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EXHIBIT 10.14
OFFICE LEASE
SAN TOMAS PROPERTIES, LLC,
a Delaware limited liability company,
as Landlord,
and
EXTREME NETWORKS, INC.,
a Delaware corporation,
as Tenant.
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TABLE OF CONTENTS
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Page
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ARTICLE 1 PREMISES, BUILDING, PROJECT, AND COMMON AREAS....................... 3
LEASE TERM; OCCURRENCE OF DELIVERY OF THE PREMISES............................ 4
ARTICLE 3 BASE RENT........................................................... 5
ARTICLE 4 ADDITIONAL RENT..................................................... 5
ARTICLE 5 USE OF PREMISES..................................................... 10
ARTICLE 6 SERVICES AND UTILITIES.............................................. 10
ARTICLE 7 REPAIRS............................................................. 11
ARTICLE 8 ADDITIONS AND ALTERATIONS........................................... 12
ARTICLE 9 COVENANT AGAINST LIENS.............................................. 14
ARTICLE 10 INSURANCE.......................................................... 14
ARTICLE 11 DAMAGE AND DESTRUCTION............................................. 16
ARTICLE 12 NONWAIVER.......................................................... 17
ARTICLE 13 CONDEMNATION....................................................... 18
ARTICLE 14 ASSIGNMENT AND SUBLETTING.......................................... 18
ARTICLE 15 SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES..... 22
ARTICLE 16 HOLDING OVER....................................................... 22
ARTICLE 17 ESTOPPEL CERTIFICATES.............................................. 23
ARTICLE 18 SUBORDINATION...................................................... 23
ARTICLE 19 DEFAULTS; REMEDIES................................................. 24
ARTICLE 20 COVENANT OF QUIET ENJOYMENT........................................ 26
ARTICLE 21 SECURITY DEPOSIT................................................... 26
ARTICLE 22 SUBSTITUTION OF OTHER PREMISES..................................... 26
ARTICLE 23 SIGNS.............................................................. 26
ARTICLE 24 COMPLIANCE WITH LAW................................................ 27
ARTICLE 25 LATE CHARGES....................................................... 28
ARTICLE 26 LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT............... 28
ARTICLE 27 ENTRY BY LANDLORD.................................................. 28
ARTICLE 28 TENANT PARKING..................................................... 29
ARTICLE 29 MISCELLANEOUS PROVISIONS........................................... 29
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(i)
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OFFICE LEASE
------------
This Office Lease (the "Lease"), dated as of the date set forth in Section
1 of the Summary of Basic Lease Information (the "Summary"), below, is made by
and between SAN TOMAS PROPERTIES, LLC, a Delaware limited liability company
("Landlord"), and EXTREME NETWORKS, INC., a Delaware corporation ("Tenant").
SUMMARY OF BASIC LEASE INFORMATION
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TERMS OF LEASE DESCRIPTION
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1. Date: July 28, 2000
2. Premises
2.1 Building: 2820 San Tomas Expressway, Santa
Clara, California.
2.2 Premises:
Approximately 47,432 rentable square
feet of space located in the
Building, as further set forth in
Exhibit A to the Office Lease.
---------
3. Lease Term
(Article 2).
3.1 Length of Term: Seven (7) years.
3.2 Lease Commencement Date: August 16, 2000.
3.3 Lease Expiration Date: August 31, 2007.
4. Base Rent (Article 3):
4.1 Amount Due:
Monthly Rental Rate
Annual Installment per Rentable
Lease Year Base Rent of Base Rent Square Foot
---------- --------- ------------ -----------
1 $2,845,920.00 $237,160.00 $5.00
2 $2,959,756.80 $246,646.40 $5.20
3 $3,079,285.44 $256,607.12 $5.41
4 $3,198,814.08 $266,567.84 $5.62
5 $3,329,726.40 $277,477.20 $5.85
6 $3,460,638.72 $288,386.56 $6.08
7 $3,602,934.72 $300,244.56 $6.33
4.2 Rent Payment Address: San Tomas Properties, LLC
P.O. Box 641387
San Jose, CA 95134-1387
5. Tenant's Share Tenant's Building Share - 100%
(Article 4):
Tenant's Phase Share - 19%
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Tenant's Project Share - 10%
6. Permitted Use General office use.
(Article 5):
7. Security Deposit $237,160.00.
(Article 21):
8. Parking Passes One hundred fifty (150) unreserved
(Article 28): parking passes.
9. Address of Tenant 3585 Monroe Street
(Section 29.18): Santa Clara, California 95051
Attention: Mr. Jeff Westling
10. Address of Landlord See Section 29.18 of the Lease.
(Section 29.18):
11. Broker(s) Colliers International
(Section 29.24): 450 W. Santa Clara Street
San Jose, California 95113
12. Tenant Improvement Allowance $5.00.
(Section 2 of Exhibit B):
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ARTICLE 1
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PREMISES, BUILDING, PROJECT, AND COMMON AREAS
---------------------------------------------
1.1 Premises, Building, Project and Common Areas.
--------------------------------------------
1.1.1 The Premises. Landlord hereby leases to Tenant and Tenant
------------
hereby leases from Landlord the premises set forth in Section 2.2 of the Summary
(the "Premises"). The outline of the Premises is set forth in Exhibit A attached
---------
hereto. The parties hereto agree that the lease of the Premises is upon and
subject to the terms, covenants and conditions herein set forth, and Tenant
covenants as a material part of the consideration for this Lease to keep and
perform each and all of such terms, covenants and conditions by it to be kept
and performed and that this Lease is made upon the condition of such
performance. The parties hereto hereby acknowledge that the purpose of Exhibit A
---------
is to show the approximate location of the Premises in the "Building," as that
term is defined in Section 1.1.2, below, only, and such Exhibit is not meant to
constitute an agreement, representation or warranty as to the construction of
the Premises, the precise area thereof or the specific location of the "Common
Areas," as that term is defined in Section 1.1.3, below, or the elements thereof
or of the accessways to the Premises or the "Project," as that term is defined
in Section 1.1.2, below. Except as specifically set forth in this Lease and in
the Tenant Work Letter attached hereto as Exhibit B (the "Tenant Work Letter")
Landlord shall not be obligated to provide or pay for any improvement work or
services related to the improvement of the Premises. Tenant also acknowledges
that neither Landlord nor any agent of Landlord has made any representation or
warranty regarding the condition of the Premises, the Building or the Project or
with respect to the suitability of any of the foregoing for the conduct of
Tenant's business, except as specifically set forth in this Lease and the Tenant
Work Letter; provided, however, that in the event that any of the base building
electrical, plumbing or HVAC systems (specifically excluding the "Excluded
Portions," as that term is defined below) are not in good working order as of
the date of delivery of the Premises to Tenant, Tenant shall deliver notice
thereof within thirty (30) days following Landlord's delivery of the Premises to
Tenant and Landlord shall, at Landlord's cost and expense, promptly commence and
diligently pursue the completion of repairs to the applicable system required to
put the same in good working order. For purposes of this Lease, the "Excluded
Portions" shall mean any portion of the electrical, plumbing and HVAC systems
which was not in existence prior to the construction of tenant improvements in
the Building, which Excluded Portions shall specifically shall include the
distribution of the electrical, plumbing and HVAC systems. Subject to Landlord's
reasonable rules and regulations, Tenant shall have access to the Premises,
twenty-four (24) hours a day, three hundred sixty-five (365) days a year.
1.1.2 The Building and The Project. The Premises are comprised of the
----------------------------
building set forth in Section 2.1 of the Summary. The term "Project," as used in
this Lease, shall mean (i) the Building and the Common Areas, (ii) the land
(which is improved with landscaping, subterranean parking facilities and other
improvements) upon which the Building and the Common Areas are located, (iii)
those certain buildings located at 2600, 2650, 2700, 2730, 2770, 2800, 2840,
2860 and 2880 San Tomas Expressway and the land upon which such adjacent
buildings are located, and (iv) at Landlord's discretion, any additional real
property, areas, land, buildings or other improvements added thereto outside of
the Project.
1.1.3 Common Areas. Tenant shall have the non-exclusive right to use
------------
in common with other tenants in the Project, and subject to the rules and
regulations referred to in Article 5 of this Lease, those portions of the
Project which are provided, from time to time, for use in common by Landlord,
Tenant and any other tenants of the Project (such areas, together with such
other portions of the Project designated by Landlord, in its discretion,
including certain areas designated for the exclusive use of certain tenants, or
to be shared by Landlord and certain tenants, are collectively referred to
herein as the "Common Areas"). The Common Areas shall consist of the "Project
Common Areas" and the "Building Common Areas." The term "Project Common Areas,"
as used in this Lease, shall mean the portion of the Project designated as such
by Landlord. The term "Building Common Areas," as used in this Lease, shall mean
the portions of the Common Areas located within the Building designated as such
by Landlord. The manner in which the Common Areas are maintained and operated
shall be at the sole discretion of Landlord and the use thereof shall be subject
to such rules, regulations and restrictions as Landlord may make from time to
time. Landlord reserves the right to close temporarily, make alterations or
additions to, or change the location of elements of the Project and the Common
Areas.
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1.2 Verification of Rentable Square Feet of Premises and Building. For
-------------------------------------------------------------
purposes of this Lease, "rentable square feet" and "usable square feet" of the
Premises shall be deemed as set forth in Section 2.2 of the Summary and shall
not be subject to remeasurement or modification.
ARTICLE 2
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LEASE TERM; OCCURRENCE OF DELIVERY OF THE PREMISES
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2.1 Initial Lease Term. The terms and provisions of this Lease shall be
------------------
effective as of the date of this Lease. The term of this Lease (the "Lease
Term") shall be as set forth in Section 3.1 of the Summary, shall commence on
the date set forth in Section 3.2 of the Summary (the "Lease Commencement
Date"), and shall terminate on the date set forth in Section 3.3 of the Summary
(the "Lease Expiration Date") unless this Lease is sooner terminated as
hereinafter provided. For purposes of this Lease, the term "Lease Year" shall
mean each consecutive twelve (12) month period during the Lease Term; provided,
however, that the first Lease Year shall commence on the Lease Commencement Date
and end on the last day of the eleventh month thereafter and the second and each
succeeding Lease Year shall commence on the first day of the next calendar
month; and further provided that the last Lease Year shall end on the Lease
Expiration Date. 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, as a
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confirmation only of the information set forth therein, which Tenant shall
execute and return to Landlord within five (5) days of receipt thereof.
2.2 Occurrence of Delivery of the Premises.
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2.2.1 Outside Date of Delivery of the Premises. If Landlord does not
----------------------------------------
cause the delivery of the Premises to occur within ninety (90) days following
------------------------
the mutual execution and delivery of this Lease (the "Outside Date"), then the
sole remedy of Tenant for such failure shall be the right to deliver a notice to
Landlord (a "Termination Notice") electing to terminate this Lease effective
upon the date occurring five (5) business days following receipt by Landlord of
the Termination Notice (the "Effective Date"). The Termination Notice must be
delivered by Tenant to Landlord, if at all, not earlier than the Outside Date
(as the same may be extended pursuant to the terms of Section 2.2.3 below) nor
later than five (5) business days after the Outside Date. The effectiveness of
any such Termination Notice delivered by Tenant to Landlord shall be governed by
the terms of this Section 2.2.
2.2.2 Extension of Outside Date After Delivery of the Termination
-----------------------------------------------------------
Notice. If Tenant delivers a Termination Notice to Landlord, then Landlord shall
------
have the right to suspend the occurrence of the Effective Date for a period
ending thirty (30) days after the Effective Date by delivering to Tenant, prior
to the Effective Date, a certification from Landlord that it is Landlord's good
faith judgment that the delivery of the Premises will occur within thirty (30)
------------------------
days after the Effective Date (the "Termination Extension Notice"). If the
delivery of the Premises occurs prior to the expiration of such thirty-day
------------------------
period, then the Termination Notice shall of no force or effect, but if the
delivery of the Premises does not occur within such thirty-day period, then this
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Lease shall terminate upon the expiration of such thirty-day period.
2.2.3 Extension of Outside Date Prior to the Delivery of Termination
---------------------------------------------------------------
Notice. Additionally, if a Termination Notice has not been delivered by Tenant
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to Landlord and, prior to the Outside Date, Landlord determines that the
delivery of the Premises will not occur by the Outside Date, Landlord shall have
------------------------
the right to deliver a written notice to Tenant stating Landlord's opinion as to
the date by which the delivery of the Premises shall occur, and Tenant shall be
------------------------
required, within five (5) business days after receipt of such notice, to deliver
a notice to Landlord pursuant to which Tenant shall elect to either terminate
this Lease, in which case this Lease shall immediately terminate and be of no
further force and effect, or to agree to extend the Outside Date to that date
set forth in such notice delivered by Landlord. Failure by Tenant to deliver
such notice or to so elect shall be deemed Tenant's agreement to extend the
Outside Date set forth in Landlord's notice to Tenant. If Tenant agrees to
extend the Outside Date, Landlord shall have a continuing right to deliver a
notice to Tenant which requests Tenant to so elect to either terminate this
Lease or to further extend the Outside Date as set forth in this Section 2.2.3,
above, until the occurrence of the delivery of the Premises or until this Lease
------------------------
is terminated. Upon the delivery of a Termination Notice by Tenant pursuant to
Section 2.2.1 above in connection with an Outside Date extended pursuant to this
Section 2.2.3, Landlord shall also
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have the same right to deliver the Termination Extension Notice as to the new
Outside Date, as set forth in Section 2.2.2, above.
2.2.4 Other Terms. The Effective Date and the Outside Date shall be
------------------
extended to the extent of any delays beyond the reasonable control of Landlord,
including "Force Majeure" delays, as that term is defined in Section 29.16 of
this Lease. Upon any termination as set forth in this Section 2.2, Landlord and
Tenant shall be relieved from any and all liability to each other resulting
hereunder. Tenant's rights to terminate this Lease, as set forth in this Section
2.2, shall be Tenant's sole and exclusive remedy at law or in equity for the
failure of the delivery of the Premises to occur as set forth above.
ARTICLE 3
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BASE RENT
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Tenant shall pay, without prior notice or demand, to Landlord or Landlord's
agent at the address set forth in Section 4.2 of the Summary, or, at Landlord's
option, at such other place as Landlord may from time to time designate in
writing, by a check for currency which, at the time of payment, is legal tender
for private or public debts in the United States of America, base rent ("Base
Rent") as set forth in Section 4 of the Summary, payable in equal monthly
installments as set forth in Section 4 of the Summary in advance on or before
the first day of each and every calendar month during the Lease Term, without
any setoff or deduction whatsoever. The Base Rent for the first full month of
the Lease Term which occurs after the expiration of any free rent period shall
be paid at the time of Tenant's execution of this Lease. If any Rent payment
date (including the Lease Commencement Date) falls on a day of the month other
than the first day of such month or if any payment of Rent is for a period which
is shorter than one month, the Rent for any fractional month shall accrue on a
daily basis for the period from the date such payment is due to the end of such
calendar month or to the end of the Lease Term at a rate per day which is equal
to 1/365 of the applicable annual Rent. All other payments or adjustments
required to be made under the terms of this Lease that require proration on a
time basis shall be prorated on the same basis.
ARTICLE 4
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ADDITIONAL RENT
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4.1 General Terms. In addition to paying the Base Rent specified in
-------------
Article 3 of this Lease, Tenant shall pay (i) "Tenant's Building Share" of the
annual "Building Direct Expenses," (ii) "Tenant's Phase Share" of the annual
"Phase Direct Expenses", and (iii) "Tenant's Project Share" of the annual
"Project Direct Expenses" as those terms are defined in Sections 4.2, below.
Landlord's estimate of "Tenant's Share of Direct Expenses," as that term is
defined in Section 4.2.1, below, for the first full month of the Lease Term
shall be paid at the time of Tenant's execution of this Lease. Such payments by
Tenant, together with any and all other amounts payable by Tenant to Landlord
pursuant to the terms of this Lease, are hereinafter collectively referred to as
the "Additional Rent", and the Base Rent and the Additional Rent are herein
collectively referred to as "Rent." All amounts due under this Article 4 as
Additional Rent shall be payable for the same periods and in the same manner as
the Base Rent. Without limitation on other obligations of Tenant which survive
the expiration of the Lease Term, the obligations of Tenant to pay the
Additional Rent provided for in this Article 4 shall survive the expiration of
the Lease Term.
4.2 Definitions of Key Terms Relating to Additional Rent. As used in this
----------------------------------------------------
Article 4, the following terms shall have the meanings hereinafter set forth:
4.2.1. "Tenant's Share of Direct Expenses" shall mean, collectively,
Tenant's Project Share of Project Direct Expenses, Tenant's Phase Share of Phase
Direct Expenses, and Tenant's Building Share of Building Direct Expenses.
4.2.2 "Direct Expenses" shall mean "Operating Expenses" and "Tax
Expenses."
4.2.3 "Project Direct Expenses" shall mean the portion of "Direct
Expenses," as equitably determined by Landlord, which is not attributable to any
particular building in the
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Project, and is not solely attributable to "Phase 1" or "Phase 2" of the
Project, as those terms are defined in Section 4.2.5, below, but which instead
relate to the Project as a whole.
4.2.4 "Building Direct Expenses" shall mean the portion of Direct
Expenses, as equitably determined by Landlord, which is attributable solely to
the Building (as opposed to the Project as a whole or either particular phase of
the Project).
4.2.5 "Phase Direct Expenses" shall mean the portion of Direct
Expenses, as equitably determined by Landlord, which is solely attributable
"Phase 1" of the Project, as that term is defined, below, and which is neither
attributable solely to the Building nor the Project as a whole. For purposes of
this Lease, (i) "Phase 1" of the Project shall be comprised of the buildings
located at 2800, 2820, 2840, 2860 and 2880 San Tomas Expressway and the
corresponding real property and common areas associated with such phase, as
equitably designated by Landlord, and (ii) "Phase 2" of the Project shall be
comprised of the buildings located at 2600, 2650, 2700, 2730 and 2770 San Tomas
Expressway and the corresponding real property and common areas associated with
such phase, as equitably designated by Landlord.
4.2.6 "Expense Year" shall mean each calendar year in which any
portion of the Lease Term falls, through and including the calendar year in
which the Lease Term expires, provided that Landlord, upon notice to Tenant, may
change the Expense Year from time to time to any other twelve (12) consecutive
month period, and, in the event of any such change, Tenant's Share of Direct
Expenses shall be equitably adjusted for any Expense Year involved in any such
change.
4.2.7 "Operating Expenses" shall mean all expenses, costs and amounts
of every kind and nature which Landlord pays or accrues during any Expense Year
because of or in connection with the ownership, management, maintenance,
security, repair, replacement, restoration or operation of the Project, or any
portion thereof. Without limiting the generality of the foregoing, Operating
Expenses shall specifically include any and all of the following: (i) the cost
of supplying all utilities, the cost of operating, repairing, maintaining, and
renovating the utility, telephone, mechanical, sanitary, storm drainage, and
elevator systems, and the cost of maintenance and service contracts in
connection therewith; (ii) the cost of licenses, certificates, permits and
inspections and the cost of contesting any governmental enactments which may
affect Operating Expenses, and the costs incurred in connection with a
transportation system management program or similar program; (iii) the cost of
all insurance carried by Landlord in connection with the Project; (iv) the cost
of landscaping, relamping, and all supplies, tools, equipment and materials used
in the operation, repair and maintenance of the Project, or any portion thereof;
(v) costs incurred in connection with the parking areas servicing the Project;
(vi) fees and other costs, including Landlord's management fee, which fee shall
not be in excess of three percent (3%) of the annual gross rentals of the
Project, consulting fees, legal fees and accounting fees, of all contractors and
consultants in connection with the management, operation, maintenance and repair
of the Project; (vii) payments under any equipment rental agreements and the
fair rental value of any management office space; (viii) wages, salaries and
other compensation and benefits, including taxes levied thereon, of all persons
engaged in the operation, maintenance and security of the Project; (ix) costs
under any instrument pertaining to the sharing of costs by the Project; (x)
operation, repair, maintenance and replacement of all systems and equipment and
components thereof of the Building; (xi) the cost of janitorial, alarm, security
and other services, replacement of wall and floor coverings, ceiling tiles and
fixtures in common areas, maintenance and replacement of curbs and walkways,
repair to roofs and re-roofing; (xii) amortization (including interest on the
unamortized cost) of the cost of acquiring or the rental expense of personal
property used in the maintenance, operation and repair of the Project, or any
portion thereof; (xiii) the cost of capital improvements or other costs incurred
in connection with the Project; provided, however, that any capital expenditure,
including earthquake deductibles, shall be amortized with interest over its
useful life in accordance with generally accepted accounting principles; (xiv)
costs, fees, charges or assessments imposed by, or resulting from any mandate
imposed on Landlord by, any federal, state or local government for fire and
police protection, trash removal, community services, or other services which do
not constitute "Tax Expenses" as that term is defined in Section 4.2.8, below;
and (xv) payments under any easement, license, operating agreement, declaration,
restrictive covenant, or instrument pertaining to the sharing of costs by the
Building.
