January 23, 1997
_____________________________________________________________________________
LEASE AGREEMENT
(PHASE I)
by and between
000 Xxxxx Xxxxxx Associates, L.P.,
a California limited partnership
("LANDLORD")
and
Netscape Communications Corporation,
a Delaware corporation
("TENANT")
Dated as of January 23, 1997
_____________________________________________________________________________
BASIC LEASE INFORMATION
Lease Date: January 23, 1997
LANDLORD: 000 Xxxxx Xxxxxx Associates, L.P.,
a California Limited Partnership
Landlord's Address: 000 Xxxxxxx
Xxxx Xxxx, XX 00000
TENANT: Netscape Communications Corporation,
a Delaware corporation
Tenant's Address: FOR NOTICE:
000 Xxxxxxxxxxx Xxx.
Xxxxxxxx Xxxx, XX 00000
Attn: Director, Real Estate
FOR BILLING:
000 Xxxxxxxxxxx Xxx.
Xxxxxxxx Xxxx, XX 00000
Attn: Director, Accounts Payable
Premises: Three (3) separate buildings to be constructed on the Land
in accordance with this Lease (each, a "Building" and
collectively, the "Buildings").
Phase I: The Buildings, land and improvements located in the area
shown on Exhibit "A" attached hereto.
Project: The Project shall consist of Phase I. The Project may be
expanded to include other land and improvements, in
accordance with Subparagraph 1(c) [Project; Common Areas;
Access & Cooperation].
Rentable Area of the Premises:195,003 Rentable Square Feet ("Rentable Area").
The parties agree that the Rentable Area is
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conclusive for purposes of calculating Rent under this Lease and is not
subject to remeasurement.
Tenant's Use of the Premises:Tenant shall use the Premises for office,
distribution, research and development, and/or light manufacturing, and for no
other purposes.
Lease Term: Commencing on the Occupancy Date and ending on the
Expiration Date, with the right to extend for an additional
term of five (5) years in accordance with Paragraph 43
[Option to Renew].
Scheduled Occupancy Date:
May 5, 1997
Scheduled Rent Commencement Date:One Hundred Twenty (120) days after the
Occupancy Date.
Expiration Date: Fifteen (15) years and six (6) months after the
Rent Commencement Date ("Expiration Date").
Rent: Base Rent plus Additional Charges.
Monthly Base Rent: $1.35 per Rentable Square Foot of the
Rentable Area of the Premises ("Monthly Base Rent").
Base Rent Adjustments: On each anniversary of the Rent Commencement Date,
the Monthly Base Rent shall increase by $.05 per
Rentable Square Foot ("Base Rent Adjustments").
Security Deposit: Tenant shall provide and maintain a letter of credit or
cash collateral in the initial amount of Seven Million Five
Hundred Thousand Dollars ($7,500,000) as more specifically
provided in Paragraph 34 [Security Deposit], which amount
may be reduced during the Term in accordance with such
paragraph.
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Guarantor of Lease: None
Broker: Cornish & Xxxxx
Broker's Fee or Commission Paid By:
Landlord
The foregoing Basic Lease Information is hereby incorporated into and made a
part of this Lease. Each reference in this Lease to any of the Basic Lease
Information shall mean the information hereinabove set forth and shall be
construed to incorporate all of the terms provided under the particular
paragraph pertaining to such information. In the event of any conflict between
any Basic Lease Information and any other portion of the Lease, the latter shall
control.
LANDLORD:
000 Xxxxx Xxxxxx Associates, L.P.,
a California limited partnership
By: Canada Corp.,
a California corporation,
Its General Partner
By: /s/ Xxxxxxx X. Xxxxxx III
_________________________
Its: President
_______________________
By: Virginia Land Company, Inc.,
a California corporation,
Its General Partner
By: /s/ Xxxx X. Xxxxxxxx
_________________________
Its:________________________
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TENANT:
Netscape Communications Corporation,
a Delaware corporation
By: /s/ Xxxxx Xxxxxx
________________________________
Xxxxx Xxxxxx
Its Chief Financial Officer
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LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease") is made and entered into as of January
__, 1997, by and between 000 Xxxxx Xxxxxx Associates, L.P., a California limited
partnership (herein called "Landlord"), and Netscape Communications Corporation,
a Delaware corporation (herein called "Tenant").
1. LEASED PREMISES.
(a) PREMISES. Upon and subject to the terms, covenants and
conditions hereinafter set forth, Landlord agrees to lease to Tenant and Tenant
agrees to hire from Landlord those premises (the "Premises") comprising three
(3) entire buildings to be constructed as shown on Exhibit "A" attached hereto
(collectively, the "Buildings" and each individually, a "Building"). The
Buildings will be located on the parcel or parcels of real property shown on
Exhibit "A" (the "Land"). The Land includes an easement over certain real
property adjacent to the Land that Landlord has the contractual right to acquire
from the City and County of San Francisco, acting by and through its Public
Utilities Commission, San Francisco Water Department ("SFWD"), in the form
attached hereto as Exhibit "O" (the "Hetch Hetchy Easement"). Landlord
currently has the contractual right to acquire title to the Land (other than the
Hetch Hetchy Easement) from Schlumberger Technology Corporation ("Seller"). The
Buildings, together with the Land, the Hetch Hetchy Easement and associated
improvements now or in the future located on the Land the Hetch Hetchy Easement
are collectively referred to as "Phase I". Landlord shall use commercially
reasonable efforts to acquire the Land and construct the Buildings in accordance
with the terms and conditions of this Lease and the Work Letter, provided that
Tenant's rights and remedies for any breach of such obligation shall be limited
as provided in Subparagraphs 3(e) [Conditions; Window Dates] and 21(e)(2)
[Tenant's Remedies].
(b) PHASE II LEASE. Landlord and Tenant intend to enter into a
separate lease (the "Phase II Lease") of four (4) buildings (the "Phase II
Buildings") to be constructed on land adjacent to Phase I (the "Phase II Land"),
including the right of Tenant to use certain improvements and facilities on such
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adjacent land (such buildings, improvements, facilities and land collectively,
"Phase II"); provided, however, that failure to enter into the Phase II Lease
shall not affect the respective rights and obligations of the parties hereunder
except as expressly and specifically provided herein. Landlord currently has
the contractual right to acquire title to the Phase II Land from Seller.
(c) PROJECT; COMMON AREAS; ACCESS & COOPERATION.
(1) DEFINITION OF PROJECT. The term "Project" shall mean Phase
I. In addition, if Landlord (or its affiliate) and Tenant enter into the Phase
II Lease, after the commencement of the Phase II Lease the term "Project" shall
include Phase I and Phase II. Subject to the requirements of Subparagraph 5(b)
[Management of Common Area], Landlord shall have the right, at any time and from
time to time, to expand the land and improvements which are included in the
"Project" to include (i) all or any portion of Phase II, and/or (ii) any other
property acquired by Landlord or its affiliates which is contiguous to the
Project (as such term is defined at any given time), regardless of whether Phase
II or any such other property is leased to Tenant or leased to, sold to or
occupied by a third party or third parties. Landlord shall deliver written
notice to Tenant of Landlord's intent to expand the Project, identifying the
property and improvements which will be added to the Project.
(2) DEFINITION OF COMMON AREA. The term "Common Area" shall
mean all areas and facilities within Phase I located outside the perimeter
footings of the Buildings, including the landscaped areas, service areas,
parking areas, recreation areas, trash enclosures, plaza, walkways, driveways,
sidewalks, access and perimeter roads, and the like; but excluding from the
Common Area all monitoring xxxxx, slurry walls, extraction xxxxx, remediation
equipment, piping, and other equipment (collectively, the "Clean-up Facilities")
which have been or may be installed on the Project for the purpose of conducting
monitoring and remediation of Hazardous Materials, and all water pipelines,
drainage pipelines, hatch covers, xxxxx and other surface and subsurface utility
facilities owned by SFWD which have been or may be installed on or under the
Hetch Hetchy Easement
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(collectively, the "SFWD Facilities"). The Clean-up Facilities are or will
be owned and controlled by Seller.
(3) USE OF COMMON AREA. During any time that Tenant leases all
of the rentable area located in the Project, Tenant shall have the right to
exclusive use of the Common Area (subject to an easement for underground
pipelines and related above ground facilities in favor of Air Products (the
"AirProducts Easement"), and all other existing and future easements, licenses
and other rights and interests in favor of or required by public utilities or
public, governmental or regulatory entities; rights reserved to SFWD under the
Hetch Hetchy Easement; rights of third parties pursuant to the Declaration and
the CC&Rs; and rights retained by Landlord pursuant to this Lease), and Landlord
shall not grant the right to use of the surface of the Common Area to any other
tenant, occupant or owner of any property located adjacent to the Project.
During any time that the Project includes any rentable area not leased to
Tenant, Tenant shall have the right to non-exclusive use of the Common Area and
any other common area located in the Project, together with other tenants,
occupants and owners of portions of the Project, subject to the terms of this
Lease. The operation and use of the Common Area shall be governed by
conditions, covenants and restrictions ("CC&Rs") between the owners of portions
of the Project, in the form attached hereto as Exhibit "B", with such
modifications as Landlord may reasonably determine to be appropriate. The CC&Rs
may be recorded against the Project by Landlord at any time, at Landlord's
election, and will at all times be superior in priority to this Lease. Landlord
shall have the right to make reasonable modifications to the CC&Rs during the
Term, including, without limitation, in order to provide necessary or
appropriate access over, across and from the Common Area (including any roadways
and drive aisles located thereon) to any property which is included in the
Project; provided that such modifications do not materially adversely affect
Tenant's use of the Premises, Minimum Parking, or access to the Premises.
(4) LANDLORD'S ACCESS. Landlord shall have reasonable and
appropriate access across the Common Area to other land which is included, or
which Landlord intends to include, in the Project, at all reasonable times for
purposes of
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construction and development of the Project. In connection with the
development of Phase II and other portions of the Project, Tenant shall
cooperate with Landlord in the establishment, execution and recordation of
the CC&Rs and any other conditions, covenants, restrictions, easements,
licenses and/or other rights and interests which encumber Phase I for the
benefit of other portions of the Project, and which are required in order to
provide sufficient parking for any portion of the Project or in connection
with other development requirements for any portion of the Project, provided
that such conditions, covenants, restrictions, easements, licenses, and/or
other rights and interests do not materially adversely affect Tenant's use of
the Premises, Minimum Parking or access to the Premises and Tenant shall not
be required to incur any out-of-pocket cost in connection with such
cooperation. Tenant shall execute and deliver any documents or instruments
reasonably required in connection therewith upon Landlord's request.
(d) RECONFIGURATION OF PHASE I. Landlord reserves the right, in
connection with the development of Phase II, without incurring any liability to
Tenant and without constituting an eviction (constructive or otherwise), and
without entitling Tenant to any abatement of Rent or to terminate this Lease or
otherwise releasing Tenant from any of Tenant's obligations under this Lease, to
take any of the following actions (each, a "Reconfiguration"):
(1) Reconfigure the property line between Phase I and Phase II,
even if such reconfiguration would cause a reduction in the size of the Land, so
long as the portions of the Land on which the Buildings (and any required
setbacks) are located are not affected by such action, the remaining Phase I
continues to be in compliance with all applicable Laws (as defined in
Subparagraph 7(a) [Tenant's Compliance Obligations]) (including, without
limitation, city parking requirements and other development approvals), Tenant's
use of the Premises as contemplated by this Lease is not impaired thereby, and
Tenant continues to have use of the Minimum Parking in accordance with Paragraph
36 [Parking]; or
(2) Subdivide the Land into two or more legal parcels, so long
as Tenant's use of the Premises as contemplated
4
by this Lease is not impaired thereby and Tenant continues to have use of the
Minimum Parking in accordance with Paragraph 36 [Parking].
Landlord shall deliver written notice to Tenant of Landlord's intent to
Reconfigure, identifying the portion of Phase I affected by the Reconfiguration
and including a new Exhibit "A" reflecting such Reconfiguration. Any
Reconfiguration shall be effective on the date designated by Landlord in its
notice to Tenant. On the effective date of such Reconfiguration, the
description of the Land shall automatically be revised, and the terms and
conditions of the original Lease shall remain in full force and effect except
that the revised Exhibit "A" reflecting the location of the newly configured
Land shall become part of this Lease. From and after the date of such
Reconfiguration, the term "Land" shall mean the reconfigured space. The Base
Rent shall not be revised as a result of any Reconfiguration. Tenant shall
cooperate with Landlord in any subdivision or lot line adjustment process in
connection with any Reconfiguration, provided that Tenant shall not be required
to incur any out-of-pocket cost in connection with such cooperation. Upon
Landlord's request, Tenant shall execute and deliver any documents or
instruments reasonably required in connection with the Reconfiguration, or the
amendment of the Lease or any subdivision or lot line adjustment process in
connection therewith.
2. OCCUPANCY AND USE. Tenant shall use and occupy the Premises for the
purpose specified in the Basic Lease Information and for no other use or purpose
without the prior written consent of Landlord. Landlord may grant or withhold
consent to a proposed change of use in its sole discretion. Notwithstanding
anything in this Lease, Tenant's use and occupancy of the Premises and Common
Area will be subject at all times to the terms and conditions of the CC&Rs, the
Declaration and the Hetch Hetchy Easement.
3. TERM AND POSSESSION.
(a) TERM; OCCUPANCY DATE; EXPIRATION DATE. The term of this Lease
(the "Term") shall commence on the Occupancy Date and, unless sooner terminated
as herein provided, shall expire on the Expiration Date, provided that Tenant
shall have an option to
5
extend the Term in accordance with the terms and conditions of Paragraph
43 [Option to Renew]. "Occupancy Date" shall mean the date on which (i)
Landlord notifies Tenant in writing that the base building shell for each
of the Buildings is sufficiently complete such that Tenant's contractor
may commence construction of the Tenant Improvements (as defined in the
Work Letter), and (ii) Landlord has tendered possession of the Premises to
Tenant; provided, however, that Landlord and Tenant may mutually agree to an
earlier Occupancy Date. After the Occupancy Date, Landlord shall reserve a
continuing right to access the Premises to take all steps required to complete
the Base Building Improvements (as defined in the Work Letter), and Tenant
acknowledges that substantial work may be required by Landlord to complete the
Base Building Improvements after the Occupancy Date. "Sufficiently Complete"
(as used in the preceding sentence) means that the roof structure shall be in
place, shell sprinklers shall be installed, concrete floors shall be poured, and
access shall be available for the delivery and placement of construction
materials. All of the rights and obligations of the parties under this Lease
(other than Tenant's obligation to pay Base Rent and Additional Charges and
Tenant's maintenance and repair obligations with respect to portions of the Base
Building Improvements which are not substantially complete) shall commence on
the Occupancy Date. At Landlord's option, the Occupancy Date may be determined
separately for each Building, in which event the Rent Commencement Date will be
determined separately for each Building, but Base Rent Adjustments and the
Expiration Date for the entire Premises will be based on the last Occupancy Date
to occur. The parties anticipate that the Occupancy Date will occur on the
Scheduled Occupancy Date set forth in the Basic Lease Information. However,
except as provided in Subparagraphs 3(e) [Conditions; Window Dates] and 21(e)(2)
[Tenant's Remedies], this Lease shall not be void or voidable as a result of any
delay in the Occupancy Date, nor shall Landlord be liable to Tenant for any loss
or damage resulting therefrom.
(b) INITIAL CONSTRUCTION. Completion of the Base Building
Improvements by Landlord and the Tenant Improvements by Tenant shall be governed
by the terms and conditions of the separate work letter ("Work Letter") attached
hereto as Exhibit "D". Tenant's obligation to construct the Tenant Improvements
pursuant to the Work Letter is independent of, and in addition
6
to, Tenant's obligation to pay Rent under this Lease. Landlord's general
contract for the Base Building Improvements (including the roof membrane)
will include or provide for the construction warranties described in the
provisions of such contract attached hereto as Exhibit "G". Upon Tenant's
request, Landlord shall use reasonable efforts to enforce any warranties
furnished to Landlord by Landlord's general contractor, Landlord's architect,
and any other persons in connection with the provision of labor and/or
material for the Base Building Improvements (including the roof membrane).
If Tenant is not satisfied with Landlord's actions in enforcing such
warranties, Tenant may upon written notice to Landlord take any actions
necessary in Tenant's reasonable judgment to enforce such warranties
directly, and Landlord shall take all commercially reasonable action to
cooperate with Tenant, including assigning to Tenant Landlord's rights with
respect to such warranties. Tenant acknowledges that Landlord has not made
any representation or warranty with respect to the construction of the Base
Building Improvements or the condition of the Premises or the Common Area or
with respect to the suitability or fitness of either for the conduct of
Tenant's permitted use or for any other purpose, except as may be expressly
and specifically provided herein.
(c) OCCUPANCY BY TENANT. Tenant shall be deemed to occupy the
Premises from and after the Occupancy Date. This Paragraph 3(c) shall not be
construed as an obligation of Tenant to continuously occupy the Premises.
Within five (5) days after the Occupancy Date, Landlord shall deliver to Tenant
a certificate confirming the Occupancy Date, in the form of Exhibit "E" hereto.
If Tenant does not agree with Landlord's determination of the Occupancy Date,
Tenant may submit such matter to arbitration in accordance with Paragraph 41
[Arbitration of Disputes], provided that prior to the resolution of such matter
by arbitration, the parties shall proceed under this Lease as if the Occupancy
Date were the date designated by Landlord, with any required adjustments to the
Rent Commencement Date made after the matter is ultimately determined by
arbitration.
