SUBLEASE
BY AND BETWEEN
ELECTRONICS FOR IMAGING, INC.,
a Delaware corporation
as Landlord
and
EQUINIX OPERATING CO., INC.
a Delaware corporation
as Tenant
February 12, 2003
SUBLEASE
THIS SUBLEASE, dated February 12, 2003, for reference purposes only, is
made by and between ELECTRONICS FOR IMAGING, INC., a Delaware corporation
("Landlord") and Equinix Operating Co., Inc., a Delaware corporation ("Tenant"),
to be effective and binding upon the parties as of the date the last of the
designated signatories to this Lease shall have executed this Lease (the
"Effective Date of this Lease").
RECITALS
A. Landlord is the lessee under that certain Master Lease (the
"Master Lease") dated as of December 29, 1999, by and between Societe Generale
Financial Corporation, a Delaware corporation ("Owner"), as Lessor, and
Landlord, as Lessee.
B. Pursuant to the Master Lease, Owner leases to Landlord and
Landlord leases from Owner, the Property and the Building.
C. Tenant desires to sublease from Landlord, and Landlord desires
to sublease to Tenant, the Leased Premises (as defined below), and the parties
have therefore agreed to enter into this Sublease. As used in this Sublease, the
capitalized terms "Lease" and "Sublease" shall each mean and refer to this
Sublease.
ARTICLE 1
REFERENCE
1.1 References. All references in this Lease (subject to any further
clarifications contained in this Lease) to the following terms shall have the
following meaning or refer to the respective address, person, date, time period,
amount, percentage, calendar year or fiscal year as below set forth:
Tenant's Address for Notice:
Prior to occupancy: 0000 Xxxxxxxx Xxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000-0000
After occupancy:
000 Xxxxxxxx Xxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Tenant's Representative: Xxxxxxxx Xxxxxxxxxxxx
(000) 000-0000
Landlord's Address for Notices: Electronics For Imaging, Inc.
000 Xxxxxxxx Xxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
1.
Landlord's Representative: Xxxxx Xxxxxxxx
Phone Number: (000) 000-0000
Intended Commencement Date: March 1, 2003
Intended Term: Sixty-One (61) months
Lease Expiration Date: Sixty-One Months (61) months from
the Commencement Date (as defined
below), unless (a) earlier
terminated by Landlord in accordance
with the terms of this Lease, or (b)
extended pursuant to Article 15
below.
Base Year 2003
First through Ninth Month's
Prepaid Rent: $ 766,665.00
Tenant's Security Deposit: $ 85,185.00
Total due @ lease execution $851,850.00
Late Charge Amount: Five percent (5%) of the Delinquent
Amount
Tenant's Required Liability
Coverage: $5,000,000 Combined Single Limit
Broker(s): Tenant: Xxxxx Xxxxxx, Cresa Partners
Landlord: Insignia/ESG
Project: The land, and any buildings,
landscaping, parking spaces,
roadways, walkways and any other
improvements or fixtures on the
land, located in the City of Xxxxxx
City, County of San Mateo, State of
California, and legally described on
Exhibit A attached hereto.
Property: That certain real property situated
in the City of Xxxxxx City, County
of San Mateo, State of California,
legally described as follows: Lot 7,
as delineated upon that certain Map
filed for record in the Office of
the Recorder of the County of San
Mateo, State of California, on
August 27, 1997, in Book 128 of
Maps, at pages 5, 6, 7, and 8,
entitled "Tract No. 143-97", Vintage
Park, being a re-subdivision of Lots
8, 9, and 10, as said lots are shown
on that certain map entitled "Tract
No. 92-83", filed for record on
December 3, 1985 in Book
2.
114 of Maps at pages 27-31, as
amended by Certificate of Correction
Recorded February 2, 1990 as
Instrument Number 90016902, San
Mateo County Records, Xxxxxx City,
San Mateo County, California." The
Property is also shown approximately
on the Site Plan attached hereto as
Exhibit B.
Building: One five (5) story steel frame
office/light assembly/R&D building
consisting of approximately 163,062
rentable square feet, located on the
Property, with primary frontage on
Velocity Way, and in which the
Leased Premises are located (the
"Building"). The approximate
location of the proposed footprint
of the Building is shown outlined on
Exhibit B hereto.
Outside Areas: The "Outside Areas" shall
mean all areas within the Property
which are located outside the
Building, such as pedestrian
walkways, loading docks, bike racks,
parking areas, landscaped areas,
open areas and enclosed trash
disposal areas.
Leased Premises: Certain interior space within the
Building, including stairwells,
connecting walkways, and atriums,
consisting of approximately 34,074
square feet (inclusive of an 7.38%
load factor) and, for purposes of
this Lease, agreed and stipulated to
contain said number of square feet.
The Leased Premises are outlined on
the Floor Plan attached hereto as
Exhibit C.
Cafe and Workout Facilities: During the term of this Lease,
Tenant shall also be entitled to use
the Cafe facilities located on the
first floor of the Building and the
building located at 000 Xxxxxxxx
Xxxxx, and the workout facilities
(on a fee basis) located on the
first floor of the Building.
Tenant's Expense Share
of the Building: The term "Tenant's Expense Share of
the Building" shall mean the
percentage obtained from time to
time by dividing the rentable square
footage of the Leased Premises at
the time of calculation by the
rentable square footage of the
Building. Such percentage is
currently 20.52%. In the event that
the rentable square footage of the
Leased Premises or of the Building
is structurally changed, Tenant's
3.
Expense Share of the building shall
be recalculated as necessary so that
the aggregate Tenant's Expense Share
of the Building of all tenants shall
equal 100%.
Lease Year: As used herein, the term "Lease
Year" shall mean each twelve (12)
month period during the Lease Term;
provided that the first Lease Year
shall commence upon March 1, 2003
and end on March 31, 2004 and rent
will commence on April 1, 2003. The
second and subsequent Lease Years
shall begin on April 1, 2004.
Base Monthly Rent: The term "Base Monthly Rent" shall
mean the following amounts: (a) $0
per rentable square foot per month
from the Delivery Date until April
1, 2003; and (b) $2.50 per rentable
square foot per month thereafter
during the first Lease Year; (c) at
the end of the each Lease Year, Base
Monthly Rent shall be increased for
the ensuing Lease Year by 3% per
annum compounded annually.
Property Operating Expenses: Tenant shall be responsible for
paying any Property Operating
Expenses commencing with the second
Lease Year.
Permitted Use: General office, research and
development, marketing, light
assembly, related incidental storage
and other related legal uses in
strict accordance with all Laws and
Restrictions.
Parking Spaces: Such number of spaces as may be
required by applicable Laws from
time to time, but in no event to
exceed 3 spaces per 1000 rentable
square feet within the Premises, on
an undesignated and unreserved
basis, to be located in such areas
of the Property and/or the Project
as may be reasonably specified by
Landlord from time to time.
Exhibits: The term "Exhibits" shall mean the
Exhibits of this Lease which are
described as follows:
Exhibit A - Legal Description of the
Project
Exhibit B - Site Plan -Project,
Building, General
Parking Areas.
Exhibit C - Floor Plan / Space Plan
4.
Exhibit D - Work Letter
Exhibit E - Standard Tenant
Improvements / Furniture
Exhibit F - Rules and Regulations
Exhibit G - Form of Tenant Estoppel
Certificate
ARTICLE 2
LEASED PREMISES, TERM AND POSSESSION
2.1 Demise Of Leased Premises. Landlord hereby subleases to Tenant and
Tenant hereby subleases from Landlord for Tenant's own use in the conduct of
Tenant's business and not for purposes of speculating in real estate, for the
Lease Term and upon the terms and subject to the conditions of this Lease, that
certain interior space described in Article 1 as the Leased Premises, reserving
and excepting to Landlord the right to seventy-five percent (75%) of all
assignment consideration and excess rentals as provided in Article 7 below.
Tenant's sublease of the Leased Premises, together with the right to use the
Outside Areas as described in Paragraph 2.2 below, shall be conditioned upon and
be subject to the continuing compliance by Tenant with (i) all the terms and
conditions of this Lease, (ii) all Laws governing the use of the Leased
Premises, the Property, and the Project, (iii) all Private Restrictions,
easements and other matters now or hereafter of public record and of which
Tenant has been given written notice respecting the use of the Leased Premises,
the Property, and the Project, and (iv) the Rules and Regulations (as defined in
Paragraph 4.12). Notwithstanding any provision of this Lease to the contrary,
Landlord hereby reserves to itself and its designees all rights of access, use
and occupancy of the Building roof, and Tenant shall have no right of access,
use or occupancy of the Building roof Tenant shall have access to the Leased
Premises twenty-four (24) hours a day, seven (7) days a week and three hundred
sixty-five (365) days a year.
2.2 Right To Use Outside Areas, Cafe Facilities and Workout Facilities.
Tenant shall have the right (in conjunction with all other tenants of the
Building) to use those portions of the Outside Areas as may be designated in
writing by Landlord from time to time, such use to be in conjunction with its
use of the Leased Premises and solely for the purposes for which they were
designated and intended and for no other purposes whatsoever. In addition, so
long as Landlord operates the facilities for its employees, Landlord shall make
available to Tenant, its agents, employees and invitees, the following: (i) at
no extra charge, the Cafe facility located on the first floor of the Building;
(ii) at no extra charge, the Cafe facility located on the first floor of 000
Xxxxxxxx Xxxxx, every weekday except the first Friday of each month; (iii) at a
cost of $ (to be passed through without profit) per person per month for each
person that Tenant desires should have access to such facility, the workout
facility located on the first floor of the Building. With respect to the workout
facilities, Landlord shall make such workout facility available for Tenant's use
no later than sixty (60) days after the Lease Commencement Date Tenant's right
to so use the Cafe facilities, the workout facilities and the Outside Areas
shall be subject to the limitations on such use as set forth in Article 1 and in
the Rules and Regulations, and shall
5.
terminate concurrently with any termination of this Lease. Except as provided
herein, Tenant shall have no right to use any portions of the Project except
those portions, if any, of the Project as may be expressly designated in writing
by Landlord from time to time, such use to be in conjunction with Tenant's use
of the Leased Premises and solely for the purposes for which they were
designated and intended and for no other purposes whatsoever. Tenant's right, if
any, to so use portions of the Project shall be subject to such limitations on
such use as may be in the Rules and Regulations or otherwise as Landlord may
prescribe and shall terminate concurrently with any termination of this Lease.
In no event shall Tenant have any right to use any portion of the Project
occupied by Landlord or utilized on a substantially exclusive basis by Landlord.
2.3 Lease Commencement Date And Lease Term. The date on which the term of
this Lease shall begin (the "Lease Commencement Date") shall be the earlier of
March 1, 2003 or the date on which Landlord delivers possession of the Leased
Premises to Tenant pursuant to Paragraph 2.4 below. The term of this Lease shall
in all events end on the Lease Expiration Date (as set forth in Article 1),
unless earlier terminated by Landlord. The Lease Term shall be that period of
time commencing on the Lease Commencement Date and ending on the Lease
Expiration Date (the "Lease Term").
2.4 Delivery Of Possession. Landlord shall deliver to Tenant possession of
the Leased Premises, demised as shown on Exhibit C attached hereto, no later
than March 1, 2003 (the "Intended Delivery Date"), so that Tenant can commence
installation of its furniture, fixtures and equipment, including, without
limitation, data and telecommunications equipment and cabling and the
Improvement Work. If Landlord is unable to so deliver possession of the Leased
Premises to Tenant on or before the Intended Delivery Date due to any reason
that is beyond Landlord's reasonable control, Landlord shall not be in default
under this Lease, nor shall this Lease be void, voidable or cancelable by
Tenant; provided, however, that Tenant shall have no obligations under this
Lease until such Delivery Date occurs. If Landlord is unable to so deliver
possession of the Leased Premises to Tenant by May 1, 2003 (including any
extension thereof by reason of Force Majeure or the actions or inactions of
Tenant) (the "delivery grace period"), then Tenant's shall be entitled to
terminate this Lease. If the failure of the Delivery Date to occur on or before
the Intended Delivery Date is due to factors beyond Landlord's reasonable
control, then in such event the remedy described in the foregoing sentence shall
be Tenant's sole remedy and in no event shall Landlord shall not be liable in
damages to Tenant for such delay or such termination. The date upon which
Landlord actually delivers possession of the Leased Premises to Tenant shall be
referred to herein as the "Delivery Date."
2.5 Condition of Leased Premises, Performance Of Improvement Work;
Acceptance Of Possession. Landlord represents and warrants to Tenant that as of
the date hereof and the Delivery Date: (i) the construction and the operation of
the Building, the Leased Premises and the Project are in full compliance with
applicable building codes, environmental, zoning and land use laws, and other
applicable local, state and federal laws, regulations and ordinances, including,
but not limited to, the Americans with Disabilities Act of 1990 ("ADA"); (ii)
Landlord is not aware of any preexisting conditions with respect to the Leased
Premises that would give rise to any maintenance, repair or replacement
obligation on the part of Tenant pursuant to the terms hereof or that would need
to be corrected in order for Tenant to use the Leased Premises for Tenant's
intended use; and (iii) the building roof, HVAC system, sprinkler system,
electrical system, plumbing, elevators, lighting systems and any other life
safety equipment and systems
6.
are in good working order. No later than the Rent Commencement Date, Landlord
shall cause to be installed in the Leased Premises at Landlord's cost and
expense the furniture described in Exhibit E as well as all data and
telecommunications equipment and cabling. In addition, Landlord shall provide,
at its sole cost and expense, (i) with respect to Tenant's server room located
in the Leased Premises, (a) a dedicated fan coil unit (which shall be installed
no later than the Delivery Date); and (b) electricity and HVAC 24 hours per day,
7 days per week with UPS and generator backup power; and (ii) with respect to
Tenant's workstations located in the Leased Premises, access to the Building's
diesel generator for backup power purposes on one electric outlet for each
workstation located in the Leased Premises. Landlord has constructed the shell
and core of the Building (the "Building Shell and Core"), and Landlord shall, at
Tenant's expense, pursuant to the work letter attached to this Lease as Exhibit
D and made a part hereof (the "Work Letter"), perform the work and make the
installations in the Leased Premises substantially as set forth in the Work
Letter (such work and installations to be performed or made by Landlord on
Tenant's behalf, hereinafter referred to as the "Improvement Work"). It is
agreed that by taking delivery of the Leased Premises, Tenant formally accepts
the Improvement Work and acknowledges that the Leased Premises are in the
condition called for in the Work Letter. Landlord reserves the right, at any
time and from time to time, to make alterations, additions, repairs or
improvements to or in or to decrease the size or area of all or any part of the
Building, the fixtures and equipment therein and the parks, plazas and walkways
outside the Building, including, without limitation, (a) the "Building Systems"
(defined herein as the heating, ventilating, air-conditioning, plumbing,
electrical, fire protection, life safety, security and other mechanical,
electrical and communications systems of the Building), (b) the common areas,
and (c) all other parts of the Building, and to change the arrangement and/or
location of entrances or passageways, doors and doorways, corridors, elevators,
stairs, toilets and other public parts of the Building, provided that any such
alterations or additions not necessitated by governmental action shall not
materially diminish the quality or quantity of services being provided to or
unreasonably interfere with Tenant's use and occupancy of the Leased Premises.
2.6 Surrender Of Possession. Immediately prior to the expiration or upon the
sooner termination of this Lease, Tenant shall remove all of Tenant's signs
(other than any signs installed by Landlord) from the exterior of the Building
and shall remove all of Tenant's equipment, trade fixtures, furniture, supplies,
wall decorations and other personal property from within the Leased Premises,
the Building and the Outside Areas, and shall vacate and surrender the Leased
Premises to Landlord in the same condition, broom clean, as existed upon
completion of the Improvement Work in accordance with this Lease and the Work
Letter, reasonable wear and tear excepted. Tenant shall repair all damage to the
Leased Premises, the exterior of the Building and the Outside Areas caused by
Tenant's removal of Tenant's property. Tenant shall patch and refinish, to
Landlord's satisfaction, all penetrations made by Tenant or its employees to the
floor, walls or ceiling of the Leased Premises, whether such penetrations were
made with Landlord's approval or not. Tenant shall repair or replace all stained
or damaged ceiling tiles, wall coverings and floor coverings to the satisfaction
of Landlord, to the extent such repairs are necessitated by actions that are not
considered normal wear and tear. Tenant shall repair all damage caused by Tenant
to the exterior surface of the Building and the paved surfaces of the Outside
Areas and, where necessary, replace or resurface same, to the extent such
repairs are necessitated by actions that are not considered normal wear and
tear. Additionally, to the extent that Landlord shall have notified Tenant in
writing at the time the improvements were first approved that it desired to have
certain improvements made by Tenant or at the request of Tenant
7.
removed at the expiration or sooner termination of the Lease, Tenant shall, upon
the expiration or sooner termination of the Lease, remove any such improvements
constructed or installed by Landlord or Tenant and repair all damage caused by
such removal. If the Leased Premises (and the Building and the Outside Areas, to
the extent applicable) are not surrendered to Landlord in the condition required
by this paragraph at the expiration or sooner termination of this Lease,
Landlord may, at Tenant's expense, so remove Tenant's signs, property and/or
improvements not so removed and make such repairs and replacements not so made
or hire, at Tenant's expense, independent contractors to perform such work.
Tenant shall be liable to Landlord for all costs incurred by Landlord in
returning the Leased Premises (and the Building and the Outside Areas, to the
extent applicable) to the required condition, together with interest on all
costs so incurred from the date paid by Landlord at the lesser of ten percent
(10%) per annum or the then maximum rate of interest not prohibited or made
usurious by Law until paid. Tenant shall pay to Landlord the amount of all costs
so incurred plus such interest thereon, within thirty (30) days of receipt of
Landlord's billing Tenant for same. Tenant shall indemnify Landlord against loss
or liability resulting from delay by Tenant in surrendering the Leased Premises,
including, without limitation, any claims made by any succeeding Tenant or any
losses to Landlord with respect to lost opportunities to sublease to succeeding
tenants.
ARTICLE 3
RENT, LATE CHARGES AND SECURITY DEPOSITS
3.1 Base Monthly Rent. Commencing on the Rent Commencement Date of thirty
(30) days after the Delivery Date [i.e., April 1, 2003 based on a Delivery Date
of March 1, 2003], and continuing throughout the Lease Term, Tenant shall pay to
Landlord, without prior demand therefore, in advance on the first day of each
calendar month, the amount set forth as "Base Monthly Rent" in Article 1 (the
"Base Monthly Rent").
3.2 Additional Rent. Commencing on the first day of the second Lease Year
and continuing throughout the Lease Term, in addition to the Base Monthly Rent,
Tenant shall pay to Landlord as additional rent (the "Additional Rent") the
following amounts:
(a) An amount equal to all Property Operating Expenses (as defined
in Article 13) incurred by Landlord. Landlord shall deliver to Tenant upon
adoption of Landlord's annual budget, Landlord's estimate of Property Operating
Expenses (including Landlord's Insurance Costs or Real Property Taxes), or group
of expenses, which it anticipates will be paid or incurred for the such calendar
year, as Landlord may determine, and Tenant shall pay to Landlord an amount
equal to the estimated amount of such expenses for such year in equal monthly
installments during such year with the installments of Base Monthly Rent.
Landlord shall have the right in its reasonable discretion to revise such
estimate and to change the methods of billing no more than once a year upon
thirty (30) days prior written notice to Tenant.
(b) Landlord's share of the consideration received by Tenant upon
certain assignments and sublettings as required by Article 7.
(c) Any legal fees and costs that Tenant is obligated to pay or
reimburse to Landlord pursuant to Article 13; and
8.
(d) Any other charges or reimbursements due Landlord from Tenant
pursuant to the terms of this Lease.