Notwithstanding the foregoing, for purposes of this Lease, Operating
Expenses shall not, however, include (a) marketing costs, including leasing
commissions, advertising and
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promotional expenses, space planning costs and attorneys' fees in connection
with the negotiation and preparation of letters, deal memos, letters of intent,
leases, and subleases and/or assignments incurred in connection with present or
future tenants or other occupants of the Project, including attorneys' fees and
other costs and expenditures incurred in connection with disputes with present
or prospective tenants or other occupants of the Project; (b) costs, including
permit, license and inspection costs, and any allowance or other tenant
improvement concessions, incurred or provided with respect to the design,
construction and/or installation of other tenants' or occupants' improvements
made for tenants or other occupants in the Project or incurred in renovating or
otherwise improving, decorating, painting or redecorating vacant space for
tenants or other occupants in the Project; (c) bad-debt expenses, rent loss,
depreciation, interest and amortization on mortgages, reserves of any kind or
ground lease payments, if any; (d) depreciation, amortization and interest
payments, except as specifically included in Operating Expenses pursuant to the
terms of this Lease and except on materials, tools, supplies and vendor-type
equipment purchased by Landlord to enable Landlord to supply services Landlord
might otherwise contract for with a third party, where such depreciation,
amortization and interest payments would otherwise have been included in the
charge for such third party's services, all as determined in accordance with
sound real estate management principles, and when depreciation or amortization
is permitted or required, the item shall be amortized over its reasonably
anticipated useful life; (e) expenses in connection with services or other
benefits which are not offered to Tenant or for which Tenant is charged for
directly but which are provided to another tenant or occupant of the Project,
without charge; (f) overhead and profit increment paid to Landlord or to
subsidiaries or affiliates of Landlord for goods and/or services in the Project
to the extent the same exceeds the costs of such by unaffiliated third parties
on a competitive basis; (g) advertising and promotional expenditures, and costs
of signs in or on the Project identifying the owner of the Project or other
tenants' signs; (h) any reserves retained by Landlord; (i) costs associated with
the operation of the business of the partnership or entity which constitutes the
Landlord, as the same are distinguished from the costs of operation of the
Project, including partnership accounting and legal matters, costs of defending
any lawsuits with any mortgagee (except as the actions of the Tenant may be in
issue), costs of selling, syndicating, financing, mortgaging or hypothecating
any of the Landlord's interest in the Project, and costs incurred in connection
with any disputes between Landlord and its employees, between Landlord and
Project management, or between Landlord and other tenants or occupants; (i) the
wages and benefits of any employee who does not devote substantially all of his
or her employed time to the Project unless such wages and benefits are prorated
to reflect time spent on operating and managing the Project vis-a-vis time spent
on matters unrelated to operating and managing the Project; provided, that in no
event shall Operating Expenses for purposes of this Lease include wages and/or
benefits attributable to personnel above the level of Project manager or Project
engineer; (j) all items and services for which Tenant or any other tenant in the
Project reimburses Landlord, provided that Landlord shall use commercially
reasonable efforts to collect such reimbursable amounts, or which Landlord
provides selectively to one or more tenants (other than Tenant) without
reimbursement; (k) costs, other than those incurred in ordinary maintenance and
repair, for sculpture, paintings, fountains or other objects of art; (l) fees
and reimbursements payable to Landlord (including its parent organization,
subsidiaries and/or affiliates) or by Landlord for management of the Project
(including the management of the Project parking facilities) which materially
exceed the amount which would normally be paid to a company, in connection with
the management of comparable buildings and/or the parking facilities of such
comparable buildings, with a general reputation for excellence and integrity
used at "arms length" and which is not, directly or indirectly, affiliated with
Landlord ("Independent Company Test"); (m) costs incurred to comply with
Applicable Laws with respect to hazardous material, which was in existence in
the Building or on the Project prior to the Lease Commencement Date, and was of
such a nature that a federal, state or municipal governmental or quasi-
governmental authority, if it had then had knowledge of the presence of such
hazardous material, in the state, and under the conditions that it then existed
in the Building or on the Project, would have then required the removal,
remediation or other action with respect to such hazardous material; and costs
incurred with respect to hazardous material, which hazardous material is brought
into the Building or onto the Project after the date hereof by Landlord or any
other tenant of the Project or by anyone other than Tenant or Tenant Parties and
is of such a nature, at that time, that a federal, state or municipal
governmental or quasi-governmental authority, if it had then had knowledge of
the presence of such hazardous material, in the state, and under the conditions,
that it then exists in the Building or on the Project, would have then required
the removal, remediation or other action with respect to such hazardous
material; (n)
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costs arising from Landlord's charitable or political contributions; and (o)
expenses arising from the gross negligence or willful misconduct of Landlord,
its agents, employees or servants.
If Landlord is not furnishing any particular work or service (the cost of
which, if performed by Landlord, would be included in Operating Expenses) to a
tenant who has undertaken to perform such work or service in lieu of the
performance thereof by Landlord, Operating Expenses shall be deemed to be
increased by an amount equal to the additional Operating Expenses which would
reasonably have been incurred during such period by Landlord if it had at its
own expense furnished such work or service to such tenant. If the Project is not
at least ninety-five percent (95%) occupied during all or a portion of any
Expense Year, Landlord may elect to make an appropriate adjustment to the
components of Operating Expenses for such year to determine the amount of
Operating Expenses that would have been incurred had the Project been ninety-
five percent (95%) occupied; and the amount so determined shall be deemed to
have been the amount of Operating Expenses for such year.
4.2.8 Taxes.
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4.2.8.1 "Tax Expenses" shall mean all federal, state, county,
or local governmental or municipal taxes, fees, charges or other impositions of
every kind and nature, whether general, special, ordinary or extraordinary,
(including, without limitation, real estate taxes, general and special
assessments, transit taxes, leasehold taxes or taxes based upon the receipt of
rent, including gross receipts or sales taxes applicable to the receipt of rent,
unless required to be paid by Tenant, personal property taxes imposed upon the
fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances,
furniture and other personal property used in connection with the Project, or
any portion thereof), which shall be paid or accrued during any Expense Year
(without regard to any different fiscal year used by such governmental or
municipal authority) because of or in connection with the ownership, leasing and
operation of the Project, or any portion thereof.
4.2.8.2 Tax Expenses shall include, without limitation: (i) Any
tax on the rent, right to rent or other income from the Project, or any portion
thereof, or as against the business of leasing the Project, or any portion
thereof; (ii) Any assessment, tax, fee, levy or charge in addition to, or in
substitution, partially or totally, of any assessment, tax, fee, levy or charge
previously included within the definition of real property tax, it being
acknowledged by Tenant and Landlord that Proposition 13 was adopted by the
voters of the State of California in the June 1978 election ("Proposition 13")
and that assessments, taxes, fees, levies and charges may be imposed by
governmental agencies for such services as fire protection, street, sidewalk and
road maintenance, refuse removal and for other governmental services formerly
provided without charge to property owners or occupants, and, in further
recognition of the decrease in the level and quality of governmental services
and amenities as a result of Proposition 13, Tax Expenses shall also include any
governmental or private assessments or the Project's contribution towards a
governmental or private cost-sharing agreement for the purpose of augmenting or
improving the quality of services and amenities normally provided by
governmental agencies; (iii) Any assessment, tax, fee, levy, or charge allocable
to or measured by the area of the Premises or the Rent payable hereunder,
including, without limitation, any business or gross income tax or excise tax
with respect to the receipt of such rent, or upon or with respect to the
possession, leasing, operating, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises, or any portion thereof; and (iv) Any
assessment, tax, fee, levy or charge, upon this transaction or any document to
which Tenant is a party, creating or transferring an interest or an estate in
the Premises.
4.2.8.3 Any costs and expenses (including, without limitation,
reasonable attorneys' fees) incurred in attempting to protest, reduce or
minimize Tax Expenses shall be included in Tax Expenses in the Expense Year such
expenses are paid. Refunds of Tax Expenses shall be credited against Tax
Expenses and refunded to Tenant regardless of when received, based on the
Expense Year to which the refund is applicable, provided that in no event shall
the amount to be refunded to Tenant for any such Expense Year exceed the total
amount paid by Tenant as Additional Rent under this Article 4 for such Expense
---------
Year. If Tax Expenses for any period during the Lease Term or any extension
thereof are increased after payment thereof for any reason, including, without
limitation, error or reassessment by applicable governmental or municipal
authorities, Tenant shall pay Landlord upon demand Tenant's Share of any such
increased Tax Expenses included by Landlord as Tax Expenses pursuant to the
terms of this Lease. Notwithstanding anything to the contrary contained in this
Section 4.2.8 (except as
-8-
<PAGE>
set forth in Section 4.2.8.1, above), there shall be excluded from Tax Expenses
(i) all excess profits taxes, franchise taxes, gift taxes, capital stock taxes,
inheritance and succession taxes, estate taxes, federal and state income taxes,
and other taxes to the extent applicable to Landlord's general or net income (as
opposed to rents, receipts or income attributable to operations at the Project),
(ii) any items included as Operating Expenses, and (iii) any items paid by
Tenant under Section 4.5 of this Lease.
4.2.9 "Tenant's Building Share" shall mean the percentage set forth
in Section 5 of the Summary.
4.2.10 "Tenant's Phase Share" shall mean the percentage set forth in
Section 5 of the Summary.
4.2.11 "Tenant's Project Share" shall mean the percentage set forth in
Section 5 of the Summary.
4.3 Intentionally Deleted.
---------------------
4.4 Calculation and Payment of Additional Rent. For each Expense Year
------------------------------------------
during the Lease Term, Tenant shall pay to Landlord, in the manner set forth in
Section 4.4.1, below, and as Additional Rent, an amount equal to Tenant's Share
of Direct Expenses.
4.4.1 Statement of Actual Direct Expenses and Payment by Tenant.
---------------------------------------------------------
Landlord shall give to Tenant following the end of each Expense Year, a
statement (the "Statement") which shall state the Direct Expenses incurred or
accrued for such preceding Expense Year. Landlord shall use commercially
reasonable diligent efforts to provide such Statement in as prompt a manner as
reasonably possible. Upon receipt of the Statement for each Expense Year
commencing or ending during the Lease Term, Tenant shall pay, with its next
installment of Base Rent due, the full amount of Tenant's Share of the Direct
Expenses for such Expense Year, less the amounts, if any, paid during such
Expense Year as "Estimated Expenses," as that term is defined in Section 4.4.2,
below. The failure of Landlord to timely furnish the Statement for any Expense
Year shall not prejudice Landlord or Tenant from enforcing its rights under this
Article 4. Even though the Lease Term has expired and Tenant has vacated the
Premises, when the final determination is made of Tenant's Share of Direct
Expenses for the Expense Year in which this Lease terminates, Tenant shall
immediately pay to Landlord such amount. The provisions of this Section 4.4.1
shall survive the expiration or earlier termination of the Lease Term.
4.4.2 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 Tenant's Share of Direct Expenses (the "Estimated Expenses").
Landlord shall use commercially reasonable diligent efforts to provide such
Estimate Statement in as prompt a manner as reasonably possible. 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 Expenses
under this Article 4, nor shall Landlord be prohibited from revising any
Estimate Statement or Estimated Expenses theretofore delivered to the extent
necessary. Thereafter, Tenant shall pay, with its next installment of Base Rent
due, a fraction of the Estimated Expenses for the then-current Expense Year
(reduced by any amounts paid pursuant to the next to last sentence of this
Section 4.4.2). Such fraction shall have as its numerator the number of months
which have elapsed in such current Expense Year, including the month of such
payment, and twelve (12) as its denominator. Until a new Estimate Statement is
furnished (which Landlord shall have the right to deliver to Tenant at any
time), Tenant shall pay monthly, with the monthly Base Rent installments, an
amount equal to one-twelfth (1/12) of the total Estimated Expenses set forth in
the previous Estimate Statement delivered by Landlord to Tenant.
4.5 Taxes and Other Charges for Which Tenant Is Directly Responsible.
----------------------------------------------------------------
4.5.1 Tenant shall be liable for and shall pay ten (10) days before
delinquency, taxes levied against Tenant's equipment, furniture, fixtures and
any other personal property located in or about the Premises. If any such taxes
on Tenant's equipment, furniture, fixtures and any other personal property are
levied against Landlord or Landlord's property or if the assessed
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<PAGE>
value of Landlord's property is increased by the inclusion therein of a value
placed upon such equipment, furniture, fixtures or any other personal property
and if Landlord pays the taxes based upon such increased assessment, which
Landlord shall have the right to do regardless of the validity thereof but only
under proper protest if requested by Tenant, Tenant shall upon demand repay to
Landlord the taxes so levied against Landlord or the proportion of such taxes
resulting from such increase in the assessment, as the case may be.
4.5.2 If the tenant improvements in the Premises, whether installed
and/or paid for by Landlord or Tenant and whether or not affixed to the real
property so as to become a part thereof, are assessed for real property tax
purposes at a valuation higher than the valuation at which tenant improvements
conforming to Landlord's "building standard" in other space in the Building are
assessed, then the Tax Expenses levied against Landlord or the property by
reason of such excess assessed valuation shall be deemed to be taxes levied
against personal property of Tenant and shall be governed by the provisions of
Section 4.5.1, above.
4.5.3 Notwithstanding any contrary provision herein, Tenant shall pay
prior to delinquency any (i) rent tax or sales tax, service tax, transfer tax or
value added tax, or any other applicable tax on the rent or services herein or
otherwise respecting this Lease, (ii) taxes assessed upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises or any portion of the Project, including
the Project parking facility; or (iii) taxes assessed upon this transaction or
any document to which Tenant is a party creating or transferring an interest or
an estate in the Premises.
ARTICLE 5
---------
USE OF PREMISES
---------------
5.1 Permitted Use. Tenant shall use the Premises solely for the Permitted
-------------
Use set forth in Section 6 of the Summary and Tenant shall not use or permit the
Premises or the Project 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.
5.2 Prohibited Uses. The uses prohibited under this Lease shall include,
---------------
without limitation, use of the Premises or a portion thereof for (i) offices of
any agency or bureau of the United States or any state or political subdivision
thereof; (ii) offices or agencies of any foreign governmental or political
subdivision thereof; (iii) offices of any health care professionals or service
organization; (iv) schools or other training facilities which are not ancillary
to corporate, executive or professional office use; (v) retail or restaurant
uses; or (vi) communications firms such as radio and/or television stations.
Tenant shall not allow occupancy density of use of the Premises which is greater
than the average density of the other tenants of the Building. Tenant further
covenants and agrees that Tenant 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 provisions of the Rules and Regulations set forth in Exhibit D,
---------
attached hereto, or in violation of the laws of the United States of America,
the State of California, or the ordinances, regulations or requirements of the
local municipal or county governing body or other lawful authorities having
jurisdiction over the Project) including, without limitation, any such laws,
ordinances, regulations or requirements relating to hazardous materials or
substances, as those terms are defined by applicable laws now or hereafter in
effect. Tenant shall not do or permit anything to be done in or about the
Premises which will in any way damage the reputation of the Project or obstruct
or interfere with the rights of other tenants or occupants of the Building, or
injure or annoy them or use or allow the Premises to be used for any improper,
unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit
any nuisance in, on or about the Premises. Tenant shall comply with all recorded
covenants, conditions, and restrictions now or hereafter affecting the Project.
ARTICLE 6
---------
SERVICES AND UTILITIES
----------------------
6.1 In General. Tenant will be responsible, at its sole cost and expense,
----------
for the furnishing of all services and utilities to the Premises, including, but
not limited to heating, ventilation and air-conditioning, electricity, water,
telephone, janitorial and interior Building
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security services. The Premises shall be separately metered for electricity and
water, and Tenant shall pay the cost of such utilities directly to the
applicable utility provider.
6.2 Interruption of Use. Tenant agrees that Landlord shall not be liable
-------------------
for damages, by abatement of rent (except as provided in Section 6.4 of this
Lease) 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 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 cause beyond Landlord's reasonable control; and such
failures or delays or diminution shall never be deemed to constitute an eviction
or disturbance of Tenant's use and possession of the Premises or relieve Tenant
from paying rent or performing any of its obligations under this Lease.
Furthermore, Landlord shall not be liable under any circumstances for a loss of,
or injury to, property or for injury to, or interference with, Tenant's
business, including, without limitation, loss of profits, however occurring,
through or in connection with or incidental to a failure to furnish any services
or utilities.
6.3 No Obligation. Provided that Landlord agrees to provide service
-------------
utility connections to the Project, including electricity, water and sewage
connections, Landlord shall have no obligation to provide any services or
utilities to the Building, including, but not limited to heating, ventilation
and air-conditioning, electricity, water, telephone, janitorial and interior
Building security services.
6.4 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
repair, maintenance, "Renovations," as that term is defined in Section 29.30 of
this Lease, or alteration performed by Landlord, or which Landlord failed to
perform, after the Lease Commencement Date and required by this Lease, which
substantially interferes with Tenant's use of the Premises, or (ii) any failure
to provide services, utilities or access to the Premises as required by this
Lease (either such set of circumstances as set forth in items (i) or (ii),
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. Except as provided in this Section 6.4,
nothing contained herein shall be interpreted to mean that Tenant is excused
from paying Rent due hereunder.
ARTICLE 7
---------
REPAIRS
-------
Tenant shall, at Tenant's own expense, pursuant to the terms of this Lease,
including without limitation Article 8 hereof, keep, maintain, repair and
improve the Premises, and every portion thereof, including, without limitation,
all improvements, fixtures and furnishings therein and all equipment within the
Premises or exclusively serving the Premises, and the floor or floors of the
Building on which the Premises are located, in good order, repair and condition
at all
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<PAGE>
times during the Lease Term. In addition, Tenant shall, at Tenant's own expense,
but under the supervision and subject to the prior approval of Landlord, and
within any reasonable period of time specified by Landlord, pursuant to the
terms of this Lease, including without limitation Article 8 hereof, promptly and
adequately repair all damage to the Premises and replace or repair all damaged,
broken, or worn fixtures and appurtenances, except for damage caused by ordinary
wear and tear or beyond the reasonable control of Tenant; provided however,
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 cost thereof, including a percentage of the cost thereof (to be
uniformly established for the Building and/or the Project) sufficient to
reimburse Landlord for all overhead, general conditions, fees and other costs or
expenses arising from Landlord's involvement with such repairs and replacements
forthwith upon being billed for same. Notwithstanding the foregoing, Landlord
shall be responsible for repairs to the exterior walls, foundation and roof of
the Building, the structural portions of the floors of the Building, and the
systems and equipment of the Building, except to the extent that such repairs
are required due to the negligence or willful misconduct of Tenant; provided,
however, that if such repairs are due to the negligence or willful misconduct of
Tenant, Landlord shall nevertheless make such repairs at Tenant's expense, or,
if covered by Landlord's insurance, Tenant shall only be obligated to pay any
deductible in connection therewith. Landlord may, but shall not be required to,
enter the Premises at all reasonable times to make such repairs, alterations,
improvements or additions to the Premises or to the Project or to any equipment
located in the Project 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 that Landlord shall use commercially reasonable
efforts to notify Tenant in advance of such entries, so that Tenant may elect to
have an employee of Tenant accompany Landlord during such entry (provided such
employee does not unreasonably interfere with Landlord's work). Tenant hereby
waives any and all rights under and benefits of subsection 1 of Section 1932 and
Sections 1941 and 1942 of the California Civil Code or under any similar law,
statute, or ordinance now or hereafter in effect.
ARTICLE 8
---------
ADDITIONS AND ALTERATIONS
-------------------------
8.1 Landlord's Consent to Alterations. Tenant may not make any
---------------------------------
improvements, alterations, additions or changes to the Premises or any
mechanical, plumbing or HVAC facilities or systems pertaining to the Premises
(collectively, the "Alterations") without first procuring the prior written
consent of Landlord to such Alterations, which consent shall be requested by
Tenant not less than thirty (30) days prior to the commencement thereof, and
which consent shall not be unreasonably withheld by Landlord, provided it shall
be deemed reasonable for Landlord to withhold its consent to any Alteration
which adversely affects the structural portions or the systems or equipment of
the Building or is visible from the exterior of the Building. The construction
of the initial improvements to the Premises shall be governed by the terms of
the Tenant Work Letter and not the terms of this Article 8.