(d) RENT COMMENCEMENT DATE; CERTIFICATE OF OCCUPANCY. Tenant's
obligation to pay Base Rent and Additional Charges hereunder shall commence on
the earlier to occur of (i) the
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Scheduled Rent Commencement Date set forth in the Basic Lease Information, or
(ii) the date on which Tenant has substantially completed the Tenant
Improvements for all of the Buildings (or, if Landlord elects to determine
the Occupancy Date for each Building separately pursuant to Subparagraph
3(a), the date on which Tenant has substantially completed the Tenant
Improvements for the applicable Building) in accordance with the Work Letter
(the "Rent Commencement Date"). After substantial completion of the Tenant
Improvements (as defined in the Work Letter), Tenant shall immediately apply
for, and use best efforts to obtain within fifteen (15) business days, a
certificate of occupancy (or equivalent documentation) for each Building.
Tenant shall promptly deliver to Landlord copies of the certificate(s) of
occupancy.
(e) CONDITIONS; WINDOW DATES. The parties have set forth certain
events which must occur prior to or during the construction of the Buildings
(each, a "Condition"), together with an "Initial Window Date" for each
Condition, on Exhibit "F" attached hereto. If any Condition is not satisfied on
or before its Initial Window Date (subject to extension pursuant to Paragraph 7
[Tenant Delays] of the Work Letter), Tenant shall have the option to terminate
this Lease by delivering written notice to Landlord within five (5) business
days after the applicable Initial Window Date; provided, however, that the
Initial Window Dates for the Occupancy Date and Substantial Completion of Base
Building Improvements shall be subject to extension (not to exceed ninety (90)
days) for any delay resulting from Force Majeure Events. If Tenant does not
elect to terminate this Lease during such period, Tenant shall again have the
option to terminate this Lease by delivering written notice to Landlord within
five (5) business days after the thirtieth day following the applicable Initial
Window Date, and each thirtieth day thereafter (each such date, together with
the Initial Window Date, a "Window Date"), if the applicable Condition is not
satisfied on or before any such Window Date. If Tenant does not deliver written
notice of termination to Landlord within any such five day period after a Window
Date, all rights and obligations of the parties under this Lease shall continue
notwithstanding the delay in the satisfaction of any Condition. If any
Condition is not satisfied after the third Window Date with respect to such
Condition, both Landlord and Tenant shall have the option to
8
terminate this Lease by delivering written notice to the other party within
five (5) business days after the applicable Window Date, or within five (5)
business days after each Window Date thereafter in connection with such
Condition; provided, however, that Landlord shall not have the option to
terminate this Lease pursuant to this paragraph after Tenant has commenced
construction of the Tenant Improvements. If this Lease is terminated by
Tenant pursuant to this Subparagraph 3(e) after construction of the Tenant
Improvements has commenced, at Landlord's option and upon Landlord's request,
Tenant shall assign to Landlord all of Tenant's rights under Tenant's general
contract, architect and/or engineer agreements and any other agreements with
contractors or suppliers in connection with the Tenant Improvements, and
Landlord shall assume Tenant's obligations under any such assigned agreements
to the extent such obligations arise from work or materials provided to the
Premises after termination of the Lease. In such event Tenant shall indemnify
and hold the Landlord Parties harmless from, and defend the Landlord Parties
against, all liens filed and claims made by any contractors, architects,
subcontractors, or suppliers who provided work or materials to the Premises
prior to the termination of the Lease in connection with the Tenant
Improvements.
(f) CREDIT TERMINATION RIGHT. Notwithstanding any other provision of
this Lease, Landlord shall have the option to terminate this Lease by delivering
written notice to Tenant at any time on or before the earlier to occur of (i)
the closing of an acquisition and construction loan to Landlord with respect to
Phase I, on terms and conditions satisfactory to Landlord, or (ii) March 31,
1997, if a material adverse change in the business, assets, financial condition,
income or prospects of Tenant has occurred since the execution of this Lease
(the "Credit Termination Right"). Landlord shall not be liable to Tenant for
any termination of this Lease pursuant to the Credit Termination Right.
4. RENT; RENT ADJUSTMENTS; ADDITIONAL CHARGES FOR EXPENSES AND TAXES.
(a) PAYMENT OF RENT.
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(1) MONTHLY BASE RENT. Commencing on the Rent Commencement
Date, Tenant shall pay to Landlord throughout the Term Base Rent in an amount
equal to the Monthly Base Rent specified in the Basic Lease Information
multiplied by the Rentable Area of the Premises, as specified in the Basic Lease
Information ("Base Rent"). Monthly Base Rent shall be payable by Tenant on or,
at Tenant's election, before the first day of each month, in advance, in lawful
money of the United States (without any prior demand therefor and without
deduction or offset whatsoever, except for abatement as may be expressly and
specifically provided for in Paragraphs 22 [Damage and Destruction] and 23
[Eminent Domain]), to Landlord at the address specified in the Basic Lease
Information or to such other firm or at such other place as Landlord may from
time to time designate in writing.
(2) OTHER RENT. Tenant shall pay all charges and other amounts
whatsoever as provided in this Lease ("Additional Charges") to Landlord at the
place where the Base Rent is payable, and Landlord shall have the same remedies
for a default in the payment of Additional Charges as for a default in the
payment of Base Rent. As used herein, the term "Rent" shall include all Base
Rent and Additional Charges (including, without limitation, Additional Charges
pursuant to Paragraph 5 [Management] and Paragraph 25 [Right of Landlord to
Perform]).
(3) PARTIAL MONTHS. If the Rent Commencement Date occurs on a
day other than the first day of a calendar month, or the Expiration Date occurs
on a day other than the last day of a calendar month, then the Base Rent and
Additional Charges for such fractional month shall be prorated by multiplying
the Monthly Base Rent by a fraction, the numerator of which shall be (A) the
actual number of days remaining in such month including and after the Rent
Commencement Date, if determining Rent for the fractional first month, or (B)
the actual number of days elapsed in such month prior to and including the
Expiration Date, if determining Rent for the fractional last month, and the
denominator of which shall be the actual number of days in such month.
(b) ADJUSTMENTS IN BASE RENT. The Monthly Base Rent under Paragraph
4(a) [Monthly Base Rent] shall be adjusted as
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provided in the Basic Lease Information.
(c) ADDITIONAL CHARGES FOR EXPENSES AND TAXES.
(1) DEFINITIONS OF CERTAIN ADDITIONAL CHARGES. For purposes of
this Subparagraph 4(c), the following terms shall have the meanings hereinafter
set forth:
(A) "TAX YEAR" shall mean each twelve (12) consecutive
month period commencing July 1st of the calendar year during which the Rent
Commencement Date of this Lease occurs.
(B) "REAL ESTATE TAXES" shall mean all taxes, assessments
and charges levied upon or with respect to Phase I or any personal property of
Landlord used in the operation thereof, or Landlord's interest in Phase I or
such personal property. Real Estate Taxes shall include, without limitation,
all general real property taxes, possessory interest taxes, and general and
special assessments, charges, fees or assessments for transit (including,
without limitation, shuttle fees and roadways), housing, police, fire,
utilities, sewers, emergency response or other governmental services or
purported benefits to Phase I (provided, however, that any refunds of Real
Estate Taxes paid by Tenant shall be credited against Tenant's further
obligation to pay Real Estate Taxes during the Term or refunded to Tenant at the
end of the Term), service payments in lieu of taxes, and any tax, fee or excise
on the act of entering into this Lease, or any other lease of space in Phase I,
or on the use or occupancy of Phase I or any part thereof, or on the rent
payable under any lease or in connection with the business of renting space in
Phase I, that are now or hereafter levied or assessed against Landlord by the
United States of America, the State of California, or any political subdivision,
public corporation, district or any other political or public entity, and shall
also include any other tax, fee or other excise, however described, that may be
levied or assessed as a substitute for, or as an addition to, in whole or in
part, any other Real Estate Taxes, whether or not now customary or in the
contemplation of the parties on the date of this Lease. Real Estate Taxes shall
not include franchise, transfer, inheritance or capital stock taxes or income
taxes measured by the net income of Landlord from all sources unless, due to a
change in the
11
method of taxation, any of such taxes is levied or assessed against Landlord
as a substitute for, or as an addition to, in whole or in part, any other tax
that would otherwise constitute a Real Estate Tax. Additionally, Real Estate
Taxes shall not include any assessments or like charges to pay for any
remediation of contamination from any Hazardous Materials other than liens,
assessments and like charges resulting from Tenant's failure to pay any costs
for which Tenant has indemnified Landlord pursuant to Subparagraph 40(b)
[Tenant Indemnity]. Real Estate Taxes shall also include reasonable legal
fees, costs and disbursements incurred in connection with proceedings to
contest, determine or reduce Real Estate Taxes. If any assessments are
levied on Phase I and Landlord pays the assessment in full, Tenant shall have
no obligation to pay more than the amount of annual installments of principal
and interest that would become due during the Lease Term had Landlord elected
to pay the assessment in installment payments.
(C) "EXPENSES" shall mean the total costs and reasonable
expenses paid or incurred by Landlord in connection with the management,
operation, maintenance and repair of Phase I, including, without limitation, (i)
the cost of fire, extended coverage, boiler, sprinkler, commercial general
liability, property, rent, earthquake, flood, and all other insurance obtained
by Landlord pursuant to Subparagraph 12(e) [Landlord's Insurance Obligations] or
required to be carried by Landlord under the Hetch Hetchy Easement, including,
without limitation, insurance premiums and any deductible amounts paid by
Landlord; (ii) the cost of air conditioning, electricity, steam, heating,
mechanical, ventilating, water, gas, elevator systems and all other utilities,
the cost of supplies and equipment and maintenance and service contracts in
connection therewith, and the cost of refuse and recycling services, parking lot
sweeping and similar maintenance services; (iii) the cost of repairs and general
maintenance and cleaning, including, without limitation, cost incurred for any
repairs, maintenance or cleaning required by the Hetch Hetchy Easement; (iv)
fees, charges and other costs for any project engineers for the Project, and
fees, charges and costs of all independent contractors (including attorneys,
accountants and consultants) engaged by Landlord and related solely to the
operation of Phase I (or, if any such costs, fees and charges are attributable
to other property managed by
12
Landlord, the portion of such costs, fees and charges allocable to Phase I,
as reasonably determined by Landlord); (v) the cost of any capital
improvements made to the Building or the Common Areas as required or
permitted by this Lease (including, without limitation, any costs incurred in
order to comply with the Declaration or Hetch Hetchy Easement in connection
with such improvements or in the repair or replacement of any improvements
which are altered, damaged or removed pursuant to the Hetch Hetchy Easement);
(vi) a management fee for Landlord's management and administrative services
in connection with Phase I in the amount of one-quarter of one percent (.25%)
of Base Rent and Additional Charges (excluding the management fee), subject
to increase pursuant to Paragraph 5 [Management]; (vii) any expenses
allocated to Phase I under the CC&Rs and expenses incurred by Landlord if
Landlord (either itself or through its agent) assumes management of the
Premises and/or Common Area pursuant to Paragraph 5 [Management]; and (viii)
any other expenses of any other kind whatsoever incurred in managing,
operating, maintaining and repairing the Premises and/or Common Areas.
Notwithstanding anything to the contrary herein contained, Expenses shall not
include, and in no event shall Tenant have any obligation to pay for pursuant
to this Subparagraph 4(c) or Subparagraph 9(b) [Repair and Maintenance;
Tenant's Obligations], (aa) the initial cost of the Base Building Improvements
which is to be paid by Landlord pursuant to the Work Letter with respect to
any Building or the Common Area; (bb) the cost of providing tenant
improvements to any other tenant in Phase I; (cc) debt service (including,
but without limitation, interest and principal) required to be made on
debt incurred by Landlord and relating to the Project; (dd) ground lease
payments or payments to SFWD in consideration for the grant of the Hetch
Hetchy Easement; (ee) the portion of a management fee paid to Landlord
or an affiliate in excess of one-quarter of one percent (.25%) of the sum
of Base Rent and Additional Charges (excluding the management fee),
subject to increase pursuant to Paragraph 5 [Management]; (ff) the cost
of special services, goods or materials provided to any other tenant;
(gg) depreciation; (hh) costs for which Landlord has a right to receive
reimbursement from others; (ii) costs occasioned by Landlord's fraud or
willful misconduct under applicable Laws; (jj) costs to correct any
construction defects in the original construction of the Base Building
Improvements for any of the Buildings or the Common
13
Area; (kk) costs arising from a disproportionate use of any utility or
service supplied by Landlord to any other occupant of the Project to
the extent that Landlord has the ability to charge such other tenant
for said costs under the terms of a lease comparable to terms governing
said costs in this Lease; (ll) environmental pollution remediation related
costs (provided that such exclusion shall not limit Tenant's indemnity
pursuant to Subparagraph 40(b) [Hazardous Materials, Tenant's
Indemnity]); (mm) any maintenance, repair or replacement costs for
which Landlord is responsible pursuant to Subparagraph 9(a) [Repair
and Maintenance; Landlord's Obligations]; (nn) advertising or
promotional costs; (oo) leasing commissions; and (pp) reserves for
expenses. All costs and expenses shall be determined on a cash basis, with
accruals appropriate to Landlord's business. Expenses shall not include
specific costs incurred for the account of, separately billed to and paid
by specific tenants in Phase I.
(D) "EXPENSE YEAR" shall mean each twelve (12) consecutive
month period commencing January 1 of the calendar year during which the Rent
Commencement Date of the Lease occurs. Landlord, upon notice to Tenant, may
change the Expense Year from time to time to any other twelve (12) consecutive
month period, and, in the event of any such change, Expenses shall be equitably
adjusted for the Expense Years involved in any such change.
(2) PAYMENT OF REAL ESTATE TAXES.
(A) PAYMENT AS DUE. With reasonable promptness after
Landlord has received the tax bills for any Tax Year, Landlord shall furnish
Tenant with a statement (herein called "Landlord's Tax Statement") setting forth
the amount of Real Estate Taxes for such Tax Year. Unless otherwise required
pursuant to clause (B) below, Tenant shall pay to Landlord actual Real Estate
Taxes in installments, twice each Tax Year, no later than fifteen (15) business
days prior to the due date of each Real Estate Tax installment.
(B) IMPOUNDS. Notwithstanding clause (A) above, if
required by any Mortgagee or, at Landlord's election, after any default by
Tenant in the timely payment of Real Estate
14
Taxes, Tenant shall pay to Landlord as Additional Charges one-twelfth
(1/12th) of Real Estate Taxes for each Tax Year on or before the first day of
each month during such Tax Year, in advance, in an amount reasonably
estimated by Landlord and billed by Landlord to Tenant. Landlord shall have
the right initially to determine monthly estimates and to revise such
estimates from time to time. If the actual Real Estate Taxes for such Tax
Year (as shown on Landlord's Tax Statement) exceed the estimated Real Estate
Taxes paid by Tenant for such Tax Year, Tenant shall pay to Landlord the
difference between the amount paid by Tenant and the actual Real Estate Taxes
within fifteen (15) days after the receipt of Landlord's Tax Statement, and
if the total amount paid by Tenant for any such Tax Year shall exceed the
actual Real Estate Taxes for such Tax Year, such excess shall be credited
against the next installment of Real Estate Taxes due from Tenant to Landlord
hereunder. If it has been determined that Tenant has overpaid Real Estate
Taxes during the last year of the Lease Term, then Landlord shall reimburse
Tenant for such overage on or before the thirtieth (30th) day following the
Expiration Date.
(3) PAYMENT OF EXPENSES.
(A) PAYMENT AS DUE. With reasonable promptness after
Landlord's receipt thereof, Landlord shall furnish Tenant with a copy of any
invoices with respect to Expenses. Unless otherwise required pursuant to clause
(B) below, Tenant shall pay to Landlord any Expenses no later than twenty (20)
days after receipt of the invoice with respect to such Expenses.
(B) MONTHLY PAYMENTS. Notwithstanding clause (A) above,
Tenant shall pay to Landlord as Additional Charges one-twelfth (1/12th) of the
Expenses for each Expense Year on or before the first day of each month of such
Expense Year, in advance, in an amount reasonably estimated by Landlord and
billed by Landlord to Tenant in any of the following events: (i) if required by
any Mortgagee (with respect to all or any particular Expenses); (ii) if Landlord
assumes management of the Premises and/or Common Area pursuant to Paragraph 5
[Management]; or (iii) at Landlord's election, after any default by Tenant in
the timely payment of Expenses. Landlord shall have the right initially to
determine monthly estimates and to revise such
15
estimates from time to time. With reasonable promptness after the expiration
of each Expense Year, Landlord shall furnish Tenant with a statement (herein
called "Landlord's Expense Statement"), setting forth in reasonable detail
the Expenses for such Expense Year. If the actual Expenses for such Expense
Year exceed the estimated Expenses paid by Tenant for such Expense Year,
Tenant shall pay to Landlord the difference between the amount paid by Tenant
and the actual Expenses within fifteen (15) days after the receipt of
Landlord's Expense Statement, and if the total amount paid by Tenant for any
such Expense Year shall exceed the actual Expenses for such Expense Year,
such excess shall be credited against the next installment of the estimated
Expenses due from Tenant to Landlord hereunder or if the Term has ended it
shall be returned to Tenant within thirty (30) days. If Tenant has overpaid
Expenses during the last year of the Lease Term, then Landlord shall
reimburse Tenant for such overage on or before the thirtieth (30th) day
following the later of the Expiration Date or the end of the last Expense
Year. To the extent any item of Expenses is payable by Landlord in advance
of the period to which it is applicable (e.g. insurance and tax escrows
required by any Mortgagee), or to the extent that prepayment is customary for
the service or matter, Landlord may (aa) include such items in Landlord's
estimate for periods prior to the date such item is to be paid by Landlord,
and (bb) to the extent Landlord has not collected the full amount of such
item prior to the date such item is to be paid by Landlord, Landlord may
include the balance of such full amount in a revised monthly estimate for
Additional Charges.
