of $1,140,000.00, payable
in equal monthly installments of $95,000.00 payable in advance on the first day
of each full calendar month during the Term. The first such monthly payment
shall be paid on the Commencement Date and shall include prorated Rent for the
period from the Commencement Date to the first day of the first full calendar
month of any year during the Term. The annual Rent to be paid by Tenant to
Landlord may be revised, readjusted or recalculated at the election of Landlord
at least thirty (30) days prior to the expiration of any rental year during the
Term.
Section 2.03 Landlord and Tenant agree that all Rent payable hereunder shall be
net to Landlord and all costs, expenses and obligations of every kind and nature
relating to the Demised Premises shall be paid by Tenant, and Landlord shall be
indemnified and saved harmless from and against such costs, expenses and
obligations.
ARTICLE III TAXES, ASSESSMENTS, ANNUAL SERVICE CHARGE
Section 3.01 Impositions
The term "Impositions" shall mean all real estate taxes, duties or assessments
(special or otherwise), water and sewer rents whether ordinary or extraordinary,
general or special, foreseen or unforeseen, of any kind and nature whatsoever,
which at any time during the Term of this Lease shall be assessed, levied,
confirmed, imposed upon or grow out of, or become due and payable in respect of,
or become a lien on or attributable in any manner to the Demised Premises, or
the rents receivable there from, or any part thereof or any use thereon or any
facility located therein or used in connection therewith or any charge or other
payment required to be paid to any governmental authority, whether or not any of
the foregoing shall be a so called "Real Estate Tax". In this regard, Tenant
acknowledges that Landlord shall be entitled to an "in lieu" payment of real
estate taxes (hereinafter referred to as the "Annual Service Charge") for the
Improvements located on the Demised Premises, and which Annual Service Charge is
afforded to Landlord pursuant to the Law. Tenant agrees that it will take all
steps necessary to maintain and preserve the Annual Service Charge during the
Term of this Lease. From and after the Commencement Date, Tenant shall pay (or
Tenant shall cause its Sub-Tenants to pay pursuant to executed leases) all
Impositions and/or the Annual Service Charge attributable to the Demised
Premises in a timely manner, and Landlord shall be indemnified and saved
harmless from and against the payment of such Impositions.
Section 3.02 Other Governmental Charges
Tenant shall also pay (or Tenant shall cause its Sub-Tenants to pay) before any
fine, penalty, interest or cost may be added thereto or become due or be imposed
by operation of law for the non-payment thereof, all excises, levies, licenses
and permit
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fees and other governmental charges, general and special, ordinary and
extraordinary, unforeseen and foreseen, of any kind and nature whatsoever which
at any time prior to or during the Term of this Lease may be assessed, levied,
confirmed, imposed upon the Demised Premises or any part thereof or any
appurtenance thereto as a result of or in connection with the use to which the
Demised Premises are put by Tenant (notwithstanding that such use may have been
consented to by Landlord).
ARTICLE IV SURRENDER
Section 4.01 Surrender of Demised Premises
Tenant shall on the last day of the Term, or upon- an earlier termination of
this Lease, quit and surrender the Demised Premises to the possession of
Landlord without delay, broom clean and in good order, condition and repair
(reasonable wear and tear excepted), free and clear of all lettings, and
occupancies or subleases, and free and clear of all liens and encumbrances other
than those, if any, created by Landlord.
Section 4.02 Landlord Not Liable
Landlord shall not be responsible for any loss or damage occurring to any
property owned by Tenant or any Sub-Tenant.
Section 4.03 Survival
The provisions of this Article IV shall survive any termination of this Lease.
ARTICLE V INSURANCE
Section 5.01 Hazard Insurance
Tenant shall carry and/or Tenant shall cause its Sub-Tenants to carry pursuant
to executed leases, Insurance for the Demised Premises (or any portion thereof
in the case of a Sub-Tenant) against loss or damage by fire and against loss or
damage by other risks now or hereafter embraced by "extended coverage", and
against such other risks as Landlord from to time may reasonably designate, with
a replacement cost (depreciation) endorsement, in amounts sufficient to prevent
Landlord or Tenant from becoming a co-insurer under the terms of the applicable
policies, but in any event in an amount not less than the "full replacement
cost" without any deduction for physical depreciation of the Improvements. Such
"Full Replacement Cost" shall be determined at Tenant's cost and expense from
time to time at the request of Landlord, by an appraiser, engineer, architect or
contractor designated by Landlord.
Section 5.02 Liability and Other insurance
Tenant shall cause its Sub-Tenants to secure and maintain such liability
(Personal Injury and Property) insurance and such other Insurance and in such
amounts as Landlord, in its sole and absolute discretion, shall deem appropriate
to protect Landlord and Tenant.
ARTICLE VI REPAIRS
Section 6.01 Landlord: No Repair Obligations
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Landlord shall not be required to furnish any services or facilities or to make
any repairs or alterations in or to the Demised Premises. Tenant assumes the
full and sole responsibility for the condition, operation, repair, replacement,
maintenance and management of the Demised Premises.
ARTICLE VII COMPLIANCE WITH LAWS, ORDINANCES, ETC.
Section 7.00 Obligations of Law and Boards
Throughout the Term, Tenant, at its sole cost and expense, shall promptly comply
with all present and future laws, ordinances, orders, rules, regulations and
requirements of all federal, state and municipal governments, courts,
departments, commissions, boards and officers, and all orders, rules and
regulations of the National Board of Fire Underwriters or any other body
exercising similar functions, foreseen or unforeseen, structural or
nonstructural, interior or exterior, ordinary as well as extraordinary, which
may be applicable to the demised Premises and the sidewalks and curbs adjoining
the Demised Premises or to the use or manner of use of the Demised Premises or
the Sub-Tenants thereof, whether or not such law, ordinance, order, rule,
regulation or requirement shall interfere with the use and enjoyment of the
Demised Premises.
ARTICLE VIII NO WASTE
Section 8.00 No Waste
Tenant will not do or suffer any waste or damage, disfigurement or injury to the
Demised Premises or any part thereof.
ARTICLE IX CONDEMNATION
Section 9.01 Entire Demised Premises Taken
If the whole of the Demised Premises shall be acquired or condemned by eminent
domain for any public or quasi-public use or purpose, then the Term shall cease
and terminate as of the date on which possession of the Demised Premises is
actually surrendered to the condemning authority, and on such date all Rent
shall be paid up to that date and thereupon this Lease shall terminate and be
null and void as if such date were the date originally set forth herein for the
expiration of the Term and neither Landlord nor Tenant shall have any further
obligations to each other pursuant to this Lease. Tenant shall in no event have
any claim against Landlord or the condemning authority for the value of any
unexpired Term.
Section 9.02 Portion of the Demised Premises Taken
If any part of the Demised Premises shall be acquired or condemned by eminent
domain for any public or quasi-public use or purpose, and in the event that such
partial taking or condemnation shall, in Tenant's reasonable business judgment,
render the Demised Premises unsuitable for the authorized business of the
Tenant, then in any such event the Term shall, at Tenant's option, exercised by
written notice to Landlord with thirty (30) days after any such taking, cease
and terminate as of the date on which possession of the portion of the Demised
Premises in question is actually surrendered
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to the condemning authority and on such date all Rent shall be paid up to that
date and thereupon this Lease shall terminate and be null and void as if such
date were the date originally set forth herein for the expiration of the Term
and neither Landlord or Tenant shall have any further obligations to each other
pursuant to this Lease. Tenant shall in no event, have any claim against
Landlord or the condemning authority for the value of the unexpired Term. In the
event of a partial taking or condemnation which is not extensive enough to
render the Demised Premises unsuitable for the business of Tenant, then Landlord
shall make the net condemnation proceeds allocable to the Demised Premises
available to Tenant for the restoration of the Demised Premises, and Tenant
shall promptly restore the Demised Premises to a condition comparable to their
condition at the time immediately prior to "the condemnation or taking, less,
however, the portion lost in the taking, and this Lease shall continue in full
force and effect pursuant to the terms and conditions hereof; provided, however,
that Rent shall abate in proportion to the area of the Demised Premises taken.
If the condemnation award made available to Tenant by Landlord is insufficient
to pay the entire cost of the restoration work, Tenant shall supply the amount
of any deficiency. For purposes of determining the amount of the funds available
for restoration of the Demised Premises from the condemnation award, said amount
will be deemed to be that part of the award which remains after payment of
Landlord's reasonable expenses incurred in recovering same and which represents
a portion of the total sum so available (excluding any award or other
compensation for land) which is equitably allocable to the Demised Premises.
ARTICLE X ASSIGNMENT AND SUBLETTING
Section 10.00 Assignment, Subletting, Etc.
Tenant shall not assign or otherwise encumber this Lease without Landlord's
prior written consent. Tenant may freely sublet the Demised Premises or any
portion thereof as Tenant, in its sole and absolute discretion, shall deem
appropriate.
ARTICLE XI DEFAULT
Section 11.00 Events of Default
If any one or more of the following events (herein sometimes called "Events of
Default") shall happen:
if default shall be made in the due and punctual payment of any Rent or any
part thereof when the same shall become due and payable, and such default
shall continue for a period of ten (10) days after written notice thereof;
or_ if default shall be made by Tenant in the performance of or compliance
with any of the covenants, agreements, terms, or conditions contained in
this Lease other than those referred to in the foregoing subdivision (a),
and such default shall continue for a period of ten (10) days after written
notice thereof from Landlord to Tenant, provided, that if Tenant proceeds
with due diligence during such ten (10) day period to cure such default and
is unable by reason of the nature of the work involved, to cure the same
within the said ten (10) days, its time to do so shall be extended for an
additional period not to exceed the time necessary to cure the same,
provided, however, that Tenant diligently prosecutes same to completion,
such extension of time shall not subject
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Landlord or Tenant to any liability, civil or criminal, and the interest of
Landlord in this Lease shall not be jeopardized thereby; or if at any time
during the Term there shall be filed by Tenant in any court pursuant to any
statute, either of the United States or of the State of New Jersey, a
petition in bankruptcy or insolvency, or for reorganization, or for the
appointment of a receiver or trustee of all or a portion of Tenant's
property or if Tenant makes an assignment for the benefit of creditors or
petitions for or enters into an arrangement; or
if at any time during the Term there shall be filed against Tenant in any
court pursuant to any statue either of the United States or of the State of
New Jersey, a petition in bankruptcy or insolvency, or for reorganization,
or for appointment of a receiver or trustee of all or a portion of Tenant's
property, and if within sixty (60) days after the commencement of any such
proceeding against Tenant, the same shall not have been dismissed;
then and in any such event, Landlord at any time thereafter may give written
notice to Tenant specifying such Event of Default or Events of Default and
stating that this Lease and the Term shall expire and terminate on the date
specified in such notice, which shall be at least ten (10) days after the giving
of such notice, and upon the date specified in such notice, this Lease and the
term and all rights of Tenant under this Lease shall expire and terminate. The
termination of this Lease by virtue of an Event of Default or Events of Default
by Tenant shall not, however, impair any lease entered into by Tenant, as
Landlord, with any Sub-Tenant for the rental of all or portion of the Demised
Premises.
ARTICLE XII UTILITIES
Section 12.00 Utilities
Tenant agrees to make its own arrangements, at Tenant's cost and expense, for
any gas, electricity and any other utility required in connection with the use
and operation of the Demised Premises. Tenant shall pay (or cause its
Sub-Tenants to pay pursuant to executed leases) before delinquency, directly to
the appropriate company or governmental agency, all charges for all utilities
consumed on the Demised Premises.
ARTICLE XIII SUBORDINATION
Section 13.01 Subordination of this Lease
At landlord's election, this Lease shall be subordinate or superior to the lien
of any present or future mortgage irrespective of the time of recording of such
mortgage. If, from time to time, Landlord shall elect that this Lease be
subordinate to the lien of any mortgage, Landlord may exercise such election by
giving notice thereof to Tenant. However, from time to time thereafter, Landlord
may elect that this Lease be paramount to the lien of such mortgage, and may
exercise such election by giving notice thereof to tenant. The exercise of any
of the elections provided in this Section shall not exhaust Landlord's right to
elect differently thereafter, from time to time. At the election of Landlord,
this clause shall be self-operative and no further instrument shall be required.
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Upon Landlord's request, from time to time, Tenant shall (a) confirm in writing
and in recordable form that this Lease is so subordinate or so paramount (as
Landlord may elect) to the lien of any mortgage and/or (b) execute an instrument
making this Lease so subordinate or so paramount (as Landlord may elect) to the
lien of any Mortgage, in such form as may be required by an applicable
mortgagee.
Section 13.02 Subordination of Leases with Sub-Tenants
Any lease entered into by Tenant, as Landlord, and any Sub-Tenant for the rental
of all or a portion of the Demised Premises shall be subordinate to this Lease.
Tenant and any Sub-Tenant shall, upon Landlord's request from time to time (a)
confirm in writing that such lease is subordinate to this Lease or to the lien
of any mortgage made by Landlord and/or (b) execute an instrument making such
lease subordinate to this Lease or to the lien of any mortgage made by Landlord.
ARTICLE XIV ATTORNMENT
Section 14.00 Attornment
If the demised Premises is encumbered by a mortgage and such mortgage is
foreclosed, or if the Demised Premises is sold pursuant to such foreclosure or
by reason of a default under said mortgage, then, notwithstanding such
foreclosure, such sale, or such default (i) Tenant shall not disaffirm this
Lease or any of its obligations hereunder, and (ii) at the request of the
applicable mortgagee or purchaser at such foreclosure or sale, Tenant shall
attorn to such mortgagee or purchaser and execute a new lease for the Demised
Premises setting forth all of the provisions of this Lease except that the term
of such new Lease shall be for the balance of the Term.
ARTICLE XV NOTICES
Section 15.00 Notices
Any notices required or authorized to be pursuant to the provisions hereof shall
be sent to the parties as follows:
a) To Landlord at: ALBANY STREET PLAZA URBAN
RENEWAL LLC.
c/o Boraie Realty
120 Albany Street, Suite 305
New Brunswick, NJ 08901
b) To Tenant at: ALBANY STREET PLAZA REAL
ESTATE MANAGEMENT
COMPANY c/o Boraie Realty
120 Albany Street, Suite 305
New Brunswick, NJ 08901
42
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or such other addresses as shall be designated by the parties hereto upon
written notice. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when sent by prepaid
registered or certified mail, return receipt requested.
ARTICLE XVI MISCELLANEOUS
Section 16.01 Captions
The captions of this Lease are for convenience and reference only and in no, way
define, limit or describe the scope or intent of this Lease nor in any way
affect this Lease.
Section 16.02 Controlling Law
This Lease shall be construed and enforced in accordance with the laws of the
State of New Jersey.
Section 16.03 Integration; Modifications
Upon the execution and delivery hereof, this instrument shall constitute the
entire lease between the Landlord and Tenant for the Demised Premises. This
Lease cannot be changed orally but only by an agreement in writing and signed by
the party against whom enforcement of any waiver, change, modification or
discharge is sought.
ARTICLE XVII Covenants to Bind and Benefit Respective Parties
Section 17.00 Binding Effect
The covenants and agreements herein contained shall bind and inure to the
benefit of Landlord and Tenant and their respective legal representatives,
successors and assigns, except as otherwise provided herein.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed as
of the day and year first above written.
WITNESS:
LANDLORD: ALBANY STREET
PLAZA URBAN RENEWAL LLC.
A New Jersey Partnership
43
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--------------------------------------------------------------------------------
Partner
WITNESS:
TENANT: ALBANY STREET PLAZA REAL
ESTATE MANAGEMENT COMPANY A New
Jersey Partnership
, Partner
-----------------------------------------
44
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EXHIBIT E
BUILDING STANDARD CLEANING SCHEDULE
FOR ALBANY STREET
PLAZA
Daily:
Empty wastepaper baskets.
Vacuum clean or carpet sweep all carpets and rugs, dry mop all resilient and
hard floors.
Dust and wipe clean all office furniture and window sills, washing window sills
when necessary (desk surfaces are to be uncluttered and free of materials).
Wipe clean all water fountains and coolers; empty waste water.
Dust and damp dust, as necessary, interiors of all wastepaper baskets.
Remove wastepaper and normal office refuse.
Sweep and dust all private stairways.
Clean all men's and ladies' toilets, sanitize all fixtures.
Mop all ceramic tile, marble and terrazzo flooring.
Periodically:
Wash all exterior windows twice a year.
Clean interior glass twice per year.
Dust while in place all pictures, frames, charts, graphs and similar wall
hangings not reached in night cleaning schedule quarterly.
Dust all vertical surfaces and walls, partitions, doors, doorbucks and other
surfaces not reached in night cleaning schedule quarterly.
Dust all Venetian blinds quarterly.
Dust ceiling surfaces, other than acoustical ceiling material, quarterly.
Vacuum all radiation and under window air conditioning equipment and reassemble
every three years.
Clean all building standard lighting fixtures.
45
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After cleaning all lights shall be turned off, doors locked and offices left in
orderly fashion.
EXHIBIT F
RULES AND REGULATIONS
The sidewalks and public portions of the building, such as entrances, passages,
courts, elevators, vestibules, stairways, corridors or halls, shall not be
obstructed or encumbered by Tenant or used for any purpose other than ingress
and engress to and from the premises in accordance with Tenant's permitted uses.
No curtains, blinds, shades, louvered openings or screens shall be attached to
or hung in, or used in connection with, any window or door of the Premises
without the prior written consent of Landlord, such approval not to be
unreasonably withheld.
Excepting such store identification signs as are approved in writing by landlord
as to both design and location, no sign, advertisement, notice or other
lettering shall be exhibited, inscribed, painted or affixed by Tenant on any
part of the outside of the premises or building or on corridor walls.
The sashes, sash doors, skylights, windows, heating, ventilating and
air-conditioning vents and doors that reflect or admit light and air into the
halls, passageways or other public places in the building shall not be covered
or obstructed by Tenant, nor shall any bottles, parcels or other articles be
placed on the window sills.
The water and wash closets and other plumbing fixtures shall not be used for any
purposes other than those for which they were constructed, and no sweepings,
rubbish, rags or other substances shall be thrown therein. All damages resulting
from any misuse of the fixtures shall be borne by tenant, if caused by it or its
agents, employees, contractors, licensees, or invitees.
No bicycles, vehicles or animals (except seeing eye dogs) of any kind shall be
brought into or kept in or about the Premises. No cooking shall be done or
permitted by tenant on the Premises except in conformity with law and then only
in the lunchroom, as set forth in Tenant's plans, which is to be primarily used
by Tenant's employees for heating beverages and food. Tenant shall not cause or
permit any unusual or objectionable odors to be produced upon or permeate from
the Premises.
Tenant shall not make, or permit to be made, any unseemly or disturbing noises
or disturb or interfere with occupants of the building or neighboring buildings
or premises or those having business with them, whether by the use of any
musical instrument, radio, talking machine, unmusical noise, whistling, singing,
or in any other way, with the exception of the Tenant's public address system.
46
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Neither Tenant, nor any Tenant servants, employees, agents, visitors or
licensees, shall at any time bring or keep upon the Premises inflammable,
combustible or explosive fluid, or chemical substance, other than reasonable
amount of cleaning fluid, or solvents required in the normal operation of
Tenant's business offices. No offensive gases or liquids will be permitted.
No additional locks or bolts of any kind shall be placed upon any of the doors
or windows by Tenant, nor shall any changes be made in existing locks or the
mechanism thereof, without the prior written approval of Landlord and unless and
until a duplicate key is delivered to Landlord. Tenant shall, upon termination
of its tenancy, restore to Landlord all keys' of stores, offices and toilet
rooms, either furnished to, or otherwise procured by, Tenant.
All moves in or out of the Premises, or the carrying in or out of any safes,
freight, furniture or bulky matter of any description must take place during the
hours which Landlord or its agent may reasonably determine from time to time,
pursuant to article 10.02. Only the building freight elevator shall be used for
such purposes. Tenant will insure that movers take reasonable measures required
by Landlord to protect the building (e.g. windows, carpets, walls, doors, and
elevator cabs) from damage.
Landlord reserves the right to exclude from the building at all times other than
business hours all persons who do not present a pass to the building signed by
Tenant. Issuance of such passes by landlord for Tenant shall be on a reasonable
basis.
The Premises shall not be used for lodging or sleeping or for any immoral or
illegal purpose.
The requirements of Tenant will be attended to only upon application at the
office of the building. Building employees shall not perform any work or do
anything outside of their regular duties, unless under special instructions from
the office of Landlord.
There shall not be used in any space, or in the public halls of any building,
either by Tenant or by its jobbers or others, in the delivery or receipt of
merchandise, any hand trucks, except those equipped with rubber tires and side
guards. No hand trucks, mail carts or mail bags shall be used in passenger
elevators, provided adequate access or use of the freight elevator is reasonably
available to Tenant, or Tenant's agents.
Landlord reserves the right to modify or delete any of the foregoing Rules &
Regulations and to make such other and reasonable Rules and Regulations as in
its judgment may from time to time be needed for the safety, care and
cleanliness of the Premises, and for the preservation of good order therein.
47
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DATED
AMEC PROPERTIES LIMITED
- to -
PACIFIC GATEWAY EXCHANGE (U,K.) LIMITED
----------
LEASE
relating to Ground Floor premises forming part of a building at
12/18 Paul Street London EC2
Term: 10 years from 11th June 1999
Rent: (pound)60,000 p.a. for the first 5
years subject to review
----------
LAYTONS
Carmelite 50 Victoria
Embankment
Blackfriars London
EC4Y0LS
Tel: 0171 842 8000 Fax: 0171 842 8080
E-mail: laytons@laytons.com
Ref: DPW/81499
<PAGE>
INDEX
1. PRELIMINARY..............................................................1
Definitions..............................................................1
Gender...................................................................4
Number...................................................................4
Obligations..............................................................4
Statutory References.....................................................4
Covenants by the Tenant..................................................4
Superior Lease:..........................................................4
DEMISE HABENDUM AND REDDENDUM..................................................5
TENANT'S COVENANTS.............................................................6
Pay Rents................................................................6
Discharge Outgoings......................................................6
Service Charge...........................................................7
Value Added Tax..........................................................9
Observance of Statutory Requirements.....................................9
Fire Precautions:.......................................................10
Repair..................................................................10
38S Decoration and Maintenance..........................................11
Rubbish and Appearance:.................................................12
Matters Prejudicial to the Demised Premises:............................12
Improvements and Alterations............................................14
Signs and Erections.....................................................14
Planning:...............................................................15
Inspection and Remedial Works...........................................17
User:...................................................................18
Assignment and Underletting:............................................19
Facilitate Landlord's Dealings with the Demised Premises................24
Landlord's Access to the Demised Premises...............................25
Provision of Information to the Landlord................................25
Payment of Fees and Expenses............................................26
Indemnities.............................................................27
Yield Up................................................................28
Observe Covenants.......................................................29
4. LANDLORD'S COVENANTS....................................................29
Quiet Enjoyment.........................................................29
Services................................................................30
Superior Lease..........................................................30
5. INSURANCE...............................................................30
Maintenance of Cover....................................................30
Tenant to Insure Glass..................................................30
Suspension of Rent on Occurrence of Insured Risk........................31
Access for reinstatement................................................31
Tenant not to Prejudice Insurance.......................................31
Re-building if Insurance Money Irrecoverable............................32
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Tenant's User and Insurance - To Pay Costs..............................32
Frustration.............................................................32
Tenant's Insurances.....................................................32
...5.10 Notification of Damage..........................................33
6. PROVISOS................................................................33
Re-Entry:...............................................................33
Distress................................................................34
Formal Licences.........................................................35
Resolution of Differences...............................................35
Compensation............................................................35
Tenant's Goods Left in Premises.........................................36
Service of Notices......................................................36
Exclusion of Implied Easements..........................................36
No Restriction on use of Adjoining Land.................................36
No Warranty as to Permitted Use.........................................37
Exclusion of Landlord's Liability for Accidental Loss or Damage.........37
Denial of Waiver........................................................37
Determination in the event of major damage or destruction...............37
Exclusion of Set-off....................................................38
Rights of Access;.......................................................38
Consents and Approvals..................................................38
EXCLUSION OF LANDLORD & TENANT ACT............................................38
OPTION TO BREAK...............................................................38
SURETY........................................................................39
Covenant................................................................39
Disclaimer..............................................................39
10. CERTIFICATE.............................................................40
THE FIRST SCHEDULE......................................................40
THE SECOND SCHEDULE.....................................................41
THE THIRD SCHEDULE......................................................41
THE FOURTH SCHEDULE.....................................................42
DEFINITIONS...................................................................42
YEARLY RENT AFTER REVIEW......................................................46
ASCERTAINMENT OF RENT ON REVIEW...............................................46
Determination by Surveyor...............................................46
Basis of Arbitration....................................................46
Basis of Valuation......................................................47
Interim Payments........................................................47
Memoranda of Revised Rent...............................................47
Costs...................................................................47
Statutory Rent Controls.................................................47
THE FIFTH SCHEDULE......................................................48
THE SIXTH SCHEDULE......................................................51
<PAGE>
1. DEFINITIONS.............................................................51
2. PREPARATION OF THE ESTIMATE.............................................53
3. PAYMENT OF INTERIM CHARGE...............................................53
4. SERVICE COSTS...........................................................53
5. PREPARATION AND SERVICE OF THE CERTIFICATE..............................5S
COMMENCEMENT AND EXPIRATION OF TERM...........................................59
VARIATION OF PROPORTION.......................................................60
DISPUTES......................................................................60
THE seventh SCHEDULE....................................................61
1. PRELIMINARY.............................................................61
Definitions and Interpretation..........................................61
Reversion...............................................................61
Landlord's Prior Consent................................................62
Licence to Assign.......................................................62
Lease Definitions.......................................................62
2. AUTHORISED GUARANTEE AGREEMENT..........................................62
Nature of this Deed.....................................................62
Limitation..............................................................62
3. TENANT'S COVENANTS......................................................63
Pay Rent................................................................63
Indemnify Landlord......................................................63
Premature Determination of Lease........................................63
4. APPLICATION OF TENANT'S COVENANTS.......................................64
4.1 Waiver............................................................64
4.2 Refusal to accept the Rent........................................64
4.3 Variation of Lease................................................64
4.4 Revised Rent......................................................64
4.5 Surrender of Part.................................................64
4.6 Release of Tenant.................................................64
5. DURATION OF TENANT'S COVENANTS..........................................64
<PAGE>
THIS LEASE is made on 1999
BETWEEN
(1) AMEC PROPERTIES LIMITED whose registered office is at Sandiway House
Hartford Northwich Cheshire ("the Landlord" which expression includes the
person for the time being entitled to the reversion immediately expectant
on the determination of the Term); and
(2) PACIFIC GATEWAY EXCHANGE (U.K.) LIMITED whose registered office is at 27
Chancery Lane London WC2N INF ("the Tenant" which expression includes its
successor or successors in title and permitted assigns)
NOW IT IS AGREED that:
1. PRELIMINARY
1.1 Definitions
In these presents:
"Associate" means (where the Tenant for the time being
is a company) any subsidiary company
holding company or associated company of
the Tenant (the expressions "subsidiary
company" and "holding company" having the
meaning respectively assigned to them by
section 736 Companies Act 1985 and the
expression "associated company" having the
meaning assigned to it by section 416
Income and Corporation Taxes Act 1988);
means
"Base Index" the figure shown in the Index for the month
current at the date hereof;
"The Building" means the building situate at and known as
12/18 Paul Street London EC2 of -which the
Demised Premises form part; means the
reception
"Common Parts" areas entrances halls staircases lifts
toilet accommodation and service areas
within
1
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the Building and the access roads and
footpaths parking and loading areas
landscaped and cultivated areas within the
curtilage of the Building and all other
areas the use of which is intended to be
common to the lessees of the Building or
any of them
"Demised Premises" means (save where the context otherwise
requires) the whole and each and every part
of the premises described in the First
Schedule hereto and any permitted
alterations or additions to the same
together with the fixtures and fittings
which are now or at any time hereafter may
be affixed to or upon the said premises;
"First Accounting Period" means the Accounting Period current at the
date hereof;
"Index" means the "all items" index figure of the
Index of Retail Prices published by the
Department of Employment or any successor
Ministry or Government Department;
"Interest" means interest (as well after as before
judgment) at that rate which is 4
percentage points above the base rate or
its equivalent for the time being in force
of the Royal Bank of Scotland PLC {or if
such rate shall no longer be published the
base rate of such other City of London
Clearing Bank as-the Landlord shall
nominate or if no such base rate be
published then such rate as the Landlord
shall consider to be comparable and an
appropriate replacement for the same);
"Insured Risks" means the risks against which the Superior
Landlord covenants to insure in the
Superior Lease;
"Notional Schedule of Works" means the Schedule of Works annexed hereto
entitled "Schedule of Notional Landlord's
2
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Refurbishment Works" which relates solely
to that part of the Demised Premises which
was originally demised to the Tenant by a
lease dated 10 April 1997 made between the
Landlord (1) and the Tenant(2);
"Permitted Hours" means the hours between 8.30am and 7pm on
Mondays to Fridays (excluding bank and
other public holidays) and 8.30am to 1pm on
Saturdays;
"Planning Acts" means the Town and Country Planning Acts
1990 the Planning (Listed Buildings and
Conservation Areas) Act 1990 the Planning
(Hazardous Substances) Act 1990 the
Planning (Consequential Provisions) Act
1990 the Planning and Compensation Act 1991
and every other statute for the time being
in force amending or replacing the same or
dealing with planning or related matters or
otherwise of a similar nature and every
regulation order direction plan instrument
permission or ruling made or issued under
or deriving validity from any of the same;
"Second Accounting Period" means the Accounting Period immediately
following the First Accounting Period and
"Third Accounting Period" and "Fourth
Accounting Period" shall be construed
accordingly; means all pipes wires cables
drains sewers and other
"Service Media" conducting media for the running and
passage of water and soil gas electricity
fuel oil or electronic impulses to and from
and within the Building;
"Superior Landlord" means the person in whom the reversion
expectant upon determination of the
Superior Lease shall for the time being be
vested;
"the Superior Lease" means the lease of the Building dated
10th November 1966 and made between
3
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The Standard Life Assurance Company (1) and
James Scott (Electrical Holdings) Limited
(2);
"the Surveyor" (save in the Fourth Schedule hereto) means
a Chartered Surveyor appointed by the
Landlord from time to time for the purposes
of these presents;
"Term" means the term hereby granted;
"these presents" means this Lease as from time to time
amended and any licence consent approval or
other deed or document supplemental hereto
1.2 Gender
Each gender includes each other gender
1.3 Number
Words importing the singular include the plural and vice versa
1.4 Obligations
For so long as there are two or more persons included in the expressions
"the Landlord" or "the Tenant" covenants contained in these presents which
are expressed to be made by or with such party shall be deemed to be made
by or with such persons jointly and severally
1.5 Statutory References
Statutory references (whether to a specific statute or to statutes
generally) shall include any modification or re-enactment thereof for the
time being in force and all instruments orders plans regulations
permissions and directions for the time being issued or given thereunder
or deriving validity therefrom
1.6 Covenants by the Tenant
Covenants by the Tenant not to do or omit any act or thing shall include
.an obligation not to permit cause or suffer such act or thing to be done
or omitted by any other person
1.7 Superior Lease:
1.7.1 References to any right of the Landlord to have access to the
Demised Premises shall be construed as extending to any superior
landlord and any mortgagee of the Building and to all persons
authorised by the Landlord and any superior landlord or mortgagee
(including agents professional advisors contractors workmen and
others)
4
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1.7.2 Any provision in this Lease referring to the consent or approval of