8.2 Manner of Construction. Landlord may impose, as a condition of its
----------------------
consent to any and all Alterations or repairs of the Premises or about the
Premises, such requirements as Landlord in its sole discretion may deem
desirable, including, but not limited to, the requirement that Tenant utilize
for such purposes only contractors, subcontractors, materials, mechanics and
materialmen selected by Tenant and reasonably approved by Landlord, and the
requirement that all Alterations conform in terms of quality and style to the
building's standards established 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 a good and workmanlike manner, in conformance with
any and all applicable federal, state, county or municipal laws, rules and
regulations and pursuant to a valid building permit, issued by the City of Santa
Clara, all in conformance with Landlord's construction rules and regulations. In
the event Tenant performs any Alterations, for non-general office use, in the
Premises which require or give rise to governmentally required changes to the
"Base Building," as that term is defined below, then Landlord shall, at Tenant's
expense, make such changes to the Base Building. The "Base Building" shall
include the structural portions of the Building, and the public restrooms and
the systems and equipment located in the internal core of the Building on the
floor or floors on which the Premises are located. In performing the work of any
such Alterations, Tenant shall have the work performed in such manner so as not
to obstruct access to the Project or any portion thereof, by any other tenant of
the Project, and so as not to obstruct the
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<PAGE>
business of Landlord or other tenants in the Project. Tenant shall not use (and
upon notice from Landlord shall cease using) contractors, services, workmen,
labor, materials or equipment that, in Landlord's reasonable judgment, would
disturb labor harmony with the workforce or trades engaged in performing other
work, labor or services in or about the Building or the Common Areas. In
addition to Tenant's obligations under Article 9 of this Lease, upon completion
of any Alterations, Tenant agrees to cause a Notice of Completion to be recorded
in the office of the Recorder of the County of Santa Clara in accordance with
Section 3093 of the Civil Code of the State of California or any successor
statute, and Tenant shall deliver to the Project management office a
reproducible copy of the "as built" drawings of the Alterations as well as all
permits, approvals and other documents issued by any governmental agency in
connection with the Alterations.
8.3 Payment for Improvements. If payment is made directly to contractors,
------------------------
Tenant shall comply with Landlord's requirements for final lien releases and
waivers in connection with Tenant's payment for work to contractors. Whether or
not Tenant orders any work directly from Landlord, Tenant shall pay to Landlord
a percentage of the cost of such work sufficient to compensate Landlord for all
overhead, general conditions, fees and other costs and expenses arising from
Landlord's involvement with such work.
8.4 Construction Insurance. In addition to the requirements of Article 10
----------------------
of this Lease, in the event that Tenant makes any Alterations, prior to the
commencement of such Alterations, Tenant shall provide Landlord with evidence
that Tenant carries "Builder's All Risk" insurance in an amount approved by
Landlord covering the construction of such Alterations, and such other insurance
as Landlord may require, it being understood and agreed that all of such
Alterations shall be insured by Tenant pursuant to Article 10 of this Lease
immediately upon completion thereof. In addition, in the event Tenant performs
Alterations in the Premises which cost exceeds, in the aggregate, $50,000.00,
Landlord may, in its discretion, require Tenant to obtain a lien and completion
bond or some alternate form of security satisfactory to Landlord in an amount
sufficient to ensure the lien-free completion of such Alterations and naming
Landlord as a co-obligee.
8.5 Landlord's Property. All Alterations, improvements, fixtures,
-------------------
equipment and/or appurtenances which may be installed or placed in or about the
Premises, from time to time, shall be at the sole cost of Tenant and shall be
and become the property of Landlord at the end of the Lease Term, except that
Tenant may remove any Alterations, improvements, fixtures and/or equipment 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 and
returns the affected portion of the Premises to a building standard tenant
improved condition as determined by Landlord; provided, however, that in the
event that Tenant's request for Landlord's approval of any particular Alteration
requests a determination by Landlord as to whether or not such Alteration shall
be required to be removed upon the expiration or earlier termination of this
Lease in accordance with the terms hereof, then Landlord's approval shall
contain such a determination (and if such consent does not affirmatively require
removal, Tenant shall have no obligation to remove the applicable Alteration).
Furthermore, Landlord may, by written notice to Tenant prior to the end of the
Lease Term, or given following any earlier termination of this Lease, require
Tenant, at Tenant's expense, to (i) remove any Alterations or improvements in
the Premises, and/or (ii) remove any "Above Building Standard Tenant
Improvements," as that term is defined in Section 2.4 of the Tenant Work Letter,
located within the Premises and replace the same with then existing "Building
Standard Tenant Improvements," as that term is defined in Section 2.3 of the
Tenant Work Letter, and to repair any damage to the Premises and Building caused
by such removal and to return the affected portion of the Premises to a building
standard tenant improved condition as determined by Landlord. If Tenant fails to
complete such removal and/or to repair any damage caused by the removal of any
Alterations or improvements in the Premises, and returns the affected portion of
the Premises to a building standard tenant improved condition as determined by
Landlord, then at Landlord's option, either (A) Tenant shall be deemed to be
holding over in the Premises and Rent shall continue to accrue in accordance
with the terms of Article 16, below, until such work shall be completed, or (B)
Landlord may do so and may charge the cost thereof to Tenant. Tenant hereby
protects, defends, indemnifies and holds Landlord harmless from any liability,
cost, obligation, expense or claim of lien in any manner relating to the
installation, placement, removal or financing of any such Alterations,
improvements, fixtures and/or equipment in, on or about the Premises, which
obligations of Tenant shall survive the expiration or earlier termination of
this Lease.
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<PAGE>
ARTICLE 9
---------
COVENANT AGAINST LIENS
----------------------
Tenant shall keep the Project and Premises free from any liens or
encumbrances arising out of the work performed, materials furnished or
obligations incurred by or on behalf of Tenant, and shall protect, defend,
indemnify and hold Landlord harmless from and against any claims, liabilities,
judgments or costs (including, without limitation, reasonable attorneys' fees
and costs) arising out of same or in connection therewith. Tenant shall give
Landlord notice at least twenty (20) days prior to the commencement of any such
work on the Premises (or such additional time as may be necessary under
applicable laws) to afford Landlord the opportunity of posting and recording
appropriate notices of non-responsibility. Tenant shall remove any such lien or
encumbrance by bond or otherwise within five (5) days after notice by Landlord,
and if Tenant shall fail to do so, Landlord may pay the amount necessary to
remove such lien or encumbrance, without being responsible for investigating the
validity thereof. The amount so paid shall be deemed Additional Rent under this
Lease payable upon demand, without limitation as to other remedies available to
Landlord under this Lease. Nothing contained in this Lease shall authorize
Tenant to do any act which shall subject Landlord's title to the Building or
Premises to any liens or encumbrances whether claimed by operation of law or
express or implied contract. Any claim to a lien or encumbrance upon the
Building or Premises arising in connection with any such work or respecting the
Premises not performed by or at the request of Landlord shall be null and void,
or at Landlord's option shall attach only against Tenant's interest in the
Premises and shall in all respects be subordinate to Landlord's title to the
Project, Building and Premises.
ARTICLE 10
----------
INSURANCE
---------
10.1 Indemnification and Waiver. Tenant hereby assumes all risk of damage
to property or injury to persons in, upon or about the Premises from any cause
whatsoever and agrees that Landlord, its partners, subpartners and their
respective officers, agents, servants, employees, and independent contractors
(collectively, "Landlord Parties") shall not be liable for, and are hereby
released from any responsibility for, any damage either to person or property or
resulting from the loss of use thereof, which damage is sustained by Tenant or
by other persons claiming through Tenant. Tenant shall indemnify, defend,
protect, and hold harmless the Landlord Parties from any and all loss, cost,
damage, expense and liability (including without limitation court costs and
reasonable attorneys' fees) incurred in connection with or arising from any
cause in, on or about the Premises, any violation of any of the requirements,
ordinances, statutes, regulations or other laws, including, without limitation,
any environmental laws which violation, with respect to environmental laws, is
caused by Tenant; any acts, omissions or negligence of Tenant or of any person
claiming by, through or under Tenant, or of the contractors, agents, servants,
employees, invitees, guests or licensees of Tenant or any such person, in, on or
about the Project or any breach of the terms of this Lease, either prior to,
during, or after the expiration of the Lease Term, provided that the terms of
the foregoing indemnity shall not apply to the gross negligence or willful
misconduct of Landlord. Should Landlord be named as a defendant in any suit
brought against Tenant in connection with or arising out of Tenant's occupancy
of the Premises, Tenant shall pay to Landlord its costs and expenses incurred in
such suit, including without limitation, its actual professional fees such as
appraisers', accountants' and attorneys' fees. Further, Tenant's agreement to
indemnify Landlord pursuant to this Section 10.1 is not intended and shall not
------------
relieve any insurance carrier of its obligations under policies required to be
carried by Tenant pursuant to the provisions of this Lease, to the extent such
policies cover the matters subject to Tenant's indemnification obligations; nor
shall they supersede any inconsistent agreement of the parties set forth in any
other provision of this Lease. The provisions of this Section 10.1 shall survive
the expiration or sooner termination of this Lease with respect to any claims or
liability arising in connection with any event occurring prior to such
expiration or termination.
10.2 Landlord's Fire and Casualty Insurance. Landlord shall carry
--------------------------------------
commercial general liability insurance with respect to the Building during the
Lease Term, and shall further insure the Building 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 in such amounts, from such companies, and on such other terms
and
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<PAGE>
conditions, as Landlord may from time to time reasonably determine.
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 in the vicinity, and Worker's Compensation and Employer's Liability
coverage as required by applicable law. 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 such insurance
policies then Tenant shall reimburse Landlord for any such increase. Tenant, at
Tenant's expense, shall comply with all rules, orders, regulations or
requirements of the American Insurance Association (formerly the National Board
of Fire Underwriters) and with any similar body.
10.3 Tenant's Insurance. Tenant shall maintain the following coverages in
------------------
the following amounts.
10.3.1 Commercial General Liability Insurance covering the insured
against claims of bodily injury, personal injury and property damage (including
loss of use thereof) arising out of Tenant's operations, and contractual
liabilities (covering the performance by Tenant of its indemnity agreements)
including a Broad Form endorsement covering the insuring provisions of this
Lease and the performance by Tenant of the indemnity agreements set forth in
Section 10.1 of this Lease, for limits of liability not less than:
Bodily Injury and $3,000,000 each occurrence
Property Damage Liability $3,000,000 annual aggregate
Personal Injury Liability $3,000,000 each occurrence
$3,000,000 annual aggregate
0% Insured's participation
10.3.2 Physical Damage Insurance covering (i) all office furniture,
business and trade fixtures, office equipment, free-standing cabinet work,
movable partitions, merchandise and all other items of Tenant's property on the
Premises installed by, for, or at the expense of Tenant, (ii) the "Tenant
Improvements," as that term is defined in Section 2.1 of the Tenant Work Letter,
and any other improvements which exist in the Premises as of the Lease
Commencement Date (excluding the Base Building) (the "Original Improvements"),
and (iii) all other improvements, alterations and additions to the Premises.
Such insurance shall be written on an "all risks" of physical loss or damage
basis, for the full replacement cost value (subject to reasonable deductible
amounts) new without deduction for depreciation of the covered items and in
amounts that meet any co-insurance clauses of the policies of insurance and
shall include coverage for damage or other loss caused by fire or other peril
including, but not limited to, vandalism and malicious mischief, theft, water
damage of any type, including sprinkler leakage, bursting or stoppage of pipes,
and explosion, and providing business interruption coverage for a period of one
year.
10.3.3 Worker's Compensation and Employer's Liability or other
similar insurance pursuant to all applicable state and local statutes and
regulations.
10.4 Form of Policies. The minimum limits of policies of insurance
----------------
required of Tenant under this Lease shall in no event limit the liability of
Tenant under this Lease. Such insurance shall (i) name Landlord, Landlord's
lender, and any other party the Landlord so specifies, as an additional insured,
including Landlord's managing agent, if any; (ii) specifically cover the
liability assumed by Tenant under this Lease, including, but not limited to,
Tenant's obligations under Section 10.1 of this Lease; (iii) be issued by an
insurance company having a rating of not less than A-X in Best's Insurance Guide
or which is otherwise acceptable to Landlord and licensed to do business in the
State of California; (iv) be primary insurance as to all claims thereunder and
provide that any insurance carried by Landlord is excess and is non-contributing
with any insurance requirement of Tenant; (v) be in form and content reasonably
acceptable to Landlord; and (vi) provide that said insurance shall not be
canceled or coverage
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changed unless thirty (30) days' prior written notice shall have been given to
Landlord and any mortgagee of Landlord. Tenant shall deliver said policy or
policies or certificates thereof to Landlord on or before the Lease Commencement
Date and at least thirty (30) days before the expiration dates thereof. In the
event Tenant shall fail to procure such insurance, or to deliver such policies
or certificate, Landlord may, at its option, procure such policies for the
account of Tenant, and the cost thereof shall be paid to Landlord within five
(5) days after delivery to Tenant of bills therefor.
10.5 Subrogation. Landlord and Tenant intend that their respective
-----------
property loss risks shall be borne by reasonable insurance carriers to the
extent above provided, and Landlord and Tenant hereby agree to look solely to,
and seek recovery only from, their respective insurance carriers in the event of
a property loss to the extent that such coverage is agreed to be provided
hereunder. The parties each hereby waive all rights and claims against each
other for such losses, and waive all rights of subrogation of their respective
insurers, provided such waiver of subrogation shall not affect the right to the
insured to recover thereunder. The parties agree that their respective insurance
policies are now, or shall be, endorsed such that the waiver of subrogation
shall not affect the right of the insured to recover thereunder, so long as no
material additional premium is charged therefor.
10.6 Additional Insurance Obligations. Tenant shall carry and maintain
--------------------------------
during the entire Lease Term, at Tenant's sole cost and expense, increased
amounts of the insurance required to be carried by Tenant pursuant to this
Article 10 and such other reasonable types of insurance coverage and in such
reasonable amounts covering the Premises and Tenant's operations therein, as may
be reasonably requested by Landlord.
ARTICLE 11
----------
DAMAGE AND DESTRUCTION
----------------------
11.1 Repair of Damage to Premises by Landlord. Tenant shall promptly
----------------------------------------
notify Landlord of any damage to the Premises resulting from fire or any other
casualty. If the Premises or any Common Areas serving or providing access to the
Premises shall be damaged by fire or other casualty, Landlord shall promptly and
diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord's reasonable control, and subject to all other terms of
this Article 11, restore the Base Building and such Common Areas. Such
restoration shall be to substantially the same condition of the Base Building
and the Common Areas prior to the casualty, except for modifications required by
zoning and building codes and other laws or by the holder of a mortgage on the
Building or Project or any other modifications to the Common Areas deemed
desirable by Landlord, provided that access to the Premises and any common
restrooms serving the Premises shall not be materially impaired. Upon the
occurrence of any damage to the Premises, upon notice (the "Landlord Repair
Notice") to Tenant from Landlord, Tenant shall assign to Landlord (or to any
party designated by Landlord) all insurance proceeds payable to Tenant under
Tenant's insurance required under Section 10.3 of this Lease, and Landlord shall
repair any injury or damage to the Tenant Improvements and the Original
Improvements installed in the Premises and shall return such Tenant Improvements
and Original 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, as assigned by Tenant, the cost of
such repairs shall be paid by Tenant to Landlord prior to Landlord's
commencement of repair of the damage. In the event that Landlord does not
deliver the Landlord Repair Notice within sixty (60) days following the date the
casualty becomes known to Landlord, Tenant shall, at its sole cost and expense,
repair any injury or damage to the Tenant Improvements and the Original
Improvements installed in the Premises and shall return such Tenant Improvements
and Original Improvements to their original condition. Whether or not Landlord
delivers a Landlord Repair Notice, prior to the commencement of construction,
Tenant shall submit to Landlord, for Landlord's review and approval, all plans,
specifications and working drawings relating thereto, and Landlord shall select
the contractors to perform such improvement work. Landlord shall not be liable
for any inconvenience or annoyance to Tenant or its visitors, or injury to
Tenant's business resulting in any way from such damage or the repair thereof;
provided however, that if such fire or other casualty shall have damaged the
Premises or Common Areas necessary to Tenant's occupancy, Landlord shall allow
Tenant a proportionate abatement of Rent to the extent Landlord is reimbursed
from the proceeds of rental interruption insurance purchased by Landlord as part
of Operating Expenses, during the time and to the extent the Premises are unfit
for occupancy for
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the purposes permitted under this Lease, and not occupied by Tenant as a result
thereof; provided, further, however, that if the damage or destruction is due to
the negligence or wilful misconduct of Tenant or any of its agents, employees,
contractors, invitees or guests, Tenant shall be responsible for any reasonable,
applicable insurance deductible (which shall be payable to Landlord upon demand)
and there shall be no rent abatement. In the event that Landlord shall not
deliver the Landlord Repair Notice, Tenant's right to rent abatement pursuant to
the preceding sentence shall terminate as of the date which is reasonably
determined by Landlord to be the date Tenant should have completed repairs to
the Premises assuming Tenant used reasonable due diligence in connection
therewith.
11.2 Landlord's Option to Repair. Notwithstanding the terms of Section
---------------------------
11.1 of this Lease, Landlord may elect not to rebuild and/or restore the
Premises, Building and/or Project, and instead terminate this Lease, by
notifying Tenant in writing of such termination within sixty (60) days after the
date of discovery of the damage, such notice to include a termination date
giving Tenant sixty (60) days to vacate the Premises, but Landlord may so elect
only if the Building or Project shall be damaged by fire or other casualty or
cause, whether or not the Premises are affected, and one or more of the
following conditions is present: (i) in Landlord's reasonable judgment, repairs
cannot reasonably be completed within one hundred eighty (180) days after the
date of discovery of the damage (when such repairs are made without the payment
of overtime or other premiums); (ii) the holder of any mortgage on the Building
or Project or ground lessor with respect to the Building or Project shall
require that the insurance proceeds or any portion thereof be used to retire the
mortgage debt, or shall terminate the ground lease, as the case may be; (iii)
the damage is not fully covered by Landlord's insurance policies, excluding
deductibles; or (iv) Landlord decides to rebuild the Building or Common Areas so
that they will be substantially different structurally or architecturally; or
(v) the damage occurs during the last twelve (12) months of the Lease Term;
provided, however, that if Landlord does not elect to terminate this Lease
pursuant to Landlord's termination right as provided above, and (I) the damage
occurs during the last twelve (12) months of the Lease Term, or (II) the repairs
cannot, in the reasonable judgment of Landlord, be completed within one hundred
eighty (180) days after being commenced, Tenant may elect, no earlier than sixty
(60) days after the date of the damage and not later than ninety (90) days after
the date of such damage, to terminate this Lease by written notice to Landlord
effective as of the date specified in the notice, which date shall not be less
than thirty (30) days nor more than sixty (60) days after the date such notice
is given by Tenant. At any time, from time to time, after the date occurring
sixty (60) days after the date of the damage, Tenant may request that Landlord
inform Tenant of Landlord'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 Waiver of Statutory Provisions. The provisions of this Lease,
------------------------------
including this Article 11, constitute an express agreement between Landlord and
Tenant with respect to any and all damage to, or destruction of, all or any part
of the Premises, the Building or the Project, and any statute or regulation of
the State of California, including, without limitation, Sections 1932(2) and
1933(4) of the California Civil Code, with respect to any rights or obligations
concerning damage or destruction in the absence of an express agreement between
the parties, and any other statute or regulation, now or hereafter in effect,
shall have no application to this Lease or any damage or destruction to all or
any part of the Premises, the Building or the Project.
ARTICLE 12
----------
NONWAIVER
---------
No provision of this Lease shall be deemed waived by either party hereto
unless expressly waived in a writing signed thereby. The waiver by either party
hereto of any breach of any term, covenant or condition herein contained shall
not be deemed to be a waiver of any subsequent breach of same or any other term,
covenant or condition herein contained. The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term, covenant or condition of this Lease, other than the
failure of Tenant to pay the particular Rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
Rent. No acceptance of a lesser amount than the Rent herein stipulated shall be
deemed a waiver of Landlord's right to receive the full amount
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due. No receipt of monies by Landlord from Tenant after the termination of this
Lease shall in any way alter the length of the Lease Term or of Tenant's right
of possession hereunder, or after the giving of any notice shall reinstate,
continue or extend the Lease Term or affect any notice given Tenant prior to the
receipt of such monies, it being agreed that after the service of notice or the
commencement of a suit, or after final judgment for possession of the Premises,
Landlord may receive and collect any Rent due, and the payment of said Rent
shall not waive or affect said notice, suit or judgment.