3.3 Year-End Adjustments; Audit Rights. Landlord shall furnish to Tenant
within three months following the end of the applicable calendar or fiscal year,
as the case may be, a statement setting forth (i) the amount of such expenses
paid or incurred during the just ended calendar or fiscal year, as appropriate,
and (ii) the amount that Tenant has paid to Landlord for credit against such
expenses for such period. Landlord's annual statement shall be final and binding
upon Landlord and Tenant unless Tenant within thirty (30) days after receipt
thereof shall contest any item therein by giving written notice to Landlord,
specifying each item contested and the reason therefore. If within thirty (30)
days of Landlord's receipt of Tenant's timely delivered written notice
contesting any items in an annual statement (the "Resolution Period"), Tenant
and Landlord are unable to come to a resolution on any items that Tenant has
contested, then, Landlord's books and records pertaining to the calculation of
Operating Expenses and Tax Expenses for the preceding year may be audited by
Tenant. If the results of such audit or annual statement show that Tenant's
payments of Additional Rent for such calendar year exceeded Tenant's obligations
for the calendar year, Landlord shall at Landlord's election, refund the over
payment to Tenant or credit the excess to the next succeeding installments of
Base Monthly and Additional Rent; provided, however, that if the Lease shall
have terminated or expired, Landlord shall promptly refund such over payment to
Tenant. If the annual statement shows that Tenant's payments of Additional Rent
for such calendar year were less than Tenant's obligation for the calendar year,
Tenant shall pay the deficiency to Landlord within thirty (30) days after
receipt of such statement. If Tenant elects to audit Landlord's books, such
audit shall be conducted at Tenant's expense, by an authorized representative of
Tenant within a period of thirty (30) days following the Resolution Period. For
purposes hereof, an authorized representative of Tenant shall mean any reputable
accounting firm or other party experienced in such audits which is not being
compensated on a contingency basis with respect to the audit. Prior to the
commencement of any audit, Tenant shall cause its authorized representative to
agree in writing, for the benefit of Landlord, that such representative will
keep the results of such audit confidential and that such representative will
not disclose or divulge the results of such audit, except to Tenant and
Landlord. Such audit shall be conducted during reasonable business hours at a
location designated by Landlord within the Project and must be completed within
thirty (30) days following the end of the Resolution Period. The audit
provisions of this paragraph shall survive the expiration or sooner termination
of this Lease for no more than thirty (30) days following the final billing
Resolution Period.
3.4 Late Charge And Interest On Rent In Default. Tenant acknowledges that
the late payment by Tenant of any monthly installment of Base Monthly Rent or
any Additional Rent will cause Landlord to incur certain costs and expenses not
contemplated under this Lease, the exact amounts of which are extremely
difficult or impractical to fix. Such costs and expenses will include without
limitation, administration and collection costs and processing and accounting
expenses. Therefore, if any installment of Base Monthly Rent is not received by
Landlord from Tenant within five (5) calendar days after the same becomes due,
Tenant shall immediately pay to Landlord a late charge in an amount equal to the
amount set forth in Article 1 as the "Late Charge Amount," and if any Additional
Rent is not received by Landlord within five (5) calendar days after the same
becomes due, Tenant shall immediately pay to Landlord a late charge in an amount
equal to 5% of the Additional Rent not so paid. Landlord and Tenant agree
9.
that this late charge represents a reasonable estimate of such costs and
expenses and is fair compensation to Landlord for the anticipated loss Landlord
would suffer by reason of Tenant's failure to make timely payment. In no event
shall this provision for a late charge be deemed to grant to Tenant a grace
period or extension of time within which to pay any rental installment or
prevent Landlord from exercising any right or remedy available to Landlord upon
Tenant's failure to pay each rental installment due under this Lease when due,
including the right to terminate this Lease. If any rent remains delinquent for
a period in excess of ten (10) calendar days, then, in addition to such late
charge, Tenant shall pay to Landlord interest on any rent that is not so paid
from said tenth day at the then maximum rate of interest not prohibited or made
usurious by Law until paid.
3.5 Payment Of Rent. Except as specifically provided otherwise in this
Lease, all rent shall be paid in lawful money of the United States, without any
abatement, reduction or offset for any reason whatsoever, to Landlord at such
address as Landlord may designate from time to time. Tenant's obligation to pay
Base Monthly Rent and all Additional Rent shall be appropriately prorated at the
commencement and expiration of the Lease Term. The failure by Tenant to pay any
Additional Rent as required pursuant to this Lease when due shall be treated the
same as a failure by Tenant to pay Base Monthly Rent when due, and Landlord
shall have the same rights and remedies against Tenant as Landlord would have
had Tenant failed to pay the Base Monthly Rent when due.
3.6 Prepaid Rent. Tenant agrees, simultaneously with execution of this
lease, to deposit with Landlord an amount equal to the Base Monthly Rent for the
first nine months rent on the initial term of this Lease. Landlord agrees to
apply such amounts in a timely manner against the Base Monthly Rent due for the
first through the ninth months of the initial Lease Term only; provided that if
at any time Tenant is in default hereunder, beyond the applicable notice and
cure period, Landlord may also apply such amount against other amounts payable
by Tenant and then past due after written notice to Tenant.
3.7 Security Deposit. Tenant shall deposit with Landlord upon execution by
Tenant of this Lease, the amount set forth in Article 1 as the "Security
Deposit" as security for the performance by Tenant of the terms of this Lease to
be performed by Tenant. The Security Deposit shall not be used as prepayment of
rent. Tenant hereby grants to Landlord a security interest in the Security
Deposit, including but not limited to replenishments thereof. Landlord may apply
such portion or portions of the Security Deposit as are reasonably necessary for
the following purposes: (i) to remedy any default by Tenant in the payment of
Base Monthly Rent or Additional Rent or a late charge or interest on defaulted
rent, or any other monetary payment obligation of Tenant under this Lease; (ii)
to repair damage to the Leased Premises, the Building or the Outside Areas
caused or permitted to occur by Tenant; (iii) to clean and restore and repair
the Leased Premises, the Building or the Outside Areas following their surrender
to Landlord if not surrendered in the condition required pursuant to the
provisions of Article 2, and (iv) to remedy any other default of Tenant to the
extent permitted by Law including, without limitation, paying in full on
Tenant's behalf any sums claimed by materialmen or contractors of Tenant to be
owing to them by Tenant for work done or improvements made at Tenant's request
to the Leased Premises. In this regard, Tenant hereby waives any restriction on
the uses to which the Security Deposit may be applied as contained in Section
1950.7(c) of the California Civil Code and/or any successor statute. In the
event the Security Deposit or any portion thereof is so used,
10.
Tenant shall pay to Landlord, promptly upon demand, an amount in cash sufficient
to restore the Security Deposit to the full original sum. Landlord shall not be
deemed a trustee of the Security Deposit. Landlord may use the Security Deposit
in Landlord's ordinary business and shall not be required to segregate it from
Landlord's general accounts. Tenant shall not be entitled to any interest on the
Security Deposit. If Landlord transfers the Building or the Property during the
Lease Term, Landlord may pay or credit the Security Deposit to any subsequent
owner in conformity with the provisions of Section 1950.7 of the California
Civil Code and/or any successor statute, in which event the transferring
landlord shall be released from all liability for the return of the Security
Deposit.
ARTICLE 4
USE OF LEASED PREMISES AND OUTSIDE AREA
4.1 Permitted Use. Tenant shall be entitled to use the Leased Premises
solely for the "Permitted Use" as set forth in Article 1 and for no other
purpose whatsoever. Tenant shall continuously use the Leased Premises for such
purpose for the entire Lease Term, and at all times in strict accordance with
all Laws and Private Restrictions. Any discontinuance of such use for a period
of sixty (60) consecutive calendar days (an "Abandonment") shall be, at
Landlord's election, a default by Tenant under the terms of this Lease. Tenant
shall have the right to use those portions of the Outside Areas as may be
designated by Landlord from time to time, such use to be in conjunction with its
Permitted Use of the Leased Premises and solely for the purposes for which they
were designated and intended and for no other purposes whatsoever.
4.2 General Limitations On Use. Tenant shall not do or permit anything to be
done in or about the Leased Premises, the Building, the Outside Areas, the
Property, or the Project which does or could (i) jeopardize the structural
integrity of the Building or (ii) cause damage to any part of the Leased
Premises, the Building, the Outside Areas, the Property, or the Project. Tenant
shall not operate any equipment within the Leased Premises which does or could
(i) injure, vibrate or shake the Leased Premises or the Building, (ii) damage,
overload or impair the efficient operation of any electrical, plumbing, heating,
ventilating or air conditioning systems within or servicing the Leased Premises
or the Building, or (iii) damage or impair the efficient operation of the
sprinkler system (if any) within or servicing the Leased Premises or the
Building. Tenant shall not install any equipment or antennas on or make any
penetrations of the exterior walls or roof of the Building, without the prior
written consent of Landlord, which shall not be unreasonably conditioned,
delayed or withheld. Tenant shall not affix any equipment to or make any
penetrations or cuts in the floor, ceiling, walls or roof of the Leased Premises
without the prior written consent of Landlord which shall not be unreasonably
conditioned, delayed or withheld. Tenant shall not place any loads upon the
floors, walls, ceiling or roof systems which could endanger the structural
integrity of the Building or damage its floors, foundations or supporting
structural components. Tenant shall not place any explosive, flammable or
harmful fluids or other waste materials in the drainage systems of the Leased
Premises, the Building, the Outside Areas, the Property, or the Project. In no
event shall the Leased Premises be used for biotechnology or so-called "wet"
laboratory purposes. Tenant shall not drain or discharge any fluids in the
landscaped areas or across the paved areas of the Property. Tenant shall not use
any of the Outside Areas for the storage of its materials, supplies, inventory
or equipment and all such materials, supplies, inventory or equipment shall at
all times
11.
be stored within the Leased Premises. Tenant shall not commit nor permit to be
committed any waste in or about the Leased Premises, the Building, the Outside
Areas, the Property, or the Project.
4.3 Noise And Emissions. All noise generated by Tenant in its use of the
Leased Premises shall be confined or muffled so that it does not interfere with
the businesses of or annoy the occupants and/or users of adjacent properties.
All dust, fumes, odors and other emissions generated by Tenant's use of the
Leased Premises shall be sufficiently dissipated in accordance with sound
environmental practice and exhausted from the Leased Premises in such a manner
so as not to interfere with the businesses of or annoy the occupants and/or
users of adjacent properties, or cause any damage to the Leased Premises, the
Building, the Outside Areas, the Property, or the Project or any component part
thereof or the property of adjacent property owners.
4.4 Parking. Tenant shall have the use, on an undesignated and unreserved
basis, of the number of parking spaces set forth in Article 1 above, such spaces
to be in such areas of the Project as may be reasonably specified from time to
time by Landlord for Tenant's parking as depicted on Exhibit B. Landlord shall
be required to ensure that such spaces are available for Tenant's use, and in
connection therewith Landlord shall be required to tow parked cars, provide
sanctions against improper parking, or otherwise take steps to free occupied
parking spaces for Tenant's use. Tenant shall not use any parking spaces for
truck parking or loading except for spaces specifically designated for such use
by Landlord. Tenant shall not, at any time, park or permit to be parked any
recreational vehicles, inoperative vehicles or equipment in the Outside Areas or
on any portion of the Property or the Project. Tenant agrees to assume
responsibility for compliance by its employees and invitees with the parking
provisions contained herein. Tenant shall have no right to park in any parking
garage or structure heretofore or hereafter constructed by or on behalf of
Landlord. If Tenant or its employees park any vehicle within the Property or the
Project in violation of these provisions, then Landlord may, upon prior written
notice to Tenant giving Tenant two (2) business days (or any applicable
statutory notice period, if longer than two (2) business days to remove such
vehicle(s), in addition to any other remedies Landlord may have under this
Lease, charge Tenant, as Additional Rent after the expiration of such two (2)
business day period, and Tenant agrees to pay, as Additional Rent, One Hundred
Dollars ($100) per day for each day or partial day that each such vehicle is so
parked within the Property or the Project. Except for vehicles that Landlord has
asked Tenant to remove, Tenant shall not tow or cause to be towed any vehicle
located on the Property or the Project until three (3) full business days after
Tenant has provided written notice to Landlord identifying such vehicle by
brand, model, color, and license plate number and state. Landlord reserves the
right to grant easements and access rights to others for use of the parking
areas on the Property, provided that such grants do not unreasonably interfere
with Tenant's use of the parking areas.
4.5 Signs. Landlord shall provide, at Landlord's sole cost and expense,
signage on the Building monument and lobby directory. Tenant shall not place or
install on or within any portion of the Leased Premises, the exterior of the
Building, the Outside Areas, the Property, or the Project any sign,
advertisement, banner, placard, or picture which is visible from the exterior of
the Leased Premises. Tenant shall not place or install on or within any portion
of the Leased Premises, the exterior of the Building, the Outside Areas, the
Property, or the Project any business identification sign which is visible from
the exterior of the Leased Premises until
12.
Landlord shall have approved in writing and in its sole discretion the location,
size, content, design, method of attachment and material to be used in the
making of such sign; provided, however, that so long as such signs are normal
and customary business directional or identification signs within the Building,
Tenant shall not be required to obtain Landlord's approval. Any sign, once
approved by Landlord, shall be installed at Tenant's sole cost and expense and
only in strict compliance with Landlord's approval, using a person approved by
Landlord to install same. Landlord may remove any signs (which have not been
approved in writing by Landlord and for which approval was required),
advertisements, banners, placards or pictures so placed by Tenant on or within
the Leased Premises, the exterior of the Building, the Outside Areas, the
Property, or the Project and charge to Tenant the cost of such removal, together
with any costs incurred by Landlord to repair any damage caused thereby,
including any cost incurred to restore the surface (upon which such sign was so
affixed) to its original condition. Tenant shall remove all of Tenant's signs
that were installed by Tenant or installed by Landlord on behalf of Tenant at
Tenant's request, repair any damage caused thereby, and restore the surface upon
which the sign was affixed to its original condition, all to Landlord's
satisfaction, upon the termination of this Lease.
4.6 Compliance With Laws And Private Restrictions. Tenant shall abide by and
shall promptly observe and comply with, at its sole cost and expense, all Laws
and Private Restrictions respecting Tenant's use and occupancy of the Leased
Premises, the Building, the Outside Areas, the Property, or the Project,
including, without limitation, building codes, the Americans With Disabilities
Act and the rules and regulations promulgated thereunder, and all Laws governing
the use and/or disposal of hazardous materials, and shall defend with competent
counsel, indemnify and hold Landlord harmless from any claims, damages or
liability resulting from Tenant's failure to so abide, observe, or comply.
Tenant's obligations hereunder shall survive the expiration or sooner
termination of this Lease.
4.7 Compliance With Insurance Requirements. With respect to any insurance
policies required or permitted to be carried by Landlord in accordance with the
provisions of this Lease, Tenant shall not conduct nor permit any other person
to conduct any activities nor keep, store or use (or allow any other person to
keep, store or use) any item or thing within the Leased Premises, the Building,
the Outside Areas, the Property, or the Project which (i) is prohibited under
the terms of any such policies, (ii) could result in the termination of the
coverage afforded under any of such policies, (iii) could give to the insurance
carrier the right to cancel any of such policies, or (iv) could cause an
increase in the rates (over standard rates) charged for the coverage afforded
under any of such policies. Tenant shall comply with all requirements of any
insurance company, insurance underwriter, or Board of Fire Underwriters which
are necessary to maintain, at standard rates, the insurance coverages carried by
either Landlord or Tenant pursuant to this Lease.
4.8 Landlord's Right To Enter. Landlord and its agents shall have the right
to enter (A) the elevator lobby, stairwells, or service elevators within the
Leased Premises, and/or onto the roof of the Building, without advance notice to
Tenant but with notice to be provided after such entry, and (B) any other
portion of the Leased Premises during normal business hours after giving Tenant
reasonable notice and subject to Tenant's reasonable security measures for the
purpose of (i) inspecting the same; (ii) showing the Leased Premises to
prospective purchasers, mortgagees or tenants; (iii) making necessary
alterations, additions or repairs; and (iv) performing any of
13.
Tenant's obligations when Tenant has failed to do so. Landlord shall have the
right to enter the Leased Premises during normal business hours (or as otherwise
agreed), subject to Tenant's reasonable security measures, for purposes of
supplying any maintenance or services agreed to be supplied by Landlord.
Landlord shall have the right to enter the Outside Areas during normal business
hours for purposes of (i) inspecting the exterior of the Building and the
Outside Areas; (ii) posting notices of nonresponsibility (and for such purposes
Tenant shall provide Landlord at least thirty (30) days' prior written notice of
any work to be performed on the Leased Premises); and (iii) supplying any
services to be provided by Landlord. Any entry into the Leased Premises or the
Outside Areas obtained by Landlord in accordance with this paragraph shall not
under any circumstances be construed or deemed to be a forcible or unlawful
entry into, or a detainer of, the Leased Premises, or an eviction, actual or
constructive of Tenant from the Leased Premises or any portion thereof.
4.9 Use Of Outside Areas. Tenant, in its use of the Outside Areas, shall at
all times ensure that it and its employees, agents, contractors, invitees, and
licensees shall keep the Outside Areas free and clear of all materials,
equipment, debris, trash (except within existing enclosed trash areas),
inoperable vehicles, and other items which are not specifically permitted by
Landlord to be stored or located thereon by Tenant. If, in the opinion of
Landlord, Tenant's employees, agents, contractors, invitees, or licensees are
using any of the Outside Areas for a use that is not permitted under this Lease
by reason of, or under claim of, the express or implied authority or consent of
Tenant, then Tenant, upon demand of Landlord, shall restrain, to the fullest
extent then allowed by Law, such unauthorized use, and shall initiate such
appropriate proceedings as may be required to so restrain such use. Landlord
reserves the right to grant easements and access rights to others for use of the
Outside Areas and shall not be liable to Tenant for any diminution in Tenant's
right to use the Outside Areas as a result so long as such actions do not
unreasonably interfere with Tenant's use of or access to the Leased Premises or
its parking rights granted hereunder.
4.10 Environmental Protection. Tenant's obligations under this Paragraph 4.10
shall survive the expiration or termination of this Lease.
(a) As used herein, the term "Hazardous Materials" shall mean any
toxic or hazardous substance, material or waste or any pollutant or infectious
or radioactive material, including but not limited to those substances,
materials or wastes regulated now or in the future under any of the following
statutes or regulations and any and all of those substances included within the
definitions of "hazardous substances," "hazardous materials," "hazardous waste,"
"hazardous chemical substance or mixture," "imminently hazardous chemical
substance or mixture," "toxic substances," "hazardous air pollutant," "toxic
pollutant," or "solid waste" in the (a) Comprehensive Environmental Response,
Compensation and Liability Act of 1990 ("CERCLA" or "Superfund"), as amended by
the Superfund Amendments and Reauthorization Act of 1986 ("XXXX"), 42 U.S.C.
Section 9601 et seq., (b) Resource Conservation and Recovery Act of 1976
("RCRA"), 42 U.S.C. Section 6901 et seq., (c) Federal Water Pollution Control
Act ("FSPCA"), 33 U.S.C. Section 1251 et seq., (d) Clean Air Act ("CAA"), 42
U.S.C. Section 7401 et seq., (e) Toxic Substances Control Act ("TSCA"), 14
U.S.C. Section 2601 et seq., (f) Hazardous Materials Transportation Act, 49
U.S.C. Section 1801, et seq., (g) Xxxxxxxxx-Xxxxxxx-Xxxxxx Hazardous Substance
Account Act ("California Superfund"), Cal. Health & Safety Code Section 25300 et
seq., (h) California Hazardous Waste Control Act, Cal. Health & Safety code
Section 25100 et seq., (i) Xxxxxx-
14.