(4) OTHER. If either the Rent Commencement Date or the
Expiration Date shall occur on a date other than the first day of a Tax Year
and/or Expense Year, Real Estate Taxes and Expenses for the Tax Year and/or
Expense Year in which the Rent Commencement Date or the Expiration Date occurs
shall be prorated.
(d) AUDIT RIGHTS. Within ninety (90) days after receipt of any
Landlord's Expense Statement or Landlord's Tax Statement, Tenant shall have the
right to audit, at Landlord's office located in the San Francisco Bay Area, at
Tenant's expense, Landlord's accounts and records relating to Expenses and Real
Estate Taxes. Such audit shall be conducted by an
16
independent certified public accountant approved by Landlord, which approval
shall not be unreasonably withheld so long as such accountant is not being
paid on a contingency fee or similar basis. If such audit reveals that
Landlord has overcharged Tenant, Tenant shall notify Landlord within one
hundred twenty (120) days after the date the applicable Landlord's Expense
Statement or Landlord's Tax Statement was received by Tenant. Landlord may
dispute such audit by arbitration pursuant to Paragraph 41
[Arbitration of Disputes]. If Landlord does not dispute such amount, or if
Tenant prevails in any such arbitration, the amount overcharged shall be paid
to Tenant within thirty (30) days thereafter, together with interest thereon
at the "prime rate" of interest announced by the WALL STREET JOURNAL for
Xxxxx Fargo Bank (or, if Xxxxx Fargo Bank ceases to exist, by another bank
mutually acceptable to Landlord and Tenant), from the date Landlord's Expense
Statement or Landlord's Tax Statement, as applicable, was delivered to Tenant
until payment of the overcharge is made to Tenant. In addition, if
Landlord's Expense Statement or Landlord's Tax Statement, as applicable,
exceeds the actual Expenses and Real Estate Taxes which should have been
charged to Tenant by more than five percent (5%), the cost of the audit shall
be paid by Landlord. If Tenant fails to object to any Landlord's Expense
Statement or Landlord's Tax Statement within one hundred twenty (120) days
after receipt thereof, such statement shall be final and shall not be subject
to any audit, challenge or adjustment.
(e) LATE CHARGES; DEFAULT RATE. Tenant recognizes that late payment
of any Base Rent or Additional Charges will result in administrative expenses to
Landlord, the extent of which additional expense is extremely difficult and
economically impractical to ascertain. Tenant therefore agrees that if any Base
Rent or Additional Charges remain unpaid ten (10) days after such amount is due,
the amount of such unpaid Base Rent or Additional Charges shall be increased by
a late charge to be paid to Landlord by Tenant, as an Additional Charge, in an
amount equal to five percent (5%) (or such greater amount not to exceed six
percent (6%) if a higher rate is charged by any Mortgagee for a late payment of
a monthly mortgage payment) of the amount of the delinquent Base Rent or
Additional Charges. In addition, any outstanding Base Rent, Additional Charges,
late charges and other outstanding amounts shall accrue interest at an
annualized rate
17
of the greater of 10% or The Ninth Circuit Federal Reserve Discount Rate plus
5% (the "Default Rate"), until paid to Landlord. Tenant agrees that such
amount is a reasonable estimate of the loss and expense to be suffered by
Landlord as a result of such late payment by Tenant and may be charged by
Landlord to defray such loss and expense. The provisions of this
Subparagraph 4(d) shall not relieve Tenant of the obligation to pay Base Rent
or Additional Charges on or before the date they are due, or affect
Landlord's remedies pursuant to Subparagraph 21(c) [Landlord's Remedies]
if any Base Rent or Additional Charges are unpaid after they are due.
5. MANAGEMENT.
(a) MANAGEMENT OF THE PREMISES. Tenant shall act as property manager
for the Premises throughout the Term, at Tenant's cost and expense; provided,
however, that Landlord may elect, by delivery of written notice to Tenant, to
assume management of the Premises if (i) Tenant does not cure any breach of its
obligations under Paragraph 9 [Repair and Maintenance], as provided in
Subparagraph 9(e) [Cure Rights], or if Tenant is in "Chronic Default" (as
defined in Subparagraph 21(f) [Chronic Default] of its obligations under
Paragraph 9 [Repair and Maintenance]; or (ii) at any time during the Term Tenant
directly occupies less than sixty percent (60%) of the Rentable Area of the
Premises (provided, however, that if Tenant subsequently occupies sixty percent
(60%) or more of the Rentable Area of the Premises, Tenant may elect by delivery
of written notice to Landlord, to resume management of the Premises on a date
designated by Tenant but no earlier than forty-five (45) days after Landlord's
receipt of such notice). If Landlord assumes the management of the Premises,
Landlord agrees that it will assume Tenant's maintenance, repair and replacement
obligations contained in Subparagraphs 9(b), (c) and (d) [Repair and
Maintenance], and that all costs incurred by Landlord in connection therewith
shall be deemed Additional Charges payable by Tenant in accordance with
Subparagraph 4(c) [Additional Charges for Expenses and Taxes], subject to the
limitations contained in Subparagraph 4(c). In addition, Landlord's monthly
management fee shall be increased from one quarter of one percent (.25%), to two
percent (2%) of Base Rent and Additional Charges, and Subparagraphs
4(c)(1)(C)(vi) and (ee) shall be revised
18
accordingly.
(b) MANAGEMENT OF THE COMMON AREA. Tenant shall act as property
manager for the Common Area throughout the Term, at Tenant's cost and expense;
provided, however, that Landlord may elect, by delivery of written notice to
Tenant, to assume management of the Common Area at any time during the Term if
(i) Tenant does not cure any breach of its obligations under Paragraph 9 [Repair
and Maintenance] as they relate to the Common Area, or if Tenant is in Chronic
Default of such obligations; or (ii) Landlord elects to manage the Common Area
together with the common area located on portions of the Project that are not
leased by Tenant. In addition, if Landlord assumes management of the Premises
pursuant to Subparagraph 5(a) [Management of the Premises], Landlord shall also
assume management of the Common Area. If Landlord assumes the management of the
Common Area, Landlord agrees that it will assume Tenant's maintenance, repair
and replacement obligations contained in Subparagraphs 9(b), (c) and (d) [Repair
and Maintenance] to the extent they apply to Common Area, and that all costs
incurred by Landlord in connection therewith ("Common Area Expenses") shall be
deemed Additional Charges payable by Tenant in accordance with Subparagraph 4(c)
[Additional Charges for Expenses and Taxes]. In addition, if Landlord assumes
management of the Common Area independently of assuming management of the
Premises, Landlord's monthly management fee shall be increased to two percent
(2%) of Base Rent and Additional Charges, and subparagraphs 4(c)(1)(C)(vi) and
(ee) shall be revised accordingly. If Landlord assumes management of the Common
Area at any time that the entire rentable area of the Project is not leased to
Tenant, any Common Area Expenses which are shared with other common areas in the
Project shall be allocated among the tenants and occupants of the Project based
on the rentable area leased to or occupied by each such tenant or occupant,
divided by the total leased or occupied rentable area of the Project.
(c) THIRD PARTY MANAGEMENT. At any time after Landlord has assumed
management of the Premises and/or Common Area pursuant to this Paragraph 5, if
Landlord does not cure any breach of its obligations (including any of Tenant's
obligations assumed by Landlord) under Paragraph 9 [Repair and Maintenance]
during the cure period provided in Subparagraph 21(d) [Landlord's
19
Default], or if Landlord is in Chronic Default of such obligations, Tenant
may elect, by delivery of written notice to Landlord, to require that a third
party manager assume management of the Premises and/or Common Area, as
applicable. Within ten (10) business days after receipt of Tenant's notice,
Landlord shall provide to Tenant a list of at least three (3) third party
management companies which are acceptable to Landlord, and Tenant shall chose
one to manage the Premises and/or Common Areas. Each of such proposed
management companies shall be reputable, with sufficient financial capability
to perform the obligations of the Project manager and with sufficient
experience managing similar projects in the South Bay Area, all in Landlord's
reasonable judgment. After receipt of written notice from Tenant designating
the manager, Landlord shall use commercially reasonable efforts to enter into
a property management contract with such manager in a timely manner. Tenant
shall pay Landlord, as an Expense, any management fee charged by such
manager, in addition to Landlord's management fee of .25%.
(d) DISPUTE OF ASSUMPTION OF MANAGEMENT. If a dispute arises between
the parties in connection with the assumption of management by Landlord or a
third party management company, as applicable, pursuant to this Paragraph 5, and
such dispute is submitted to arbitration in accordance with Paragraph 41
[Arbitration of Disputes], prior to the resolution of such matter by arbitration
the disputed assumption of management shall proceed, with any required transfer
of management and/or other required adjustments made after the matter is
ultimately determined by arbitration.
6. RESTRICTIONS ON USE. Tenant acknowledges that the Premises and Common
Areas may not be used or operated in violation of the requirements of the
Declaration, the CC&Rs or the Hetch Hetchy Easement, and Hazardous Materials may
not be used or located on the Premises or Common Area in a manner which would
adversely affect Landlord's rights and benefits under the Seller Indemnity
described in Subparagraph 40(d) [Seller Indemnity] (all such documents are
collectively referred to as the "Restrictive Documents"); provided, however,
that the parties agree that Tenant's permitted use under this Lease and parking
rights under Paragraph 36 [Parking] do not violate the Restrictive Documents.
Landlord has listed certain specific uses
20
and activities that are prohibited on all or certain portions of the Premises
and Common Area pursuant to the Restrictive Documents on Exhibit "P" attached
hereto. In addition, Landlord shall have the right to modify Exhibit "P" to
add other restrictions on use and activities on the Premises and Common Area
under the Restrictive Documents, by written notice to Tenant, so long as such
restrictions do not materially adversely affect Tenant's permitted use of the
Premises, Tenant's Minimum Parking or Tenant's access to the Premises.
Tenant shall not use the Premises or Common Area in a manner in violation of
the requirements listed on Exhibit "P", as it may be amended by Landlord from
time to time in accordance with the preceding sentence, and upon written
notice from Landlord Tenant shall discontinue any such use of the Premises or
Common Area. In addition, Tenant shall not do or permit anything to be done
in or about the Premises or Common Area which will obstruct or interfere with
the Clean-up Facilities, or with the rights of any parties to the Declaration
or the CC&Rs or any other tenant or occupant in the Project, or injure them,
nor use or allow the Premises or Common Area to be used for any unlawful
purpose, nor shall Tenant cause or maintain or permit any nuisance in, on or
about the Premises or Common Area. Tenant shall not commit or suffer the
commission of any waste in, on or about the Premises or Common Area.
Landlord acknowledges that, for purpose of this Paragraph, the existence of
the Existing Hazardous Materials (as defined in Paragraph 40 [Hazardous
Materials Liability]) on the Project on the Occupancy Date, and Tenant's
failure to remediate such Existing Hazardous Materials, shall not be a
violation of Tenant's obligations under this Paragraph 6 with respect to
nuisance or waste.
7. COMPLIANCE WITH LAWS.
(a) TENANT'S COMPLIANCE OBLIGATIONS. Tenant shall promptly, at its
sole expense, maintain the Premises and Common Area, any Alterations permitted
hereunder and Tenant's use and operations thereon in strict compliance at all
times with all present and future laws, statutes, ordinances, resolutions,
regulations, proclamations, orders or decrees of any municipal, county, state or
federal government or other governmental or regulatory authority with
jurisdiction over the Project, or any portion thereof, whether currently in
effect or adopted in the
21
future and whether or not in the contemplation of the parties hereto
(collectively, "Laws"). Such Laws shall include, without limitation, all
Laws relating to health and safety (including, without limitation, the
California Occupational Safety and Health Act of 1973 and the California Safe
Drinking Water and Toxic Enforcement Act of 1986, including posting and
delivery of notices required by such Laws with respect to the Premises and
Common Area) and disabled accessibility (including, without limitation, the
Americans with Disabilities Act, 42 U.S.C. section 12101 et SEQ.),
Environmental Laws, and all present and future life safety, fire, sprinkler,
seismic retrofit, building code and municipal code requirements; provided
however, that Tenant's obligation to comply with Environmental Laws is
subject to the terms and conditions of Paragraph 40 [Hazardous Materials
Liability], and Tenant shall not be responsible for compliance with clean-up
provisions of any Environmental Laws except to the extent of any release
caused or permitted by the Tenant Parties or otherwise included in Tenant's
indemnity contained in Subparagraph 40(b) [Tenant Indemnity].
Notwithstanding the foregoing, Tenant shall not be required to make any
structural alterations to the Base Building Improvements in order to comply
with Laws unless the requirement that such alterations be made is triggered
by any of the following (or, if such requirement results from the cumulative
effect of any of the following when added to other acts, omissions,
negligence or events, to the extent such alterations are required by any of
the following): (i) the installation, use or operation of the Tenant
Improvements, any Alterations, or any of Tenant's trade fixtures or personal
property; (ii) the acts, omissions or negligence of Tenant, or any of its
servants, employees, contractors, agents or licensees; or (iii) the
particular use or particular occupancy or manner of use or occupancy of the
Premises or Common Area by Tenant, or any of its servants, employees,
contractors, agents or licensees. The parties acknowledge and agree that
Tenant's obligation to comply with all Laws as provided in this paragraph
(subject to the limitations contained herein) is a material part of the
bargained-for consideration under this Lease. Tenant's obligations under
this Paragraph shall include, without limitation, the responsibility of
Tenant to make substantial or structural repairs and alterations to the
Premises (including the Base Building Improvements, Tenant Improvements, and
any Alterations) to the extent provided above, regardless of, among
22
other factors, the relationship of the cost of curative action to the Rent
under this Lease, the length of the then remaining Term hereof, the relative
benefit of the repairs to Tenant or Landlord, the degree to which the
curative action may interfere with Tenant's use or enjoyment of the Premises,
and the likelihood that the parties contemplated the particular Law involved.
Tenant waives any rights now or hereafter conferred upon it by any existing
or future Law to terminate this Lease, to receive any abatement, diminution,
reduction or suspension of payment of Rent, or to compel Landlord to make any
repairs to comply with any such Laws, on account of any occurrence or
situation arising during the Term.
(b) INSURANCE REQUIREMENTS. Tenant shall not do or permit anything
to be done in or about the Project or bring or keep anything therein which will
cause a cancellation of any insurance on the Project or otherwise violate any
requirements, guidelines, conditions, rules or orders with respect to such
insurance. Tenant shall at its sole cost and expense promptly comply with the
requirements of the board of fire underwriters or other similar body now or
hereafter constituted relating to or affecting the condition, use or occupancy
of the Premises or the Common Area (other than in situations where compliance
involves repair, maintenance or replacement of items that Landlord is expressly
required to repair, maintain or replace under this Lease).
(c) NO LIMITATION ON OBLIGATIONS. The provisions of this Paragraph 7
shall in no way limit Tenant's maintenance, repair and replacement obligations
under Paragraph 9 [Repair and Maintenance], or Tenant's obligation to pay
Expenses under Subparagraph 4(c) [Additional Charges for Expenses and Taxes].
The judgment of any court of competent jurisdiction or the admission of Tenant
in an action against Tenant, whether Landlord is a party thereto or not, that
Tenant has so violated any such Law shall be conclusive of such violation as
between Landlord and Tenant.
8. ADDITIONAL ALTERATIONS.
(a) LANDLORD'S ALTERATIONS. After completion of the Base
Building Improvements, Landlord shall not be permitted
23
to make or suffer to be made any additional alterations, additions or
improvements in, on or to the Buildings or any part thereof without the prior
written consent of Tenant, except as may be required by Law or as expressly
required or permitted by this Lease.
(b) LANDLORD'S CONSENT TO TENANT'S ALTERATIONS. Tenant shall not
make or suffer to be made any additional alterations, additions or improvements
("Alterations") in, on or to the Premises or Common Area or any part thereof,
without the prior written consent of Landlord. Alterations do not include
initial construction of the Tenant Improvements. Failure of Landlord to give
its disapproval to any Alterations within fifteen (15) calendar days after
receipt of Tenant's written request for approval shall constitute approval by
Landlord of such Alterations so long as Tenant's request includes the following
statement in capitalized and boldfaced letters: BY FAILING TO RESPOND TO THIS
REQUEST WITHIN FIFTEEN DAYS, YOU WILL BE DEEMED TO HAVE APPROVED THE TENANT'S
INSTALLATION OF THE ALTERATIONS DESCRIBED IN THIS REQUEST. Any Alterations in,
on or to the Premises or Common Areas, except for Tenant's movable furniture and
equipment, trade fixtures and Alterations which may be removed without damage to
the Premises, shall become the property of Landlord upon their completion
without compensation to Tenant. Landlord shall not unreasonably withhold its
consent to Alterations that (i) do not materially affect the structure of the
Buildings, the Building Systems (as defined below) or the Buildings' security or
other systems; (ii) are not visible from the exterior of the Buildings; (iii)
are consistent with Tenant's permitted use hereunder; and (iv) comply with the
Declaration; the CC&Rs; the Hetch Hetchy Easement; any easements, licenses or
other use agreements or encumbrances on Landlord's title to the Land (including,
without limitation, any underground easements in favor of PG&E or AirProducts);
and any Mortgage.