ARTICLE 13
----------
CONDEMNATION
------------
If the whole or any part of the Premises shall be taken by power of eminent
domain or condemned by any competent authority for any public or quasi-public
use or purpose, or if any adjacent property or street shall be so taken or
condemned, or reconfigured or vacated by such authority in such manner as to
require the use, reconstruction or remodeling of any part of the Premises,
Building or Project, or if Landlord shall grant a deed or other instrument in
lieu of such taking by eminent domain or condemnation, Landlord shall have the
option to terminate this Lease effective as of the date possession is required
to be surrendered to the authority. If any portion of the Premises is taken and
such taking materially impairs Tenant's ability to use the Premises or conduct
it's business therein, or if access to the Premises is substantially impaired,
in each case for a period in excess of ninety (90) days, Tenant shall have the
option to terminate this Lease effective as of the date possession is required
to be surrendered to the authority. Tenant shall not because of such taking
assert any claim against Landlord or the authority for any compensation because
of such taking and Landlord shall be entitled to the entire award or payment in
connection therewith, except that Tenant shall have the right to file any
separate claim available to Tenant for any taking of Tenant's personal property
and fixtures belonging to Tenant and removable by Tenant upon expiration of the
Lease Term pursuant to the terms of this Lease, and for moving expenses, so long
as such claims do not diminish the award available to Landlord, its ground
lessor with respect to the Building or Project or its mortgagee, and such claim
is payable separately to Tenant. All Rent shall be apportioned as of the date
of such termination. If any part of the Premises shall be taken, and this Lease
shall not be so terminated, the Rent shall be proportionately abated. Tenant
hereby waives any and all rights it might otherwise have pursuant to Section
1265.130 of The California Code of Civil Procedure. Notwithstanding anything to
the contrary contained in this Article 13, in the event of a temporary taking of
all or any portion of the Premises for a period of one hundred and eighty (180)
days or less, then this Lease shall not terminate but the Base Rent and the
Additional Rent shall be abated for the period of such taking in proportion to
the ratio that the amount of rentable square feet of the Premises taken bears to
the total rentable square feet of the Premises. Landlord shall be entitled to
receive the entire award made in connection with any such temporary taking.
ARTICLE 14
----------
ASSIGNMENT AND SUBLETTING
-------------------------
14.1 Transfers. Tenant shall not, without the prior written consent of
---------
Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit any lien to
attach to, or otherwise transfer, this Lease or any interest hereunder, permit
any assignment, or other transfer of this Lease or any interest hereunder by
operation of law, sublet the Premises or any part thereof, or enter into any
license or concession agreements or otherwise permit the occupancy or use of the
Premises or any part thereof by any persons other than Tenant and its employees
and contractors (all of the foregoing are hereinafter sometimes referred to
collectively as "Transfers" and any person to whom any Transfer is made or
sought to be made is hereinafter sometimes referred to as a "Transferee"). If
Tenant desires Landlord's consent to any Transfer, Tenant shall notify Landlord
in writing, which notice (the "Transfer Notice") shall include (i) the proposed
effective date of the Transfer, which shall not be less than thirty (30) days
nor more than one hundred eighty (180) days after the date of delivery of the
Transfer Notice, (ii) a description of the portion of the Premises to be
transferred (the "Subject Space"), (iii) all of the terms of the proposed
Transfer and the consideration therefor, including calculation of the "Transfer
Premium", as that term is defined in Section 14.3 below, in connection with such
Transfer, the name and address of the proposed Transferee, and an executed copy
of all documentation effectuating the proposed Transfer, including all operative
documents to evidence such Transfer and all agreements incidental or related to
such Transfer, provided that Landlord shall have the
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<PAGE>
right to require Tenant to utilize Landlord's standard Transfer documents in
connection with the documentation of such Transfer, (iv) current financial
statements of the proposed Transferee certified by an officer, partner or owner
thereof, business credit and personal references and history of the proposed
Transferee and any other information required by Landlord which will enable
Landlord to determine the financial responsibility, character, and reputation of
the proposed Transferee, nature of such Transferee's business and proposed use
of the Subject Space and (v) an executed estoppel certificate from Tenant in the
form attached hereto as Exhibit E. Any Transfer made without Landlord's prior
---------
written consent shall, at Landlord's option, be null, void and of no effect, and
shall, at Landlord's option, constitute a default by Tenant under this Lease.
Whether or not Landlord consents to any proposed Transfer, Tenant shall pay
Landlord's review and processing fees, as well as any reasonable professional
fees (including, without limitation, attorneys', accountants', architects',
engineers' and consultants' fees) incurred by Landlord, within thirty (30) days
after written request by Landlord.
14.2 Landlord's Consent. Landlord shall not unreasonably withhold its
------------------
consent to any proposed Transfer of the Subject Space to the Transferee on the
terms specified in the Transfer Notice. Without limitation as to other
reasonable grounds for withholding consent, the parties hereby agree that it
shall be reasonable under this Lease and under any applicable law for Landlord
to withhold consent to any proposed Transfer where one or more of the following
apply:
14.2.1 The Transferee is of a character or reputation or engaged in a
business which is not consistent with the quality of the Building or the
Project, or would be a significantly less prestigious occupant of the Building
than Tenant;
14.2.2 The Transferee intends to use the Subject Space for purposes
which are not permitted under this Lease;
14.2.3 The Transferee is either a governmental agency or
instrumentality thereof;
14.2.4 INTENTIONALLY DELETED;
14.2.5 The Transferee is not a party of reasonable financial worth
and/or financial stability in light of the responsibilities to be undertaken in
connection with the Transfer on the date consent is requested;
14.2.6 The proposed Transfer would cause a violation of another lease
for space in the Project, or would give an occupant of the Project a right to
cancel its lease;
14.2.7 The terms of the proposed Transfer will allow the Transferee
to exercise a right of renewal, right of expansion, right of first offer, or
other similar right held by Tenant (or will allow the Transferee to occupy space
leased by Tenant pursuant to any such right); or
14.2.8 Either the proposed Transferee, or any person or entity which
directly or indirectly, controls, is controlled by, or is under common control
with, the proposed Transferee, (i) occupies space in the Project at the time of
the request for consent, or (ii) is negotiating with Landlord to lease space in
the Project at such time, or (iii) has negotiated with Landlord during the
twelve (12)-month period immediately preceding the Transfer Notice; provided in
each event that Landlord has space in the Project reasonably capable of
satisfying the proposed Transferee's space requirement.
If Landlord consents to any Transfer pursuant to the terms of this Section
14.2 (and does not exercise any recapture rights Landlord may have under Section
14.4 of this Lease), Tenant may within six (6) months after Landlord's consent,
but not later than the expiration of said six-month period, enter into such
Transfer of the Premises or portion thereof, upon substantially the same terms
and conditions as are set forth in the Transfer Notice furnished by Tenant to
Landlord pursuant to Section 14.1 of this Lease, provided that if there are any
changes in the terms and conditions from those specified in the Transfer Notice
(i) such that Landlord would initially have been entitled to refuse its consent
to such Transfer under this Section 14.2, or (ii) which would cause the proposed
Transfer to be more favorable to the Transferee than the terms set forth in
Tenant's original Transfer Notice, Tenant shall again submit the Transfer to
Landlord for its approval and other action under this Article 14 (including
Landlord's right of recapture, if any, under Section 14.4 of this Lease).
Notwithstanding anything to the contrary in this Lease, if
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Tenant or any proposed Transferee claims that Landlord has unreasonably withheld
or delayed its consent under Section 14.2 or otherwise has breached or acted
unreasonably under this Article 14, their sole remedies shall be a declaratory
judgment and an injunction for the relief sought without any monetary damages,
and Tenant hereby waives all other remedies, including, without limitation, any
right at law or equity to terminate this Lease, on its own behalf and, to the
extent permitted under all applicable laws, on behalf of the proposed
Transferee. Tenant shall indemnify, defend and hold harmless Landlord from any
and all liability, losses, claims, damages, costs, expenses, causes of action
and proceedings involving any third party or parties (including without
limitation Tenant's proposed subtenant or assignee) who claim they were damaged
by Landlord's wrongful withholding or conditioning of Landlord's consent.
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 seventy-five percent (75%) of any "Transfer Premium," as that term is
defined in this Section 14.3, received by Tenant from such Transferee. "Transfer
Premium" shall mean all rent, additional rent or other consideration payable by
such Transferee in connection with the Transfer in excess of the Rent and
Additional Rent payable by Tenant under this Lease during the term of the
Transfer on a per rentable square foot basis if less than all of the Premises is
transferred, after deducting the reasonable expenses incurred by Tenant for (i)
any free base rent reasonably provided to the Transferee, (ii) any changes,
alterations and improvements to the Premises in connection with the Transfer,
and (iii) any legal expenses and any brokerage commissions in connection with
the Transfer. "Transfer Premium" shall also include, but not be limited to, key
money, bonus money or other cash consideration paid by Transferee to Tenant in
connection with such Transfer, and any payment in excess of fair market value
for services rendered by Tenant to Transferee or for assets, fixtures,
inventory, equipment, or furniture transferred by Tenant to Transferee in
connection with such Transfer. In the calculations of the Rent (as it relates to
the Transfer Premium calculated under this Section 14.3), and the Transferee's
Rent and Quoted Rent under Section 14.2 of this Lease, the Rent paid during each
annual period for the Subject Space, and the Transferee's Rent and the Quoted
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 Landlord's Option as to Subject Space. Notwithstanding anything to
-------------------------------------
the contrary contained in this Article 14, Landlord shall have the option, by
giving written notice to Tenant within thirty (30) days after receipt of any
Transfer Notice, to recapture the Subject Space for the remainder of the Lease
Term. Such recapture shall cancel and terminate this Lease with respect to the
Subject Space as of the date stated in the Transfer Notice as the effective date
of the proposed Transfer. In the event of a recapture by Landlord, if this Lease
shall be canceled with respect to less than the entire Premises, then (i) the
Rent reserved herein shall be prorated on the basis of the number of rentable
square feet retained by Tenant in proportion to the number of rentable square
feet contained in the Premises; (ii) this Lease as so amended shall continue
thereafter in full force and effect, and upon request of either party, the
parties shall execute written confirmation of the same; and (iii) Landlord shall
construct or cause to be constructed a demising wall separating that portion of
the Premises recaptured by Landlord from that portion of the Premises retained
by Tenant; provided that, Tenant hereby agrees that, notwithstanding Tenant's
occupancy of its retained portion of the Premises during the construction of
such demising wall by Landlord, Landlord shall be permitted to construct such
demising wall during normal business hours, without any obligation to pay
overtime other premiums, and the construction of such demising wall by Landlord
shall in no way constitute a constructive eviction of Tenant nor entitle Tenant
to any abatement of Rent (except as provided in Section 6.4 of this Lease), and
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 construction of such demising wall, nor shall Tenant be entitled to any
compensation or damages from Landlord for loss of the use of the whole or any
part of its retained portion of the Premises or of Tenant's personal property or
improvements resulting from the construction of such demising wall, or for any
inconvenience or annoyance occasioned by the construction of such demising wall.
Notwithstanding the foregoing, Landlord shall use commercially reasonable
efforts to perform the construction of the demising wall so as to minimize
interference with Tenant's use of, and access to the Premises. If Landlord
declines, or fails to elect in a timely manner, to recapture the Subject Space
under this Section 14.4, then, provided Landlord has consented to the proposed
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Transfer, Tenant shall be entitled to proceed to transfer the Subject Space to
the proposed Transferee, subject to provisions of this Article 14.
14.5 Effect of Transfer. If Landlord consents to a Transfer, (i) the terms
------------------
and conditions of this Lease shall in no way be deemed to have been waived or
modified, (ii) such consent shall not be deemed consent to any further Transfer
by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord,
promptly after execution, an original executed copy of all documentation
pertaining to the Transfer in form reasonably acceptable to Landlord, (iv)
Tenant shall furnish upon Landlord's request a complete statement, certified by
an independent certified public accountant, or Tenant's chief financial officer,
setting forth in detail the computation of any Transfer Premium Tenant has
derived and shall derive from such Transfer, and (v) no Transfer relating to
this Lease or agreement entered into with respect thereto, whether with or
without Landlord's consent, shall relieve Tenant or any guarantor of the Lease
from any liability under this Lease, including, without limitation, in
connection with the Subject Space. Landlord or its authorized representatives
shall have the right at all reasonable times to audit the books, records and
papers of Tenant relating to any Transfer, and shall have the right to make
copies thereof. If the Transfer Premium respecting any Transfer shall be found
understated, Tenant shall, within thirty (30) days after demand, pay the
deficiency, and if understated by more than two percent (2%), Tenant shall pay
Landlord's costs of such audit.
14.6 Additional Transfers. For purposes of this Lease, the term "Transfer"
--------------------
shall also include (i) if Tenant is a partnership, the withdrawal or change,
voluntary, involuntary or by operation of law, of fifty percent (50%) or more of
the partners, or transfer of fifty percent (50%) or more of partnership
interests, within a twelve (12)-month period, or the dissolution of the
partnership without immediate reconstitution thereof, and (ii) if Tenant is a
closely held corporation (i.e., whose stock is not publicly held and not traded
through an exchange or over the counter), (A) the dissolution, merger,
consolidation or other reorganization of Tenant or (B) the sale or other
transfer of an aggregate of fifty percent (50%) or more of the voting shares of
Tenant (other than to immediate family members by reason of gift or death),
within a twelve (12)-month period, or (C) the sale, mortgage, hypothecation or
pledge of an aggregate of fifty percent (50%) or more of the value of the
unencumbered assets of Tenant within a twelve (12)-month period.
14.7 Occurrence of Default. Any Transfer hereunder shall be subordinate
---------------------
and subject to the provisions of this Lease, and if this Lease shall be
terminated during the term of any Transfer, Landlord shall have the right to:
(i) treat such Transfer as cancelled and repossess the Subject Space by any
lawful means, or (ii) require that such Transferee attorn to and recognize
Landlord as its landlord under any such Transfer. If Tenant shall be in default
under this Lease, Landlord is hereby irrevocably authorized, as Tenant's agent
and attorney-in-fact, to direct any Transferee to make all payments under or in
connection with the Transfer directly to Landlord (which Landlord shall apply
towards Tenant's obligations under this Lease) until such default is cured. Such
Transferee shall rely on any representation by Landlord that Tenant is in
default hereunder, without any need for confirmation thereof by Tenant. Upon any
assignment, the assignee shall assume in writing all obligations and covenants
of Tenant thereafter to be performed or observed under this Lease. No collection
or acceptance of rent by Landlord from any Transferee shall be deemed a waiver
of any provision of this Article 14 or the approval of any Transferee or a
release of Tenant from any obligation under this Lease, whether theretofore or
thereafter accruing. In no event shall Landlord's enforcement of any provision
of this Lease against any Transferee be deemed a waiver of Landlord's right to
enforce any term of this Lease against Tenant or any other person. If Tenant's
obligations hereunder have been guaranteed, Landlord's consent to any Transfer
shall not be effective unless the guarantor also consents to such Transfer.
14.8 Non-Transfers. Notwithstanding anything to the contrary contained in
-------------
this Article 14, neither (i) an assignment to an entity which acquires all or
substantially all of the stock or assets of Tenant, (ii) an assignment of the
Premises to a transferee which is the resulting entity of a merger or
consolidation of Tenant with another entity, nor (iii) 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) (collectively, "Affiliates"), shall be deemed a Transfer under this
Article 14, 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 assignment or sublease or such
affiliate, and further provided that such assignment or sublease is not a
subterfuge by Tenant to avoid its
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obligations under this Lease. "Control," as used in this Section 14.8, shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a person or entity, whether by
ownership of voting securities, by contract, or otherwise.
ARTICLE 15
----------
SURRENDER OF PREMISES; OWNERSHIP AND
------------------------------------
REMOVAL OF TRADE FIXTURES
-------------------------
15.1 Surrender of Premises. No act or thing done by Landlord or any agent
---------------------
or employee of Landlord during the Lease Term shall be deemed to constitute an
acceptance by Landlord of a surrender of the Premises unless such intent is
specifically acknowledged in writing by Landlord. The delivery of keys to the
Premises to Landlord or any agent or employee of Landlord shall not constitute a
surrender of the Premises or effect a termination of this Lease, whether or not
the keys are thereafter retained by Landlord, and notwithstanding such delivery
Tenant shall be entitled to the return of such keys at any reasonable time upon
request until this Lease shall have been properly terminated. The voluntary or
other surrender of this Lease by Tenant, whether accepted by Landlord or not, or
a mutual termination hereof, shall not work a merger, and at the option of
Landlord shall operate as an assignment to Landlord of all subleases or
subtenancies affecting the Premises or terminate any or all such sublessees or
subtenancies.
15.2 Removal of Tenant Property by Tenant. Upon the expiration of the
------------------------------------
Lease Term, or upon any earlier termination of this Lease, Tenant shall, subject
to the provisions of this Article 15, quit and surrender possession of the
Premises to Landlord in as good order and condition as when Tenant took
possession and as thereafter improved by Landlord and/or Tenant, reasonable wear
and tear and repairs which are specifically made the responsibility of Landlord
hereunder excepted. Upon such expiration or termination, Tenant shall, without
expense to Landlord, remove or cause to be removed from the Premises all debris
and rubbish, and such items of furniture, equipment, business and trade
fixtures, free-standing cabinet work, movable partitions and other articles of
personal property owned by Tenant or installed or placed by Tenant at its
expense in the Premises, and such similar articles of any other persons claiming
under Tenant, as Landlord may, in its sole discretion, require to be removed,
and Tenant shall repair at its own expense all damage to the Premises and
Building resulting from such removal.
ARTICLE 16
----------
HOLDING OVER
------------
If Tenant holds over after the expiration of the Lease Term or earlier
termination thereof, with or without the express or implied consent of Landlord,
such tenancy shall be from month-to-month only, and shall not constitute a
renewal hereof or an extension for any further term, and in such case Rent shall
be payable at a monthly rate equal to (I) 150% during the first sixty (60) days
of holdover, and (II) 200% thereafter, of the greater of (i) the Rent applicable
during the last rental period of the Lease Term under this Lease, and (ii) the
then-current market rent for the Premises (as reasonably determined by
Landlord). Such month-to-month tenancy shall be subject to every other
applicable term, covenant and agreement contained herein. For purposes of this
Article 16, a holding over shall include Tenant's remaining in the Premises
after the expiration or earlier termination of the Lease Term, as required
pursuant to the terms of Section 8.5, above, to remove any required improvements
or Alterations (and to complete any corresponding repairs or restorations as set
forth in Section 8.5 of this Lease). Nothing contained in this Article 16 shall
be construed as consent by Landlord to any holding over by Tenant, and Landlord
expressly reserves the right to require Tenant to surrender possession of the
Premises to Landlord as provided in this Lease upon the expiration or other
termination of this Lease. The provisions of this Article 16 shall not be
deemed to limit or constitute a waiver of any other rights or remedies of
Landlord provided herein or at law. If Tenant fails to surrender the Premises
upon the termination or expiration of this Lease, in addition to any other
liabilities to Landlord accruing therefrom, Tenant shall protect, defend,
indemnify and hold Landlord harmless from all loss, costs (including reasonable
attorneys' fees) and liability resulting from such failure, including, without
limiting the generality of the foregoing, any claims made by any succeeding
tenant founded upon such failure to surrender and any lost profits to Landlord
resulting therefrom.
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ARTICLE 17
----------
ESTOPPEL CERTIFICATES
---------------------
Within ten (10) days following a request in writing by Landlord, Tenant
shall execute, acknowledge and deliver to Landlord an estoppel certificate,
which, as submitted by Landlord, shall be substantially in the form of Exhibit
-------
E, attached hereto (or such other form as may be required by any prospective
-
mortgagee or purchaser of the Project, or any portion thereof), indicating
therein any exceptions thereto that may exist at that time, and shall also
contain any other information reasonably requested by Landlord or Landlord's
mortgagee or prospective mortgagee. Any such certificate may be relied upon by
any prospective mortgagee or purchaser of all or any portion of the Project.
Tenant 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. Failure of
Tenant to timely execute, acknowledge and deliver such estoppel certificate or
other instruments shall constitute an acceptance of the Premises and an
acknowledgment by Tenant that statements included in the estoppel certificate
are true and correct, without exception.
ARTICLE 18
----------
SUBORDINATION
-------------
This Lease shall be subject and subordinate to all present and future
ground or underlying leases of the Building or Project and to the lien of any
mortgage, trust deed or other encumbrances now or hereafter in force against the
Building or Project or any part thereof, if any, and to all renewals,
extensions, modifications, consolidations and replacements thereof, and to all
advances made or hereafter to be made upon the security of such mortgages or
trust deeds, unless the holders of such mortgages, trust deeds or other
encumbrances, or the lessors under such ground lease or underlying leases,
require in writing that this Lease be superior thereto. Landlord shall use
commercially reasonable efforts to provide Tenant with a non-disturbance
agreement in a commercially reasonable form from Landlord's presently existing
lender holding a first deed of trust on the Building on or before the date which
is the later to occur of (i) thirty (30) days following the mutual execution and
delivery of this Lease by Landlord and Tenant, and (ii) thirty (30) days
following Tenant's execution and delivery of such non-disturbance agreement.
Landlord's delivery to Tenant of commercially reasonable non-disturbance
agreement(s) in favor of Tenant from any ground lessors, mortgage holders or
lien holders of Landlord who later come into existence at any time prior to the
expiration of the Lease Term shall be in consideration of, and a condition
precedent to, Tenant's agreement to be bound by the terms of this Article 18.