Cologne Water Quality Control Act ("Xxxxxx-Cologne Act"), Cal. Water Code
Section 13000 et seq., (j) Hazardous Waste Disposal Land Use Law, Cal. Health &
Safety codes Section 25220 et seq., (k) Safe Drinking Water and Toxic
Enforcement Act of 1986 ("Proposition 65"), Cal. Health & Safety code Section
25249.5 et seq., (l) Hazardous Substances Underground Storage Tank Law, Cal.
Health & Safety code Section 25280 et seq., (m) Air Resources Law, Cal. Health &
Safety Code Section 39000 et seq., and (n) regulations promulgated pursuant to
said laws or any replacement thereof, or as similar terms are defined in the
federal, state and local laws, statutes, regulations, orders or rules. Hazardous
Materials shall also mean any and all other biohazardous wastes and substances,
materials and wastes which are, or in the future become, regulated under
applicable Laws for the protection of health or the environment, or which are
classified as hazardous or toxic substances, materials or wastes, pollutants or
contaminants, as defined, listed or regulated by any federal, state or local
law, regulation or order or by common law decision, including, without
limitation, (i) trichloroethylene, tetrachloroethylene, perchloroethylene and
other chlorinated solvents, (ii) any petroleum products or fractions thereof,
(iii) asbestos, (iv) polychlorinted biphenyls, (v) flammable explosives, (vi)
urea formaldehyde, (vii) radioactive materials and waste, and (viii) materials
and wastes that are harmful to or may threaten human health, ecology or the
environment.
(b) Notwithstanding anything to the contrary in this Lease, Tenant,
at its sole cost, shall comply with all Laws relating to the storage, use and
disposal of Hazardous Materials; provided, however, that unless caused by
Tenant, Tenant shall not be responsible for contamination of the Leased Premises
by Hazardous Materials existing as of the Lease Commencement Date. Tenant shall
not store, use or dispose of any Hazardous Materials; provided, however, that if
Landlord and Owner, in their sole discretion, approve the same, then Tenant may
store, use and dispose of those Hazardous Materials listed in a Hazardous
Materials management plan ("HMMP") which Tenant shall deliver to Landlord upon
execution of this Lease and update at least annually with Landlord ("Permitted
Materials") which may be used, stored and disposed of provided (i) such
Permitted Materials are used, stored, transported, and disposed of in strict
compliance with applicable laws, (ii) such Permitted Materials shall be limited
to the materials listed on and may be used only in the quantities specified in
the HMMP, and (iii) Tenant shall provide Landlord with copies of all material
safety data sheets and other documentation required under applicable Laws in
connection with Tenant's use of Permitted Materials as and when such
documentation is provided to any regulatory authority having jurisdiction, and
(iv) in no event shall Tenant cause or permit anyone for whom Tenant is
responsible to discharge into the plumbing or sewage system of the Building or
onto the land underlying or adjacent to the Building any Hazardous Materials.
Tenant shall be solely responsible for and shall defend, indemnify, and hold
Landlord and Owner and their agents harmless from and against all claims, costs
and liabilities, including reasonable attorneys' fees and costs, arising out of
or in connection with Hazardous Materials on or emanating from the Leased
Premises to the extent caused by Tenant; provided that Tenant shall not be
responsible for and, such indemnity does not extend to contamination of the
Leased Premises by Hazardous Materials resulting from the gross negligence or
willful misconduct of Landlord or Owner. If the presence of Hazardous Materials
on the Leased Premises caused or permitted by Tenant results in contamination or
deterioration of water or soil, then Tenant shall promptly take any and all
action necessary to clean up such contamination, but the foregoing shall in no
event be deemed to constitute permission by Landlord to allow the presence of
such Hazardous Materials. Tenant shall further be solely responsible for, and
shall defend, indemnify, and hold Landlord and
15.
Owner and their agents harmless from and against all claims, costs and
liabilities, including reasonable attorneys' fees and costs, arising out of or
in connection with any removal, cleanup and restoration work and materials
required hereunder to remedy any contamination of the Leased Premises and other
property caused by Tenant and to return the Leased Premises and any other
property of whatever nature to their condition existing prior to the appearance
of the Hazardous Materials; provided that Tenant shall not be responsible for
and, such indemnity does not extend to claims, costs and liabilities arising out
of or in connection with any work required to remedy any contamination of the
Leased Premises resulting from the gross negligence or willful misconduct of
Landlord or Owner.
(c) Upon termination or expiration of the Lease, Tenant at its sole
expense shall cause all Hazardous Materials placed in or about the Leased
Premises, the Building, the Property and/or the Project by Tenant, its agents,
contractors, or invitees, and all installations (whether interior or exterior)
made by or on behalf of Tenant relating to the storage, use, disposal or
transportation of Hazardous Materials, to be removed from the Property and/or
the Project and transported for use, storage or disposal in accordance and
compliance with all Laws and other requirements respecting Hazardous Materials
used or permitted to be used by Tenant. Tenant shall apply for and shall obtain
from all appropriate regulatory authorities (including any applicable fire
department or regional water quality control board) all permits, approvals and
clearances necessary for the closure of the Property and/or the Project and
shall take all other actions as may be required to complete the closure of the
Property and/or the Project. In addition, if Tenant, its agents, contractors, or
invitees are responsible for the presence of Hazardous Materials in or about the
Leased Premises, the Building, the Property or the Project, then, prior to
vacating the Leased Premises, Tenant shall undertake and submit to Landlord an
environmental site assessment from an environmental consulting company
acceptable to Landlord which site assessment shall evidence Tenant's compliance
with this Paragraph 4.10.
(d) At any time prior to expiration of the Lease term, subject to
reasonable prior notice and Tenant's reasonable security requirements and
provided such activities do not unreasonably interfere with the conduct of
Tenant's business at the Leased Premises, Landlord shall have the right to enter
in and upon the Property, Building and Leased Premises in order to conduct
appropriate tests of water and soil to determine whether levels of any Hazardous
Materials in excess of legally permissible levels has occurred. Landlord shall
furnish copies of all such test results and reports to Tenant and, at Tenant's
option and cost, shall permit split sampling for testing and analysis by Tenant.
Such testing shall be at Tenant's expense if Landlord has a reasonable basis for
suspecting and confirms the presence of Hazardous Materials in the soil or
surface or ground water in, on, under, or about the Project, the Property, the
Building or the Leased Premises, which has been caused by or resulted from the
activities of Tenant, its agents, contractors, or invitees.
(e) Landlord may voluntarily cooperate in a reasonable manner with
the efforts of all governmental agencies in reducing actual or potential
environmental damage. Tenant shall not be entitled to terminate this Lease or to
any reduction in or abatement of rent by reason of such compliance or
cooperation except to the extent such environmental damage unreasonably
interferes with Tenant's use and occupancy of the Leased Premises. Tenant agrees
at all times to cooperate fully with the requirements and recommendations of
governmental agencies regulating, or otherwise involved in, the protection of
the environment.
16.
4.11 Construction Activities. Tenant acknowledges that there may be other
construction occurring on the Property or the Project now and in the future,
including, but not limited to, the grading of land and the construction of
buildings, parking lots, parking garages, roadways, and other structures, and
improvements ancillary thereto. So long as such construction activities do not
unreasonably interfere with Tenant's access to, use or occupancy of the Leased
Premises, Tenant will not object thereto, will not seek to impose any
restriction or limitation thereon, will not assert any challenge thereto, and
will at all times cooperate with Landlord in obtaining and maintaining any and
all necessary government approvals and permits at no cost to Tenant. Tenant
further acknowledges that there will, necessarily, be some disruption in the
Project and of the business to be conducted by Tenant in the Leased Premises,
including, but not limited to, noise, dust, interruption and re-routing of
traffic, dislocation of parking, construction traffic, sidewalk superintending,
and the like. So long as such disruptions do not unreasonably interfere with
Tenant's access to, use or occupancy of the Leased Premises, Tenant hereby
accepts said disruptions as a necessary and normal part of the above-described
grading and construction and hereby waives any and all claims for damages
resulting from the same, or resulting from the interruption or diminution of
Tenant's business, or in any other manner resulting from or proximately caused
by such grading or by the construction of such buildings, parking lots, parking
garages, roadways, and other structures, and improvements ancillary thereto, and
further waives any claims for injunctive relief and any other relief that might
impede or interfere with the construction or renovation thereof. Tenant agrees
that Landlord may amend or modify the Rules and Regulations to address issues
relating to such construction activities and the orderly conduct of thereof, and
Tenant hereby agrees to comply therewith; provided, however, that in no event
shall the Rules and Regulations be amended in a manner that unreasonably
interferes with Tenant's use or occupancy of the Leased Premises or its rights
otherwise granted hereunder.
4.12 Rules And Regulations. Landlord shall have the right from time to time
to establish rules and regulations and/or amendments or additions thereto
(collectively, "Rules and Regulations"), respecting the use of the Leased
Premises, the Outside Areas, the Property, and the Project for the care and
orderly management of thereof; provided, however, that in no event shall the
Rules and Regulations be amended in a manner that unreasonably interferes with
Tenant's use or occupancy of the Leased Premises or its rights otherwise granted
hereunder. A copy of the present Rules and Regulations is attached hereto as
Exhibit F. Tenant shall comply with the Rules and Regulations. Upon delivery to
Tenant of a copy of any reasonable amendments or additions to the Rules and
Regulations, Tenant shall also comply therewith. A violation by Tenant of any of
such Rules and Regulations shall constitute a breach by Tenant under this Lease.
If there is a conflict between the Rules and Regulations and any of the
provisions of this Lease, the provisions of this Lease shall prevail. Landlord
shall have no duty to enforce the Rules and Regulations against, nor shall
Landlord be responsible or liable to Tenant for the violation of such Rules and
Regulations by, any other tenant of the Property unless said failure
unreasonably interferes with Tenant's rights hereunder.
4.13 Reservations. Landlord reserves the right from time to time to grant,
without the consent or joinder of Tenant, such easements, rights of way and
dedications that Landlord deems necessary, and to cause the recordation of
parcel maps and covenants, conditions, and restrictions, so long as such
easements, rights of way and dedications, maps, covenants, conditions and
restrictions do not unreasonably interfere with the use of the Leased Premises
by Tenant or its rights granted hereunder.
17.
ARTICLE 5
REPAIRS, MAINTENANCE, SERVICES AND UTILITIES
5.1 Repair And Maintenance. Except in the case of damage to or destruction
of the Leased Premises, the Building, the Outside Areas, the Property, or the
Project caused by an act of God or other peril, in which case the provisions of
Article 10 shall control, the parties shall have the following obligations and
responsibilities with respect to the repair and maintenance of the Leased
Premises, the Building, the Outside Areas, the Property, and the Project.
(a) Landlord's and Tenant's Obligations. Landlord shall, at all
times during the Lease Term, keep and maintain in good order, condition and
repair the Leased Premises and every part thereof including, without limiting
the generality of the foregoing, (i) all interior walls, floors and ceilings,
(ii) all windows, doors and skylights, (iii) all electrical wiring, conduits,
connectors and fixtures, (iv) all plumbing, pipes, sinks, toilets, faucets and
drains, (v) all lighting fixtures, bulbs and lamps and all heating, ventilating
and air conditioning equipment, and (vi) all entranceways to the Leased
Premises. Any costs incurred by Landlord pursuant to the foregoing sentence
shall be included as part of the costs described under subsection (i)(B) of
Section 13.12(c) relating to Property Maintenance Cost. Notwithstanding the
foregoing, Tenant shall, at its sole cost and expense, repair all damage to the
Leased Premises, the Building, the Outside Areas, the Property, or the Project
caused by the activities of Tenant, its employees, invitees or contractors
promptly following written notice from Landlord to so repair such damages.
(b) Landlord's Obligations, Building and Building Systems. Landlord
shall, at all times during the Lease Term, maintain in good condition and repair
the foundation, roof structure, load-bearing and exterior walls of the Building,
and those Building elevators, electrical, plumbing, and life safety (and
Building central heating, ventilating, and air conditioning) systems or
components thereof which serve the Building but which do not serve, or are not
identifiable with, the Leased Premises or the premises leased to other building
tenants. Landlord shall hire a licensed roofing contractor to regularly and
periodically inspect and perform required maintenance on the roof of the
Building, and a licensed heating, ventilating and air conditioning contractor to
regularly and periodically inspect and perform required maintenance on the
heating, ventilating and air conditioning equipment and systems serving the
Leased Premises. The provisions of this subparagraph (b) shall in no way limit
the right of Landlord to charge to Tenant, as Additional Rent pursuant to
Article 3 (to the extent permitted pursuant to Article 3), the costs incurred by
Landlord in performing such maintenance and/or making such repairs.
5.2 Utilities and Services. Landlord will furnish to the Leased Premises
during the period from 6:00 a.m. to 8:00 p.m., Monday through Friday, and 6:00
a.m. to 12 p.m. on Saturday, except for New Year's Day, Presidents Day, Memorial
Day, Independence Day, Labor Day, Thanksgiving, Christmas and such other
holidays as are generally recognized in San Francisco, California (hereafter,
"Building Standard Hours"), and subject to rules and regulations from time to
time established by Landlord: heating, air conditioning and ventilation in
amounts required, in Landlord's reasonable judgment, for the normal use and
occupancy of the Leased Premises, provided that Landlord shall comply with
ASHRAE . Tenant shall pay Landlord the amount of
18.
Landlord's then current hourly charge at cost with no xxxx-up for Building
standard HVAC usage during any times other than Building Standard Hours.
Notwithstanding anything to the contrary herein, Landlord will furnish
twenty-four (24) hours a day, seven (7) days a week HVAC to Tenant's server
room. Tenant must provide a minimum of 24 hours advance notice to Landlord, as
to what after-hours usage Tenant will require.
(a) Subject to subparagraphs (c) and (d) below, Landlord will
furnish to the Leased Premises (including Tenant's server room) twenty-four (24)
hours a day, seven (7) days a week: (a) elevator service, (b) electric current
in amounts required for normal lighting by building standard overhead
fluorescent fixtures and for Tenant's computers, electronic data processing
machines, copying machines and other office equipment, located in the Leased
Premises, and (c) water for lavatory and drinking purposes. In addition,
Landlord shall furnish to Tenant janitorial service during the times and in the
manner that such services are customarily furnished in comparable office
buildings in the area; provided that in no event shall Landlord be obligated to
furnish janitorial service on Saturdays, Sundays, or legal holidays. It is
understood that subject to subparagraphs (c) and (d) below, such elevator
service, electric current and water will be available twenty-four (24) hours a
day.
(b) In the event any governmental entity promulgates or revises any
statute, ordinance or building, fire or other code or imposes mandatory controls
or guidelines on Landlord or the Building or any part thereof relating to the
use or conservation of energy, water, gas, light or electricity or the reduction
of automobile emissions or the provision of any other utility or service
provided with respect to this Lease, or in the event Landlord is required by law
to make alterations or to perform maintenance with respect to, any part of the
Building in order to comply with such mandatory controls, or guidelines, such
compliance, the making of such alterations and/or the performance of such
maintenance shall in no event entitle Tenant to any damages, relieve Tenant of
the obligation to pay the full Base Monthly Rent and Additional Rent reserved
hereunder, or to perform each of its other covenants hereunder or constitute or
be construed as a constructive or other eviction of Tenant.
(c) Without the prior written consent of Landlord, which Landlord
may refuse in its sole discretion, the electrical current available to the
Leased Premises for power (excluding the central heating, air conditioning,
ventilating system and standard overhead lighting) shall at no time exceed a
connected load of 27,000 xxxxx at 277/480 volts and 154,688 xxxxx at 120/208
volts. Without the prior written consent of Landlord, which Landlord may refuse
in its sole discretion, Tenant shall not: (a) connect or use any electrical
equipment that exceeds the capacity of the Building electrical system; (b)
connect any apparatus, machine or device through electrical outlets except in
the manner for which such outlets are designed and without the use of any device
intended to increase the plug capacity of any electrical outlet; or (c) maintain
at any time an electrical demand load in excess of 116,016 xxxxx. If Tenant's
electrical circuitry requires more than one 277 volt, 20 amp single phase
breaker per three kilowatts of connected load of electrical current or one 120
volt, 20 amp single phase breaker per 1.2 kilowatts of connected load of
electrical current, Landlord shall install at Tenant's expense such additional
breakers and transformers as shall be reasonably required for such circuitry. At
any time that Tenant's use of electricity exceeds 50,692 kilowatt hours per
month, Landlord shall have the right to impose a reasonable charge, as
determined by Landlord, for such excess use.
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(d) Tenant acknowledges that the heating, air conditioning and
ventilating system of the Building is designed to operate efficiently while
electrical equipment such as customary lamps, computers and other small
fractional horsepower office machines are being used in the Leased Premises and
while the Leased Premises are occupied in any Building System zone per the floor
space plan provided. If the temperature otherwise maintained in any portion of
the Building or the Leased Premises by the heating, air conditioning and
ventilating system of the Building is affected by (a) Tenant's use of any
lights, machines or equipment (including, without limitation, computers,
electronic data processing machines and copying machines), or (b) the occupancy,
as defined by the floor space plan, of the Leased Premises is exceeded or (c) an
electrical load that generates heat in excess of 527,948 BTU / hour, Landlord
shall have the right, unless Tenant ceases and desists from such usage or excess
occupancy within five (5) days after written notice from Landlord, to install
any machinery and equipment that Landlord reasonably deems necessary to restore
temperature balance, including, without limitation, modifications to the
standard air conditioning equipment, and the cost thereof, including the cost of
installation and any additional cost of operation and maintenance incurred
thereby, shall be paid by Tenant to Landlord within thirty (30) days after
receipt of demand therefore by Landlord.
(e) Any costs incurred by Landlord to provide the utilities and
services pursuant to this section 5.2 shall be included as part of the costs
described under subsection (i)(B) of Section 13.12(c) relating to Property
Maintenance Cost.
5.3 Access Control. Except for providing Tenant with a card based access
system to the Leased Premises, which Landlord shall be responsible for repairing
and maintaining during the Lease Term, Tenant acknowledges that Landlord has not
undertaken any duty whatsoever to provide security for the Leased Premises, the
Building, the Outside Areas, the Property, or the Project and, accordingly,
Landlord is not responsible for the security of same or the protection of
Tenant's property or Tenant's employees, invitees or contractors. To the extent
Tenant determines that such security or protection services are advisable or
necessary, Tenant shall arrange for and pay the costs of providing same, and
shall cause such security or protection services to be coordinated with any
similar services, if any, being provided from time to time with respect to any
other portions of the Project. Landlord shall staff the Building lobby during
Building Hours. Any costs incurred by Landlord to meet its obligations pursuant
to this section shall be included as part of the costs described under
subsection (i)(B) of Section 13.12(c) relating to Property Maintenance Cost.
5.4 Energy And Resource Consumption; Traffic Management System. So long as
Landlord does not unreasonably interfere with Tenant's use and occupancy of the
Leased Premises, Landlord may voluntarily cooperate in a reasonable manner with
the efforts of governmental or quasi-governmental agencies and/or utility
suppliers in reducing energy or other resource consumption within, and/or
vehicular traffic to and from, the Property or the Project, and the cost
incurred by Landlord in connection therewith shall be included as part of the
costs described under subsection (i)(B) of Section 13.12(c) relating to Property
Maintenance Cost. Tenant shall not be entitled to terminate this Lease or to any
reduction in or abatement of rent by reason of such compliance or cooperation.