the Landlord shall where required by the Superior Lease be construed
as also requiring the consent or approval of any superior landlord
and any mortgagee of the Building but nothing in this Lease shall be
construed as implying that any obligation is imposed upon any
superior landlord or mortgagee not unreasonably to refuse any such
consent or approval
2. DEMISE HABENDUM AND REDDENDUM.
In consideration of the rents hereby reserved and of the covenants by the
Tenant hereinafter contained the Landlord hereby demises unto the Tenant
ALL THOSE the Demised Premises TOGETHER WITH the rights specified in the
Second Schedule hereto EXCEPTING AND RESERVING unto the Landlord and
persons authorised by it from time to time and all others entitled to the
like rights the rights specified in Part I of the Third Schedule hereto
and subject to the matters referred to in Part II of the Third Schedule
hereto TO HOLD the same UNTO the Tenant for the term of 10 years
commencing on and including the 11 day of June One thousand nine hundred
and ninety nine YIELDING AND PAYING therefor to the Landlord in such
manner as the Landlord may from time to time require: FIRST yearly during
the Term and so in proportion for any period less than a year a peppercorn
rent (if demanded) from and including the Term Commencement Date until 28
September 1999 and thereafter the rent of SIXTY THOUSAND POUNDS
((pound)60,000) subject to review as provided in the Fourth Schedule
hereto such rent to be paid quarterly in advance by bankers standing order
to an account specified by ' the Landlord on the usual quarter days in
each year and in each case without any deduction whatsoever save any
deductions which a tenant is obliged to make notwithstanding contrary
agreement between the parties the first payment or a proportionate part
thereof in respect of the period from the 29th day of September 1999 to
the quarter day next ensuing to be paid on the 29th day of September 1999;
SECOND by way of further or additional rent a fair proportion (to be
properly and reasonably determined by the Surveyor) of the amounts the
Landlord may from time to time expend in effecting or procuring or
otherwise relating to insurance of the Building (including without
limitation all premiums and insurance survey expenses) such sum or sums to
be paid on demand without deduction in respect of
5
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any agency or other commission whether paid or allowed to the Landlord
itself or otherwise; THIRD by way of further or additional rent but without
prejudice to any other right remedy or power herein contained or otherwise
available to the Landlord such sum or sums as shall equal Interest upon
rents or other sums payable by the Tenant to the Landlord pursuant to these
presents which shall have become due but remain unpaid from the date when
the same became due until payment thereof such sum or sums to be payable on
demand; and FOURTH by way of further or additional rent any Value Added Tax
which is or may become payable on the rents firstly, secondly and thirdly
herein reserved
3. TENANT'S COVENANTS
The Tenant hereby covenants with the Landlord that it will:
3.1 Pay Rents
Pay the rents sums and payments at the times and in the manner at and in
which the same are hereinbefore reserved and made payable without any
deduction (except as aforesaid) and not to exercise or seek to exercise any
right or claim to withhold rent or any right or claim to legal or equitable
set off:
3.2 Discharge Outgoings
Pay and discharge and indemnify the Landlord against:
3.2.1 all rates taxes duties charges assessments impositions and outgoings
whatsoever whether parliamentary parochial local or of any other
description and whether capital or non-recurring and even if of a
wholly novel nature which are now or may at any time hereafter be
taxed assessed charged or imposed upon or payable in respect of the
Demised Premises or on the owners or occupiers in respect thereof;
3.2.2 a fair proportion of any rates taxes duties charges assessments
impositions and outgoings of the nature hereinbefore mentioned which
are now or may at any time hereafter be taxed assessed charged or
imposed upon or payable in respect of the Demised Premises or any part
thereof together with other property (or on the owners or occupiers in
respect of the same);
3.2.3 any rates payable by the Landlord or loss of rating relief applicable
to empty premises suffered by it after the end of the Term by reason
of such
6
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relief being allowed to the Tenant or any underlessee of the Tenant in
respect of any period before the end of the Term; all charges for
electricity water and gas supplied to or consumed in the Demised
Premises-and the meter rents in connection therewith and all telephone
and other communications charges in respect of the Demised Premises
PROVIDED THAT:
3.2.4.1 nothing in this sub-clause 3.2 shall oblige the Tenant to pay or
indemnify the Landlord against any tax assessed or charged upon any
dealing with the reversion expectant hereon or on the rents hereby
reserved PROVIDED FURTHER THAT the Tenant shall be obliged to pay or
indemnify the Landlord against Value Added Tax assessed or charged on
the rents hereby reserved;
3.2.4.2 if any dispute shall arise as to the amount or method of any
apportionment to be made for the purposes of paragraph 3.2.2 of this
sub-clause the same shall be determined under the provisions of
sub-clause 6.4 hereof;
3.2.4.3 if by any statutory provision the Tenant is prohibited from paying
any amount which it would otherwise be its obligation to pay under
this sub-clause or the Landlord is required to pay any such amount
without reimbursement from the Tenant notwithstanding the provisions
of this sub-clause then the rent first herein reserved shall be
increased in respect of the quarter in which the Landlord is required
to pay such amounts to such sum as after deduction of the amount which
the Landlord is so required to pay or the Tenant is prohibited from
paying leaves clear in the hands of the Landlord the amount of the
rent so First reserved and payable in respect of that quarter
3.3 Service Charge
To pay the Landlord a Service Charge (and an Interim Charge on account
thereof) calculated and payable in accordance with the Sixth Schedule
hereto to the intent that the Landlord shall be fully indemnified paid and
reimbursed by the Tenant with the Tenant's due share of all costs expenses
overheads payments charges and liabilities incurred by the Landlord in
connection with the Building and the provision of present and future
services to the occupiers thereof PROVIDED
7
<PAGE>
ALWAYS that the liability of the Tenant for payment of Service Charge
pursuant to this sub clause (save for the cost of any electricity supplied
to the Demised Premises to which this proviso shall not apply) shall be
limited as follows:
3.3.1 during the First Accounting Period the liability of the Tenant for
payment .of such Service Charge (save as aforesaid) shall not exceed
the sum of (pound)44,550.00 ("the Base Charge") plus VAT thereon (if
any) apportioned on a daily basis for the period from the date hereof
until the last day of the First Accounting Period;
3.2.2 during the Second Accounting Period and the Third Accounting Period
liability of the Tenant for payment of such Service Charge (save
aforesaid) shall not exceed the Base Charge plus such sum as on the
last day of each such Accounting Period bears the same proportion to
the Base Charge as the Index on that date bears to the Base Index plus
VAT thereon (if any);
3.3.3 during the part of the of Fourth Accounting Period commencing on the
first day thereof and ending on the third anniversary of the date
hereof the liability of the Tenant for payment of such Service Charge
(save as aforesaid) shall not exceed the Base Charge plus such sum as
on the last day of the Fourth Accounting Period bears the same
proportion to the Base Charge as the Index on that day bears to the
Base Index plus VAT thereon (if any) and such maximum sum shall be
apportioned on a daily basis for the period from the first day of the
Fourth Accounting Period until the third anniversary of the date
hereof;
3.3.4 the maximum sum payable by the Tenant in respect of any Accounting
Period calculated in accordance with the foregoing sub clauses shall
not under any circumstances be less than the maximum so payable by the
Tenant during the immediately preceding Accounting Period;
3.3.5 in the event of any change after the date of this lease in the
reference base used to compile the Index then for the purpose of this
lease the figure taken to be shown in the Index after such change
shall be the figure which would have been shown in the Index if the
reference base current at the date of this lease had been retained;
3.3.6 if it becomes impossible because of any change after the date of this
lease in the methods used to compile the Index or for any other reason
8
<PAGE>
whatsoever to calculate the maximum amount of such Service Charge
payable by the Tenant during any Accounting Period to which this
proviso applies then the matter shall be referred for resolution
pursuant to sub clause 6.4 of this lease
3.4 Value Added Tax
In addition to the rents fees and other payments of whatsoever nature which
are or. shall be reserved or which are or may become payable pursuant to
the provisions of these presents by or on behalf of the Tenant to the
Landlord or any person acting on its behalf the Tenant shall pay by way of
further and additional rent to the Landlord or any such person Value Added
Tax and any similar or substituted tax at the appropriate rate which is or
may at any time hereafter become payable in respect of such payment or the
supply to which it relates (including without limitation where the Tenant
reimburses the Landlord for payments and such taxation thereon made by the
Landlord) and to indemnify the Landlord against the same (including any
penalties and interest in respect thereof)
3.5 Observance of Statutory Requirements
In relation to any and every statute and other obligation for the time
being having the force of law (including without limitation the
requirements of any government department local authority or other public
authority or duly authorised officer or court of competent jurisdiction
acting under or in pursuance of the same):
3.5.1 observe and comply in all respects with the provisions and
requirements of the same so far as they relate-to or affect the
Demised Premises or any part thereof or the user thereof or the
employment therein of any person or persons whether by the Landlord
Tenant or owner or occupier thereof;
3.5.2 execute all works and provide and maintain all arrangements which by
or under the same are or may be directed or required to be executed
provided and maintained (whether by the landlord or tenant or owner or
occupier thereof) at any time during the Term upon or in respect of
the Demised Premises or any part thereof or in respect of any user
thereof or employment therein of any person or persons
3.5.3 indemnify the Landlord at all times against all costs charges and
expenses of or incidental to the execution of any works or the
provision of any arrangements so directed or required as aforesaid;
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3.5.4 not at any time during the Term do on or about the Demised Premises
any act or thing by reason of which the Landlord may under any statute
incur or have imposed upon the Landlord or become liable to pay any
penalty damages compensation cost charge or expense
3.6 Fire Precautions:
3.6.1 Compliance with Recommendations: Without limiting the preceding
sub-clause comply at all times with all recommendations (whether
legally enforceable or not) from time to time of the appropriate
authorities and of any insurer of the Demised Premises in relation to
fire precautions affecting the Demised Premises and keep and maintain
sufficient fire fighting and extinguishing apparatus in and about the
Demised Premises installed in compliance with such recommendations and
with any legal requirements and open to inspection and maintained to
the reasonable satisfaction of the Landlord and not to obstruct the
access to or means of working of the same
3.6.2 Not Obstruct Escapes: Not at any time obstruct any fire escape doors
corridors stairs or other equipment facilities or arrangements upon or
in the Demised Premises
3.7 Repair
3.7.1 Sole Obligations: To keep the Demised Premises (including the doors
floors windows and glass all landlord's fixtures and fittings and all
Service Media sanitary and water apparatus plate glass services and
appurtenances of whatsoever nature belonging to the Demised Premises)
in good and substantial repair and properly maintained cleansed and
amended in every respect and whenever necessary to comply with such
obligation properly renewed and replaced with appropriate items of
equivalent or superior quality (damage by any of the Insured Risks
excepted save to the extent that the policy or policies of insurance
shall not have been vitiated or payment of any of the policy monies
withheld or refused by reason of any act neglect or default of the
Tenant or any sub-tenant or their respective employees agents
licensees or invitees)
3.7.2 Common Obligations: Pay to the Landlord on demand a proper proportion
of the .expenses of repairing maintaining renewing and rebuilding all
party walls or fences and all service areas and access ways
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and all pipes sewers drains watercourses or other easements used or to
be used in common by the occupiers of the Demised Premises and the
occupiers of any adjoining or neighbouring premises and to keep the
Landlord indemnified against such proportion of such expense as
aforesaid PROVIDED ALWAYS that if any dispute shall arise as to the
amount of any apportionment to be made for the purposes of this sub-
clause the same shall be determined by the Surveyor
3..8 Decoration and Maintenance
3.8.1 Internal: In the fifth year of the Term and also during the twelve
months immediately preceding its termination (howsoever the same may
be determined) but not twice in consecutive years properly prepare
paint and paper or otherwise treat as appropriate all the internal
surfaces originally painted papered or treated and all additions
thereto in the Demised Premises with -appropriate materials and
generally to redecorate throughout restoring and making good the
Demised Premises in accordance with good standards of workmanship and
materials and in the last year to a colour scheme previously approved
in writing by the Landlord (such approval not to be unreasonably
withheld or delayed)
3.8.2 Cleaning: As often as necessary clean and treat in an appropriate
manner to the reasonable satisfaction of the Landlord all materials
surfaces and finishes of the interior and the exterior of the Demised
Premises which ought normally to be so cleaned and treated (including
without limitation all wood plaster metal stonework cladding and
concrete) and wash ail surfaces requiring to be washed and keep clear
all gutters drains downpipes and gulleys serving the Demised Premises
3.8.3 Equipment: Keep all the equipment plant machinery apparatus and
services for the time being in or serving the Demised Premises in good
working order and properly and regularly maintained by competent and
suitably qualified persons and operate the same properly
3.8.4 Windows: Clean the insides of the window glazing of the Demised
Premises at least once in every month
3.8.5 Common Parts: Not to place or leave nor to permit to be .left or
placed any items in the Common Parts but to keep the same unobstructed
at all times
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3.8.6 General obligation: Without limiting the foregoing obligationsth
Tenant shall in any event at all times keep the Demised Premises in
every respect in good order well maintained tended decorated clean and
tidy so as to be onsistent with high standards of office and estate
management and ensure the Demised Premises retain the attributes of
high class administrative offices
3.9 Rubbish and Appearance:
3.9.1 Removal of Rubbish: Not form any refuse dump or scrap heap on the
Demised Premises or any part thereof but instead deposit and store all
refuse rubbish scrap and waste material at all times in proper
receptacles within the Demised Premises so as not to be unsightly and
ensure that all the same is removed therefrom regularly and not less
often than weekly
3.9.2 Maintenance of Appearance: Not bring or do upon the Demised Premises
anything which is or may become in the reasonable opinion of the
Landlord untidy unclean unsightly or otherwise detrimental to the
amenities or appearance of the Demised Premises or any neighbouring
premises and comply forthwith with the requirements of any written
notice given by the Landlord to restore the amenities or appearance of
the Demised Premises or any neighbouring premises
3.9.3 Goods outside the Buildings: Not place exhibit or hang any goods or
articles outside the Demised Premises
3.10 Matters Prejudicial to the Demised Premises:
3.10.1 Not Damage: Not do or suffer on or to the Demised Premises anything
which may prejudice damage weaken or endanger the same in any way or
lessen their value
3.10.2 Overloading: Not place or keep in the Demised Premises any article
in such position or in such quantity or weight or otherwise in such
manner howsoever as to overload or cause damage to or be in the
reasonable opinion of the Landlord likely to overload or damage the
Demised Premises nor otherwise treat or use any part of the Demised
Premises in such a manner as to subject them to any strain beyond that
which they are designed to bear or otherwise to be likely to damage
them in any respect
3.10.3 Prohibited Equipment: Not install or bring upon the Demised Premises
any machinery or equipment which may cause a nuisance or annoyance to
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others or by vibration weight noise or otherwise be likely to damage
or weaken the Demised Premises in any respect
3.10.4 Drainage: Take all such measures as may be reasonably necessary to
ensure that any effluent or other matter discharged into or placed in
the drains and sewers which belong to or are used for the Demised
Premises alone or in common with other premises will not be corrosive
or in any way harmful to the said drains or sewers or cause any
obstruction or deposit therein
3.10.5 Electrical Installation: Not use or treat the electrical wiring and
electrical installations in the Demised Premises or any part thereof
in such a way as to overload the same nor otherwise prejudice or cause
damage to the same
3.10.6 Deleterious Substances: Not store or bring upon any part of the
Demised Premises (including without limitation the car park forming
part of the Building save normal fuel in the fuel tanks of permitted
vehicles) any petrol benzol kerosene or other highly or especially
offensive combustible inflammable explosive radioactive or dangerous
spirit liquor fluid .or substance or any materials that may attack or
in any way injure by percolation corrosion vibration or otherwise the
structure of the Demised Premises or the Building except with the
prior written consent of the Landlord and within a store properly
designed and constructed for that purpose to the satisfaction of the
Landlord and the storage of such substances and materials and their
use within the Demised Premises shall in all respects be in accordance
with all general or local statutes and any local regulation or byelaw
and any requirements of any insurance effected in respect of the
Demised Premises or the Building
3.10.7 Encroachments: Not obstruct any of the windows or lights belonging
to the Demised Premises and use its best endeavours to prevent any new
window light passage drain or other encroachment or easement being
made into against upon or over the Demised Premises and if any
encroachment or easement whatsoever shall be attempted to be made or
acquired by any person or persons give notice thereof in writing to
the Landlord as soon as reasonably practicable after the same shall
come to its notice and at the cost of the Tenant do all such things as
the Landlord may
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request or which may be proper for preventing any encroachment or
easement being made or acquired
3.10.8 Security: Ensure that the Demised Premises are at all times secure
against damage by vandalism and malicious damage
3.11 Improvements and Alterations
3.11.1 Structural Changes: Not to make any alteration or addition to the
Demised Premises which is structural or external or otherwise cut maim
or remove any of the walls ceilings roofs floors girders or timbers of
the Demised Premises (unless for the purpose of making good defects)
3.11.2 Non Structural Changes: Not without the prior written consent of the
Landlord (which shall not be unreasonably withheld or delayed) make
any non-structural internal alteration or addition to the Demised
Premises PROVIDED THAT after giving written notice to the Landlord
with all relevant information of its intention so to do the Tenant may
from time to time without such consent (but subject to all other
necessary consents and approvals and all other obligations of the
Tenant) install internal demountable partitions of a design and
materials and to a layout and otherwise complying with the Tenant's
obligations under these presents and reposition remove and alter the
same (in a manner complying with the said obligations);
3.11.3 Reinstatement: Unless otherwise requested by the Landlord to
reinstate the Demised Premises to their former original condition and
remove any partitioning and similar works to the reasonable
satisfaction of the Landlord at the end or sooner determination of the
Term;
3.11.4 Notification of Value of Alterations: Upon completion of any
material alterations permitted hereunder notify the Landlord of the
full reinstatement value thereof
3.11.5 Waste: Not commit any waste save as expressly permitted by the
preceding sub-clauses of this sub-clause 3.11
3.12 Signs and Erections
Not exhibit on the grounds roof outer walls or windows (so as to be visible
from the outside) of the Demised Premises any aerial antenna mast wire dish
flagpole sign signboard advertisement hoarding fascia placard bill notice
poster symbol sticker or other notification whatsoever save with the prior
written consent of the
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Landlord (such consent not to be unreasonably withheld or delayed) in
addition to any permission required by statute and maintain to the
reasonable satisfaction of the Landlord any of the same which are so
approved
3.13 Planning:
3.13.1 Not Breach the Planning Acts: Not at anytime during the Term do or
omit anything on or in connection with the Demised. Premises the doing
or omission of which contravenes the Planning Acts or any licences
consents permissions approvals and conditions- (if any) granted or
imposed thereunder or under any enactment repealed thereby and
indemnify the Landlord against all actions proceedings damages
penalties costs charges claims and demands in respect of any such acts
and omissions
3.13.2 Approval of Applications: If the Landlord consents to any matter for
which its consent is required under these presents and such matter
requires licence consent permission or approval under the Planning
Acts the Tenant shall not submit the application to the appropriate
national or local or other public authority (hereinafter referred to
as "the planning authority") unless and until the form and wording of
the application has been approved in writing by the Landlord (such
approval not-to be unreasonably withheld or delayed) and subject
thereto any application shall be made at the cost of the Tenant and
(if requested) in the name of the Landlord and all other persons (if
any) interested in the Demised Premises
3.13.3 Copy Planning Decisions: Give to the Landlord immediately upon
receiving the same a copy of every licence consent permission approval
and other decision by any planning authority whether granted or
refused
3.13.4 Conditional Grants: If the planning authority indicates its
willingness to grant any desired licence consent permission or
approval only with modifications or subject to conditions not to
effect such modifications or conditions without the prior written
consent of the Landlord (such consent not to be unreasonably withheld
or delayed) and give to the Landlord forthwith full particulars of
such modifications or conditions
3.13.5 Observance of Conditions: Observe and perform all conditions
attached to any planning permission and keep, the Landlord fully and
effectually indemnified against all actions proceedings damages
penalties costs charges claims and demands whatsoever in respect of
the costs of the said
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application and works and things done in pursuance of the said
plannihg permission and in respect of all breaches (if any) of the
said conditions and every part thereof respectively and (without
limiting the foregoing) unless the Landlord otherwise directs carry
out during the Term all works required to be carried out by a date
after its termination as a condition of any planning consent granted
during the Term for development commenced during the Term
3.13.6 Notify Landlord of Planning Communications: Give notice forthwith to
the Landlord of any notice order or proposal for a notice or order
served on the Tenant under the Planning Acts and if so required by the
Landlord at the Landlord's cost produce or join in making such
objections or representations in respect of any proposal as the
Landlord may reasonably require
3.13.7 Compliance with Planning Requirements: Promptly comply at the
Tenant's own cost with any notice or order served under the provisions
of the Planning Acts on the Landlord or the Tenant relating to the
Demised Premises except any such that result from any action or
application of or by the Landlord or its predecessor or predecessors
3.13.8 Planning Compensation: If the Tenant receives any compensation with
respect to its interest hereunder because of revocation or
modification of a planning permission or of any restriction placed
upon the user of the Demised Premises under or by virtue of the
Planning Acts then upon the termination of the Term in any manner the
Tenant shall forthwith make such provision as is just and equitable
for the Landlord to receive a due proportion of such compensation Any
dispute as to the proportion payable to the Landlord shall be
determined in accordance with sub-clause 6.4
3.13.9 Not Precipitate Compulsory Purchase Order: Not make any application
or do any act which may give rise to a proposal or cause to be served
an order for the compulsory acquisition of the Demised Premises or any
part thereof
3.13.10 Restriction on Planning Applications and Development: Not make any
application for planning permission in respect of the Demised Premises
or any part thereof nor carry out any development or other works
whatsoever
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at the Demised Premises or any part thereof if the making of such
application for planning permission or the grant of a planning
permission pursuant thereto or the carrying out of such development or
other works would give rise to any tax charge or other levy payable by
the Landlord
3.14 Inspection and Remedial Works
3.14.1 Permit Inspection: Permit the Landlord or the Landlord's agents or
such workmen as may be authorised by them upon reasonable prior
written notice except in the case of emergency at reasonable times and
as often as may be necessary to enter into and upon the Demised
Premises and examine the state of repair and condition of the same
3.14.2 Opening-Up and Tests: In any examination pursuant to sub-clause
3.14.1 the Landlord may where necessary cause parts of the Demised
Premises to be opened up or tested or subjected to other works and if
any defect or breach of covenant is thereby revealed (or the extent of
any defect or breach established) the Tenant shall make good any
damage caused by such opening up tests or other works at its own
expense but otherwise the Landlord shall make good the same
3.14.3 Remedial Works: Within two calendar months (or sooner if requisite)
after notice in writing to the Tenant of any defects wants of
reparation maintenance decoration renewals or replacements for which
the Tenant is liable under these presents and any other matters found
on such examination to be in breach of the covenants by the Tenant in
these presents the Tenant shall commence and proceed diligently to
repair and make good maintain decorate or renew and replace the same
as the case may be or (in the case of items existing in breach of
covenant) remove the same or otherwise rectify the breach in a good
and proper manner in all respects to the reasonable satisfaction of
the Landlord and will complete all such works as soon as practicable
according to such notice and the covenants in that behalf hereinbefore
contained
3.14.4 Default by Tenant: If the Tenant defaults in performing its
obligations under sub-clause 3.14.3 it shall be lawful but not
obligatory for the workmen or others to be employed by the Landlord to
enter upon the Demised Premises and carry out the works required by
the notice and all expenses properly incurred thereby shall on demand
be paid by the Tenant
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to the Landlord and if not so paid shall be recoverable by the
Landlord as liquidated damages together with Interest thereon from the
date of demand until the date of actual payment (both dates inclusive)
AND the Tenant hereby irrevocably appoints the Landlord to be the
agent of the Tenant throughout the Term (but without liability to
account) for the purpose o entering on inspecting and viewing any
parts of the Demised Premises not at the time of such inspection in
the occupation of the Tenant
3.15 User:
3.15.1 Permitted User: Use the Demised Premises and every part thereof or
permit the same to be used solely as offices for use within Class B.I
of the Town & Country Planning (Use Classes) Order 1987 as enacted at
the date hereof and for no other purpose
3.15.2 Prohibited Activities: Not use the Demised Premises or any part
thereof for any illegal immoral noisy noxious offensive or dangerous
purpose nor for any sale by auction public exhibition show or
political meeting nor do or allow to remain upon the Demised Premises
anything which may reasonably be considered to be an annoyance
nuisance disturbance damage or otherwise to the detriment of the
Landlord or the owners or occupiers of any adjoining or neighbouring
premises
3.15.3 Electronic Equipment: Not use any radio electric or electronic
equipment in the Demised Premises in such manner or condition as to
cause electric electronic or other interference to adjoining or
neighbouring premises or equipment owned or operated therein
3.15.4 Musical Instruments: Not use any musical instruments radio sets
television sets tape recorders record players or other audio equipment
in the Demised Premises so as to be audible from outside the Demised
Premises
3.15.5 Parking Spaces: Use any car parking areas and facilities comprised
within the Building and over which rights are herein granted solely
for the parking of private motor cars for the benefit of persons
occupying or visiting the Demised Premises and in particular but
without limitation not to permit washing maintenance or (save in
emergency to vehicles brought onto such car parking areas for a
purpose permitted by this sub clause
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other than the execution of such work) repair work to or upon motor
vehicles and not bum or store rubbish or other material thereon
3.15.6 Residential Purposes: Not use the Demised Premises or any part
thereof as sleeping accommodation or for residential purposes
3.16 Assignment and Underletting:
3.16.1 Dealings with Part: Not (save as hereinafter provided) assign
transfer mortgage charge or part with or share the possession or
occupation of any part of the Demised Premises or suffer any person to
occupy or share the occupation of any part of the Demised Premises
whether as a licensee or otherwise or grant or allow any rights over
the same
3.16.2 Assignment:
3.16.2.1 Interpretation: In this sub-clause the following expressions have
the following meanings:
"Intended Assignee" means the party to whom the Tenant
proposes to assign this Lease;
"Tenant's Application Date" means the date of the Tenant's
application to the Landlord for
consent to assign;
"A G A" means an Authorised Guarantee
Agreement as defined in Section 16 of
the Act in the form set out in the
Seventh Schedule or such other form
as the Landlord shall reasonably
require;
"The Act" means the Landlord and Tenant
(Covenants) Act 1995;
"Surety Covenants" means the covenants on the part of a
proposed surety in the form set out
in Clause 9;
3.16.2.2 Landlord's Prior Consent: Not without the prior consent in writing
of the Landlord (not to be unreasonably withheld or delayed) and of
the Superior Landlord to assign the whole of the Demised Premises
3.16.2.3 Landlord's Refusal of Consent: The Landlord may (for the purposes
of Section 19 (1A) of the Landlord and Tenant Act 1927) refuse its
consent to an assignment by the Tenant of the whole of Demised
Premises in any of the following circumstances:-
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(a) if at the Tenant's Application Date or at the time of completion
of the proposed assignment any rents or other sums which have
fallen due for payment to the Landlord under this Lease remain
unpaid (whether in whole or in part);
(b) if at the Tenant's Application Date or at the time of completion
of the proposed assignment there is in the reasonable opinion of
the Landlord a substantial subsisting breach of covenant by the
Tenant relating to the state of repair or condition of the
Demised Premises;
(c) if the Tenant for the time being is a company and the intended
Assignee is an Associate of the Tenant;
(d) if in the reasonable opinion of the Landlord the Intended
Assignee is not of sufficient financial standing to enable it to
comply with the obligations of the Tenant under this Lease;
(e) if in the reasonable opinion of the Landlord the assignment would
have an adverse effect on the value of the Landlord's reversion
to the Demised Premises;
(f) where for any reason not otherwise provided for in this sub-
clause it is reasonable for the Landlord to withhold its consent
3.16.2.4 Preconditions of Grant of Consent: The Landlord may (for the
purposes of SI9(1A) of the Landlord and Tenant Act 1927) grant consent
subject to all or any of the following conditions:-
(a) that the Tenant executes and unconditionally delivers to the
Landlord an A G A and the Surety (if any) covenants with the
Landlord by deed in such form as the Landlord shall reasonably
require to fully guarantee and indemnify the Landlord from and
against any failure by the Tenant to comply with its obligations
contained in the A G A;
(b) that the Intended Assignee deposits with the Landlord such sum as
the Landlord may reasonably determine not exceeding 12 months of
the rent first reserved in this Lease at the rate current at the
Tenant's Application Date and enters into a Rent Deposit Deed
with the Landlord in such form as the Landlord shall reasonably
require or where reasonably required by the Landlord
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the Intended Assignee will procure a guarantor or guarantors
acceptable to the Landlord (acting reasonably) to enter into a
full guarantee and indemnity of the Intended Assignee's
obligations under this .Lease in the form of the Surety
Covenants;
(c) that if at any time before the assignment any' of the
circumstances set out in Clause 3.16.2.3 apply, the Landlord may
revoke its consent to the assignment by written notice to the
Tenant;
(d) that the assignment is completed within such time as may
reasonably be specified by the Landlord;
(e) that the Intended Assignee enters into a Deed to be prepared by
the Landlord at the cost of the Tenant containing a covenant by
the Intended Assignee with the Landlord to observe and perform
the covenants terms and conditions contained in this Lease and to
be observed and performed by the Tenant as if such covenants
terms and conditions were therein repeated with the substitution
of the name of the Intended Assignee for the name of the Tenant;
(f) any other conditions which in the circumstances it would be
reasonable for the Landlord to impose
3.16.3 Underletting:
3.16.3.1 Landlord's Prior Consent: Not without the prior consent in writing
of the Landlord (such consent not to be unreasonably withheld or
delayed) to underlet the whole of the Demised Premises or to underlet
any part or parts of the Demised Premises except such part as would
result in not more than two separate occupations of the Demised
Premises (the occupation of the Tenant counting as the first of such
occupations) ("a Permitted Part") but subject at all times to any
restrictions imposed by or contained in the Superior Lease
3.16.3.2 Covenants by Undertenants: Not underlet the whole of the Demised
Premises or a Permitted Part unless and until the intended undertenant
has been approved in writing by the Landlord ("the Permitted
Undertenant") and the Permitted Undertenant has entered into a Deed to
be prepared by the Landlord at, the reasonable cost of the Tenant
containing a covenant with the Landlord by the Permitted Undertenant
to perform and observe during the term to be granted by the underlease
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the covenants terms and conditions contained in this Lease and to be
performed and observed by the Tenant (save for the payment of the
yearly rent first hereby reserved and insofar as the same relate to
and affect the Permitted Part in the case of an underletting of a
Permitted Part) in the same manner as if such covenants and conditions
were therein repeated with the substitution of the name of the
Permitted Undertenant for the name of the Tenant
3.16.3.3 Sureties: If a Permitted Undertenant shall be a limited liability
company (or the Landlord otherwise reasonably so requires) then such
person or persons as the Landlord reasonably considers to be of
suitable financial standing shall prior to any underletting join in
the Deed to be entered into pursuant to this sub-clause as surety and
(jointly and severally) covenant with the Landlord that such Permitted
Undertenant shall observe and perform its obligations to the Landlord
as aforementioned and that any neglect or forbearance of the Landlord
or any disclaimer or forfeiture of this Lease shall not release or
exonerate the surety
3.16.3.4 Conditions of Underletting: Not grant any underlease of the whole
of the Demised Premises or of a Permitted Part except upon the
following conditions:
(a) the form of each underlease is previously approved by the
Landlord (such approval not to be unreasonably withheld or
delayed) and in particular contains covenants similar to and in
all respects consistent with those herein contained in so far as
applicable;
(b) the Landlord is reasonably satisfied that the rent payable
thereunder is a full market rack rent without fine or premium and
is not less than that for the time being payable hereunder (or in
the case of an underletting of a Permitted Part at a rate per net
lettable square foot not less than that payable hereunder for the
time being) and that the underlease provides for upward only
review of such rent on the rent review dates and on the same
basis as (mutandis mutatis) specified in the Fourth Schedule to
this Lease;
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(c) the licence for the grant of each underlease contains a covenant
by the Tenant with the Landlord to enforce the covenants on the
part of the Permitted Undertenant therein contained and a direct
covenant by the Permitted Undertenant with the Landlord to
observe those covenants;
(d) sections 24 to 28 inclusive of the Landlord. and Tenant Act 1954
(as amended) are effectively excluded with the due authority of
an appropriate court order and the Landlord has received a copy
of such order certified by the Tenant's solicitors to be a true
copy;
(e) the grant of any sub-underlease and the parting with or sharing
possession of the whole or any part of the premises thereby
demised are absolutely prohibited and the assignment of the whole
of the same is prohibited without the Landlord's and the
Superior. Landlords prior written consents (the consent of the
Landlord not to be unreasonably withheld or delayed) and the
assignment mortgage or charge of any part of the same is
absolutely prohibited
3.16.3.5 Schedule of Underlertings: If and when reasonably called upon by
the Landlord so to do supply to the Landlord from time to time a
schedule containing full details of all subsisting underlettings of
the Demised Premises
3.16.3.6 Breach of Underlease Covenants: In the event of a breach non-
performance or non-observance of any of the covenants conditions .
agreements and provisions contained or referred to in this Lease
(except the covenant for payment of rent) by any underlessee of the
Tenant forthwith upon discovering the same take and institute all
necessary steps and proceedings to remedy such breach non-performance
or non- observance and otherwise to exercise and enforce as
appropriate all rights and obligations contained in any underlease of
the Demised Premises or part thereof
3.16.3.7 Rent Reviews in Underleases: If any underlease provides for a rent
review the Tenant will exercise that .review in accordance with its
terms and not agree the reviewed rent without the Landlord's prior
written approval (approval not to be unreasonably withheld)
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3.16.4 Beneficial Interests: Not hold or occupy the Demised Premises or any
part thereof as trustee or agent or otherwise for the benefit of any
other person
3.16.5 Possession and Occupation: Not part with or share possession or
occupation of the Demised Premises or any part thereof except by
virtue of an assignment or underletting of a kind permitted by this
sub-clause
3.16.6 Grant of Rights: Not grant rights over the whole or any part of the
Demised Premises save such as are contained in an underlease of a
Permitted Part
3.16.7 Sharing: Notwithstanding the provisions of this sub-clause if and
for so long as the Tenant for the time being is a company the Tenant
may share possession of the whole or any part of the Demised Premises
with any other company which is a wholly owned subsidiary of the
Tenant Provided that the Tenant shall first inform the Landlord of the
name and any change of occupier from time to time of the Demised
Premises and so that no relationship of landlord and tenant is thereby
created or transferred
3.16.8 Notice of Assignment or Underletting: Within one calendar month next
after any transfer charge assignment underlease (whether immediate or
mediate) or devolution of the Demised Premises to give notice in
writing of such transfer charge assignment underlease or devolution
and of the name address and description of the transferee chargee
assignee or person upon whom the relevant term or any part thereof may
have devolved or of the undertenant (as the case may be) to the
Landlord and any superior landlord AND produce to the Landlord and any
superior landlord or their respective solicitors for the time being
the instrument of transfer charge assignment or devolution or the
counterpart of the underlease or a certified copy thereof and to pay
to each of them a reasonable fee for the registration thereof
3.17 Facilitate Landlord's Dealings with the Demised Premises
3.17.1 Permit Inspection by Prospective Purchasers: At all reasonable times
and subject to reasonable prior notice during the Term and provided
that the same shall not materially interrupt or prejudice the business
of the Tenant or of any lawful occupier of the Demised Premises permit
all prospective purchasers of or dealers in the Landlord's
reversionary interest
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by order in writing of the Landlord or the Landlord's agents to view
and take measurements of the Demised Premises without interruption
3.17.2 Permit Re-Letting Notices: Permit the Landlord or the Landlord's
agents at any time within six calendar months next before the
expiration or sooner determination of the Term to enter upon the
Demised Premises and to fix and retain without interference upon any
suitable part or parts thereof a notice board for re-letting the same
provided that it does not obscure any window or access of light or.