(c) PERMITTED ALTERATIONS. Notwithstanding Subparagraph 8(b),
Tenant may make Alterations to the Premises (but not the Common Area, or the
interior courtyard or roof of any Building) without Landlord's prior consent so
long as (x) such Alterations comply with items (i) through (iv) in Paragraph
8(b) [Landlord's Consent to Tenant's Alterations], (y) such Alterations do not
require underground digging, and (z) the cost
24
of each such Alteration (or group of Alterations, if occurring substantially
at the same time and as part of a single project) does not exceed Fifty
Thousand Dollars ($50,000), and the cost of all such Alterations in any
twelve (12) month period during the Term in the aggregate does not exceed One
Hundred Thousand Dollars ($100,000) (any such Alterations being defined
herein as "Permitted Alterations").
(d) REQUIREMENTS FOR TENANT ALTERATIONS. Tenant shall make any
Alterations consented to or permitted under this Paragraph 8 at Tenant's sole
cost and expense, in compliance with the following requirements: (i) Alterations
(other than Permitted Alterations) shall be made in accordance with plans and
specifications reasonably approved by Landlord, and all Alterations shall be
made in accordance with the requirements of Paragraph 10 [Liens]; (ii) any
contractor or person selected by Tenant to make Alterations (other than
Permitted Alterations) must first be approved in writing by Landlord, in its
reasonable discretion; (iii) Alterations shall be made in compliance with all
applicable Laws; (iv) Alterations shall not alter or interfere with the ceiling
of any Building (all partitions being below the ceiling grid, except in areas
designated by Landlord on plans and specifications), unless approved by Landlord
in its sole discretion; and (v) Alterations shall not cause more than fifty
percent (50%) of the rentable floor area on any floor in any Building to be
enclosed as hard wall office unless approved by Landlord in its sole discretion;
provided, however, that Tenant may make Alterations that do not comply with the
standards set forth in items (iv) and (v) above (subject to any other applicable
Landlord consent requirement) if Tenant agrees to reconfigure the affected floor
to such standard upon expiration or earlier termination of this Lease. By
making Alterations which do not comply with the standards set forth in items
(iv) and (v) above, Tenant shall be deemed to have agreed to reconfigure the
Premises upon expiration or termination of the Lease as provided above unless
Landlord specifically agrees otherwise in writing. Upon completion of any
Alterations (other than Permitted Alterations), Tenant shall furnish Landlord
with a complete set of final as-built plans and specifications, at Tenant's cost
and expense. If Tenant fails to provide Landlord with any such final as-built
plans and specifications within one hundred twenty (120) days after completion
of the applicable
25
Alterations, Landlord may, at Landlord's election, cause such final as-built
plans and specifications to be prepared at Tenant's cost and expense, and the
expenses thereof incurred by Landlord shall be reimbursed as Additional
Charges within thirty (30) days after submission of a xxxx or statement
therefor. With respect to items (i) and (ii) above, failure of Landlord to
give its disapproval to any plans and specifications or general contractor
within fifteen (15) calendar days after receipt of Tenant's written request
for approval shall constitute approval by Landlord of such matters so long as
Tenant's request includes the following statement in capitalized and
boldfaced letters: BY FAILING TO RESPOND TO THIS REQUEST WITHIN FIFTEEN DAYS,
YOU WILL BE DEEMED TO HAVE APPROVED THE PLANS AND SPECIFICATIONS AND/OR
GENERAL CONTRACTOR FOR TENANT'S ALTERATIONS DESCRIBED IN THIS REQUEST.
(e) REMOVAL OF ALTERATIONS AND RESTORATION. Upon the expiration or
sooner termination of the Term, Tenant shall upon demand by Landlord, at
Landlord's election, either (i) at Tenant's sole cost and expense, forthwith and
with all due diligence remove any Alterations made by or for the account of
Tenant that are designated by Landlord to be removed and restore the Premises to
its original condition as of the Rent Commencement Date, subject to normal wear
and tear and the rights and obligations of Tenant concerning casualty damage
pursuant to Paragraph 22 [Damage and Destruction], or (ii) pay Landlord the
reasonable estimated cost thereof as required by Subparagraph 26(b) [Delivery
and Restoration of Premises]. Upon the written request of Tenant prior to
installation of any Alterations, Landlord shall notify Tenant of its election to
require that such Alterations must be removed upon the expiration or sooner
termination of this Lease, so long as such written request clearly requests
Landlord's election regarding the removal of such Alterations. Landlord's
failure to specifically notify Tenant of Landlord' election shall be deemed
Landlord's election to require removal of the Alterations upon expiration of the
Term, notwithstanding any deemed approval by Landlord of the Alterations
pursuant to this paragraph.
(f) REIMBURSEMENT OF LANDLORD'S REVIEW COSTS. Tenant shall reimburse
Landlord upon demand for any reasonable out-of-pocket expenses incurred by
Landlord in connection with the
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review of any Alterations made by Tenant, including reasonable fees charged
by Landlord's contractors or consultants to review plans and specifications
prepared by Tenant.
9. REPAIR AND MAINTENANCE.
(a) LANDLORD'S OBLIGATIONS. Landlord shall maintain, repair and
replace, at its sole cost and expense, the following, except as provided in
Subparagraph 9(c) [Tenant's Obligations for Structural Maintenance] below: (i)
the roof structure (but not the roof membrane) and structural portions of the
Buildings (including load bearing walls and foundations); (ii) all underground
plumbing owned by Landlord from the point of connection to the City of Mountain
View's main line to the point of entry into each of the Buildings; and (iii)
structural portions of the parking facilities in Phase I, to the extent the
required maintenance, repair or replacement results from defects in the original
design or construction of the parking facilities (but not including resurfacing,
pothole repair or a new slurry seal, if required by use of the parking
facilities or from other causes). Tenant shall notify Landlord in writing
within fifteen (15) days (or immediately by telephone or facsimile in the event
of emergency, with prompt confirmation delivered in accordance with Paragraph 28
[Notices]) after Tenant becomes aware of any circumstances which Tenant believes
may trigger Landlord's obligations under this Subparagraph 9(a). Landlord shall
not be in breach of its obligations under this Subparagraph 9(a) with respect to
any particular repair, replacement or maintenance requirement unless and until
Landlord has received such written notice from Tenant and had sufficient
opportunity to satisfy such obligations. Tenant shall be liable to Landlord for
any additional cost incurred by Landlord in satisfying such obligations, or any
damage to the Project, resulting from Tenant's failure to timely notify Landlord
of such circumstances as required by this paragraph.
(b) TENANT'S OBLIGATIONS. Tenant shall maintain, repair and replace,
at its sole cost and expense, all portions of the Premises and Common Areas
included in Phase I which are not Landlord's obligations under Subparagraph 9(a)
[Landlord's Obligations], including, without limitation, (i) the roof membrane
and exterior of each Building, (ii) the Building systems
27
for electrical, mechanical, HVAC and plumbing and all controls appurtenant
thereto (collectively, "Building Systems"), (iii) parking areas, courtyards,
sidewalks, entry ways, lawns, landscaping and other similar facilities of the
Buildings and Common Areas, and (iv) the interior portion of the Buildings,
the Tenant Improvements, the Alterations, and any additional tenant
improvements, alterations or additions installed by or on behalf of Tenant
within the Premises. Phase I shall at all times be maintained by Tenant in
the condition of a first-class office and research and development park.
Without limiting the foregoing, certain portions of the Common Area, Building
exteriors and Building Systems shall be maintained in accordance with certain
standards and a maintenance schedule which shall be provided by Landlord to
Tenant after completion of the Base Building Improvements in accordance with
commercially reasonable recommendations of Landlord's landscaping and/or
building contractors, manufacturers and/or consultants. Tenant agrees to
review the maintenance standards and schedule proposed by Landlord within ten
(10) business days following the date they are submitted by Landlord to
Tenant and to notify Landlord, in writing, of any objections to the standards
and schedule, in Tenant's reasonable discretion. If Tenant fails to notify
Landlord of any objection within such ten (10) business day period, Tenant
shall be deemed to have approved the proposed standards and schedule. If
Tenant objects to the proposed standards and schedule and the parties are
unable to resolve Tenant's objections, either party may submit such dispute
to arbitration pursuant to Paragraph 41 [Arbitration of Disputes], provided
that prior to the resolution of such matter by arbitration, Tenant shall
maintain the Project in accordance with Landlord's proposed standards and
schedule. The maintenance standard and schedule which are placed into effect
pursuant to this paragraph shall be added to the Lease as Exhibit "R", and
may be amended by Landlord from time to time during the Term, by delivering
written notice thereof to Tenant, subject to Tenant's approval in its
reasonable discretion in accordance with the procedure set forth in this
paragraph. Tenant's obligations under this Paragraph 9 include, without
limitation, the replacement, at Tenant's sole cost and expense, of any
portions of Phase I which are not Landlord's express responsibility under
Subparagraph 9(a) [Landlord's Obligations], if it would be commercially
prudent to replace, rather than repair, such
28
portions of Phase I, regardless of whether such replacement would be
considered a capital expenditure. Tenant hereby waives and releases its
right to make repairs at Landlord's expense under Sections 1941 and 1942 of
the California Civil Code or under any similar law, statute or ordinance now
or hereafter in effect. In addition, Tenant hereby waives and releases its
right to terminate this Lease under Section 1932(1) of the California Civil
Code or under any similar law, statute or ordinance now or hereafter in
effect.
(c) TENANT'S OBLIGATIONS FOR STRUCTURAL MAINTENANCE. Notwithstanding
the provisions of Subparagraph 9(a) [Landlord's Obligations] and without
limiting Tenant's other obligations hereunder, Tenant shall bear the full cost
of structural repairs or maintenance to preserve the Buildings in good working
order and condition, to the extent such structural repair and/or maintenance is
required due to the following (except to the extent any claims arising from any
of the following are reimbursed by insurance carried by Landlord, are covered by
the waiver of subrogation in Paragraph 13 [Waiver of Subrogation] or are
otherwise provided for in Paragraph 22 [Damage and Destruction]): (i) the
installation, use or operation of any Alterations or other modification to the
Premises or Common Area made by Tenant; (ii) the installation, use or operation
of Tenant's property or fixtures; (iii) the moving of Tenant's property or
fixtures in or out of any Building or in and about the Project; or (iv) the
acts, omissions or negligence of Tenant, or any of its servants, employees,
contractors, agents or licensees, or the particular use or particular occupancy
or manner of use or occupancy of the Premises or Common Area by Tenant or any
such person. In addition, if at any time during the Term Hazardous Materials
are released, discharged, or disposed of on any portion of the Premises or
Common Area, in violation of Tenant's obligations hereunder, repairs of the
storm drains and/or plumbing from the point of connection to the City of
Mountain View's main line to the point of entry into each of the Buildings shall
be excluded from Landlord's obligations under Subparagraph 9(a). Tenant shall
not cause or permit any disposal or release of Hazardous Substances into the
plumbing systems at the Project. Prior to Tenant's performance of any
structural repairs or maintenance required under this paragraph, the parties
shall agree on the scope of the required structural repair or
29
maintenance, and shall agree upon which alternative method is appropriate if
more than one alternative exists. If the parties are unable to agree on the
scope or alternative, despite reasonable efforts, such dispute shall be
submitted to arbitration pursuant to Paragraph 41 [Arbitration of Disputes];
provided, however, that if the failure to make any such structural repair or
maintenance during the pendency of such arbitration would have a material,
detrimental effect on the condition or operation of any Building, Tenant
shall either (x) delay the activity which would trigger the required
structural repair or maintenance, or (y) if such activity already has
occurred or cannot be delayed, commence and diligently pursue the required
structural repair or maintenance based on the scope and alternative (if more
than one) specified by Landlord, with a reasonable adjustment to be made by
the parties after the matter is ultimately determined by arbitration.
(d) MAINTENANCE SERVICE CONTRACTS. In connection with Tenant's
maintenance and repair obligations contained in this Xxxxxxxxx 0, Xxxxxx shall,
at its own cost and expense, enter into regularly scheduled preventive
maintenance service contracts with maintenance contractors approved by Landlord,
in its reasonable discretion, for servicing all hot and cold water, heating, air
conditioning and electrical systems, elevators and equipment within Phase I, and
shall provide copies of such contracts to Landlord. At Landlord's option at any
time in which Tenant is in default hereunder, maintenance service contracts
shall be prepaid by Tenant on an annual basis. Tenant shall use commercially
reasonable efforts to cause each maintenance service contract to specifically
name Landlord as a third party beneficiary, with the right to receive copies of
all notices delivered under such contract and the ability to exercise Tenant's
rights thereunder upon Tenant's default under this Paragraph 9 or upon
Landlord's assumption of management of the Premises pursuant to Subparagraph
5(a) [Management of Premises], at Landlord's election. If Tenant is unable,
despite such efforts, to include such rights in any maintenance service
contract, Tenant agrees to itself provide Landlord with copies of notices
delivered under such contract, and at Landlord's election Tenant shall assign
Tenant's rights under such contract to Landlord upon Landlord's assumption of
management of the Premises.
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(e) CURE RIGHTS. Tenant shall have a period of thirty (30) days from
the date of written notice from Landlord within which to cure any failure to
fulfill any of its obligations under this Paragraph 9; provided, however, that
if such failure is curable but cannot be cured within such thirty (30) day
period, Tenant shall have such additional time as may be reasonably required to
cure so long as Tenant commences such cure within the initial thirty (30) day
period and diligently prosecutes such cure to completion. If Tenant fails to
cure such failure as provided above, or in the event of an emergency which
materially adversely affects the Project, Landlord may, at Landlord's election,
cure such failure, at Tenant's cost and expense, and the expenses thereof
incurred by Landlord shall be reimbursed as Additional Charges within thirty
(30) days after submission of a xxxx or statement therefor. The remedies
described in this paragraph and in Paragraph 5 [Management] are cumulative and
constitute Landlord's exclusive remedies if Tenant fails to maintain, repair or
replace any portions of the Premises or Common Area in accordance with its
obligations under this Paragraph 9; provided, however, that nothing contained in
this Subparagraph 9(e) shall limit Landlord's right to receive reimbursement for
attorneys' fees or waive or affect Tenant's indemnity and insurance obligations
under this Lease and Landlord's rights to those indemnity and insurance
obligations.
(f) NO LIABILITY OF LANDLORD. There shall be no abatement of Rent
with respect to, and Landlord shall not be liable for any injury to or
interference with Tenant's business arising from, any repairs, maintenance,
alteration or improvement in or to any portion of the Project or the Clean-up
Facilities by any party, except as expressly and specifically provided in
Paragraph 22 [Damage and Destruction], provided, however that (i) Base Rent and
Additional Charges may be abated during the period of any interference to
Tenant's business which exceeds ninety (90) days, in proportion to the portion
of the Premises Tenant is unable to use, only if such interruption results from
an insured casualty such that proceeds are payable to Landlord under the rental
interruption insurance carried by Landlord pursuant to Subparagraph 12(e)
[Landlord's Insurance Obligations] and only to the extent of such proceeds
actually received by Landlord, and (ii) subject to the limitations on Tenant's
recourse against
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Landlord contained in Subparagraph 21(e) [Tenant's Remedies], Landlord shall
be liable for any actual damage to Tenant to the extent caused by Landlord's
gross negligence or willful misconduct in connection with any such repairs,
maintenance, alteration or improvement.
10. LIENS. Tenant shall keep the Project free from any liens arising out
of any work performed, material furnished or obligations incurred by Tenant. If
Tenant does not, within thirty (30) days following notice by Landlord of any
such lien, cause it to be released of record by payment or posting of a proper
bond (or such shorter period of time as may be required to avoid a default under
any Mortgage), Landlord shall have, in addition to all other remedies provided
herein and by law, the right, but not the obligation, to cause it to be released
by such means as Landlord deems proper, including payment of the claim giving
rise to such lien. All sums paid and expenses incurred by Landlord in
connection therewith shall be considered Additional Charges and shall be payable
to Landlord by Tenant on demand, with interest at the Default Rate. Landlord
shall have the right at all times to post and keep posted on the Premises and
Common Area any notices permitted or required by law or by any Mortgagee, for
the protection of the Premises, the Buildings, the Land, the Common Area, the
Project, Landlord, any Mortgagee, and any other party having an interest in any
portion of the Project from mechanics' and materialmen's liens. Tenant shall
give Landlord at least five (5) business days' prior notice of commencement of
any construction on the Premises or Common Area other than Permitted
Alterations. This Paragraph 10 shall survive any termination of this Lease.