Tenant agrees at all times to cooperate fully with Landlord and to abide by all
reasonable rules established by Landlord (i) in order to maximize the efficient
operation of the electrical, heating, ventilating and air conditioning systems
and all other energy or other resource consumption systems within the Property,
and/or (ii) in order to
20.
comply with the requirements or recommendations of utility suppliers and
governmental or quasi-governmental agencies regulating the consumption of energy
and/or other resources, and/or (iii) in order to comply with any requirements,
recommendations, or guidelines relating to traffic management.
5.5 Limitation Of Landlord's Liability. Landlord shall not be liable to
Tenant for injury to Tenant, its employees, agents, invitees or contractors,
damage to Tenant's property or loss of Tenant's business or profits, nor shall
Tenant be entitled to terminate this Lease or to any reduction in or abatement
of rent by reason of (i) Landlord's failure to provide security services or
systems within the Property for the protection of the Leased Premises, the
Building or the Outside Areas, or the protection of Tenant's property or
Tenant's employees, invitees, agents or contractors, except as required under
Section 5.3 above or (ii) Landlord's failure to perform any maintenance or
repairs to the Leased Premises, the Building, the Outside Areas, the Property,
or the Project until Tenant shall have first notified Landlord, in writing, of
the need for such maintenance or repairs, and then only after Landlord shall
have had a reasonable period of time following its receipt of such notice within
which to perform such maintenance or repairs, or (iii) any failure,
interruption, rationing or other curtailment in the supply of water, electric
current, gas or other utility service to the Leased Premises, the Building, the
Outside Areas, the Property, or the Project from whatever cause (other than
Landlord's gross negligence or willful misconduct), or (iv) the unauthorized
intrusion or entry into the Leased Premises by third parties (other than
Landlord).
ARTICLE 6
ALTERATIONS AND IMPROVEMENTS
6.1 By Tenant. Tenant shall not make any alterations to or modifications of
the Leased Premises or construct any improvements within the Leased Premises
until Landlord shall have first approved, in writing, the plans and
specifications therefore, which approval may not be unreasonably conditioned,
delayed (which in this case shall mean beyond fifteen (15) business days), or
withheld. Landlord's approval of Tenant's plans and specifications shall create
no liability on the part of Landlord for their completeness, sufficiency, or
compliance with Laws or Private Restrictions. Tenant's written request shall
also contain a request (in bold, all capital letters) for Landlord to elect
whether or not it will require Tenant to remove the subject alterations,
modifications or improvements at the expiration or earlier termination of this
Lease. If such additional request is not included, Landlord may make such
election at the expiration or earlier termination of this Lease (and for
purposes of Tenant's removal obligations set forth in Paragraph 2.6 above,
Landlord shall be deemed to have made the election at the time the alterations,
modifications or improvements were completed). All such modifications,
alterations or improvements, once so approved, shall be made, constructed or
installed by Tenant at Tenant's expense (including all permit fees and
governmental charges related thereto), using a licensed contractor first
approved by Landlord, in substantial compliance with the Landlord-approved plans
and specifications therefore. All work undertaken by Tenant shall be done in
accordance with all Laws and in a good and workmanlike manner using new
materials of good quality. Tenant shall not commence the making of any such
modifications or alterations or the construction of any such improvements until
(i) all required governmental approvals and permits shall have been obtained,
(ii) all requirements regarding insurance imposed by this Lease have
21.
been satisfied, (iii) Tenant shall have given Landlord at least five (5)
business days prior written notice of its intention to commence such work so
that Landlord may post and file notices of non-responsibility, and (iv) if
requested by Landlord, Tenant shall have obtained contingent liability and broad
form builder's risk insurance in an amount satisfactory to Landlord in its
reasonable discretion to cover any perils relating to the proposed work not
covered by insurance carried by Tenant pursuant to Article 9. In no event shall
Tenant make any modification, alterations or improvements whatsoever to the
Outside Areas or the exterior or structural components of the Building
including, without limitation, any cuts or penetrations in the floor, roof or
exterior walls of the Leased Premises. As used in this Article, the term
"modifications, alterations and/or improvements" shall include, without
limitation, the installation of additional electrical outlets, overhead lighting
fixtures, drains, sinks, partitions, doorways, or the like.
6.2 Ownership Of Improvements. All modifications, alterations and
improvements made or added to the Leased Premises by Tenant (other than Tenant's
inventory, equipment, movable furniture, wall decorations and trade fixtures)
shall be deemed real property and a part of the Leased Premises, but shall
remain the property of Tenant during the Lease Term and Tenant hereby covenants
and agrees not to grant a security interest in any such items to any party other
than Landlord. Any such modifications, alterations or improvements, once
completed, shall not be altered or removed from the Leased Premises during the
Lease Term without Landlord's written approval first obtained in accordance with
the provisions of Paragraph 6.1 above. At the expiration or sooner termination
of this Lease, all such modifications, alterations and improvements other than
Tenant's inventory, equipment, movable furniture, wall decorations and trade
fixtures, shall automatically become the property of Landlord and shall be
surrendered to Landlord as part of the Leased Premises as required pursuant to
Article 2, unless Landlord shall require Tenant to remove any of such
modifications, alterations or improvements in accordance with the provisions of
Article 2, in which case Tenant shall so remove same. Landlord shall have no
obligations to reimburse Tenant for all or any portion of the cost or value of
any such modifications, alterations or improvements so surrendered to Landlord.
All modifications, alterations or improvements which are installed or
constructed on or attached to the Leased Premises by Landlord and/or at
Landlord's expense shall be deemed real property and a part of the Leased
Premises and shall be property of Landlord. All lighting, plumbing, electrical,
heating, ventilating and air conditioning fixtures, partitioning, window
coverings, wall coverings and floor coverings installed by Tenant shall be
deemed improvements to the Leased Premises and not trade fixtures of Tenant.
6.3 Alterations Required By Law. Tenant shall make all modifications,
alterations and improvements to the Leased Premises, at its sole cost, that are
required by any Law because of (i) Tenant's use or occupancy of the Leased
Premises, the Building, the Outside Areas, the Property, or the Project, (ii)
Tenant's application for any permit or governmental approval, or (iii) Tenant's
making of any modifications, alterations or improvements to or within the Leased
Premises.
6.4 Liens. Tenant shall keep the Property and every part thereof free from
any lien, and shall pay when due all bills arising out of any work performed,
materials furnished, or obligations incurred by Tenant, its agents, employees or
contractors relating to the Property. If any such claim of lien is recorded
against Tenant's interest in this Lease, the Property or any part thereof,
Tenant shall bond against, discharge or otherwise cause such lien to be entirely
released within
22.
thirty (30) days after receipt of notice that the same has been recorded.
Tenant's failure to do so shall be conclusively deemed a material default under
the terms of this Lease.
ARTICLE 7
ASSIGNMENT AND SUBLETTING BY TENANT
7.1 By Tenant. Tenant shall not sublet the Leased Premises or any portion
thereof or assign its interest in this Lease, whether voluntarily or by
operation of Law, or permit the occupancy by other than Tenant, its employees
and contractors, without Landlord's prior written consent which shall not be
unreasonably conditioned, delayed or withheld. Any subletting or assignment
without Landlord's prior written consent, at Landlord's election, shall
constitute a default by Tenant under the terms of this Lease. The acceptance of
rent by Landlord from any person or entity other than Tenant, or the acceptance
of rent by Landlord from Tenant with knowledge of a violation of the provisions
of this paragraph, shall not be deemed to be a waiver by Landlord of any
provision of this Article or this Lease or to be a consent to any subletting by
Tenant or any assignment of Tenant's interest in this Lease. Without limiting
the circumstances in which it may be reasonable for Landlord to withhold its
consent to an assignment or subletting, Landlord and Tenant acknowledge that it
shall be reasonable for Landlord to withhold its consent in the following
instances:
(a) the proposed assignee or sublessee is a governmental agency;
(b) in Landlord's reasonable judgment, the use of the Leased
Premises by the proposed assignee or sublessee would involve occupancy other
than for a Permitted Use, would entail any alterations which would lessen the
value of the leasehold improvements in the Leased Premises, or would require
increased services by Landlord;
(c) in Landlord's reasonable judgment, the financial worth of the
proposed assignee is less than that of Tenant or does not meet the credit
standards applied by Landlord;
(d) the proposed assignee or sublessee (or any of its affiliates)
has been in material default under a lease, has been in litigation with a
previous landlord, or in the ten years prior to the assignment or sublease has
filed for bankruptcy protection, has been the subject of an involuntary
bankruptcy, or has been adjudged insolvent;
(e) Landlord has experienced a previous default by or is or has been
in litigation with the proposed assignee or sublessee
(f) in Landlord's reasonable judgment, the Leased Premises, or the
relevant part thereof, will be used in a manner that will violate any negative
covenant as to use contained in this Lease;
(g) the use of the Leased Premises by the proposed assignee or
sublessee will violate any applicable law, ordinance or regulation;
(h) the proposed assignee or sublessee is, as of the date of the
proposed assignment or subletting, a tenant in the Building or the Project, or
Landlord and such proposed assignee or
23.
sublessee have, at or prior to such time, been in communication regarding lease
of space in the Project;
(i) the proposed assignment or sublease fails to include all of the
terms and provisions required to be included therein pursuant to this Article 7;
(j) Tenant is then in default of any obligation of Tenant under this
Lease or Tenant has defaulted under this Lease beyond any applicable cure period
on three or more occasions; or
(k) the proposed assignee or sublessee is deemed, in Landlord's
reasonable judgment, to be competitive in any way (including but not limited to
competition by product type, labor usage, or employee pool) by Landlord; or
(l) the proposed assignment or sublease is at below market rates,
taking into consideration all relevant factors; or
(m) in the case of a subletting of less than the entire Leased
Premises, if the subletting would result in the division of the Leased Premises
into more than two subparcels or would require improvements to be made outside
of the Leased Premises.
7.2 Merger, Reorganization, or Sale of Assets. Except for a Permitted
Transfer (as defined below), any dissolution, spin-off or other disposition,
merger, consolidation or other reorganization of Tenant, or the sale, transfer
or other change in the aggregate over the Lease Term of more than 49% of the
capital stock, partnership or membership interests, or other equity interests,
of Tenant), or the sale or transfer of a material portion of the assets of
Tenant, shall be deemed a voluntary assignment of Tenant's interest in this
Lease; provided, however, that the foregoing shall not apply so long as Tenant
is an entity whose outstanding stock is listed on a recognized security
exchange, or if at least 80% of its voting stock is owned by another entity, the
voting stock of which is so listed. Notwithstanding anything herein to the
contrary, Tenant may assign its entire interest under this Lease to a successor
to Tenant by purchase, merger, consolidation or reorganization without the
consent of Landlord, provided that all of the following conditions are satisfied
(a "Permitted Transfer"): (1) Tenant is not in default under this Lease; (2)
Tenant's successor shall own all or substantially all of the assets of Tenant;
(3) Tenant's successor shall have a net worth which is at least equal to the
greater of Tenant's net worth at the date of this Lease or Tenant's net worth as
of the day prior to the proposed purchase, merger, consolidation or
reorganization; and (4) Tenant shall give Landlord written notice at least
thirty (30) days prior to the effective date of the proposed purchase, merger,
consolidation or reorganization. Tenant's notice to Landlord shall include
information and documentation showing that each of the above conditions has been
satisfied. If requested by Landlord, Tenant's successor shall sign a
commercially reasonable form of assumption agreement. If Tenant is a partnership
or limited liability company, then in addition to the foregoing, a withdrawal or
change, voluntary, involuntary or by operation of Law, of any general partner or
managing member or manager, or the dissolution of the partnership or the limited
liability company, shall be deemed a voluntary assignment of Tenant's interest
in this Lease. Upon Landlord's reasonable request from time to time, Tenant
shall promptly provide Landlord with a statement certified by the Tenant's chief
operating officer, which shall provide the following information: (a) the names
of all of Tenant's shareholders, partners or members and their ownership
interests
24.
at the time thereof, provided Tenant's shares are not publicly traded; (b) the
state in which Tenant is incorporated, formed or organized; (c) the location of
Tenant's principal place of business; (d) any information that is made public
regarding a material change in the ownership structure of Tenant, including,
without limitation, a merger or consolidation; and (e) any other public
information regarding Tenant's ownership that Landlord reasonably requests.
7.3 Landlord's Election. If Tenant shall desire to assign its interest under
the Lease or to sublet the Leased Premises, Tenant must first notify Landlord,
in writing, of its intent to so assign or sublet, at least thirty (30) days in
advance of the date it intends to so assign its interest in this Lease or sublet
all or any portion of the Leased Premises but not sooner than one hundred eighty
(80) days in advance of such date, specifying in detail the terms of such
proposed assignment or subletting, including the name of the proposed assignee
or sublessee, the property assignee's or sublessee's intended use of the Leased
Premises, current financial statements (including a balance sheet, income
statement and statement of cash flow, all prepared in accordance with generally
accepted accounting principles) of such proposed assignee or sublessee, the form
of documents to be used in effectuating such assignment or subletting and such
other information as Landlord may reasonably request. Landlord shall have a
period of thirty (30) days following receipt of such notice and the required
information within which to do one of the following: (i) consent to such
requested assignment or subletting subject to Tenant's compliance with the
conditions set forth in Paragraph 7.4 below, or (ii) refuse to so consent to
such requested assignment or subletting, provided that such consent shall not be
unreasonably conditioned, delayed or refused; or (iii) terminate this Lease, at
Landlord's sole option, as to only such portion of the Leased Premises as is the
subject of the proposed assignment or subletting as of the proposed effective
date of such assignment or sublease. During such thirty (30) day period, Tenant
covenants and agrees to supply to Landlord, upon request, all necessary or
relevant information which Landlord may reasonably request respecting such
proposed assignment or subletting and/or the proposed assignee or sublessee.
7.4 Conditions To Landlord's Consent. If Landlord elects to consent, or
shall have been ordered to so consent by a court of competent jurisdiction, to
such requested assignment or subletting, such consent shall be expressly
conditioned upon the occurrence of each of the conditions below set forth, and
any purported assignment or subletting made or ordered prior to the full and
complete satisfaction of each of the following conditions shall be void and, at
the election of Landlord, which election may be exercised at any time following
such a purported assignment or subletting but prior to the satisfaction of each
of the stated conditions, shall constitute a material default by Tenant under
this Lease until cured by satisfying in full each such condition by the assignee
or sublessee. The conditions are as follows:
(a) Landlord having approved in form and substance the assignment or
sublease agreement and any ancillary documents, which approval shall not be
unreasonably conditioned, delayed or withheld by Landlord if the requirements of
this Article 7 are otherwise complied with.
(b) Each such sublessee or assignee having agreed, in writing
satisfactory to Landlord and its counsel and for the benefit of Landlord, to
assume, to be bound by, and to perform the obligations of this Lease to be
performed by Tenant which relate to space being subleased.
25.
(c) Tenant having fully and completely performed all of its
obligations under the terms of this Lease through and including the date of such
assignment or subletting.
(d) Tenant having reimbursed to Landlord all reasonable costs and
reasonable attorneys' fees incurred by Landlord in conjunction with the
processing and documentation of any such requested subletting or assignment.
(e) Tenant having delivered to Landlord a complete and
fully-executed duplicate original of such sublease agreement or assignment
agreement (as applicable) and all related agreements.
(f) Tenant having paid, or having agreed in writing to pay as to
future payments, to Landlord seventy-five percent (75%) of all assignment
consideration or excess rentals to be paid to Tenant or to any other on Tenant's
behalf or for Tenant's benefit for such assignment or subletting as follows:
(i) If Tenant assigns its interest under this Lease and if
all or a portion of the consideration for such assignment is to be paid by the
assignee at the time of the assignment, Tenant shall have paid to Landlord and
Landlord shall have received an amount equal to seventy-five percent (75%) of
the assignment consideration so paid or to be paid (whichever is the greater) at
the time of the assignment by the assignee; or
(ii) If Tenant assigns its interest under this Lease and if
Tenant is to receive all or a portion of the consideration for such assignment
in future installments, that Tenant and Tenant's assignee shall have entered
into a written agreement with and for the benefit of Landlord satisfactory to
Landlord and its counsel whereby Tenant and Tenant's assignee jointly agree to
pay to Landlord an amount equal to seventy-five percent (75%) of all such future
assignment consideration installments to be paid by such assignee as and when
such assignment consideration is so paid.
(iii) If Tenant subleases the Leased Premises, that Tenant and
Tenant's sublessee shall have entered into a written agreement with and for the
benefit of Landlord satisfactory to Landlord and its counsel whereby Tenant and
Tenant's sublessee jointly agree to pay to Landlord seventy-five percent (75%)
of all excess rentals to be paid by such sublessee as and when such excess
rentals are so paid.
7.5 Assignment Consideration And Excess Rentals Defined. For purposes of
this Article, including any amendment to this Article by way of addendum or
other writing, the term "assignment consideration" shall mean all consideration
to be provided by or on behalf of the assignee to Tenant or to any other party
on Tenant's behalf or for Tenant's benefit in connection with or related to such
assignment, after deducting reasonable third party broker costs actually paid by
Tenant, if any, but without deduction for any other costs or expenses
(including, without limitation, tenant improvements, capital improvements,
building upgrades, permit fees, attorneys' fees, and other consultants' fees)
incurred by Tenant in connection with such assignment, and the term "excess
rentals" shall mean all consideration to be paid by the sublessee to Tenant or
to any other party on Tenant's behalf or for Tenant's benefit for the sublease
of all or any portion of the Leased Premises in excess of the rent due to
Landlord under
26.
the terms of this Lease for the portion so subleased for the same period, after
deducting reasonable third party broker costs actually paid by Tenant, if any,
but without deduction for any other costs or expenses (including, without
limitation, tenant improvements, capital improvements, building upgrades, permit
fees, attorneys' fees, and other consultants' fees) incurred by Tenant in
connection with such sublease. Tenant agrees that the portion of any assignment
consideration and/or excess rentals arising from any assignment or subletting by
Tenant which is to be paid to Landlord pursuant to this Article now is and shall
then be the property of Landlord and not the property of Tenant.
7.6 Payments. All payments required by this Article to be made to Landlord
shall be made in cash in full as and when they become due. At the time Tenant,
Tenant's assignee or sublessee makes each such payment to Landlord, Tenant or
Tenant's assignee or sublessee, as the case may be, shall deliver to Landlord an
itemized statement in reasonable detail showing the method by which the amount
due Landlord was calculated and certified by the person making such statement as
true and correct.
7.7 Good Faith. The rights granted to Tenant by this Article are granted in
consideration of Tenant's express covenant that all pertinent allocations which
are made by Tenant between the rental value of the Leased Premises and the value
of any of Tenant's personal property which may be conveyed or leased generally
concurrently with and which may reasonably be considered a part of the same
transaction as the permitted assignment or subletting shall be made fairly,
honestly and in good faith. If Tenant shall breach this covenant, Landlord may
immediately declare Tenant to be in default under the terms of this Lease and
terminate this Lease and/or exercise any other rights and remedies Landlord
would have under the terms of this Lease in the case of a material default by
Tenant under this Lease. In the event Tenant assigns or subleases all or any
portion of the Leased Premises at below market rates, it shall be rebuttably
presumed that Tenant has engaged in bad faith and that consideration is being
provided by the assignee or sublessee in excess of the consideration allocated
by Tenant to the Leased Premises or portion thereof which is the subject of the
assignment or sublease. Tenant shall have the burden of proof to rebut such
presumption.
7.8 Effect Of Landlord's Consent. No subletting or assignment, even with the
consent of Landlord, shall relieve Tenant of its personal and primary obligation
to pay rent and to perform all of the other obligations to be performed by
Tenant hereunder. Consent by Landlord to one or more assignments of Tenant's
interest in this Lease or to one or more sublettings of the Leased Premises
shall not be deemed to be a consent to any subsequent assignment or subletting.