air to the Demised Premises and permit all persons by order in writing
of the Landlord or the Landlord's agents and by prior appointment to
view the Demised Premises at reasonable hours in the daytime without
interruption but not so as to materially interrupt or prejudice the
business of the Tenant
3.18 Landlord's Access to the Demised Premises
Permit the Landlord with or without its agents surveyors workmen and others
and the Surveyor at reasonable times (after at least twenty-four hours'
notice except in case of emergency) to enter the Demised Premises:
for the purposes referred to in sub-clause 3.17 hereof; to take
inventories of the fixtures and things in the Demised Premises to be
yielded up at the determination of the Term;
3.18.3 to estimate the value thereof for any purpose;
3.18.4 to execute any works to any adjacent adjoining or neighbouring
premises;
3.18.5 to make the same secure against entry by any unauthorised person or
against any danger which may appear to the Landlord to threaten or
endanger the Demised Premises or the Landlord's interest therein (and
so that the Landlord shall be under no obligation to take such action
and shall not by so doing be deemed to re-enter or determine the
Term);
3.18.6 to ascertain whether the covenants and conditions herein contained
on the part of the Tenant are being observed
3.19 Provision of Information to the Landlord
3.19.1 Give Notices: Immediately upon becoming aware of the same give
written notice to the Landlord of:
3.19.1.1 any notice order or proposal for a notice or order served on
the Tenant by any person or authority and to provide the Landlord
with a copy thereof and if so required by the Landlord to join in
making such
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objections or representations in respect of any such notice order or
proposal as the Landlord may require; and
3.19.1.2 any defect in the Demised Premises which is a 'relevant defect/1/
as that expression is defined in Section 4 Defective Premises Act 1972
3.19.2 Keyholders: Keep the Landlord informed as to the names addresses and
telephone numbers for use at all times of the day and night including
weekends of the persons for the time being responsible for the Demised
Premises outside business hours and who have the means of access
thereto in case of emergency
Disclose Information: Give to the Landlord at its request from time to
time such plans drawings papers and other information relating to the
Demised Premises as may be within the knowledge of the Tenant or
available to it and which the Landlord may reasonably require whether
in connection with any application or request by the Tenant or
concerning any alteration or addition or user or safety matters or
otherwise howsoever (and the Tenant hereby warrants that all
information supplied by it or on its behalf to the Landlord will be
complete accurate and not misleading)
3.20 Payment of Fees and Expenses
3.20.1 Abatement of Nuisance: Pay all costs charges and expenses incurred
by the Landlord in abating any nuisance in respect of the Demised
Premises and executing all such works as may be necessary for abating
a nuisance in obedience to a notice served by a local or other
competent authority
3.20.2 Sections 146 and 147 Law of Property Act 1925: Pay to the Landlord
all costs charges and expenses (including legal costs and fees payable
to a surveyor) which may be incurred by the Landlord in or in
contemplation of any proceedings under Section 146 or Section 147 of
the Law of Property Act 1925 or either of them notwithstanding
forfeiture is avoided otherwise than by relief granted by the court
3.20.3 Costs of Licences: Pay the Landlord's reasonable legal expenses
managing agents' and surveyors' and consultants' fees (in each case
where reasonably incurred) (including disbursements and stamp duty and
the fees of any surveyors in approving plans or the execution of any
works carried out pursuant to any licence) in respect of all licences
consents and approvals of or by the Landlord its agents or advisers
all applications by
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the Tenant for any of the same including charges fees and
disbursements actually incurred in cases where consent is reasonably
refused or the application is withdrawn for any reason whatsoever
3.20.4 Enforcement Expenses: Pay all expenses including solicitors' and
other legal costs and surveyors' consultants' managing agents' and
other fees and expenses incurred by the Landlord of and incidental to
the preparation service and enforcement of any notice hereunder or the
recovery or attempted recovery of any rent or other monies payable by
the Tenant hereunder or otherwise in enforcing the obligations of the
Tenant hereunder including without limitation those relating to the
preparation and service of and otherwise concerning any schedules
relating to want of repair to the Demised Premises and whether served
during or within six months after the determination of the Term
3.21 Indemnities
Indemnify and keep fully and effectually indemnified the Landlord in
respect of:
3.21.1 all actions proceedings costs claims and demands which may be made
by any adjoining owner tenant occupier or any other person whatsoever
or any competent authority by reason of:
3.21.1.1 any defect in the Demised Premises for which the Tenant is liable
or in the execution of any works or the existence of any alterations
or additions to the Demised Premises for which the Tenant is liable;
3.21.1.2 any interference or alleged interference or obstruction of any
right or alleged right of light air drainage or other right or alleged
right now existing for the benefit of any adjoining or neighbouring
property;
3.21.1.3 any stoppage of the drains used in common with the owner or
occupier of adjoining or neighbouring property caused by the Tenant
3.21.2 all liability which may be incurred by the Landlord in respect of
any of the matters referred to in paragraph 3.21.1 of this sub-clause
for which the Tenant is liable;
3.21.3 any claims proceedings or demands and the costs and expenses
incurred thereby which may be brought against the Landlord by any
employees workpeople agents or visitors of the Tenant in respect of
any accident loss or damage whatsoever to person or property howsoever
caused and occurring in or upon the Demised Premises for which the
Tenant is liable
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and without limitation indemnify the Landlord against any liability
which the Landlord may incur for nuisance or negligence or breach of
statutory duty under the Defective Premises Act 1972 on account of the
condition of the Demised Premises or any part thereof in respect of
which the Tenant is liable;
3.21.4 all general rates and other outgoings which are payable by the
Landlord as a result of the Tenant's vacating the Demised Premises at
any date prior to the said expiry or earlier determination of the term
hereby granted;
3.21.5 every loss and damage whatsoever incurred by the Landlord by reason
of any breach or non-observance of the Tenant's obligations in this
Lease and indemnify the Landlord from and against all actions claims
liabilities costs and expenses thereby arising all monies becoming
payable under this covenant being payable by way of further rent;
3.21.6 all liabilities costs claims and demands arising by virtue of any
breach and/or omission in respect of the matters referred to in Part
II of the Third Schedule hereto
AND this sub-clause shall remain in force notwithstanding the expiry or
earlier determination of the Term as aforesaid
3.22 Yield Up
3.22.1 Yield Up: At the expiration or sooner determination of the Term
quietly yield up unto the Landlord the Demised Premises in such state
and condition as shall in all respects be consistent with a full and
due performance by the Tenant of its covenants in these presents and
on the assumption (if not the fact) that the works described in the
Notional Schedule of Works have been completed in a good and
workmanlike manner using good quality new materials and in accordance
with all necessary consents and to the reasonable satisfaction of the
Surveyor PROVIDED ALWAYS that portable partitions or Tenant's fixtures
affixed by the Tenant with the approval of the Landlord may or will if
required by the Landlord be removed by the Tenant on the Tenant making
good to the reasonable satisfaction of the Landlord any damage caused
to the Demised Premises by reason of such removal
3.22.2 Removal of Ancillary Items: The removal of the Tenant's portable
partitions or fixtures as aforesaid shall include the removal of all
ancillary
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equipment and supports of any kind and any other ancillary items
placed or constructed upon the Demised Premises by the Tenant or its
sub-tenants in relation to any items removed by the Tenant
3.22.3 Disconnection from Services: Wherever such fixtures fittings plant
or machinery are connected to or take supplies from any of the main
services they shall be disconnected by the appropriate statutory
undertaker or by a competent and properly qualified individual or
company in such a manner that all redundant service media are removed
and sealed off at points as close as possible to the various ring
mains or principal distribution pipes which provide the supplies and
such removal and sealing off shall be carried out so as not to
interfere with the continued function of the main services
3.22.4 Make Good: Make good all buildings walls floors roofs main services
and any other parts of the Demised Premises after the removal of any
such fixtures fittings plant or machinery to the reasonable
satisfaction of the Landlord
3.23 Observe Covenants
To observe and perform the covenants restrictions impositions reservations
declarations obligations and other matters referred to in Part II of the
Third Schedule hereto
4. LANDLORD'S COVENANTS
4.1 Quiet Enjoyment
The Landlord so as to bind the persons for the time being entitled to the
immediate reversion expectant on the Term but not so as to impose any
personal liability on itself except as to its own acts and defaults hereby
covenants with the Tenant that the Tenant duly paying the said rents and
sums and other payments (if any) hereby reserved and made payable and
observing and performing the covenants and conditions herein contained and
on the Tenant's part to be observed and performed shall and may peaceably
and quietly possess and enjoy the Demised Premises during the Term without
any disturbance by the Landlord or any persons lawfully claiming under or
in trust for the Landlord or by title paramount
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4.2 Services
Subject to payment by the Tenant of the Service Charge the Landlord hereby
covenants with the Tenant to perform the obligations and provide the
services Specified in the Fifth Schedule hereto during the Permitted Hours
4.3 Superior Lease
The Landlord hereby covenants to pay the rents reserved by and observe and
perform the lessee's covenants (so far as these are not the responsibility
of the Tenant under the provisions hereof) contained in the Superior Lease
and at the request and cost of the Tenant (and subject to the Tenant first
providing reasonable security for such costs) to use reasonable endeavours
to enforce the Lessor's covenants contained in the Superior Lease
5. INSURANCE
5.1 Maintenance of Cover
Unless such insurance is vitiated by act or default of the Tenant its
underlessees employees contractors licensees or invitees the Landlord use
its best endeavours to procure performance by the Superior Landlord of its
covenants in the Superior Lease as to insurance of the Building
5.2 Tenant to Insure Glass
The Tenant shall insure and keep insured in the joint names of the Landlord
and the Tenant with an insurance office approved by the Landlord in writing
(such approval not to be unreasonably withheld) all plate glass (if any)
forming part of the Demised Premises against damage or destruction by
accident in a sum sufficient to replace the same in the event of total
destruction and pay all premiums necessary for the above purpose within
seven days after the same become due and whenever so required produce to
the Landlord the policies of such insurance and the receipt for the current
year's premiums and layout forthwith all money received under such
insurance and any additional money which may be required in replacement of
the plate glass with glass of the same nature quality and thickness
PROVIDED THAT if default is made in keeping up such insurance or producing
any such policy or receipt as aforesaid the Landlord may effect or keep up
the insurance provided for by this covenant and thereupon the Tenant shall
on demand repay to the Landlord all premiums and expenses paid or payable
in respect thereof with Interest thereon in each case from the date of
payment by the Landlord
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5.3 Suspension of Rent on Occurrence of Insured Risk
If the Demised Premises or any part thereof or the means of access thereto
shall at any time be destroyed or so damaged by an Insured Risk as to be
unfit for occupation or use and the relative policy or policies of
insurance effected by the Landlord or the Superior Landlord shall not be
vitiated or payment of the policy monies refused wholly or partly by any
act or default of or suffered by the Tenant, its underlessees contractors
employees or licensees or invitees then the rent First reserved by clause 2
of this Lease or a fair and just proportion thereof according to the nature
duration and extent of the damage sustained shall be suspended and cease to
be payable until the expiration of three years from the occurrence of such
damage or until the reinstatement of the Demised Premises or the means of
access thereto the expiration of a notice of election by the Landlord or
the Tenant to terminate this Lease in accordance with the provisions of
sub-clause 6.13 hereof (whichever shall first occur} and in case of dispute
as to the proportion or period of such abatement the same shall be
conclusively determined by the Surveyor acting reasonably
5.4 Access for reinstatement
For the purpose of repairing and reinstating the Demised Premises the
Landlord and all persons authorised by it with equipment and materials
shall have full and uninterrupted right of entry at all times upon the
Demised Premises and every part thereof and the Tenant shall not do or
cause anything likely to impede such works
5.5 Tenant not to Prejudice Insurance
The Tenant shall not do or permit or suffer any act or thing which may
render void or voidable or otherwise vitiate or prejudice any insurance of
or relating to the Demised Premises or any rents or other monies or the
recoverability of any monies thereunder or render any increased premium
payable for any such insurance (and without prejudice to the Landlord's
remedies for a breach of such obligation the Tenant shall pay to the
Landlord any sum paid by way of increased premiums or loading or other
expenses thereby incurred by the Landlord) or which may make void or
voidable any policy of insurance thereon and shall comply with all
recommendations of the insurers as to fire precautions and otherwise
relating to the Premises
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5.10 Notification of Damage
Promptly upon the same occurring the Tenant shall give notice to the
Landlord of the occurrence of any damage to the Demised Premises by any
means or other event relevant to the insurance maintained by the Landlord
6. PROVISOS o |
PROVIDED ALWAYS AND IT IS HEREBY AGREED AND DECLARED as follows:
6.1 Re-Entry:
6.1.1 These presents are upon the express condition that if any of the
events specified in paragraph 6.1.2 of this sub-clause shall occur
then and in any of such circumstances and thenceforth it shall be
lawful for the Landlord or any person or persons duly authorised by
the Landlord in that behalf to re-enter the Demised Premises or any
part thereof in the name of the whole and to re-possess and enjoy the
same as if these presents had not been made without prejudice to any
right of action or remedy of the Landlord in respect of any antecedent
breach of any of the covenants by the Tenant
The events referred to in paragraph (a) of this sub-clause are:
6.1.2.1 the rents reserved herein or any part thereof remaining unpaid for
twenty-one days after becoming payable (whether formally demanded or
not); or
6.1.2.2 any covenant or stipulation by the Tenant contained in this Lease
not being performed or observed; or
6.1.2.3 in relation to the Tenant (or any one party included within the
definition of the Tenant) an Insolvency Event as defined in paragraphs
6.1.3 or 6.1.4 of this sub-clause occurring; or
6.1.2.4 the Tenant (or any one party included within the definition of the
Tenant) being a company re-register with unlimited liability or
effecting a return or reduction of capital or being struck off the
Register of Companies; or
6.1.2.5 the Tenant permitting any execution or distress to be levied on any
goods for the time being in the Premises
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6.1.3 "Insolvency Event" in relation to a company means any of the
following events being:
the Company being unable to pay its debts as they fall due or the value of
its assets being less than the amount of its liabilities taking into
account its contingent and prospective liabilities;
a proposal being made for a voluntary arrangement under Part I of the
Insolvency Act 1986 (referred to as "the Act" in the remainder of this
definition);
a petition being presented for an administration order under Part II of the
Act;
a receiver or manager being appointed whether under Part III of the Act
(including an administrative receiver) or otherwise;
the company going into liquidation as defined in section 247(2) of the Act
(other than a voluntary winding up solely for the purposes of amalgamation
of reconstruction while solvent);
6.1.3.6 a provisional liquidator being appointed under section 135 of the
Act;
6.1.3.7 a proposal being made for a scheme of arrangement under section 425
of the Companies Act 1985
6.1.4 "Insolvency Event" in relation to an individual means:
6.1.4.1 an application being made for an interim order or a proposal being
made for a voluntary arrangement under Part VIII of the Act;
6.1.4.2 a bankruptcy petition being presented to the Court or his
circumstances being such that a bankruptcy petition could be presented
under Part XI of the Act;
6.1.4.3 his entering into a deed of arrangement
6.2 Distress
If any monies payable hereunder by way of rent shall be in arrear for
twenty one days whether lawfully demanded or not it shall be lawful for the
Landlord to enter into and upon the Demised Premises or any part thereof to
enter and distrain and the distress or distresses then and there found to
dispose of in due course of law and to apply the proceeds thereof in or
towards payment of the said rents sums or other payments so in arrear and
all costs charges and expenses occasioned by the nonpayment thereof and so
that the power of the Landlord to distrain upon the | Demised Premises for
rent in arrear shall extend to and include any tenant's fixtures
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6.6 Tenant's Goods Left in Premises
If at such time as the Tenant has vacated the Demised Premises after the
.determination of the Term either by effluxion of time or otherwise any
property of the Tenant remains in or on the Demised Premises and the Tenant
fails to remove the same within twenty eight days after being requested by
the Landlord so to do by a notice in that behalf then and in such case the
Landlord may as the agent of the Tenant (and the Landlord is hereby
appointed by the Tenant to act in that behalf) sell such property (without
being responsible for ensuring that such price is the best price
obtainable) and shall then hold the proceeds of sale after deducting the
costs and expenses of removal storage and sale reasonably and properly
incurred by it to the order of the Tenant PROVIDED THAT the Tenant will
indemnify the Landlord against any liability incurred by it to any third
party whose property shall have been sold by the Landlord in the bona fide
mistaken belief (which shall be presumed unless the contrary be proved)
that such property belonged to the Tenant and was liable to be dealt with
as such pursuant to this sub-clause
6.7 Service of Notices
In addition to any other prescribed mode of service any notice hereunder
shall be validly served if served in accordance with Section 196 Law of
Property Act 1925 as amended by the Recorded Delivery Service Act 1962 or
in the case of the Tenant if sent by post to or left addressed to it (or if
there shall be more than one to any of them so that service on any one of
the Tenant shall be good service on all) on the Demised Premises or in the
case of the Tenant and any surety if sent to it him or any of them by post
or left at the last known address or addresses of it him or any of them in
Great Britain and any notice sent to the Tenant or any surety by post shall
be conclusively deemed to have been served twenty four hours after the same
was posted
6.8 Exclusion of Implied Easements
The Tenant shall not be entitled to any right easement liberty privilege or
advantage whatsoever other than those expressly granted herein and no
further right easement liberty privilege or advantage of any kind shall be
implied herein whether by statutory implication or otherwise howsoever
6.9 No Restriction on use of Adjoining Land
Nothing herein contained or implied shall impose or be deemed to impose any
restriction on the use of any land or buildings of the Landlord not
comprised in this
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Lease or give the Tenant the benefit of or the right to enforce or to have
enforced or to prevent the release or modification of any agreement
covenant condition or stipulation entered into by any lessee or tenant of
the Landlord in respect of property not comprised in this Lease or shall
operate to prevent or restrict in any way the development of any land not
comprised in this Lease
6.10 No Warrant}' as to Permitted Use
Nothing herein contained of implied shall be taken to be a covenant
warranty or representation by the Landlord that the Demised Premises can
lawfully be used for any particular purpose
6.11 Exclusion of Landlord's Liability for Accidental Loss or Damage
The Landlord shall not be responsible to the Tenant or the Tenant's
licensees underlessees employees agents or other persons in the Demised
Premises or calling upon the Tenant for any accident happening or injury
suffered or damage to or loss of any chattel sustained on the Demised
Premises
6.12 Denial of Waiver
No demand for or acceptance of rent by the Landlord or anyone on its behalf
nor any other act or conduct consistent with a continuance of the tenancy
whether or not made with knowledge of any breach of covenant or obligation
by the Tenant shall constitute a waiver in whole or in part of such breach
which shall be deemed So be a continuing breach and neither the Tenant nor
any successor to the Tenant may set up any such demand acceptance act or
conduct as a defence in any action for forfeiture or otherwise Each of the
covenants by the Tenant herein shall continue in full effect
notwithstanding that the Landlord may have waived any former breach of the
same by the Tenant or may have waived any similar obligation of any other
person
6.13 Determination in the event of major damage or destruction
6.13.1 If the Demised Premises shall be so damaged or destroyed as to be
rendered wholly unfit for occupation and use for the purposes of this
Lease without substantial re-building the Landlord may elect to treat
this Lease as at an end by serving upon the Tenant at least one
month's notice in writing of such election upon the expiration of
which the Landlord may re-enter upon the Demised Premises or any part
of them in the name of the whole and thereupon the Term shall cease
for all purposes but without prejudice to the remedy of either party
against the other in respect of any
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then subsisting breach of covenant or any arrears of rent or other
monies payable by the Tenant hereunder
6.13.2 If upon the expiry of three years commencing on the date of the
damage or destruction the Demised Premises are not made Fit for
occupation and use the Landlord or the Tenant may by notice served on
the other at any time before the Demised Premises have been made fit
for occupation and use elect to treat this Lease as at an end and
thereupon the Term shall cease for all purposes but without prejudice
to the remedy of either party against the other in respect of any then
subsisting breach of covenant or any arrears of rent or other monies
payable by the Tenant hereunder
6.14 Exclusion of Set-off
Any payment due from the Tenant or the Surety to the Landlord hereunder
whether by way of rent or otherwise shall be paid without set-off or
counterclaim
6.15 Rights of Access
Rights of access reserved or allowed to the Landlord shall be exercisable
as well by the Superior Landlord or mortgagee as by the Landlord and shall
permit access by any persons authorised by the Landlord the Superior
Landlord or mortgagee including agents advisers contractors workmen and
others whether with or without equipment and materials
6.16 Consents and Approvals
Consents and approvals required of the Landlord hereunder shall if the
Landlord so requires be required equally from any mortgagee of the Superior
Landlord but nothing herein contained shall be construed as implying that
any mortgagee or the Superior Landlord is obliged not to unreasonably
withhold its consent or approval
7. EXCLUSION OF LANDLORD & TENANT ACT
Having been authorised so to do by an Order of Mayors and City of London
Court dated the 2nd day of June 1999 the parties hereto hereby agree that
the provisions of Sections 24 to 28 (inclusive) of the Landlord and Tenant
Act 1954 (as amended) shall not apply to this Lease.
8. OPTION TO BREAK -n, O^t
If the Tenant shall desire to determine the Term on the 11th day of June
2004 ("the Tenant's Option Date") and shall give to the Landlord not less
than 6 months prior
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written notice of such desire and provided that up to the Tenant's Option
Date the Tenant shall pay the rents hereby reserved then upon the Tenant's
Option Date this. Lease shall absolutely cease and determine but without
prejudice to the rights and remedies of the Landlord in respect of any
antecedent breach non-observance or non-performance of the covenants and
other obligations on the part of the Tenant and any Surety contained in
this Lease
9. SURETY
The Surety hereby covenants with the Landlord as follows:
9.1 Covenant
That the Tenant will during the Term and as well after as before any
disclaimer of this Lease pay the rent thereby on the days and in the manner
aforesaid and will perform and observe all the Tenant's covenants
hereinbefore contained and that in case of default of such payment of rent
or in the performance or observance of such covenants as aforesaid the
Surety will pay and make good to the Landlord on demand all losses damages
costs and expenses thereby arising and that as between the Surety and the
Landlord the liability of the Surety shall be as a principal debtor or
covenantor and provided that any neglect or forbearance of the Landlord in
endeavouring to obtain payment of the rent hereby reserved when the same
becomes payable or to enforce performance of the said covenants and any
time which may be given to the Tenant by the Landlord shall not release or
exonerate or in any way affect the liability of the Surety under this
covenant
9.2 Disclaimer
That in the event of the Tenant during the Term becoming bankrupt or (being
a company) entering into liquidation (as the case may be) and the trustee
in bankruptcy or the liquidator (as the case may be) disclaiming this Lease
then if the Landlord shall within two months after such disclaimer serve
upon the Surety a notice in writing in this behalf the Surety will accept
from the Landlord at the cost' in all respects of the Surety a lease of the
demised premises for a term equal in duration to the then unexpired residue
of the Term hereof such lease to contain the like Tenant's and Landlord's
covenants respectively and the provisos and conditions in all respects
(including the proviso for re-entry) as are herein contained and (if this
lease shall subsist notwithstanding such disclaimer) subject to and with
the benefit of this Lease
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[GRAPHIC]
GROUND FLOOR LAYOUT
__________________
12-18 PAUL ST, EC2
__________________
__________________
<PAGE>
10. CERTIFICATE
It is hereby certified that there is no Agreement for Lease to which this
Lease gives . effect
IN WITNESS this document has been signed as a deed and delivered on the date
first above written
THE FIRST SCHEDULE
The Demised Premises
ALL THOSE offices and premises situate on the ground floor of the Building and
more particularly shown edged red on the plan annexed hereto and including:
(a) the entirety of the windows window frames roof-lights doors and door-frames
thereof (except for the external decorative surfaces of any such window
frames and of any door between the Demised Premises and the internal Common
Parts and of the frame of any such door) and all glass therein
(b) the finishes (including plaster) on the faces of any load-bearing walls
beams and columns within or enclosing such premises (but not the remainder
of such walls beams or columns)
(c) the internal half (severed vertically) of any non-load-bearing walls
separating such premises from other internal parts of the Building (but not
the remaining half of such walls)
(d) the whole of all external non load-bearing walls enclosing the Demised
Premises
(e) the whole of all internal non-load-bearing walls within the Demised
Premises
(f) the ceilings and ceiling finishes of the Demised Premises (but not the
structural beams joists or structural floor slabs supporting the floors or
on which floor finishes have beer, laid)
(g) the floors and floor finishes of the Demised Premises and all other
internal surfaces and partitions therein
(h) all stairs situated entirely within the Demised Premises and all other
internal surfaces and partitions therein
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all service media in the Demised Premises which exclusively serve the same
(j) all service media exclusively serving the Demised Premises but situated in
some other part of the Building
THE SECOND SCHEDULE
Rights included in the Demise
1. The right in common with the Landlord and all others entitled thereto of
access to and from the Demised Premises through over and along the Common
Parts or to use the Common Parts
2. The running and supply of water soil gas electricity fuel oil and other
electronic impulses through the Service Media to and from the Demised
Premises with the right to enter upon other parts of the Building upon
reasonable prior notice (except in emergency) to the Landlord and other
occupiers thereof with workmen and others and with plant machinery and
materials for the purpose of inspecting maintaining and repairing the
Service Media causing as little damage as reasonably possible and making
good all damage actually occasioned
3. The right of support shelter and protection to the Demised Premises from
other parts of the Building
4. The right in case of emergency only to use any designated means of escape
within the Building
5. The right to the exclusive use of two car parking spaces within the
curtilage of the Building to be allocated by the Landlord from time to time
for the parking of private motor cars
THE THIRD SCHEDULE
Part I: Exceptions and Reservations from the Demise
1. The right to erect a new building or to alter any building for the time
being on any land adjoining neighbouring or opposite the Building or to
carry out alterations to the Building notwithstanding that such alterations
or erections may diminish the access of light and air or other rights
enjoyed by the Demised Premises and the right
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to deal with the Building or any property adjoining opposite or near to the
Demised Premises as it may think fit
2. The right to enter upon the Demised Premises upon reasonable prior notice
(except in emergency) with workmen and others and with plant machinery and
materials for the purpose of carrying out works in performance of its
obligation hereunder or of carrying out works to the remainder of the
Building causing as little damage as reasonably possible in the exercise of
such right and making .good all damage actually occasioned
3. The right of passage and running of water soil gas electricity fuel oil and
other electronic impulses through the Service Media within the Demised
Premises to or from the other parts of the Building
4. The right of support shelter and protection to the remainder of the
Building from the Demised Premises.
5. | The right to use in case of emergency any means of escape within the
Demised Premises
Part II: Particulars of Restrictions and Adverse Matters
1. The matters contained or referred to in the Superior Lease (in so far as
these relate to the Demised Premises)
2. The matters contained or referred to in the Property and Charges Registers
of the Landlord's Title Number EGL 313657 at HM Land Registry in so far as
these relate to the Demised Premises
THE FOURTH SCHEDULE
Clauses 1.1 and 2: Rent Review Calculation
1. DEFINITIONS
In this Schedule:
"Assumptions" are the following assumptions at the Review Date on
which the relevant Review Period commences:
(a) that the Demised Premises are available for
immediate letting after the expiry of a rent
free period or concession or discount as to
rent such as would be
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negotiated in the open market between a willing
landlord and a willing tenant for fitting out
upon a letting of the Demised Premises as a
whole;
(b) that the Demised Premises are available for
immediate letting either (in the sole
discretion of the Landlord):
(i) with vacant possession; or
(ii) subject to .but with the benefit of such
underleases as shall have been created of
the Demised Premises with the consent of
the Landlord as aforesaid and shall be
subsisting at the Review Date
(c) that the covenants on the part of the Tenant
have been fully performed and observed;
(d) that the user permitted by this Lease and the
buildings erected on the Demised Premises
comply with the Planning Acts and all other
statutes;
(e) that the Demised Premises are fit for immediate
occupation and use in good repair and fully
fitted out and equipped and all necessary
services are available and connected and the
works described in the Notional Schedule of
Works have been completed at the cost of the
Landlord in good and workmanlike manner using
good quality new materials and in accordance
with all necessary consents;
(f) that no work has been carried out on the
Demised Premises by the Tenant its sub-tenants
and their predecessors in title or any of them
which has diminished the rental value thereof;
(g) that in case the Demised Premises have been
destroyed or damaged they have been fully
restored
"Current Rent" means the yearly rent, payable hereunder immediately
preceding the Review Date
"Disregards" are the following matters:
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(a) the fact that the Tenant its sub-tenants and
their respective predecessors in title or any
of them have been or are in occupation of the
Demised Premises or any part thereof;
(b) any goodwill attached to the Demised Premises
since the commencement of the Term by reason of
the carrying on thereat of the business of the
Tenant its sub-tenants and their predecessors
in title or any of them;
(c) any increase in rental value of any improvement
or works to the Demised Premises or any part
thereof carried out with the consent of the
Landlord (where required) and all other
applicable consents and requirements and
otherwise than in pursuance of any obligation
to the Landlord or its predecessors in title
and at the sole cost of the Tenant its
sub-tenants or their respective predecessors in
title during the Term or during any period of
occupation prior thereto arising out of an
agreement to grant the Term;
(d) (so far as may be permitted by law) all
statutory restrictions relating to the
assessment and recovery of rent
"Market Rent" means the full yearly rack rent at which the Demised
Premises might reasonably be expected to be let by a
willing landlord to a willing tenant as a whole
without fine or premium in the open market at the
Review Date on which the Review Period commences and
in each case for a term of years equivalent to the
unexpired residue of the Term or the term of 10
years whichever shall be the greater and otherwise
subject to the provisions of this Lease (other than
the amounts of yearly rent herein reserved but
including the provisions for rent review) AND
applying the Assumptions but disregarding the
Disregards
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"Payment Date" means the quarter day next following the date upon
which en ine Revised Rent shall have been
ascertained in accordance with the provisions of
this Schedule
"Review Date" means the 11th day of June in the year 2004
"Review Period" means the period commencing on the Review Date and
ending on the last day of the Term
"Revised Rent" means in respect of the Review Period for which the
same is required to be ascertained the yearly rent
as may at any time be agreed in writing between the
Landlord and the Tenant in respect of the Review
Period or (in default of agreement) the Market Rent
on the Review Date
"Shortfall" means in respect of the period (if any) beginning
immediately before the Review Period and ending
immediately before the usual quarter day next
following the date on which the Revised Rent for the
Review Period is ascertained the amount (if any) by
which the aggregate equal quarterly instalments of
the Revised Rent which would have been payable
during that period had the Revised Rent been
determined at the commencement thereof exceeds the
aggregate of the instalments of the Current Rent
payable for the same period
"Shortfall Interest" means interest on the Shortfall at the base rate of
The Royal Bank of Scotland PLC (or if such rate
shall no longer be published the base rate of such
other clearing bank as the Landlord shall nominate)
calculated on a daily basis to the date of payment
(as well after as before judgment) PROVIDED THAT for
the avoidance ofdoubt the Tenant shall only be
obliged to pay such interest in respect of the
quarterly instalments of the Revised Rent on each of
those sums from the dates on which they would have
been due (if the Revised Rent had been determined
before the Review Date) until the Payment Date (or,
if later, the date on which payment of the same is
received by the Landlord)
"Surveyor" means a Chartered Surveyor having not less than ten
years practice in England and recent substantial
experience in
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valuing premises of the kind and character similar
to those of the Demised Premises and who is a member
of a leading national or local firm of surveyors
practising in the field of office lettings as may be
nominated by agreement between the Landlord and the
Tenant or in default of agreement appointed by or on
behalf of the President for the time being of the
Royal Institution of Chartered Surveyors on the
application of the Landlord or the Tenant provided
that if the said President shall for any reason not
be available or be unable to make such appointment
at the time of application therefor the appointment
may be made by the Vice-President or next senior
officer of the said Institution then available and
able to make such appointment or if no such officer
of the said Institution shall be so available and
able by such officer of such professional body of
surveyors as the Landlord shall designate and any
reference hereafter to the President shall be deemed
to include a reference to such Vice President or
other officer
2. YEARLY RENT AFTER REVIEW
The yearly rent for each Review Period shall be equal to whichever shall be
the greater of the Current Rent and the Revised Rent
3. ASCERTAINMENT OF RENT ON REVIEW
3.1 Determination by Surveyor
If the Landlord and Tenant have not agreed the Revised Rent by a date four
months prior to the relevant Review Date (or such earlier date as the
Landlord and the Tenant may have agreed in writing) the Landlord or the
Tenant may at any time thereafter require the Market Rent to be determined
by the Surveyor acting (in the sole discretion of the Landlord) either as
an expert or as an arbitrator
3.2 Basis of Arbitration
If the Surveyor shall act as an arbitrator the arbitration shall be
conducted in accordance with the Arbitration Act 1996 or any statutory
modification or re-enactment thereof for the time being in force
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3.3 Basis of Valuation
If the Surveyor shall act as an expert:
3.3.1 his fees and expenses including the costs of appointment shall be
borne by the Tenant;
3.3.2 he shall afford an opportunity to the Landlord and the Tenant to make
representations to him;
3.3.3 he shall decide the Market Rent in his own opinion as expert and his
decision shall be final and conclusive as to the amount thereof
3.4 Interim Payments
If the Revised Rent payable on and from the Review Date has not been agreed
or determined by the Review Date the Current Rent shall continue to be
payable and upon the Payment Date the Tenant shall pay to the Landlord any
Shortfall together with Shortfall Interest For this purpose the Revised
Rent shall be deemed to have been ascertained on the date when the same has
been agreed between the Landlord and the Tenant or as the case may be the
date of award of the arbitrator or of the determination by the valuer
3.5 Memoranda of Revised Rent
When the amount of any Revised Rent has been so-ascertained memoranda
thereof shall thereupon be prepared and signed by or on behalf of the
Landlord and the Tenant and annexed to this Lease and the Counterpart
hereof
3.6 Costs
The Tenant shall upon the Landlord's request pay to the Landlord by way of
full indemnity all surveyors' legal and other costs and fees properly
incurred by the Landlord in relation to ascertainment of the Revised Rent
and matters provided for herein
3.7 Statutory Rent Controls
If:
3.7.1 at any time the Landlord suffers the imposition by any means
whatsoever of control over the rent payable hereunder; or
3.7.2 there shall be any law or public policy which shall restrict curtail
or ' modify the Landlord's right to collect the rent herein reserved
or to review or increase the yearly rent in accordance with the
provisions hereof; or
3.7.3 it shall otherwise be unlawful for the Landlord to receive or for the
Tenant to pay the whole of the rent for the time being reserved
hereunder
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the Landlord shall on each occasion after such control or part thereof as
is referred to in paragraphs 3.7.1, 3.7.2 or 3.7.3 hereof is removed
relaxed or modified be entitled on giving to the Tenant not less than one
month's notice in writing to introduce an intermediate review date which
shall be the date of expiration of such notice and the rent payable
hereimder from such date to the Review Date or until the end of the Term
(as the case may be) shall be determined in similar manner to that provided
for rent review upon the Review Date The imposition of an intermediate rent
review shall not alter any Review Date
THE FIFTH SCHEDULE
Particulars of Landlord's Services
1. To maintain and keep in good and substantial repair and condition and
rebuild replace or renew when necessary or when the Landlord (acting
reasonably) considers desirable:-
the main structure of the Building and the external and load-bearing walls
and foundations and roof of the Building and its main tanks drains gutters
and rain water pipes (other than those included in this Lease or in the
corresponding lease of any other part of the Building) all Service Media
available for use by the Tenant in common with the lessees of other parts
of the Building (except where they are repairable by a statutory
undertaking) the Common Parts the boundary walls and fences of the Building
or (in the case of the party walls or structures) the portions thereof
belonging to the Building any accommodation occupied or used by any staff
employed by the Landlord under the provisions of this clause all other
parts of the Building not included in the above paragraphs and not included
in this Lease or in the corresponding lease of any other part of the
Building
2. To use its best endeavours to light the Common Parts where and when
necessary and keep the Common Parts clean and where the Landlord considers
appropriate to
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furnish the internal Common Parts in a style and manner which the Landlord
from time to time in its absolute discretion considers suitable for the
Building
3. As and when the Landlord considers necessary (but at least once in every
five years) to paint decorate and otherwise treat the parts previously or
usually painted decorated or otherwise treated of:-
(a) the exterior of the Building
(b) the internal Common Parts
(c) any accommodation provided for staff under this clause
4. To use its best endeavours to maintain (and renew when the Landlord
considers necessary) any existing heating and hot water boilers plant
equipment and apparatus or any plant equipment and apparatus (if any) that
may hereafter be installed in the Building and which may serve the Common
Parts or the Building as a whole (other than any radiators pipes and other
apparatus within and solely serving the Demised Premises and other lettable
parts of the Building)
5. To use its best endeavours to maintain at all reasonable hours through any
existing central hot water system or any such system (if any) that may
hereafter be installed in the Building an adequate supply of hot water for
domestic use in any existing basins in the Demised Premises and the basins
in any other parts of the Building and during each period from the First
day of October to the following First day of May (or such other period as
the Landlord may determine from time to time having regard to weather
conditions) to provide reasonably adequate heat to any existing radiators
in the Demised Premises and in any other part of the Building unless the
Landlord shall be prevented from performing this covenant by the act
neglect or default of the Tenant or his employees agents licensees or
visitors or by any breakdown of apparatus or any interruption of the supply
of fuel or current or any other cause over which the Landlord has no
control and the Landlord shall not be liable for any loss damage or
inconvenience suffered by the Tenant due to the inadequate or irregular
supply or hot water or heating to the Demised Premises or to the Common
Parts
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6. To pay any outgoings charged or imposed on the Common Parts or on the
Building as a whole or on any accommodation provided for staff under the
following sub- paragraph and in respect of any such accommodation provided
for staff under the following sub-paragraph and in respect of any such
accommodation the outgoings thereof shall be deemed to include any rent
paid by the Landlord therefor or (if the Landlord shall provide such
accommodation within the Building or within other premises belonging to the
Landlord) a notional rent therefore equivalent to the rent at which the
Landlord's surveyor considers such accommodation might be expected to be
let from time to time in the open market with vacant possession.
7. At the Landlord's discretion to employ (on such terms and conditions as the
Landlord considers appropriate) maintenance staff cleaners or other persons
for the purpose of performing the Landlord's covenants under this Lease and
in particular (if the Landlord in its discretion considers appropriate)
provide free accommodation (whether in the Building or elsewhere) and any
other services for them while employed by the Landlord
8. At the Landlord's discretion to employ a firm of Managing Agents to manage
the Building and pay all proper fees salaries charges and expenses payable
to those agents or any other persons who may be managing the Building
9. To employ such surveyors builders architects engineers accountants or other
professional persons as the Landlord may consider necessary or desirable
for the property maintenance safety and administration of the Building
10. To use its best endeavours to maintain (if and when installed by the
Landlord at its discretion) and to pay all rental charges for any existing
coin or credit card operated telephone boxes in the Common Parts
11. To use its best endeavours to maintain such fire extinguishers in the
Common Parts as the Landlord may from time to time consider necessary and
to pay all charges in connection with their rental installation and
maintenance
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12. To use its best endeavours to maintain and when the Landlord considers
necessary renew or replace any existing lift and its ancillary plant and
equipment and to maintain adequate insurance against risks of breakdown and
third party claims in respect of the lift and lift equipment in such
amounts and on such terms as the Landlord shall from time to time consider
appropriate
13. The use its best endeavours to maintain (if and when installed at the
Landlord's discretion) an electric entry-phone serving the main entrance to
the Building and to pay any charges in connection with its rental
installation and maintenance
14. To do all further acts as the Landlord in its absolute discretion may
consider necessary or advisable for the proper maintenance safety amenity
and administration of the Building
15. As and when the Landlord thinks fit to set aside as a reserve such sums of
money as the Landlord shall reasonably require to meet future costs which
the Landlord reasonably expects to incur under this Lease in carrying out
work (whether or not annually recurring) of replacement maintenance repair
redecoration and renewal and for the purposes of the Sixth Schedule the
sums set aside under this clause shall be treated as items of expenditure
incurred by the Landlord
PROVIDED ALWAYS that the Landlord shall not be responsible for any failure to
provide or interruption in the provision of the services above specified nor for
any inconvenience or injury to persons or property arising from such failure or
interruption or the non performance of the covenants set out in this Schedule
where the same arises from or is due to mechanical breakdown failure or
malfunction strikes labour disputes or shortages or any cause or circumstance
beyond the control of the Landlord
THE SIXTH SCHEDULE
Calculation of Service Charge
1. DEFINITIONS
In this Schedule the following definitions apply:
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"Tenant's Proportion" means (subject to the provisions of paragraph 7
hereof) the proportion which at the commencement of
the relevant Accounting Period the floorspace of the
Demised Premises bears to the aggregate of the
floorspace of every lettable part of the Building the
said proportion as at the date of this Lease is 15.8%
Provided Always that the Tenant shall not be required
to pay any part of the Service Costs attributable to
any part of the Building which is not let but which
is available or intended or separate letting
"Floorspace" means in relation to the Demised Premises floorspace
as conclusively determined from time to time by the
Landlord's Surveyor
"Service Costs" means the amount so defined in paragraph 4 of this
Schedule
"Service Charge" means the Tenant's Proportion of the amount of the
Service Costs for each Accounting Period
"Estimate" means each estimate prepared under the provisions of
paragraph 2.1 of this Schedule
"Interim Charge" means the Tenant's Proportion of the amount of the
Estimate for each Accounting Period
"Certficate" means the certificate and statement respectively
mentioned in paragraph 5 of this Schedule
"Accounting Date" means the 31st day of December in each year (or such
other date as the Landlord may from time to time
substitute therefor)
"Accounting Period" means each period commencing immediately after one
Accounting Date and ending on the following
Accounting Date
"Payment Days" means the usual quarter days in each year
"Accountant" means an accountant or firm of accountants being
qualified under section 28 of the Landlord and
Tenant Act 1985
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2. PREPARATION OF THE ESTIMATE
2.1.1 On or before (or if that shall be impractical then as soon as
practicable after) each Accounting Date the Landlord shall prepare an
Estimate in writing of the Service Costs expected to be incurred or
charged in or in respect of the Accounting Period commencing
immediately after that Accounting Date
2.1.2 The Estimate shall contain a summary of those estimated Service Costs
2.1.3 Within fourteen days after the preparation of each Estimate a copy
thereof shall be served by the Landlord upon the Tenant together with
a statement showing the Interim Charge payable by the Tenant in
respect thereof
3. PAYMENT OF INTERIM CHARGE
3.1.1 The Interim Charge for each Accounting Period shall be paid by the
Tenant by four equal instalments on the Payment Days during such
Accounting Period
3.1.2 The Initial Inter0im Charge hereunder shall be at the rate
of (pound)22,544 per annum and the first payment thereof shall be made
on the execution of this Lease and shall be an apportioned part for
the period from the date hereof until the next Payment Day
3.1.3 Should the Interim Charge for any Accounting Period not be
ascertained and notified to the Tenant by the first Payment Day in
that Period the Tenant shall pay on account thereof a provisional
interim charge at the rate previously payable until the Payment Day
following the ascertainment and notification to it of the new Interim
Charge and on that Payment Day the Tenant shall pay (in addition to
the new Interim Charge payable on that day) the amount by which the
new Interim Charge for the period since the first Payment Day of that
Accounting Period may exceed the amount paid on account but if the
amount paid on account shall exceed the new Interim Charge for that
Period the Landlord shall give credit for the overpayment
4. SERVICE COSTS
4.1.1 The Service Costs of any Accounting Period are all the costs expenses
overheads payments charges and outgoings (together with Value Added
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contributions to the National Insurance of any such staff and the cost
of provision of pensions for any such staff
4.1.2.2 the cost of providing any uniforms working clothes tools appliances
equipment and materials used for cleaning maintaining servicing and
administering the Building and the said plant and equipment in the
Building and for supplying the services mentioned in paragraph 4.1
4.1.2.3 the cost of electricity gas oil or other fuel used for (i) the
provision and handling of any conditioned-air central-heating and hot
water in the Building (ii) the operation of any lifts in the Building
and (iii) the lighting of the Common Parts
4.1.2.4 the cost of the provision and laundering of towels for the porter's
room and the porter's lavatories in the Building
4.1.2.5 the cost of the provision and cultivation of any plants and flowers
in the Common Parts
4.1.2.6 the cost of the cleaning and maintenance of the pavements and
pathways belonging to the Building
4.1.2.7 the cost of leasing or hiring plant and equipment in the Building
4.1.2.8 the cost of complying with the provisions or requirements of the
Office Shops and Railway Premises Act 1963 The Health and Safety at
Work etc Act 1974 and the Fire Precautions Act 197I and any other Act
of Parliament affecting the Building or the plant and equipment in the
Building and the cost of opposing making representations in respect of
and/or complying with the provisions or requirements or any notice
order regulation or bye-laws made thereunder
4.1.2.9 the cost of inspecting examining maintaining repairing overhauling
and servicing and (where necessary) replacing the plant and equipment
in the Building
4.1.2.10 all payments and liabilities in respect of the cost of repairing
maintaining cleansing and renewing any party or other walls fences and
structures and service media and other things common to the Building
and other adjacent or neighbouring premises
4.1.2.11 the cost of employing a managing agent to manage the Office
Portion of the Building
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4.1.2.12 the cost of employing or engaging solicitors counsel and other
professional persons in connection with the management of the Building
and the administration and collection of the Service Costs from the
occupiers of the Building
4.1.2.13 the cost of employing agents architects engineers surveyors or
other professional persons to advise upon arrange or supervise the
execution of any works on or the provision of any services in the
Building (including the repair maintenance renewal or replacement of
any machinery plant or equipment)
4.1.2.14 if the Landlord shall require its employed staff to perform the
functions mentioned in paragraphs 4.1.2.11 4.1.2.12 or 4.1.2.13 in
lieu of agents architects engineers surveyors or Other professional
persons (as the case may be) then a reasonable charge by the Landlord
for performing such functions
4.1.2.15 if the Landlord shall itself provide any labour or materials for
the provision of any services or for the carrying out of any works
falling within paragaph 4.1 or this paragraph then a proper sum or
sums therefor including a reasonable element of profit for the
Landlord thereon
4.1.2.16 the cost of keeping the books and records of the expenditure
comprised in the Service Costs
4.1.2.17 the costs of any surveyor appointed to determine any dispute as to
the Service Costs or any component thereof and the costs of making
representations in any proceedings determination or arbitration in
relation to the Service Costs
4.1.2.18 the cost of enforcing or attempting'to enforce against the Tenant
the covenants and restrictions imposed on the Tenant by this lease and
the cost of enforcing or attempting to enforce against other tenants
in the Building similar covenants and restrictions imposed on them but
only so far as such costs shall not be recovered from the person
against whom such enforcement is made or attempted or from the person
requesting such enforcement
4.1.2.19 the cost of preparing auditing and certifying the Service Costs
4.1.2.20 all Value Added Tax paid by the Landlord in respect of the
foregoing
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4.1.2.21 the cost of opening and maintaining one or more bank accounts and
the cost (including interest) of borrowing funds (by loan or on
overdraft) to provide monies to defray the costs and expenses above
mentioned to the extent to which the same may for the time being
exceed the aggregate of (i) monies in hand and from the Interim
Charges actually received from the Tenant from the other tenants of
the Building and (ii) the Interim Charges referable to those lettable
parts of the Building which are not for the time being let on leases
under which a corresponding Interim Charge and Service Charge is
payable
4.1.2.22 such sums as the Landlord may from time to time require to be set
aside in a reserve fund as a reserve to meet such future costs as the
Landlord shall expect to incur (either during or after the expiration
of the Term) in replacing maintaining and renewing those parts of the
Building and the fixtures fittings plant and equipment therein which
the Landlord is obliged or entitled to replace maintain or renew under
the terms of this lease provided that
(a) any such reserve fund shall be placed by the Landlord in a
separate bank deposit account and shall be held on trust to be
expended for the purposes aforesaid for the benefit of the owners
and occupiers of the Building from time to time
(b) upon any transfer of the Landlord's reversion the then balance of
the fund shall be transferred to the new Landlord to be held as
aforesaid
(c) all interest earned on the fund (less any taxation upon such
interest) shall accrue to the fund
4.1.3 PROVIDED THAT (for the avoidance of doubt) nothing contained in this
paragraph 4 shall (i) impose upon the Landlord any obligation to carry
out any works or provide any services beyond the matters set out in
the Fifth Schedule hereto or (ii) extend the Service Costs to include
the cost of any works acts matters or things to or in respect of any
parts of the Demised Premises for which the Tenant is liable under the
terms of this Lease or the corresponding parts of the other lettable
parts of the Building
4.1.4 In the preceding paragraphs the expression "plant and equipment"
shall include (but not by way of limitation) any internal telephone
systems lifts
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boilers air conditioning or cooling equipment fire fighting equipment
fire water sprinkiers and all pipes wires conduits ducts traps valves
pumps meters radiators and other conducting measuring and inspection
media and other devices used therewith
5. PREPARATION AND SERVICE OF THE CERTIFICATE
The Landlord or its managing agents shall keep proper books and records of
the Service Costs and as soon as practicable after each Accounting Date
shall produce the same to the Accountant who shall prepare a Certificate of
the Service Costs of the Accounting Period ending on that Accounting Date
The Certificate shall contain a fair summary of the Service Costs to which
it relates If there shall be a reserve fund, the Certificate shall also
contain a statement of the amount of the reserve fund at the commencement
of the Accounting Period, the taxation upon and expenditure from the
reserve fund during or in respect of that Accounting Period and the balance
remaining after the payment and expending thereof, and the sums included in
the Service Costs to be set aside in the reserve fund
5.1.4 The Certificate shall be signed by the Accountant who shall therein
certify that the summary of Service Costs set out therein is a fair
summary thereof and that the said Service Costs are sufficiently
supported by accounts, receipts and other documents which have been
produced to him
5.1.5 Within 14 days of the signing of each Certificate a copy thereof
shall be served upon the Tenant together with a Statement showing:
5.1.5.1 the Service Charge payable by the Tenant in respect of the
Accounting Period to which the Certificate relates
5.1.5.2 the Interim Charge paid by the Tenant on account thereof
5.1.5.3 the amount (if any) by which the Service Charge exceeds or falls
short of the said Interim Charge
5.1.6 If appropriate, the Statement shall be accompanied by the appropriate
Value Added Tax invoice from the Landlord or its managing agents
5.1.7 Within the period of 14 days from the service of each Statement, the
Tenant shall pay to the Landlord the amount (if any) by which the
Service
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Charge therein stated may exceed the Interim Charges stated to have
been received on account thereof In the event that the Service Charge
therein stated may be less than the Interim Charges stated to have
been received on account thereof, the surplus Interim Charges shall be
credited against future Interim Charges or Service Charges payable by
the Tenant or (in respect of the period down to the end of the Term),
shall be repaid to the Tenant
5.1.8 For the period of the two months commencing on the date of service of
each Certificate the Tenant or its authorized representative shall be
entitled to inspect the books records invoices and accounts relating
to the Service Costs included in such Certificate during normal office
hours at the offices of the Landlord or its managing agents on the
Tenant giving to the Landlord or its managing agents not less than two
working days written request for such inspection
5.1.9 So far as permitted by law the Certificate shall be conclusive of the
amount of Service Costs therein specified and so far as permitted by
law the Statement shall be conclusive of the amount due from or to be
credited to the Tenant as therein specified.