----------
Tenant covenants and agrees in the event any proceedings are brought for the
foreclosure of any such mortgage or deed in lieu thereof (or if any ground lease
is terminated), to attorn, without any deductions or set-offs whatsoever, to the
lienholder or purchaser or any successors thereto upon any such foreclosure sale
or deed in lieu thereof (or to the ground lessor), if so requested to do so by
such purchaser or lienholder or ground lessor, and to recognize such purchaser
or lienholder or ground lessor as the lessor under this Lease, provided such
lienholder or purchaser or ground lessor shall agree to accept this Lease and
not disturb Tenant's occupancy, so long as Tenant timely pays the rent and
observes and performs the terms, covenants and conditions of this Lease to be
observed and performed by Tenant. Landlord's interest herein may be assigned as
security at any time to any lienholder. Tenant shall, within 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 this Lease to any such mortgages, trust deeds, ground leases or
underlying leases. Tenant waives the provisions of any current or future
statute, rule or law which may give or purport to give Tenant any right or
election to terminate or otherwise adversely affect this Lease and the
obligations of the Tenant hereunder in the event of any foreclosure proceeding
or sale.
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ARTICLE 19
----------
DEFAULTS; REMEDIES
------------------
19.1 Events of Default. The occurrence of any of the following shall
-----------------
constitute a default of this Lease by Tenant:
19.1.1 Any failure by Tenant to pay any Rent or any other charge
required to be paid under this Lease, or any part thereof, when due unless such
failure is cured within three (3) days after notice; or
19.1.2 Except where a specific time period is otherwise set forth
for Tenant's performance in this Lease, in which event the failure to perform by
Tenant within such time period shall be a default by Tenant under this Section
19.1.2, any failure by Tenant to observe or perform any other provision,
covenant or condition of this Lease to be observed or performed by Tenant where
such failure continues for ten (10) days after written notice thereof from
Landlord to Tenant; provided that if the nature of such default is such that the
same cannot reasonably be cured within a ten (10) day period, Tenant shall not
be deemed to be in default if it diligently commences such cure within such
period and thereafter diligently proceeds to rectify and cure such default, but
in no event exceeding a period of time in excess of thirty (30) days after
written notice thereof from Landlord to Tenant; or
19.1.3 To the extent permitted by law, a general assignment by
Tenant or any guarantor of this Lease for the benefit of creditors, or the
taking of any corporate action in furtherance of bankruptcy or dissolution
whether or not there exists any proceeding under an insolvency or bankruptcy
law, or the filing by or against Tenant or any guarantor of any proceeding under
an insolvency or bankruptcy law, unless in the case of a proceeding filed
against Tenant or any guarantor the same is dismissed within sixty (60) days, or
the appointment of a trustee or receiver to take possession of all or
substantially all of the assets of Tenant or any guarantor, unless possession is
restored to Tenant or such guarantor within thirty (30) days, or any execution
or other judicially authorized seizure of all or substantially all of Tenant's
assets located upon the Premises or of Tenant's interest in this Lease, unless
such seizure is discharged within thirty (30) days; or
19.1.4 Abandonment or vacation of all or a substantial portion of
the Premises by Tenant; or
19.1.5 The failure by Tenant to observe or perform according to the
provisions of Articles 17 or 18 of this Lease where such failure continues for
more than two (2) business days after notice from Landlord; or
19.1.6 Tenant's failure to occupy the Premises within ten (10)
business days after the Lease Commencement Date.
The notice periods provided herein are in lieu of, and not in addition to,
any notice periods provided by law.
19.2 Remedies Upon Default. Upon the occurrence of any event of default by
---------------------
Tenant, Landlord shall have, in addition to any other remedies available to
Landlord at law or in equity (all of which remedies shall be distinct, separate
and cumulative), the option to pursue any one or more of the following remedies,
each and all of which shall be cumulative and nonexclusive, without any notice
or demand whatsoever.
19.2.1 Terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may,
without prejudice to any other remedy which it may have for possession or
arrearages in rent, enter upon and take possession of the Premises and expel or
remove Tenant and any other person who may be occupying the Premises or any part
thereof, without being liable for prosecution or any claim or damages therefor;
and Landlord may recover from Tenant the following:
(i) The worth at the time of any unpaid rent which has
been earned at the time of such termination; plus
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(ii) The worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided; plus
(iii) The worth at the time of award of the amount by
which the unpaid rent for the balance of the Lease Term after the time of award
exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(iv) Any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, specifically including but not limited to, brokerage
commissions and advertising expenses incurred, expenses of remodeling the
Premises or any portion thereof for a new tenant, whether for the same or a
different use, and any special concessions made to obtain a new tenant; and
(v) At Landlord's election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from time to time by
applicable law.
The term "rent" as used in this Section 19.2 shall be deemed to be and to
mean all sums of every nature required to be paid by Tenant pursuant to the
terms of this Lease, whether to Landlord or to others. As used in Paragraphs
19.2.1(i) and (ii), above, the "worth at the time of award" shall be computed by
allowing interest at the rate set forth in Article 25 of this Lease, but in no
case greater than the maximum amount of such interest permitted by law. As used
in Paragraph 19.2.1(iii) above, the "worth at the time of award" shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus 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 this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all rent as it becomes due.
19.2.3 Landlord shall at all times have the rights and remedies
(which shall be cumulative with each other and cumulative and in addition to
those rights and remedies available under Sections 19.2.1 and 19.2.2, above, or
any law or other provision of this Lease), without prior demand or notice except
as required by applicable law, to seek any declaratory, injunctive or other
equitable relief, and specifically enforce this Lease, or restrain or enjoin a
violation or breach of any provision hereof.
19.3 Subleases of Tenant. Whether or not Landlord elects to terminate this
-------------------
Lease on account of any default by Tenant, as set forth in this Article 19,
----------
Landlord shall have the right to terminate any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by
Tenant and affecting the Premises or may, in Landlord's sole discretion, succeed
to Tenant's interest in such subleases, licenses, concessions or arrangements.
In the event of Landlord's election to succeed to Tenant's interest in any such
subleases, licenses, concessions or arrangements, Tenant shall, as of the date
of notice by Landlord of such election, have no further right to or interest in
the rent or other consideration receivable thereunder.
19.4 Form of Payment After Default. Following the occurrence of an event of
-----------------------------
default by Tenant, Landlord shall have the right to require that any or all
subsequent amounts paid by Tenant to Landlord hereunder, whether to cure the
default in question or otherwise, be paid in the form of cash, money order,
cashier's or certified check drawn on an institution acceptable to Landlord, or
by other means approved by Landlord, notwithstanding any prior practice of
accepting payments in any different form.
19.5 Efforts to Relet. No re-entry or repossession, repairs, maintenance,
----------------
changes, alterations and additions, reletting, appointment of a receiver to
protect Landlord's interests hereunder, or any other action or omission by
Landlord shall be construed as an election by Landlord to terminate this Lease
or Tenant's right to possession, or to accept a surrender of the Premises, nor
shall same operate to release Tenant in whole or in part from any of Tenant's
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<PAGE>
obligations hereunder, unless express written notice of such intention is sent
by Landlord to Tenant. Tenant hereby irrevocably waives any right otherwise
available under any law to redeem or reinstate this Lease.
ARTICLE 20
----------
COVENANT OF QUIET ENJOYMENT
---------------------------
Landlord covenants that Tenant, on paying the Rent, charges for services
and other payments herein reserved and on keeping, observing and performing all
the other terms, covenants, conditions, provisions and agreements herein
contained on the part of Tenant to be kept, observed and performed, shall,
during the Lease Term, peaceably and quietly have, hold and enjoy the Premises
subject to the terms, covenants, conditions, provisions and agreements hereof
without interference by any persons lawfully claiming by or through Landlord.
The foregoing covenant is in lieu of any other covenant express or implied.
ARTICLE 21
----------
SECURITY DEPOSIT
----------------
Concurrent with Tenant's execution of this Lease, Tenant shall deposit with
Landlord a security deposit (the "Security Deposit") in the amount set forth in
Section 7 of the Summary, as security for the faithful performance by Tenant of
all of its obligations under this Lease. If Tenant defaults with respect to any
provisions of this Lease, including, but not limited to, the provisions relating
to the payment of Rent, the removal of property and the repair of resultant
damage, Landlord may, without notice to Tenant, but shall not be required to
apply all or any part of the Security Deposit for the payment of any Rent or any
other sum in default and Tenant shall, upon demand therefor, restore the
Security Deposit to its original amount. Any unapplied portion of the Security
Deposit shall be returned to Tenant, or, at Landlord's option, to the last
assignee of Tenant's interest hereunder, within sixty (60) days following the
expiration of the Lease Term. Tenant shall not be entitled to any interest on
the Security Deposit. Tenant hereby waives the provisions of Section 1950.7 of
the California Civil Code, or any successor statute.
ARTICLE 22
----------
SUBSTITUTION OF OTHER PREMISES
------------------------------
Landlord shall have the right, not more than once during the Lease Term, to
relocate the Premises to other space in the Project comparable to the Premises,
and all terms hereof shall apply to the new space with equal force; provided
that Tenant's Base Rent shall not be increased as a result of such relocation of
the Premises; and provided further that Tenant shall not be required to pay Base
Rent for the first (1st) two (2) full months following such relocation. In such
event, Landlord shall give Tenant at least ninety (90) days prior written
notice, shall provide Tenant, at Landlord's sole cost and expense, with tenant
improvements at least equal in quality to those in the Premises and shall move
Tenant's effects to the new space at Landlord's sole cost and expense at such
time and in such manner as to inconvenience Tenant as little as reasonably
practicable. In addition, Landlord shall reimburse Tenant for the reasonable
costs and expenses incurred by Tenant in connection with such relocation
(including, but not limited to, the costs of reasonable supplies of replacement
stationery, change of address notices, and telephone and computer installations,
cabling and wiring), within thirty (30) days of Landlord's receipt of an invoice
therefor. Simultaneously with such relocation of the Premises, the parties
shall immediately execute an amendment to this Lease stating the relocation of
the Premises.
ARTICLE 23
----------
SIGNS
-----
23.1 Full Building. Subject to Landlord's prior written approval, in its
-------------
reasonable discretion, and provided all signs are in keeping with the quality,
design and style of the Building and Project, Tenant, if the Premises comprise
an entire Building, at its sole cost and expense, may install identification
signage anywhere in the Premises, provided that such signs must not be visible
from the exterior of the Building.
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<PAGE>
23.2 Prohibited Signage and Other Items. Any signs, notices, logos,
----------------------------------
pictures, names or advertisements which are installed and that have not been
separately approved by Landlord may be removed without notice by Landlord at the
sole expense of Tenant. Tenant may not install any signs on the exterior or roof
of the Project or the Common Areas. Any signs, window coverings, or blinds (even
if the same are located behind the Landlord-approved window coverings for the
Building), or other items visible from the exterior of the Premises or Building,
shall be subject to the prior approval of Landlord, in its sole discretion.
23.3 Monument Signage. The Tenant named in this Lease (the "Original
----------------
Tenant") only shall have the non-exclusive right to have a sign on each of the
existing monuments at the entrances to the Project on San Tomas Expressway and
Walsh Road and to have a sign on the existing monument located at the entrance
to the Project (the "Monument"); provided that (i) the location of Tenant's sign
on the Monument shall be designated by Landlord, (ii) the size, materials,
design and other specifications of Tenant's sign on the Monument ("Tenant's
Sign") shall be subject to Landlord's prior written consent, which consent may
be withheld in Landlord's sole discretion; (iii) Tenant's Sign shall comply with
all applicable governmental rules and regulations; and (iv) Tenant's Sign shall
be personal to the Original Tenant, not be transferable to transferees of
Tenant, and shall only apply in the event the Original Tenant occupies the
entire Premises. Landlord shall be responsible for the cost of the Monument, and
Tenant shall be responsible for all costs incurred by Tenant in connection with
the design, construction, installation, maintenance, repair, compliance with
laws and removal of Tenant's Sign. Tenant shall be responsible for the removal
of Tenant's Sign upon the expiration or earlier termination of this Lease, or
upon the expiration of Tenant's right to Tenant's Sign hereunder.
ARTICLE 24
----------
COMPLIANCE WITH LAW
-------------------
Tenant shall not do anything or suffer anything to be done in or about the
Premises or the Project which will in any way conflict with any law, statute,
ordinance or other governmental rule, regulation or requirement now in force or
which may hereafter be enacted or promulgated (collectively, "Applicable Laws").
At its sole cost and expense, Tenant shall promptly comply with all such
Applicable Laws which relate to (i) Tenant's use of the Premises, (ii) the
Alterations or tenant improvements in the Premises, or (iii) the "Base
Building," as that term is defined below, but, as to the Base Building, only to
the extent such obligations are triggered by, and directly related to, Tenant's
Alterations, the Tenant Improvements, or Tenant's use of the Premises for non-
general office use. Should any standard or regulation now or hereafter be
imposed on Landlord or Tenant by a state, federal or local governmental body
charged with the establishment, regulation and enforcement of occupational,
health or safety standards for employers, employees, landlords or tenants, then
Tenant agrees, at its sole cost and expense, to comply promptly with such
standards or regulations. Tenant shall be responsible, at its sole cost and
expense, to make all alterations to the Premises as are required to comply with
the governmental rules, regulations, requirements or standards described in this
Article 24. The judgment of any court of competent jurisdiction or the
----------
admission of Tenant in any judicial action, regardless of whether Landlord is a
party thereto, that Tenant has violated any of said governmental measures, shall
be conclusive of that fact as between Landlord and Tenant. Landlord shall
comply with all Applicable Laws relating to the Base Building, to the extent
that compliance with such Applicable Laws is not the responsibility of Tenant
under this Lease, provided that Landlord's failure to comply therewith would
prohibit Tenant from obtaining or maintaining a certificate of occupancy for the
Premises, or would unreasonably and materially affect the safety of Tenant's
employees or create a significant health hazard for Tenant's employees or would
prevent Tenant from using the Premises for its intended business purposes.
Landlord shall be permitted to include in Operating Expenses any costs or
expenses incurred by Landlord under this Article 24, but only to the extent
consistent with the terms of Section 4.2.7 above. For purposes of this Lease,
the "Base Building" shall include the structural portions of the Building, and
the public restrooms and the systems and equipment located in the internal core
of the Building on the floor or floors on which the Premises are located.
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<PAGE>
ARTICLE 25
----------
LATE CHARGES
------------
If any installment of Rent or any other sum due from Tenant shall not be
received by Landlord or Landlord's designee within five (5) days after said
amount is due, then Tenant shall pay to Landlord a late charge equal to five
percent (5%) of the overdue amount plus any attorneys' fees incurred by Landlord
by reason of Tenant's failure to pay Rent and/or other charges when due
hereunder. The late charge shall be deemed Additional Rent and the right to
require it shall be in addition to all of Landlord's other rights and remedies
hereunder or at law and shall not be construed as liquidated damages or as
limiting Landlord's remedies in any manner. In addition to the late charge
described above, any Rent or other amounts owing hereunder which are not paid
within ten (10) days after the date they are due shall bear interest from the
date when due until paid at a rate per annum equal to the lesser of (i) the
annual "Bank Prime Loan" rate cited in the Federal Reserve Statistical Release
Publication G.13(415), published on the first Tuesday of each calendar month (or
such other comparable index as Landlord and Tenant shall reasonably agree upon
if such rate ceases to be published) plus four (4) percentage points, and (ii)
the highest rate permitted by applicable law.
ARTICLE 26
----------
LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT
----------------------------------------------------
26.1 Landlord's Cure. All covenants and agreements to be kept or performed
---------------
by Tenant under this Lease shall be performed by Tenant at Tenant's sole cost
and expense and without any reduction of Rent, except to the extent, if any,
otherwise expressly provided herein. If Tenant shall fail to perform any
obligation under this Lease, and such failure shall continue in excess of the
time allowed under Section 19.1.2, above, unless a specific time period is
otherwise stated in this Lease, Landlord may, but shall not be obligated to,
make any such payment or perform any such act on Tenant's part without waiving
its rights based upon any default of Tenant and without releasing Tenant from
any obligations hereunder.
26.2 Tenant's Reimbursement. Except as may be specifically provided to the
----------------------
contrary in this Lease, Tenant shall pay to Landlord, upon delivery by Landlord
to Tenant of statements therefor: (i) sums equal to expenditures reasonably made
and obligations incurred by Landlord in connection with the remedying by
Landlord of Tenant's defaults pursuant to the provisions of Section 26.1; (ii)
sums equal to all losses, costs, liabilities, damages and expenses referred to
in Article 10 of this Lease; and (iii) sums equal to all expenditures made and
obligations incurred by Landlord in collecting or attempting to collect the Rent
or in enforcing or attempting to enforce any rights of Landlord under this Lease
or pursuant to law, including, without limitation, all legal fees and other
amounts so expended. Tenant's obligations under this Section 26.2 shall survive
the expiration or sooner termination of the Lease Term.
ARTICLE 27
----------
ENTRY BY LANDLORD
-----------------
Landlord reserves the right at all reasonable times and upon reasonable
notice to Tenant (except in the case of an emergency) and provided Tenant is
given a reasonable opportunity to supply an employee of Tenant to accompany
Landlord, to enter the Premises to (i) inspect them; (ii) show the Premises to
prospective purchasers, mortgagees or tenants, or to current or prospective
mortgagees, ground or underlying lessors or insurers; (iii) post notices of
nonresponsibility; or (iv) alter, improve or repair the Premises or the
Building, or for structural alterations, repairs or improvements to the Building
or the Building's systems and equipment. Notwithstanding anything to the
contrary contained in this Article 27, Landlord may enter the Premises at any
time to (A) perform services required of Landlord, including janitorial service;
(B) take possession due to any breach of this Lease in the manner provided
herein; and (C) perform any covenants of Tenant which Tenant fails to perform.
Landlord may make any such entries without the abatement of Rent (except as
provided in Section 6.4 of this Lease) and may take such reasonable steps as
required to accomplish the stated purposes. 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
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with which to unlock all the doors in the Premises, excluding Tenant's vaults,
safes and special security areas designated in advance by Tenant. In an
emergency, Landlord shall have the right to use any means that Landlord may deem
proper to open the doors in and to the Premises. Any entry into the Premises by
Landlord in the manner hereinbefore described shall not be deemed to be a
forcible or unlawful entry into, or a detainer of, the Premises, or an actual or
constructive eviction of Tenant from any portion of the Premises. No provision
of this Lease shall be construed as obligating Landlord to perform any repairs,
alterations or decorations except as otherwise expressly agreed to be performed
by Landlord herein.
ARTICLE 28
----------
TENANT PARKING
--------------
28.1 Tenant Parking Passes. Tenant shall be permitted, throughout the
---------------------
Lease Term, to use on a non-exclusive basis, free of charge, the number of
parking passes set forth in Section 8 of the Summary, which passes shall relate
to the Project's parking facilities.. Tenant's continued right to use the
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 facility where the parking passes are located, including any sticker or
other identification system established by Landlord, Tenant's cooperation in
seeing that Tenant's employees and visitors also comply with such rules and
regulations and Tenant not being in default under this Lease.
28.2 Other Terms. Landlord specifically reserves the right to change the
-----------
size, configuration, design, layout and all other aspects of the Project parking
facility at any time and Tenant acknowledges and agrees that Landlord may,
without incurring any liability to Tenant and without any abatement of Rent
under this Lease, from time to time, close-off or restrict access to the Project
parking facility for purposes of permitting or facilitating any such
construction, alteration or improvements. Landlord may delegate its
responsibilities hereunder to a parking operator in which case such parking
operator shall have all the rights of control attributed hereby to the Landlord.
The parking passes provided to Tenant pursuant to this Article 28 are provided
to Tenant solely for use by Tenant's own personnel and such passes may not be
transferred, assigned, subleased or otherwise alienated by Tenant without
Landlord's prior approval.
28.3 Parking Procedures. The parking passes initially will not be
------------------
separately identified; however Landlord reserves the right in its sole and
absolute discretion to separately identify by signs or other markings the area
to which Tenant's parking passes relate. Landlord shall have no obligation to
monitor the use of such parking facility, nor shall Landlord be responsible for
any loss or damage to any vehicle or other property or for any injury to any
person. Tenant's parking passes shall be used only for parking of automobiles no
larger than full size passenger automobiles, sport utility vehicles or pick-up
trucks. Tenant shall comply with all rules and regulations which may be adopted
by Landlord from time to time with respect to parking and/or the parking
facilities servicing the Project. Tenant shall not at any time use more parking
passes than the number so allocated to Tenant or park its vehicles or the
vehicles of others in any portion of the Project parking facility not designated
by Landlord as a non-exclusive parking area. Tenant shall not have the exclusive
right to use any specific parking space. If Landlord grants to any other tenant
the exclusive right to use any particular parking space(s), Tenant shall not use
such spaces. All trucks (other than pick-up trucks) and delivery vehicles shall
be (i) parked at the loading dock of the Building, (ii) loaded and unloaded in a
manner which does not interfere with the businesses of other occupants of the
Project, and (iii) permitted to remain on the Project only so long as is
reasonably necessary to complete loading and unloading. In the event Landlord
elects in its sole and absolute discretion or is required by any law to limit or
control parking, whether by validation of parking tickets or any other method of
assessment, Tenant agrees to participate in such validation or assessment
program under such reasonable rules and regulations as are from time to time
established by Landlord.