If Landlord shall have been ordered by a court of competent jurisdiction to
consent to a requested assignment or subletting, or such an assignment or
subletting shall have been ordered by a court of competent jurisdiction over the
objection of Landlord, such assignment or subletting shall not be binding
between the assignee (or sublessee) and Landlord until such time as all
conditions set forth in Paragraph 7.4 above have been fully satisfied (to the
extent not then satisfied) by the assignee or sublessee, including, without
limitation, the payment to Landlord of all agreed assignment considerations
and/or excess rentals then due Landlord. No subtenant shall have any right to
assign its sublease or to further sublet any portion of the sublet premises or
to permit any portion of the sublet premises to be used or occupied by any other
party. If Landlord shall have been ordered by a court of competent jurisdiction
to consent to a requested assignment or subletting, or such an assignment or
subletting shall have been ordered by a court of competent
27.
jurisdiction over the objection of Landlord, such assignment or subletting shall
not be binding between the assignee (or sublessee) and Landlord until such time
as all conditions set forth in Paragraph 7.4 above have been fully satisfied (to
the extent not then satisfied) by the assignee or sublessee, including, without
limitation, the payment to Landlord of all agreed assignment considerations
and/or excess rentals then due Landlord. Upon an event of default while a
sublease is in effect, Landlord may collect directly from the sublessee all sums
becoming due to Tenant under the sublease and apply this amount against any sums
due Landlord by Tenant, and Tenant authorizes and directs any sublessee to make
payments directly to Landlord upon notice from Landlord. No direct collection by
Landlord from any sublessee shall constitute a novation or release of Tenant or
any guarantor, a consent to the sublease or a waiver of the covenant prohibiting
subleases.
7.9 Assignment or Sublease to Subsidiary or Affiliate. Notwithstanding the
foregoing, Landlord's consent shall not be required in connection with an
assignment or sublease by Tenant to an Affiliate (as hereinafter defined) of
Tenant, so long as such affiliated assignee's or sublessee's use of the Leased
Premises does not materially change. As used in this Paragraph 7.9, the term
"Affiliate" shall mean as to an entity, any entity which controls, is controlled
by or is under common control with such entity. The term "control" shall mean
the ownership, directly or indirectly, of more than fifty percent (50%) of the
outstanding voting stock of a corporation or other equity interest if such
entity is not a corporation.
ARTICLE 8
LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY
8.1 Limitation On Landlord's and Owner's Liability And Release. Neither
Landlord nor Owner shall be liable to Tenant for, and Tenant hereby releases
Landlord and Owner and their officers, directors, shareholders, partners,
principals, members, agents, employees, lenders, attorneys, contractors, and
consultants from, any and all liability, whether in contract, tort or on any
other basis, for any injury to or any damage sustained by Tenant, Tenant's
agents, employees, contractors or invitees, any damage to Tenant's property, or
any loss to Tenant's business, loss of Tenant's profits or other financial loss
of Tenant resulting from or attributable to the condition of, the management of,
the repair or maintenance of, the protection of, the supply of services or
utilities to, the damage in or destruction of the Leased Premises, the Building,
the Property, the Outside Areas, or the Project, including without limitation
(i) the failure, interruption, rationing or other curtailment or cessation in
the supply of electricity, water, gas or other utility service to the Project,
the Property, the Building or the Leased Premises; (ii) the vandalism or
forcible entry into the Project, the Property, the Building or the Leased
Premises; (iii) the penetration of water into or onto any portion of the
Project, the Property, the Building or the Leased Premises; (iv) the failure to
provide security and/or adequate lighting in or about the Project, the Property,
the Building or the Leased Premises, (v) the existence of any design or
construction defects within the Project, the Property, the Building or the
Leased Premises; (vi) the failure of any mechanical systems to function properly
(such as the HVAC systems); (vii) the blockage of access to any portion of the
Project, the Property, the Building or the Leased Premises, except that Tenant
does not so release Landlord, Owner or any such indemnified party from such
liability to the extent such damage was proximately caused by Landlord's,
Owner's or such indemnified party's gross negligence, willful misconduct, or
28.
Landlord's failure to perform an obligation expressly undertaken pursuant to
this Lease after a reasonable period of time shall have lapsed following receipt
of written notice from Tenant to so perform such obligation. In this regard,
Tenant acknowledges that it is fully apprised of the provisions of Law relating
to releases, and particularly to those provisions contained in Section 1542 of
the California Civil Code which reads as follows:
"A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor."
Notwithstanding such statutory provision, and for the purpose of implementing a
full and complete release and discharge, Tenant hereby (i) waives the benefit of
such statutory provision and (ii) acknowledges that, subject to the exceptions
specifically set forth herein, the release and discharge set forth in this
paragraph is a full and complete settlement and release and discharge of all
claims and is intended to include in its effect, without limitation, all claims
which Tenant, as of the date hereof, does not know of or suspect to exist in its
favor.
8.2 Tenant's Indemnification Of Landlord and Owner. Tenant shall defend with
competent counsel satisfactory to Landlord and Owner, Landlord and Owner and
their respective officers, directors, shareholders, partners, principals,
members, agents, employees, lenders, attorneys, contractors, and consultants
(the "Indemnified Parties") against any claims made or legal actions filed or
threatened against any of the Indemnified Parties with respect to the violation
of any Law or Private Restriction, or the death, bodily injury, personal injury,
property damage, or interference with contractual or property rights suffered by
any third party occurring within the Leased Premises, the Building, the Outside
Areas, the Property, or the Project, to the extent resulting from Tenant's use
or occupancy of the Leased Premises, the Building, the Outside Areas, the
Property, or the Project, or resulting from Tenant's activities in or about the
Leased Premises, the Building, the Outside Areas, the Property, or the Project,
and Tenant shall indemnify and hold the Indemnified Parties harmless from any
loss, liability, penalties, or expense whatsoever (including any loss
attributable to vacant space which otherwise would have been leased, but for
such activities) resulting therefrom, except to the extent proximately caused by
the gross negligence or willful misconduct of Landlord or the Indemnified Party.
Tenant's obligations under this paragraph shall survive the expiration or sooner
termination of this Lease.
ARTICLE 9
INSURANCE
9.1 Tenant's Insurance. Tenant shall maintain insurance complying with all
of the following:
(a) Tenant shall procure, pay for and keep in full force and effect,
at all times during the Lease Term, the following:
(i) Commercial general liability insurance insuring Tenant
against liability for personal injury, bodily injury, death and damage to
property occurring within the Leased Premises, or resulting from Tenant's use or
occupancy of the Leased Premises, the Building, the
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Outside Areas, the Property, or the Project, or resulting from Tenant's
activities in or about the Leased Premises, the Outside Areas, the Property, or
the Project, with coverage in an amount equal to Tenant's Required Liability
Coverage (as set forth in Article 1), which insurance shall contain "blanket
contractual liability" and "broad form property damage" endorsements insuring
Tenant's performance of Tenant's obligations to indemnify Landlord as contained
in this Lease.
(ii) Fire and property damage insurance in "special form"
coverage insuring Tenant against loss from physical damage to Tenant's personal
property, inventory, trade fixtures and improvements within the Leased Premises
with coverage for the full actual replacement cost thereof;
(iii) Business income/extra expense insurance sufficient to
pay Base Monthly Rent and Additional Rent for a period of not less than twelve
(12) months;
(iv) Plate glass insurance, at actual replacement cost;
(v) Product liability insurance (including, without
limitation, if food and/or beverages are distributed, sold and/or consumed
within the Leased Premises, to the extent obtainable, coverage for liability
arising out of the distribution, sale, use or consumption of food and/or
beverages (including alcoholic beverages, if applicable) at the Leased Premises
for not less than Tenant's Required Liability Coverage (as set forth in
Article 1);
(vi) Workers' compensation insurance (statutory coverage)
with employer's liability in amounts not less than $1,000,000 insurance
sufficient to comply with all laws; and
(vii) With respect to making of any alterations or
modifications or the construction of improvements or the like undertaken by
Tenant, course of construction, commercial general liability, automobile
liability and workers' compensation (to be carried by Tenant's contractor), in
an amount and with coverage reasonably satisfactory to Landlord.
(b) Each policy of liability insurance required to be carried by
Tenant pursuant to this paragraph or actually carried by Tenant with respect to
the Leased Premises or the Property: (i) shall, except with respect to insurance
required by subparagraph (a)(vii) above, name Landlord, and such others as are
designated by Landlord, as additional insureds; (ii) shall be primary insurance
providing that the insurer shall be liable for the full amount of the loss, up
to and including the total amount of liability set forth in the declaration of
coverage, without the right of contribution from or prior payment by any other
insurance coverage of Landlord; (iii) shall be in a form satisfactory to
Landlord; (iv) shall be carried with companies reasonably acceptable to Landlord
with Best's ratings of at least A and (v) shall provide that such policy shall
not be subject to cancellation, lapse or change except after at least thirty
(30) days prior written notice to Landlord, and (vi) shall contain a so-called
"severability" or "cross liability" endorsement. Each policy of property
insurance maintained by Tenant with respect to the Leased Premises or the
Property or any property therein (i) shall provide that such policy shall not be
subject to cancellation, lapse or change except after at least thirty (30) days
prior written notice to Landlord and (ii) shall contain a waiver and/or a
permission to waive by the insurer of any right of subrogation against Landlord,
its partners, principals, members, officers, employees, agents and contractors,
which might arise by reason of any payment under such policy or by
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reason of any act or omission of Landlord, its partners, principals, members,
officers, employees, agents and contractors.
(c) Prior to the time Tenant or any of its contractors enters the
Leased Premises, Tenant shall deliver to Landlord, with respect to each policy
of insurance required to be carried by Tenant pursuant to this Article, a copy
of such policy (appropriately authenticated by the insurer as having been
issued, premium paid) or a certificate of the insurer certifying in form
satisfactory to Landlord that a policy has been issued, premium paid, providing
the coverage required by this paragraph and containing the provisions specified
herein. With respect to each renewal or replacement of any such insurance, the
requirements of this paragraph must be complied with not less than thirty (30)
days prior to the expiration or cancellation of the policies being renewed or
replaced. Landlord may, at any time and from time to time, inspect and/or copy
any and all insurance policies required to be carried by Tenant pursuant to this
Article. If Landlord's Lender, insurance broker, advisor or counsel reasonably
determines at any time that the amount of coverage set forth in Paragraph 9.1(a)
for any policy of insurance Tenant is required to carry pursuant to this Article
is not adequate, then Tenant shall increase the amount of coverage for such
insurance to such greater amount as Landlord's Lender, insurance broker, advisor
or counsel reasonably deems adequate. In the event Tenant does not maintain said
insurance, Landlord may, in its sole discretion and without waiving any other
remedies hereunder, procure said insurance and Tenant shall pay to Landlord as
additional rent the cost of said insurance plus a ten percent (10%)
administrative fee.
9.2 Landlord's Insurance. With respect to insurance maintained by Landlord:
(a) Landlord shall maintain, as the minimum coverage required of it
by this Lease, fire and property damage insurance in so-called special form
coverage insuring Landlord (and such others as Landlord may designate) against
loss from physical damage to the Building with coverage of not less than one
hundred percent (100%) of the full actual replacement cost thereof and against
loss of rents for a period of not less than six months. Such fire and property
damage insurance, at Landlord's election but without any requirements on
Landlord's behalf to do so, (i) may be written in so-called "all risk" form,
excluding only those perils commonly excluded from such coverage by Landlord's
then property damage insurer; (ii) may provide coverage for physical damage to
the improvements so insured for up to the entire full actual replacement cost
thereof; (iii) may be endorsed to cover loss or damage caused by any additional
perils against which Landlord may elect to insure, including earthquake and/or
flood; and/or (iv) may provide coverage for loss of rents for a period of up to
twelve months. Landlord shall not be required to cause such insurance to cover
any of Tenant's personal property, inventory, and trade fixtures, or any
modifications, alterations or improvements made or constructed by Tenant to or
within the Leased Premises. Landlord shall use commercially reasonable efforts
to obtain such insurance at competitive rates.
(b) Landlord shall maintain commercial general liability insurance
insuring Landlord (and such others as are designated by Landlord) against
liability for personal injury, bodily injury, death, and damage to property
occurring in, on or about, or resulting from the use or occupancy of the
Property, or any portion thereof, with combined single limit coverage of at
least Ten Million Dollars ($10,000,000). Landlord may carry such greater
coverage as Landlord
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or Landlord's Lender, insurance broker, advisor or counsel may from time to time
determine is reasonably necessary for the adequate protection of Landlord, the
Property, and the Project.
(c) Landlord may maintain any other insurance which in the opinion
of its insurance broker, advisor or legal counsel is prudent in carry under the
given circumstances, provided such insurance is commonly carried by owners of
property similarly situated and operating under similar circumstances.
9.3 Mutual Waiver Of Subrogation. Landlord hereby releases Tenant, and
Tenant hereby releases Landlord and its respective partners, principals,
members, officers, agents, employees and servants, from any and all liability
for loss, damage or injury to the property of the other in or about the Leased
Premises, the Property, or the Project which is caused by or results from a
peril or event or happening which is covered by insurance actually carried and
in force at the time of the loss by the party sustaining such loss; provided,
however, that such waiver shall be effective only to the extent permitted by the
insurance covering such loss and to the extent such insurance is not prejudiced
thereby.
ARTICLE 10
DAMAGE TO LEASED PREMISES
10.1 Landlord's Duty To Restore. If the Leased Premises, the Building or the
Outside Area are damaged by any peril after the Effective Date of this Lease,
Landlord shall restore the same, as and when required by this paragraph, unless
this Lease is terminated by Landlord pursuant to Paragraph 10.3 or by Tenant
pursuant to Paragraph 10.4. If this Lease is not so terminated, then upon the
issuance of all necessary governmental permits, Landlord shall commence and
diligently prosecute to completion the restoration of the Leased Premises, the
Building or the Outside Area, as the case may be, to the extent then allowed by
law, to substantially the same condition in which it existed as of the Lease
Commencement Date. Landlord's obligation to restore shall be limited to the
improvements constructed by Landlord. Landlord shall have no obligation to
restore any alterations, modifications or improvements made by Tenant to the
Leased Premises or any of Tenant's personal property, inventory or trade
fixtures. Upon completion of the restoration by Landlord, Tenant shall forthwith
replace or fully repair all of Tenant's improvements constructed by Tenant to
like or similar conditions as existed at the time immediately prior to such
damage or destruction.
10.2 Insurance Proceeds. All insurance proceeds available from the fire and
property damage insurance carried by Landlord shall be paid to and become the
property of Landlord. If this Lease is terminated pursuant to either Paragraph
10.3 or 10.4, all insurance proceeds available from insurance carried by Tenant
which cover loss of property that is Landlord's property or would become
Landlord's property on termination of this Lease shall be paid to and become the
property of Landlord, and the remainder of such proceeds shall be paid to and
become the property of Tenant. If this Lease is not terminated pursuant to
either Paragraph 10.3 or 10.4, all insurance proceeds available from insurance
carried by Tenant which cover loss to property that is Landlord's property shall
be paid to and become the property of Landlord, and all proceeds available from
such insurance which cover loss to property which would only become the property
of Landlord upon the termination of this Lease shall be paid to and remain
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the property of Tenant. The determination of Landlord's property and Tenant's
property shall be made pursuant to Paragraph 6.2.
10.3 Landlord's Right To Terminate. Landlord shall have the option to
terminate this Lease in the event any of the following occurs, which option may
be exercised only by delivery to Tenant of a written notice of election to
terminate within sixty (60) days after the date of such damage or destruction:
(a) The Building is damaged by any peril covered by valid and
collectible insurance actually carried by Landlord and in force at the time of
such damage or destruction (an "insured peril") to such an extent that the
estimated cost to restore the Building exceeds the lesser of (i) the insurance
proceeds available from insurance actually carried by Landlord plus the
deductible with respect to such insurance, or (ii) fifty percent (50%)of the
then actual replacement cost thereof;
(b) The Building is damaged by an uninsured peril, which peril
Landlord was not required to insure against pursuant to the provisions of
Article 9 of this Lease.
(c) The Building is damaged by any peril and, because of the laws
then in force, the Building (i) cannot be restored at reasonable cost or (ii) if
restored, cannot be used for the same use being made thereof before such damage.
10.4 Tenant's Right To Terminate. If the Leased Premises, the Building or the
Outside Area are damaged by any peril and Landlord does not elect to terminate
this Lease or is not entitled to terminate this Lease pursuant to this Article,
then as soon as reasonably practicable, Landlord shall furnish Tenant with the
written opinion of Landlord's architect or construction consultant as to when
the restoration work required of Landlord may be complete. Tenant shall have the
option to terminate this Lease in the event any of the following occurs, which
option may be exercised only by delivery to Landlord of a written notice of
election to terminate within seven (7) business days after Tenant receives from
Landlord the estimate of the time needed to complete such restoration:
(a) If the time estimated to substantially complete the restoration
exceeds nine (9) months from and after the commencement of construction; or
(b) If the damage occurred within twelve (12) months of the last day
of the Lease Term and the time estimated to substantially complete the
restoration exceeds one hundred eighty (180) days from and after the date such
restoration is commenced.
10.5 Tenant's Waiver. Landlord and Tenant agree that the provisions of
Paragraph 10.4 above, captioned "Tenant's Right To Terminate", are intended to
supersede and replace the provisions contained in California Civil Code, Section
1932, Subdivision 2, and California Civil Code, Section 1934, and accordingly,
Tenant hereby waives the provisions of such Civil Code Sections and the
provisions of any successor Civil Code Sections or similar laws hereinafter
enacted.
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ARTICLE 11
CONDEMNATION
11.1 Tenant's Right To Terminate. Except as otherwise provided in Paragraph
11.4 below regarding temporary takings, Tenant shall have the option to
terminate this Lease if, as a result of any taking, (i) all of the Leased
Premises is taken, or (ii) twenty-five percent (25%) or more of the Leased
Premises is taken and the part of the Leased Premises that remains cannot,
within a reasonable period of time, be made reasonably suitable for the
continued operation of Tenant's business. Tenant must exercise such option
within a reasonable period of time, to be effective on the later to occur of (i)
the date that possession of that portion of the Leased Premises that is
condemned is taken by the condemnor or (ii) the date Tenant vacated the Leased
Premises.
11.2 Landlord's Right To Terminate. Except as otherwise provided in Paragraph
11.4 below regarding temporary takings, Landlord shall have the option to
terminate this Lease if, as a result of any taking, (i) all of the Leased
Premises is taken, (ii) twenty-five percent (25%) or more of the Leased Premises
is taken and the part of the Leased Premises that remains cannot, within a
reasonable period of time, be made reasonably suitable for the continued
operation of Tenant's business, or (iii) because of the laws then in force, the
Leased Premises may not be used for the same use being made before such taking,
whether or not restored as required by Paragraph 11.3 below. Any such option to
terminate by Landlord must be exercised within a reasonable period of time, to
be effective as of the date possession is taken by the condemnor.
11.3 Restoration. If any part of the Leased Premises or the Building is taken
and this Lease is not terminated, then Landlord shall, to the extent not
prohibited by laws then in force, repair any damage occasioned thereby to the
remainder thereof to a condition reasonably suitable for Tenant's continued
operations and otherwise, to the extent practicable, in the manner and to the
extent provided in Paragraph 10.1.
11.4 Temporary Taking. If a portion of the Leased Premises is temporarily
taken for a period of ninety (90) days or less and such period does not extend
beyond the Lease Expiration Date, this Lease shall remain in effect. If any
portion of the Leased Premises is temporarily taken for a period which exceeds
ninety (90) days or which extends beyond the Lease Expiration Date, then the
rights of Landlord and Tenant shall be determined in accordance with Paragraphs
11.1 and 11.2 above.