6. COMMENCEMENT AND EXPIRATION OF TERM
6.1.1 The Service Charge for the Accounting Period during which this Lease
shall have been granted shall be apportioned as from the date of this
Lease
6.1.2 The provisions of this Schedule shall remain in force notwithstanding
the expiration or earlier determination of the term created by this
Lease and the Service Charge for the Accounting Period during which
the date of such expiration or determination falls shall be
apportioned down to that date
6.1.3 The apportionments mentioned in paragraphs 6.1.1 and 6.1.2 above
shall be computed as if the total Service Costs for the relevant
Accounting Periods were incurred by equal daily amounts throughout
such Accounting Periods respectively
59
<PAGE>
7. VARIATION OF PROPORTION
The Landlord shall be entitled from time to time by giving written notice
to the Tenant to vary the Tenant's Proportion as a consequence of any
alteration or addition to the Building or any alteration in the
arrangements for the provision of services therein or any other relevant
circumstances Any variation in such proportions shall take effect from such
date as the Landlord may specify in such written notice having regard to
the date of occurrence of the reason for such variation
8. DISPUTES
8.1.1 Any dispute arising out of this Schedule shall be referred to the
determination of an independent surveyor acting as an arbitrator in
accordance with the provisions of the Arbitration Act 1996
8.1.2 The said surveyor shall be appointed (in the absence of agreement} on
the application of either party by or on behalf of the President for
the time being of The Royal Institution of Chartered Surveyors
8.1.3 In the event of there being disputes between the Landlord and two or
more tenants in the Building with respect to the same Certificate, the
Landlord shall be entitled to require all such disputes to be
consolidated before the same independent surveyor
8.1.4 The Tenant shall not be entitled to dispute or question the amount of
any item in the Services Costs on the sole ground that it exceeds the
amount shown in the relevant Estimate nor on the ground that it could
have been provided or performed at lower cost
8.1.5 No dispute or question in relation to the contents of any Certificate
shall be valid unless made by the Tenant in written notice specifying
the item or items | disputed or questioned and served on the Landlord
within one month of the service of the Certificate (time being of the
essence)
8.1.6 No dispute or question affecting any Certificate or Statement shall
entitle the tenant to withhold payment of the sums specified in
paragraph 5.1.7 of this Schedule or any other sums payable under the
terms of this Lease but if it shall be ascertained (by virtue of a
determination under paragraphs 8.1.1 to 8.1.3 of this Schedule or
otherwise) that the Tenant has made any
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<PAGE>
overpayment in respect of the Service Costs the Landlord shall repay
the amount of the overpayment to the Tenant within 14 days
THE SEVENTH SCHEDULE
Clause 3.16: Authorised Guarantee Agreement
THIS AGREEMENT is made on 19{ }
-
BETWEEN
(1) {FIRST PARTY} of/(registered no. { } ) whose registered
----------------
office is at { } ("the Landlord" which expression
-------------------
includes the person for the time being entitled to the reversion
immediateiy expectant on the determination of the Term); and
(2) {SECOND PARTY) of (registered no. { } ) whose registered
-------------
office is at { } {"the Tenant" which expression
--------------------
includes its successor or successors in title and permitted assigns)
NOW THIS DEED WITNESSES that:
1. PRELIMINARY
1.1 Definitions and Interpretation
This Deed is supplemental to an underlease ("the Lease") dated the { }
--
1999 and made between (1) {the Landlord)} and (2) {the Tenant} by which the
property known as ground floor 12/18 Paul Street London EC2 ("the Demised
Premises") was demised for the term of 10 years from and including the { }
--
1999 ("the Term"') subject to the payment of the rents ("the Rent")
reserved by and the performance of the provisions of the Lease
1.2 Reversion
The reversion immediately expectant on the determination of the Term
{remains} {is now} vested in the Landlord and the unexpired residue of the
Term {remains} {is now) vested in the Tenant
61
<PAGE>
1.3 Landlord's Prior Consent
The Lease contains provisions prohibiting the Tenant from assigning the
Demised Premises without the consent of the Landlord such consent not to be
unreasonably withheld in certain circumstances and further provides that
any consent may be subject to a condition that the Tenant enters into an
authorised guarantee agreement as defined in the Landlord and Tenant
(Covenants) Act 1995 ("the 1995 Act")
1.4 Licence to Assign
The Landlord has agreed (at the request of the Tenant) to grant a licence
to the Tenant to assign its estate and interest in the Demised Premises to
{ } of { } ("the Assignee") subject to:
-------------- ---------------------
1.4.1 the Tenant and the Assignee entering into a formal licence in the
form required by the Landlord; and the Tenant entering into this
Authorised Guarantee Agreement
1.5 Lease Definitions
All terms defined in the Lease have the same meanings when used in this
Deed except where the contrary appears and "Losses" includes all
liabilities incurred by the Landlord all damage and loss suffered by it and
all damages awarded against it all claims demands actions and proceedings
made or brought against it and all costs disbursements and expenses
incurred by it
2. AUTHORISED GUARANTEE AGREEMENT
2.1 Nature of this Deed
This Deed is an authorised guarantee agreement as defined in the 1995 Act
section 16
2.2 Limitation
Nothing in this Deed imposes on the Tenant: ' any requirement to guarantee
the performance under the Lease of any person other than the Assignee; or
any liability restriction or other requirement (of whatever nature) in
relation to any time after the Assignee is released by the 1995 Act from
its obligations under the Lease
62
<PAGE>
3. TENANT'S COVENANTS
The Tenant covenants with'the Landlord and (without the need for any
express assignment) with all of its successors in title:
3.1 Pay Rent
If the Assignee does not pay the Rent or any other sum due under the Lease
on the date on which it is due to pay to the Landlord on demand the Rent or
other sum;
3.2 Indemnify Landlord
If the Assignee is in breach of any provision of the Lease to remedy that
breach on demand and to indemnify and keep indemnified the Landlord against
all Losses suffered by the Landlord as a result (directly or indirectly) of
that breach;
3.3 Premature Determination of Lease
In addition to the obligations set out in sub-clauses 3.1 and 3.2 in the
event of the Premature Determination of the Lease:
3.3.1 to pay to the Landlord on demand an amount equal to the Rent and
other sums that would have been payable under the Lease for the period
beginning on the date of such Premature Determination and ending on
the earliest of:
(a) the date upon which the Demised Premises are re-let;
(b) the date upon which the Term would have expired by effluxion of
time had there been no Premature Determination;
(c) the expiry of the period of one year beginning on the date upon
which such Premature Determination takes effect; and
if so requested by the Landlord within ninety days of the date upon
which such Premature Determination takes effect to take from the
Landlord a lease of the Demised Premises from the date upon which such
Premature Determination took effect for a term equal to the unexpired
residue of the Term which would then have remained had there been no
Premature Determination and at the Rent payable at the time of such
Premature Determination or (where a rent review is pending at that
time at the Rent subsequently agreed or determined under the Fourth
Schedule of the Lease to have been payable at that time) and upon the
same terms as those contained in the Lease with all provisions of a
periodical nature (including for example those relating to review of
the Rent) expressed to apply on the
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actual dates that would have applied if there had been no Premature
Determination; and
3.3.3 to pay the costs of the Landlord incurred in relation to the
Premature Determination and where appropriate the grant of the lease
to the Tenant
4. APPLICATION OF TENANT'S COVENANTS
The obligations of the Tenant set out in Clause 3 wilt continue to apply
even if:
4.1 Waiver
The Landlord grants any time or indulgence to the Assignee or fails to
enforce payment of the Rent or any other sum or the performance of the
terms of the Lease;
4.2 Refusal to accept the Rent
The Landlord refuses to accept the Rent tendered when the Landlord was
entitled (or would after service of a notice under the Law of Property Act
1925, section 146 be entitled) to re-enter the Demised Premises;
4.2 Variation of Lease
The terms of the Lease are varied except where the variation is a relevant
variation as defined in the 1995 Act, section 18(4);
4.4 Revised Rent
A revised Rent has heen agreed or determined under the Fourth Schedule of
the Lease;
4.5 Surrender of Part
The Assignee surrenders part of the Demised Premises and where this happens
the liability of the Tenant under the Lease continues for the part of the
Demised Premises not surrendered after making any necessary apportionments
under the Law of Property Act 1925, section 140;
4.6 Release of Tenant
The Tenant would have been released by any other event
5. DURATION OF TENANT'S COVENANTS
The obligations of the Tenant set out in Clause 3 apply for the period
beginning on the date upon which the Demised Premises are assigned to the
Assignee and ending on the date upon which the Assignee is released by the
1995 Act from its obligations under the Lease
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<PAGE>
IN WITNESS this document has been signed as a deed and delivered on the date
first above written
SIGNED AS A DEED )
by )
acting by a director and )
the secretary or two directors )
Director:
Name (please print):
Director/Secretary: Name (please print):
65
<PAGE>
AT&T CENTER OFFICE LEASE
MITSUI FUDOSAN (U.S.A.), INC.,
a California corporation,
as Landlord,
and
PACIFIC GATEWAY EXCHANGE,
a Delaware corporation,
as Tenant.
<PAGE>
TABLE OF CONTENTS
Article Subject Matter Page
------- -------------- ----
ARTICLE 1 - REAL PROPERTY, BUILDING AND PREMISES........................ 1
ARTICLE 2 - LEASE TERM.................................................. 2
ARTICLE 3 - BASE RENT................................................... 5
ARTICLE 4 - ADDITIONAL RENT............................................. 7
ARTICLE 5 - USE OF PREMISES............................................. 24
ARTICLE 6 - SERVICES AND UTILITIES...................................... 25
ARTICLE 7 - REPAIRS..................................................... 34
ARTICLE 8 - ADDITIONS AND ALTERATIONS................................... 35
ARTICLE 9 - COVENANT AGAINST LIENS...................................... 38
ARTICLE 10 - INSURANCE................................................... 38
ARTICLE 11 - DAMAGE AND DESTRUCTION...................................... 42
ARTICLE 12 - NONWAIVER................................................... 45
ARTICLE 13 - CONDEMNATION................................................ 45
ARTICLE 14 - ASSIGNMENT AND SUBLETTING................................... 46
ARTICLE 15 - SURRENDER OF PREMISES; REMOVAL OF TRADE FIXTURES............ 50
ARTICLE 16 - HOLDING OVER................................................ 51
ARTICLE 17 - ESTOPPEL CERTIFICATES....................................... 52
ARTICLE 18 - SUBORDINATION............................................... 52
ARTICLE 19 - DEFAULTS; REMEDIES.......................................... 53
ARTICLE 20 - ATTORNEYS' FEES............................................. 57
ARTICLE 21 - INTENTIONALLY OMITTED....................................... 58
ARTICLE 22 - GOOD FAITH.................................................. 58
ARTICLE 23 - SIGNS....................................................... 58
ARTICLE 24 - COMPLIANCE WITH LAW......................................... 59
(i)
<PAGE>
ARTICLE 25 - LATE CHARGES................................................ 60
ARTICLE 26 - LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT........ 60
ARTICLE 27 - ENTRY BY LANDLORD........................................... 61
ARTICLE 28 - TENANT PARKING.............................................. 62
ARTICLE 29 - MISCELLANEOUS PROVISIONS.................................... 63
EXHIBITS
A OUTLINE OF PREMISES
B RULES AND REGULATIONS
C NOTICE OF LEASE TERM DATES
D TENANT WORK LETTER
E FORM OF TENANT'S ESTOPPEL CERTIFICATE
F ASBESTOS DISCLOSURE STATEMENT
G HVAC TEMPERATURE DESIGN CONDITIONS
(ii)
<PAGE>
AT&T CENTER
SUMMARY OF BASIC LEASE INFORMATION
This Summary of Basic Lease Information (the "Summary") is hereby incorporated
by reference into and made a part of the attached Office Lease (this Summary and
the Office Lease to be known collectively as the "Lease") which pertains to the
office building (the "Building") which is located at 611 West Sixth Street, Los
Angeles, California 90017. Each reference in the Office Lease to any term of
this Summary shall have the meaning as set forth in this Summary for such term.
In the event of a conflict between the terms of this Summary and the Office
Lease, the terms of the Office Lease shall prevail. Any initially capitalized
terms used herein and not otherwise defined herein shall have the meaning as set
forth in the Office Lease.
TERMS OF LEASE
(References are to
the Office Lease) DESCRIPTION
---------------- -----------
1. Dated as of: December 9, 1997.
2. Landlord: MITSUI FUDOSAN (U.S.A.), INC.,
3. Address of Landlord c/o REsource Asset Management,
(Section 29.14): Inc.
611 West Sixth Street
Suite 1880
Los Angeles, California 90017
4. Tenant: Pacific Gateway Exchange, a
Delaware corporation
Prior to Lease Commencement Date:
5. Address of Tenant 111 8th Avenue
(Section 29.14): Suite 524
New York, New York 10013
Attention: Mr. Tom Durkin
Following Lease Commencement Date:
611 West Sixth Street
Suite 1200
Los Angeles, California 90017
<PAGE>
Attention: Mr. Clarence Dalcour
<PAGE>
6. Premises (Article 1):
Approximately 16,089 rentable square
feet of space comprising the entirety
of the twelfth (12th) floor, as
outlined in Exhibit A attached hereto,
known as Suite 1200.
7. Term (Article 2):
7.1 Lease Term: Ten (10) years.
7.2 Lease Commencement Date: The earlier of (i) the date Tenant, or
any person occupying any of the
Premises with Tenant's permission,
commences business operations from the
Premises, and (ii) April 15, 1998. The
April 15, 1998 date referenced above
shall be extended on a day-for-day
basis for "Landlord Delays" and for
"Force Majeure Delays," as such terms
are defined in the Tenant Work Letter
attached hereto as Exhibit D.
7.3 Lease Expiration Date: The last day of the month in which the
tenth (10th) anniversary of the Lease
Commencement Date occurs.
Base Rent (Article 3)
Monthly Installment of
.Lease Year Annual Base Rent. Base Rent
----------- ---------------- ---------
1st through 5th $281,557.50 $23,463.13, subject to
(calculated at the rate of Section 3.2 of the
$17.50 per RSF of the Lease
Premises), subject to
Section 3.2 of the Lease
6th through 10th $313,735.50 (calculated
$26,144.63 at the rate of
$19.50 per RSF of the
Premises)
9. Additional Rent (Article 4)
Base Year: Calendar: year 1998.
Tenant's Share of Direct Expense: 2.249%
10. Security Deposit (Article 21) None.
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<PAGE>
11. Number of Parking Passes
(Article 28): Sixteen {16} unreserved parking passes.
12. Brokers (Section 29.19): CB Commercial Real Estate Group, Inc.
13. Permitted Use (Article 5): The installation and operation of
telecommunications equipment, including
a switch facility, and related
facilities, including general office
space, subject to the restrictions set
forth in Article 5.
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<PAGE>
AT&T CENTER
OFFICE LEASE
This Office Lease, which includes the preceding Summary of Basic Lease
Information (the "Summary") attached hereto as pages (i) through (iii) and
incorporated herein by this reference (the Office Lease and Summary to be known
sometimes collectively hereafter as the "Lease"), dated as of the date set forth
in Section 1 of the Summary, is made by and between Landlord and Tenant as those
terms are defined in Sections 2 and 4 of the Summary, respectively.
ARTICLE 1
REAL PROPERTY, BUILDING AND PREMISES
1.1 Real Property, Building- and Premises. Upon and subject to the terms
set forth in the Lease, Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord the premises set forth in Section 6 of the Summary (the
"Premises"), which Premises are located in the building (the "Building") located
at 611 West Sixth Street, Los Angeles, California 90017, reserving, however, to
Landlord: (i) the sole and exclusive right to consent to the use or occupancy of
the Premises by any person other than Tenant, whether by sublease, assignment or
otherwise, and all right, title and interest in the economic value of the
leasehold estate in the Premises for the Lease Term, all as more fully set forth
in Article 14 of the Lease (ii) all of the Building, except for the space within
the inside surfaces bounding the Premises, and except as provided in this
Article 1, and (iii) the rights, interest and estates reserved to Landlord by
provisions of the Lease or operation of law. The outline of the Premises is set
forth in Exhibit A attached hereto. The rentable square footages of the Premises
is set forth in Section 6 of the Summary. The Building, the parking structure
servicing the Building ("Parking Garage"), the land upon which the Building
stands, are herein sometimes collectively referred to herein as the "Real
Property." Tenant acknowledges that Landlord has made no representation or
warranty regarding the condition of the Real Property except as specifically set
forth in the Lease. Tenant is hereby granted the right to the nonexclusive use
of the common corridors and hallways, stairwells, elevators, restrooms and other
public or common areas located on the Real Property; provided, however, that the
manner in which such public and common areas are maintained and operated shall
be at the reasonable discretion of Landlord and the use thereof shall be subject
to the rules, regulations and restrictions attached hereto as Exhibit B (the
"Rules and Regulations"). Landlord reserves the right to make alterations or
additions to or to change the location of elements of the Real Property and the
common areas thereof to the extent Tenant's rights and
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<PAGE>
obligations under the Lease are not adversely affected thereby, as reasonably
determined by Landlord. Except when and where Tenant's right of access is
specifically excluded in the Lease, Tenant shall have the right of access to the
Premises, the Building and the Parking Garage twenty-four (24) hours per day,
seven (7) days per week during the "Lease Term," as that term is defined in
Section 2.1 of the Lease,
1.2 Rentable Square Feet of Premises and Building. For purposes of the
Lease, "rentable square feet" shall be calculated pursuant to Standard Method
for Measuring Floor Area in Office Buildings, ANSI Z65.1 - 1980 ("BOMA
Standard"). Landlord and Tenant each stipulate that the rentable square feet of
the Premises is as set forth in Section 6 of the Summary and further stipulate
that as of the date of the Lease the rentable square feet of the Building is
Seven Hundred Fifteen Thousand Four Hundred Sixty Three (715,463). Any space
added to the Premises during the Lease Term shall be measured in accordance with
the BOMA Standard.
ARTICLE 2
LEASE
TERM
2.1 Lease Term. The terms and provisions of the Lease shall be effective as
of the date of the Lease. The term of the Lease (the "Lease Term") shall be as
set forth in Section 7.1 of the Summary and shall commence on the date (the
"Lease Commencement Date") set forth in Section 7.2 of the Summary, and shall
terminate on the date (the "Lease Expiration Date") set forth in Section 7.3 of
the Summary, unless the Lease is sooner terminated or extended as hereinafter
provided. For purposes of the Lease, the term "Lease Year" shall mean each
consecutive twelve (12) month period during the Lease Term. At any time during
the Lease Term, Landlord may deliver to Tenant a notice in the form as set forth
in Exhibit C, attached hereto, which notice Tenant shall sign and return to
Landlord, after having made any necessary corrections thereto, within ten (10)
business days of receipt of the notice from Landlord. If Landlord disagrees with
any of the corrections made thereto by Tenant or if a dispute occurs regarding
the occurrence of the Lease Commencement Date, such dispute shall be resolved
pursuant to the terms of Section 29.27 of the Lease. Failure of Landlord to send
such notice shall have no affect on the Lease Commencement Date.
2.2 Intentionally Omitted.
2.3 Option to Extend.
2.3.1 Option Right. Landlord hereby grants Tenant one (1) option to
extend the Lease Term (the "Option to Extend") for a period of five (5)
years (the "Option Term"), which Option to Extend shall be exercisable only
by written notice delivered by
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<PAGE>
Tenant to Landlord as provided below, provided that, as of the date of
delivery of such notice, Tenant is not in monetary or material non-monetary
default under the Lease after the expiration of all applicable cure
periods. Upon the proper exercise of such Option to Extend and provided
that, as of the end of the Lease Term, Tenant is not in monetary or
material non-monetary default under the Lease after the expiration of all
applicable cure periods, the Lease Term, as it applies to the Premises,
shall be extended for a period of five (5) years. The rights contained in
this Section 2.3 shall not be personal to Tenant and may be exercised by
Tenant or any assignee, sublessee or other transferee of Tenant's interest
in the Lease permitted under the Lease.
2.3.2 Option Rent. The Rent payable by Tenant during the Option Term
shall be equal to the "Market Rent," as that term is defined, below. The
"Market Rent" shall be equal to the rent (including additional rent and any
"base year" or "expense stop" applicable thereto), including all
escalations, at which, as of the commencement of the Option Term, as the
case may be, for which tenants are leasing non-sublease, non-encumbered,
nonequity, non-renewal space comparable in age, size, location, floor
height and quality to the Premises for a term equal to that of the Option
Term ("Comparable Transactions"), which comparable space is located in the
Building, or if there do not exist enough Comparable Transactions within
the Building, then within "Comparable Buildings" (as that term is defined
below in this Section 2.3.2) leased by landlords, taking into consideration
the following concessions: (a) rental abatement concessions, if any, being
granted such tenants in connection with such comparable space; (b) tenant
improvements provided or to be provided for such comparable space, taking
into account, and, in determining the Market Rent for the Option Term,
deducting the value of, the existing improvements in the Premises, such
value to be based upon the age, quality and layout of the improvements and
the extent to which the same can be utilized by Tenant based upon the fact
that the precise tenant improvements existing in the Premises are
specifically suitable to Tenant; and (c) other monetary concessions being
granted such tenants in connection with such comparable space; provided,
however, that in calculating the Market Rent, no consideration shall be
given to (i) the fact that Landlord is or is not required to pay a real
estate brokerage commission in connection with Tenant's exercise of its
right to lease the Premises during the Option Term, or the fact that
landlords are or are not paying real estate brokerage commissions in
connection with such comparable space, and (ii) any period of rental
abatement, if any, granted to tenants in comparable transactions in
connection with the design, permitting and construction of tenant
improvements in such comparable spaces. For purposes of the Lease,
"Comparable Buildings" means the following office buildings in downtown Los
Angeles: MCI Center; 7 07 Wilshire Boulevard; and Union Bank Square.
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<PAGE>
2.3.3 Exercise of Option to Extend. The Option to Extend contained in
this Section 2.3 shall be exercised by Tenant, if at all, and only in the
following manner: (i) Tenant shall deliver written notice to Landlord not
more than thirteen (13) months nor less than twelve (12) months prior to
the expiration of the Lease Term, stating that Tenant is interested in
exercising its Option to Extend; (ii) Landlord, after receipt of Tenant's
notice, shall deliver notice (the "Option Rent Notice") to Tenant not less
than ten (10) months prior to the expiration of the Lease Term, setting
forth the Option Rent; and (iii) if Tenant wishes to exercise such Option
to Extend, Tenant shall, on or before the earlier of (A) the date occurring
nine (9) months prior to the expiration of the Lease Term, and (B) the date
occurring thirty (3 0) days after Tenant's receipt of the Option Rent
Notice, exercise the Option to Extend by delivering written notice (the
"Option Exercise Notice") thereof to Landlord, and upon, and concurrent
with, such exercise, Tenant may, at its election, object to the Market Rent
contained in the Option Rent Notice, in which case the parties shall follow
the procedure, and the Market Rent shall be determined, as set forth in
Section 2.3.4 below. Notwithstanding the foregoing Tenant may, anytime
prior to the date occurring nine (9) months prior to the expiration of the
Lease Term, exercise the option to extend by delivering the option exercise
notice to Landlord, in which case the parties shall follow the procedure,
and the Market Rent shall be determined, as set forth in Section 2.3.4,
below.
2.3.4 Determination of Market Rent. In the event Tenant timely and
appropriately objects to the Market Rent, Landlord and Tenant shall attempt
to agree upon the Market Rent using their best good-faith efforts. If
Landlord and Tenant fail to reach agreement within ten (10) days following
Tenant's objection to the Market Rent, (the "Outside Agreement Date"), then
each party shall make a separate determination of the Market Rent, as the
case may be, within five (5) days, and such determinations shall be
submitted to arbitration in accordance with Sections 2.3.4.1 through
2.3.4.7 below.
2.3.4.1 Landlord and Tenant shall each appoint one (1) arbitrator
who shall by profession be a real estate broker or appraiser who shall have
been active over the five (5) year period ending on the date of such
appointment in the leasing (or appraisal, as the case may be) of commercial
properties in the Los Angeles, California area. The determination of the
arbitrators shall be limited solely to the issue of whether Landlord's or
Tenant's submitted Market Rent is the closer to the actual Market Rent as
determined by the arbitrators, taking into account the requirements of
Section 2.3.2 of the Lease. Each such arbitrator shall be appointed within
fifteen (15) days after the applicable Outside Agreement Date.
2.3.4.2 The two (2) arbitrators so appointed shall within ten
(10) days of the date of the appointment of the last appointed arbitrator
agree upon and appoint a third (3rd)
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<PAGE>
arbitrator who shall be qualified under the same criteria set forth
hereinabove for qualification of the initial two arbitrators.
2.3.4.3 The three (3) arbitrators shall within thirty (30) days
of the appointment of the third (3rd) arbitrator reach a decision as to
whether the parties shall use Landlord's or Tenant's submitted Market Rent,
and shall notify Landlord and Tenant thereof.
2.3.4.4 The decision of the majority of the three (3) arbitrators
shall be binding upon Landlord and Tenant.
2.3.4.5 If either Landlord or Tenant fails to appoint an
arbitrator within fifteen (15) days after the applicable Outside Agreement
Date, the arbitrator appointed by one (1) of them shall reach a decision,
notify Landlord and Tenant thereof, and such arbitrator's decision shall be
binding upon Landlord and Tenant.
2.3.4.6 If the two (2) arbitrators fail to agree upon and appoint
a third (3rd) arbitrator, or both parties fail to appoint an arbitrator,
then the appointment of the third (3rd) arbitrator or any arbitrator shall
be dismissed and the matter to be decided shall be forthwith submitted to
arbitration under the provisions of the American Arbitration Association,
but subject to the instructions set forth in this Section 2.3.4.
2.3.4.7 The cost of arbitration shall be paid by Landlord and
Tenant equally.
ARTICLE 3
BASE RENT
3.1 Base Rent. Subject to the terms of Section 3.2 of the Lease, Tenant
shall pay, without notice or demand, to Landlord at the management office of the
Building, or at such other place as Landlord may from time to time designate in
writing, in the form of a check (which is drawn upon a bank which is located in
the State of California), base rent ( "Base Rent") as set forth in Section 8 of
the Summary, payable in equal monthly installments as set forth in Section 8 of
the Summary in advance on or before the first day of each and every calendar
month during the Lease Term, without any set-off or deduction whatsoever (except
as otherwise specifically set forth in the Lease). The Base Rent for the first
full calendar month of the Lease Term, shall be paid at the time of Tenant's
execution of the Lease. If any "Rent", as that term is defined in Section 4.1,
below, payment date (including the Lease Commencement Date) falls on a day of a
calendar month other than the first day of such calendar month or if any Rent
payment is for a period which is shorter than one calendar month such as during
the last month of the Lease Term,
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<PAGE>
the Rent for any fractional calendar month shall accrue on a daily basis for the
period from the date such payment is due to the end of such calendar month or to
the end of the Lease Term at a rate per day which is equal to 1/365 of the Rent.
All other payments or adjustments required to be made under the terms of the
Lease that require proration on a time basis shall be prorated on the same
basis.
3.2 Abatement of Rent. Notwithstanding the provisions of Sections 8 and 9
of the Summary, Section 3.1 of the Lease, or Article 4 of the Lease, Landlord
hereby agrees to abate the Rent otherwise payable as follows:
(i) From the first (1st) month through and including the eighth (8th) month
of the Lease Term (the "First Abatement Period"), the entire Base Rent due
shall be abated (i.e. the Base Rent otherwise payable by Tenant to Landlord
shall be reduced to zero for such period, and Tenant shall have no
obligation to pay monthly installments of Base Rent for such period); and
(ii) From the ninth (9th) month through and including the thirty-second
(32nd) month of the Lease Term (the "Second Abatement Period"), the Base
Rent attributable to 2,589 rentable square feet in the Premises (the
"Abated Space") shall be abated (i.e. the Base Rent otherwise payable by
Tenant to Landlord shall be reduced by Three Thousand Seven Hundred
Seventy-Five and 63/100 Dollars ($3,775.63) per month).
Furthermore, Tenant shall have no obligation to pay any "Direct Expenses," as
such term is defined in Section 4.2.2 of the Lease, with respect to the Premises
during the First Abatement Period and the Abated Space during the Second
Abatement Period. During the First Abatement Period, Tenant shall still be
responsible for the payment of any extraordinary expenses relative to Tenant's
use and occupancy of the Premises, and during the Second Abatement Period,
Tenant shall still be responsible for the payment of any extraordinary expenses
relative to Tenant's use and occupancy of the Abated Space (including, by way of
illustration but not limitation, any costs of so-called "after hours"
air-conditioning beyond the hours set forth in Section 6.1 of the Lease and for
any excess power or water usage which would be specifically charged to Tenant
rather than to all tenants of the Building pursuant to Article 6 of the Lease).
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ARTICLE 4
ADDITIONAL RENT
4.1 Additional Rent. In addition to paying the Base Rent specified in
Article 3 of the Lease, Tenant shall pay as additional rent "Tenant's Share" of
the annual "Direct Expenses," as those terms are defined in Sections 4.2.6 and
4.2.2 of the Lease, respectively, which are in excess of the amount of Direct
Expenses applicable to the "Base Year," as that term is defined in Section 4.2.1
of the Lease. Such additional rent, together with any and all other amounts
payable by Tenant to Landlord, as additional rent or otherwise, pursuant to the
terms of the Lease, shall be hereinafter collectively referred to as the
"Additional Rent." The Base Rent and Additional Rent are herein collectively
referred to as the "Rent." All amounts due under this Article 4 as Additional
Rent shall be payable in the same manner, time and place as the Base Rent,
except as otherwise expressly set forth in this Article 4. Without limitation on
other obligations of Tenant and Landlord which shall survive the expiration of
the Lease Term, the obligations of Tenant to pay the Additional Rent provided
for in this Article 4, and Landlord's obligation to refund to Tenant any
overpayments of such Additional Rent, shall survive the expiration of the Lease
Term.
4.2 Definitions. As used in this Article 4, the following terms shall have
the meanings hereinafter set forth:
"Base Year" shall mean the year set forth in Section 9.1 of the
Summary.
"Direct Expenses" shall mean "Operating Expenses" and "Tax Expenses."
"Expense Year" shall mean each calendar year in which any portion of
the Lease Term falls (including the Base Year), through and including the
calendar year in which the Lease Term expires.