ARTICLE 29
----------
MISCELLANEOUS PROVISIONS
------------------------
29.1 Terms; Captions. The words "Landlord" and "Tenant" as used herein
---------------
shall include the plural as well as the singular. The necessary grammatical
changes required to make
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<PAGE>
the provisions hereof apply either to corporations or partnerships or
individuals, men or women, as the case may require, shall in all cases be
assumed as though in each case fully expressed. The captions of Articles and
Sections are for convenience only and shall not be deemed to limit, construe,
affect or alter the meaning of such Articles and Sections.
29.2 Binding Effect. Subject to all other provisions of this Lease, each
--------------
of the covenants, conditions and provisions of this Lease shall extend to and
shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective heirs, personal
representatives, successors or assigns, provided this clause shall not permit
any assignment by Tenant contrary to the provisions of Article 14 of this Lease.
29.3 No Air Rights. No rights to any view or to light or air over any
-------------
property, whether belonging to Landlord or any other person, are granted to
Tenant by this Lease. If at any time any windows of the Premises are
temporarily darkened or the light or view therefrom is obstructed by reason of
any repairs, improvements, maintenance or cleaning in or about the Project, the
same shall be without liability to Landlord and without any reduction or
diminution of Tenant's obligations under this Lease.
29.4 Modification of Lease. Should any current or prospective mortgagee
---------------------
ground lessor for the Building or Project require a modification of this Lease,
which modification will not cause an increased cost or expense to Tenant or in
any other way materially and adversely change the rights and obligations of
Tenant hereunder, then and in such event, Tenant agrees that this Lease may be
so modified and agrees to execute whatever documents are reasonably required
therefor and to deliver the same to Landlord within ten (10) days following a
request therefor. At the request of Landlord or any mortgagee or ground lessor,
Tenant agrees to execute a short form of Lease and deliver the same to Landlord
within ten (10) days following the request therefor.
29.5 Transfer of Landlord's Interest. Tenant acknowledges that Landlord
-------------------------------
has the right to transfer all or any portion of its interest in the Project or
Building and in this Lease, and Tenant agrees that in the event of any such
transfer, Landlord shall automatically be released from all liability under this
Lease and Tenant agrees to look solely to such transferee for the performance of
Landlord's obligations hereunder after the date of transfer and such transferee
shall be deemed to have fully assumed and be liable for all obligations of this
Lease to be performed by Landlord, including the return of any Security Deposit,
and Tenant shall attorn to such transferee. Tenant further acknowledges that
Landlord may assign its interest in this Lease to a mortgage lender as
additional security and agrees that such an assignment shall not release
Landlord from its obligations hereunder and that Tenant shall continue to look
to Landlord for the performance of its obligations hereunder.
29.6 Prohibition Against Recording. Except as provided in Section 29.4 of
-----------------------------
this Lease, neither this Lease, nor any memorandum, affidavit or other writing
with respect thereto, shall be recorded by Tenant or by anyone acting through,
under or on behalf of Tenant.
29.7 Landlord's Title. Landlord's title is and always shall be paramount
----------------
to the title of Tenant. Nothing herein contained shall empower Tenant to do any
act which can, shall or may encumber the title of Landlord.
29.8 Relationship of Parties. Nothing contained in this Lease shall be
-----------------------
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant.
29.9 Application of Payments. Landlord shall have the right to apply
-----------------------
payments received from Tenant pursuant to this Lease, regardless of Tenant's
designation of such payments, to satisfy any obligations of Tenant hereunder, in
such order and amounts as Landlord, in its sole discretion, may elect.
29.10 Time of Essence. Time is of the essence with respect to the
---------------
performance of every provision of this Lease in which time of performance is a
factor.
29.11 Partial Invalidity. If any term, provision or condition contained in
------------------
this Lease shall, to any extent, be invalid or unenforceable, the remainder of
this Lease, or the application of such term, provision or condition to persons
or circumstances other than those with respect to
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<PAGE>
which it is invalid or unenforceable, shall not be affected thereby, and each
and every other term, provision and condition of this Lease shall be valid and
enforceable to the fullest extent possible permitted by law.
29.12 No Warranty. In executing and delivering this Lease, Tenant has not
-----------
relied on any representations, including, but not limited to, any representation
as to the amount of any item comprising Additional Rent or the amount of the
Additional Rent in the aggregate or that Landlord is furnishing the same
services to other tenants, at all, on the same level or on the same basis, or
any warranty or any statement of Landlord which is not set forth herein or in
one or more of the exhibits attached hereto.
29.13 Landlord Exculpation. The liability of Landlord or the Landlord
--------------------
Parties to Tenant for any default by Landlord under this Lease or arising in
connection herewith or with Landlord's operation, management, leasing, repair,
renovation, alteration or any other matter relating to the Project or the
Premises shall be limited solely and exclusively to an amount which is equal to
the lesser of (a) the interest of Landlord in the Building or (b) the equity
interest Landlord would have in the Building if the Building were encumbered by
third-party debt in an amount equal to eighty percent (80%) of the value of the
Building (as such value is determined by Landlord), provided that in no event
shall such liability extend to any sales or insurance proceeds received by
Landlord or the Landlord Parties in connection with the Project, Building or
Premises. Neither Landlord, nor any of the Landlord Parties shall have any
personal liability therefor, and Tenant hereby expressly waives and releases
such personal liability on behalf of itself and all persons claiming by, through
or under Tenant. The limitations of liability contained in this Section 29.13
shall inure to the benefit of Landlord's and the Landlord Parties' present and
future partners, beneficiaries, officers, directors, trustees, shareholders,
agents and employees, and their respective partners, heirs, successors and
assigns. Under no circumstances shall any present or future partner of Landlord
(if Landlord is a partnership), or trustee or beneficiary (if Landlord or any
partner of Landlord is a trust), have any liability for the performance of
Landlord's obligations under this Lease. Notwithstanding any contrary provision
herein, neither Landlord nor the Landlord Parties shall be liable under any
circumstances for injury or damage to, or interference with, Tenant's business,
including but not limited to, loss of profits, loss of rents or other revenues,
loss of business opportunity, loss of goodwill or loss of use, in each case,
however occurring.
29.14 Entire Agreement. It is understood and acknowledged that there are
----------------
no oral agreements between the parties hereto affecting this Lease and this
Lease 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 this
Lease. None of the terms, covenants, conditions or provisions of this Lease can
be modified, deleted or added to except in writing signed by the parties hereto.
29.15 Right to Lease. Landlord reserves the absolute right to effect such
--------------
other tenancies in the Project as Landlord in the exercise of its sole business
judgment shall determine to best promote the interests of the Building or
Project. Tenant does not rely on the fact, nor does Landlord represent, that
any specific tenant or type or number of tenants shall, during the Lease Term,
occupy any space in the Building or Project.
29.16 Force Majeure. Any prevention, delay or stoppage due to strikes,
-------------
lockouts, labor disputes, acts of God, inability to obtain services, labor, or
materials or reasonable substitutes therefor, governmental actions, civil
commotions, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent and other charges to be paid by Tenant
pursuant to this Lease and except as to Tenant's obligations under Articles 5
and 24 of this Lease (collectively, a "Force Majeure"), notwithstanding anything
to the contrary contained in this Lease, shall excuse the performance of such
party for a period equal to any such prevention, delay or stoppage and,
therefore, if this Lease specifies a time period for performance of an
obligation of either party, that time period shall be extended by the period of
any delay in such party's performance caused by a Force Majeure.
29.17 Waiver of Redemption by Tenant. Tenant hereby waives, for Tenant and
------------------------------
for all those claiming under Tenant, any and all rights now or hereafter
existing to redeem by order or
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<PAGE>
judgment of any court or by any legal process or writ, Tenant's right of
occupancy of the Premises after any termination of this Lease.
29.18 Notices. All notices, demands, statements, designations, approvals
-------
or other communications (collectively, "Notices") given or required to be given
by either party to the other hereunder or by law shall be in writing, shall be
(A) sent by United States certified or registered mail, postage prepaid, return
receipt requested ("Mail"), (B) transmitted by telecopy, if such telecopy is
promptly followed by a Notice sent by Mail, (C) delivered by a nationally
recognized overnight courier, or (D) delivered personally. Any Notice shall be
sent, transmitted, or delivered, as the case may be, to Tenant at the
appropriate address set forth in Section 9 of the Summary, or to such other
place as Tenant may from time to time designate in a Notice to Landlord, or to
Landlord at the addresses set forth below, or to such other places as Landlord
may from time to time designate in a Notice to Tenant. Any Notice will be deemed
given (i) three (3) days after the date it is posted if sent by Mail, (ii) the
date the telecopy is transmitted, (iii) the date the overnight courier delivery
is made, or (iv) the date personal delivery is made or attempted to be made. If
Tenant is notified of the identity and address of Landlord's mortgagee or ground
or underlying lessor, Tenant shall give to such mortgagee or ground or
underlying lessor written notice of any default by Landlord under the terms of
this Lease by registered or certified mail, and such mortgagee or ground or
underlying lessor shall be given a reasonable opportunity to cure such default
prior to Tenant's exercising any remedy available to Tenant. As of the date of
this Lease, any Notices to Landlord must be sent, transmitted, or delivered, as
the case may be, to the following addresses:
DivcoWest Group, LLC
150 Spear Street
San Francisco, California 94105
Attn: Lesli Wang
with a copy to:
DivcoWest Group, LLC
150 Almaden Boulevard
Suite 700
San Jose, California 95113
Attention: Asset Manager
and
Allen, Matkins, Leck, Gamble & Mallory
1999 Avenue of the Stars, Suite 1800
Los Angeles, California 90067
Attention: Anton N. Natsis, Esq.
29.19 Joint and Several. If there is more than one Tenant, the obligations
-----------------
imposed upon Tenant under this Lease shall be joint and several.
29.20 Authority. If Tenant is a corporation, trust or partnership, each
---------
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in California and that Tenant has full right and authority to execute
and deliver this Lease and that each person signing on behalf of Tenant is
authorized to do so. In such event, Tenant shall, within ten (10) days after
execution of this Lease, deliver to Landlord satisfactory evidence of such
authority and, if a corporation, upon demand by Landlord, also deliver to
Landlord satisfactory evidence of (i) good standing in Tenant's state of
incorporation and (ii) qualification to do business in California.
29.21 Attorneys' Fees. In the event that either Landlord or Tenant should
---------------
bring suit for the possession of the Premises, for the recovery of any sum due
under this Lease, or because of the breach of any provision of this Lease or for
any other relief against the other, then all costs and expenses, including
reasonable attorneys' fees, incurred by the prevailing party therein shall be
paid by the other party, which obligation on the part of the other party shall
be deemed to have accrued on the date of the commencement of such action and
shall be enforceable whether or not the action is prosecuted to judgment.
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29.22 Governing Law; WAIVER OF TRIAL BY JURY. This Lease shall be
--------------------------------------
construed and enforced in accordance with the laws of the State of California.
IN ANY ACTION OR PROCEEDING ARISING HEREFROM, LANDLORD AND TENANT HEREBY CONSENT
TO (I) THE JURISDICTION OF ANY COMPETENT COURT WITHIN THE STATE OF CALIFORNIA,
(II) SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY CALIFORNIA LAW, AND (III) IN
THE INTEREST OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE
OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN
CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S
USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY
EMERGENCY OR STATUTORY REMEDY. IN THE EVENT LANDLORD COMMENCES ANY SUMMARY
PROCEEDINGS OR ACTION FOR NONPAYMENT OF BASE RENT OR ADDITIONAL RENT, TENANT
SHALL NOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR DESCRIPTION (UNLESS SUCH
COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH PROCEEDING OR ACTION, BUT SHALL BE
RELEGATED TO AN INDEPENDENT ACTION AT LAW.
29.23 Submission of Lease. Submission of this instrument for examination
-------------------
or signature by Tenant does not constitute a reservation of, option for or
option to lease, and it is not effective as a lease or otherwise until execution
and delivery by both Landlord and Tenant.
29.24 Brokers. Landlord and Tenant hereby warrant to each other that they
-------
have had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the real estate brokers or agents
specified in Section 11 of the Summary (the "Brokers"), and that they know of no
other real estate broker or agent who is entitled to a commission in connection
with this Lease. Each party agrees to indemnify and defend the other party
against and hold the other party harmless from any and all claims, demands,
losses, liabilities, lawsuits, judgments, costs and expenses (including without
limitation reasonable attorneys' fees) with respect to any leasing commission or
equivalent compensation alleged to be owing on account of any dealings with any
real estate broker or agent, other than the Brokers, occurring by, through, or
under the indemnifying party.
29.25 Independent Covenants. This Lease shall be construed as though the
---------------------
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord's expense or to any setoff of the Rent or other amounts owing
hereunder against Landlord.
29.26 Project or Building Name and Signage. Landlord shall have the right
------------------------------------
at any time to change the name of the Project or Building and to install, affix
and maintain any and all signs on the exterior and on the interior of the
Project or Building as Landlord may, in Landlord's sole discretion, desire.
Tenant shall not use the name of the Project or Building or use pictures or
illustrations of the Project or Building in advertising or other publicity or
for any purpose other than as the address of the business to be conducted by
Tenant in the Premises, without the prior written consent of Landlord.
29.27 Counterparts. This Lease may be executed in counterparts with the
------------
same effect as if both parties hereto had executed the same document. Both
counterparts shall be construed together and shall constitute a single lease.
29.28 Confidentiality. Tenant acknowledges that the content of this Lease
---------------
and any related documents are confidential information. Tenant shall keep such
confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than Tenant's financial,
legal, and space planning consultants.
29.29 Transportation Management. Tenant shall fully comply with all
-------------------------
present or future programs intended to manage parking, transportation or traffic
in and around the Building, and in connection therewith, Tenant shall take
responsible action for the transportation planning and management of all
employees located at the Premises by working directly with Landlord, any
governmental transportation management organization or any other transportation-
related committees or entities.
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29.30 Building Renovations. It is specifically understood and agreed that
--------------------
Landlord has made no representation or warranty to Tenant and has no obligation
and has made no promises to alter, remodel, improve, renovate, repair or
decorate the Premises, Building, 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 hereby acknowledges that Landlord is currently
renovating or may during the Lease Term renovate, improve, alter, or modify
(collectively, the "Renovations") the Project, the Building and/or the Premises
including without limitation the parking structure, common areas, systems and
equipment, roof, and structural portions of the same, which Renovations may
include, without limitation, (i) installing sprinklers in the Building common
areas and tenant spaces, (ii) modifying the common areas and tenant spaces to
comply with applicable laws and regulations, including regulations relating to
the physically disabled, seismic conditions, and building safety and security,
and (iii) installing new floor covering, lighting, and wall coverings in the
Building common areas, and in connection with any Renovations, Landlord may,
among other things, erect scaffolding or other necessary structures in the
Building, limit or eliminate access to portions of the Project, including
portions of the common areas, or perform work in the Building, which work may
create noise, dust or leave debris in the Building. Tenant hereby agrees that
such Renovations and Landlord's actions in connection with such Renovations
shall in no way constitute a constructive eviction of Tenant nor entitle Tenant
to any abatement of Rent (except as provided in Section 6.4 of this Lease).
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.
29.31 No Violation. Tenant hereby warrants and represents that neither
------------
its execution of nor performance under this Lease shall cause Tenant to be in
violation of any agreement, instrument, contract, law, rule or regulation by
which Tenant is bound, and Tenant shall protect, defend, indemnify and hold
Landlord harmless against any claims, demands, losses, damages, liabilities,
costs and expenses, including, without limitation, reasonable attorneys' fees
and costs, arising from Tenant's breach of this warranty and representation.
29.32 Communications and Computer Lines. Tenant may install, maintain,
---------------------------------
replace, remove or use any communications or computer wires and cables
(collectively, the "Lines") at the Project in or serving the Premises, provided
that (i) Tenant shall obtain Landlord's prior written consent, use an
experienced and qualified contractor approved in writing by Landlord, and comply
with all of the other provisions of Articles 7 and 8 of this Lease, (ii) an
acceptable number of spare Lines and space for additional Lines shall be
maintained for existing and future occupants of the Project, as determined in
Landlord's reasonable opinion, (iii) the Lines therefor (including riser cables)
shall be appropriately insulated to prevent excessive electromagnetic fields or
radiation, and shall be surrounded by a protective conduit reasonably acceptable
to Landlord, (iv) any new or existing Lines servicing the Premises shall comply
with all applicable governmental laws and regulations, (v) as a condition to
permitting the installation of new Lines, Landlord may require that Tenant
remove existing Lines located in or serving the Premises and repair any damage
in connection with such removal, and (vi) Tenant shall pay all costs in
connection therewith. Landlord reserves the right to require that Tenant remove
any Lines located in or serving the Premises which are installed in violation of
these provisions, or which are at any time in violation of any laws or represent
a dangerous or potentially dangerous condition.
29.33 Development of the Project.
--------------------------
29.33.1 Subdivision. Landlord reserves the right to further
-----------
subdivide all or a portion of the Project, provided that Tenant's rights under
this Lease are not materially adversely affected thereby. Tenant agrees to
execute and deliver, upon demand by Landlord and in the form requested by
Landlord, any additional documents needed to conform this Lease to the
circumstances resulting from such subdivision.
29.33.2 The Other Improvements. If portions of the Project or
----------------------
property adjacent to the Project (collectively, the "Other Improvements") are
owned by an entity other than Landlord, Landlord, at its option, may enter into
an agreement with the owner or owners of
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any or all of the Other Improvements to provide (i) for reciprocal rights of
access and/or use of the Project and the Other Improvements, (ii) for the common
management, operation, maintenance, improvement and/or repair of all or any
portion of the Project and the Other Improvements, (iii) for the allocation of a
portion of the Direct Expenses to the Other Improvements and the operating
expenses and taxes for the Other Improvements to the Project, and (iv) for the
use or improvement of the Other Improvements and/or the Project in connection
with the improvement, construction, and/or excavation of the Other Improvements
and/or the Project. Nothing contained herein shall be deemed or construed to
limit or otherwise affect Landlord's right to convey all or any portion of the
Project or any other of Landlord's rights described in this Lease.
29.33.3 Construction of Project and Other Improvements. Tenant
----------------------------------------------
acknowledges that portions of the Project and/or the Other Improvements may be
under construction following Tenant's occupancy of the Premises, and that such
construction may result in levels of noise, dust, obstruction of access, etc.
which are in excess of that present in a fully constructed project. Tenant
hereby waives any and all rent offsets or claims of constructive eviction which
may arise in connection with such construction.
29.34 Office and Communications Services.
----------------------------------
29.34.1 The Provider. Landlord has advised Tenant that certain
------------
office and communications services may be offered to tenants of the Project by a
concessionaire under contract to Landlord ("Provider"). Tenant shall be
permitted to contract with Provider for the provision of any or all of such
services on such terms and conditions as Tenant and Provider may agree.
29.34.2 Other Terms. Tenant acknowledges and agrees that: (i)
-----------
Landlord has made no warranty or representation to Tenant with respect to the
availability of any such services, or the quality, reliability or suitability
thereof; (ii) the Provider is not acting as the agent or representative of
Landlord in the provision of such services, and Landlord shall have no liability
or responsibility for any failure or inadequacy of such services, or any
equipment or facilities used in the furnishing thereof, or any act or omission
of Provider, or its agents, employees, representatives, officers or contractors;
(iii) Landlord shall have no responsibility or liability for the installation,
alteration, repair, maintenance, furnishing, operation, adjustment or removal of
any such services, equipment or facilities; and (iv) any contract or other
agreement between Tenant and Provider shall be independent of this Lease, the
obligations of Tenant hereunder, and the rights of Landlord hereunder, and,
without limiting the foregoing, no default or failure of Provider with respect
to any such services, equipment or facilities, or under any contract or
agreement relating thereto, shall have any effect on this Lease or give to
Tenant any offset or defense to the full and timely performance of its
obligations hereunder, or entitle Tenant to any abatement of rent or additional
rent or any other payment required to be made by Tenant hereunder, or constitute
any accrual or constructive eviction of Tenant, or otherwise give rise to any
other claim of any nature against Landlord.
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IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
executed the day and date first above written.
"Landlord":
SAN TOMAS PROPERTIES, LLC,
a Delaware limited liability company
By: DivcoWest Group, LLC,
a Delaware limited liability company
Its: Agent
By:_______________________________________
Its:_________________________________
"Tenant":
EXTREME NETWORKS, INC.,
a Delaware corporation
By:_______________________________________
Its:_________________________________
By:_______________________________________
Its:_____________________________
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EXHIBIT A
---------
OUTLINE OF PREMISES
[TO BE PROVIDED]
-1-
<PAGE>
EXHIBIT B
---------
TENANT WORK LETTER
This Tenant Work Letter shall set forth the terms and conditions relating
to the construction of the Premises. This Tenant Work Letter is essentially
organized chronologically and addresses the issues of the construction of the
Premises, in sequence, as such issues will arise during the actual construction
of the Premises. All references in this Tenant Work Letter to Articles or
Sections of "this Lease" shall mean the relevant portions of Articles 1 through
------------------
29 of the Office Lease to which this Tenant Work Letter is attached as Exhibit
-- -------
B, and all references in this Tenant Work Letter to Sections of "this Tenant
-
Work Letter" shall mean the relevant portions of Sections 1 through 5 of this
--------------------
Tenant Work Letter.