11.5 Division Of Condemnation Award. Any award made for any taking of the
Property, the Building, or the Leased Premises, or any portion thereof, shall
belong to and be paid to Landlord, and Tenant hereby assigns to Landlord all of
its right, title and interest in any such award; provided, however, that Tenant
shall be entitled to receive any portion of the award that is made specifically
(i) for the taking of personal property, inventory or trade fixtures belonging
to Tenant, (ii) for the interruption of Tenant's business or its moving costs,
or (iii) for the value of any leasehold improvements installed and paid for by
Tenant. The rights of Landlord and Tenant regarding any condemnation shall be
determined as provided in this Article, and each party hereby waives the
provisions of Section 1265.130 of the California Code of Civil Procedure, and
the provisions of any similar law hereinafter enacted, allowing either party to
petition the
34.
Supreme Court to terminate this Lease and/or otherwise allocate condemnation
awards between Landlord and Tenant in the event of a taking of the Leased
Premises.
11.6 Abatement Of Rent. In the event of a taking of the Leased Premises which
does not result in a termination of this Lease, then, as of the date possession
is taken by the condemning authority, the Base Monthly Rent shall be reduced in
the same proportion that the area of that part of the Leased Premises so taken
(less any addition to the area of the Leased Premises by reason of any
reconstruction) bears to the area of the Leased Premises immediately prior to
such taking. In the case of a temporary taking, such abatement shall only
continue during the pendency of the temporary taking.
11.7 Taking Defined. The term "taking" or "taken" as used in this Article 11
shall mean any transfer or conveyance of all or any portion of the Property to a
public or quasi-public agency or other entity having the power of eminent domain
pursuant to or as a result of the exercise of such power by such an agency,
including any inverse condemnation and/or any sale or transfer by Landlord of
all or any portion of the Property to such an agency under threat of
condemnation or the exercise of such power.
ARTICLE 12
DEFAULT AND REMEDIES
12.1 Events Of Tenant's Default. Tenant shall be in default of its
obligations under this Lease if any of the following events occur:
(a) After applicable notice, Tenant shall have failed to pay Base
Monthly Rent or any Additional Rent when due; or
(b) Tenant shall have done or permitted to be done any act, use or
thing in its use, occupancy or possession of the Leased Premises or the Building
or the Outside Areas which is prohibited by the terms of this Lease; or Tenant
shall have failed to perform any term, covenant or condition of this Lease
(except those requiring the payment of Base Monthly Rent or Additional Rent,
which failures shall be governed by subparagraph (a) above) and such prohibited
act or failure shall not be cured within thirty (30) days after written notice
from Landlord to Tenant specifying the nature of such prohibited action or
failure and requesting Tenant to cure the same; provided, however, that if such
prohibited action or failure cannot reasonably be cured within thirty (30) days,
Tenant shall have such longer period as is reasonably necessary to cure such
failure provided that Tenant commences its cure within such thirty (30) day
period and prosecutes such cure to completion; or
(c) Tenant shall have sublet the Leased Premises or assigned or
encumbered its interest in this Lease in violation of the provisions contained
in Article 7, whether voluntarily or by operation of law; or
(d) There shall have been an Abandonment (as defined in Section 4.1)
of the Leased Premises by the Tenant; or
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(e) Tenant or any Guarantor of this Lease shall have permitted or
suffered the sequestration or attachment of, or execution on, or the appointment
of a custodian or receiver with respect to, all or any substantial part of the
property or assets of Tenant (or such Guarantor) or any property or asset
essential to the conduct of Tenant's (or such Guarantor's) business, and Tenant
(or such Guarantor) shall have failed to obtain a return or release of the same
within sixty (60) days thereafter, or prior to sale pursuant to such
sequestration, attachment or levy, whichever is earlier; or
(f) Tenant or any Guarantor of this Lease shall have made a general
assignment of all or a substantial part of its assets for the benefit of its
creditors; or
(g) Tenant or any Guarantor of this Lease shall have allowed (or
sought) to have entered against it a decree or order which: (i) grants or
constitutes an order for relief, appointment of a trustee, or condemnation or a
reorganization plan under the bankruptcy laws of the United States; (ii)
approves as properly filed a petition seeking liquidation or reorganization
under said bankruptcy laws or any other debtor's relief law or similar statute
of the United States or any state thereof; or (iii) otherwise directs the
winding up or liquidation of Tenant; provided, however, if any decree or order
was entered without Tenant's consent or over Tenant's objection, Landlord may
not terminate this Lease pursuant to this subparagraph if such decree or order
is rescinded or reversed within sixty (60) days after its original entry; or
(h) Tenant or any Guarantor of this Lease shall have availed itself
of the protection of any debtor's relief law, moratorium law or other similar
law which does not require the prior entry of a decree or order and same is not
rescinded or reversed within sixty (60) days after its original entry.
12.2 Landlord's Remedies. In the event of any default by Tenant, and without
limiting Landlord's right to indemnification as provided in Article 8.2,
Landlord shall have the following remedies, in addition to all other rights and
remedies provided by Law or otherwise provided in this Lease, to which Landlord
may resort cumulatively, or in the alternative:
(a) Landlord may, at Landlord's election, keep this Lease in effect
and enforce, by an action at law or in equity, all of its rights and remedies
under this Lease including, without limitation, (i) the right to recover the
rent and other sums as they become due by appropriate legal action, (ii) the
right to make payments required by Tenant, or perform Tenant's obligations and
be reimbursed by Tenant for the cost thereof with interest at the then maximum
rate of interest not prohibited by Law from the date the sum is paid by Landlord
until Landlord is reimbursed by Tenant, and (iii) the remedies of injunctive
relief and specific performance to prevent Tenant from violating the terms of
this Lease and/or to compel Tenant to perform its obligations under this Lease,
as the case may be.
(b) Landlord may, at Landlord's election, terminate this Lease by
giving Tenant written notice of termination, in which event this Lease shall
terminate on the date set forth for termination in such notice, in which event
Tenant shall immediately surrender the Leased 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 Leased Premises and expel or remove Tenant and any other person who may
be occupying
36.
the Leased Premises or any part thereof, without being liable for prosecution or
any claim or damages therefore. Any termination under this subparagraph shall
not relieve Tenant from its obligation to pay to Landlord all Base Monthly Rent
and Additional Rent then or thereafter due, or any other sums due or thereafter
accruing to Landlord, or from any claim against Tenant for damages previously
accrued or then or thereafter accruing. In no event shall any one or more of the
following actions by Landlord, in the absence of a written election by Landlord
to terminate this Lease constitute a termination of this Lease:
(i) Appointment of a receiver or keeper in order to protect
Landlord's interest hereunder;
(ii) Consent to any subletting of the Leased Premises or
assignment of this Lease by Tenant, whether pursuant to the provisions hereof or
otherwise; or
(iii) Any action taken by Landlord or its partners,
principals, members, officers, agents, employees, or servants, which is intended
to mitigate the adverse effects of any breach of this Lease by Tenant,
including, without limitation, any action taken to maintain and preserve the
Leased Premises on any action taken to relet the Leased Premises or any portion
thereof for the account at Tenant and in the name of Tenant.
(c) In the event Tenant breaches this Lease and abandons the Leased
Premises, Landlord may terminate this Lease, but this Lease shall not terminate
unless Landlord gives Tenant written notice of termination. If Landlord does not
terminate this Lease by giving written notice of termination, Landlord may
enforce all its rights and remedies under this Lease, including the right and
remedies provided by 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 right to sublet or assign, subject only to reasonable
limitations"), as in effect on the Effective Date of this Lease.
(d) In the event Landlord terminates this Lease, Landlord shall be
entitled, at Landlord's election, to the rights and remedies provided in
California Civil Code Section 1951.2, as in effect on the Effective Date of this
Lease. For purposes of computing damages pursuant to Section 1951.2, an interest
rate equal to the maximum rate of interest then not prohibited by Law shall be
used where permitted. Such damages shall include, without limitation:
(i) The worth at the time of the award of the unpaid rent
which had been earned at the time of termination; plus
(ii) The worth at the time of award of the amount by which
the unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(iii) The worth at the time of award of the amount by which
the unpaid rent for the balance of the term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided,
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; plus
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(iv) Any other amount necessary to compensate Landlord for
all detriment proximately caused by Tenant's failure to perform Tenant's
obligations under this Lease, or which in the ordinary course of things would be
likely to result therefrom, including without limitation, the following: (i)
expenses for cleaning, repairing or restoring the Leased Premises, (ii) expenses
for altering, remodeling or otherwise improving the Leased Premises for the
purpose of reletting, including removal of existing leasehold improvements
and/or installation of additional leasehold improvements (regardless of how the
same is funded, including reduction of rent, a direct payment or allowance to a
new tenant, or otherwise), (iii) broker's fees allocable to the remainder of the
Lease Term, advertising costs and other expenses of reletting the Leased
Premises, (iv) expenses incurred in removing, disposing of and/or storing any of
Tenant's personal property, inventory or trade fixtures remaining therein; (v)
reasonable attorney's fees, expert witness fees, court costs and other
reasonable expenses incurred by Landlord (but not limited to taxable costs) in
retaking possession of the Leased Premises, establishing damages hereunder, and
releasing the Leased Premises; and (vi) any other expenses, costs or damages
otherwise incurred or suffered as a result of Tenant's default.
(e) Any notice of Tenant's breach or default given hereunder
shall be effective and shall subject Tenant to judgment for possession and
judgment for the actual amount of rent and other sums found to be due in an
unlawful detainer or other civil action, notwithstanding the fact that the
amount of rent demanded in such notice is not in fact correct, provided that (1)
it is determined that some amount of rent was owing, (2) the amount stated in
the notice was identified in such notice as an estimated amount, and (3) the
amount claimed in the notice was reasonably estimated. The amount claimed in
such notice shall be conclusively presumed to have been reasonably estimated if,
in relation to the amount determined to be due upon the trial or other judicial
determination of that issue, the estimated amount was no more than twenty
percent (20%) more or less than the amount determined to be due.
12.3 Landlord's Default And Tenant's Remedies. In the event Landlord fails to
perform its obligations under this Lease, Landlord shall nevertheless not be in
default under the terms of this Lease until such time as Tenant shall have first
given written notice specifying the nature of such failure to perform its
obligations, and then only after Landlord shall have had thirty (30) days
following its receipt of such notice within which to perform such obligations;
provided that, if longer than thirty (30) days is reasonably required in order
to perform such obligations, Landlord shall have such longer period. In the
event of Landlord's default as above set forth, then, and only then, Tenant may
then proceed in equity or at law to compel Landlord to perform its obligations
and/or to recover damages proximately caused by such failure to perform (except
as and to the extent Tenant has waived its right to damages as provided in this
Lease).
12.4 Limitation Of Tenant's Recourse. Tenant's sole recourse against Landlord
shall be limited solely and exclusively to an amount which is equal to the
lesser of (a) the interest of Landlord in the Building and the Outside Areas, or
(b) the equity interest Landlord would have in the Building and the Outside
Areas if the Building and the Outside Areas were encumbered by third-party debt
in an amount equal to eighty percent (80%) of the value of the Building and the
Outside Areas (as such value is reasonably determined by Landlord). If Landlord
is a corporation, trust, partnership, joint venture, limited liability company,
unincorporated association, or other form of business entity, Tenant agrees that
(i) the obligations of Landlord under this Lease shall not constitute personal
obligations of the officers, directors, trustees,
38.
partners, joint venturers, members, owners, stockholders, or other principals of
such business entity, and (ii) Tenant shall have recourse only to the interest
of such corporation, trust, partnership, joint venture, limited liability
company, unincorporated association, or other form of business entity in the
Building and the Outside Areas for the satisfaction of such obligations and not
against the assets of such officers, directors, trustees, partners, joint
venturers, members, owners, stockholders or principals. Additionally, if
Landlord is a partnership or limited liability company, then Tenant covenants
and agrees:
(a) No partner or member of Landlord shall be sued or named as a
party in any suit or action brought by Tenant with respect to any alleged breach
of this Lease (except to the extent necessary to secure jurisdiction over the
partnership and then only for that sole purpose);
(b) No service of process with respect to any alleged breach of this
Lease shall be made against any partner or member of Landlord except for the
sole purpose of securing jurisdiction over the partnership; and
(c) No writ of execution will ever be levied against the assets of
any partner or member of Landlord other than to the extent of his or her
interest in the assets of the partnership or limited liability company
constituting Landlord.
Tenant further agrees that each of the foregoing covenants and agreements shall
be enforceable by Landlord and by any partner or member of Landlord and shall be
applicable to any actual or alleged misrepresentation or nondisclosure made
regarding this Lease or the Leased Premises or any actual or alleged failure,
default or breach of any covenant or agreement either expressly or implicitly
contained in this Lease or imposed by statute or at common law.
12.5 Tenant's Waiver. Landlord and Tenant agree that the provisions of
Paragraph 12.3 above are intended to supersede and replace the provisions of
California Civil Code Sections 1932(1), 1941 and 1942, and accordingly, Tenant
hereby waives the provisions of California Civil Code Sections 1932(1), 1941 and
1942 and/or any similar or successor law regarding Tenant's right to terminate
this Lease or to make repairs and deduct the expenses of such repairs from the
rent due under this Lease.
ARTICLE 13
GENERAL PROVISIONS
13.1 Taxes On Tenant's Property. Tenant shall pay before delinquency any and
all taxes, assessments, license fees, use fees, permit fees and public charges
of whatever nature or description levied, assessed or imposed against Tenant or
Landlord by a governmental agency arising out of, caused by reason of or based
upon Tenant's estate in this Lease, Tenant's ownership of property, improvements
made by Tenant to the Leased Premises or the Outside Areas, improvements made by
Landlord for Tenant's use within the Leased Premises or the Outside Areas,
Tenant's use (or estimated use) of public facilities or services or Tenant's
consumption (or estimated consumption) of public utilities, energy, water or
other resources (collectively, "Tenant's Interest"). Upon demand by Landlord,
Tenant shall furnish Landlord with satisfactory evidence of these payments. If
any such taxes, assessments, fees or public
39.
charges are levied against Landlord, Landlord's property, the Building, the
Property, or the Project, or if the assessed value of the Building, the
Property, or the Project is increased by the inclusion therein of a value placed
upon Tenant's Interest, regardless of the validity thereof, Landlord shall have
the right to require Tenant to pay such taxes, and if not paid and satisfactory
evidence of payment delivered to Landlord at least ten (10) days prior to
delinquency, then Landlord shall have the right to pay such taxes on Tenant's
behalf and to invoice Tenant for the same. Tenant shall pay to Landlord, as
Additional Rent, the amount set forth in Landlord's invoice within the earlier
to occur of (a) thirty (30) days of the date it receives an invoice from
Landlord setting forth the amount of such taxes, assessments, fees, or public
charge so levied, or (b) after applicable notice, the due date of such invoice.
Failure by Tenant to pay the amount so invoiced within such time period shall be
conclusively deemed a default by Tenant under this Lease. Tenant shall have the
right to bring suit in any court of competent jurisdiction to recover from the
taxing authority the amount of any such taxes, assessments, fees or public
charges so paid.
13.2 Holding Over. This Lease shall terminate without further notice on the
Lease Expiration Date (as set forth in Article 1). Any holding over by Tenant
after expiration of the Lease Term shall neither constitute a renewal nor
extension of this Lease nor give Tenant any rights in or to the Leased Premises
except as expressly provided in this paragraph. Any such holding over to which
Landlord has consented shall be construed to be a tenancy from month to month,
on the same terms and conditions herein specified insofar as applicable, except
that the Base Monthly Rent shall be increased to an amount equal to one hundred
fifty percent (150%) of the Base Monthly Rent payable during the last full month
immediately preceding such holding over. Tenant acknowledges that if Tenant
holds over without Landlord's consent, such holding over may compromise or
otherwise affect Landlord's ability to enter into new leases with prospective
tenants regarding the Leased Premises. Therefore, if Tenant fails to surrender
the Leased Premises upon the expiration or termination of this Lease, in
addition to any other liabilities to Landlord accruing therefrom, Tenant shall
protect, defend, indemnify and hold Landlord harmless from and against all
claims resulting from such failure, including, without limiting the foregoing,
any claims made by any succeeding tenant founded upon such failure to surrender,
and any losses suffered by Landlord, including lost profits, resulting from such
failure to surrender.
13.3 Subordination To Mortgages. This Lease is subject to and subordinate to
all ground leases, so-called "synthetic leases," mortgages and deeds of trust
which affect the Building, the Property, or the Project and which are of public
record (or memoranda of same are of public record) as of the Effective Date of
this Lease, and to all renewals, modifications, consolidations, replacements and
extensions thereof. However, if the lessor under any such ground lease or
synthetic lease, or any lender holding any such mortgage or deed of trust, shall
advise Landlord that it desires or requires this Lease to be made prior and
superior thereto, then, upon written request of Landlord to Tenant, Tenant shall
promptly execute, acknowledge and deliver any and all customary or reasonable
documents or instruments which Landlord and such lessor or lender deems
necessary or desirable to make this Lease prior thereto. Tenant hereby consents
to Landlord's ground leasing the land underlying the Building, the Property, or
the Project, and/or leasing or subleasing the Building, the Property, or the
Project, and/or encumbering the Building, the Property, or the Project as
security for future loans on such terms as Landlord shall desire, all of which
future leases, ground leases, mortgages or deeds of trust shall be subject to
and
40.
subordinate to this Lease. However, if any lessor under any such future ground
lease or any lender holding such future mortgage or deed of trust shall desire
or require that this Lease be made subject to and subordinate to such future
ground lease, mortgage or deed of trust, then Tenant agrees, within ten (10)
business days after Landlord's written request therefore, to execute,
acknowledge and deliver to Landlord any and all documents or instruments
requested by Landlord or by such lessor or lender as may be necessary or proper
to assure the subordination of this Lease to such future ground lease, mortgage
or deed of trust, but only if such lessor or lender, either in a new writing or
in the document to which this Lease is being subordinated, agrees not to disturb
Tenant's quiet possession of the Leased Premises so long as Tenant is not in
default beyond applicable grace, notice and cure periods under this Lease. If
Landlord assigns the Lease as security for a loan, or executes a so-called
"synthetic lease," Tenant agrees to execute such documents as are reasonably
requested by the lender or lessor and to provide reasonable provisions in the
Lease (which do not impair Tenant's rights hereunder) protecting such lender's
or lessor's interest which are customarily required by institutional lenders
making loans secured by a deed of trust, or by institutional synthetic lessors.
13.4 Tenant's Attornment Upon Foreclosure. Tenant shall, upon request, attorn
(i) to any purchaser of the Building or the Property at any foreclosure sale or
private sale conducted pursuant to any security instruments encumbering the
Building or the Property, (ii) to any grantee or transferee designated in any
deed given in lieu of foreclosure of any security interest encumbering the
Building or the Property, or (iii) to the lessor under an underlying ground
lease of the land underlying the Building or the Property, or any synthetic
lease of the Building or the Property, should such lease or ground lease be
terminated; provided that such purchaser, grantee or lessor recognizes Tenant's
rights under this Lease.
13.5 Mortgagee Protection. In the event of any default on the part of
Landlord, Tenant will give notice by registered mail to Owner and any Lender or
lessor under any underlying ground lease or synthetic lease who shall have
requested, in writing, to Tenant that it be provided with such notice, and
Tenant shall offer such Lender or lessor a reasonable opportunity to cure the
default, including time to obtain possession of the Leased Premises by power of
sale or judicial foreclosure or other appropriate legal proceedings if
reasonably necessary to effect a cure.