"Operating Expenses" shall mean, except as otherwise provided in this
Section 4.2.4 or otherwise in the Lease, all expenses, costs and amounts of
every kind and nature which Landlord shall pay or incur during any Expense Year
because of or in connection with the ownership, management, maintenance, repair,
replacement, restoration or operation of the Real Property, including, without
limitation, any amounts paid or incurred for (i) the cost of supplying all
utilities (including, without limitation, any telephone risers or intrabuilding
network cabling), the cost of operating, maintaining, repairing and managing the
utility systems, mechanical systems, sanitary and storm drainage systems, and
escalator and elevator systems, and the cost of supplies, tools, and equipment
and maintenance and service contracts in connection therewith; (ii) the cost of
licenses, certificates, permits and inspections and the cost of
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shall be deemed to be included in Operating Expenses for the Base Year; and (c)
any costs and expenses related to the operation and maintenance of the Parking
Garage, including without limitation, insurance premiums, taxes and utilities
not included in the Base Year shall be deemed to be included in the Base Year;
and (d) the cost of any additional services voluntarily instituted by Landlord
after the Base Year which are not provided in the Comparable Buildings (unless
the addition of such service is approved by Tenant) shall be imputed into the
Base Year. Notwithstanding anything in this Section 4.2.4 to the contrary, for
purposes of the Lease, Operating Expenses shall not, however, include:
(1) any payments under a ground lease or master lease relating to the
Building or Real Property;
(2) costs of purchasing or renting items considered capital repairs,
replacements, improvements and equipment under generally accepted accounting
principles consistently applied in the real estate industry, except for those
described in items (viii) or (x), above;
(3) the cost of any item to the extent Landlord receives reimbursement from
insurance or condemnation proceeds;
(4) costs, including permit, license and inspection costs, incurred with
respect to the installation of tenants' or other occupants' improvements made
for tenants or other occupants in the Building or incurred in renovating or
otherwise improving, decorating, painting or redecorating space for tenants or
other occupants of the Building;
(5) marketing and promotional costs, including but not limited to leasing
commissions, real estate brokerage commissions, and attorneys' fees in
connection with the negotiation and preparation of letters, deal memos, letters
of intent, leases, subleases and/or assignments, space planning costs, and other
costs and expenses incurred in connection with lease, sublease and/or assignment
negotiations and transactions with present or prospective tenants or other
occupants of the Building;
(6) costs of services, utilities, or other benefits which are not offered
to Tenant or for which Tenant is charged for directly but which are provided to
another tenant or occupant of the Building, including, but not limited to, above
Building standard heating, ventilation and air-conditioning, janitorial services
and exclusive use common areas;
(7) costs incurred by Landlord due to any violation of the terms and
conditions of any lease of space or occupancy agreement in the Building or Real
Property;
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subject to the provisions of subitem 34 below, costs and the overhead and
profit increment paid to Landlord, to affiliates or partners of landlord,
partners or affiliates of such partners, or affiliates of Landlord for goods
and/or services in the Building or Real Property to the extent the same exceeds
the costs or the overhead profit increment, as the case may be, of such goods
and/or services rendered by unaffiliated third parties on a competitive basis in
comparable buildings;
interest, principal, attorneys' fees, environmental investigations or
reports, points, fees and other lender costs and closing costs on debts or
amortization on any mortgage or mortgages or any other debt instrument
encumbering the Building or the Real Property or any part thereof or on any
unsecured debt (except as permitted in items (viii) or (x) above);
Landlord's general corporate overhead and general and administrative
expenses, except to the extent that such expenses relate to services which, if
not provided by Landlord as part of Landlord's general corporate overhead (i)
would have to be provided by a third party and (ii) if so provided by a third
party would qualify as an Operating Expense under the Lease; provided, however,
that to the extent any such services are provided off-site the cost thereof
shall be appropriately prorated;
salaries of officers, executives or other employees of Landlord, any
affiliate of Landlord, or partners or affiliates of such partners or affiliates,
other than any personnel engaged in the management, operation, maintenance, and
repair of the Building (but not leasing or marketing), and working in the
Building management office and not typically included in the management fee
being paid and included in Operating Expenses; provided such individuals do not
hold a position which is generally considered to be higher in rank than the
position of Property Manager (or its equivalent) for the Building, so long as
compensation for such position has been included in the Operating Expenses for
the Base Year or the group chief engineer of the Building and provided further
that the costs associated with any personnel not exclusively engaged with the
Building shall be appropriately prorated;
all items and services for which Tenant or any other tenant in the Building
is required to reimburse Landlord (other than through Tenant's share or any
other tenant's share of Operating Expenses);
advertising and promotional expenditures, including but not limited to
tenant newsletters, other than the Building's tenant newsletter received by the
tenants of the Building;
electric power or other utility costs for which any tenant directly
contracts with the local public service company; provided, however, that if any
tenant in the Building contracts
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directly for electric power service during any portion of the relevant period,
the total electric power costs for the Building shall be "grossed up" to reflect
what those costs would have been had each tenant in the Building used the
Building-standard amount of electric power;
(15) costs incurred in connection with any governmental laws and
regulations applicable to the Building which were enacted prior to the Lease
Commencement Date, including, but not limited to life, fire and safety codes,
environmental and Hazardous Materials laws and federal, state or local laws or
regulations relating to disabled access, including, but not limited to, the
Americans With Disabilities Act;
(16) all management fees and costs, and the wages, salaries, employee
benefits and taxes for personnel working in connection with the operation and
management of the Building parking areas;
(17) costs, penalties, fines, or awards and interest incurred as a result
of Landlord's negligence in Landlord's operation of the Building, violations of
law, negligence or inability or unwillingness to make payments and/or to file
any income tax, or other tax or informational returns when due;
(18) costs which are covered by and reimbursed under any contractor,
manufacturer or supplier warranty or service contract;
(19) costs arising from the negligence, or intentional acts of Landlord or
its agents, or any other tenant, or any vendors, contractors, subcontractors or
providers of materials or services selected, hired or engaged by Landlord or its
agents to the extent Landlord receives reimbursement therefrom;
costs arising from Landlord's charitable or political contributions;
costs arising from any type of insurance maintained by Landlord which is
not required or allowed to be maintained by Landlord pursuant to the Lease;
costs for the maintenance or repair of the objects or art located in the
Building if serviced by the original artist thereof or its agent or employee and
costs for sculpture, paintings or other objects of art which are not, as of the
date of the Lease, located in the Building;
costs (including in connection therewith all attorneys' fees and costs of
settlement judgments and payments in lieu thereof) arising from claims, disputes
or potential disputes in connection with potential or actual claims, litigation
or arbitrations pertaining to Landlord and/or the Building;
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(24) costs, including but not limited to attorneys' fees associated with
the operation of the business of the partnership or entity which constitutes
Landlord as the same are distinguished from the costs or operation of the
Building, including partnership accounting and legal matters, costs of defending
any lawsuits with any mortgagee, costs of selling, syndicating, financing,
mortgaging or hypothecating any of Landlord's interest in the Building, or any
part thereof, costs of any disputes between Landlord and its employees, disputes
of Landlord with Building management or personnel, or outside fees paid in
connection with disputes with other tenants;
(25) costs incurred in removing and storing the property of former tenants
or occupants of the Building,-
(26) the cost of any work or services performed for any tenant (including
Tenant) at such tenant's cost;
(27) the cost of installing, operating and maintaining any specialty
service, observatory, broadcasting facilities, luncheon club, museum, athletic
or recreational club, or child care facility (unless such child care facility
has been mandated by any applicable governmental entity);
(28) the cost of correcting major and/or latent defects in the design,
construction or equipping of the Building or in the Building equipment;
(29) the cost of furnishing and installing non-Building Standard
replacement bulbs and ballasts in tenant spaces;
(30) the cost of any parties, ceremonies or other events for tenants or
third parties which are not tenants of the Building, whether conducted in the
Building or in any other location, it being agreed and understood that nothing
contained herein shall require the exclusion from Operating Expenses of those
costs incurred in connection with Landlord's normal and customary business
operations and negotiations with respect to parties who perform services which
benefit the Building;
(31) reserves of any kind, including but not limited to replacement
reserves, and reserves for bad debts or lost rent or any similar charge not
involving the payment of money to third parties;
(32) costs incurred by Landlord in connection with rooftop communications
equipment of Landlord or other persons, tenants, or occupants on the Building if
such communications equipment is not generally available to all tenants or
occupants of the Building;
(33) costs relating to any management office for the Building including
rent, or for any other management office in the Building except that Operating
Expenses shall include
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(i) rent for up to 3,000 rentable square feet of a Building management office at
rates then being generally charged for the Building and (ii) actual and
reasonable costs of any furniture, fixtures and equipment installed in and used
in connection with the operation of such management office;
(34) payment of any management fee, whether paid to Landlord or an outside
managing agent, in excess of the prevailing management fee charged in the
Comparable Buildings (as such term is defined in Section 2.3.2), it being agreed
that the management fee included in the Base Year shall be three percent (3%) of
the gross revenues realized from the Building, "grossed up", if necessary, to
reflect the Building as one hundred percent (100%) occupied with rent paying
tenants;
(35) any costs expressly excluded from Operating Expenses or Tax Expenses
elsewhere in the Lease or included as Expenses Tax;
(36) intentionally omitted;
(37) "takeover" expenses, including, but not limited to, the expenses
incurred by Landlord with respect to space located in another building of any
kind or nature in connection with the leasing of space in the Building;
(38) costs incurred in connection with the original construction or the
Building or Real Property or any addition to the Building or Real Property or in
connection with any major renovation or major change in the Building or Real
Property, including but not limited to the addition or deletion of floors but
subject to item (x), above;
(39) any costs, fees, dues contributions or similar expenses for industry
associations or similar organizations in which the Building or the Landlord is
not a member; provided, however, if any such membership directly benefits other
buildings owned by Landlord in addition to the Building, then the costs thereof
shall be appropriately prorated among all of the buildings so benefitted;
(40) any costs associated with the purchase or rental of furniture,
fixtures or equipment for Landlord's offices, including marketing and leasing
offices, except as permitted in subitem 33 above;
(41) the entertainment expenses of Landlord, its employees, agents,
partners and affiliates to the extent such expenses are for people who do not
perform services which benefit the Building;
(42) all Operating Expenses incurred in connection with any areas of the
Building or Real Property solely devoted to retail use;
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(43) any costs recovered by Landlord to the extent such cost recovery
allows Landlord to recover more than one hundred percent (100%) of the Operating
Expenses for any calendar year from tenants of the Building;
(44) intentionally omitted;
(45) costs for which Landlord has been reimbursed or receives a credit,
refund or discount; and
(46) the costs of the removal, encapsulation or entombment of any
asbestos-containing material other than those items typically included in
Landlord's standard asbestos operations and maintenance program as set forth in
Section 29.25.2 of the Lease, so long as such costs represent actual monitoring
and maintenance costs and such costs have been included in the Base Year.
To the extent that any expense is not specifically included or excluded as
a component of Operating Expenses in the definition of "Operating Expenses,"
whether such expense shall be treated as an Operating Expenses shall be
determined in accordance with generally accepted accounting principles,
consistently applied, in the real estate industry and to the extent that an
expense is included as Operating Expenses under the Lease, but a method for the
treatment or calculation of such expense is not specifically set forth in the
Lease, then the treatment and calculation of such expense shall be done in
accordance with the generally accepted accounting principles, consistently
applied in the real estate industry. Operating Expenses relating to periods of
the Lease Term that fall partly within any calendar year shall be reasonably
allocated when determining Tenant's Share of Operating Expenses.
All assessments and premiums shall be deemed to be paid by Landlord in the
maximum number of installments permitted by law and shall not be included as
Operating Expenses except in the year in which the assessment or premium
installment is actually paid.
4.2.5 "Systems and Equipment" shall mean but not be limited to any plant,
machinery, transformers, duct work, cable, wires, and other equipment,
facilities, and systems designed to supply heat, ventilation, air conditioning
and humidity or any other services or utilities, or comprising or serving as any
component or portion of the electrical, gas, steam, plumbing, sprinkler,
communications, alarm, security, or fire/life safety systems or equipment, or
any other mechanical, electrical, electronic, computer or other systems or
equipment which serve the Building in whole or in part.
4.2.6 "Tax Expenses" shall mean all federal, state, county, or local
governmental or municipal taxes, fees, charges or other impositions of every
kind and nature, whether general, special, ordinary or extraordinary (including,
without limitation, real
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estate taxes, general and special assessments, transit taxes or charges,
business or license taxes or fees, annual or periodic license or use fees, open
space charges, housing fund assessments, leasehold taxes or taxes based upon the
receipt of rent, including gross receipts or sales taxes applicable to the
receipt of rent, unless required to be paid by Tenant, personal property taxes
imposed upon the fixtures, machinery, equipment, apparatus, systems and
equipment, appurtenances, furniture and other personal property used in
connection with the Building), which Landlord shall pay or incur during any
Expense Year (without regard to any different fiscal year used by such
governmental or municipal authority) because of or in connection with the
ownership, leasing and operation of the Real Property. For purposes of the
Lease, Tax Expenses shall be calculated as if (i) all tenant improvements in the
Building were fully constructed, (ii) the Building were one hundred percent
(100%) occupied with rent paying tenants, and (iii) the Real Property, the
Building and all tenant improvements in the Building were fully assessed for
real estate tax purposes (including gross receipts and real property tax
purposes and without regard to any Proposition 8 reduction which may be
obtained}, and accordingly, during the Base Year and any Expense Year, Tax
Expenses shall be deemed to be increased appropriately.
4.2.6.1 Tax Expenses shall include, without limitation:
(i) Any assessment, tax, fee, levy or charge in addition to, or
in substitution, partially or totally, of any assessment, tax, fee, levy or
charge previously included within the definition of real property tax, it being
acknowledged by Tenant and Landlord that Proposition 13 was adopted by the
voters of the State of California in the June 1978 election ("Proposition 13")
and that assessments, taxes, fees, levies and charges may be imposed by
governmental agencies for such services as fire protection, street, sidewalk and
road maintenance, conservation, refuse removal and for other governmental
services formerly provided without charge to property owners or occupants, and,
in further recognition of the decrease in the level and quality of governmental
services and amenities as a result of Proposition 13, Tax Expenses shall also
include any governmental or private assessments or the Building's or the Real
Property's contribution towards a governmental or private cost-sharing agreement
for the purpose of augmenting or improving the quality of services and amenities
normally provided by governmental agencies. It is the Intention of Tenant and
Landlord that all such new and increased assessments, taxes, fees, levies, and
charges and all similar assessments, taxes, fees, levies and charges be included
within the definition of Tax Expenses for purposes of the Lease;
(ii) Any assessment, tax, fee, levy, or charge allocable to or
measured by the area of the Premises or the rent payable hereunder, including,
without limitation, any
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gross income tax with respect to the receipt of such rent, or upon or with
respect to the possession, leasing, operating, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises, or any portion
thereof;
(iii) Any assessment, tax, fee, levy or charge, upon this
transaction or any document to which Tenant is a party, creating or transferring
an interest or an estate in the Premises; and
(iv) Any possessory taxes charged or levied in lieu of real
estate taxes.
4.2.6.2 Any expenses incurred by Landlord in attempting to protest,
reduce or minimize Tax Expenses (other than those expenses incurred in
connection with any Proposition 8 reduction in Tax Expenses and/or any attempt
by Landlord to obtain any such Proposition 8 reduction) shall be included in
Operating Expenses in the Expense Year such expenses are paid. Tax refunds shall
be credited against Tax Expenses and refunded to Tenant regardless of when
received, based on the Expense Year to which the refund is applicable, provided
that in no event hall the amount to be refunded to Tenant for any such Expense
ear exceed the total amount paid by Tenant as Additional Rent under this Article
4 for such Expense Year. All special assessments which may be paid in
installments shall be deemed paid by Landlord in the maximum number of
installments permitted by law and not included in Tax Expenses except in the
year in which the assessment is so deemed paid; provided, however, that if the
prevailing practice in Comparable Buildings is to pay such assessments on an
early basis, and Landlord pays the same on such basis, such assessments shall be
included in Tax Expenses in the year paid by Landlord. Notwithstanding anything
to the contrary set forth in the Lease, the amount of Tax Expenses for the Base
Year and any Expense Year shall be calculated without taking into account any
decreases in real estate taxes obtained in connection with Proposition 8, and,
therefore, the Tax Expenses in the Base Year and/or an Expense Year may be
greater than those actually incurred by Landlord, but shall, nonetheless, be the
Tax Expenses due under the Lease; provided that, notwithstanding the foregoing,
upon a "Reassessment," as that term is defined in Section 4.5 of the Lease, the
component of the Base Year which consists of Tax Expenses that are attributable
to the assessed value of the Real Property under Proposition 13 (without taking
into account any Proposition 8 reductions) shall be adjusted for purposes of
comparison to all subsequent Expense Years (commencing with the Expense Year in
which the Reassessment took place) to an amount equal to the real estate taxes
based upon such Reassessment.
4.2.6.3 Notwithstanding anything to the contrary contained in this
Section 4.2.5 (except as set forth in Section 4.2.5.1 or levied in whole or part
in lieu of Tax Expenses), there shall be excluded from Tax Expenses (i) all
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excess profits taxes, franchise taxes, gift taxes, capital stock taxes,
inheritance and succession taxes, estate taxes, federal and state income taxes,
and other taxes to the extent applicable to Landlord's general or net income (as
opposed to rents, receipts or income attributable to operations at the
Building), (ii) any items included as Operating Expenses or specifically
excluded from Operating Expenses, (iii) taxes on tenant improvements in any
space in the Building based upon an assessed level in excess of the assessed
level for which Tenant has been individually and directly charged by Landlord
under the Lease and not as part of Operating Expenses, (iv) penalties incurred
as a result of Landlord's negligence, inability or unwillingness to make
payments of, and/or to file any tax or informational returns with respect to,
any Taxes, when due, (v) any other taxes or assessments charged or levied
against Landlord which are not directly incurred as a result of the operation of
the Building and (vi) any real estate taxes directly payable by Tenant or any
other tenant in the Building under the applicable provisions in their respective
leases.
4.2.7 Tenant's Share" shall mean the percentage set forth in Section 9.2 of
the Summary. Tenant's Share was calculated by multiplying the number of rentable
square feet of the Premises by 100 and dividing the product by the total
rentable square feet in the Building.
4.3 Calculation and Payment of Additional Rent.
4.3.1 Calculation of Excess. If for any Expense Year which does not
occur during the Base Year and ends or commences within the Lease Term, Tenant's
Share of Direct Expenses for such Expense Year exceeds Tenant's Share of the
amount of Direct Expenses applicable to the Base Year, then Tenant shall pay to
Landlord, in the manner set forth in Section 4.3.2, below, and as Additional
Rent, an amount equal to the excess (the "Excess"). For any partial year within
the Lease Term, the Excess shall be calculated by comparing Tenant's Share of
Direct Expenses for such partial Expense Year to the comparable pro rata portion
of Tenant's Share of Direct Expenses applicable to the Base Year.
4.3.2 Statement of Actual Direct Expenses and Payment by Tenant.
Following the end of each Expense Year, Landlord shall give to Tenant a
statement (the "Statement"), which Statement shall be derived from an audit
conducted by an independent certified public accountant (which accountant is a
member of a nationally recognized accounting firm), which shall state the Direct
Expenses incurred or accrued for such preceding Expense Year on a line item by
line item basis as provided by such certified public accountant, and which shall
indicate the amount, if any, of any Excess. Upon receipt of the Statement for
each Expense Year ending during the Lease Term, if an Excess is present, Tenant
shall pay, with its next installment of Base Rent due, but in no event later
than thirty (30) days after receipt of such Statement, the full amount of the
Excess for such Expense
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Year, less the amounts, if any, paid during such Expense Year as "Estimated
Excess," as that term is defined in Section 4.3.3, below. If, however, the
amounts paid as Estimated Excess are greater than the actual Excess indicated on
the actual Statement, the amount so overpaid shall be credited against Tenant's
payments of Estimated Excess next coming due after the Statement, or if the
Lease has terminated, shall be paid by Landlord to Tenant within thirty (30)
days after Tenant's receipt of the Statement. The failure of Landlord to timely
furnish the Statement for any Expense Year shall not prejudice Landlord from
enforcing its rights under this Article 4. Even though the Lease Term has
expired and Tenant has vacated the Premises, when the final determination is
made of Tenant's Share of the Direct Expenses for the Expense Year in which the
Lease terminates, taking into consideration that the Lease Expiration Date may
have occurred prior to the final day of the applicable Expense Year, if an
Excess is present, Tenant shall immediately pay to Landlord an amount as
calculated pursuant to the provisions of Section 4.3.1 of the Lease. The
provisions of this Section 4.3.2 shall survive the expiration or earlier
termination of the Lease Term. Notwithstanding the immediately preceding
sentence, Tenant shall not be responsible for Tenant's Share of any Direct
Expenses attributable to any Expense Year which are first billed to Tenant more
than two (2) calendar years after the Lease Expiration Date, provided that in
any event (i) Tenant shall be responsible for Tenant's Share of those items of
Direct Expenses which are not under Landlord's reasonable control, specifically
including Tax Expenses and public utility charges, at any time following the
Lease Expiration Date which are attributable to any Expense Year, and (ii)
Landlord shall refund any amount of Tenant's Share of any Direct Expenses due
Tenant notwithstanding that such refund may be determined by Landlord more than
two (2) years following the Lease Expiration Date.
4.3.3 Statement of Estimated Direct Expenses. In addition, landlord shall
give Tenant a yearly expense estimate statement (the "Estimate Statement") which
shall set forth Landlord's reasonable estimate (the "Estimate") of what the
total amount of Direct Expenses for the then-current Expense Year shall be and
the estimated excess (the "Estimated Excess") as calculated by comparing Direct
Expenses, which shall be based upon the Estimate, to the amount of Direct
Expenses applicable to the Base Year, which Estimate Statement may be revised
and reissued by Landlord from time to time. The failure of Landlord to timely
furnish the Estimate Statement for any Expense Year shall not preclude Landlord
from enforcing its rights to collect any Estimated Excess under this Article 4,
nor shall Landlord be prohibited from revising any Estimate Statement or
Estimated Excess theretofore delivered to the extent necessary; provided
however, any such subsequent revision shall set forth on a reasonably specific
basis any particular expense increase. Upon receipt of an Estimate Statement,
Tenant shall thereafter pay, upon the later to occur of (a) the date its next
installment of Base Rent is due, or (b) the date thirty (30) days after receipt
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of such Statement, a fraction of the Estimated Excess (or the increase in the
Estimated Excess if pursuant to a revised Estimate Statement) for the
then-current Expense Year (reduced by any amounts paid pursuant to the last
sentence of this Section 4.3.3). Such fraction shall have as its numerator the
number of months which have elapsed in such current Expense Year to the month of
such payment, both months inclusive, and shall have twelve (12) as its
denominator. Until a new Estimate Statement is furnished, Tenant shall pay
monthly, with the monthly Base Rent installments, an amount equal to one-twelfth
(1/12) of the total Estimated Excess set forth in the previous Estimate
Statement delivered by Landlord to Tenant.
4.4 Allocation of Direct Expenses. Notwithstanding anything to the contrary
set forth in this Article 4, when calculating the Direct Expenses for the Base
Year or any subsequent comparison year, such Direct Expenses shall exclude
market-wide labor-rate increases due to extraordinary circumstances, including,
but not limited to, boycotts and strikes, and utility rate increases due to
extraordinary circumstances including, but not limited to, conservation
surcharges, boycotts, embargoes or other shortages.
4.5 Taxes and Other Charges for Which Tenant Is Directly Responsible.
Direct Expenses shall exclude and Tenant shall reimburse Landlord, as Additional
Rent, upon demand for any and all taxes required to be paid by Landlord,
excluding state, local and federal personal or corporate income taxes measured
by the net income of Landlord from all sources and estate and inheritance taxes,
whether or not now customary or within the contemplation of the parties hereto,
when:
4.5.1 Said taxes are measured by or reasonably attributable to the
cost or value of Tenant's equipment, furniture, fixtures and other personal
property located in the Premises, or by the cost or value of any leasehold
improvements made in or to the Premises by or for Tenant, to the extent the cost
or value of such leasehold improvements exceeds the cost or value of a building
standard build-out as determined by Landlord (which the parties stipulate to be
Thirty-Five Dollars ($35.00) per rentable square foot) regardless of whether
title to such improvements shall be vested in Tenant or Landlord;
4.5.2 Said taxes are assessed upon or with respect to the possession,
leasing, operation, management, maintenance, alteration, repair, use or
occupancy by Tenant of the Premises, any portion of the Real Property or the
parking facility used by Tenant in connection with the Lease;
4.5.3 Said taxes are assessed upon this transaction or any document to
which Tenant is a party creating or transferring an interest or an estate in the
Premises; or
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4.5.4 Said assessments are levied or assessed upon the Real Property
or any part thereof or upon Landlord by any governmental authority or entity,
and relate to the construction, operation, management, use, alteration or repair
of mass transit improvements including, but not limited to, any amounts paid in
connection with Metrorail.
4.6 Tenant's Payment of Certain Tax Expenses. Notwithstanding anything to
the contrary contained in the Lease, in the event that during the initial ten
(10) year Lease Term any sale, refinancing, or change in ownership of the Real
Property is consummated, and as a result thereof, and to the extent that in
connection therewith, the Real Property is reassessed (the "Reassessment") for
real estate tax purposes by the appropriate governmental authority pursuant to
the terms of Proposition 13 (as adopted by the voters of the State of California
in the June, 1978 election), then the terms of this Section 4.6 shall apply.
4.6.1 The Tax Increase. For purposes of this Section 4.6, the term
"Tax Increase" shall mean that portion of the Tax Expenses, as calculated
immediately following the Reassessment, which is attributable solely to the
Reassessment. Accordingly, the term Tax Increase shall not include any portion
of the Tax Expenses, as calculated immediately following the Reassessment, which
(i) is attributable to the initial assessment of the value of the Real Property,
the base, shell and core of the Building, or the tenant improvements located in
the Building, (ii) is attributable to assessments pending immediately prior to
the Reassessment, which assessments were conducted during, and included in, such
Reassessment, or which assessments were otherwise rendered unnecessary following
the Reassessment, or (iii) is attributable to the annual inflationary increase
to real estate taxes. When calculating a Tax Increase, Tax Expenses shall be
calculated as though there had been no Proposition 8 reduction in such Tax
Expenses even if, indeed, a Proposition 8 reduction had occurred and, therefore,
a Tax Increase shall not include any increase in Tax Expenses which relate to
the total or partial elimination of a Proposition 8 reduction.
4.6.2 Tenant's Protection. During the period of the initial five (5)
years of the Lease Term, Tenant shall not be obligated to pay any portion of the
Tax Increase relating to a Reassessment occurring during the initial five (5)
years of the Lease Term.
4.7 Landlord's Right to Purchase the Proposition 13 Protection Amount
Attributable to a Particular Reassessment. The amount of Tax Expenses which
Tenant is not obligated to pay or will not be obligated to pay on or prior to
the expiration of the initial five (5) years of the Lease Term, in connection
with a particular Reassessment which occurs on or prior to the expiration of the
initial five (5) years of the Lease Term, pursuant to the terms of this Section
4.7, shall be sometimes referred to hereafter as a "Proposition 13 Protection
Amount."
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If the occurrence of a Reassessment is reasonably foreseeable by-Landlord based
upon a fully executed and delivered purchase and sale agreement for the Building
and the Proposition 13 Protection Amount attributable to such Reassessment can
be reasonably quantified or estimated for each Lease Year commencing with the
Lease Year in which the Reassessment will occur, the terms of this Section 4.7
shall apply to each such Reassessment. Upon notice to Tenant, Landlord shall
have the right to purchase the Proposition 13 Protection Amount relating to the
applicable Reassessment (the "Applicable Reassessment"), at any time during the
Lease Term following the execution and delivery of such purchase and sale
agreement for the Building, by paying to Tenant an amount equal to the
"Proposition 13 Purchase Price," as that term is defined below, provided that
the right of any successor of Landlord to exercise its right of repurchase
hereunder shall not apply to any Reassessment which results from the event
pursuant to which such successor of Landlord became the Landlord under this
Lease. As used herein, "Proposition 13 Purchase Price" shall mean the present
value of the Proposition 13 Protection Amount remaining during the Lease Term,
as of the date of payment of the Proposition 13 Purchase Price by Landlord. Such
present value shall be calculated (i) by using the portion of the Proposition 13
Protection Amount attributable to each remaining Lease Year (as though the
portion of such Proposition 13 Protection Amount benefitted Tenant at the middle
of each Lease Year), as the amounts to be discounted, and (ii) by using
discount rates for each amount to be discounted equal to the average rates of
yield for United States Treasury Obligations with maturity dates as close as
reasonably possible to the end of each Lease Year during which the portions of
the Proposition 13 Protection Amount would have benefitted Tenant, which rates
shall be those in effect as of Landlord's exercise of its right to purchase, as
set forth in this Section 4.7. Upon such payment of the Proposition 13 Purchase
Price, the provisions of Section 4.6.2 of this Lease shall not apply to any Tax
Increase attributable to the Applicable Reassessment. Since Landlord is
estimating the Proposition 13 Purchase Price because a Reassessment has not yet
occurred and is estimating the Proposition 13 Purchase Price based upon the
then-current status of Proposition 13 (or any successor statute to, replacement
of or statute in lieu of Proposition 13), then when such Reassessment occurs or
Proposition 13 is modified, if Landlord has underestimated the Proposition 13
Purchase Price, then upon notice by Landlord to Tenant, Tenant's Rent next due
shall be credited with the amount of such underestimation, and if Landlord
overestimates the Proposition 13 Purchase Price, then upon notice by Landlord to
Tenant, Rent next due shall be increased by the amount of the overestimation.
4.8 Books and Records. Notwithstanding anything in the Lease to the
contrary, Tenant shall have the right, after reasonable notice and at reasonable
tiraes {but not more than one (!) time per Expense Year} to have an employee of
Tenant inspect Landlord's accounting records at Landlord's office, provided that
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Tenant Is not then in default under the Lease beyond any applicable notice and
cure period with respect to the payment of Base Rent and Tenant's Share of
Direct Expenses and Tenant has paid all amounts required to be paid under the
applicable Statement and provided further that such inspection is not performed
on a contingency basis. If, after such inspection, Tenant continues to dispute
the amount of Tenant's Share of Direct Expenses, an agent designated by Tenant
shall be entitled to audit Landlord's records by the audit department of one of
the "Big Six" accounting firms to determine the proper amount of Tenant's Share
of Direct Expenses. Any such "Big Six" firm shall be independent, shall not then
be performing any services for either Landlord or Tenant, shall be subject to
the reasonable approval of both Landlord and Tenant and shall not charge for
such audit on a contingency basis. Landlord and Tenant agree that before any
final report of any such audit is issued (which report is to be issued by a
certified public accountant), Landlord and Tenant will be given a reasonable
opportunity and a fair hearing process, and in Landlord's instance, in order to
explain Landlord's accounting records and its procedures with respect to Direct
Expenses. If such audit or review reveals that Landlord has overcharged Tenant,
then within thirty (30) days after the results of such audit are made available
to Landlord, Landlord shall credit Tenant toward the payment of the rent next
due and payable under the Lease the amount of such overcharge. If the audit
reveals that Tenant was undercharged then within thirty (30) days after the
result of the audit are made available to Tenant, Tenant shall reimburse
Landlord the amount of such undercharge. Tenant agrees to pay the cost of such
audit, provided that, if any such audit reveals that Landlord's determination of
Tenant's Share of Direct Expenses as set forth in any such Statement sent to
Tenant was in error by an amount in excess of three percent (3%) of the total
increase in Direct Expenses for the year or years in question over the Base
Year, Landlord shall pay the cost of such Inspection and audit, it being agreed
that if the inspection were performed by an employee of Tenant then the cost of
such inspection shall only be the actual, reasonable and documented
out-of-pocket costs incurred by Tenant in connection with such audit. If
Landlord or Tenant desires to contest such audit results, either party may do so
by submitting the results of the audit to arbitration pursuant to the provisions
of Section 29.27, below, within twenty (20) days of receipt of the results of
the audit, and the arbitration shall be final and binding upon Landlord and
Tenant and the "losing" party shall be responsible for the cost thereof, it
being agreed that Landlord shall not be considered the "losing" party unless the
arbitration determines that Landlord's determination of Tenant's Share of Direct
Expenses as set forth In the Statement(s) at issue was in error by an amount in
excess of three percent (3%) of the total increase in Direct Expenses for the
Expense Year or Expense Years in question over the Base Year. Landlord shall be
required to maintain records of all Direct Expenses and other Rent Adjustments
for the entirety of the two (2) year period ("Review Period") following
Landlord's delivery
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to Tenant of each Statement setting forth Tenant's Share of Direct Expenses. In
addition., Landlord shall be required to maintain records of all Direct Expenses
for the Base Year for at least two (2) years following the end of the Base Year.
The payment by Tenant of any amounts pursuant to this Article 4 shall not
preclude Tenant from questioning the correctness of any Statement delivered by
Landlord, provided that the failure of Tenant to object thereto within the
Review Period shall be conclusively deemed Tenant's approval of the applicable
Statement. If, in the course of an audit or an inspection of Landlord's books
and records by another tenant in the Building, it is discovered that an
arithmetic error was made in the calculation of Direct Expenses, then Tenant's
Share of Direct Expenses shall be adjusted to reflect the correction of such
arithmetic error. If such error resulted in an overcharge by Tenant, then
Landlord shall credit Tenant toward the payment of Rent next due and payable
under the Lease the amount of such overcharge. If the error resulted in an
undercharge, then Tenant shall, within thirty (30) days after demand by
Landlord, pay to Landlord the amount of such undercharge; provided, however that
any such payment by Tenant shall be subject to the provisions of the last
sentence of Section 4.3.2 of the Lease except that the two (2) year period set
forth therein shall be extended by any audit period which occurs after the Lease
Expiration Date. Neither Tenant nor Tenant's agent shall reveal the results of
any audit performed pursuant to the provisions of this Section 4.8 to any third
party except as may be required in connection with obtaining any amounts due to
Tenant hereunder.
ARTICLE 5
USE OF PREMISES
Tenant shall use the Premises solaly_f_Qr the/"Permitted Use" , _jas that
term is defined in Section 13 of the Summary, and Tenant shall not use or permit
the Premises to be used for any other purpose or purposes whatsoever without the
prior written consent of Landlord, which may be withheld in Landlord's sole
discretion, but which may not be withheld if Landlord is permitting other
tenants to use comparable amounts of space above the ground floor of the
Building for the same use that was not consented to by Landlord following
Tenant's request for Landlord's consent thereto. Tenant further covenants and
agrees that it shall not use, or suffer or permit any person or persons to use,
the Premises or any part thereof for any use or purpose contrary to the Rules
and Regulations, or in violation of the laws of the United States of America,
the State of California, or the ordinances, regulations or requirements of the
local municipal or county governing body or other lawful authorities having
jurisdiction over the Building. Tenant shall faithfully observe and comply with
the Rules and Regulations. Landlord shall not be responsible to Tenant for the
nonperformance of any of such Rules and Regulations by or otherwise with respect
to the
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acts or omissions of any other tenants or occupants of the Building; provided,
however, that Landlord shall use reasonable efforts, in keeping with good
management practices and procedures, to remedy any violation of any of the Rules
and Regulations which results in a material interference with Tenant's use of,
or access to, the Premises or the Building. Tenant shall not use or allow
another person or entity to use any part of the Premises for the storage, use,
treatment, manufacture or sale of hazardous materials or substances as defined
pursuant to any applicable federal, state or local governmental or
quasi-governmental law, code, ordinance, rule, or regulation. Landlord
acknowledges, however, that Tenant will maintain products in the Premises which
are incidental to the operation of its offices, such as photocopy supplies,
secretarial supplies and limited janitorial supplies, which products contain
chemicals which are categorized as hazardous materials. Landlord agrees that the
use of such products in the Premises in compliance with all applicable laws and
in the manner in which such products are designed to be used shall not be a
violation by Tenant of this Article 5.
ARTICLE 6
SERVICES AND UTILITIES
6.1 Standard Tenant Services. Landlord shall provide the following services
on all days during the Lease Term, unless otherwise stated below.
6.1.1 Subject to all governmental rules, regulations and guidelines
applicable thereto, Landlord shall provide i heating and air conditioning j when
necessary for normal comfort for normal office use in the Premises and in
accordance with the HVAC Temperature Design Conditions set forth in Exhibit G
attached -|j hereto and made a part hereof, from Monday through Friday, during
/the period from 8:00 a.m. to 6:00 p.m., and on Saturdays during / the period
from 9:00 a.m. to 12:00 p.m. (collectively, the "Building Hours"), except for
New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
Christmas Day and any other nationally recognized holidays (collectively, the
"Holidays").
6.1.2 Landlord shall provide adequate electrical wiring and facilities
for connection to Tenant's lighting fixtures and incidental use equipment,
provided that the demand electrical load of Tenant's lighting fixtures and the
incidental use equipment, in the aggregate, does not exceed an average of four
(4) watts per rentable square foot of the Premises during the Building Hours on
a monthly basis, and the electricity so furnished for incidental use' equipment
will be at a nominal one hundred twenty/two hundred eight (120/208) volts and
no electrical circuit for the supply of such incidental use equipment will
require a current capacity exceeding twenty (20)
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amperes, and the electricity so furnished for Tenant's lighting will be at a
nominal one hundred twenty/two hundred seventy seven (120/277) volts. Tenant
shall bear the cost of replacement of lamps, starters and ballasts for
non-Building standard lighting fixtures within the Premises. Landlord hereby
advises Tenant that Landlord can provide electrical capacity (not including Base
Building central HVAC) of at least nine (9) watts per rentable square foot
within the Premises, however, Tenant, at its sole cost and expense, shall be
obligated for any cost associated with providing excess capacity over four (4)
watts per rentable square foot (it being understood, however, that Tenant shall
only be responsible for the cost of electrical distribution devices and
distribution on the particular floor of the Premises where such additional
electrical capacity shall be required).
Landlord shall provide city water from the regular Building outlets
for drinking, lavatory and toilet purposes.
Landlord shall provide janitorial services Monday through Friday
except the date of observation of the Holidays, in and about the Premises which
is at least comparable to such services as provided in the Comparable Buildings.
Landlord shall provide nonexclusive automatic elevator service at all
times.
Landlord shall provide security at least comparable to the security
being provided in the Comparable Buildings, it being agreed and understood that
currently there is at least one (1) attendant in the lobby of the Building
twenty-four (24) hours a day, each day of the year.
6.2 Overstandard Tenant Use. Subject to the provisions of Sections 6.4 and
6.S below, Tenant shall not, without Landlord's prior written consent, /use
heat-generating machines, machines II other than normal fractional horsepower
office machines, or equipment or lighting other than building standard lights in
the 1 Premises, which materially adversely affect the temperature otherwise
maintained by the air conditioning system or materially increase the water
normally furnished for the Premises by \ Landlord pursuant to the terms of
Section 6.1 of the Lease. Landlord has the right to install, supplementary air
conditioning units or other facilities in the Premises, including:
supplementary or additional metering devices; and the cost j thereof, including
the cost of any further installation, j operation and maintenance, increased
wear and tear on existing i equipment and other similar charges, shall be paid
by Tenant' to Landlord upon billing by Landlord, it being agreed and 'understood
that notwithstanding anything else to the contrary set forth herein Tenant
shall, within thirty (30) days of Tenant's receipt of an invoice with respect
thereto, pay the cost of any electricity required to operate any supplemental
air conditioning unit servicing only the Premises, which cost shall be at
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Landlord's Actual Cost (as defined below) as determined by a submeter but shall
not include any administrative charge. If Tenant uses water, or heat or air
conditioning in excess of that supplied by Landlord pursuant to Section 6.1 of
the Lease, or if Tenant's consumption of electricity (other than that required
for the operation of any supplemental air conditioning unit in the Premises)
shall exceed four (4) watts per rentable square foot of the Premises, calculated
on an annualized basis for the hours described in Section 6.1.1 above
(collectively, "Overstandard Usage"), Tenant shall pay to Landlord, within
thirty (30) days of receipt of written notice, all out-of-pocket costs actually
incurred by Landlord, without mark-up for profit but with an administrative
charge designed to reimburse Landlord for its actual (or reasonably estimated),
administrative costs of providing any such Overstandard Usage (the "Actual
Cost(s)") in connection with Landlord providing such Overstandard Usage, the
cost of the installation, operation, and maintenance of equipment which is
installed in order to supply such excess consumption, and the cost of the
increased wear and tear on existing equipment caused by such excess consumption
as such costs are reasonably determined, by Landlord, - and Landlord has the
right to install, devices to separately meter any increased use and Tenant shall
pay the increased cost directly to Landlord, on demand, including the cost of
such additional metering devices. Tenant shall have the right to access and use
Landlord's chilled water system for Tenant's supplemental cooling unit(s)
twenty-four (24) hours a day, seven (7) days a week; provided, however, that any
such access and use shall be at Tenant's sole cost and expense. If Tenant
desires to use heat, ventilation or air conditioning ("HVAC") during hours other
than those for which Landlord is obligated to supply such utilities pursuant to
the terms of Section 6.1 of the Lease, Tenant shall give Landlord such prior
notice, as Landlord shall from time to time establish as appropriate, of
Tenant's desired use and Landlord shall supply such utilities to Tenant at
Landlord's Actual Cost of such Overstandard Usage, which shall include a
reasonable administrative fee in an amount equal to or reasonably estimated
to~T5e~ Landlord's actual administrative costs of providing such "aft_er-hours"
HVAC, it being agreed and understood that if more than ~ohe Mi--fee-nant
requires and contracts for any such "after-hours" HVAC the cost of such usage
will be appropriately prorated between or among such tenants as reasonably
determined by Landlord. Amounts payable by Tenant to Landlord for such use of
additional utilities shall be deemed Additional Rent hereunder and shall be
billed on a monthly basis.