SECTION 1
DELIVERY OF THE PREMISES AND BASE BUILDING
Upon the full execution and delivery of this Lease by Landlord and Tenant,
Landlord shall deliver the Premises and "Base Building," as that term is defined
below, to Tenant, and Tenant shall accept the Premises and Base Building from
Landlord in their presently existing, "as-is" condition. The "Base Building"
shall consist of those portions of the Premises which were in existence prior to
the construction of the tenant improvements in the Premises for the prior tenant
of the Premises.
SECTION 2
TENANT IMPROVEMENTS
2.1 Tenant Improvement Allowance. Tenant shall be entitled to a one-time
----------------------------
tenant improvement allowance (the "Tenant Improvement Allowance") in the amount
of $5.00 per rentable square foot of the Premises for the costs relating to the
initial design and construction of Tenant's improvements, which are permanently
affixed to the Premises (the "Tenant Improvements"). In no event shall Landlord
be obligated to make disbursements pursuant to this Tenant Work Letter in a
total amount which exceeds the Tenant Improvement Allowance.
2.2 Disbursement of the Tenant Improvement Allowance.
------------------------------------------------
2.2.1 Tenant Improvement Allowance Items. Except as otherwise set
----------------------------------
forth in this Tenant Work Letter, the Tenant Improvement Allowance shall be
disbursed by Landlord only for the following items and costs (collectively the
"Tenant Improvement Allowance Items"):
2.2.1.1 Payment of the fees of the "Architect" and the
"Engineers," as those terms are defined in Section 3.1 of this Tenant Work
-----------
Letter, which fees shall, notwithstanding anything to the contrary contained in
this Tenant Work Letter, not exceed an aggregate amount equal to $3.50 per
usable square foot of the Premises, and payment of the fees incurred by, and the
cost of documents and materials supplied by, Landlord and Landlord's consultants
in connection with the preparation and review of the "Construction Drawings," as
that term is defined in Section 3.1 of this Tenant Work Letter;
-----------
2.2.1.2 The payment of plan check, permit and license fees
relating to construction of the Tenant Improvements;
2.2.1.3 The cost of construction of the Tenant
Improvements, including, without limitation, testing and inspection costs,
freight elevator usage, hoisting and trash removal costs, and contractors' fees
and general conditions;
2.2.1.4 The cost of any changes in the Base Building when
such changes are required by the Construction Drawings (including if such
changes are due to the fact that such work is prepared on an unoccupied basis),
such cost to include all direct architectural and/or engineering fees and
expenses incurred in connection therewith;
-1-
<PAGE>
2.2.1.5 The cost of any changes to the Construction
Drawings or Tenant Improvements required by all applicable building codes (the
"Code");
2.2.1.6 The cost of Landlord's Work;
2.2.1.7 The cost of the "Coordination Fee," as that term
is defined in Section 4.2.2 of this Tenant Work Letter;
-------------
2.2.1.8 Sales and use taxes; and
2.2.1.9 All other costs to be expended by Landlord in
connection with the construction of the Tenant Improvements.
2.2.2 Disbursement of Tenant Improvement Allowance. Following
--------------------------------------------
Tenant's completion of the construction of the Tenant Improvements, and
Landlord's receipt of the "Allowance Documentation," as that term is defined
below, Landlord shall disburse the Tenant Improvement Allowance to Tenant. For
the purposes of this Tenant Work Letter, the Allowance Documentation shall be
defined as (i) invoices from all of "Tenant's Agents," as that term is defined
in Section 4.1.2 of this Tenant Work Letter, for labor rendered and materials
-------------
delivered to the Premises; (ii) properly executed mechanics lien releases in
compliance with both California Civil Code Section 3262(d)(2) and either Section
3262(d)(3) or Section 3262(d)(4), (iii) a certificate from Architect, in a form
reasonably acceptable to Landlord, certifying that the construction of the
Tenant Improvements in the Premises has been substantially completed, and (iv)
all other information reasonably requested by Landlord. Tenant's request for
payment shall be deemed Tenant's acceptance and approval of the work furnished.
Thereafter, Landlord shall deliver a check to Tenant for that portion of the
Tenant Improvement Allowance spent by Tenant, as evidenced by the Allowance
Documentation, provided that Landlord does not dispute any request for payment
based on non-compliance of any work with the "Approved Working Drawings," as
that term is defined in Section 3.4 below, or due to any substandard work which
-----------
adversely affects the mechanical, electrical, plumbing, heating, ventilating and
air conditioning, life-safety or other systems of the Building, the curtain wall
of the Building, the structure or exterior appearance of the Building, or any
other tenant's use of such other tenant's leased premises in the Building, or
for any other reason. Landlord's payment of such amounts shall not be deemed
Landlord's approval or acceptance of the work furnished or materials supplied as
set forth in Tenant's payment request.
2.2.3 Other Terms. Landlord shall only be obligated to make
-----------
disbursements from the Tenant Improvement Allowance to the extent costs are
incurred by Tenant for Tenant Improvement Allowance Items. All Tenant
Improvement Allowance Items for which the Tenant Improvement Allowance has been
made available shall be deemed Landlord's property under the terms of this
Lease. Any portion of the Tenant Improvement Allowance which is not utilized by
Tenant within six (6) months from the delivery of the Premises to Tenant shall
revert to and become the sole property of Landlord.
2.3 Standard Tenant Improvement Package. Landlord has established
-----------------------------------
specifications (the "Building Standard Tenant Improvements") for the Building
standard components to be used in the construction of the Tenant Improvements in
the Premises. The quality of Tenant Improvements shall be equal to or of
greater quality than the quality of the Building Standard Tenant Improvements,
provided that Landlord may, at Landlord's option, require the Tenant
Improvements to comply with certain Building Standard Tenant Improvements.
Landlord may make changes to the Specifications for the Standard Improvement
Package from time to time.
2.4 Removal of Above Building Standard Tenant Improvements. "Above
------------------------------------------------------
Standard Tenant Improvements" shall mean (a) any part of the Tenant Improvements
which do not constitute Building Standard Tenant Improvements, including, but
not limited to, plumbing and millwork; (b) any changes in or additions to the
Tenant Improvements made at the request of Tenant or due to any other act or
omission on the part of Tenant; and (c) a configuration of the Tenant
Improvements which is not usual and customary for normal occupancy. If so
directed by Landlord at the time consent to the Approved Working Drawings is
granted pursuant to the terms of Section 3.4 of this Tenant Work Letter, Tenant,
at its sole cost and expense, shall remove from the Premises any Above Standard
Tenant Improvements designated by Landlord, and shall replace such designated
Above Standard Tenant Improvements to be removed with Building Standard Tenant
Improvements. Such removal and replacement of Above Standard Tenant
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<PAGE>
Improvements shall be performed promptly and shall be completed by Tenant on or
before the end of the Term of this Lease if notice of removal is given at least
thirty (30) days prior to the end of the Term, and if Tenant fails to remove
and/or replace any Above Standard Tenant Improvements, Landlord may do so and
Tenant shall reimburse Landlord for the cost of such removal and/or replacement.
SECTION 3
CONSTRUCTION DRAWINGS
3.1 Selection of Architect/Construction Drawings. Tenant shall retain the
--------------------------------------------
architect/space planner designated by Landlord (the "Architect") to prepare the
"Construction Drawings," as that term is defined in this Section 3.1. Tenant
-----------
shall retain the engineering consultants designated by Landlord (the
"Engineers") to prepare all plans and engineering working drawings relating to
the structural, mechanical, electrical, plumbing, HVAC, lifesafety, and
sprinkler work in the Premises, which work is not part of the Base Building.
The plans and drawings to be prepared by Architect and the Engineers hereunder
shall be known collectively as the "Construction Drawings." All Construction
Drawings shall comply with the drawing format and specifications determined by
Landlord, and shall be subject to Landlord's approval. Tenant and Architect
shall verify, in the field, the dimensions and conditions as shown on the
relevant portions of the base building plans, and Tenant and Architect shall be
solely responsible for the same, and Landlord shall have no responsibility in
connection therewith. Landlord's review of the Construction Drawings as set
forth in this Section 3, shall be for its sole purpose and shall not imply
---------
Landlord's review of the same, or obligate Landlord to review the same, for
quality, design, Code compliance or other like matters. Accordingly,
notwithstanding that any Construction Drawings are reviewed by Landlord or its
space planner, architect, engineers and consultants, and notwithstanding any
advice or assistance which may be rendered to Tenant by Landlord or Landlord's
space planner, architect, engineers, and consultants, Landlord shall have no
liability whatsoever in connection therewith and shall not be responsible for
any omissions or errors contained in the Construction Drawings, and Tenant's
waiver and indemnity set forth in this Lease shall specifically apply to the
Construction Drawings.
3.2 Final Space Plan. Tenant shall supply Landlord with four (4) copies
----------------
signed by Tenant of its final space plan for the Premises before any
architectural working drawings or engineering drawings have been commenced. The
final space plan (the "Final Space Plan") shall include a layout and designation
of all offices, rooms and other partitioning, their intended use, and equipment
to be contained therein. Landlord may request clarification or more specific
drawings for special use items not included in the Final Space Plan. Landlord
shall advise Tenant within five (5) business days after Landlord's receipt of
the Final Space Plan for the Premises if the same is unsatisfactory or
incomplete in any respect. If Tenant is so advised, Tenant shall promptly cause
the Final Space Plan to be revised to correct any deficiencies or other matters
Landlord may reasonably require.
3.3 Final Working Drawings. After the Final Space Plan has been approved
----------------------
by Landlord, Tenant shall supply the Engineers with a complete listing of
standard and non-standard equipment and specifications, including, without
limitation, B.T.U. calculations, electrical requirements and special electrical
receptacle requirements for the Premises, to enable the Engineers and the
Architect to complete the "Final Working Drawings" (as that term is defined
below) in the manner as set forth below. Upon the approval of the Final Space
Plan by Landlord and Tenant, Tenant shall promptly cause the Architect and the
Engineers to complete the architectural and engineering drawings for the
Premises, and Architect shall compile a fully coordinated set of architectural,
structural, mechanical, electrical and plumbing working drawings in a form which
is complete to allow subcontractors to bid on the work and to obtain all
applicable permits (collectively, the "Final Working Drawings") and shall submit
the same to Landlord for Landlord's approval. Tenant shall supply Landlord with
four (4) copies signed by Tenant of such Final Working Drawings. Landlord shall
advise Tenant within five (5) business days after Landlord's receipt of the
Final Working Drawings for the Premises if the same is unsatisfactory or
incomplete in any respect. If Tenant is so advised, Tenant shall immediately
revise the Final Working Drawings in accordance with such review and any
disapproval of Landlord in connection therewith. In addition, if the Final
Working Drawings or any amendment thereof or supplement thereto shall require
alterations in the Base, Shell and Core (as contrasted with the Tenant
Improvements), and if Landlord in its sole and exclusive discretion agrees to
any such alterations, and notifies Tenant of the need and cost for such
alterations, then Tenant shall
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<PAGE>
pay the cost of such required changes upon receipt of bills therefor. Tenant
shall pay all direct architectural and/or engineering fees in connection
therewith.
3.4 Approved Working Drawings. The Final Working Drawings shall be
-------------------------
approved by Landlord (the "Approved Working Drawings") prior to the commencement
of construction of the Premises by Tenant. After approval by Landlord of the
Final Working Drawings, Tenant may submit the same to the appropriate municipal
authorities for all applicable building permits. Tenant hereby agrees that
neither Landlord nor Landlord's consultants shall be responsible for obtaining
any building permit or certificate of occupancy for the Premises and that
obtaining the same shall be Tenant's responsibility; provided, however, that
Landlord shall cooperate with Tenant in executing permit applications and
performing other ministerial acts reasonably necessary to enable Tenant to
obtain any such permit or certificate of occupancy. No changes, modifications or
alterations in the Approved Working Drawings may be made without the prior
written consent of Landlord, which consent may not be unreasonably withheld.
SECTION 4
CONSTRUCTION OF THE TENANT IMPROVEMENTS
4.1 Tenant's Selection of Contractors.
---------------------------------
4.1.1 The Contractor. A general contractor shall be retained by
--------------
Tenant to construct the Tenant Improvements. Such general contractor
("Contractor") shall be selected by Tenant subject to Landlord's reasonable
approval, and Tenant shall deliver to Landlord notice of its selection of the
Contractor upon such selection.
4.1.2 Tenant's Agents. All subcontractors, laborers, materialmen,
---------------
and suppliers used by Tenant (such subcontractors, laborers, materialmen, and
suppliers, and the Contractor to be known collectively as "Tenant's Agents")
must be approved in writing by Landlord, which approval shall not be
unreasonably withheld or delayed. If Landlord does not approve any of Tenant's
proposed subcontractors, laborers, materialmen or suppliers, Tenant shall submit
other proposed subcontractors, laborers, materialmen or suppliers for Landlord's
written approval.
4.2 Construction of Tenant Improvements by Tenant's Agents.
------------------------------------------------------
4.2.1 Construction Contract; Cost Budget. Prior to Tenant's
----------------------------------
execution of the construction contract and general conditions with Contractor
(the "Contract"), Tenant shall submit the Contract to Landlord for its approval,
which approval shall not be unreasonably withheld or delayed. Prior to the
commencement of the construction of the Tenant Improvements, and after Tenant
has accepted all bids for the Tenant Improvements, Tenant shall provide Landlord
with a detailed breakdown, by trade, of the final costs to be incurred or which
have been incurred, as set forth more particularly in Sections 2.2.1.1 through
------------------------
2.2.1.9, above, in connection with the design and construction of the Tenant
-------
Improvements to be performed by or at the direction of Tenant or the Contractor,
which costs form a basis for the amount of the Contract (the "Final Costs").
4.2.2 Tenant's Agents.
---------------
4.2.2.1 Landlord's General Conditions for Tenant's Agents and
-----------------------------------------------------
Tenant Improvement Work. Tenant's and Tenant's Agent's construction of the
-----------------------
Tenant Improvements shall comply with the following: (i) the Tenant Improvements
shall be constructed in strict accordance with the Approved Working Drawings;
(ii) Tenant's Agents shall submit schedules of all work relating to the Tenant's
Improvements to Contractor and Contractor shall, within five (5) business days
of receipt thereof, inform Tenant's Agents of any changes which are necessary
thereto, and Tenant's Agents shall adhere to such corrected schedule; and (iii)
Tenant shall abide by all rules made by Landlord's Building manager with respect
to the use of freight, loading dock and service elevators, storage of materials,
coordination of work with the contractors of other tenants, and any other matter
in connection with this Tenant Work Letter, including, without limitation, the
construction of the Tenant Improvements. Tenant shall pay a logistical
coordination fee (the "Coordination Fee") to Landlord in an amount equal to the
product of (i) five percent (5%) and (ii) the sum of the Tenant Improvement
Allowance, the Over-Allowance Amount, as such amount may be increased hereunder,
and any other amounts expended by Tenant in connection with the design and
construction of the Tenant Improvements, which
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<PAGE>
Coordination Fee shall be for services relating to the coordination of the
construction of the Tenant Improvements.
4.2.2.2 Indemnity. Tenant's indemnity of Landlord as set forth
---------
in this Lease shall also apply with respect to any and all costs, losses,
damages, injuries and liabilities related in any way to any act or omission of
Tenant or Tenant's Agents, or anyone directly or indirectly employed by any of
them, or in connection with Tenant's non-payment of any amount arising out of
the Tenant Improvements and/or Tenant's disapproval of all or any portion of any
request for payment. Such indemnity by Tenant, as set forth in this Lease, shall
also apply with respect to any and all costs, losses, damages, injuries and
liabilities related in any way to Landlord's performance of any ministerial acts
reasonably necessary (i) to permit Tenant to complete the Tenant Improvements,
and (ii) to enable Tenant to obtain any building permit or certificate of
occupancy for the Premises.
4.2.2.3 Requirements of Tenant's Agents. Each of Tenant's
-------------------------------
Agents shall guarantee to Tenant and for the benefit of Landlord that the
portion of the Tenant Improvements for which it is responsible shall be free
from any defects in workmanship and materials for a period of not less than one
(1) year from the date of completion thereof. Each of Tenant's Agents shall be
responsible for the replacement or repair, without additional charge, of all
work done or furnished in accordance with its contract that shall become
defective within one (1) year after the later to occur of (i) completion of the
work performed by such contractor or subcontractors and (ii) the Lease
Commencement Date. The correction of such work shall include, without additional
charge, all additional expenses and damages incurred in connection with such
removal or replacement of all or any part of the Tenant Improvements, and/or the
Building and/or common areas that may be damaged or disturbed thereby. All such
warranties or guarantees as to materials or workmanship of or with respect to
the Tenant Improvements shall be contained in the Contract or subcontract and
shall be written such that such guarantees or warranties shall inure to the
benefit of both Landlord and Tenant, as their respective interests may appear,
and can be directly enforced by either. Tenant covenants to give to Landlord any
assignment or other assurances which may be necessary to effect such right of
direct enforcement.
4.2.2.4 Insurance Requirements.
----------------------
(a) General Coverages. All of Tenant's Agents
-----------------
shall carry worker's compensation insurance covering all of their
respective employees, and shall also carry public liability insurance,
including property damage, all with limits, in form and with companies as
are required to be carried by Tenant as set forth in this Lease.
(b) Special Coverages. Tenant shall carry
-----------------
"Builder's All Risk" insurance in anamount approved by Landlord covering
the construction of the Tenant Improvements, and such other insurance as
Landlord may require, it being understood and agreed that the Tenant
Improvements shall be insured by Tenant pursuant to this Lease immediately
upon completion thereof. Such insurance shall be in amounts and shall
include such extended coverage endorsements as may be reasonably required
by Landlord including, but not limited to, the requirement that all of
Tenant's Agents shall carry excess liability and Products and Completed
Operation Coverage insurance, each in amounts not less than $500,000 per
incident, $1,000,000 in aggregate, and in form and with companies as are
required to be carried by Tenant as set forth in this Lease.
(c) General Terms. Certificates for all
-------------
insurance carried pursuant to this Section 4.2.2.4 shall be delivered to
---------------
Landlord before the commencement of construction of the Tenant Improvements
and before the Contractor's equipment is moved onto the site. All such
policies of insurance must contain a provision that the company writing
said policy will give Landlord thirty (30) days prior written notice of any
cancellation or lapse of the effective date or any reduction in the amounts
of such insurance. In the event that the Tenant Improvements are damaged by
any cause during the course of the construction thereof, Tenant shall
immediately repair the same at Tenant's sole cost and expense. Tenant's
Agents shall maintain all of the foregoing insurance coverage in force
until the Tenant Improvements are fully completed and accepted by Landlord,
except for any Products and Completed Operation Coverage insurance required
by Landlord, which is to be maintained for ten (10) years following
completion of the work and acceptance by Landlord and Tenant. All policies
carried
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<PAGE>
under this Section 4.2.2.4 shall insure Landlord and Tenant, as their
---------------
interests may appear, as well as Contractor and Tenant's Agents. All
insurance, except Workers' Compensation, maintained by Tenant's Agents
shall preclude subrogation claims by the insurer against anyone insured
thereunder. Such insurance shall provide that it is primary insurance as
respects the owner and that any other insurance maintained by owner is
excess and noncontributing with the insurance required hereunder. The
requirements for the foregoing insurance shall not derogate from the
provisions for indemnification of Landlord by Tenant under Section 4.2.2.2
---------------
of this Tenant Work Letter. Landlord may, in its discretion, require Tenant
to obtain a lien and completion bond or some alternate form of security
satisfactory to Landlord in an amount sufficient to ensure the lien-free
completion of the Tenant Improvements and naming Landlord as a co-obligee.
4.2.3 Governmental Compliance. The Tenant Improvements shall
-----------------------
comply in all respects with the following: (i) the Code and other state,
federal, city or quasi-governmental laws, codes, ordinances and regulations, as
each may apply according to the rulings of the controlling public official,
agent or other person; (ii) applicable standards of the American Insurance
Association (formerly, the National Board of Fire Underwriters) and the National
Electrical Code; and (iii) building material manufacturer's specifications.