11. ASSIGNMENT AND SUBLETTING.
(a) RESTRICTION ON ASSIGNMENT AND SUBLEASING. Tenant shall not
directly or indirectly, voluntarily or by operation of law, (i) sell, assign,
encumber, pledge or otherwise transfer or hypothecate all or any part of the
Premises, the Tenant Improvements, or Tenant's leasehold estate hereunder
(collectively, "Assignment"), or (ii) sublet the Premises or any portion thereof
or otherwise permit the Premises to be occupied by anyone other than Tenant
(collectively, "Sublease"), without Landlord's prior written consent to each
Assignment or Sublease,
32
which consent shall not be unreasonably withheld or delayed by Landlord;
provided, however, that Landlord may withhold its consent, in its sole
discretion, to any Assignment which affects less than the entire Premises, or
any Sublease which would result in more than two (2) separate entities
(including Tenant and any subtenants or other occupants) occupying any floor
in any Building. Without otherwise limiting the criteria upon which Landlord
may withhold its consent to any proposed Sublease or Assignment, if Landlord
withholds its consent where either (i) the creditworthiness of the proposed
Sublessee or Assignee is not reasonably acceptable to Landlord or any
Mortgagee, or (ii) the proposed Sublessee's or Assignee's use of the Premises
is not in compliance with the allowed Tenant's Use of the Premises as
described in the Basic Lease Information or, in Landlord's judgment, would
require or result in presence of Hazardous Materials on the Premises and/or
Common Area in excess of those described in Subparagraph 40(f)
[Tenant's Disclosure Obligations], such withholding of consent shall be
presumptively reasonable. If Landlord consents to the Sublease or
Assignment, Tenant may thereafter enter into a valid Sublease or Assignment
upon the terms and conditions set forth in this Paragraph 11.
(b) REQUIRED NOTICE. If Tenant desires at any time to enter into an
Assignment of this Lease or a Sublease of the Premises or any portion thereof,
it shall first give written notice to Landlord containing (i) the name of the
proposed assignee, subtenant or occupant; (ii) a description of the proposed
assignee's, subtenant's, or occupant's business and activities to be carried on
in the Premises; (iii) the terms and provisions of the proposed Assignment or
Sublease; and (iv) such financial information as Landlord may reasonably
request concerning the proposed assignee, subtenant or occupant.
(c) LANDLORD'S RESPONSE TO PROPOSED ASSIGNMENT. Within fifteen (15)
days after Landlord's receipt of the notice specified in Subparagraph 11(b)
[Required Notice] with respect to an Assignment of Tenant's interest under this
Lease, Landlord may by written notice to Tenant elect to (i) terminate this
Lease, (ii) consent to the Assignment, or (iii) disapprove the Assignment.
Notwithstanding anything in this Subparagraph 11(c) to the contrary, Landlord
shall not have the right to terminate this Lease in connection with any
"Permitted Transfer" (as
33
defined below).
(d) LANDLORD'S RESPONSE TO PROPOSED SUBLEASE. Within fifteen (15)
days after Landlord's receipt of the notice specified in Subparagraph 11(b)
[Required Notice] with respect to a Sublease, Landlord may by written notice
to Tenant elect to (i) sublease itself the portion of the Premises specified
in Tenant's notice; (ii) consent to the Sublease; or (iii) disapprove the
Sublease. Notwithstanding anything in this Subparagraph 11(d) to the
contrary, Landlord shall not have the rights set forth in (i) and (iii) of
this Subparagraph 11(d) in connection with any Sublease to a "Strategic
Partner" (as defined below) in compliance with Subparagraph 11(h)
[Strategic Partners]. If Landlord elects to Sublease from Tenant as
described in clause (i) above, the Monthly Base Rent payable by Landlord
shall be the rent set forth in Tenant's notice (which shall be allocated
between Landlord and Tenant in accordance with Subparagraph 11(e) [Bonus Rent]).
If Landlord exercises the option set forth in clause (i) above with
respect to a portion of the Premises, Landlord shall have the right to
further sublease that portion of the Premises at Landlord's election without
the consent of Tenant.
(e) BONUS RENT. If Landlord consents to any Assignment or Sublease
pursuant to Subparagraph 11(c) [Landlord's Response To Proposed Assignment] or
Subparagraph 11(d) [Landlord's Response To Proposed Sublease], Tenant may within
one hundred twenty (120) days after Landlord's consent, but not later than the
expiration of said one hundred twenty (120) days, enter into such Assignment or
Sublease of the Premises or portion thereof upon the terms and conditions set
forth in the notice furnished by Tenant to Landlord pursuant to Subparagraph
11(b) [Required Notice]. However, fifty percent (50%) of any rent or other
consideration realized by Tenant under any such Assignment or Sublease in excess
of the Base Rent and Additional Charges payable hereunder (or the amount thereof
proportionate to the portion of the Premises subject to such Sublease or
Assignment) shall be paid to Landlord, after deducting therefrom the unamortized
Cost of Tenant Improvements (calculated as provided below) located on the
portion of the Premises subject to such Sublease or Assignment as of the
effective date of such Assignment or Sublease which are attributable to and
allocated in
34
equal installments over the term of the Sublease or Assignment, determined by
assuming a useful life equal to fifteen (15) years and amortization on a
straight line basis (without interest), and after deducting therefrom any
customary brokers' commissions that Tenant has incurred in connection with
such Assignment or Sublease amortized on a straight line basis (without
interest) over the term of the Sublease or Assignment. Tenant shall, not
later than ninety (90) days after the Rent Commencement Date, deliver
evidence of the cost of the Tenant Improvements, which shall be acceptable to
Landlord in its reasonable discretion, for Landlord's use as the basis for
calculating the cost of the Tenant Improvements for purposes of this
Subparagraph 11(e) (such resulting calculation being referred to herein as
the "Cost of Tenant Improvements"). The Cost of Tenant Improvements shall be
allocated evenly over the Premises. Failure by Landlord to either consent or
refuse such consent to a proposed Assignment or Sublease within the fifteen
(15) day time period specified above shall be deemed to be Landlord's consent
thereto.
(f) EFFECT OF TRANSFER. Landlord's consent to any Assignment or
Sublease shall not relieve Tenant of any obligation to be performed by Tenant
under this Lease, whether arising before or after the Assignment or Sublease.
Landlord's consent to any Assignment or Sublease shall not relieve Tenant from
the obligation to obtain Landlord's express written consent to any other
Assignment or Sublease. Any Assignment or Sublease that is not in compliance
with this Paragraph 11 shall be void and, at the option of Landlord, shall
constitute a material default by Tenant under this Lease. The acceptance of
Base Rent or Additional Charges by Landlord from a proposed assignee or
sublessee shall not constitute the consent to such Assignment or Sublease by
Landlord.
(g) PERMITTED TRANSFER. The following shall be deemed a voluntary
Assignment of Tenant's interest in this Lease: (i) any dissolution, merger,
consolidation, or other reorganization of Tenant; and (ii) if the capital stock
of Tenant is not publicly traded, the sale or transfer of stock to one person or
entity possessing or controlling more than fifty percent (50%) of the total
combined voting power of all classes of Tenant's stock issued, outstanding and
entitled to vote for the election of directors. Notwithstanding anything to the
contrary contained in
35
this Xxxxxxxxx 00, Xxxxxx may enter into any of the following transfers (a
"Permitted Transfer") without Landlord's prior written consent: (1) Tenant
may assign its interest in the Lease to a corporation which results from a
merger, consolidation or other reorganization, so long as immediately
following such transaction the surviving corporation satisfies each of the
Transfer Standards (as defined below); and (2) Tenant may assign this Lease
to a corporation which purchases or otherwise acquires all or substantially
all of the assets of Tenant, so long as immediately following such
transaction such acquiring corporation satisfies each of the Transfer
Standards. For purposes of this Subparagraph 11(g), the Transfer Standards
shall mean each of the following, as reflected in audited financial
statements (which include an unqualified certification by a licensed
certified pubic accountant reasonably acceptable to Landlord) provided to
Landlord: (a) a tangible net worth of at least One Hundred Eighty Million
Dollars ($180,000,000); (b) a ratio of current assets to current liabilities
of at least 1.75:1; (c) unencumbered and unrestricted cash and cash
equivalents of the greater of One Hundred Million Dollars ($100,000,000) or
five percent (5%) of Tenant's total assets; (d) a ratio of debt to equity (on
an historic cost basis) not in excess of 2:1; and (e) no operating losses
(exclusive of losses due to acquisitions) for the prior two (2) years
(combined operations of pre-existing entities).
(h) STRATEGIC PARTNERS. Tenant may Sublease portions of the
Premises to Tenant's Strategic Partners (as defined below) without Landlord's
prior consent, subject to the following conditions: (1) after any such
Sublease, Tenant shall continue to directly occupy at least eighty percent (80%)
of the Rentable Area in the Premises; and (2) Tenant shall provide Landlord with
written notice at least thirty (30) days' prior to any such Sublease including
the name of the Strategic Partner, the location of the subleased space, the name
and address of the Strategic Partner's agent for service of process and delivery
of notices under this Lease, and a certification by an officer of Tenant that
the subtenant is a "Strategic Partner" as defined in this Subparagraph 11(h).
Any Strategic Partner subleasing a portion of the Premises shall maintain an
agent for service of process and notice, and notify Landlord of any changes in
such agent, at all times during the term of such sublease. The term "Strategic
Partner" shall refer to any entity (i) in which Tenant
36
holds an unsubordinated ownership interest of at least ten percent (10%),
(ii) that is engaged in a business which Tenant believes to be of strategic
importance to its own business, and (iii) that Tenant determines, in its
reasonable business judgment, would benefit Tenant's business by conducting
its own business within Tenant's Premises.
(i) ASSUMPTION BY TRANSFEREE. Each assignee, sublessee or other
transferee, other than Landlord, shall assume all obligations of Tenant under
this Lease arising after the date of transfer, as provided in this Subparagraph
11(i), and shall be and remain liable jointly and severally with Tenant for the
payment of Base Rent and Additional Charges, and for the performance of all the
terms, covenants, conditions and agreements herein contained on Tenant's part to
be performed for the Term; provided, however, that the assignee, sublessee,
mortgagee, pledgee or other transferee shall be liable to Landlord for rent only
in the amount set forth in the Assignment or Sublease and shall only be required
to perform those obligations under the Lease to the extent that they relate to
the portion of the Premises subleased or interest in the Lease assigned. Any
Sublease or Assignment shall expressly provide that if this Lease terminates,
the subtenant or assignee will attorn to and become the tenant of the Landlord
at the option of Landlord if Landlord elects to recognize such assignment or
sublease upon such termination. No Assignment shall be binding on Landlord
unless the assignee or Tenant delivers to Landlord a counterpart of the
Assignment and an instrument that contains a covenant of assumption by the
assignee satisfactory in substance and form to Landlord, consistent with the
requirements of this Subparagraph 11(i), but the failure or refusal of the
assignee to execute such instrument of assumption shall not release or discharge
the assignee from its liability as set forth above.
(j) EFFECT ON EXTENSION OPTION. Notwithstanding any other
provision of this Lease, Tenant may not enter into any Sublease (including,
without limitation, a Sublease to a Strategic Partner) with a term which
exceeds the Expiration Date unless (i) the conditions to Tenant's right to
extend the Term contained in Paragraph 43 [Option to Renew] have been met at
or prior to Tenant's execution of such Sublease, and (ii) Tenant delivers its
Exercise Notice pursuant to Paragraph 43 [Option to Renew] at or prior to
Tenant's execution of such Sublease.
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12. INSURANCE AND INDEMNIFICATION.
(a) RELEASE OF LANDLORD. Landlord shall not be liable to Tenant, and
Tenant hereby waives all claims against Landlord Parties for any injury or
damage to any person or property in or about the Premises or Common Area by or
from any cause whatsoever (other than the gross negligence or willful misconduct
of Landlord or its agents, servants, contractors or employees (collectively,
including Landlord, "Landlord Parties")), and without limiting the generality of
the foregoing, whether caused by water leakage of any character from the roof,
walls, or other portion of the Buildings or Common Area, or caused by gas, fire,
oil, electricity, or any cause whatsoever, in, on, or about the Project or any
part thereof (other than that caused by the gross negligence or willful
misconduct of Landlord Parties). Tenant acknowledges that any casualty
insurance carried by Landlord will not cover, and Landlord shall not be
responsible for, loss of income to Tenant or damage to the Alterations in the
Premises installed by Tenant or Tenant's personal property located within the
Premises, including, without limitation, during construction of Base Building
Improvements and Tenant Improvements. Tenant shall be required to maintain the
insurance described in Subparagraph 12(c) [Tenant's Insurance Requirements]
below during the Term.
(b) TENANT INDEMNITY. Except to the extent caused by the gross
negligence or willful misconduct of the Landlord Parties, Tenant shall indemnify
and hold the Landlord Parties harmless from and defend the Landlord Parties
against any and all claims or liability for any injury or damage to any person
or property whatsoever occurring in or on the Premises. Tenant further agrees
to indemnify and hold the Landlord Parties harmless from, and defend the
Landlord Parties against, any and all claims, losses, or liabilities (including
damage to Landlord's property) arising from (x) any breach of this Lease by
Tenant and/or (y) the conduct of any work, business or activities of Tenant, its
agents, servants, employees, or invitees (collectively, including Tenant,
"Tenant Parties"), in or about the Project.
38
(c) TENANT'S INSURANCE REQUIREMENTS. Tenant shall procure at its
cost and expense and keep in effect during the Term (including, without
limitation, during the course of construction of Tenant Improvements) the
following insurance:
(1) COMMERCIAL GENERAL LIABILITY INSURANCE. A policy of
Commercial General Liability insurance written on an occurrence form, insuring
Landlord, any Mortgagee, Tenant and any manager under the CC&Rs with respect to
Phase I, SFWD with respect to the Hetch Hetchy Easement area, and any other
entity with an interest in any portion of the Common Area if designated by
Landlord, against any liability arising out of the ownership, use, occupancy,
maintenance, repair or improvement of the Premises or the Common Area and as
appurtenant thereto. Such insurance shall provide $5,000,000 combined single
limit for bodily injury and property damage. The limits of said insurance shall
not, however, limit the liability of the Tenant hereunder, and Tenant is
responsible for ensuring that the amount of liability insurance carried by
Tenant is sufficient for Tenant's purposes. Tenant may carry said insurance
under a blanket policy so long as "per location" liability aggregate limit is
maintained, satisfactory to Landlord. If Tenant shall fail to procure and
maintain said insurance, Landlord may, but shall not be required to, procure and
maintain same, but at the expense of Tenant. In addition, Landlord may elect,
at Landlord's sole option, to procure and maintain the liability insurance
required by this Subparagraph 12(c)(i) with respect to the Common Area, at the
expense of Tenant. Tenant shall deliver to Landlord prior to occupancy of the
Premises copies of policies of liability insurance required herein, and
certificates evidencing the existence and amounts of such insurance which name
as additional insured the City and County of San Francisco, its Public Utilities
Commission and SFWD (with respect to the Hetch Hetchy Easement areas), Landlord,
any Mortgagee, any manager under the CC&Rs, and any other entity with an
interest in any portion of the Common Area if designated by Landlord, with
evidence satisfactory to Landlord and any such parties of payment of premiums.
No policy shall be cancelable or subject to reduction of coverage except after
thirty (30) days' prior written notice to Landlord. Tenant acknowledges and
agrees that insurance coverage carried by Landlord will not cover Tenant's
property within the Premises and that Tenant shall be responsible, at
39
Tenant's sole cost and expense, for providing insurance coverage for Tenant's
movable equipment, furnishings, trade fixtures and other personal property in
or upon the Premises and for any alterations, additions or improvements
(other than the initial construction of the Tenant Improvements) to or of the
Premises or any part thereof made by Tenant, in the event of damage or loss
thereto from any cause whatsoever.
(2) TIME ELEMENT INSURANCE. Business income and extra expense
insurance, insuring Tenant for a period of eighteen (18) months against losses
arising from the interruption of Tenant's business, and for lost profits, and
charges and expenses which continue but would have been earned if the business
had gone on without interruption, insuring against such perils, in such form as
is reasonably satisfactory to Landlord. Such insurance should be without
deductible and on an agreed amount basis with no coinsurance payable.
(3) PROPERTY INSURANCE. Tenant shall maintain a policy or
policies of fire and property damage insurance under "special form" causes of
loss (formerly known as "all risk"), with an earthquake sprinkler leakage
endorsement, insuring the personal property, inventory, trade fixtures, and if
applicable boiler and machinery, within the Premises for the full replacement
value thereof. The proceeds from any of such policies shall be used for the
repair or replacement of such items so insured.
(4) WORKERS COMPENSATION INSURANCE. Tenant shall also maintain
a policy or policies of workers' compensation insurance and any other employee
benefit insurance sufficient to comply with all Laws.
Insurance required hereunder shall be in companies rated "A" VI or better in
"Best's Insurance Guide." Tenant shall deliver policies of such insurance or
certificates thereof to Landlord on or before the Occupancy Date, and thereafter
at least thirty (30) days before the expiration dates of expiring policies; and,
in the event Tenant shall fail to procure such insurance, or to deliver such
policies or certificates, Landlord may, at its option, procure same for the
account of Tenant, and the cost thereof shall be paid to Landlord as Additional
Charges within
40
fifteen (15) days after delivery to Tenant of bills therefor.
(d) SURVIVAL. The provisions of this Paragraph 12 shall survive the
expiration or termination of this Lease with respect to any claims or liability
arising out of events occurring prior to such expiration or termination.