6.3 Interruption of Use. Except as provided in Section 19.4.2 of the Lease,
Tenant agrees that Landlord shall not be liable for damages, by abatement of
Rent or otherwise, for failure to furnish or delay in furnishing any service
(including telephone and telecommunication services), or for any diminution in
the quality or quantity thereof, when such failure or delay or diminution is
occasioned, in whole or in part, by repairs, replacements, or improvements, by
any strike, lockout or other
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labor trouble, by inability to secure electricity, gas, water, or other fuel at
the Building after reasonable effort to do so, by any accident or casualty
whatsoever, by act or default of Tenant or other parties, or by any other
similar cause beyond Landlord's reasonable control; and, except as provided in
Section 19.4.2 of the Lease, such failures or delays or diminution shall never
be deemed to constitute an eviction or disturbance of Tenant's use and
possession of the Premises or relieve Tenant from paying Rent or performing any
of its obligations under the Lease. Furthermore, Landlord shall not be liable
under any circumstances for injury to, or interference with, Tenant's business,
including, without limitation, loss of profits, however occurring, through or in
connection with or incidental to a failure to furnish any of the services or
utilities as set forth in this Article 6.
6.4 Supplemental Cooling Unit And Generator. Tenant shall have jthe_right
a its sole cost and expense to install (i) a supplemental cooling unit (the
"Equipment") either within the Premises or on a portion of the fifth (5th) floor
roof of the Building and (ii) a generator (the "Generator") on a portion of the
fifth (5th) floor roof of the Building upon the satisfaction of each of the
following express conditions:
(a) That any such cooling unit must be an air cooled condenser unit;
(b) Tenant's right to install, operate and maintain the Equipment and
the Generator shall be subject to all governmental laws, rules and regulations,
and Landlord makes no representation that such laws, rules or regulations permit
such installation and operation. Tenant shall obtain all necessary governmental
approvals and permits prior to installation thereof,-
(c) The installation and any actual, direct, out-of-pocket costs
relating thereto (including without limitation, costs of obtaining any necessary
permits or approvals) and the maintenance, repair, insurance obligations and
liability with respect to such Equipment and Generator shall be borne completely
by Tenant, but such use of space on the fifth (5th) floor roof of the Building
for the Equipment and/or for the Generator shall be without any Base Rent or
Additional Rent;
(d) It is expressly understood that Landlord retains the right to use
the fifth (5th) floor roof of the Building for any purpose whatsoever provided
that Landlord shall not interfere with the use of the Equipment and the
Generator;
(e) Landlord shall not have any obligations with respect to the
Equipment or the Generator nor shall Landlord be responsible for any damage that
may be caused to Tenant or the Equipment or the Generator by any other tenant in
the Building;
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The Equipment shall be Tenant's property. The Generator shall be
Landlord's property, and shall be surrendered to Landlord in good condition upon
expiration of the Lease Term or termination of the Lease without compensation to
Tenant; provided, however, that at the election of Landlord, exercisable by
notice to Tenant, Tenant shall, at Tenant's sole expense upon the expiration of
the Lease Term or termination of the Lease remove the Generator (or that portion
of the Generator required to be removed by Landlord) and repair all damage to
the Building caused by such removal and restore such area to its condition prior
to the installation of the Generator, reasonable wear and tear excepted. Tenant
shall, upon the expiration of the Lease Term or termination of the Lease, remove
the equipment and repair all damage to the Building caused by such removal and
restore such area to its condition prior to the installation of the Equipment,
reasonable wear and tear excepted;
Tenant shall, at its expense, defend, indemnify and hold harmless
Landlord and Landlord Parties (as hereinafter defined in Section 10.1) from any
and all loss, cost, damage, expense and liability (including without limitation,
court costs and reasonable attorneys' fees) incurred in connection with or
arising from Tenant's installation, operation, maintenance or removal of the
Equipment and Generator, except to the extent that any such loss, cost, damage,
expense or liability results from the negligence or willful misconduct of
Landlord or Landlord Parties and is not covered by insurance carried by Tenant
or required to be carried by Tenant pursuant to the Lease {provided, however,
that in no event shall Landlord be liable for any consequential damages};
(h) Except as otherwise expressly provided in the Lease, Tenant shall
(i) be solely responsible for any damage to the Equipment and the Generator,
including but not limited to, any damage caused to the Building during the
installation, use or maintenance of the Equipment and the Generator, or caused
by the Equipment or the Generator itself, (ii) promptly pay any tax, license or
permit fees charged pursuant to any laws or regulations in connection with the
installation, maintenance or use of the Equipment and the Generator and comply
with all precautions and safeguards recommended by all governmental authorities,
and (iii) not adversely affect any structural elements of the Building in
connection with the installation of the Equipment or the Generator;
(i) That at least fourteen (14) days prior to the intended
installation of any of the Equipment and/or of the Generator, Tenant shall
submit in writing a complete list of all such Equipment and/or of the Generator,
and a diagram showing the exact locations where the Equipment and/or the
Generator is to be installed. Said list shall contain a complete description of
the Equipment and/or of the Generator including but not limited to the name of
the manufacturer, model and serial number and exact dimensions and weight of
each unit and component part. All of
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the Equipment and any venting required to be provided in connection therewith
and the Generator shall be located in areas of the Premises or of the fifth
(5th) floor roof, as the case may be, designated by Landlord;
(j) That the design of, and the plans and specifications for, the
installation of the Equipment and of the Generator (including any meters or
submeters installed by Tenant in connection therewith) to the extent that such
installation involves or impacts the electrical or mechanical systems for the
Building shall be performed and prepared by Levine/Seegel at Tenant's sole cost
and expense;
(k) That the installation and use of the Equipment or the Generator so
designated will in no way overload, create any problem with, or require any
modification of the designed or legal floor load of the Building, or the
electrical or heating, ventilating and air conditioning systems or any other
system of the Building;'
(1) That any specified location as provided in paragraph (c) above
shall not be altered after its initial installation without Landlord's prior
written approval;
(m) That any electricity furnished to or consumed as a result of said
Equipment and/or the Generator shall be at the /sole cost and expense of Tenant
and, to that end. Tenant will, under Landlord's supervision, install at Tenant's
sole cost and expense a separate meter or sub-meter to measure all of the
electricity consumed at any time as a result of such Equipment and/or the
Generator. Tenant shall reimburse Landlord for such electricity at the same rate
or rates as Tenant would be required to pay if the same were furnished directly
to Tenant by the appropriate public utility (but without the addition of any
administrative fee for the reading of any such meter or sub-meter) and such
payments shall be additional charges due and payable by Tenant on the first day
of each calendar month and in default of payment of such additional charges
Landlord shall have all the remedies as in the case of nonpayment of an
installment of Base Rent; and
(n) The Equipment, Generator and any riser system used by Tenant shall
be designed and operated by Tenant so that the sound transmission levels do not
exceed forty (40) decibels within the Premises and the Building "Noise Level".
In the event the sound transmission levels in the Premises and/or the Building
shall exceed the Noise Level, Tenant shall undertake any and all actions to
reduce the sound transmission levels in the Premises and the Building to the
Noise Level.
6.5 Access to Additional Electricity and to Diesel Fuel. Tenant shall have
the right, at Tenant's sole cost and expense, to access (i) up to eight hundred
(800) amps of electrical power ("Extra Amps") from the electrical room located
on the fifth
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(5th) floor of the Building (the "Electrical Room") and (ii) the diesel fuel
stored in the tank ("Fuel Tank") located in the basement of the Building. This
right shall include the right to install, at Tenant's sole cost and expense,
(xx) a conduit and all related equipment and any additional wiring or services
to the Building or Premises required in connection therewith (collectively, the
"Electrical Conduit") to provide for the transmittal of the Extra Amps from the
Electrical Room to the Premises, and (yy) piping necessary to tap into, on the
fifth (5th) floor, both the supply and return lines to the Fuel Tank and
transport the diesel fuel to the Generator (collectively, the "Fuel Lines")
subject to the satisfaction of each of the following express conditions:
That the installation of the Electrical Conduit and the Fuel Lines
shall be the sole cost and expense of Tenant and shall be performed under
Landlord's supervision at times other than Building Hours (as such term is
defined in Section 6.1.1) designated by Landlord;
That the Electrical Conduit and the Fuel Lines shall be located in
areas designated by Landlord;
That the design of, and the plans and specifications for, the
Electrical Conduit and the Fuel Lines (including any meters or sub-meters
installed by Tenant in connection therewith) shall be performed and prepared by
Levine/Seegel at Tenant's sole cost and expense;
(d) That the installation of the Electrical Conduit and the Fuel Lines
and the use of the Extra Amps and the diesel fuel by Tenant will in no way
overload, create any problem with, or require any modification of the designed
or legal floor load of the Building, or the electrical or heating, ventilating
and air conditioning systems or any other system of the Building;
(e) That any specified location as provided in paragraph (b) above
shall not be altered after its initial installation without Landlord's prior
written approval;
(f) That any electricity furnished to or consumed as a result of the
Extra Amps shall be at the sole cost and expense of Tenant and, to that end,
Tenant will, under Landlord's supervision, install at Tenant's sole cost and
expense a separate meter or sub-meter to measure all of the electricity consumed
at any time as a result of the Extra Amps. Tenant shall reimburse Landlord for
such electricity at the same rate or rates as Tenant would be required to pay if
the same were furnished directly to Tenant by the appropriate public utility
(but without the addition of any administrative fee for the reading of any such
meter or sub-meter) and such payments shall be additional charges due and
payable by Tenant on the first (1st) day of each calendar month and in the event
of default of payment of such additional
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charges Landlord shall have all the remedies as in the case of nonpayment of an
installment of Base Rent;
(g) That any diesel fuel furnished to or consumed by Tenant shall be
at the sole cost and expense of Tenant and, to that end, Tenant will, under
Landlord's supervision, install at Tenant's sole cost and expense a separate
meter or sub-meter to measure all of the diesel fuel consumed by Tenant at any
time during the Lease Term. Tenant shall reimburse Landlord for such diesel fuel
at the same rate or rates as Landlord paid, on a per gallon basis, for such
diesel fuel (without the addition of any administrative fee for the reading of
any such meter or sub-meter) and such payment shall be additional charges due
and payable by Tenant on the first (1st) day of each calendar month and in the
event of default of payment of such additional charges Landlord shall have all
the remedies as in the case of nonpayment of an installment of Base Rent;
(h) Tenant's right to install, operate and maintain the Electrical
Conduit and the Fuel Lines shall be subject to all governmental laws, rules and
regulations, and Landlord makes no representation that such laws, rules or
regulations permit such installation and operation. Tenant shall obtain all
necessary governmental approvals and permits prior to installation thereof;
(i) Landlord shall not have any obligations with respect to the
Electrical Conduit or the Fuel Lines nor shall Landlord be responsible for any
damage that may be caused to Tenant or the Electrical Conduit or the Fuel Lines
by any other tenant in the Building, except to the extent that any such damage
may be caused by the negligence or willful misconduct of Landlord or Landlord
Parties and is not covered by insurance carried by Tenant or required to be
carried by Tenant under the Lease provided, however, that in no event shall
Landlord be liable for any consequential damages). Furthermore, nothing in this
subparagraph (i) will prohibit Tenant from proceeding against any other tenant
which causes any such damage);
(j) The Electrical Conduit and the Fuel Lines shall be Landlord's
property, and shall be surrendered to Landlord in good condition upon expiration
of the Lease Term or termination of the Lease without compensation to Tenant;
provided, however, that at the election of Landlord, exercisable by notice to
Tenant, Tenant shall, at Tenant's sole expense upon the expiration of the Lease
Term or termination of the Lease remove the Electrical Conduit and/or the Fuel
Lines (or that portion of the Electrical Conduit and/or the Fuel Lines required
to be removed by Landlord) and repair all damage to the Building caused by such
removal and restore such area to its condition prior to the installation of the
Electrical Conduit and/or the Fuel Lines, reasonable wear and tear excepted;
(k) Tenant shall, at its expense, defend, indemnify and hold harmless
Landlord and Landlord Parties (as hereinafter
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defined in Section 10.1) from any and all loss, cost, damage, expense and
liability (including without limitation, court costs and reasonable attorneys'
fees) incurred in connection with or arising from Tenant's installation,
operation or maintenance of the Electrical Conduit and/or the Fuel Lines; and
(1) Except as otherwise expressly provided in this Lease, Tenant shall
(i) be solely responsible for any damage to the Electrical Conduit and/or the
Fuel Lines, including but not limited to, any damage caused to the Building
during the installation, use or maintenance of the Electrical Conduit and/or the
Fuel Lines, or caused by the Electrical Conduit and/or the Fuel Lines
themselves, (ii) promptly pay any tax, license or permit fees charged pursuant
to any laws or regulations in connection with the installation, maintenance or
use of the Electrical Conduit and/or the Fuel Lines and comply with all
precautions and safeguards recommended by all governmental authorities, and
(iii) not adversely affect any structural elements of the Building in connection
with the installation of the Electrical Conduit and/or the Fuel Lines.
6.6 Conduit. Landlord shall provide Tenant with access to space in the
Building (the location thereof to be determined by Landlord in its sole
discretion) to accommodate Tenant's initial need to run two (2) four-inch (4")
wide conduits from the basement of the Building to the twelfth (12th) floor of
the Building (the "Initial Conduit Space"). All costs associated with the
installation of conduits in the Initial Conduit Space shall be the sole
responsibility of Tenant. However, Tenant shall not pay to Landlord any Base
Rent, Direct Expenses, or any other fees with respect to the Initial Conduit
Space. Landlord shall also provide Tenant with access to space in the Building
(the location thereof to be determined by Landlord in its sole discretion) which
can accommodate Tenant's future need to run two (2) additional four-inch (4")
wide conduits from the basement of the Building to the twelfth (12) floor (the
"Future Conduit Space"). All costs associated with the installation of conduits
in the Future Conduit Space shall be the sole responsibility of Tenant. In
addition, beginning upon that date on which Tenant first starts its construction
of or in any such Future Conduit Space, Tenant shall pay to Landlord, in
addition to Base Rent, Additional Rent, or any other sums payable to Landlord
under the Lease, One and 00/100 Dollar ($1.00) per linear foot of the Future
Conduit Space per month until such time as Tenant ceases to use such Future
Conduit Space. The conduits described in this Section 6.6 and the wiring or
cabling installed therein by Tenant are sometimes hereinafter collectively
referred to as "Basement Conduits" and the installation thereof shall be subject
to each of the following conditions:
(a) The construction on any Basement Conduits shall be performed under
Landlord's supervision at times other than the Building Hours (as such term is
defined in Section 6.1.1) designated by Landlord;
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(b) The Basement Conduits shall be Landlord's property, and shall be
surrendered to Landlord in good condition upon expiration of the Lease Term or
termination of the Lease without compensation to Tenant; provided, however, that
at the election of Landlord, exercisable by notice to Tenant, Tenant shall, at
Tenant's sole expense upon the expiration of the Lease Term or termination of
the Lease remove the Basement Conduits (or that portion of the Basement Conduits
required to be removed by Landlord) and repair all damage to the Building caused
by such removal and restore such area to its condition prior to the installation
of the Basement Conduits, reasonable wear and tear excepted;
(c) Tenant shall, at its expense, defend, indemnify and hold harmless
Landlord and Landlord Parties (as hereinafter defined in Section 10.1) from any
and all loss, cost, damage, expense and liability (including without limitation,
court costs and reasonable attorneys' fees) incurred in connection with or
arising from Tenant's installation, operation or maintenance of the Basement
Conduits;
(d) Except as otherwise expressly provided in the Lease, Tenant shall
(i) be solely responsible for any damage to the Basement Conduits, including but
not limited to, any damage caused to the Building during the installation, use
or maintenance of the Basement Conduits, or caused by the Basement Conduits
themselves and (ii) not adversely affect any structural elements of the Building
in connection with the installation of the Basement Conduits; and
(e) At such time as Tenant ceases to use the Future Conduit Space
Landlord may use all or any portion of the Future Conduit Space.
ARTICLE 7
REPAIRS
Landlord shall repair and maintain the structural-portions of the Building,
including the foundation, floor/ceiling slabs, roof, curtain wall, exterior
glass and mullions, columns, beams, shafts (including elevator shafts), stairs,
parking garage, stairwells, elevator cabs, plazas, art work, sculptures,
washrooms, and all common and public areas (collectively, "Building Structure")
and the base Building mechanical, electrical, life safety, plumbing, sprinkler
systems and heating, ventilating and air conditioning systems which are not part
of Tenant's Improvements or were not originally constructed by or for the
benefit of Tenant (the "Building Systems"). Tenant shall, at Tenant's own
expense, pursuant to the terms of the Lease, including without limitation
Article 8 hereof, keep the Premises, including all improvements, fixtures and
furnishings therein, in good order, repair and condition at all times during
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the Lease Term. In addition, except as provided as part of Landlord's repair
obligation set forth above or elsewhere in the Lease, Tenant shall, at Tenant's
own expense but under the supervision and subject to the prior approval of
Landlord, and within any reasonable period of time specified by Landlord,
pursuant to the terms of the Lease, including without limitation Article 8
hereof, promptly and adequately repair all damage to the Premises and replace or
repair all damaged or broken fixtures and appurtenances; provided however, that,
at Landlord's option, or if Tenant fails to make such repairs, Landlord may, but
need not, make such repairs and replacements, and Tenant shall pay Landlord the
reasonable actual cost thereof plus a reasonable administrative charge designed
to reimburse Landlord for the costs of all non-Building personnel involved in
making such repairs and replacements. Subject to the provisions of Article 27 of
the Lease, Landlord may, but shall not be required to, enter the Premises at all
reasonable times to make such repairs, alterations, improvements and additions
to the Premises or to the Building or to any equipment located in the Building
as Landlord shall desire or deem necessary or as Landlord may be required to do
by governmental or quasi-governmental authority or court order or decree;
provided, however, except for (i) emergencies, or (ii) repairs which are the
obligation of Tenant hereunder, any such entry into the Premises by Landlord
shall be made, to the extent reasonably possible, in a manner so as not to
materially interfere with Tenant's use of, or access to, the Premises. Tenant
hereby waives and releases its right to make repairs at Landlord's expense under
Sections 1941 and 1942 of the California Civil Code or under any similar law,
statute, or ordinance now or hereafter in effect. Notwithstanding anything in
the Lease to the contrary, Tenant shall not be required to make any repair to,
modification of, or addition to the Building Systems or Building Structure,
except and to the extent required because of Tenant's use of the premises for
other than normal office purposes.
ARTICLE 8
ADDITIONS AND ALTERATIONS
8.1 Landlord's Consent to Alterations. Tenant shall have the right, without
Landlord's consent but upon five (5) business days prior notice to Landlord, to
make strictly cosmetic, non-structural additions and alterations ("Cosmetic
Alterations") to the Premises that do not (i) involve the expenditure of more
than $25,000.00 in the aggregate, (ii) affect the exterior appearance of the
Building, (iii) affect the Building Systems or the Building Structure, or (iv)
violate law. Except in connection with Cosmetic Alterations, Tenant may make
improvements, alterations, additions or changes to the Premises (collectively,
the "Alterations") only upon procuring the prior written consent of Landlord to
such Alterations, which consent shall be requested by Tenant not less than
fifteen (15) days prior to the commencement thereof, and which consent shall not
be withheld by
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Landlord, unless there (i) is an adverse affect on the Building Structure, (ii)
there is an adverse affect on the Building Systems, (iii) there is an affect on
the exterior appearances of the Building, (iv) there is an adverse affect on the
conduct of another tenant's normal and customary business operation or (v) there
is a violation of, or noncompliance with, applicable laws. If Landlord does not
respond to a written request from Tenant requesting Landlord's consent to
Alterations within seven (7) business days after Landlord's receipt of such
request and all documentation reasonably necessary for Landlord to evaluate such
request, then Landlord shall be deemed to have consented to such Alterations.
The construction of the initial improvements to the Premises shall be governed
by the terms of the Tenant Work Letter, attached hereto as Exhibit D, and not
the terms of this Article 8.
8.2 Manner of Construction. Landlord may impose, as a condition of its
consent to all Alterations or repairs of the Premises or about the Premises,
such reasonable requirements as Landlord in its reasonable discretion may deem
desirable (provided that the same shall in any event be consistent with the
provisions of the Lease), including, but not limited to, the requirement that
upon Landlord's request, made at the time such consent is granted, Tenant shall,
at Tenant's expense, remove such Alterations upon the expiration or any early
termination of the Lease Term, and repair any damage to the Premises and/or the
Building caused by such removal, and/or the requirement that Tenant utilize for
such purposes only contractors, materials, mechanics and materialmen reasonably
approved by Landlord. If such Alterations will involve the use of or disturb
hazardous materials or substances existing in the Premises, Tenant shall comply
with Landlord's rules and regulations concerning such hazardous materials or
substances. Tenant shall construct such Alterations and perform such repairs in
conformance with any and all applicable rules and regulations of any federal,
state, county or municipal code or ordinance and, if legally required, pursuant
to a valid building permit, issued by the City of Los Angeles, in conformance
with Landlord's construction rules and regulations. All work with respect to any
Alterations must be done in a good and workmanlike manner. In performing the
work of any such Alterations, Tenant shall have the work performed in such
manner as not to obstruct access to the Building or the common areas for any
other tenant of the Building, and as not to obstruct the business of Landlord or
other tenants in the Building, or interfere with the labor force working in the
Building. Upon completion of any Alterations, Tenant agrees to cause a timely
Notice of Completion to be recorded in the office of the Recorder of the County
of Los Angeles in accordance with the terms of Section 3 093 'of the Civil Code
of the State of California or any successor statute, and Tenant shall deliver to
the Building management office a reproducible copy of the "as built" drawings of
the Alterations.
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8.3 Payment for Improvements. In the event Tenant orders any Alteration or
repair work directly from Landlord, the -reasonable out-of-pocket charges
reasonably incurred for such work shall be deemed Additional Rent under the
Lease, payable within thirty (30) days after being billed therefor, either
periodically during construction or upon the substantial completion of such
work, at Landlord's option. Upon completion of such work, Tenant shall deliver
to Landlord, if payment is made directly to contractors, evidence of payment,
contractors' affidavits and full and final waivers of all liens for labor,
services or materials. If Tenant orders any work directly from Landlord, Tenant
shall pay to Landlord a percentage of the cost of such work (such percentage to
be established on a uniform basis for the Building) sufficient to compensate
Landlord for all overhead, general conditions, fees and other costs and expenses
arising from Landlord's involvement with such work, and if Tenant does not order
any work directly from Landlord, Tenant shall reimburse Landlord for Landlord's
reasonable out-of-pocket costs and expenses reasonably incurred in connection
with Landlord's review of such work. If Tenant and Landlord do not agree on
Landlord's percentage prior to Landlord's commencement of the Alteration or
repair work that Tenant orders directly from Landlord, Tenant may perform such
work.
8.4 Construction Insurance. In the event that Tenant makes any Alterations,
Tenant agrees to carry "Builder's All Risk" insurance in an amount approved by
Landlord covering the construction of such Alterations, and such other insurance
as Landlord may require, it being understood and agreed that all of such
Alterations shall be insured by Tenant pursuant to Article 10 of the Lease
immediately upon completion thereof. In addition, if Tenant assigns the Lease,
Landlord may, in its reasonable discretion, require Tenant's assignee to obtain
a lien and completion bond or some other alternate form of security satisfactory
to Landlord in an amount sufficient to insure the lien-free completion of such
Alterations and naming Landlord as a co-obligee.
8.5 Landlord's Property. All Alterations, improvements, fixtures and/or
equipment which may be installed or placed in or about the Premises, and all
signs installed in, on or about the Premises, from time to time, shall, except
as herein provided, be at the sole cost of Tenant and shall be and become the
property of Landlord, except that, except as may be otherwise provided in
Sections 6.4, 6.5 and 6.6, Tenant may remove any Alterations, improvements,
fixtures and/or equipment that is not permanently affixed to the Premises which
Tenant can substantiate|to Landlord have not been paid for with any tenant
improvement allowance funds provided to Tenant by Landlord, provided Tenant
repairs any damage to the Premises and Building caused by such removal, it being
agreed and understood that Tenant shall remove its switching equipment and
facilities subject only to Tenant's obligation to repair any damage to the
Premises and/or Building caused by such removal. Furthermore, Landlord may, at
the time
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of granting Landlord's consent to any Alteration which is atypical for normal
and customary office purposes, require that Tenant, at Tenant's expense (i)
remove such Alteration upon the expiration or early termination of the Lease
Term and (ii) repair any damage to the Premises and Building caused by such
removal. If Tenant fails to complete such removal and/or to repair any damage
caused by the removal of such Alterations, Landlord may do so and may charge the
cost thereof to Tenant.
ARTICLE 9
COVENANT AGAINST LIENS
Tenant has no authority or power to cause or permit any lien or encumbrance
of any kind whatsoever, whether created by act of Tenant, operation of law or
otherwise, to attach to or be placed upon the Real Property, Building or
Premises, and any and all liens and encumbrances created by Tenant shall attach
to Tenant's interest only. Landlord shall have the right at all times to post
and keep posted on the Premises any notice which it reasonably deems necessary
for protection from such liens. Tenant covenants and agrees not to suffer or
permit any lien of mechanics or materialmen or others to be placed against the
Real Property, the Building or the Premises with respect to work or services
claimed to have been performed for or materials claimed to have been furnished
to Tenant or the Premises, and, in case of any such lien attaching or notice of
any lien, Tenant covenants and agrees to cause it to be immediately released and
removed of record. Notwithstanding anything to the contrary set forth in the
Lease, in the event that such lien is not released and removed on or before the
date occurring five (5) days after notice of such lien is delivered by Landlord
to Tenant, Landlord, at its sole option, may immediately take all action
necessary to release and remove such lien, without any duty to investigate the
validity thereof, and all sums, costs and expenses, including reasonable
attorneys' fees and costs, incurred by Landlord in connection with such lien
shall immediately be deemed Additional Rent under the Lease and shall be due and
payable by Tenant.
ARTICLE 10
INSURANCE
10.1 Indemnification and Waiver. To the extent not prohibited by law,
Landlord, its partners, trustees, ancillary trustees and their respective
officers, directors, shareholders, beneficiaries, agents, servants, employees,
and independent contractors (collectively, the "Landlord Parties") shall not be
liable for any damage either to person or property or resulting from the loss of
use thereof, which damage is sustained by Tenant or by other persons claiming
through Tenant, except to the extent caused by the negligence or willful
misconduct of the Landlord
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Parties. Tenant shall indemnify, defend, protect, and hold harmless Landlord
Parties from any and all loss, cost, damage, expense and liability (including
without limitation court costs and reasonable attorneys' fees) (collectively,
"Claims") incurred in connection with or arising from any cause in or on the
Premises or any acts, omissions or negligence of Tenant or of any person
claiming by, through or under Tenant, its partners, and their respective
officers, agents, servants, employees, and independent contractors
(collectively, the "Tenant Parties"), in, on or about the Real Property, either
prior to, during, or after the expiration of the Lease Term, provided that
Tenant shall not be required to indemnify and hold Landlord harmless from any
Claims (i) by any person, property or entity resulting from the negligence or
willful misconduct of the Landlord Parties in connection with the Landlord
Parties' activities in the Building (except for damage to the Tenant
Improvements and Tenant's personal property, fixtures, furniture and equipment
in the Premises, to the extent Tenant is required to obtain, the requisite
insurance coverage pursuant to the Lease) or the Real Property, or (ii)
resulting from damage to the Building Structure or Building Systems, and
Landlord hereby so indemnifies and holds Tenant harmless from any such Claims;
provided further that because Landlord is required to maintain insurance on the
Building and Tenant compensates Landlord for such insurance as part of Tenant's
Share of Operating Expenses and because of the existence of waivers of
subrogation set forth in Section 10.4 of the Lease, Landlord hereby indemnifies
and holds Tenant harmless from any Claim to any property outside of the Premises
to the extent such Claim is covered by such insurance (or would have been
covered if Landlord had carried the insurance required hereunder), even if
resulting from the negligent acts, omissions, or willful misconduct of the
Tenant Parties. Similarly, since Tenant must carry insurance pursuant to this
Article 10 to cover its personal property within the Premises and the Tenant
Improvements, Tenant hereby indemnifies and holds Landlord harmless from any
Claim to any property within the Premises, to the extent such Claim is covered
by such insurance, even if resulting from the negligent acts, omissions or
willful misconduct of the Landlord Parties. Should Landlord be named as a
defendant in any suit brought against Tenant in connection with or arising out
of an event covered by the foregoing indemnity, Tenant shall pay to Landlord its
costs and expenses incurred in such suit, including without limitation, its
actual professional fees such as appraisers', accountants' and attorneys' fees.
Further, Tenant's agreement to indemnify Landlord pursuant to this Section 10.1
is not intended and shall not relieve any insurance carrier of its obligations
under policies required to be carried by Tenant or Landlord pursuant to the
provision of the Lease, to the extent such policies cover the matters subject to
Tenant's indemnification obligations; nor shall they supersede any inconsistent
agreement of the parties set forth in any other provision of the Lease. The
provisions of this Section 10.1 shall survive the expiration or sooner
termination of the Lease
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with respect to any claims or liability occurring prior to such expiration or
termination.
10.2 Landlord's Fire and Casualty Insurance. Landlord shall insure the
Building (including the Building Structure and Building Systems) during the
Lease Term against loss or damage due to fire and other casualties covered
within the classification of fire and extended coverage, vandalism coverage and
malicious mischief, sprinkler leakage, water damage and special extended
coverage. Such coverage shall be for one hundred percent (100%) of the full
replacement cost of the Building in compliance with all applicable laws.
Additionally, at the option of Landlord, such insurance coverage may include the
risks of earthquakes and/or flood damage and additional hazards, a rental loss
endorsement and one or more loss payee endorsements in favor of the holders of
any mortgages or deeds of trust encumbering the interest of Landlord in the
Building or the ground or underlying lessors of the Building, or any portion
thereof. Notwithstanding the foregoing provisions of this Section 10.2, the
coverage and amounts of insurance carried by Landlord in connection with the
Building shall at a minimum be comparable to the coverage and amounts of
insurance which are carried by reasonably prudent landlords of Comparable
Buildings, and Worker's Compensation and Employee's Liability Coverage as
required by applicable law. Upon inquiry by Tenant, from time to time, Landlord
shall inform Tenant of all such insurance carried by Landlord. Tenant shall, at
Tenant's expense, comply with all customary insurance company requirements
pertaining to the use of the Premises. If Tenant's conduct or use of the
Premises other than for normal office purposes causes any increase in the
premium for any insurance policies carried by Landlord, then Tenant shall
reimburse Landlord for any such increase. Tenant, at Tenant's expense, shall
comply with all rules, orders, regulations or requirements of the American
Insurance Association (formerly the National Board of Fire Underwriters) and
with any similar body.
10.3 'Tenant's Insurance. Tenant shall maintain the following coverages in
the following amounts.
10.3.1 Commercial General Liability Insurance covering the insured
against claims of bodily injury, personal injury and property damage arising out
of Tenant's operations, assumed liabilities or use of the Premises, including a
Commercial General Liability endorsement covering the insuring provisions of the
Lease and the performance by Tenant of the indemnity agreements set forth in
Section 10.1 of the Lease, for limits of liability not less than: (i) Bodily
Injury and Property Damage Liability - $3,000,000 each occurrence and $3,000,000
annual aggregate, and (ii) Personal Injury Liability - $3,000,000 each
occurrence and $3,000,000 annual aggregate.
10.3.2 Physical Damage Insurance covering (i) all office furniture,
trade fixtures, office equipment, merchandise
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and all other items of Tenant's property on the Premises installed by, for, or
at the expense of Tenant, (ii) the "Tenant Improvements, " as that term is
defined in the Tenant Work Letter, and (iii) all other improvements, alterations
and additions to the Premises which do not comprise Building Structure or
Building Systems. Such insurance shall be written on an "all risks" of physical
loss or damage basis, for the guaranteed replacement cost value new without
deduction for depreciation of the covered items and in amounts that meet any
co-insurance clauses of the policies of insurance and shall include a vandalism
and malicious mischief endorsement, sprinkler leakage coverage and earthquake
sprinkler leakage coverage.
10.3.3 Form of Policies. The minimum limits of policies of insurance
required of Tenant under the Lease shall in no event limit the liability of
Tenant under the Lease. Such insurance shall (i) name Landlord, and any other
party it so specifies, as an additional insured; (ii) specifically cover the
liability assumed by Tenant under the Lease, including, but not limited to,
Tenant's obligations under Section 10.1 of the Lease; (iii) be issued by an
insurance company having a rating of not less than A-VII in Best's Insurance
Guide or which is otherwise acceptable to Landlord and licensed to do business
in the State of California; (iv) be primary insurance as to all claims
thereunder and provide that any insurance carried by Landlord is excess and is
noncontributing with any insurance requirement of Tenant; (v) provide that said
insurance shall not be canceled unless thirty (30) days' prior written notice
shall have been given to Landlord and any mortgagee of Landlord; and (vi)
contain a cross-liability endorsement or severability of interest clause
acceptable to Landlord. Tenant shall deliver said policy or policies or
certificates thereof to Landlord on or before the Lease Commencement Date and at
least thirty (30) days before the expiration dates thereof.
10.4 Subroation. Landlord and Tenant agree to have their respective
insurance companies issuing property damage insurance waive any rights of
subrogation that such companies may have against Landlord or Tenant, as the case
may be, so long as the insurance carried by Landlord and Tenant, respectively,
is not invalidated thereby. As long as such waivers of subrogation are required
by the Lease to be contained in their respective insurance policies, Landlord
and Tenant hereby waive any right that either may have against the other on
account of any loss or damage to their respective property to the extent such
loss or damage is insurable under policies of insurance for fire and all risk
coverage, theft, or other similar insurance. If either party fails to carry the
amounts and types of insurance required to be carried by it pursuant to this
Article 10, in addition to any remedies the other party may have under the
Lease, such failure shall be deemed to be a covenant and agreement by such party
to self-insure with respect to the type and amount of insurance which such party
so failed to carry, with full waiver of subrogation with respect thereto.
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10.5 Additional Insurance Obligations. Tenant shall carry and maintain
during the entire Lease Term, at Tenant's sole cost and expense, increased
amounts of the insurance required to be carried by Tenant pursuant to this
Article 10, and such other reasonable types of insurance coverage and in such
reasonable amounts covering the Premises and Tenant's operations therein, as may
be reasonably requested by Landlord, but in no event shall such increased
amounts of insurance or such other reasonable types of insurance be in excess of
that required by landlords of the Comparable Buildings.
ARTICLE 11
DAMAGE AND DESTRUCTION
11.1 Repair of Damage to Premises by Landlord. Tenant shall promptly notify
Landlord of any damage to the Premises resulting from fire or any other casualty
or any condition existing in the Premises as a result of a fire or other
casualty that would give rise to the terms of this Article 11. If the Premises,
the Building Structure, the Building Systems or any common areas of the Building
serving or providing access to the Premises shall be damaged by fire or other
casualty or be subject to a condition existing as a result of a fire or other
casualty, Landlord shall promptly and diligently, subject to reasonable delays
for insurance adjustment or other matters beyond Landlord's reasonable control,
and subject to all other terms of this Article 11, commence to restore, and
thereafter diligently prosecute to completion, the base, shell, and core of the
Premises and such common areas to substantially the same condition as existed
prior to the casualty, except for modifications required by zoning and building
codes and other laws or by the holder of a mortgage on the Building or any other
modifications to the common areas deemed desirable by Landlord, provided access
to the Premises and any common restrooms serving the Premises shall not be
materially impaired. Notwithstanding any other provision of the Lease, upon the
occurrence of any damage to the Premises, if the Lease is not terminated, all
insurance proceeds payable to Tenant under Tenant's insurance required under
Section 10.3.2 of the Lease shall be disbursed for all costs and expenses
incurred by Landlord in connection with the repair of any such damage pursuant
to a disbursement procedure mutually approved by Landlord and Tenant. Landlord
shall repair any injury or damage to the Tenant Improvements installed in the
Premises and shall return such Tenant Improvements to their original condition;
provided that if the cost of such repair by Landlord exceeds the amount of
insurance _proceeds received by Landlord from Tenant's insurance carrier, the
cost of such repairs shall be paid by Tenant to Landlord prior to Landlord's
repair of the damage. As long as the Tenant Improvements in the Premises are
rebuilt, Tenant shall be entitled to retain any portion of the proceeds of the
insurance described in Section 10.3.2 in excess of the cost of such
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restoration. Landlord shall not be liable for any inconvenience or annoyance to
Tenant or its visitors, or injury to Tenant's business resulting in any way from
such damage or the repair thereof; provided however, that if such fire or other
casualty shall have damaged the Premises or common areas necessary to Tenant's
occupancy, Landlord shall allow Tenant a proportionate abatement of Rent, during
the time and to the extent the Premises are unfit for occupancy for the purposes
permitted under the Lease, and not occupied by Tenant as a result thereof;
provided, further, if the Premises is damaged such that the remaining portion
thereof is not sufficient to allow Tenant to conduct its business operations
from such remaining portion and Tenant does not conduct its business operations
therefrom, and Landlord shall allow Tenant a total abatement of Rent during the
time and to the extent the Premises are unfit for occupancy for the purposes
permitted under the Lease, and not occupied by Tenant as a result of the subject
damage.