13.6 Estoppel Certificate. Tenant will, following any request by Landlord,
promptly execute and deliver to Landlord an estoppel certificate substantially
in form attached as Exhibit G, (i) certifying that this Lease is unmodified and
in full force and effect, or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect, (ii) stating the date to which the rent and other charges are paid
in advance, if any, (iii) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults if any are claimed, and (iv) certifying such other information
about this Lease as may be reasonably requested by Landlord, its Lender or
prospective lenders, investors or purchasers of the Building or the Property.
Tenant's failure to execute and deliver such estoppel certificate within ten
(10) business days after Landlord's request therefore shall be a material
default by Tenant under this Lease, and Landlord shall have all of the rights
and remedies available to Landlord as Landlord would otherwise have in the case
of any other material default by Tenant, including the right to terminate this
Lease and xxx for damages proximately caused thereby, it being agreed and
understood by Tenant that Tenant's failure to so deliver such estoppel
certificate in a timely manner could result in Landlord being
41.
unable to perform committed obligations to other third parties which were made
by Landlord in reliance upon this covenant of Tenant. Landlord and Tenant intend
that any statement delivered pursuant to this paragraph may be relied upon by
any Lender or purchaser or prospective Lender or purchaser of the Building, the
Property, or any interest in them.
13.7 Tenant's Financial Information. Tenant shall deliver to Landlord within
five (5) business days after Landlord's request, copies of all statements,
reports and notices sent or made available generally by Tenant to its security
holders or to any holders of subordinated debt and all reports on Form 10-K,
10-Q and 8-K filed with the Securities and Exchange Commission. Landlord shall
be entitled to disclose such financial statements or other information to its
Lender, to any present or prospective principal of or investor in Landlord, or
to any prospective Lender or purchaser of the Building, the Property, or any
portion thereof or interest therein. Any such financial statement or other
information which is marked "confidential" or "company secrets" (or is otherwise
similarly marked by Tenant) shall be confidential and shall not be disclosed by
Landlord to any third party except as specifically provided in this paragraph,
unless the same becomes a part of the public domain without the fault of
Landlord.
13.8 Transfer By Landlord. Landlord and its successors in interest shall have
the right to transfer any portions (including all) of their interest in the
Building, the Property, or any portion thereof at any time and to any person or
entity. In the event of any such transfer, the Landlord originally named herein
(and in the case of any subsequent transfer, the transferor), from the date of
such transfer, (i) shall be automatically relieved, without any further act by
any person or entity, of all liability for the performance of the obligations of
the Landlord hereunder which may accrue after the date of such transfer and (ii)
shall be relieved of all liability for the performance of the obligations of the
Landlord hereunder which have accrued before the date of transfer if its
transferee agrees to assume and perform all such prior obligations of the
Landlord hereunder. Tenant shall attorn to any such transferee. After the date
of any such transfer, the term "Landlord" as used herein shall mean the
transferee of such interest in the Building or the Property.
13.9 Force Majeure. The time for performance of the obligations of each of
the parties under this Lease (other than the obligations to pay money) shall be
temporarily extended, if such party is prevented or delayed in performing such
obligations by reason of any strikes, lockouts or labor disputes; government
restrictions, regulations, controls, action or inaction; civil commotion; or
extraordinary weather, fire or other acts of God.
13.10 Notices. Any notice required or permitted to be given under this Lease
shall be in writing and (i) personally delivered, (ii) sent by United States
mail, registered or certified mail, postage prepaid, return receipt requested,
(iii) sent by Federal Express or similar nationally recognized overnight courier
service, or (iv) transmitted by facsimile with a hard copy sent within one (1)
business day by any of the foregoing means, and in all cases addressed as
follows, and such notice shall be deemed to have been given upon the date of
actual receipt or delivery (or refusal to accept delivery) at the address
specified below (or such other addresses as may be specified by notice in the
foregoing manner) as indicated on the return receipt or air xxxx:
42.
If to Landlord: Electronics For Imaging, Inc.
000 Xxxxxxxx Xxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Facsimile: (000) 000-0000
with a copy to: Xxxxxx Godward LLP
Xxx Xxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Facsimile: (000) 000-0000
If to Tenant: Equinix, Inc
prior to occupancy: 0000 Xxxxxxxx Xxxxxxx
Xxxxxxxx Xxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxxxxxxx
Facsimile: (000) 000-0000
After occupancy: Equinix, Inc.
000 Xxxxxxxx Xxx
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxxxxxxx
Facsimile: (000) 000-0000
In each case
with a copy to: Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
Any notice given in accordance with the foregoing shall be deemed received upon
actual receipt or refusal to accept delivery.
13.11 Attorneys' Fees. In the event any party shall bring any action,
arbitration proceeding or legal proceeding alleging a breach of any provision of
this Lease, to recover rent, to terminate this Lease, or to enforce, protect,
determine or establish any term or covenant of this Lease or rights or duties
hereunder of either party, the prevailing party shall be entitled to recover
from the non-prevailing party as a part of such action or proceeding, or in a
separate action for that purpose brought within one year from the determination
of such proceeding, reasonable attorneys' fees, expert witness fees, court costs
and other reasonable expenses incurred by the prevailing party.
43.
13.12 Definitions. Any term that is given a special meaning by any provision
in this Lease shall, unless otherwise specifically stated, have such meaning
wherever used in this Lease or in any Addenda or amendment hereto. In addition
to the terms defined in Article 1, the following terms shall have the following
meanings:
(a) Real Property Taxes. The term "Real Property Tax" or "Real
Property Taxes" shall each mean the sum of:
(i)(A) Tenant's Expense Share of the Building, multiplied by (B)(1) all
taxes, assessments, levies and other charges of any kind or nature whatsoever,
general and special, foreseen and unforeseen (including all instruments of
principal and interest required to pay any general or special assessments for
public improvements and any increases resulting from reassessments caused by any
change in ownership or new construction), now or hereafter imposed by any
governmental or quasi-governmental authority or special district having the
direct or indirect power to tax or levy assessments (collectively, the "Tax
Component"), which are levied or assessed for whatever reason against the
Property or any portion thereof, or Landlord's interest therein, or the
fixtures, equipment and other property of Landlord that is an integral part of
the Property and located thereon, or Landlord's business of owning, leasing or
managing the Property or the gross receipts, income or rentals from the
Property, plus (2) all charges, levies or fees imposed by any governmental
authority against Landlord by reason of or based upon the use of or number of
parking spaces within the Property, the amount of public services or public
utilities used or consumed (e.g. water, gas, electricity, sewage or waste water
disposal) at the Property, the number of person employed by tenants of the
Property, the size (whether measured in area, volume, number of tenants or
whatever) or the value of the Property, or the type of use or uses conducted
within the Property, and all costs and fees (including attorneys' fees)
reasonably incurred by Landlord in contesting any Real Property Tax and in
negotiating with public authorities as to any Real Property Tax, plus
(ii)(A) Tenant's Expense Share of the Project, multiplied by (B)(1)
the Tax Component as levied or assessed for whatever reason against the Common
Areas of the Project (as hereinafter defined) or any portion thereof, or
Landlord's interest therein, or the fixtures, equipment and other property of
Landlord that is an integral part of the Common Areas of the Project and located
thereon, or Landlord's business of owning, leasing or managing the Common Areas
of the Project or the gross receipts, income or rentals from the Common Areas of
the Project, plus (2) all charges, levies or fees imposed by any governmental
authority against Landlord by reason of or based upon the use of or number of
parking spaces within the Common Areas of the Project, the amount of public
services or public utilities used or consumed (e.g. water, gas, electricity,
sewage or waste water disposal) by the Common Areas of the Project, the size
(whether measured in area, volume, number of tenants or whatever) or the value
of the Common Areas of the Project, or the type of use or uses conducted within
the Common Areas of the Project, and all costs and fees (including attorneys'
fees) reasonably incurred by Landlord in contesting any Real Property Tax and in
negotiating with public authorities as to any Real Property Tax relating to the
Common Areas of the Project. [As used herein, the term "Common Areas of the
Project" means those exterior portions of the improved portions of the Project
(e.g. landscaping, parking spaces, roadways, walkways) which at the time of
calculation, are available for the enjoyment of Tenant and other Project tenants
or which service the project. The Common Areas of the Project shall not include,
any vacant unimproved land, and any other
44.
portions of the Project that contain land, buildings and other improvements that
are not available for the enjoyment of Tenant or which do not service the
project and other Project tenants.
If, at any time during the Lease Term, the taxation or assessment of the
Property or the Common Areas of the Project prevailing as of the Effective Date
of this Lease shall be altered so that in lieu of or in addition to any the Real
Property Tax described above there shall be levied, awarded or imposed (whether
by reason of a change in the method of taxation or assessment, creation of a new
tax or charge, or any other cause) an alternate, substitute, or additional use
or charge (i) on the value, size, use or occupancy of the Property, or the
Common Areas of the Project, or Landlord's interest therein or (ii) on or
measured by the gross receipts, income or rentals from the Property or the
Common Areas of the Project, or on Landlord's business of owning, leasing or
managing the Property or the Common Areas of the Project, or (iii) computed in
any manner with respect to the operation of the Property or the Common Areas of
the Project, then any such tax or charge, however designated, shall be included
within the meaning of the terms "Real Property Tax" or "Real Property Taxes" for
purposes of this Lease. Notwithstanding the foregoing, the terms "Real Property
Tax" or "Real Property Taxes" shall not include estate, inheritance, transfer,
gift or franchise taxes of Landlord or the federal or state income tax imposed
on Landlord's income from all sources.
(b) Landlord's Insurance Costs. The term "Landlord's Insurance
Costs" shall mean the sum of:
(i)(A) Tenant's Expense Share of the Property, multiplied by (B) the
costs to Landlord to carry and maintain the policies of fire and property damage
insurance for the Building and the Property and general liability and any other
insurance required or permitted to be carried by Landlord pursuant to Article 9
and any deductible amounts paid by Landlord upon the occurrence of any insured
casualty or loss, plus
(ii)(A) Tenant's Expense Share of the Project, multiplied by (B) the
costs to Landlord to carry and maintain for the Common Areas of the Project the
policies of fire and property damage insurance and general liability and any
other insurance required or permitted to be carried by Landlord pursuant to
Article 9 and any deductible amounts paid by Landlord upon the occurrence of any
insured casualty or loss to the Common Areas of the Project.
(c) Property Maintenance Costs. The term "Property Maintenance
Costs" shall mean the sum of:
(i)(A) Tenant's Expense Share of the Building, multiplied by (B) all
costs and expenses (except Landlord's Insurance Costs and Real Property Taxes)
paid or incurred by Landlord in owning (which for purposes of this Lease
excludes leasing the Property from Owner pursuant to the Master Lease, and any
rent payments thereunder), but including protecting, operating, maintaining,
repairing and preserving the Property and all parts thereof, including without
limitation, (1) property management fees which shall be consistent with
comparable properties within San Mateo County, (2) the amortizing portion of the
cost of any capital improvements made by Landlord to the Property or capital
assets acquired by Landlord after the Base Year required under any (x)
governmental requirement with which the Property was not required to comply
during the Base Year, or (y) for the protection of the health and safety of the
occupants
45.
of the Property or that are designed to reduce other Property Maintenance Costs,
such cost thereof to be amortized at the rate of ten percent (10%) per annum on
funds borrowed for the purpose of constructing or acquiring such capital
improvements or capital assets, but in either case not more than the maximum
rate permitted by law at the time such capital improvements or capital assets
are constructed or acquired; the amortizing portion of any costs incurred by
Landlord in the making of any modifications, alterations or improvements
required by any governmental authority as set forth in Article 6, which are so
amortized during the Lease Term, (3) association dues, fees, and charges of any
kind payable pursuant to any Private Restrictions, and (4) repairs to and
maintenance of the Property, including building systems and appurtenances
thereto and normal repair and replacement of worn-out equipment, facilities and
installations, but excluding the replacement of major building systems (except
to the extent provided in (2) above) such other costs as may be paid or incurred
with respect to operating, maintaining, and preserving the Property, such as
repairing exterior surfaces of the Building (including roofs), repairing and
resurfacing paved areas, and repairing and replacing, when necessary,
electrical, plumbing, heating, ventilating and air conditioning systems serving
the Building, plus
(ii)(A) Tenant's Expense Share of the Project, multiplied by (B) all
costs and expenses (except Landlord's Insurance Costs and Real Property Taxes)
paid or incurred by Landlord in owning (which for purposes of this Lease
excludes leasing the Project from Owner pursuant to the Master Lease, and any
rent payments thereunder), but including protecting, operating, maintaining,
repairing and preserving the Common Areas of the Project and all parts thereof,
including without limitation, (1) property management fees which shall be
consistent with comparable properties within San Mateo County, (2) the
amortizing portion of the cost of any capital improvements made by Landlord to
the Common Areas of the Project or capital assets acquired by Landlord with
respect to the Common Areas of the Project after the Base Year required under
(x) any governmental requirement with which the Project was not required to
comply during the Base Year, or (y) for the protection of the health and safety
of the occupants of the Common Areas of the Project or that are designed to
reduce other Property Maintenance Costs, such cost thereof to be amortized at
the rate of ten percent (10%) per annum on funds borrowed for the purpose of
constructing or acquiring such capital improvements or capital assets, but in
either case not more than the maximum rate permitted by law at the time such
capital improvements or capital assets are constructed or acquired any costs
incurred by Landlord in the making of any modifications, alterations or
improvements required by any governmental authority as set forth in Article 6,
which are so amortized during the Lease Term, (3) association dues, fees, and
charges of any kind payable pursuant to any Private Restrictions, and (4) such
other costs as may be paid or incurred with respect to operating, maintaining,
and preserving the Common Areas of the Project.
In no event shall Property Maintenance Costs include the following: (i)
depreciation on any portion of the Building, the Property or the Project or
equipment or systems therein; (ii) debt service; (iii) rental under any ground
or underlying lease; (iv) interest (except as expressly provided above with
respect to the amortization of capital improvements); (v) attorneys' fees and
expenses incurred in connection with lease negotiations or disputes with
existing or prospective tenants of the Building, the Property or the Project;
(vi) the cost of any repairs, improvements, alterations or equipment which would
be properly classified as capital expenditures according to generally accepted
accounting principles and practices (except for any capital expenditures
46.
included in Property Maintenance Costs above); (vii) the cost of decorating,
improving for tenant occupancy, painting or redecorating portions of the
Building, the Property or the Project to be demised to tenants; (viii) executive
salaries or Landlord's general overhead and personnel costs above the level of
Building manager; (ix) advertising; (x) real estate brokers' or other leasing
commissions; (xi) replacement of or repairs to the structural portions of the
roof or to the exterior walls or any other structural repairs to any portion of
the Building, the Property or the Project; (xii) repairs to the extent covered
by insurance proceeds or paid by Tenant or other third parties; (xiiii) costs of
abatement or remediation of Hazardous Substances, including asbestos, brought
upon, constructed in, stored, used or disposed of in or about the Building, the
Property or the Project by Landlord, or a predecessor owner of the Building, the
Property or the Project, or a particular tenant or occupant of the Building, the
Property or the Project or any other third party, other than Tenant, its agents,
employees, contractors, invitees, subtenants or assignees; (xiv) costs of
services furnished to one or more tenants of the Building, the Property or the
Project which are not furnished to Tenant; (xv) political or charitable
contributions; or (xvi) the cost of paintings, sculptures and other works of
art.
(d) Property Operating Expenses. The term "Property Operating
Expenses" shall mean and include all Real Property Taxes, Landlord's Insurance
Costs, and Property Maintenance Costs for a given calendar year to the extent
such Real Property Taxes, Landlord's Insurance Costs and Property Maintenance
Cost exceed the Real Property Taxes, Landlord's Insurance Costs and Property
Maintenance Costs paid by Landlord during the Base Year. Any Real Property
Taxes, Landlord's Insurance Costs, or Property Maintenance Costs for the Base
Year shall not include market-wide cost increases due to extraordinary
circumstances, including, but not limited to, Force Majeure, boycotts, strikes,
conservation surcharges, embargoes or shortages, or amortized costs relating to
capital improvements. In no event shall the components of Property Operating
Expenses for any year subsequent to the Base Year be less than the components of
Property Operating Expenses in the Base Year. If in any Lease Year the Property
or the Project is less than 95% occupied, the Property Operating Expenses shall
be appropriately adjusted to reflect a 95% occupancy level for the Property or
the Project.
(e) Law. The term "Law" shall mean any judicial decisions and any
statute, constitution, ordinance, resolution, regulation, rule, administrative
order, land use approval, entitlement, general or specific plan, use permit, or
other requirements of any municipal, county, state, federal, or other
governmental agency or authority having jurisdiction over the parties to this
Lease, the Leased Premises, the Building, the Property, or the Project, or any
of them, in effect either at the Effective Date of this Lease or at any time
during the Lease Term, including, without limitation, any regulation, order, or
policy of any quasi-official entity or body (e.g. a board of fire examiners or a
public utility or special district).
(f) Lender. The term "Lender" shall mean the holder of any
promissory note or other evidence of indebtedness secured by the Property or any
portion thereof.
(g) Private Restrictions. The term "Private Restrictions" shall mean
(as they may exist from time to time) any and all covenants, conditions and
restrictions, private agreements of which tenant is given notice, easements, and
any other recorded documents or instruments affecting the use of the Property,
the Building, the Leased Premises, the Outside Areas, or the Project of which
Tenant is given notice. Tenant, at the written request of Landlord, shall at any
47.
time or times execute any new Private Restrictions that are either (1) requested
by Landlord and do not unreasonably interfere with Tenant's use of the Leased
Premises, or (2) required by any applicable governmental or quasi-governmental
agency.
(h) Rent. The term "Rent" shall mean collectively Base Monthly Rent
and all Additional Rent.
(i) Tenant's Expense Share of the Project. The term "Tenant's
Expense Share of the Project" shall mean the percentage obtained from time to
time by dividing the rentable square footage of the Leased Premises at the time
of calculation by the rentable square footage of all the buildings that are part
of the Project. Such percentage is currently 8.02%. In the event that the
rentable square footage of the buildings in the Project changes (as a result of
structural alterations to existing buildings or the addition of new buildings),
Tenant's Expense Share of the Project shall be recalculated using the above
formula.
13.13 Landlord's Right to Relocate Tenant. Landlord shall have the right, upon
providing Tenant sixty (60) days' notice in writing, to provide Tenant with
comparable space of approximately the same size and at the same elevation as the
Leased Premises and to move Tenant to said space. Landlord shall arrange for
moving Tenant and shall pay the costs of actually moving Tenant, including but
not limited to the cost of moving and installing Tenant's furniture, fixtures
and equipment, including data and telecommunications equipment and cabling, in
such new space, as well as the cost of reprinting Tenant's business cards and
stationery. In the event Landlord moves Tenant to such new space, then this
Lease and each and all of the terms and covenants and conditions hereof shall
remain in full force and effect, the rentable square footage of the Leased
Premises, Base Monthly Rent, Tenant's Expense Share of the Building and Tenant's
Expense Share of the Common Areas shall be revised accordingly, and the revised
floor plan shall become part of this Lease and shall reflect the location of the
new space. Notwithstanding anything to the contrary herein, Landlord shall not
have the right to exercise its right to relocate during the last twelve (12)
months of the initial Term of the Lease.
13.14 General Waivers. One party's consent to or approval of any act by the
other party requiring the first party's consent or approval shall not be deemed
to waive or render unnecessary the first party's consent to or approval of any
subsequent similar act by the other party. No waiver of any provision hereof, or
any waiver of any breach of any provision hereof, shall be effective unless in
writing and signed by the waiving party. The receipt by Landlord of any rent or
payment with or without knowledge of the breach of any other provision hereof
shall not be deemed a waiver of any such breach. No waiver of any provision of
this Lease shall be deemed a continuing waiver unless such waiver specifically
states so in writing and is signed by both Landlord and Tenant. No delay or
omission in the exercise of any right or remedy accruing to either party upon
any breach by the other party under this Lease shall impair such right or remedy
or be construed as a waiver of any such breach theretofore or thereafter
occurring. The waiver by either party of any breach of any provision of this
Lease shall not be deemed to be a waiver of any subsequent breach of the same or
any other provisions herein contained.