(e) LANDLORD'S INSURANCE OBLIGATIONS. Landlord shall purchase and
keep in force a policy or policies of liability, fire and property damage
insurance, including provisions allowing the payment of deductibles (which shall
be payable by Tenant pursuant to Subparagraph 4(c)) and pre-payment for coverage
up to one year, covering loss or damage to the Premises (including the Tenant
Improvements) and Common Area in the amount of the full replacement value
thereof, insuring direct physical loss or damage included within the "special
form" classification of coverage and flood and earthquake insurance, if
available, plus a policy of rental income insurance in the amount of eighteen
(18) months Base Rent and Additional Charges and, at Landlord's election
pursuant to Subparagraph 12(c)(i) [Commercial General Liability Insurance],
Commercial General Liability insurance for the Common Area. At Tenant's
request, Landlord shall include any specific Alterations made in accordance with
this Lease in such policies, provided that Tenant provides Landlord with all
information reasonably required by Landlord or its insurer in connection with
such Alterations. In addition, during the course of construction of the Base
Building Improvements and Tenant Improvements, Landlord shall purchase and keep
in force Comprehensive Builder's Risk/Course of Construction insurance, with the
same requirements as policies described above but with appropriate adjustments
to reflect that the Project is under construction. Tenant shall pay to Landlord
the cost of all such policy or policies of insurance pursuant to Subparagraph
4(c) [Additional Charges for Expenses and Taxes], except for the cost of
Builder's Risk/Course of Construction insurance which is attributable to
construction of the Base Building Improvements (as determined by Landlord, in
its reasonable discretion). If Landlord's insurance cost is increased due to
Tenant's use of the Premises, Tenant agrees to pay to Landlord the full cost of
such increase. Tenant shall have no interest in nor any right to the proceeds
of any insurance procured by Landlord for the Premises or the Common Area.
Notwithstanding the foregoing obligations of
41
Landlord to carry insurance, Landlord may modify the foregoing coverages if
and to the extent it is commercially reasonable to do so; provided, however,
that such coverages shall not be voluntarily reduced by Landlord without
Tenant's prior consent.
13. WAIVER OF SUBROGATION. Notwithstanding anything to the contrary in
this Lease, to the extent that this waiver does not invalidate or impair their
respective insurance policies, the parties hereto release each other and their
respective contractors, subcontractors, agents, employees, successors, assignees
and subtenants, and any manager under the CC&Rs, from all liability for injury
to any person or damage to any property that is caused by or results from a risk
(i) which is actually insured against, to the extent of receipt of payment under
such policy (unless the failure to receive payment under any such policy results
from a failure of the insured party to comply with or observe the terms and
conditions of the insurance policy covering such liability, in which event, such
release shall not be so limited), (ii) which is required to be insured against
under this Lease or the Work Letter, or (iii) which would normally be covered by
the standard ISO "special" form of casualty insurance, without regard to the
negligence or willful misconduct of the entity so released. Landlord and Tenant
shall each obtain a similar waiver of subrogation requirement in their
respective construction contracts for the Base Building Improvements and Tenant
Improvements, respectively, and shall require that their respective contractors
obtain a similar waiver from all subcontractors of all tiers. Landlord and
Tenant shall each obtain, and shall cause their respective contractors and
subcontractors to obtain, from their respective insurers under all policies of
fire, theft and other property insurance maintained by either of them at any
time during the Term (including during the course of construction of the Base
Building Improvements and the Tenant Improvements) insuring or covering the
Project or any portion thereof of its contents therein, a waiver of all rights
of subrogation which the insurer of one party might otherwise, if at all, have
against the other party, and Landlord and Tenant shall each indemnify the other
against any loss or expense, including reasonable attorneys' fees, resulting
from the failure to obtain such waiver.
14. SERVICES AND UTILITIES.
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(a) TENANT'S RESPONSIBILITY. Subject to the provisions elsewhere
herein contained and to the Rules and Regulations, Tenant shall be responsible
for arranging for, and direct payment of any and all cost of, garbage pickup,
recycling, janitorial, security, landscape maintenance, street and parking lot
sweeping and resurfacing, transportation management programs, water,
electricity, gas, telephone, cable and digital communications equipment,
required inspections and testing of elevators, fire sprinklers and other life
safety equipment and Building Systems, and any and all other utilities and
services, and Tenant shall provide the maintenance, repair and replacement of
Building Systems in connection with such utilities and services as described in
Subparagraph 9(b) [Repair and Maintenance; Tenant's Obligations]. Without
limiting the foregoing, Tenant shall be responsible for the expense of
installation, operation, and maintenance of its electrical distribution system,
and telephone and other communications cabling, throughout Phase I, subject to
Paragraph 4 [Electrical Systems, Telephone Systems and Dedicated Communications
Lines] of the Work Letter. Landlord shall cooperate with Tenant's efforts to
arrange all such services. If Landlord assumes management of the Premises
pursuant to Subparagraph 5(a) [Management of the Premises], Tenant shall
cooperate fully with Landlord and abide by all the reasonable regulations and
requirements that Landlord may prescribe for the proper functioning and
protection of the Building Systems.
(b) NO EXCESSIVE LOAD. Tenant will not without the prior written
consent of Landlord, which consent shall not be unreasonably withheld or
delayed, use any apparatus or device in the Premises which, when used, puts an
excessive load on any Building or its structure or systems.
(c) NO LIABILITY OF LANDLORD. Landlord shall not be in default
hereunder or be liable for any damages directly or indirectly resulting from,
nor shall Rent be abated by reason of, (i) the installation (but not including
installation which is Landlord's obligation pursuant to the Work Letter), use or
interruption of use of any equipment in connection with the foregoing utilities
and services; (ii) failure to furnish or delay in furnishing any services to be
provided by Landlord when such failure or delay is caused by Force Majeure
Events, or by the making of repairs or improvements to Phase I or any portion
43
thereof which are the responsibility of Landlord under this Lease; or (iii) the
limitation, curtailment, rationing or restriction on use of water or
electricity, gas or any other form of energy or any other service or utility
whatsoever serving Phase I or any Building; provided, however, that (aa) Base
Rent and Additional Charges may be abated during the period of any total
interruption of utilities to the Premises which exceeds thirty (30) days only if
such interruption results from an insured casualty such that proceeds are
payable to Landlord under the rental interruption insurance carried by Landlord
pursuant to Subparagraph 12(e) [Landlord's Insurance Obligations] and only to
the extent of such proceeds actually received by Landlord, and (bb) subject to
the limitations on Tenant's recourse against Landlord contained in Subparagraph
21(e) [Tenant's Remedies], Landlord shall be liable for any actual damage to
Tenant's property to the extent caused by Landlord's gross negligence or willful
misconduct in connection with the failure to furnish or delay in furnishing any
services to be provided by Landlord. For purposes of this Lease and the Work
Letter, "Force Majeure Events" shall mean Acts of God or the elements, Acts of
the government, labor disturbances of any character, and other similar
conditions, beyond the reasonable control of the party whose performance,
obligation or liability is excused or delayed by such event (collectively,
"Force Majeure Events").
15. TENANT'S CERTIFICATES. Tenant, at any time and from time to time,
within ten (10) days after written request from Landlord, will execute,
acknowledge and deliver to Landlord and, at Landlord's request, to any
prospective purchaser, ground or underlying lessor or Mortgagee of any part of
the Project or any other party acquiring an interest in Landlord, a certificate
of Tenant substantially in the form attached as Exhibit "H" (with changes
required to make such certificate true). The certificate may also contain any
other information reasonably required by any such persons. It is intended that
any certificate of Tenant delivered pursuant to this Paragraph 15 may be relied
upon by Landlord and any prospective purchaser, ground or underlying lessor or
Mortgagee of any part of the Project or such other party. If requested by
Tenant, Landlord shall provide Tenant with a similar certificate.
16. HOLDING OVER. If Tenant (directly or through any successor-in-
interest of Tenant) remains in possession of all or any portion of the Premises
after the expiration or termination
44
of this Lease without the consent of Landlord, Tenant's continued possession
shall be on the basis of a tenancy at the sufferance of Landlord. In such
event, Tenant shall continue to comply with or perform all the terms and
obligations of Tenant under this Lease, except that the Monthly Base Rent
during Tenant's holding over shall be the greater of the then-fair market
rent for the Premises (as reasonably determined by Landlord) or one hundred
twenty-five percent (125%) of the Monthly Base Rent payable in the last full
month prior to the termination hereof (and shall be increased in accordance
with Subparagraph 4(b) [Adjustments in Base Rent]). In addition to Rent,
Tenant shall pay Landlord for all damages proximately caused by reason of the
Tenant's retention of possession. Landlord's acceptance of Rent after such
termination shall not constitute a renewal of this Lease, and nothing
contained in this provision shall be deemed to waive Landlord's right of
re-entry or any other right hereunder or at law. Tenant acknowledges that,
in Landlord's marketing and re-leasing efforts for the Premises, Landlord is
relying on Tenant's vacation of the Premises on the Expiration Date.
Accordingly, Tenant shall indemnify, defend and hold Landlord harmless from
and against all claims, liabilities, losses, costs, expenses and damages
arising or resulting directly or indirectly from Tenant's failure to timely
surrender the Premises, including (i) any loss, cost or damages suffered by,
any prospective tenant of all or any part of the Premises, and (ii)
Landlord's damages as a result of such prospective tenant rescinding or
refusing to enter into the prospective lease of all or any portion of the
Premises by reason of such failure of Tenant to timely surrender the Premises.
17. SUBORDINATION. Without the necessity of any additional document, this
Lease shall be subject and subordinate at all times to: (i) all ground leases
or underlying leases that may now exist or hereafter be executed affecting any
portion of the Premises or Common Area; and (ii) the lien of any mortgage or
deed of trust that may now exist or hereafter be executed in any amount for
which any portion of the Premises or Common Area or any ground leases or
underlying leases, or Landlord's interest or estate in any of said items, is
specified as security (any such lien being herein defined as a "Mortgage" and
the holder of any Mortgage being a "Mortgagee"). Notwithstanding the foregoing,
Landlord shall have the right to subordinate or cause to be subordinated any
such ground leases or underlying leases or any Mortgage to this Lease. If any
ground lease or underlying lease terminates, or any Mortgage is foreclosed or a
conveyance in lieu
45
of foreclosure is made, for any reason, Tenant shall, notwithstanding any
subordination, attorn to and become the Tenant of the successor in interest
to Landlord at the option of such successor in interest. Notwithstanding
anything to the contrary contained herein, this Lease shall not be subject or
subordinate to any ground or underlying lease or to any lien, Mortgage, or
other security interest affecting the Premises, and Tenant shall not attorn
to the ground lessor, Mortgagee or other holder of the interest to which this
Lease would be subordinated unless such ground lessor, Mortgagee or holder
executes a reasonable recognition and non-disturbance agreement which
provides that Tenant shall be entitled to continue in possession of the
Premises on the terms and conditions of this Lease if and for so long as
Tenant fully performs all of its obligations hereunder. Tenant shall execute
and deliver upon demand by Landlord, and in the form requested by Landlord or
any Mortgagee and reasonably acceptable to Tenant, any additional documents
evidencing the priority or subordination of this Lease with respect to any
such ground leases or underlying leases or the lien of any such Mortgage.
Tenant shall execute, deliver and authorize recordation of any such documents
within twenty (20) days after Landlord's written request.
18. RULES AND REGULATIONS. Tenant shall faithfully observe and comply
with the rules and regulations attached to this Lease as Exhibit "J" and all
reasonable nondiscriminatory modifications thereof and additions thereto from
time to time put into effect by Landlord, provided such rules and regulations do
not unreasonably interfere with Tenant's use of the Premises and the Common
Areas as contemplated by this Lease. In the event of an express and direct
conflict between the terms, covenants, agreements and conditions of this Lease
and those set forth in the rules and regulations, as modified and amended from
time to time by Landlord, this Lease shall control.
19. RE-ENTRY BY LANDLORD. Landlord reserves and shall at all reasonable
times have the right to re-enter the Premises and the Common Area (upon
reasonable prior notice (except in the case of an emergency), and subject to
Tenant's reasonable security precautions and the right of Tenant to accompany
Landlord at all times, if such entry is to the Premises) to inspect the same; to
supply any service to be provided by Landlord to Tenant hereunder (unless Tenant
is supplying such service); to show the Premises and Common Area to prospective
purchasers, Mortgagees or tenants
46
(as to prospective tenants other than prospective tenants of any recaptured
space, only during the last twelve (12) months of the initial Term or the
last twenty-four (24) months of any Extension Term); to post notices of
nonresponsibility; to alter, improve or repair the Premises and Common Area
and any portion thereof as required or allowed by this Lease or by law (and
Landlord may for that purpose erect, use, and maintain scaffolding, pipes,
conduits, and other necessary structures in and through the Premises and
Common Area where reasonably required by the character of the work to be
performed); and to take, or allow other parties to take, any actions
contemplated by the Declaration or the CC&Rs, or in connection with the
remediation orders described in Paragraph 40 [Hazardous Materials Liability],
the Clean-up Facilities, or related monitoring or remediation of Hazardous
Materials. Landlord shall not be liable in any manner for any inconvenience,
disturbance, loss of business, nuisance or other damage arising from
Landlord's or any third party's (including without limitation pursuant to the
Declaration or the CC&Rs) entry and acts pursuant to this Paragraph 19.
Tenant shall not be entitled to an abatement or reduction of Base Rent or
Additional Charges if Landlord exercises any rights reserved in this
paragraph. Tenant hereby waives any claim for damages for any injury or
inconvenience to or interference with Tenant's business, any loss of
occupancy or quiet enjoyment of the Premises, and any other loss occasioned
thereby, except to the extent caused by Landlord's gross negligence or
willful misconduct. For each of the aforesaid purposes, Landlord shall have
the right to use any and all means which Landlord reasonably determines are
necessary or proper to open doors on the Premises in an emergency in order to
obtain entry to any portion of the Premises. Any entry to the Premises, or
portion thereof obtained by Landlord by any of said means, or otherwise,
shall not under any emergency circumstances be construed or deemed to be a
forcible or unlawful entry into, or a detainer of, the Premises, or an
eviction, actual or constructive, of Tenant from the Premises or any portions
thereof. Landlord shall use best efforts during re-entry to not unreasonably
interfere with Tenant's use of the Premises or its business conducted therein.
20. INSOLVENCY OR BANKRUPTCY. The appointment of a receiver to take
possession of all or substantially all of the assets of Tenant, or an assignment
by Tenant for the benefit of creditors, or any action taken or suffered by
Tenant under any insolvency, bankruptcy, reorganization or other debtor relief
47
proceedings, (each of the foregoing, an "Insolvency Proceeding"), whether now
existing or hereafter amended or enacted, shall, at Landlord's option,
constitute a breach of this Lease by Tenant, unless a petition in bankruptcy,
receiver attachment, or other remedy pursued by a third party is discharged
within sixty (60) days. Upon the happening of any such event (including the
expiration of such 60 day period, if applicable) or at any time thereafter,
this Lease shall terminate five (5) days after written notice of termination
from Landlord to Tenant. In no event shall this Lease be assigned or
assignable by operation of law (except as provided in Paragraph 11
[Assignment and Subletting]) or by voluntary or involuntary bankruptcy
proceedings or otherwise. In no event shall this Lease or any rights or
privileges hereunder be an asset of Tenant under any bankruptcy, insolvency,
reorganization or other debtor relief proceedings.
21. DEFAULT.
(a) TENANT'S DEFAULT. The failure to perform or honor any covenant,
condition or representation made under this Lease shall constitute a default
hereunder by Tenant upon expiration of the appropriate grace period hereinafter
provided, except as expressly and specifically provided in Subparagraph 9(e)
[Repair and Maintenance; Cure Rights]. Tenant shall have a period of three (3)
days from the date of written notice from Landlord (which notice shall be in
lieu of and not in addition to the notice required by Section 1161 of the
California Code of Civil Procedure) within which to cure any default in the
payment of Base Rent or Additional Charges; provided, however, that Landlord
shall not be required to provide such notice more than twice during any four (4)
year period during the Term with respect to non-payment of Base Rent or
Additional Charges, the third such non-payment constituting default without
requirement of notice. Tenant shall have a period of thirty (30) days from the
date of written notice from Landlord (which notice shall be in lieu of and not
in addition to the notice required by Section 1161 of the California Code of
Civil Procedure) within which to cure any other curable default under this
Lease; provided, however, that with respect to any curable default other than
the payment of Base Rent or Additional Charges that cannot reasonably be cured
within thirty (30) days, the default shall not be deemed to be uncured if Tenant
commences to cure within thirty (30) days from Landlord's notice and continues
to prosecute diligently the
48
curing thereof. Notwithstanding the foregoing, (i) if a different cure
period is specified elsewhere in this Lease or the Work Letter with respect
to any specific obligation of Tenant, such specific cure period shall apply
with respect to a default of such obligation; (ii) the foregoing cure rights
shall not extend the specified time for compliance with any required
delivery, approval or performance obligation of Tenant under the Work Letter;
and (iii) the foregoing cure rights shall not apply to any Draw Event (as
defined in the Work Letter).