11.2 Landlord's Option to Repair. Notwithstanding the terms of Section 11.1
of the Lease, Landlord may elect not to rebuild and/or restore the Premises
and/or Building and instead terminate the Lease by notifying Tenant in writing
of such termination within forty-five (45) days after the date of damage, such
notice to include a termination date giving Tenant ninety (90) days to vacate
the Premises, but Landlord may so elect only if the Building shall be damaged by
fire or other casualty or cause or be subject to a condition existing as a
result of such a fire or other casualty or cause, whether or not the Premises
are affected, and one or more of the following conditions is present: (i)
repairs cannot reasonably be completed within one (1) year of the date of damage
(when such repairs are made without the payment of overtime or other premiums);
(ii) the damage or condition arising as a result of such damage is not fully
covered by Landlord's insurance policies and such uncovered amount is in excess
of Two Million Dollars ($2,000,000.00); or (iii) the damage occurs during the
last twelve (12) months of the Lease Term; provided, however, that if Landlord
does not elect to terminate the Lease pursuant to Landlord's termination right
as provided above, and the repairs cannot, in the reasonable judgment of an
architect or a contractor selected by Landlord and reasonably approved by
Tenant, be completed within one (1) year after the date of such damage (which
one (l)-year period shall not be subject to extension as a result of any "Force
Majeure," as that term is defined in Section 29.13, below), Tenant may elect, no
earlier than forty-five (45) days after the date of the damage and not later
than ninety (90) days after the date of such damage, to terminate the Lease by
written notice to Landlord effective as of the date specified in the notice.
Furthermore, if neither Landlord nor Tenant have terminated the Lease, and the
repairs are not actually completed within such one (1) year period. Tenant shall
have the right to terminate the Lease within five (5) business days of the end
of such period and thereafter during the first five (5) business days of each
calendar month following the end of such period until such time as the repairs
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are complete, by notice to Landlord (the "Damage Termination Notice"), effective
as of a date set forth in the Damage Termination Notice (the "Damage Termination
Date"), which Damage Termination Date shall not be less than five (5) business
days following the end of such period or each such month, as the case may be.
Notwithstanding the foregoing, if Tenant delivers a Damage Termination Notice to
Landlord, then Landlord shall have the right to suspend the occurrence of the
Damage Termination Date for a period ending thirty (30) days after the Damage
Termination Date set forth in the Damage Termination Notice by delivering to
Tenant, within five (5) business days of Landlord's receipt of the Damage
Termination Notice, a certificate of Landlord's contractor responsible for the
repair of the damage certifying that it is such contractor's good faith judgment
that the repairs shall be substantially completed within thirty (30) days after
the Damage Termination Date. If repairs shall be substantially completed prior
to the expiration of such thirty-day period, then the Damage Termination Notice
shall be of no force or effect, but if the repairs shall not be substantially
completed within such thirty-day period, then the Lease shall terminate upon the
expiration of such thirty-day period. At any time, from time to time, after the
date occurring forty-five (45) days after the date of the damage, Tenant may
request that Landlord provide Tenant with a certificate from the architect or
contractor described above setting forth such architect's or contractor's
reasonable opinion of the date of completion of the repairs and Landlord shall
respond to such request within five (5) business days.
11.3 Destruction During Final Year. Notwithstanding anything to the
contrary contained in Sections 11.1 and 11.2, if the Premises or the Building is
wholly or partially damaged or destroyed within the final twelve (12) months of
the Lease Term, and such damage or destruction will require, in Landlord's
reasonable judgment (notice of which judgment ["Landlord's Determination
Notice"] shall be given to Tenant no later than thirty (30) days after the
applicable damage or destruction), more than thirty (30) days to repair, then
Tenant may, at its option, by giving Landlord notice within thirty (30) days
after Tenant's receipt of Landlord's Determination Notice, elect to terminate
the Lease effective as of the date set forth in Tenant's notice.
11.4 Waiver of Statutory Provisions. The provisions of the Lease, including
this Article 11, constitute an express agreement between Landlord and Tenant
with respect to any and all damage to, or destruction of, all or any part of the
Premises, the Building or any other portion of the Real Property, and any
statute or regulation of the State of California, including, without limitation,
Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any
rights or obligations concerning damage or destruction in the absence of an
express agreement between the parties, and any other statute or regulation, now
or hereafter in effect, shall have no application
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to the Lease or any damage or destruction to all or any part of the Premises,
the Building or any other portion of the Real Property.
ARTICLE 12
NONWAIVER
No waiver of any provision or breach of the Lease shall be implied by any
failure of Landlord or Tenant to enforce any remedy on account of the violation
of such provision, even if such violation shall continue or be repeated
subsequently, any waiver by Landlord or Tenant of any provision of the Lease may
only be in writing, and no express waiver shall affect any provision other than
the one specified in such waiver and that one only for the time and in the
manner specifically stated. Forbearance by Landlord or Tenant in enforcement of
one or more of the remedies herein provided upon an event of default shall not
be deemed or construed to constitute a waiver of such default. The acceptance of
any Rent hereunder by Landlord following the occurrence of any default, whether
or not known to Landlord, shall not be deemed a waiver of any such default,
except only a default in the payment of the Rent so accepted. Tenant's payment
of any Rent hereunder shall not constitute a waiver by Tenant of any breach or
default by Landlord under the Lease.
ARTICLE 13
CONDEMNATION
If ten percent (10%) or more of the Premises or Building shall be taken by
power of eminent domain or condemned by any competent authority for any public
or quasi-public use or purpose, or if Landlord shall grant a deed or other
instrument in lieu of such taking by eminent domain or condemnation, Landlord
shall have the option to terminate the Lease upon ninety (90) days' notice,
provided such notice is given no later than one hundred eighty (180) days after
the date of such taking, condemnation, reconfiguration, vacation, deed or other
instrument. If more than twenty-five percent (25%) of the rentable square feet
of the Premises is taken, or if access to the Premises is substantially
impaired, Tenant shall have the option to terminate the Lease upon ninety (90)
days' notice, provided such notice is given no later than one hundred eighty
(180) days after the date of such taking. Landlord shall be entitled to receive
the entire award or payment in connection therewith, except that Tenant shall
have the right to file any separate claim available to Tenant for any taking of
Tenant's personal property and fixtures belonging to Tenant and removable by
Tenant upon expiration of the Lease Term pursuant to the terms of the Lease, and
for moving expenses, so long as such claim does
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not diminish the award available to Landlord, its ground lessor with respect to
the Real Property or its mortgagee, and such claim is payable separately to
Tenant or is otherwise separately identifiable. Notwithstanding anything in the
preceding sentence or in this Article 13 to the contrary, Landlord and Tenant
shall each be entitled to receive fifty percent (50%) of the "bonus value" of
the leasehold estate in connection therewith, which bonus value shall be equal
to the difference between the Rent payable under the Lease and the sum
established by the condemning authority as the award for compensation. All Rent
shall be apportioned as of the date of such termination, or the date of such
taking, whichever shall first occur. If any part of the Premises shall be taken,
and the Lease shall not be so terminated, the Rent shall be proportionately
abated. Tenant hereby waives any and all rights it might otherwise have pursuant
to Section 12 65.130 of the California Code of Civil Procedure.
ARTICLE 14
ASSIGNMENT AND SUBLETTING
14.1 Transfers. Tenant shall not, without the prior written consent of
Landlord (except as otherwise provided in Section 14.7, below), assign,
mortgage, pledge, hypothecate, encumber, or permit any lien to attach to, or
otherwise transfer, the Lease or any interest hereunder, permit any assignment
or other such foregoing transfer of the Lease or any interest hereunder by
operation of law, sublet the Premises or any part thereof, or permit the use of
the Premises by any persons other than Tenant and its employees (all of the
foregoing are hereinafter sometimes referred to collectively as "Transfers" and
any person to whom any Transfer is made or sought to be made is hereinafter
sometimes referred to as a "Transferee"). If Tenant shall desire Landlord's
consent to any Transfer, Tenant shall notify Landlord in writing, which notice
(the "Transfer Notice") shall include (i) the proposed effective date of the
Transfer, which shall not be less than fifteen (15) days nor more than one
hundred eighty (180) days after the date of delivery of the Transfer Notice,
(ii) a description of the portion of the Premises to be transferred (the
"Subject Space"), (iii) all of the terms of the proposed Transfer and the
consideration therefor, including a calculation of the "Transfer Premium," as
that term is defined in Section 14.3, below, in connection with such Transfer,
the name and address of the proposed Transferee, and a copy of any existing
and/or proposed documentation pertaining to the proposed Transfer, including any
existing operative documents to be executed to evidence such Transfer or the
agreements incidental or related to such Transfer, () current financial
statements of the proposed Transferee certified by an officer, partner or owner
thereof, and credit or bank references, and (v) information with regard to the
nature of the business such proposed Transferee intends to operate in the
Premises and how long the proposed Transferee has operated such business.
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Landlord shall approve or disapprove of the proposed transfer within fifteen
(15) business days after Landlord's receipt of the applicable Transfer Notice.
In the event that Landlord fails to notify Tenant in writing of such approval or
disapproval within such fifteen (15) business days, Landlord shall be deemed to
have approved such Transfer. Any Transfer requiring Landlord's consent hereunder
which is made without Landlord's prior written consent shall, at Landlord's
option, be null, void and of no effect. Whether or not Landlord shall grant
consent, Tenant shall within thirty (30) days after written request by Landlord,
reimburse Landlord for all reasonable and actual costs and expenses incurred by
Landlord in connection with its review of a proposed Transfer in an amount not
to exceed One Thousand Five Hundred Dollars ($1,500.00) for a Transfer in the
ordinary course of business.
14.2 Landlord's Consent. Landlord shall not unreasonably withhold its
consent to any proposed Transfer of the Subject Space to the Transferee on the
terms specified in the Transfer Notice. The parties hereby agree that it shall
be deemed to be reasonable under the Lease and under any applicable law for
Landlord to withhold consent to any proposed Transfer where one or more of the
following apply, without limitation as to other reasonable grounds for
withholding consent:
14.2.1 The Transferee is of a character or reputation or engaged in a
business which is materially inconsistent with the quality of the Building;
14.2.2 The Transferee's intended use of the Premises is inconsistent
with the Permitted Use;
14.2.3 The Transferee is not a party of reasonable financial worth
and/or financial stability in light of the responsibilities involved under the
Lease on the date consent is requested; or
14.2.4 The proposed Transfer would cause Landlord to be in violation
of another lease or agreement to which Landlord is a party, or would give an
occupant of the Building a right to cancel its lease (the "Restrictive
Provision") and, following Tenant's written request given to Landlord of the
possible Restrictive Provision in connection with a proposed Transfer, Tenant
has notice of such Restrictive Provision prior to presenting the Transfer to
Landlord.
Notwithstanding anything to the contrary in the Lease, if Tenant or any
proposed Transferee claims that Landlord has unreasonably withheld or delayed
its consent under Section 14.2 or otherwise has breached or acted unreasonably
under this Article 14, their sole remedies shall be declaratory judgment and an
injunction for the relief sought and monetary damages, and Landlord and Tenant
each hereby waives all other remedies, including, without limitation, any right
provided under
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California law at law or equity to terminate the Lease, on its own behalf and,
to the extent permitted under all applicable laws, on behalf of the proposed
Transferee. If Landlord consents to any Transfer pursuant to the terms of this
Section 14.2 (and does not exercise any recapture rights Landlord may have under
Section 14.4 of the Lease), Tenant may within six (6) months after Landlord's
consent, but not later than the expiration of said six-month period, enter into
such Transfer of the Premises or portion thereof, upon terms and conditions not
materially different than those set forth in the Transfer Notice furnished by
Tenant to Landlord pursuant to Section 14.1 of the Lease, provided that if there
are any changes in the terms and conditions from those specified in the Transfer
Notice such that Landlord would initially have been entitled to refuse its
consent to such Transfer under this Section 14.2, Tenant shall again submit the
Transfer to Landlord for its approval and other action under this Article 14.
14.3 Transfer Premium. If Landlord consents to a Transfer, as a condition
thereto which the parties hereby agree is reasonable, Tenant shall pay to
Landlord fifty percent (50%) of any "Transfer Premium, " as that term is defined
in this Section 14 . 3, received by Tenant from such Transferee. "Transfer
Premium" shall mean all rent, additional rent or other consideration payable by
such Transferee in excess of the Rent and Additional Rent payable by Tenant
under the Lease, on a per rentable square foot basis if less than all of the
Premises is transferred, after deducting the reasonable expenses incurred by
Tenant for (a) the Base Rent and the amount of Tenant's Share of Direct Expenses
paid to Landlord by Tenant during the period of the sublease term or during the
assignment with respect to the Subject Space; (b) the Base Rent and the amount
of Tenant's Share of Direct Expenses as to the Subject Space paid to Landlord by
Tenant for the period commencing on the later of (i) the date the space was
listed with a broker for assignment or subletting purposes or (ii) the date the
Subject Space had been vacated by Tenant and continuing until the date the
assignee or sublessee was to pay rent under the assignment or sublease; (c) any
improvement allowance or other economic concession (planning allowance, moving
expenses, etc.) paid by Tenant to sublessee or assignee; (d) brokers'
commissions; (e) attorneys' fees; (f) lease takeover payments; and (g) costs of
advertising the space for sublease or assignment. "Transfer Premium" shall also
include, but not be limited to, key money and bonus money paid by Transferee to
Tenant in connection with such Transfer, and any payment in excess of fair
market value for services rendered by Tenant to Transferee or for assets,
fixtures, inventory, equipment, or furniture transferred by Tenant to Transferee
in connection with such Transfer; provided, however, that "Transfer Premium"
shall not include any amount received by Tenant for the sale of its business or
any portion thereof as distinguished from amounts received by Tenant for its
leasehold interest in the Lease. In the calculations of the Rent (as it relates
to the Transfer Premium calculated under this Section 14.3), the Rent
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paid during each annual period for the Subject Space, and the Transferee's Rent
shall be computed after adjusting such rent to the actual effective rent to be
paid, taking into consideration any and all leasehold concessions granted in
connection therewith, including, but not limited to, any rent credit and tenant
improvement allowance. For purposes of calculating any such effective rent, all
such concessions shall be amortized on a straight-line basis over the relevant
term.
14.4 Effect of Transfer. If Landlord consents to a Transfer, (i) the terms
and conditions of the Lease shall in no way be deemed to have been waived or
modified, (ii) such consent shall not be deemed consent to any further Transfer
by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord,
promptly after execution, an original executed copy of all documentation
pertaining to the Transfer which shall obligate the Transferee, at Landlord's
option, to attorn to Landlord upon a default by Tenant under the Lease which
results in an early termination of the Lease upon the terms and conditions set
forth in the applicable Transfer document, (iv) Tenant shall furnish upon
Landlord's request a complete statement, certified by an independent certified
public accountant, or an appropriate Tenant officer, setting forth in detail the
computation of any Transfer Premium Tenant has derived and shall derive from
such Transfer, and (v) no Transfer relating to the Lease or agreement entered
into with respect thereto, whether with or without Landlord's consent, shall
relieve Tenant from liability under the Lease. Landlord or its authorized
representatives shall have the right at all reasonable times to audit the books,
records and papers of Tenant relating to any Transfer, and shall have the right
to make copies thereof. If the Transfer Premium respecting any Transfer shall be
found understated, Tenant shall, within thirty (30) days after demand, pay the
deficiency and Landlord's costs of such audit.
14.5 Intentionally Omitted.
14.6 Non-Transfers. Notwithstanding anything to the contrary contained in
the Lease, neither (i) an assignment to a transferee of all or substantially all
of the assets of Tenant, (ii) an assignment to a transferee of all or
substantially all of the assets of Tenant located in Southern California, (iii)
an assignment of the Premises to a transferee which is the resulting entity of a
merger or consolidation of Tenant with another entity, (iv) an assignment or
subletting of all or a portion of the Premises to an affiliate of Tenant (an
entity which is controlled by, controls, or is under common control with,
Tenant) nor (v) the co-location of facilities/equipment by other companies in
connection with Tenant's normal operations of its business in the Premises,
shall be deemed a Transfer under Article 14 of the Lease, provided that Tenant
notifies Landlord of any such assignment or sublease and promptly supplies
Landlord with any documents or information reasonably requested by Landlord
regarding such transfer or transferee as set forth in
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items (i) through (iii) above and, that such assignment or sublease is not a
subterfuge by Tenant to avoid its obligations under the Lease. "Control," as
used in this Section 14.7, shall mean the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
person or entity, whether through the ownership of voting securities, by
contract or otherwise.
ARTICLE 15
SURRENDER OF PREMISES; REMOVAL OF TRADE FIXTURES
Surrender of Premises. No act or thing done by Landlord or any agent or
employee of Landlord or Tenant during the Lease Term, shall be deemed to
constitute an acceptance by Landlord of a surrender of the Premises unless such
intent is specifically acknowledged in a writing signed by Landlord and Tenant.
The delivery of keys to the Premises to Landlord or any agent or employee of
Landlord shall not constitute a surrender of the Premises or effect a
termination of the Lease, whether or not the keys are thereafter retained by
Landlord, and notwithstanding such, delivery Tenant shall be entitled to the
return of such keys at any reasonable time upon request until the Lease shall
have been terminated. The voluntary or other surrender of the Lease by Tenant,
whether accepted by Landlord or not, or a mutual termination hereof, shall not
work a merger, and at the option of Landlord shall operate as an assignment to
Landlord of all subleases or subtenancies affecting the Premises.
Removal of Tenant Property by Tenant. Subject to the provisions of Sections
6.4, 6.5 and 6.6, all articles of personal property and all business and trade
fixtures, machinery and equipment, furniture and movable partitions owned by
Tenant or installed by Tenant at its expense in the Premises, which items are
not a part of the tenant improvements installed in the Premises, shall remain
the property of Tenant, and may be removed by Tenant at any time during the
Lease Term as long as Tenant is not in default under the Lease with any
applicable cure period having expired. Upon the expiration of the Lease Term, or
upon any earlier termination of the Lease, Tenant shall, subject to the
provisions of this Article 15, quit and surrender possession of the Premises to
Landlord in as good order and condition as when Tenant took possession and as
thereafter improved by Landlord and/or Tenant, reasonable wear and tear,
casualty and repairs which are specifically made the responsibility of Landlord
hereunder excepted; provided however, that to the extent Tenant is required
under the Lease to insure any Tenant Improvements and/or Alterations then Tenant
shall be liable for the repairs and restoration thereof. Upon such expiration or
termination, Tenant shall, without expense to Landlord, remove or cause to be
removed from the Premises all debris and rubbish, and such items of furniture,
equipment, freestanding cabinet work, and other articles of personal property
owned by Tenant or
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installed or placed by Tenant at its expense in the Premises, and such similar
articles of any other persons claiming under Tenant and Tenant shall repair at
its own expense all damage to the Premises and Building resulting from such
removal.
ARTICLE 16
HOLDING OVER
If Tenant holds over after the expiration of the Lease Term hereof, with or
without the express or implied consent of Landlord, such tenancy shall be from
month-to-month only, and shall not constitute a renewal hereof or an extension
for any further term, and in such case the monthly Base Rent shall be adjusted
upward from the monthly Base Rent payable under the Lease during the last month
of the Term of the Lease, taking into account the rent abatement with respect to
the Abated Space set forth in Section 3.2 of the Lease ("Final Month's Base
Rent") commencing as of the second (2nd) month of such month to month tenancy as
follows: (i) to one hundred twenty-five percent (125%) of the Final Month's Base
Rent for the second (2nd) month of such month-to-month tenancy,- (ii) to one
hundred forty percent (140%) of the Final Month's Base Rent for the third (3rd)
month of such month-to-month tenancy; and (iii) to one hundred fifty percent
(150%) of the Final Month's Base Rent for the fourth (4th) month of such
month-to-month tenancy and for any month of such month-to-month tenancy
thereafter. Such month-to-month tenancy shall be subject to every other term,
covenant and agreement contained herein. Nothing contained in this Article 16
shall be construed as consent by Landlord to any holding over by Tenant, and
Landlord expressly reserves the right to require Tenant to surrender possession
of the Premises to Landlord as provided in the Lease upon the expiration or
other termination of the Lease. The provisions of this Article 16 shall not be
deemed to limit or constitute a waiver of any other rights or remedies of
Landlord provided herein or at law. Tenant acknowledges that if Tenant holds
over without Landlord's consent, such holding over may compromise or otherwise
affect Landlord's ability to enter into new leases with prospective tenants
regarding the Premises. Therefore, if Tenant fails to surrender the Premises
upon the termination or expiration of the Lease, in addition to any other
liabilities to Landlord accruing therefrom, Tenant shall protect, defend,
indemnify and hold Landlord harmless from all loss, costs (including reasonable
attorneys' fees) and liability resulting from such failure, including, without
limiting the generality of the foregoing, any claims made by any succeeding
tenant founded upon such failure to surrender, and any losses suffered by
Landlord, including lost profits, resulting from such failure to surrender.
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ARTICLE 17
ESTOPPEL CERTIFICATES
Within ten (10) days following a request in writing by Landlord or Tenant,
Tenant or Landlord, as the case may be, shall execute and deliver to the
requesting party (the "Requesting Party") an estoppel certificate, which shall
be substantially in the form of Exhibit E, attached hereto, (or such other
reasonable form as may be required by any prospective mortgagee or purchaser of
the Building, or any portion thereof, or an assignee, sublessee or person or
entity acquiring Tenant), indicating therein any exceptions thereto that may
exist at that time, and shall also contain any other information reasonably
requested by the Requesting Party or Landlord's mortgagee or prospective
mortgagee or purchasers. Landlord or Tenant, as the case may be, shall execute
and deliver whatever other instruments may be reasonably required for such
purposes. At any time during the Lease Term, Landlord may require Tenant to
provide Landlord with a current financial statement and financial statements of
the two (2) years prior to the current financial statement year. Such statements
shall be prepared in accordance with generally accepted accounting principles
and, if such is the normal practice of Tenant, shall be audited by an
independent certified public accountant. Any such statements shall be provided
only to the extent they exist and in the form that they exist. Failure of Tenant
or Landlord to timely execute and deliver such estoppel certificate or other
instruments upon five (5) additional days' written notice from the Requesting
Party shall constitute acknowledgment by the other party that statements
included in the estoppel certificate are true and correct, without exception.
ARTICLE 18
SUBORDINATION
The Lease and Tenant's rights hereunder are subject and subordinate to any
ground or underlying leases of the Real Property and to the lien of any
mortgages or trust deeds, now or hereafter in force against the Real Property
and the Building, if any, and to all renewals, extensions, modifications,
consolidations and replacements thereof, and to all advances made or hereafter
to be made upon the security of such mortgages or trust deeds (each a "Superior
Interest"), unless the holders of such mortgages or trust deeds, or the lessors
under such ground lease or underlying leases, require in writing that the Lease
be superior thereto. In consideration of, and as a condition precedent to,
Tenant's agreement to permit its interest pursuant to the Lease to be
subordinated to any particular future ground or underlying lease of the Building
or the Real Property or to the lien of any first mortgage or trust deed,
hereafter enforced against the Building or the Real Property and to any
renewals, extensions, modifications, consolidations and replacements
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thereof, Landlord shall deliver to Tenant a commercially reasonable
non-disturbance agreement executed by the landlord under such ground lease or
underlying lease or the holder of such mortgage or trust deed, as appropriate,
recognizing the Lease and Tenant's right to offset Rent pursuant to the terms of
the Lease. Tenant covenants and agrees in the event any proceedings are brought
for the foreclosure of any such mortgage, to attorn, without any deductions or
set-offs whatsoever, to the purchaser upon any such foreclosure sale if so
requested to do so by such purchaser, and to recognize such purchaser as the
lessor under the Lease. Tenant shall, within five (5) days of request by
Landlord, execute such further instruments or assurances as Landlord may
reasonably deem necessary to evidence or confirm the subordination or
superiority of the Lease to any such mortgages, trust deeds, ground leases or
underlying leases.
ARTICLE 19
DEFAULTS; REMEDIES
19.1 Defaults. The occurrence of any of the following shall constitute a
default of the Lease by Tenant:
19.1.1 Any failure by Tenant to pay any Rent or any other charge
required to be paid under the Lease, or any part thereof, within three (3)
business days of notice that the same is due, which notice shall be in addition
to, and not in lieu of, any notice required under California Code of Civil
Procedure Section 1161 or any similar or successor law; or
19.1.2 Any failure by Tenant to observe or perform any other
provision, covenant or condition of the Lease to be observed or performed by
Tenant where such failure continues for thirty (30) days after written notice
thereof from Landlord to Tenant; provided however, that any such notice shall be
in addition to, and not in lieu of, any notice required under California Code of
Civil Procedure Section 1161 or any similar or successor law; and provided
further that if the nature of such failure is such that the same cannot
reasonably be cured within a thirty (30) day period, Tenant shall not be deemed
to be in default if it diligently commences such cure within such period and
thereafter diligently, proceeds to rectify and cure said failure, as soon as
possible.
19.2 Remedies Upon Default. Upon the occurrence of a default by Tenant,
Landlord shall have, in addition to any other remedies available to Landlord at
law or in equity, the option to pursue any one or more of the following
remedies, each and all of which shall be cumulative and nonexclusive, without
any notice or demand whatsoever.
19.2.1 Terminate the Lease, in which event Tenant shall immediately
surrender the Premises to Landlord, and if
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Tenant fails to do so, Landlord may, without prejudice to any other remedy which
it may have for possession or arrearages in rent, enter upon and take possession
of the Premises and expel or remove Tenant and any other person who may be
occupying the Premises or any part thereof, without being liable for prosecution
or any claim or damages therefor; and Landlord may recover from Tenant the
following:
(i) The worth at the time of award of any unpaid rent which has
been earned at the time of such termination; plus
(ii) The worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(iii) The worth at the time of award of the amount by which the
unpaid rent for the balance of the Lease Term after the time of award exceeds
the amount of such rental loss that Tenant proves could have been reasonably
avoided; plus
(iv) Any other amount necessary to compensate Landlord for all
the detriment proximately caused by Tenant's failure to perform its obligations
under the Lease or which in the ordinary course of things would be likely to
result therefrom, specifically including but not limited to, brokerage
commissions and advertising expenses incurred, expenses of remodeling the
Premises or any portion thereof for a new tenant, whether for the same or a
different use, and any special concessions made to obtain a new tenant; and
(v) At Landlord's election, such other amounts in addition to or
in lieu of the foregoing as may be permitted from time to time by applicable
law.
The term "rent" as used in this Section 19.2 shall be deemed to be and to mean
all sums of every nature required to be paid by Tenant pursuant to the terms of
the Lease, whether to Landlord or to others. As used in Paragraphs 19.2.1 (i)
and (ii), above, the "worth at the time of award" shall be computed by allowing
interest at the rate set forth in Article 25 of the Lease, but in no case
greater than the maximum amount of such interest permitted by law. As used in
Paragraph 19.2.1 (iii) above, the "worth at the time of award" shall be computed
by discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percent (1%).
19.2.2 Landlord shall have the remedy described in California Civil
Code Section 1951.4 (lessor may continue lease in effect after lessee's breach
and abandonment and recover Rent as it becomes due, if lessee has the right to
sublet or assign, subject only to reasonable limitations). Accordingly, if
Landlord does not elect to terminate the Lease on account of any
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default by Tenant, Landlord may, from time to time, without terminating the
Lease, enforce all of its rights and remedies under the Lease, including the
right to recover all rent as it becomes due.
19.3 Subleases of Tenant. Whether or not Landlord elects to terminate the
Lease on account of any default by Tenant, as set forth in this Article 19,
Landlord shall have the right to terminate any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by
Tenant and affecting the Premises or may, in Landlord's sole discretion, succeed
to Tenant's interest in such subleases, licenses, concessions or arrangements.
In the event of Landlord's election to succeed to Tenant's interest in any such
subleases, licenses, concessions or arrangements, Tenant shall, as of the date
of notice by Landlord of such election, have no further right to or interest in
the rent or other consideration receivable thereunder.
19.4 Landlord Default.
19.4.1 General. Notwithstanding anything to the contrary set forth in
the Lease, Landlord shall be in default in the performance of any obligation
required to be performed by Landlord pursuant to the Lease if (i) in the event a
failure by Landlord is with respect to the payment of money, Landlord fails to
pay such unpaid amounts within five (5) business days of written notice from
Tenant that the same was not paid when due, or (ii) in the event a failure by
Landlord is other than the obligation to pay money, Landlord fails to perform
such obligation within thirty (30) days after the receipt of notice from Tenant
specifying in detail Landlord's failure to perform; provided, however, if the
nature of Landlord's obligation is such that more than thirty (30) days are
required for its performance, then Landlord shall not be in default under the
Lease if it shall commence such performance within such thirty (30) day period
and thereafter diligently pursue the same to completion. Upon any such default
by Landlord under the Lease, Tenant may, except as otherwise specifically
provided in the Lease to the contrary, exercise any of its rights provided at
law or in equity.
19.4.2 Abatement of Rent. In the event that Tenant is prevented from
using, and does not use, the Premises or any portion thereof, as a result of (i)
any failure to make available services, utilities or access to the Premises,
Building, or parking garage, (ii) the presence of Hazardous Materials (as
defined in Section 29.25.1 of the Lease) not brought on the Premises or released
into the Premises or the Building by Tenant, its employees, agents, invitees or
customers, Tenant acknowledging the presence of ACM (as defined in Section
29.25.2) to the extent disclosed in the Lease and agreeing that the mere
presence of such ACM as so disclosed will not trigger the rent abatement set
forth herein, or (iii) any repairs, maintenance or alterations performed by
Landlord or which Landlord failed to
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perform and which Landlord was required to perform under the Lease, (any such
set of circumstances as set forth in items (i) (ii) and (iii), above, to be
known as an "Abatement Event"), then Tenant shall give Landlord notice of such
Abatement Event, and if such Abatement Event continues for five (5) consecutive
business days after Landlord's receipt of any such notice (the "Eligibility
Period"), then the Base Rent and Tenant's Share of Direct Expenses shall be
abated or reduced, as the case may be, after expiration of the Eligibility
Period for such time that Tenant continues to be so prevented from using, and
does not use, the Premises or a portion thereof, in the proportion that the
rentable area of the portion of the Premises that Tenant is prevented from
using, and does not use, bears to the total rentable area of the Premises;
provided, however, in the event that Tenant is prevented from using, and does
not use, a portion of the Premises for a period of time in excess of the
Eligibility Period and the remaining portion of the Premises is not sufficient
to allow Tenant to effectively conduct its business therein, and if Tenant does
not conduct its business from such remaining portion, then for such time after
expiration of the Eligibility Period during which Tenant is so prevented from
effectively conducting its business therein, the Base Rent and Tenant's Share of
Direct Expenses for the entire Premises shall be abated for such time as Tenant
continues to be so prevented from using, and does not use, the Premises. If,
however, Tenant reoccupies any portion of the Premises during such period, the
Rent allocable to such reoccupied portion, based on the proportion that the
rentable area of such reoccupied portion of the Premises bears to the total
rentable area of the Premises, shall be payable by Tenant from the date Tenant
reoccupies such portion of the Premises. Such right to abate Base Rent and
Tenant's Share of Direct Expenses shall be Tenant's sole and exclusive remedy at
law or in equity for an Abatement Event; provided, however, that if Landlord has
not cured such Abatement Event within one (1) year after receipt of notice from
Tenant (or, in the event that the Premises or the Building are rendered
inaccessible to Tenant by a casualty or act of Landlord, one (1) year following
the date of Landlord's actual knowledge of the occurrence of the Abatement
Event), Tenant shall have the right to terminate the Lease during the first ten
(10) business days of each calendar month following the end of such one (l)-year
period until such time as Landlord has cured the Abatement Event, which right
may be exercised only by delivery of thirty (30) days' notice to Landlord (the
"Abatement Event Termination Notice") during such ten (10) business-day period,
and shall be effective as of a date set forth in the Abatement Event Termination
Notice (the "Abatement Event Termination Date"), which Abatement Event
Termination Date shall not be less than thirty (30) days, and not more than six
(6) months, following the delivery of the Abatement Event Termination Notice.
Notwithstanding anything contained in this Section 19.4.2 to the contrary,
Tenant's Abatement Rent Termination Notice shall be null and void (but only in
connection with the first notice sent by Tenant with respect to each separate
Abatement Event) if Landlord cures such Abatement Event
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within such thirty (30) day period following receipt of the Abatement Event
Termination Notice. If Tenant's right to abatement occurs because of an eminent
domain taking and/or because of damage or destruction to the Premises, the
Building's Parking Garage, and/or the Building, Tenant's abatement period shall
continue until Tenant has been given sufficient time, and sufficient access to
the Premises, to rebuild such portion it is required to rebuild, to install its
property, furniture, fixtures, and equipment to the extent the same shall have
been removed as a result of such damage or destruction and to move in over a
weekend. To the extent Tenant is entitled to abatement without regard to the
Eligibility Period, because of an event covered by Articles 11 and 13 of the
Lease, then the Eligibility Period shall not be applicable. Except as provided
in this Section 19.4.2, nothing contained herein shall be interpreted to mean
that Tenant is excused from paying Rent due hereunder. Subject to Section 29.27,
the provisions of this Section 19.4.2 shall not prejudice Tenant's right to seek
any other relief or remedy that it may be entitled to under law with respect to
any default by Landlord under the Lease.
19.4.3 Landlord Bankruptcy Proceeding. In the event that the
obligations of Landlord under the Lease are not performed during the pendency of
a bankruptcy or insolvency proceeding involving Landlord as the debtor, or
following the rejection of the Lease in accordance with Section 365 of the
United States Bankruptcy Code, then notwithstanding any provision of the Lease
to the contrary, Tenant shall have the right to set off against the Rent next
due and owing under the Lease (a) any and all damages caused by such
nonperformance of Landlord's obligations under the Lease by Landlord,
debtor-in-possession, or the bankruptcy trustee, and (b) any and all damages
caused by the nonperformance of Landlord's obligations under the Lease following
any rejection of the Lease in accordance with Section 365 of the United States
Bankruptcy Code.
19.5 Efforts to Relet. For the purposes of this Article 19, Tenant's right
to possession shall not be deemed to have been terminated by efforts of Landlord
to relet the Premises, by its acts of maintenance or preservation with respect
to the Premises, or by appointment of a receiver to protect Landlord's interests
hereunder. The foregoing enumeration is not exhaustive, but merely illustrative
of acts which may be performed by Landlord without terminating Tenant's right to
possession.
ARTICLE 20
ATTORNEYS'
FEES
If either party commences litigation against the other for the specific
performance of the Lease, for damages for the breach hereof or otherwise for
enforcement of any remedy hereunder, the parties hereto agree to and hereby do
waive any right to a trial
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by jury and, in the event of any such commencement of litigation, the prevailing
party shall be entitled to recover from the other party such costs and
reasonable attorneys' fees as may have been incurred.
ARTICLE 21
INTENTIONALLY OMITTED
ARTICLE 22
GOOD
FAITH
Except for (i) matters for which there is a standard of consent or
discretion specifically set forth in the Lease, (ii) matters which could have an
adverse effect on the Building Structure or Building Systems, or which could
affect the exterior appearance of the Building or which could disturb the ACM
(as defined in Section 29.25.2) as determined by Landlord in its sole
discretion, or (iii) matters covered by Article 4 (Additional Rent), Article 10
(Insurance), or Article 19 (Defaults; Remedies) of the Lease (collectively, the
"Excepted Matters"), any time the consent of Landlord or Tenant is required
under the Lease, such consent shall not be unreasonably withheld or delayed,
and, except with regard to the Excepted Matters, whenever the Lease grants
Landlord or Tenant the right to take action, exercise discretion, establish
rules and regulations or make an allocation or other determination, Landlord and
Tenant shall act reasonably and in good faith.
ARTICLE 23
SIGNS
23.1 Full Floor Tenants. Subject to Landlord's prior written approval, in
its reasonable discretion, and provided all signs are in keeping with the
quality, design and style of the Building, Tenant, if the Premises comprise an
entire floor of the Building, at its sole cost and expense, may install
identification signage anywhere in the Premises including in the elevator lobby
of the Premises, provided that such signs must not be visible from the exterior
of the Building.
23.2 Multi-Tenant Floor Tenants. If Tenant occupies less than the entire
floor on which the Premises is located, Tenant's identifying signage shall be
provided by Landlord and such signage shall be comparable to that used by
Landlord for other similar floors in the Building and shall comply with
Landlord's Building standard signage program. Any additions, deletions or
modifications to such Building standard signage shall be at
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Tenant's sole expense and subject to the prior written approval of Landlord, in
its sole discretion.
Prohibited Signage and Other Items. Any signs, notices, logos, pictures,
names or advertisements which are installed and that have not been individually
approved by Landlord may be removed without notice by Landlord at the sole
expense of Tenant. Tenant may not install any signs on the exterior or roof of
the Building or the common areas of the Building or the Real Property. Any
signs, window coverings, or blinds (even if the same are located behind the
Landlord approved window coverings for the Building), or other items visible
from the exterior of the Premises or Building are subject to the prior written
approval of Landlord, in its sole discretion.
Building Directory. Tenant shall be entitled, at Tenant's sole cost and
expense, to one (1) line on the Building directory per each 1,000 rentable
square feet of the Premises, to display Tenant's name and location in the
Building and the name of Tenant's key employees. Such listings shall be listed
under Tenant's name only and not disbursed throughout the Building directory.
ARTICLE 24
COMPLIANCE WITH LAW
Tenant shall not do anything in or about the Premises which will in any way
conflict with any law, statute, ordinance or other governmental rule, regulation
or requirement now in force or which may hereafter be enacted or promulgated.
Should any standard or regulation now or hereafter be imposed on Tenant by a
state, federal or local governmental body charged with the establishment,
regulation and enforcement of occupational, health or safety standards for
employers, employees or tenants, then Tenant agrees, at its sole cost and
expense, to comply promptly with such standards or regulations. Subject to
Article 7, Tenant shall be responsible, at its sole cost and expense, to make
all alterations to the Premises as are required to comply with the governmental
rules, regulations, requirements or standards described in this Article 24 but
shall not be required to make changes to the Building Structure or Building
Systems except as required in connection with Tenant Improvements and
Alterations installed by or on behalf of Tenant, which improvements are not
general office improvements.