13.15 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
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AND TENANT HEREBY CONSENT TO (I) THE JURISDICTION OF THE SUPERIOR COURT OF
CALIFORNIA LOCATED IN THE COUNTY OF SAN MATEO, OR THE UNITED STATES DISTRICT
COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA, AND (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 LEASED
PREMISES, THE BUILDING, THE OUTSIDE AREA, THE PROPERTY, OR THE PROJECT 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 MONTHLY 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.
13.16 Miscellaneous. Should any provisions of this Lease prove to be invalid
or illegal, such invalidity or illegality shall in no way affect, impair or
invalidate any other provisions hereof, and such remaining provisions shall
remain in full force and effect. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor. Any copy of this Lease which is executed by the parties shall be deemed
an original for all purposes. This Lease shall, subject to the provisions
regarding assignment, apply to and bind the respective heirs, successors,
executors, administrators and assigns of Landlord and Tenant. The term "party"
shall mean Landlord or Tenant as the context implies. If Tenant consists of more
than one person or entity, then all members of Tenant shall be jointly and
severally liable hereunder. Submission of this Lease for review, examination or
signature by Tenant does not constitute an offer to lease, a reservation of or
an option for lease, and notwithstanding any inconsistent language contained in
any other document, this Lease is not effective as a lease, sublease, or
otherwise until execution and delivery by both Landlord and Tenant, and no party
shall have any binding obligations pursuant hereto until such party shall have
executed this Lease and delivered an executed copy of this Lease to the other
party. This Lease shall be construed and enforced in accordance with the Laws of
the State in which the Leased Premises are located. The captions in this Lease
are for convenience only and shall not be construed in the construction or
interpretation of any provision hereof. When the context of this Lease requires,
the neuter gender includes the masculine, the feminine, a partnership,
corporation, limited liability company, joint venture, or other form of business
entity, and the singular includes the plural. The terms "must," "shall," "will,"
and "agree" are mandatory. The term "may" is permissive. When a party is
required to do something by this Lease, it shall do so at its sole cost and
expense without right of reimbursement from the other party unless specific
provision is made therefore. Where Landlord's consent is required hereunder, the
consent of Owner, any Lender, ground lessor, or synthetic lessor shall also be
required. Landlord and Tenant shall both be deemed to have drafted this Lease,
and the rule of construction that a document is to be construed against the
drafting party shall not be employed in the construction or interpretation of
this Lease. Where Tenant is obligated not to perform any act or is not permitted
to perform any act, Tenant is also obligated to restrain any others reasonably
within its control, including agents, invitees,
49.
contractors, subcontractors and employees, from performing such act. Landlord
shall not become or be deemed a partner or a joint venturer with Tenant by
reason of any of the provisions of this Lease.
ARTICLE 14
CORPORATE AUTHORITY
BROKERS AND ENTIRE AGREEMENT
14.1 Corporate Authority. If Tenant is a corporation, each individual
executing this Lease on behalf of such corporation represents and warrants that
Tenant is validly formed and duly authorized and existing, that Tenant is
qualified to do business in the State in which the Leased Premises are located,
that Tenant has the full right and legal authority to enter into this Lease, and
that he or she is duly authorized to execute and deliver this Lease on behalf of
Tenant in accordance with its terms. Tenant shall, within thirty (30) days after
execution of this Lease, deliver to Landlord a certified copy of the resolution
of its board of directors authorizing or ratifying the execution of this Lease
and if Tenant fails to do so, such failure shall be a material breach by Tenant,
in which event Landlord may in its sole discretion elect to terminate this
Lease.
14.2 Brokerage Commissions. Tenant represents, warrants and agrees that it
has not had any dealings with any real estate broker(s), leasing agent(s),
finder(s) or salesmen, other than the Brokers (as named in Article 1) with
respect to the sublease by it of the Leased Premises pursuant to this Lease, and
that it will indemnify, defend with competent counsel, and hold Landlord
harmless from any liability for the payment of any real estate brokerage
commissions, leasing commissions or finder's fees claimed by any other real
estate broker(s), leasing agent(s), finder(s), or salesmen to be earned or due
and payable by reason of Tenant's agreement or promise (implied or otherwise) to
pay (or to have Landlord pay) such a commission or finder's fee by reason of its
leasing the Leased Premises pursuant to this Lease. Landlord shall be
responsible for paying any commissions owed to Landlords Broker pursuant to a
separate agreement.
14.3 Entire Agreement. This Lease and the Exhibits (as described in Article
1), which Exhibits are by this reference incorporated herein, constitute the
entire agreement between the parties, and there are no other agreements,
understandings or representations between the parties relating to the sublease
by Landlord of the Leased Premises to Tenant, except as expressed herein. No
subsequent changes, modifications or additions to this Lease shall be binding
upon the parties unless in writing and signed by both Landlord and Tenant.
14.4 Landlord's Representations. Landlord hereby represents and warrants to
Tenant, that Landlord has the right and authority to sublease the "Leased
Premises" to Tenant without the consent of the Owner. Tenant acknowledges that
neither Landlord nor any of its agents made any representations or warranties
respecting the Property, the Building or the Leased Premises, upon which Tenant
relied in entering into the Lease, which are not expressly set forth in this
Lease. Tenant further acknowledges that neither Landlord nor any of its agents
made any representations as to (i) whether the Leased Premises may be used for
Tenant's intended use under existing Law, or (ii) the suitability of the Leased
Premises for the conduct of Tenant's
50.
business, or (iii) the exact square footage of the Leased Premises, and that
Tenant relies solely upon its own investigations with respect to such matters.
Tenant expressly waives any and all claims for damage by reason of any
statement, representation, warranty, promise or other agreement of Landlord or
Landlord's agent(s), if any, not contained in this Lease or in any Exhibit
attached hereto.
ARTICLE 15
OPTION TO EXTEND
15.1 So long as Equinix or an Affiliate as defined herein is the Tenant
hereunder and occupies the entirety of the Leased Premises, and subject to the
condition set forth in clause (b) below, Tenant or such Affiliate shall have one
(1) option to extend the Lease Term with respect to the entirety of the Leased
Premises (the "Option"), for a period of five (5) years from the expiration of
the initial Lease Term (the "Extension Period"), subject to the following
conditions:
(a) The Option shall be personal to Equinix or an Affiliate as
defined herein and shall not be transferable, and shall be exercised, if at all,
by written notice of exercise given to Landlord by Tenant or such Affiliate not
more than twelve (12) months nor less than six (6) months prior to the
expiration of the initial Lease Term;
(b) Anything herein to the contrary notwithstanding, if Landlord
determines within a period of forty-five (45) days from the date Landlord
receives Tenant's or an Affiliate's notice of exercise ("Landlord's Election
Period"), that Landlord will utilize all or any portion of the Leased Premises
for Landlord's own use, Landlord shall have, in addition to all of Landlord's
other rights and remedies provided in this Lease, the right to terminate the
Option as to all of the Leased Premises, at Landlord's sole option, upon
forty-five (45) days written notice to Tenant or such Affiliate; and
(c) Anything herein to the contrary notwithstanding, if Tenant is in
default under any of the terms, covenants or conditions of this Lease, either at
the time Tenant exercises the Option or on the commencement date of the
Extension Period, Landlord shall have, in addition to all of Landlord's other
rights and remedies provided in this Lease, the right to terminate the Option
upon notice to Tenant.
15.2 In the event the Option is exercised in a timely fashion and Landlord
does not elect to terminate pursuant to clauses (b) or (c) above, the Lease
shall be extended for the term of the Extension Period upon all of the terms and
conditions of this Lease, provided that the Base Monthly Rent for the Extension
Period shall be the "Fair Market Rent" for the Leased Premises, increased as set
forth below. For purposes hereof, "Fair Market Rent" shall mean the Base Monthly
Rent reasonably determined pursuant to the process described below. In no event,
however, shall any adjustment of Base Monthly Rent pursuant to this paragraph
result in a decrease of the Base Monthly Rent for the Leased Premises below the
amount due from Tenant for the preceding portion of the initial Lease Term for
which Base Monthly Rent had been fixed. At the end of the Lease Year coinciding
with the first 12 month period of the Extension Period,
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Base Monthly Rent shall be increased for the ensuing Lease Year to reflect the
change in the CPI for the 12-month period ending five (5) months prior to the
expiration of the Lease Year then ended, but in no event shall Base Monthly Rent
be increased less than 3% per annum compounded annually nor more than 3% per
annum compounded annually for such 12 month period. At the end of each
subsequent Lease Year during the Extension Period, Base Monthly Rent shall be so
increased for the ensuing Lease Year in accordance with the formula set forth in
the preceding sentence.
15.3 No later than thirty (30) days after the expiration of
Landlord's Election Period, Landlord shall notify Tenant in writing of
Landlord's estimate of the Base Monthly Rent for the Extension Period, based on
the provisions of Paragraph 15.2 above. Within thirty (30) days after receipt of
such notice from Landlord, Tenant shall have the right either to (i) accept
Landlord's statement of Base Monthly Rent as the Base Monthly Rent for the
Extension period; or (ii) elect to arbitrate Landlord's estimate of Fair Market
Rent, such arbitration to be conducted pursuant to the provisions hereof.
Failure on the part of Tenant to require arbitration of Fair Market Rent within
such 30-day period shall constitute acceptance of the Base Monthly Rent for the
Extension period as calculated by Landlord. If Tenant elects arbitration, the
arbitration shall be concluded within ninety (90) days after the date of
Tenant's election, subject to extension for an additional 30-day period if a
third arbitrator is required and does not act in a timely manner. To the extent
that arbitration has not been completed prior to the expiration of any preceding
period for which Base Monthly Rent has been determined, Tenant shall pay Base
Monthly Rent at the rate calculated by Landlord, with the potential for an
adjustment to be made once Fair Market Rent is ultimately determined by
arbitration.
15.4 In the event of arbitration, the judgment or the award rendered
in any such arbitration may be entered in any court having jurisdiction and
shall be final and binding between the parties. The arbitration shall be
conducted and determined in the County of San Mateo in accordance with the then
prevailing rules of the American Arbitration Association or its successor for
arbitration of commercial disputes except to the extent that the procedures
mandated by such rules shall be modified as follows:
(a) Tenant shall make demand for arbitration in writing
within thirty (30) days after service of Landlord's determination of Fair Market
Rent given under Paragraph 15.3 above, specifying therein the name and address
of the person to act as the arbitrator on its behalf. The arbitrator shall be
qualified as a real estate appraiser familiar with the Fair Market Rent of
similar research and development, light assembly or office space in the Xxxxxx
City, San Mateo and Redwood Shores areas who would qualify as an expert witness
over objection to give opinion testimony addressed to the issue in a court of
competent jurisdiction. Failure on the part of Tenant to make a proper demand in
a timely manner for such arbitration shall constitute a waiver of the right
thereto. Within fifteen (15) days after the service of the demand for
arbitration, Landlord shall give notice to Tenant, specifying the name and
address of the person designated by Landlord to act as arbitrator on its behalf
who shall be similarly qualified. If Landlord fails to notify Tenant of the
appointment of its arbitrator, within or by the time above specified, then the
arbitrator appointed by Tenant shall be the arbitrator to determine the issue.
(b) In the event that two arbitrators are chosen pursuant to
Paragraph 15.4(a) above, the arbitrators so chosen shall, within fifteen (15)
days after the second arbitrator is appointed
52.
determine the Fair Market Rent, which for such purposes shall be the projected
fair market rental rate at the commencement of the Extension Period for space
comparable to the Leased Premises, comparable Class A mid-rise office buildings
in the Xxxxxx City, San Mateo and Redwood Shores areas (without any deductions
or adjustments for costs and expenses, including but not limited to brokerage
commissions, tenant improvement allowances, etc., saved by Landlord by reason of
extending the Lease Term rather than re-leasing the Leased Premises to a new
tenant), but in no event lower than the Base Monthly Rent for the preceding
portion of the initial Lease Term for which Base Monthly Rent had been fixed. If
the two arbitrators shall be unable to agree upon a determination of Fair Market
Rent within such 15-day period, they, themselves, shall appoint a third
arbitrator, who shall be a competent and impartial person with qualifications
similar to those required of the first two arbitrators pursuant to Paragraph
15.4(a). In the event they are unable to agree upon such appointment within
seven (7) days after expiration of such 15-day period, the third arbitrator
shall be selected by the parties themselves, if they can agree thereon, within a
further period of fifteen (15) days. If the parties do not so agree, then either
party, on behalf of both, may request appointment of such a qualified person by
the then Presiding Judge of the California Superior Court for the County of San
Mateo, acting in his private and not in his official capacity, and the other
party shall not raise any question as to such Judge's full power and
jurisdiction to entertain the application for and make the appointment. The
three arbitrators shall decide the dispute if it has not previously been
resolved by following the procedure set forth below.
(c) Where an issue cannot be resolved by agreement between
the two arbitrators selected by Landlord and Tenant or settlement between the
parties during the course of arbitration, the issue shall be resolved by the
three arbitrators within fifteen (15) days of the appointment of the third
arbitrator in accordance with the following procedure. The arbitrator selected
by each of the parties shall state in writing his determination of the Fair
Market Rent supported by the reasons therefore with counterpart copies to each
party. The arbitrators shall arrange for a simultaneous exchange of such
proposed resolutions. The role of the third arbitrator shall be to select which
of the two proposed resolutions most closely approximates his determination of
Fair Market Rent. The third arbitrator shall have no right to propose a middle
ground or any modification of either of the two proposed resolutions. The
resolution he chooses as most closely approximating his determination shall
constitute the decision of the arbitrators and be final and binding upon the
parties.
(d) In the event of a failure, refusal or inability of any
arbitrator to act, his successor shall be appointed by him, but in the case of
the third arbitrator, his successor shall be appointed in the same manner as
provided for appointment of the third arbitrator. The arbitrators shall decide
the issue within fifteen (15) days after the appointment of the third
arbitrator. Any decision in which the arbitrator appointed by Landlord and the
arbitrator appointed by Tenant concur shall be binding and conclusive upon the
parties. Each party shall pay the fee and expenses of its respective arbitrator
and both shall share the fee and expenses of the third arbitrator, if any, and
the attorneys' fees and expenses of counsel for the respective parties and of
witnesses shall be paid by the respective party engaging such counsel or calling
such witnesses.
(e) The arbitrators shall have the right to consult experts
and competent authorities to obtain factual information or evidence pertaining
to a determination of Fair Market Rent, but any such consultation shall be made
in the presence of both parties with full right on their part to
53.
cross-examine. The arbitrators shall render their decision and award in writing
with counterpart copies to each party. The arbitrators shall have no power to
modify the provisions of this Lease.
ARTICLE 16
TELEPHONE SERVICE
Notwithstanding any other provision of this Lease to the contrary:
(a) Landlord shall provide Tenant access to the Building
intra-building network cable ("INC") as is determined to be available by
Landlord in its reasonable discretion. Tenant's access to the INC shall be
solely by arrangements made by Tenant, as Tenant may elect, directly with
Pacific Xxxx (or such vendor as Landlord may designate), and Tenant shall pay
all reasonable charges as may be imposed by such utility in connection
therewith. Pacific Xxxx'x charges shall be deemed to be reasonable. Subject to
the foregoing, Landlord shall have no responsibility for providing to Tenant any
telephone equipment, including wiring, within the Leased Premises or for
providing telephone service or connections from the utility to the Leased
Premises, except as required by law.
(b) Tenant shall not alter, modify, add to or disturb any telephone
wiring in the Leased Premises or elsewhere in the Building without the
Landlord's prior written consent. Tenant shall be liable to Landlord for any
damage to the telephone wiring in the Building due to the negligent act or
omission, of Tenant or any employee, contractor or other agent of Tenant. Tenant
shall have no access to the telephone closets within the Building, except in the
manner and under procedures established by Landlord. Tenant shall promptly
notify Landlord of any actual or suspected failure of telephone service to the
Leased Premises.
(c) All costs incurred by Landlord for the installation,
maintenance, repair and replacement of telephone wiring in the Building shall be
included as part of the costs described under subsection (i)(B) of Section
13.12(c) relating to Property Maintenance Cost.
(d) Landlord makes no warranty as to the quality, continuity or
availability of the telecommunications services in the Building, and Tenant
hereby waives any claim against Landlord for any actual or consequential damages
(including damages for loss of business) in the event Tenant's
telecommunications services in any way are interrupted, damaged or rendered less
effective, except to the extent caused by the grossly negligent or willful act
or omission by Landlord, its agents or employees. Tenant acknowledges that
Landlord meets its duty of care to Tenant with respect to the Building INC by
contracting with a reliable third party vendor to assume responsibility for the
maintenance and repair thereof (which contract shall contain provisions
requiring such vendor to inspect the INC periodically (the frequency of such
inspections to be determined by such vendor based on its experience and
professional judgment), and requiring such vendor to meet local and federal
requirements for telecommunications material and workmanship). Subject to the
foregoing, Landlord shall not be liable to Tenant and Tenant waives all claims
against Landlord whatsoever, whether for personal injury, property damage, loss
of use of the Leased Premises, or otherwise, due to the interruption or failure
of telephone services to the Leased Premises. Except to the extent arising from
Landlord's gross
54.
negligence or willful misconduct, Tenant hereby holds Landlord harmless and
agrees to indemnify, protect and defend Landlord from and against any liability
for any damage, loss or expense due to any failure or interruption of telephone
service to the Leased Premises . Tenant agrees to obtain loss of rental
insurance adequate to cover any damage, loss or expense occasioned by the
interruption of telephone service.
ARTICLE 17
FIRST RIGHT TO NEGOTIATE
If (i) there then exists no default by Tenant, (ii) Tenant, any assignee
pursuant to a Permitted Transfer or any Affiliate shall be in possession of the
entire Leased Premises, (iii) this Lease is still in full force and effect, (iv)
the entire fourth floor of the Building (the "ROFR Space") is marketed to lease
by Landlord, (v) the Landlord does not elect to use the ROFR Space for its own
purposes or lease it to OEM or an Affiliate of Landlord, and (vi) Landlord
desires to lease to a third party that is not OEM or an Affiliate of Landlord,
then Landlord shall notify Tenant in writing of such offer or desire to lease
such "ROFR" Space as soon as reasonably practicable. Any such notice by Landlord
shall contain all the relevant terms on which Landlord is willing to lease the
"ROFR" Space. Tenant may, by giving notice to Landlord within fifteen (15) days
after receipt of such notice from Landlord, elect, at its sole option, to lease
the "ROFR" Space on the terms contained in the notice. If Tenant shall have so
elected to lease the "ROFR" Space, it shall enter into an amendment of this
Lease within thirty (30) days after it shall have received the same from
Landlord, confirming the lease of such "ROFR" Space to Tenant on the such terms,
which amendment shall be in a commercially reasonable form mutually acceptable
by Landlord and Tenant.
[signature page follows]
55.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the respective dates below set forth with the intent to be legally bound thereby
as of the Effective Date of this Lease first above set forth.
LANDLORD:
ELECTRONICS FOR IMAGING, INC.,
a Delaware corporation
Dated: February 13, 2003 By: /s/ XXXXXX XXXXX
-------------------------------
Title: CFO
-----------------------------
TENANT:
EQUINIX OPERATING CO., INC.,
a Delaware corporation
Dated: February 13, 2003 By: /s/ XXXXX X. XXXXX
-------------------------------
Title: CFO
-----------------------------
56.