4.2.4 Inspection by Landlord. Landlord shall have the right to
----------------------
inspect the Tenant Improvements at all times, provided however, that Landlord's
failure to inspect the Tenant Improvements shall in no event constitute a waiver
of any of Landlord's rights hereunder nor shall Landlord's inspection of the
Tenant Improvements constitute Landlord's approval of the same. Should Landlord
disapprove any portion of the Tenant Improvements, Landlord shall notify Tenant
in writing of such disapproval and shall specify the items disapproved. Any
defects or deviations in, and/or disapproval by Landlord of, the Tenant
Improvements shall be rectified by Tenant at no expense to Landlord, provided
however, that in the event Landlord determines that a defect or deviation exists
or disapproves of any matter in connection with any portion of the Tenant
Improvements and such defect, deviation or matter might adversely affect the
mechanical, electrical, plumbing, heating, ventilating and air conditioning or
life-safety systems of the Building, the structure or exterior appearance of the
Building or any other tenant's use of such other tenant's leased premises,
Landlord may, take such action as Landlord deems necessary, at Tenant's expense
and without incurring any liability on Landlord's part, to correct any such
defect, deviation and/or matter, including, without limitation, causing the
cessation of performance of the construction of the Tenant Improvements until
such time as the defect, deviation and/or matter is corrected to Landlord's
satisfaction.
4.2.5 Meetings. Commencing upon the execution of this Lease, Tenant
--------
shall hold weekly meetings at a reasonable time, with the Architect and the
Contractor regarding the progress of the preparation of Construction Drawings
and the construction of the Tenant Improvements, which meetings shall be held at
a location designated by Landlord, and Landlord and/or its agents shall receive
prior notice of, and shall have the right to attend, all such meetings, and,
upon Landlord's request, certain of Tenant's Agents shall attend such meetings.
In addition, minutes shall be taken at all such meetings, a copy of which
minutes shall be promptly delivered to Landlord. One such meeting each month
shall include the review of Contractor's current request for payment.
4.3 Notice of Completion; Copy of Record Set of Plans. Within ten (10)
-------------------------------------------------
days after completion of construction of the Tenant Improvements, Tenant shall
cause a Notice of Completion to be recorded in the office of the Recorder of the
county in which the Building is located in accordance with Section 3093 of the
Civil Code of the State of California or any successor statute, and shall
furnish a copy thereof to Landlord upon such recordation. If Tenant fails to do
so, Landlord may execute and file the same on behalf of Tenant as Tenant's agent
for such purpose, at Tenant's sole cost and expense. At the concllusion of
construction, 9i) Tenant shall cause the Architect and Contractor (A) to update
the Approved Working Drawings as necessary to reflect all changes made to the
Approved Working Drawings as necessary to reflect all changes made to the best
of their knowledge that the "record-set" of as-built drawings are true and
correct, which certification shall survive the expiration or termination of this
Lease, and (C) to deliver to Landlord two (2) sets of copies of such record set
of drawings within ninety (90) days following issuance of a certificate of
occupancy for the Premises, and (ii) Tenant shall deliver to Landlord a copy of
all warranties, guaranties, and operating manuals and information relating to
the improvements, equipment, and systems in the Premises.
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<PAGE>
SECTION 5
MISCELLANEOUS
5.1 Tenant's Representative. Tenant has designated Mr. Jeff Westling as
-----------------------
its sole representative with respect to the matters set forth in this Tenant
Work Letter, who shall have full authority and responsibility to act on behalf
of the Tenant as required in this Tenant Work Letter.
5.2 Landlord's Representative. Landlord has designated Ms. Leslie Wang
-------------------------
as its sole representatives with respect to the matters set forth in this Tenant
Work Letter, who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Tenant Work
Letter.
5.3 Time of the Essence in This Tenant Work Letter. Unless otherwise
----------------------------------------------
indicated, all references herein to a "number of days" shall mean and refer to
calendar days. If any item requiring approval is timely disapproved by
Landlord, the procedure for preparation of the document and approval thereof
shall be repeated until the document is approved by Landlord.
5.4 Tenant's Lease Default. Notwithstanding any provision to the contrary
----------------------
contained in this Lease, if an event of default as described in the Lease or
this Tenant Work Letter has occurred at any time on or before the Substantial
Completion of the Premises, then (i) in addition to all other rights and
remedies granted to Landlord pursuant to this Lease, Landlord shall have the
right to withhold payment of all or any portion of the Tenant Improvement
Allowance and/or Landlord may cause Contractor to cease the construction of the
Premises (in which case, Tenant shall be responsible for any delay in the
substantial completion of the Premises caused by such work stoppage), and (ii)
all other obligations of Landlord under the terms of this Tenant Work Letter
shall be forgiven until such time as such default is cured pursuant to the terms
of this Lease (in which case, Tenant shall be responsible for any delay in the
substantial completion of the Premises caused by such inaction by Landlord).
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<PAGE>
EXHIBIT C
---------
NOTICE OF LEASE TERM DATES
To: _______________________
_______________________
_______________________
_______________________
Re: Office Lease dated ____________, 20__ between ____________________, a
_____________________ ("Landlord"), and _______________________, a
_______________________ ("Tenant") concerning the office building
located at ____________________________, Santa Clara, California.
Gentlemen:
In accordance with the Office Lease (the "Lease"), we wish to advise you
and/or confirm as follows:
1. The Lease Term shall commence on or has commenced on ______________
for a term of __________________ ending on __________________.
2. Rent commenced to accrue on __________________, in the amount of
________________.
3. If the Lease Commencement Date is other than the first day of the
month, the first billing will contain a pro rata adjustment. Each
billing thereafter, with the exception of the final billing, shall be
for the full amount of the monthly installment as provided for in the
Lease.
4. Your rent checks should be made payable to __________________ at
___________________.
5. The exact number of rentable/usable square feet within the Premises is
____________ square feet.
"Landlord":
_______________________,
a _____________________
By:_____________________
Its: ______________
Agreed to and Accepted
as of ____________, 20___.
"Tenant":
_________________________
a _______________________
By: ___________________________
Its: ____________________
EXHIBIT C
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<PAGE>
EXHIBIT D
---------
RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Project. In the event of any
conflict between the Rules and Regulations and the other provisions of this
Lease, the latter shall control.
1. Tenant shall not alter any lock or install any new or additional locks
or bolts on any doors or windows of the Premises without obtaining Landlord's
prior written consent. Tenant shall bear the cost of any lock changes or repairs
required by Tenant. Two keys will be furnished by Landlord for the Premises, and
any additional keys required by Tenant must be obtained from Landlord at a
reasonable cost to be established by Landlord. Upon the termination of this
Lease, Tenant shall restore to Landlord all keys of stores, offices, and toilet
rooms, either furnished to, or otherwise procured by, Tenant and in the event of
the loss of keys so furnished, Tenant shall pay to Landlord the cost of
replacing same or of changing the lock or locks opened by such lost key if
Landlord shall deem it necessary to make such changes.
2. All doors opening to public corridors shall be kept closed at all times
except for normal ingress and egress to the Premises.
3. Landlord reserves the right to close and keep locked all entrance and
exit doors of the Building during such hours as are customary for comparable
buildings in the Santa Clara, California area. Tenant, its employees and agents
must be sure that the doors to the Building are securely closed and locked when
leaving the Premises if it is after the normal hours of business for the
Building. Any tenant, its employees, agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time when it is
considered to be after normal business hours for the Building, may be required
to sign the Building register. Access to the Building may be refused unless the
person seeking access has proper identification or has a previously arranged
pass for access to the Building. Landlord will furnish passes to persons for
whom Tenant requests same in writing. Tenant shall be responsible for all
persons for whom Tenant requests passes and shall be liable to Landlord for all
acts of such persons. The Landlord and his agents shall in no case be liable for
damages for any error with regard to the admission to or exclusion from the
Building of any person. In case of invasion, mob, riot, public excitement, or
other commotion, Landlord reserves the right to prevent access to the Building
or the Project during the continuance thereof by any means it deems appropriate
for the safety and protection of life and property.
4. No furniture, freight or equipment of any kind shall be brought into
the Building without prior notice to Landlord. All moving activity into or out
of the Building shall be scheduled with Landlord and done only at such time and
in such manner as Landlord designates. Landlord shall have the right to
prescribe the weight, size and position of all safes and other heavy property
brought into the Building and also the times and manner of moving the same in
and out of the Building. Safes and other heavy objects shall, if considered
necessary by Landlord, stand on supports of such thickness as is necessary to
properly distribute the weight. Landlord will not be responsible for loss of or
damage to any such safe or property in any case. Any damage to any part of the
Building, its contents, occupants or visitors by moving or maintaining any such
safe or other property shall be the sole responsibility and expense of Tenant.
5. No furniture, packages, supplies, equipment or merchandise will be
received in the Building or carried up or down in the elevators, except between
such hours, in such specific elevator and by such personnel as shall be
designated by Landlord.
6. The requirements of Tenant will be attended to only upon application at
the management office for the Project or at such office location designated by
Landlord. Employees of Landlord shall not perform any work or do anything
outside their regular duties unless under special instructions from Landlord.
EXHIBIT D
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<PAGE>
7. No sign, advertisement, notice or handbill shall be exhibited,
distributed, painted or affixed by Tenant on any part of the Premises or the
Building without the prior written consent of the Landlord. Tenant shall not
disturb, solicit, peddle, or canvass any occupant of the Project and shall
cooperate with Landlord and its agents of Landlord to prevent same.
8. The toilet rooms, urinals, wash bowls and other apparatus shall not be
used for any purpose other than that for which they were constructed, and no
foreign substance of any kind whatsoever shall be thrown therein. The expense of
any breakage, stoppage or damage resulting from the violation of this rule shall
be borne by the tenant who, or whose servants, employees, agents, visitors or
licensees shall have caused same.
9. Tenant shall not overload the floor of the Premises, nor mark, drive
nails or screws, or drill into the partitions, woodwork or drywall or in any way
deface the Premises or any part thereof without Landlord's prior written
consent. Tenant shall not purchase spring water, ice, towel, linen, maintenance
or other like services from any person or persons not approved by Landlord.
10. Except for vending machines intended for the sole use of Tenant's
employees and invitees, no vending machine or machines other than fractional
horsepower office machines shall be installed, maintained or operated upon the
Premises without the written consent of Landlord.
11. Tenant shall not use or keep in or on the Premises, the Building, or
the Project any kerosene, gasoline, explosive material, corrosive material,
material capable of emitting toxic fumes, or other inflammable or combustible
fluid chemical, substitute or material. 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.
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 Project by reason of noise, odors, or vibrations, or
interfere with other tenants or those having business therein, whether by the
use of any musical instrument, radio, phonograph, or in any other way. Tenant
shall not throw anything out of doors, windows or skylights or down passageways.
14. Tenant shall not bring into or keep within the Project, the Building or
the Premises any animals, birds, aquariums, or, except in areas designated by
Landlord, bicycles or other vehicles.
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, county and city laws, codes, ordinances,
rules and regulations.
16. The Premises shall not be used for manufacturing or for the storage of
merchandise except as such storage may be incidental to the use of the Premises
provided for in the Summary. Tenant shall not occupy or permit any portion of
the Premises to be occupied as an office for a messenger-type operation or
dispatch office, public stenographer or typist, or for the manufacture or sale
of liquor, narcotics, or tobacco in any form, or as a medical office, or as a
barber or manicure shop, or as an employment bureau without the express prior
written consent of Landlord. Tenant shall not engage or pay any employees on the
Premises except those actually working for such tenant on the Premises nor
advertise for laborers giving an address at the Premises.
17. Landlord reserves the right to exclude or expel from the Project any
person who, in the judgment of Landlord, is intoxicated or under the influence
of liquor or drugs, or who shall in any manner do any act in violation of any of
these Rules and Regulations.
18. Tenant, its employees and agents shall not loiter in or on the
entrances, corridors, sidewalks, lobbies, courts, halls, stairways, elevators,
vestibules or any Common Areas for the
EXHIBIT D
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<PAGE>
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. Tenant shall participate in recycling
programs undertaken by Landlord.
20. Tenant shall store all its trash and garbage within the interior of
the Premises. No material shall be placed in the trash boxes or receptacles if
such material is of such nature that it may not be disposed of in the ordinary
and customary manner of removing and disposing of trash and garbage in Santa
Clara, California without violation of any law or ordinance governing such
disposal. All trash, garbage and refuse disposal shall be made only through
entry-ways and elevators provided for such purposes at such times as Landlord
shall designate. If the Premises is or becomes infested with vermin as a result
of the use or any misuse or neglect of the Premises by Tenant, its agents,
servants, employees, contractors, visitors or licensees, Tenant shall forthwith,
at Tenant's expense, cause the Premises to be exterminated from time to time to
the satisfaction of Landlord and shall employ such licensed exterminators as
shall be approved in writing in advance by Landlord.
21. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
22. Any persons employed by Tenant to do janitorial work shall be subject
to the prior written approval of Landlord, and while in the Building and outside
of the Premises, shall be subject to and under the control and direction of the
Building manager (but not as an agent or servant of such manager or of
Landlord), and Tenant shall be responsible for all acts of such persons.
23. No awnings or other projection shall be attached to the outside walls
of the Building without the prior written consent of Landlord, and 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 other than Landlord standard drapes.
All electrical ceiling fixtures hung in the Premises or spaces along the
perimeter of the Building must be fluorescent and/or of a quality, type, design
and a warm white bulb color approved in advance in writing by Landlord. Neither
the interior nor exterior of any windows shall be coated or otherwise
sunscreened without the prior written consent of Landlord. Tenant shall be
responsible for any damage to the window film on the exterior windows of the
Premises and shall promptly repair any such damage at Tenant's sole cost and
expense. 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. Tenant shall abide by Landlord's regulations
concerning the opening and closing of window coverings which are attached to the
windows in the Premises, if any, which have a view of any interior portion of
the Building or Building Common Areas.
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 windowsills.
25. Tenant must comply with requests by the Landlord concerning the
informing of their employees of items of importance to the Landlord.
26. Tenant must comply with all applicable "NO-SMOKING" or similar
ordinances. If Tenant is required under the ordinance to adopt a written smoking
policy, a copy of said policy shall be on file in the office of the Building.
27. Tenant hereby acknowledges that Landlord shall have no obligation to
provide guard service or other security measures for the benefit of the
Premises, the Building or the Project. Tenant hereby assumes all responsibility
for the protection of Tenant and its agents, employees, contractors, invitees
and guests, and the property thereof, from acts of third parties, including
keeping doors locked and other means of entry to the Premises closed, whether or
not Landlord, at its option, elects to provide security protection for the
Project or any portion thereof. Tenant further assumes the risk that any safety
and security devices, services and programs
EXHIBIT D
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<PAGE>
which Landlord elects, in its sole discretion, to provide may not be effective,
or may malfunction or be circumvented by an unauthorized third party, and Tenant
shall, in addition to its other insurance obligations under this Lease, obtain
its own insurance coverage to the extent Tenant desires protection against
losses related to such occurrences. Tenant shall cooperate in any reasonable
safety or security program developed by Landlord or required by law.
28. All office equipment of any electrical or mechanical nature shall be
placed by Tenant in the Premises in settings approved by Landlord, to absorb or
prevent any vibration, noise and annoyance.
29. Tenant shall not use in any space or in the public halls of the
Building, any hand trucks except those equipped with rubber tires and rubber
side guards.
30. No auction, liquidation, fire sale, going-out-of-business or
bankruptcy sale shall be conducted in the Premises without the prior written
consent of Landlord.
31. No tenant shall use or permit the use of any portion of the Premises
for living quarters, sleeping apartments or lodging rooms.
32. 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.
33. Tenant shall install and maintain, at Tenant's sole cost and expense,
an adequate, visibly marked and properly operational fire extinguisher next to
any duplicating or photocopying machines or similar heat producing equipment,
which may or may not contain combustible material, in the Premises.
Landlord reserves the right at any time to change or rescind any one or
more of these Rules and Regulations, or to make such other and further
reasonable Rules and Regulations as in Landlord's judgment may from time to time
be necessary for the management, safety, care and cleanliness of the Premises,
Building, the Common Areas and the Project, and for the preservation of good
order therein, as well as for the convenience of other occupants and tenants
therein. Landlord may waive any one or more of these Rules and Regulations for
the benefit of any particular tenants, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of any other
tenant, nor prevent Landlord from thereafter enforcing any such Rules or
Regulations against any or all tenants of the Project. Tenant shall be deemed to
have read these Rules and Regulations and to have agreed to abide by them as a
condition of its occupancy of the Premises.
EXHIBIT D
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<PAGE>
EXHIBIT E
---------
FORM OF TENANT'S ESTOPPEL CERTIFICATE
The undersigned as Tenant under that certain Office Lease (the "Lease")
made and entered into as of ___________, 20__ by and between _______________ as
Landlord, and the undersigned as Tenant, for Premises on the ______________
floor(s) of the office building located at ______________, Santa Clara,
California ____________, certifies as follows:
1. Attached hereto as Exhibit A is a true and correct copy of the Lease
and all amendments and modifications thereto. The documents contained in Exhibit
A represent the entire agreement between the parties as to the Premises.
2. The undersigned currently occupies the Premises described in the Lease,
the Lease Term commenced on __________, and the Lease Term expires on
___________, and the undersigned has no option to terminate or cancel the Lease
or to purchase all or any part of the Premises, the Building and/or the Project.
3. Base Rent became payable on ____________.
4. The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Exhibit A.
5. Tenant has not transferred, assigned, or sublet any portion of the
Premises nor entered into any license or concession agreements with respect
thereto except as follows:
6. Tenant shall not modify the documents contained in Exhibit A without
the prior written consent of Landlord's mortgagee.
7. All monthly installments of Base Rent, all Additional Rent and all
monthly installments of estimated Additional Rent have been paid when due
through ___________. The current monthly installment of Base Rent is
$_____________________.
8. All conditions of the Lease to be performed by Landlord necessary to
the enforceability of the Lease have been satisfied and Landlord is not in
default thereunder. In addition, the undersigned has not delivered any notice to
Landlord regarding a default by Landlord thereunder.
9. No rental has been paid more than thirty (30) days in advance and no
security has been deposited with Landlord except as provided in the Lease.
10. As of the date hereof, there are no existing defenses or offsets, or,
to the undersigned's knowledge, claims or any basis for a claim, that the
undersigned has against Landlord.
11. If Tenant is a corporation or partnership, each individual executing
this Estoppel Certificate on behalf of Tenant hereby represents and warrants
that Tenant is a duly formed and existing entity qualified to do business in
California and that Tenant has full right and authority to execute and deliver
this Estoppel Certificate and that each person signing on behalf of Tenant is
authorized to do so.
12. There are no actions pending against the undersigned under the
bankruptcy or similar laws of the United States or any state.
13. Other than in compliance with all applicable laws and incidental to the
ordinary course of the use of the Premises, the undersigned has not used or
stored any hazardous substances in the Premises.
14. To the undersigned's knowledge, all tenant improvement work to be
performed by Landlord under the Lease has been completed in accordance with the
Lease and has been accepted by the undersigned and all reimbursements and
allowances due to the undersigned under the Lease in connection with any tenant
improvement work have been paid in full.
EXHIBIT E
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<PAGE>
The undersigned acknowledges that this Estoppel Certificate may be
delivered to Landlord or to a prospective mortgagee or prospective purchaser,
and acknowledges that said prospective mortgagee or prospective purchaser will
be relying upon the statements contained herein in making the loan or acquiring
the property of which the Premises are a part and that receipt by it of this
certificate is a condition of making such loan or acquiring such property.
Executed at ______________ on the ____ day of ___________, 20__.
"Tenant":
_________________________,
a _______________________
By: _____________________
Its: _____________
By: _____________________
Its: _____________
EXHIBIT E
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<PAGE>
INDEX
-----
Page(s)
-------
Abatement Event........................................... 11
Additional Rent........................................... 5
Affiliates................................................ 21
Alterations............................................... 12
Applicable Laws........................................... 27
Bank Prime Loan........................................... 28
Base Building............................................. 12, 27
Base Rent................................................. 5
Brokers................................................... 33
Builder's All Risk........................................ 13
Building Common Areas,.................................... 3
Building Common Areas..................................... 3
Building Direct Expenses.................................. 6
Direct Expenses........................................... 5
Eligibility Period........................................ 11
Estimate.................................................. 9
Estimate Statement........................................ 9
Estimated Expenses........................................ 9
Expense Year.............................................. 6
Force Majeure............................................. 31
Independent Company Test.................................. 7
Landlord.................................................. 1
Landlord Parties.......................................... 14
Landlord Repair Notice.................................... 16
Lease..................................................... 1
Lease Commencement Date................................... 4
Lease Expiration Date..................................... 4
Lease Term................................................ 4
Lease Year................................................ 4
Lines..................................................... 34
Mail...................................................... 32
Monument.................................................. 27
Notices................................................... 32
Operating Expenses........................................ 6
Premises.................................................. 3
Project Common Areas...................................... 3
Project Common Areas,..................................... 3
Project Direct Expenses................................... 5
Proposition 13............................................ 8
Provider.................................................. 35
Renovations............................................... 34
Rent...................................................... 5
Security Deposit.......................................... 26
Statement................................................. 9
Subject Space............................................. 18
Summary................................................... 1
Tax Expenses.............................................. 8
Tenant.................................................... 1
Tenant's Building Share................................... 9
Tenant's Project Share.................................... 9
Tenant's Sign............................................. 27
Transfer.................................................. 21
Transfer Notice........................................... 18
Transfer Premium.......................................... 20
Transferee................................................ 18
Transfers................................................. 18
(ii)