Landlord shall be obligated to comply with all laws which are applicable to
the common areas of the Building, the Building Structure and the Building
Systems including, without limitation, the requirements of the Americans with
Disabilities Act of 1990. Landlord's obligations with respect to code compliance
work in connection with the initial tenant improvement work to be
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performed in the Premises are set forth in the Tenant Work Letter attached
hereto as Exhibit D.
ARTICLE 25
LATE
CHARGES
If any installment of Rent shall not be received by Landlord or Landlord's
designee within five (5) business days after receipt of a written notice from
Landlord that such amount was not paid when due, then Tenant shall pay to
Landlord a late charge equal to two percent (2%) of the overdue amount, plus any
attorneys' fees incurred by Landlord by reason of Tenant's failure to pay Rent
and/or other charges when due hereunder. The late charge shall be deemed
Additional Rent and the right to require it shall be in addition to all of
Landlord's other rights and remedies hereunder or at law and shall not be
construed as liquidated damages or as limiting Landlord's remedies in any
manner. In addition to the late charge described above, any Rent or other
amounts owing hereunder which are not paid on or before the date they are due
shall thereafter bear interest until paid at a rate per annum equal to ten
percent (10%) per annum, provided that in no case shall such rate be higher than
the highest rate permitted by applicable law.
ARTICLE 26
LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT
Landlord's Cure. All covenants and agreements to be kept or performed by
Tenant under the Lease shall be performed by Tenant at Tenant's sole cost and
expense and without any reduction of Rent. If Tenant shall fail to perform any
of its obligations under the Lease, then upon three (3) additional days' notice
from Landlord, Landlord may, but shall not be obligated to, after reasonable
prior notice to Tenant, make any such payment or perform any such act on
Tenant's part without waiving its right based upon any default of Tenant and
without releasing Tenant from any obligations hereunder.
Tenant's Reimbursement. Except as may be specifically provided to the
contrary in the Lease, Tenant shall pay to Landlord, within fifteen (15) days
after delivery by Landlord to Tenant of statements therefor: sums equal to
expenditures reasonably made and obligations incurred by Landlord in connection
with the remedying by Landlord of Tenant's defaults pursuant to the provisions
of Section 26.1. Tenant's obligations under this Section 26.2 shall survive the
expiration or sooner termination of the Lease Term.
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ARTICLE 27
ENTRY BY
LANDLORD
Landlord reserves the right at all reasonable times and upon reasonable
notice to the Tenant to enter the Premises to (i) inspect them; (ii) show the
Premises to prospective purchasers, mortgagees or ground or underlying lessors,
or, during the last twelve (12) months of the Lease Term, prospective tenants;
(iii) post notices of nonresponsibility; or (iv) alter, improve or repair the
Premises or the Building if necessary to comply with current building codes or
other applicable laws, or for structural alterations, repairs or improvements to
the Building. Notwithstanding anything to the contrary contained in this Article
27, Landlord may enter the Premises at any time to (A) perform services required
of Landlord; (B) take possession due to any breach of the Lease in the manner
provided herein; and (C) subject to the provisions of Section 26.1 perform any
covenants of Tenant which Tenant fails to perform. Landlord may make any such
entries without the abatement of Rent and may take such steps as required to
accomplish the stated purposes; provided, however, that except for emergencies,
any such entry shall be performed in a manner so as not to unreasonably
interfere with Tenant's use of the Premises and shall be performed after normal
business hours if reasonably practical. Except as otherwise set forth in Section
19.4, Tenant hereby waives any claims for damages or for any injuries or
inconvenience to or interference with Tenant's business, lost profits, any loss
of occupancy or quiet enjoyment of the Premises, and any other loss occasioned
thereby. For each of the above purposes, Landlord shall at all times have a key
with which to unlock all the doors in the Premises, excluding Tenant's vaults,
safes and special security areas designated in advance by Tenant. In an
emergency, Landlord shall have the right to use any means that Landlord may deem
proper to open the doors in and to the Premises. Notwithstanding anything to the
contrary set forth in this Article 27, (i) Tenant shall have the right to
accompany Landlord anytime Landlord enters the Premises and (ii) Tenant may
designate certain areas of the Premises as "Secured Areas" should Tenant require
such areas for the purpose of securing certain valuable property or confidential
information. In connection with the foregoing, Landlord shall not enter such
Secured Areas except upon two (2) business days prior notice to Tenant;
provided, however, that in the event of an emergency no notice shall be required
to enter such Secured Areas, but Landlord shall use all commercially reasonable
efforts to minimize damage to the Premises. Any entry into the Premises by
Landlord in the manner hereinbefore described shall not be deemed to be a
forcible or unlawful entry into, or a detainer of, the Premises, or an actual or
constructive eviction of Tenant from any portion of the Premises.
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ARTICLE 28
TENANT
PARKING
Tenant acknowledges that Landlord does not own nor control the Parking
Garage; however, Landlord shall use commercially reasonable efforts to cause the
owner of the Parking Garage ("Garage Owner") to provide up to the number of
automobile parking passes set forth in Section 11 of the Summary to Tenant,
which number may, subject to the approval of the operator of the Parking Garage,
be increased (but not increased above sixteen (16)) or decreased in number upon
nine (9) month's prior written notice to Landlord.
Tenant shall pay to the Garage Owner for automobile parking passes on a
monthly basis the prevailing rate charged for parking passes at the location of
such automobile parking passes. Tenant's continued right to use the automobile
parking passes is conditioned upon Tenant abiding by all rules and regulations
which are prescribed from time to time for the orderly operation and use of the
Parking Garage and upon Tenant's cooperation in seeing that Tenant's employees
and visitors also comply with such rules and regulations. Landlord and the
Garage Owner specifically reserve the right to change the size, configuration,
design, layout and all other aspects of the Parking Garage and Tenant
acknowledges and agrees that Landlord and/or the Garage Owner may, without
incurring any liability to Tenant and without any abatement of Rent under the
Lease, from time to time, temporarily close-off or restrict access to the
Parking Garage, or temporarily relocate Tenant's automobile parking passes to
other parking structures and/or surface parking areas within a reasonable
distance from the Parking Garage, for purposes of permitting or facilitating any
such construction, alteration or improvements or to accommodate or facilitate
renovation, alteration, construction or other modification of other improvements
or structures located on the Real Property. The Garage Owner may delegate its
responsibilities hereunder to a parking operator in which case such parking
operator shall have all the rights of control attributed hereby to the Landlord
and the Garage Owner. The parking rates charged by the Garage Owner for Tenant's
automobile parking passes shall be exclusive of any parking tax or other charges
imposed by governmental authorities in connection with the use of such parking,
which taxes and/or charges shall be paid directly by Tenant or the parking
users, or, if directly imposed against the Garage Owner, Tenant shall reimburse
the Garage Owner for all such taxes and/or charges concurrent with its payment
of the parking rates described herein.
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ARTICLE 29
MISCELLANEOUS
PROVISIONS
29.1 Binding Effect. Each of the provisions of the Lease shall extend to
and shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective successors or assigns,
provided this clause shall not permit any assignment by Tenant contrary to the
provisions of Article 14 of the Lease.
29.2 No Air Rights. No rights to any view or to light or air over any
property, whether belonging to Landlord or any other person, are granted to
Tenant by the Lease. If at any time any windows of the Premises are temporarily
darkened or the light or view therefrom is obstructed by reason of any repairs,
improvements, maintenance or cleaning in or about the Building, the same shall
be without liability to Landlord and without any reduction or diminution of
Tenant's obligations under the Lease.
29.3 Modification of Lease. Should any current or prospective mortgagee or
ground lessor for the Building require a modification of the Lease, which
modification will not cause an increased cost or expense to Tenant or in any
other way adversely change the rights and obligations of Tenant hereunder, then
and in such event, Tenant agrees that the Lease may be so modified and agrees to
execute whatever documents are required therefor and deliver the same to
Landlord within twenty (20) days following the request therefor. At the request
of Landlord or any mortgagee or ground lessor Tenant agrees to execute a short
form of Lease and to deliver the same to Landlord within twenty (20) days
following the request therefor, the recordation of which shall be at the sole
cost and expense of Landlord and not included as an Operating Expense.
29.4 Transfer of Landlord's Interest. Tenant acknowledges that Landlord has
the right to transfer all or any portion of its interest in the Real Property
and Building and in the Lease, and Tenant agrees that in the event of any such
transfer, Landlord shall automatically be released from all liability under the
Lease not accrued as of the date of the transfer and Tenant agrees to look
solely to such transferee for the performance of Landlord's obligations
hereunder after the date of transfer, upon agreement by such transferee to fully
assume and be liable for all obligations of the Lease to be performed by
Landlord which first accrue or arise after the date of the conveyance and Tenant
shall attorn to such transferee. Tenant further acknowledges that Landlord may
assign its interest in the Lease to a mortgage lender as additional security and
agrees that such an assignment shall not release Landlord from its obligations
hereunder and that Tenant shall continue to look to Landlord for the performance
of its obligations hereunder.
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29.5 Prohibition Against Recording. Except as provided in Section 29.3 of
the Lease, neither the Lease, nor any memorandum, affidavit or other writing
with respect thereto, shall be recorded by Tenant with the Los Angeles County
Recorder's Office or by anyone acting through, under or on behalf of Tenant.
29.6 Captions. The captions of Articles and Sections are for convenience
only and shall not be deemed to limit, construe, affect or alter the meaning of
such Articles and Sections.
29.7 Relationship of Parties. Nothing contained in the Lease shall be
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant, it being expressly understood and
agreed that neither the method of computation of Rent nor any act of the parties
hereto shall be deemed to create any relationship between Landlord and Tenant
other than the relationship of landlord and tenant.
29.8 Time of Essence. Time is of the essence of the Lease and each of its
provisions.
29.9 Partial Invalidity. If any term, provision or condition contained in
the Lease shall, to any extent, be invalid or unenforceable, the remainder of
the Lease, or the application of such term, provision or condition to persons or
circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of the Lease shall be valid and enforceable to the
fullest extent possible permitted by law.
29.10 Landlord Exculpation. It is expressly understood and agreed that
notwithstanding anything in the Lease to the contrary, and notwithstanding any
applicable law to the contrary, the liability of Landlord and the Landlord
Parties hereunder (including any successor landlord) and any recourse by Tenant
against Landlord or the Landlord Parties shall be limited solely and exclusively
to an amount which is equal to the interest of Landlord in the Building, and
neither Landlord, nor any of the Landlord Parties shall have any personal
liability therefor, and Tenant hereby expressly waives and releases such
personal liability on behalf of itself and all persons claiming by, through or
under Tenant.
29.11 Entire Agreement. It is understood and acknowledged that there are no
oral agreements between the parties hereto affecting the Lease and the Lease
constitutes the parties' entire agreement with respect to the leasing of the
Premises and supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between the
parties hereto or displayed by Landlord to Tenant with respect to the subject
matter thereof, and none thereof shall be used to interpret or construe the
Lease. the Lease, the
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exhibits and schedules attached hereto, and any side letter or separate
agreement executed by Landlord and Tenant in connection with the Lease and dated
of even date herewith contain all of the terms, covenants, conditions,
warranties and agreements of the parties relating in any manner to the rental,
use and occupancy of the Premises, shall be considered to be the only agreement
between the parties hereto and their representatives and agents, and none of the
terms, covenants, conditions or provisions of the Lease can be modified, deleted
or added to except in writing signed by the parties hereto.
29.12 Right to Lease. Subject to the express terms of the Lease, Landlord
reserves the absolute right to effect such other tenancies in the Building as
Landlord in the exercise of its sole business judgment shall determine to best
promote the interests of the Building. Tenant does not rely on the fact, nor
does Landlord represent, that any specific tenant or type or number of tenants
shall, during the Lease Term, occupy any space in the Building.
29.13 Force Majeure. Any prevention, delay or stoppage due to strikes,
lockouts, labor disputes, acts of God, inability to obtain services, labor, or
materials or reasonable substitutes therefor, governmental actions, civil
commotions, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform (collectively, the "Force Majeure"),
except with respect to the obligations imposed with regard to Rent and other
charges to be paid by Tenant pursuant to the Lease, and except as to Tenant's
obligations under Article 5 and Article 24 (to the extent that Tenant's failure
to perform Tenant's obligations under Article 24 would result in any kind of
penalty or fine for Landlord) of the Lease notwithstanding anything to the
contrary contained in the Lease, shall excuse the performance of such party for
a period equal to any such prevention, delay or stoppage and, therefore, if the
Lease specifies a time period for performance of an obligation of either party,
that time period shall be extended by the period of any delay in such party's
performance caused by a Force Majeure. Notwithstanding anything to the contrary
set forth herein, the provisions set forth in Article 11 or Section 19.4.2 shall
not be extended by the period of any delay in such party's performance caused by
Force Majeure, except to the extent expressly set forth in such provisions.
29.14 Notices. All notices, demands, statements, approvals or
communications (collectively, "Notices") given or required to be given by either
party to the other hereunder shall be in writing, shall be sent by United States
certified or registered mail, postage prepaid, return receipt requested, or
delivered personally (a) to Tenant at the appropriate address set forth in
Section 5 of the Summary, or to such other place as Tenant may from time to time
designate in a Notice to Landlord; or (b) to Landlord at the addresses set forth
in Section 3 of the Summary, or to such other firm or to such other place as
Landlord may from
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time to time designate in a Notice to Tenant. Any Notice will be deemed given on
the date which is (i) two (2) business days after the date it is mailed as
provided in this Section 29.14 or (ii) upon the date personal delivery is made.
If Tenant is notified of the identity and address of Landlord's mortgagee or
ground or underlying lessor, Tenant shall give to such mortgagee or ground or
underlying lessor written notice of any default by Landlord under the terms of
the Lease by registered or certified mail, and such mortgagee or ground or
underlying lessor shall be given a reasonable opportunity to cure such default
prior to Tenant's exercising any remedy available to Tenant.
29.15 Joint and Several. If there is more than one Tenant, the obligations
imposed upon Tenant under the Lease shall be joint and several.
29.16 Authority. If Tenant is a corporation or partnership, each individual
executing the Lease on behalf of Tenant hereby represents and warrants that
Tenant is a duly formed and existing entity qualified to do business in
California and that Tenant has full right and authority to execute and deliver
the Lease and that each person signing on behalf of Tenant is authorized to do
so.
29.17 Governing Law. the Lease shall be construed and enforced in
accordance with the laws of the State of California.
29.18 Submission of Lease. Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or an option for lease,
and it is not effective as a lease or otherwise until execution and delivery by
both Landlord and Tenant.
29.19 Brokers. Landlord shall pay all brokerage commissions owing to
Landlord's designated representative and CB Commercial Real Estate Group, Inc.
("Tenant's Broker") in connection with the transaction contemplated by the
Lease. Landlord's designated representative and Tenant's Broker may be
collectively referred to herein as the "Brokers." Landlord and Tenant each
represent and warrant to the other that other than the Brokers, no broker,
agent, or finder negotiated or was instrumental in negotiating or consummating
the Lease on its behalf and that it knows of no broker, agent, or finder, other
than the Brokers, who is, or might be, entitled to a commission or compensation
in connection with the Lease. In the event of any such claims for additional
brokers' or finders' fees or commissions in connection with the negotiation,
execution or consummation of the Lease, then Landlord shall indemnify, save
harmless and defend Tenant from and against such claims if they shall be based
upon any statement, representation or agreement by Landlord, and Tenant shall
indemnify, save harmless and defend Landlord if such claims shall be based upon
any statement, representation or agreement made by Tenant.
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29.20 Independent Covenants. the Lease shall be construed as though the
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord's expense or to any set-off of the Rent or other amounts owing
hereunder against Landlord, except as specifically provided in the Lease to the
contrary.
29.21 Building Name and Signage. Landlord shall have the right at any time
to change the name of the Building and to install, affix and maintain any and
all signs on the exterior and on the interior of the Building as Landlord may,
in Landlord's sole discretion, desire. Tenant shall not use the name of the
Building or use pictures or illustrations of the Building in advertising or
other publicity, without the prior written consent of Landlord.
29.22 Transportation Management. Tenant shall fully comply with all
governmentally mandated programs intended to manage parking, transportation or
traffic in and around the Building.
29.23 Successors. Except as otherwise expressly provided herein, the
obligations of the Lease shall bind and benefit the successors and assigns of
the parties hereto; provided, however, that no assignment, sublease or other
transfer in violation of the provisions of Article 14 shall operate to vest any
rights in any putative assignee, subtenant or transferee of Tenant.
29.24 Landlord Renovations. It is specifically understood and agreed that
Landlord has made no representation or warranty to Tenant and has no obligation
to alter, remodel, improve, renovate, repair or decorate the Premises, Building,
or any part thereof and that no representations respecting the condition of the
Premises or the Building have been made by Landlord to Tenant except as
specifically set forth herein or in the Tenant Work Letter. However, Tenant
acknowledges that Landlord may during the Lease Term renovate, improve, alter,
or modify (collectively, the "Renovations") the Building, Premises, and/or Real
Property, including without limitation the Parking Garage, common areas,
systems and equipment, roof, and structural portions of the same, which
Renovations may include, without limitation, (i) modifying the common areas and
tenant spaces to comply with applicable laws and regulations, including
regulations relating to the physically disabled, seismic conditions, and
building safety and security, (ii) installing new floor covering, lighting, and
wall coverings in the Building common areas, and in connection with any
Renovations, Landlord may, among other things, erect scaffolding or other
necessary structures in the Building, limit or eliminate access to portions of
the Real Property, including portions of the common areas, or perform work in
the Building, which work may create noise, dust or leave debris in the Building,
(iii) renovation of the main entry to the Building and the main
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Building lobby area, (iv) installations, repairs or maintenance of telephone
risers, and (v) renovation of the elevator, lobbies, elevator doors and frames.
Tenant hereby agrees that such Renovations and Landlord's actions in connection
with such Renovations shall in no way constitute a constructive eviction of
Tenant nor entitle Tenant to any abatement of Rent (except as otherwise set
forth in Section 19.4.2 above). Landlord shall have no responsibility or for any
reason be liable to Tenant for any direct or indirect injury to or interference
with Tenant's business arising from the Renovations, nor shall Tenant be
entitled to any compensation or damages from Landlord for loss of the use of the
whole or any part of the Premises or of Tenant's personal property or
improvements resulting from the Renovations or Landlord's actions in connection
with such Renovations, or for any inconvenience or annoyance occasioned by such
Renovations or Landlord's actions in connection with such Renovations; provided,
however, that Landlord shall be responsible for any damage to property to the
extent caused by the negligence or willful misconduct of Landlord.
29.25 Environmental Conditions and Asbestos Disclosures.
29.25.1 As used herein, the term "Hazardous Material" means any
hazardous or toxic substance, material or waste which is or becomes regulated by
any local governmental authority, the state in which the Building is located or
the United States Government. Subject to Section 29.25.2, to the extent that the
existence of any "Hazardous Material" poses a health threat and the removal
thereof is required by applicable law, or if the existence of such Hazardous
Material will prevent the issuance of a certificate of occupancy or its
equivalent for the Premises, Landlord shall remove such Hazardous Material. The
costs arising from the presence or removal (which removal is required in
compliance with any governmental laws, ordinances, regulations or orders which
are enacted prior to the Lease Commencement Date) of Hazardous Materials located
in the Building (which Hazardous Materials were designated as Hazardous
Materials under the then-applicable law as of the Lease Commencement Date),
including, without limitation, any costs incurred pursuant to the requirements
of any governmental laws, ordinances, regulations or orders relating to health,
safety or environmental conditions, including but not limited to regulations
concerning asbestos, soil and ground water conditions or contamination regarding
Hazardous Materials or substances, shall be excluded from Operating Expenses;
provided, however, that any costs arising from (i) the presence or removal of
any such Hazardous Materials placed in or around or released in the Building by
Tenant or its agents, employees or contractors or (ii) any removal,
encapsulation or entombment of ACM (as such term is defined in Section 29.25.2
below) necessitated by any construction or repair or maintenance work performed
by or for Tenant in the Building or in the Premises shall be Tenant's sole
responsibility.
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29.25.2 Landlord has advised Tenant that there is ACM in the Premises
as well as in other areas of the Building. In this regard, Landlord agrees to
(i) exclude from Operating Expenses the cost of removal, encapsulation or
entombment of asbestos-containing material ("ACM"), unless such removal,
encapsulation or entombment is necessitated in the performance of Landlord's
normal and customary repair or maintenance obligations as specifically provided
in the Lease; (ii) monitor, maintain, and, if necessary, abate, encapsulate or
entomb ACM in the Building in accordance with all applicable laws; and (iii)
subject to the last sentence of this Section 29.25.2, remove ACM if the presence
of ACM would prohibit Tenant from obtaining or maintaining a certificate of
occupancy for the Premises. However, Landlord may include as an Operating
Expense those costs incurred by Landlord in Landlord's normal and customary
procedures and practices related to monitoring the ACM in the Building and to
maintaining the ACM in the Building at a safe level, including without
limitation, performing the prevalent air monitoring, replacing respirators and
providing regular physical examinations for the Building engineers. Landlord has
further advised Tenant that, according to the United States Environmental
Protection Agency: "The presence of asbestos in a building does not necessarily
mean that the health of building occupants is necessarily in danger. As long as
ACM remains in good condition and is not disturbed, exposure is unlikely."
Attached hereto as Exhibit F is a disclosure statement regarding asbestos in the
Building. Tenant acknowledges that such notice complies with the requirements of
Section 25915 of the California Health and Safety Code and Tenant further
acknowledges that Landlord gave Tenant the opportunity to hire, at Tenant's sole
cost and expense, an industrial hygienist (or other qualified individual) of
Tenant's choice to review all of Landlord's reports, records and procedures
relating to ACM in the Building, including, but limited to the location of any
ACM that Tenant may encounter as part of the construction and installation of
the Tenant Improvements (including without limitation the Equipment and
Generator described in Section 6.4, the Electrical Conduit and Fuel Lines
described in Section 6.5 and the Basement Conduits described in Section 6.6),
prior to the execution of the Lease. Notwithstanding anything to the contrary
set forth in the Lease, subject to Landlord's representation set forth in
Section 29.25.3 below, Tenant acknowledges that it will be liable for any and
all costs incurred in the remediation of any ACM which, in Landlord's reasonable
judgment, is necessitated by or results from any construction, repair or
maintenance performed by or for Tenant in the Building or in the Premises.
29.25.3 Landlord represents that Landlord has abated, encapsulated or
entombed all reasonably accessible ACM currently located in the tenant areas on
the twelfth (12th) floor of the Building. Notwithstanding the foregoing, Tenant
acknowledges that it may encounter ACM in performing its initial tenant
improvement work in the Premises and in the Building (including without
limitation the installation of the Equipment and
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Generator described in Section 6.4, the Electrical Conduit and Fuel Lines
described in Section 6.5 and the Basement Conduits described in Section 6.6) or
in subsequent repair or maintenance work required in connection therewith and
Tenant further acknowledges that it will be responsible, at its sole cost and
expense, for the remediation, to Landlord's reasonable satisfaction, of any ACM
which it may so encounter and/or disturb in the course of any such construction,
repair or maintenance.
29.26 Intentionally Omitted.
29.27 Arbitration.
29.27.1 General Submittals to Arbitration. The submittal of all
matters to arbitration in accordance with the terms of this Section 29.27 shall
be the sole and exclusive method, means and procedure to resolve any and all
claims, disputes or disagreements arising under the Lease, except for (i) any
issue for which an alternative resolution procedure is specifically provided in
the Lease, (ii) all claims by either party which (A) seek anything other than
enforcement of rights under the Lease, or (B) are primarily founded upon matters
of fraud, willful misconduct, bad faith or any other allegations of tortious
action, and seek the award of punitive or exemplary damages, and () claims
relating to Landlord's exercise of any unlawful detainer rights pursuant to
California law or rights or remedies used by Landlord to gain possession of the
Premises or terminate Tenant's right of possession to the Premises. The parties
hereby irrevocably waive any and all rights to the contrary and shall at all
times conduct themselves in strict, full, complete and timely accordance with
the terms of this Section 29.27 and all attempts to circumvent the terms of this
Section 29.27 shall be absolutely null and void and of no force or effect
whatsoever. As to any matter submitted to arbitration (except with respect to
the payment of money) to determine whether a matter would, with the passage of
time, constitute a default, such passage of time shall not commence to run until
any such affirmative arbitrated determination, as long as it is simultaneously
determined in such arbitration that the challenge of such matter as a potential
default was made in good faith. As to any matter submitted to arbitration with
respect to the payment of money, to determine whether a matter would, with the
passage of time, constitute a default, such passage of time shall not commence
to run in the event that the party which is obligated to make the payment does
in fact make the payment to the other party. Such payment can be made "under
protest, " which shall occur when such payment is accompanied by a good faith
notice stating the reasons that the party has elected to make a payment under
protest. Such protest will be deemed waived unless the subject matter identified
in the protest is submitted to arbitration as set forth in this Section 29.27.
29.27.2 JAMS. Any dispute to be arbitrated pursuant to the provisions
of this Section 29.27 shall be determined by
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binding arbitration before a retired judge of the Superior Court of the State of
California (the "Arbitrator") under the auspices of Judicial Arbitration &
Mediation Services, Inc. ("JAMS"). Such arbitration shall be initiated by the
parties, or either of them, within ten (10) days after either party sends
written notice (the "Arbitration Notice") of a demand to arbitrate by registered
or certified mail to the other party and to JAMS. The Arbitration Notice shall
contain a description of the subject matter of the arbitration, the dispute with
respect thereto, the amount involved, if any, and the remedy or determination
sought. The parties may agree on a retired judge from the JAMS panel. If they
are unable to promptly agree, JAMS will provide a list of three (3) available
judges and each party may strike one. The remaining judge (or if there are two
(2), the one selected by JAMS) will serve as the Arbitrator. In the event that
JAMS shall no longer exist or if JAMS fails or refuses to accept submission of
such dispute, then the dispute shall be resolved by binding arbitration before
the American Arbitration Association ("AAA") under the AAA's commercial
arbitration rules then in effect.
29.27.3 Arbitration Procedure.
29.27.3.1 Pre-Decision Actions. The Arbitrator shall schedule a
pre-hearing conference to resolve procedural matters, arrange for the exchange
of information, obtain stipulations, and narrow the issues. The parties will
submit proposed discovery schedules to the Arbitrator at the pre-hearing
conference. The scope and duration of discovery will be within the sole
discretion of the Arbitrator. The Arbitrator shall have the discretion to order
a pre-hearing exchange of information by the parties, including, without
limitation, production of requested documents, exchange of summaries of
testimony of proposed witnesses, and examination by deposition of parties and
third-party witnesses. This discretion shall be exercised in favor of discovery
reasonable under the circumstances.
29.27.3.2 The Decision. The arbitration shall be conducted in Los
Angeles, California. Any party may be represented by counsel or other authorized
representative. In rendering a decision(s), the Arbitrator shall determine the
rights and obligations of the parties according to the substantive and
procedural laws of California and the terms and provisions of the Lease. The
Arbitrator's decision shall be based on the evidence introduced at the hearing,
including all logical and reasonable inferences therefrom. The Arbitrator may
make any determination, and/or grant any remedy or relief that is just and
equitable. The decision must be based on, and accompanied by, a written
statement of decision explaining the factual and legal basis for the decision as
to each of the principal controverted issues. The decision shall be conclusive
and binding, and it may thereafter be confirmed as a judgment by the Superior
Court of the State of California, subject only to challenge on the grounds set
forth in California Code of Civil Procedure Section 1286.2. The validity and
enforceability of the
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Arbitrator's decision is to be determined exclusively by the California courts
pursuant to the provisions of the Lease. The Arbitrator may award costs,
including without limitation attorneys' fees, and expert and witness costs, to
the prevailing party, if any, as determined by the Arbitrator in its discretion.
The Arbitrator's fees and costs shall be paid by the nonprevailing party as
determined by the Arbitrator in its discretion. A party shall be determined by
the Arbitrator to be the prevailing party if its proposal for the resolution of
dispute is the closer to that adopted by the Arbitrator.
29.28 Roof Rights. If Tenant wants to place an antenna or satellite dish of
any kind on the roof of the Building or wants to otherwise use any antenna or
satellite dish of any kind located on the roof of the Building, Tenant must
enter into an agreement with Broadcast Services, Inc. regarding such roof-top
antenna or satellite dish usage.
29.29 Telecommunications Carriers. Landlord shall not unreasonably restrict
telecommunications companies from running fiber optic cables into the Building.
IN WITNESS WHEREOF, Landlord and Tenant have caused their duly authorized
representatives to execute the Lease as of the day and date first above written.
"Landlord":
MITSUI FUDOSAN (U.S.A.), INC.,
a California corporation
"Tenant":
PACIFIC GATEWAY EXCHANGE,
a Delaware corporation
[GRAPHIC]
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EXHIBIT "A"
12TH FLOOR
(ENTIRE)
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<PAGE>
EXHIBIT B
AT&T CENTER
RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the following Rules and
Regulations. Provided that Landlord shall enforce these Rules and Regulations in
a nondiscriminatory manner, Landlord shall not be responsible to Tenant for the
nonperformance of any of said Rules and Regulations by or otherwise with respect
to the acts or omissions of any other tenants or occupants of the Real Property.
1. Tenant shall not alter any lock or install any new or additional locks
or bolts on any doors or windows of the Premises without obtaining Landlord's
prior written consent. Tenant shall bear the cost of any lock changes or repairs
required by Tenant. Two keys will be furnished by Landlord for the Premises, and
any additional keys required by Tenant must be obtained from Landlord at
Landlord's Actual Cost.
2. All doors opening to public corridors, except for the main entryway to
the Premises, shall be kept closed at all times except for normal ingress and
egress to the Premises.
3. Landlord reserves the right to close and keep locked all entrance and
exit doors of the Building during such hours as are customary for Comparable
Buildings provided that Tenant shall at all times have access to the Building,
subject to Landlord's reasonable security rules and regulations. Tenant, its
employees and agents must be sure that the doors to the Building are securely
closed and locked when leaving the Premises if it is after the normal hours of
business for the Building. Tenant, its employees, agents or any other persons
entering or leaving the Building at any time when it is so locked, or any time
when it is considered to be after normal business hours for the Building, may be
required to sign the Building register. Access to the Building may be refused
unless the person seeking access has proper identification or has a previously
arranged pass for access to the Building. Landlord and its agents shall in no
case be liable for damages for any error with regard to the admission to or
exclusion from the Building of any person. In case of invasion, mob, riot,
public excitement, or other commotion, Landlord reserves the right to prevent
access to the Building or the Real Property during the continuance thereof by
any means it deems appropriate for the safety and protection of life and
property.
4. All moving activity into or out of the Building shall be scheduled with
Landlord and done only at such time and in such manner as Landlord designates.
Landlord shall have the right to prescribe the weight, size and position of all
safes and other
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heavy property brought into the Building and also the times and manner of moving
the same in and out of the Building. Safes and other heavy objects shall, if
considered necessary by Landlord, stand on supports of such thickness as is
necessary to properly distribute the weight. Landlord will not be responsible
for loss of or damage to any such safe or property in any case. Any damage to
any part of the Building, its contents, occupants or visitors by moving or
maintaining any such safe or other property shall be the sole responsibility and
expense of Tenant.
5. No furniture, packages, supplies, eguipment or merchandise will be
received in the Building or carried up or down in the elevators, except between
such hours and in such specific elevator as shall be designated by Landlord.
6. he requirements of Tenant will be attended to only upon application at
the management office for the Real Property or at such office location
designated by Landlord. Employees of Landlord shall not perform any work or do
anything outside their regular duties unless under special instructions from
Landlord.
7. Tenant shall not disturb, solicit, or canvass any occupant of the Real
Property and shall cooperate with Landlord and its-agents of Landlord to prevent
the same.
8. The toilet rooms, urinals, wash bowls and other apparatus shall not be
used for any purpose other than that for which they were constructed, and no
foreign substance of any kind whatsoever shall be thrown therein. The expense of
any breakage, stoppage or damage resulting from the violation of this rule shall
be borne by the tenant who, or whose employees or agents, shall have caused it..
9. Tenant shall not overload the floor of the Premises, nor, except for
customary office decorations, mark, drive nails or screws, or drill into the
partitions, woodwork or plaster or in any way deface the Premises or any part
thereof without Landlord's prior written consent.
10. Except for vending machines intended for the sole use of Tenant's
employees and invitees, no vending machine or machines other than fractional
horsepower office machines shall be installed, maintained or operated upon the
Premises without the written consent of Landlord.
11. Tenant shall not use or keep in or on the Premises, the Building, or
the Real Property any kerosene, gasoline or other inflammable or combustible
fluid or material. Tenant shall provide material safety data sheets for any
Hazardous Material used or kept on the Premises.
12. Tenant shall not without the prior written consent of Landlord use any
method of heating or air conditioning other than that supplied by Landlord.
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13. Tenant shall not use, keep or permit to be used or kept, any foul or
noxious gas or substance in or on the Premises, or permit or allow the Premises
to be occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Real Property by reason of noise, odors, or vibrations,
or interfere in any way with other tenants or those having business therein.
14. Tenant shall not bring into or keep within the Real Property, the
Building or the Premises any animals, birds, bicycles or other vehicles.
15. No cooking shall be done or permitted on the Premises, nor shall the
Premises be used for the storage of merchandise, for lodging or for any
improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters' laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages for employees and visitors, provided that such use is in accordance
with all applicable federal, state and city laws, codes, ordinances, rules and
regulations.
16. Landlord will approve where and how telephone and telegraph wires are
to be introduced to the Premises. No boring or cutting for wires shall be
allowed without the consent of Landlord. The location of telephone, call boxes
and other office equipment affixed to the Premises shall be subject to the
approval of Landlord.
17. Landlord reserves the right to exclude or expel from the Real Property
any person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in violation
of any of these Rules and Regulations.
18. Tenant, its employees and agents shall not loiter in or on the
entrances, corridors, sidewalks, lobbies, halls, stairways, elevators, or any
common areas of the Building for the purpose of smoking tobacco products or for
any other purpose, nor in any way obstruct such areas, and shall use them only
as a means of ingress and egress for the Premises.
19. Tenant shall not waste electricity, water or air conditioning and
agrees to cooperate fully with Landlord to ensure the most effective operation
of the Building's heating and air conditioning system, and shall refrain from
attempting to adjust any controls.
20. Tenant shall store all its trash and garbage within the interior of the
Premises or in places in the Building designated or approved by Landlord for the
storage of trash or garbage. No material shall be placed in the trash boxes or
receptacles if such material is of such nature that it may not be disposed of in
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the ordinary and customary manner of removing and disposing of trash in the
vicinity of the Building without violation of any law or ordinance governing
such disposal. All trash, garbage and refuse disposal shall be made only through
entryways and elevators provided for such purposes at such times as Landlord
shall designate. If the Premises is or becomes infested with vermin as a result
of the use or any misuse or neglect of the Premises by Tenant, its agents,
servants, employees, contractors, visitors or licensees, Tenant shall forthwith,
at Tenant's expense, cause the Premises to be exterminated from time to time, to
the satisfaction of Landlord and shall employ such licensed exterminators as
shall be approved in writing in advance by Landlord.
21. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
22. Tenant shall assume any and all responsibility for protecting the
Premises from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed.
23. No awnings or other projection shall be attached to the outside walls
of the Building without the prior written consent of Landlord. No curtains,
blinds, shades or screens shall be attached to or hung in, or used in connection
with, any window or door of the Premises without the prior written consent of
Landlord. Tenant shall be responsible for any damage to the window film on the
exterior windows of the Premises and shall promptly repair any such damage at
Tenant's sole cost and expense. Tenant shall keep its window coverings closed
during any period of the day when the sun is shining directly on the windows of
the Premises. Prior to leaving the Premises for the day, Tenant shall draw or
lower window coverings and extinguish all lights. All electrical ceiling
fixtures hung in offices or spaces along the perimeter of the Building must be
fluorescent and/or of a quality, type, design and bulb color approved by
Landlord.
24. The sashes, sash doors, skylights, windows, and doors that reflect or
admit light and air into the halls, passageways or other public places in the
Building shall not be covered or obstructed by Tenant, nor shall any bottles,
parcels or other articles be placed on the window sills to the extent the same
can be seen from outside of the Building as reasonably determined by Landlord.
25. Tenant must comply with reasonable requests by Landlord concerning the
informing of their employees of items of importance to Landlord.
26. Tenant shall not use in any space or in the public halls of the
Building any hand trucks except those equipped with
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rubber tires and side guards or such other material-handling equipment as
Landlord may approve. Tenant shall not bring any other vehicles of any kind into
the Building.
27. Without the written consent of Landlord, Tenant shall not use the name
of the Building in connection with or in promoting or advertising the business
of Tenant except as Tenant's address.
28. Tenant shall not purchase spring water, towels, janitorial or
maintenance or other similar services from any company or persons not approved
by Landlord. Landlord shall approve a sufficient number of sources of such
services to provide Tenant with a reasonable selection, but only in such
instances and to such extent as Landlord in its judgment shall consider
consistent with the security and proper operation of the Building.
29. Tenant shall install and maintain, at Tenant's sole cost and expense,
an adequate, visibly marked and properly operational fire extinguisher next to
any duplicating or photocopying machines or similar heat producing equipment,
which may or may not contain combustible material, in the Premises.
30. No smoking is allowed in the Building.
31. Tenant shall secure its furniture, fixtures and equipment in the
Premises so as to protect them from damage in an earthquake.
Landlord reserves the right at any time to change or rescind any one or
more of these Rules and Regulations, or to make such other and further
reasonable Rules and Regulations as in Landlord's judgment may from time to time
be reasonably necessary for the management, safety, care and cleanliness of the
Premises, Building, and the Real Property, and for the preservation of good
order therein, as well as for the convenience of other occupants and tenants
therein. Landlord may waive any one or more of these Rules and Regulations for
the benefit of any particular tenants, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of any other
tenant, nor prevent Landlord from thereafter enforcing any such Rules or
Regulations against any or all tenants of the Real Property. Tenant shall be
deemed to have read these Rules and Regulations and to |