(b) PHASE II LEASE DEFAULT. From and after Landlord's completion of
its obligation to construct initial improvements under the Phase II Lease (if
any), any default under the Phase II Lease (if any) by Tenant or a subtenant of
Tenant which is not cured within any applicable grace or cure period provided
therein shall constitute a default under this Lease by Tenant; provided,
however, that an Insolvency Proceeding with respect to any subtenant shall not
constitute a default hereunder by Tenant so long as Tenant is not in breach of
any monetary, maintenance and repair obligations under the Phase II Lease and
Tenant is not itself then the subject of an Insolvency Proceeding. At any time
during the Term of this Lease, Landlord, in its sole discretion, may delete this
Subparagraph 21(b) from this Lease by delivering written notice thereof to
Tenant, without any further action required by Tenant. Upon request by either
party, the parties shall execute and deliver an amendment to this Lease
documenting any such deletion of this Paragraph by Landlord.
(c) LANDLORD'S REMEDIES. Upon an uncured default of this Lease by
Tenant, Landlord shall have the following rights and remedies in addition to any
other rights or remedies available to Landlord at law or in equity:
(1) The rights and remedies provided by California Civil Code,
Section 1951.2, including but not limited to, recovery of the worth at the time
of award of the amount by which the unpaid Base Rent and Additional Charges for
the balance of the Term after the time of award exceeds the amount of rental
loss for the same period that the Tenant proves could be reasonably avoided, as
computed pursuant to subsection (b) of said Section 1951.2;
(2) The rights and remedies provided by
49
California Civil Code, Section 1951.4, that allows Landlord to continue this
Lease in effect and to enforce all of its rights and remedies under this
Lease, including the right to recover Base Rent and Additional Charges as
they become due, for so long as Landlord does not terminate Tenant's right to
possession. Acts of maintenance or preservation, efforts to relet the
Premises or the appointment of a receiver upon Landlord's initiative to
protect its interest under this Lease shall not constitute a termination of
Tenant's rights to possession;
(3) The right to terminate this Lease by giving notice to Tenant
in accordance with applicable law;
(4) If Landlord elects to terminate this Lease, the right and
power to enter the Premises and remove therefrom all persons and property, and
to store such property in a public warehouse or elsewhere at the cost of and for
the account of Tenant, and to sell such property and apply such proceeds
therefrom pursuant to applicable California law.
(d) LANDLORD'S DEFAULT. Landlord shall have a period of thirty (30)
days from the date of written notice from Tenant of Landlord's default (any such
notice, a "Landlord Default Notice") to cure any default by Landlord under this
Lease; provided, however, that with respect to any default that cannot
reasonably be cured within thirty (30) days, the default shall not be deemed to
be uncured if Landlord commences to cure within thirty (30) days from receipt of
the Landlord Default Notice and continues to prosecute diligently the curing
thereof. Tenant agrees to give any Mortgagee, by registered or certified mail,
a copy of any Landlord Default Notice served upon the Landlord, provided that
prior to such notice Tenant has been notified in writing of the address of such
Mortgagee. If Landlord fails to cure such default within the time provided for
in this Lease, then the Mortgagee shall have an additional thirty (30) days
after the expiration of such cure period within which to cure such default
(provided that Tenant notifies Mortgagee concurrently with Tenant's delivery of
the Landlord Default Notice to Landlord; otherwise, Mortgagee shall have thirty
(30) days from the later of the date on which it receives notice of the default
from Tenant and the expiration of Landlord's cure period). If such default
cannot be cured by Mortgagee within the cure period, Tenant may not exercise any
of its remedies so long as Mortgagee has commenced and is diligently pursuing
the
50
remedies necessary to cure such default (including, but not limited to,
commencement of foreclosure proceedings, if necessary to effect such cure).
(e) TENANT'S REMEDIES.
(1) LIMITATION ON REMEDIES. If any default hereunder by
Landlord is not cured within the applicable cure period provided in Subparagraph
21(d) [Landlord's Default], Tenant's exclusive remedies shall be an action for
specific performance or action for actual damages. Tenant hereby waives the
benefit of any laws granting it (A) the right to perform Landlord's obligation,
or (B) the right to terminate this Lease or withhold Rent on account of any
Landlord default. Tenant shall look solely to Landlord's interest in Phase I
for the recovery of any judgment from Landlord. Landlord, or if Landlord is a
partnership, its partners whether general or limited, or if Landlord is a
corporation, its directors, officers or shareholders, shall never be personally
liable for any such judgment. Any lien obtained to enforce such judgment and
any levy of execution thereon shall be subject and subordinate to any Mortgage
(excluding any Mortgage which was created as part of an effort to defraud
creditors, i.e. a fraudulent conveyance); provided, however that any such
judgement and any such levy of execution thereon shall not be subject or
subordinated to any Mortgage that is created or recorded in the Official Records
of Santa Xxxxx County after the date of the judgement giving rise to such lien.
Notwithstanding the foregoing limitation of recourse to Landlord's interest in
Phase I, Tenant shall have the right to recover from Landlord the full amount of
the Letter of Credit, the Completion Assurance, or any other security deposit or
letter of credit provided by Tenant to Landlord pursuant to this Lease or the
Work Letter, to the extent that it is drawn upon, retained, or applied by
Landlord in violation of this Lease or the Work Letter.
(2) REMEDY FOR CONSTRUCTION DEFAULT. Notwithstanding the
limitation of recourse to Landlord's interest in Phase I contained in
Subparagraph 21(e)(1) above (but without negating Tenant's right of recovery
with respect to any letter of credit or security deposit pursuant to the last
sentence of such paragraph), if Landlord fails to use commercially reasonable
efforts (taking into account any Force Majeure Events) to meet any Condition
prior to its Initial Window Date (as it may be
51
extended pursuant to Paragraph 7 [Tenant Delays] of the Work Letter),
Tenant's exclusive remedy shall be to terminate this Lease pursuant to
Subparagraph 3(e) [Conditions; Window Dates]and commence an action for actual
damages incurred by Tenant as a result of such failure, up to a maximum
aggregate sum of Five Hundred Thousand Dollars ($500,000).
(f) CHRONIC DEFAULT. A party shall be in "Chronic Default" under
this Lease at any time that the other party has delivered more than two (2)
notices of default to such party hereunder during the previous four (4) years,
regardless of whether such defaults were cured within any applicable grace or
cure period; provided, however, that any such notice of default relating to a
default which was disputed, in good faith, and ultimately determined (by
agreement of the parties, arbitration or judicial action) not to be a default
shall not be considered for purposes of determining whether a party is in
Chronic Default.
22. DAMAGE AND DESTRUCTION
(a) RESTORATION. Subject to the termination rights set forth in
Subparagraphs 22(c) [Casualty at End of Term] and Subparagraph 22(d) [Mutual
Termination Option; Insured Casualty], if the Premises or any portion thereof
are damaged or destroyed by fire or other casualty, Tenant will promptly give
written notice thereof to Landlord, and:
(1) Tenant, at Tenant's sole cost and expense, and pursuant to
the provisions of Paragraph 8 [Additional Alterations] and/or the Work Letter,
as applicable, will promptly repair, restore and rebuild the Tenant Improvements
and any Alterations as nearly as possible to the condition they were in
immediately prior to such damage or destruction or with such changes or
alterations as may be made pursuant to Paragraph 8 [Additional Alterations]; and
(2) to the extent that any such damage or destruction affects
the Base Building Improvements, Landlord shall repair the same at Landlord's
cost to the extent of Landlord's obligations under the Work Letter.
(b) INSURANCE PROCEEDS. Subject to the provisions of
Subparagraph 22(f) [Proceeds Upon Termination], all insurance
52
proceeds recovered by the Landlord on account of such damage or destruction,
less the cost, if any, to the Landlord of such recovery and/or of any repair
to the Base Building Improvements for which Landlord is responsible, shall be
paid out from time to time to or at the direction of Tenant to the extent
required to repair, restore and rebuild the Tenant Improvements and any
Alterations covered by Landlord's insurance as required by Subparagraph
22(a)(1) [Restoration], pursuant to disbursement procedures established by
Landlord and/or any Mortgagee. The amount of available insurance proceeds
shall not limit Tenant's or Landlord's obligation to repair, restore and
rebuild the Tenant Improvements and Alterations and the Base Building
Improvements, respectively, in accordance with this Paragraph 22.
(c) CASUALTY AT END OF TERM. Notwithstanding anything to the
contrary contained in this Lease, if during the twelve (12) months prior to the
expiration of the Term, any of the Buildings or a substantial portion thereof
are damaged or destroyed by fire or other casualty, either Tenant or Landlord
shall have the option to terminate this Lease with respect to the affected
Building as of the date of such damage or destruction by written notice to the
other party given within thirty (30) days after such damage or destruction, in
which event the Landlord shall make a proportionate refund to the Tenant of such
Rent as may have been paid in advance. For the purposes of this paragraph, a
"substantial portion" of a Building shall mean twenty percent (20%) or more of
the Rentable Area thereof. If neither party elects to terminate this Lease,
Landlord and/or Tenant shall repair, restore and rebuild the Premises in
accordance with Subparagraph 22(a) [Restoration].
(d) MUTUAL TERMINATION OPTION; INSURED CASUALTY. Notwithstanding
anything to the contrary contained herein, if at any time during the Term the
Base Building Improvements for any Building shall be damaged or destroyed to the
extent that, in Landlord's reasonable judgment, they cannot be reconstructed
within eighteen (18) months following the date such reconstruction is commenced,
either Landlord or Tenant shall have the right to terminate this Lease as of the
date of such damage or destruction with respect to the affected Building by
written notice to the other party. Within forty-five (45) days after any damage
or destruction described in this Subparagraph 22(d), Landlord shall either
terminate the Lease with respect to the affected Building or deliver notice to
Tenant advising of
53
Landlord's election not to so terminate. If Tenant is so notified, but
Landlord does not elect to terminate, Tenant may terminate this Lease as of
the date of such damage or destruction with respect to the affected Building
by written notice to Landlord given within forty-five (45) days after receipt
of Landlord's notice. If neither party elects to terminate this Lease,
Landlord and/or Tenant shall repair, restore and rebuild the Premises in
accordance with Subparagraph 22(a) [Restoration].
(e) DESTRUCTION WHERE NO PROCEEDS ARE AVAILABLE. Subject to Tenant's
termination right under Subparagraph 22(c) [Casualty at End of Term], in the
event of a total or partial destruction of any Building (i) by a casualty of a
type not required to be insured against by Landlord under the terms of this
Lease, or (ii) under circumstances where Landlord has been required by any
Mortgagee to utilize substantially all of the insurance proceeds to pay down the
Mortgage, which destruction exceeds five percent (5%) of the replacement cost of
the Base Building Improvements, this Lease shall automatically terminate, unless
(x) Landlord elects to reconstruct the Base Building Improvements, and (y) the
damage can be reconstructed within eighteen (18) months following commencement
of reconstruction. If Landlord elects to reconstruct, the cost incurred by
Landlord for such reconstruction shall be amortized over the useful life of the
Base Building Improvements and such amortization shall be reimbursed by Tenant
to Landlord as an Additional Charge together with interest at the prime rate of
Xxxxx Fargo Bank plus two percent (2%) (adjusted monthly); provided, however,
that Tenant shall not be obligated to pay for any portion of the useful life of
the Base Building Improvements which extends beyond the Expiration Date. If
Landlord elects to reconstruct the Base Building Improvements, Tenant shall be
obligated to reconstruct the Tenant Improvements, at Tenant's cost.
(f) PROCEEDS UPON TERMINATION. If this Lease is terminated under
Subparagraph 22(c) [Casualty at End of Term] or Subparagraph 22(d) [Mutual
Termination Option; Insured Casualty] with respect to any Building(s), Landlord
shall be entitled to retain any and all insurance proceeds arising out of the
damage or destruction (including, without limitation, proceeds attributable to
the Tenant Improvements), except for any portion of the award specifically
compensating Tenant for the loss of its personal property, equipment and trade
fixtures. If Landlord elects to terminate this Lease pursuant to Subparagraph
22(d),
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Landlord shall reimburse Tenant for the unamortized Cost of Tenant
Improvements (determined in accordance with Subparagraph 11(e) [Bonus Rent])
as of the date of termination to the extent of available insurance proceeds
(so long as Landlord is in compliance with its obligations under Subparagraph
12(e) [Landlord's Insurance Obligations] with respect to such insurance)
after deducting the cost to Landlord of recovery of such proceeds and/or
repair to the Base Building Improvements. Upon any termination, Tenant
shall assign all of its rights to any insurance proceeds to which it is
entitled (except any portion specifically compensating Tenant for the loss of
its personal property, equipment and trade fixtures) to Landlord and shall
pay to Landlord the amount of any deductible under any insurance policy
attributable to the casualty resulting in such termination.
(g) RENT ABATEMENT. In the event of an insured casualty, the Base
Rent and Additional Charges during the period from the date of the damage or
destruction until completion of the restoration, repair, replacement or
rebuilding shall be abated by an amount that is in the same ratio to the Base
Rent and Additional Charges as the area of the Premises rendered unusable for
the permitted use hereunder bears to the area of the Premises prior to the
damage or destruction, but only to the extent of the amount of proceeds payable
to Landlord (taking into account any applicable waiting period or deductibles)
under the rental interruption insurance required to be carried by Landlord
pursuant to Subparagraph 12(e) [Landlord's Insurance Obligations].
(h) WAIVER OF STATUTORY PROVISIONS. Tenant hereby waives the
provisions of Section 1932.2, and Section 1933.4, of the Civil Code of
California, or any similar laws now or hereafter in effect, that would relieve
the Tenant from any obligation to pay Rent under this Lease due to any damage or
destruction.
23. EMINENT DOMAIN.
(a) ENTIRE BUILDING. If an entire Building shall be taken or
appropriated under the power of eminent domain or conveyed in lieu thereof (any
such event, a "Taking"), (i) this Lease and all right, title and interest of the
Tenant hereunder shall cease and come to an end on the date of vesting of title
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pursuant to such Taking with respect to such Building, (ii) the Base Rent and
Additional Charges payable with respect to said Building shall be apportioned as
of the date of such vesting, and (iii) this Lease shall be and remain unaffected
with respect to any portion of the Premises not taken.
(b) PARTIAL BUILDING; TERMINATION. If there is a Taking of less than
an entire Building, this Lease shall terminate as to the portion of the Building
so taken upon vesting of title pursuant to such Taking, and if, but only if,
such Taking is so extensive that it renders the remaining portion of such
Building unsuitable for the use being made of the Building on the date
immediately preceding such Taking, either the Tenant or the Landlord may
terminate this Lease as to the remainder of such Building by written notice to
the other party not later than thirty (30) days after the date of such vesting,
specifying as the date for termination a date not later than thirty (30) days
after such notice. On the date specified in such notice, (i) the term of this
Lease and all right, title and interest of Tenant hereunder shall cease with
respect to said Building, (ii) the Base Rent and Additional Charges payable with
respect to said Building shall be apportioned as of the date of such
termination, and (iii) this Lease shall be and remain unaffected with respect to
any Building not included in such Taking.
(c) PARTIAL BUILDING; RESTORATION. If there is a Taking of less than
an entire Building and this Lease is not terminated with respect to said
Building as provided in (b) above, this Lease shall terminate as to the portion
of the Building so taken upon vesting of title pursuant to such Taking. In any
such case, Landlord shall restore the Base Building Improvements (to the extent
of Landlord's obligations under the Work Letter) for the portion of the Building
continuing under this Lease at Landlord's cost and expense; provided, however,
that Landlord shall not be required to repair or restore any injury or damage to
the property of Tenant or to make any repairs or restoration of any Tenant
Improvements or Alterations installed on the Premises by or at the expense of
Tenant. Tenant shall, at Tenant's sole cost and expense, promptly and pursuant
to the provisions of Paragraph 8 [Additional Alterations], restore those
portions of the Tenant Improvements and Alterations not so taken. Thereafter,
the Base Rent and Additional Charges to be paid under this Lease for the
remainder of the Term shall be proportionately reduced, such that thereafter the
amounts to
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be paid by Tenant with respect to such Building shall be in the ratio that
the portion of the Building not so taken bears to the total area of the
Building prior to such Taking.
(d) END OF TERM TAKING. If, during the twelve (12) months prior to
the expiration of the Term, there is a Taking of a portion of the Building, both
Landlord and Tenant shall have the option, exercisable by written notice to the
other party given within thirty (30) days after such vesting of title, of
terminating this Lease with respect to said Building as of the date of vesting
of title pursuant to the Taking, in which event Landlord shall make a
proportionate refund to Tenant of any Base Rent and Additional Charges that have
been paid in advance.
(e) TAKING OF COMMON AREA. If there is a Taking of any portion of
the Common Area which causes the Premises to violate parking requirements,
building setbacks or access requirements under any applicable Laws, Landlord
shall cure such non-compliance by any reasonable means (including, without
limitation, by a Reconfiguration). If Landlord determines that such violation is
not curable by reasonable means, Landlord shall have the option, exercisable by
written notice to Tenant of terminating this Lease as of the date of vesting of
title pursuant to the Taking. If Landlord does not terminate this Lease
pursuant to the preceding sentence and fails to commence to cure such violation
within thirty (30) days after such Taking, Tenant shall have the option,
exercisable by written notice to Landlord, of terminating this Lease as of the
date of vesting of title pursuant to the Taking. If this Lease is terminated
pursuant to this Subparagraph 23(e), Landlord shall make a proportionate refund
to Tenant of any Base Rent and Additional Charges that have been paid in
advance. In addition, if Landlord exercises its right to terminate this Lease
pursuant to this Subparagraph 23(e), Tenant shall be entitled to any portion of
any award paid in connection with such Taking which is received by Landlord and
which is attributable to the then unamortized value of the Tenant Improvements.
(f) AWARD. Landlord shall receive (and Tenant shall assign to
Landlord upon demand from Landlord) any income, rent, award or any interest
therein which may be paid in connection with any Taking, whether partial or
total, and whether or not either Landlord or Tenant exercises any right it may
have to terminate this Lease. Tenant shall have no claim against
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Landlord for any part of such sum paid by virtue of the Taking, whether or
not attributable to the value of the unexpired term of this Lease. However,
Tenant shall be entitled to petition the condemning authority for the
following: (i) the then unamortized value of any Tenant Improvements or
Alterations paid for by Tenant which Tenant is required to remove upon
termination of the Lease; (ii) the value of Tenant's trade fixtures; (iii)
Tenant's relocation costs; and (iv) Tenant's goodwill, loss of business and
business interruption.
(g) TEMPORARY TAKING. Notwithstanding anything to the contrary
contained in this Paragraph 23, if there is a Taking of the temporary use or
occupancy of any part of the Premises during the Term, this Lease shall be and
remain unaffected by such Taking and Tenant shall continue to pay in full all
Base Rent and Additional Charges payable hereunder by Tenant during the Term.
In such event, Tenant shall be entitled to receive that portion of any award
which represents compensation for the use or occupancy of the Premises during
the Term, and Landlord shall be entitled to receive that portion of any award
which represents the cost of restoration of the Premises and the use and
occupancy of the Premises after the end of the Term. Notwithstanding the
foregoing, if Landlord determines in its reasonable judgment that any Taking of
the temporary use or occupancy of any part of the Premises will continue until
the end of the Term, either party may elect to terminate this Lease by written
notice to the other party at any time after Landlord has made such determination
and delivered written notice thereof to Tenant, and Landlord shall be entitled
to receive the entire award for the Taking, except for that portion which
represents compensation for the use or occupancy of the Premises during the
period of time prior to such termination.
(h) WAIVER OF STATUTORY PROVISIONS. Landlord and Tenant understand
and agree that the provisions of this Paragraph 23 are intended to govern fully
the rights and obligations of the parties in the event of a Taking of all or any
portion of the Premises. Accordingly, the parties each hereby waives any right
to terminate this Lease in whole or in part under Sections 1265.120 and 1265.130
of the California Code of Civil Procedure or under any similar Law now or
hereafter in effect.
24. SALE BY LANDLORD. Landlord shall not sell or otherwise convey its
interest in any portion of the Premises prior to
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substantial completion of the Base Building Improvements, other than by
foreclosure by, or a conveyance in lieu of foreclosure to, a Mortgagee who
has executed a recognition and non-disturbance agreement as contemplated by
Paragraph 17 [Subordination], or a subsequent conveyance by such Mortgagee.
If Landlord sells or otherwise conveys its interest in all or any portion of
the Premises, Landlord shall be relieved of its obligations under the Lease
with respect to the conveyed portion from and after the date of sale or
conveyance only when Landlord transfers the proportionate amount of any
security deposit of Tenant to its successor and the successor assumes in
writing the obligations to be performed by Landlord on and after the
effective date of the transfer, whereupon Tenant shall attorn to such
successor.
25. RIGHT OF LANDLORD TO PERFORM. All covenants and agreements to be
performed by Tenant under any of the terms of this Lease shall be performed by
Tenant at Tenant's sole cost and expense and without any abatement of Base Rent
or Additional Charges. If Tenant defaults in the payment of any sum of money,
other than Base Rent or Additional Charges, required to be paid by it hereunder
or fails to perform any other act on its part to be performed hereunder, and
such failure continues for ten (10) days after notice thereof by Landlord (or
such longer period as noted in Subparagraph 9(e) [Cure Rights] or Subparagraph
21(a) [Tenant's Default], except in the event of emergency), Landlord may, but
shall not be obligated to, make any such payment or perform any such act on
Tenant's part to be made or performed as provided in this Lease without waiving
or releasing Tenant from any obligations of Tenant. All sums so paid by
Landlord and all reasonable and necessary incidental costs incurred by Landlord
in connection therewith, together with interest thereon at the Default Rate from
the date of such payment by Landlord, shall be payable to Landlord on demand as
Additional Charges.
26. OWNERSHIP OF IMPROVEMENTS; SURRENDER OF PREMISES.
(a) OWNERSHIP OF TENANT IMPROVEMENTS & ALTERATIONS. The Tenant
Improvements and any Alterations constructed on or affixed to the Premises by or
on behalf of Tenant pursuant to the terms and conditions of this Lease and the
Work Letter, except for Tenant's movable furniture and equipment, trade fixtures
and Alterations which can be removed without damage to the Premises, but
including without limitation all electrical conduits and
59
wiring and other equipment located in such conduits, shall become Tenant's
property upon their completion, shall remain Tenant's property throughout the
Term of this Lease and shall become Landlord's property upon the expiration
or earlier termination of this Lease.
(b) DELIVERY AND RESTORATION OF PREMISES. At the end of the Term
or any renewal thereof or other sooner termination of this Lease, Tenant will
peaceably deliver to Landlord possession of the Premises, together with all
improvements or additions thereon (including, without limitation, the Tenant
Improvements and Alterations which Landlord does not require Tenant to remove
pursuant to Paragraph 8 [Additional Alterations] or the Work Letter), and all
electrical conduits, substructures, switches and wiring located on or under
the Premises or Common Area and communications equipment, cable conduits and
wiring, and other related equipment located within any such conduits, in the
same condition as received or first installed, subject to normal wear and
tear but in the condition described on Exhibit "K" attached hereto, subject
to the terms of Paragraph 23 [Eminent Domain], and the rights and obligations
of Landlord and Tenant concerning casualty damage pursuant to Paragraph 22
[Damage and Destruction]. At Landlord's election, in lieu of requiring
Tenant to restore the Premises (or any portion thereof) to the condition
required by this Paragraph, Landlord may require Tenant to pay Landlord the
reasonable estimated cost thereof. In addition, upon the termination of this
Lease, Tenant shall deliver the electrical facilities and distribution system
and the telephone and other communications facilities and equipment serving
the Premises (including each Building) in a condition and configuration
acceptable at such time for transfer of its ownership and control to Pacific
Gas and Electric (or any successor provider of electric services) ("PG&E")
with respect to the electrical distribution system, and in an appropriate and
usable condition and configuration for the provision of telephone and other
communications services by Pacific Xxxx (or any successor provider of local
telephone services)("PacBell") with respect to the communications facilities,
such that each Building may be separately metered for electric service and
provided with appropriate telephone and other communications service. Any
repair, upgrading or reconfiguration of the electrical distribution system or
the telephone and other communications facilities and equipment required in
order to meet then-existing PG&E requirements or then current PacBell
communication
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standards, as applicable, shall be completed by Tenant, at Tenant's expense,
prior to the termination of the Lease (or, at Landlord's election, Tenant
shall pay Landlord the reasonable estimated cost of such repair, upgrading or
reconfiguration). Any cable or electrical or communications conduits or other
portions of Tenant's electrical distribution system or communications system
located throughout the Project shall not create any easement, license or
other property interest or right of any kind in Tenant, other than Tenant's
right to the use of such improvements pursuant to the terms and conditions of
this Lease, and such right shall not survive the expiration or earlier
termination of this Lease. Tenant may, upon the termination of this Lease,
remove all movable furniture, trade fixtures and equipment belonging to
Tenant which is not an integral part of any Building System, at Tenant's sole
cost, provided that Tenant repairs any damage caused by such removal.
Property not so removed shall be deemed abandoned by Tenant, and title to the
same shall thereupon pass to Landlord. Upon request by Landlord, and unless
otherwise agreed to in writing by Landlord pursuant to Paragraph 8
[Additional Alterations] or the Work Letter, Tenant shall either (i) remove,
at Tenant's sole cost, any or all Tenant Improvements and Alterations to the
Premises installed by or at the expense of Tenant and all movable furniture
and equipment belonging to Tenant which may be left by Tenant and repair any
damage resulting from such removal, or (ii) pay Landlord the reasonable
estimated cost thereof.
(c) NO MERGER. The voluntary or other surrender of this Lease by
Tenant, or a mutual cancellation thereof, shall not work a merger, and shall, at
the option of Landlord, terminate all or any existing subleases or subtenancies,
or may, at the option of Landlord, operate as an assignment to it of any or all
such subleases or subtenancies.
27. WAIVER. If either Landlord or Tenant waives the performance of any
term, covenant or condition contained in this Lease, such waiver shall not be
deemed to be a waiver of any subsequent breach of the same or any other term,
covenant or condition contained herein. Furthermore, the acceptance of Base
Rent or Additional Charges by Landlord shall not constitute a waiver of any
preceding breach by Tenant of any term, covenant or condition of this Lease,
regardless of Landlord's knowledge of such preceding breach at the time Landlord
accepted such Base Rent or Additional Charges. Failure by Landlord to enforce
any
61
of the terms, covenants or conditions of this Lease for any length of time
shall not be deemed to waive or to decrease the right of Landlord to insist
thereafter upon strict performance by Tenant. Waiver by Landlord of any
term, covenant or condition contained in this Lease may only be made by a
written document signed by Landlord.
28. NOTICES. Except as otherwise expressly provided in this Lease, and
except for routine bills or invoices for Base Rent or Additional Charges
delivered by Landlord pursuant to Paragraph 4 [Rent] which Landlord may elect to
deliver by first class U.S. mail, any bills, statements, notices, demands,
requests or other communications given or required to be given under this Lease
shall be effective only if rendered or given in writing, sent by certified mail
(return receipt requested), reputable overnight carrier, or delivered
personally, (i) to Tenant at Tenant's address set forth in the Basic Lease
Information, or (ii) to Landlord at Landlord's address set forth in the Basic
Lease Information; or (iii) to such other address as either Landlord or Tenant
may designate as its new address for such purpose by notice given to the other
in accordance with the provisions of this Paragraph 28. Any xxxx, statement,
notice, demand, request or other communication shall be deemed to have been
rendered or given on the date the return receipt indicates delivery of or
refusal of delivery if sent by certified mail, the day upon which recipient
accepts and signs for delivery from a reputable overnight carrier or on the date
a reputable overnight carrier indicates refusal of delivery, upon the date
personal delivery is made, or three (3) days after mailed by first class U.S.
mail.
29. TAXES PAYABLE BY TENANT. Prior to delinquency Tenant shall pay all
taxes levied or assessed upon Tenant's equipment, furniture, fixtures and other
personal property located in or about the Premises. If the assessed value of
Landlord's property is increased by the inclusion therein of a value placed upon
Tenant's equipment, furniture, fixtures or other personal property, Tenant shall
pay to Landlord, upon written demand, the taxes so levied against Landlord, or
the proportion thereof resulting from said increase in assessment.
30. ABANDONMENT. Tenant shall not abandon the Premises and cease
performing its financial and maintenance obligations under this Lease at any
time during the Term. If Tenant abandons and
62
ceases performing its financial and maintenance obligations under this Lease,
or surrenders the Premises or is dispossessed by process of law or otherwise,
any personal property belonging to Tenant and left on the Premises shall, at
the option of Landlord, be deemed to be abandoned and title thereto shall
thereupon pass to Landlord. Notwithstanding anything to the contrary
contained herein, Tenant may not vacate the Premises if such would result in
a termination of Landlord's insurance. Upon Tenant's request, Landlord will
ask its insurer if such vacation of the Premises would result in termination
of its current insurance policy. Solely for purposes of this Paragraph 30,
Tenant shall not be deemed to have abandoned the Premises solely because
Tenant is not occupying the Premises.
31. SUCCESSORS AND ASSIGNS. Subject to the provisions of Paragraphs 11
[Assignment and Subletting] and 24 [Sale by Landlord], the terms, covenants and
conditions contained herein shall be binding upon and inure to the benefit of
the parties hereto and their respective legal and personal representatives,
successors and assigns.
32. ATTORNEY'S FEES. If Tenant or Landlord brings any action for any
relief against the other, declaratory or otherwise, arising out of this Lease,
including any suit by Landlord for the recovery of Base Rent or Additional
Charges or possession of the Premises, the losing party shall pay to the
prevailing party a reasonable sum for attorney's fees, which shall be deemed to
have accrued on the commencement of such action and shall be paid whether or not
the action is prosecuted to judgment.
33. LIGHT AND AIR. Tenant covenants and agrees that no diminution of
light, air or view by any structure which may hereafter be erected (whether or
not by Landlord) shall entitle Tenant to any reduction of Rent under this Lease,
result in any liability of Landlord to Tenant, or in any other way affect this
Lease or Tenant's obligations hereunder.
34. SECURITY DEPOSIT.
(a) LETTER OF CREDIT. At such time as Landlord acquires the Land and
the Credit Termination Right expires or is waived by Landlord, Tenant shall
deliver to Landlord an unconditional, irrevocable, transferable letter of
credit, in the
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amount of Seven Million Five Hundred Thousand Dollars ($7,500,000), issued by
Bank of America NT & SA, or another financial institution reasonably
acceptable to Landlord, in the form attached hereto as Exhibit "M", with an
original term of no less than one year and automatic extensions through the
end of the Term of this Lease and sixty (60) days thereafter (the "Letter of
Credit"). Tenant shall keep the Letter of Credit, at its expense, in full
force and effect until the sixtieth (60th) day after the Expiration Date or
other termination of this Lease, to insure the faithful performance by Tenant
of all of the covenants, terms and conditions of this Lease, including,
without limitation, Tenant's obligations to repair, replace or maintain the
Premises and to maintain the Letter of Credit, and Tenant's payment
obligations with respect to Tenant Modifications (as defined in the Work
Letter) being made by Change Order to Landlord's construction contract. The
Letter of Credit shall provide thirty (30) days' prior written notice to
Landlord of cancellation or material change thereof, and shall further
provide that, in the event of any nonextension of the Letter of Credit at
least thirty (30) days prior to its expiration, the entire face amount shall
be payable to Landlord, and Landlord shall hold any funds so obtained as the
security deposit required under this Lease. Such funds so obtained by
Landlord, or any unused portion thereof, shall be returned to Tenant upon
replacement of the Letter of Credit. If Landlord uses any portion of any cash
security deposit to cure any default by Tenant hereunder, Tenant shall
replenish the security deposit to the original amount within ten (10) days of
notice from Landlord. Tenant's failure to do so shall become a material
default under this Lease. Landlord shall keep any cash security funds
separate from its general funds, and shall invest such cash security at
Tenant's reasonable direction, and any interest actually earned by Landlord
on such cash security shall be paid to Tenant on a quarterly basis within ten
(10) business days after receipt thereof by Landlord. If an uncured or
incurable default occurs under this Lease, or if Tenant is the subject of an
Insolvency Proceeding, Landlord may present its written demand for payment of
the entire face amount of the Letter of Credit and the funds so obtained
shall be paid to, or as otherwise directed by, Landlord. Landlord may retain
such funds to the extent required to compensate Landlord for damages
incurred, or to reimburse Landlord as provided herein, in connection with any
such default, and any remaining funds shall be held as a cash security
deposit.
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(b) REDUCTION AFTER OCCUPANCY. The face amount of the Letter of
Credit may be reduced to Three Million Two Hundred Seventy Thousand Dollars
($3,270,000) either (i) if the Phase II Lease is terminated by either party due
to the failure of any of the Conditions Precedent (as defined in the Phase II
Lease) or if Landlord exercises its Credit Termination Right under the Phase II
Lease; or (ii) so long as Tenant has not defaulted under this Lease, when Tenant
has completed and paid the entire cost of all Tenant Improvements and Tenant
Modifications, has fully discharged any mechanics' or materialmen's liens
against the Premises in connection with the Tenant Improvements and Tenant
Modifications, and is conducting business at the Premises.
(c) FURTHER REDUCTION. The face amount of the Letter of Credit
may be reduced to One Million Six Hundred Thirty-Five Thousand Dollars
($1,635,000) on the eighth (8th) anniversary of the Rent Commencement Date,
so long as (i) Tenant is not in default under the Lease on such date, and
(ii) Tenant is not in Chronic Default under this Lease on such date. In
addition, the face amount of the Letter of Credit may be reduced to an amount
equal to one month's Base Rent when Tenant can establish to Landlord's
reasonable satisfaction that Tenant has achieved annual net income of at
least Fifty Million Dollars ($50,000,000), as reflected in audited financial
statements (which include an unqualified certification by a licensed
certified public accountant reasonably acceptable to Landlord), for either
(x) three consecutive years, or (y) three out of four consecutive years.
(d) SUBSTITUTION OF CASH COLLATERAL. In lieu of, or in replacement
of, the Letter of Credit, Tenant may deliver to Landlord at any time during the
Term a cash security deposit in the face amount required of the Letter of
Credit, provided that Landlord shall have no additional liability or reduced
benefits from that which Landlord would have if Tenant provided a Letter of
Credit. All terms, conditions and requirements with respect to the Letter of
Credit contained in this Paragraph 34, including, without limitation,
application of proceeds, reduction of amount, and investment requirements for
cash security, shall apply to any such cash security deposit.
35. FINANCIAL INFORMATION. Tenant will furnish to the
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Landlord within ninety (90) days after the end of each calendar year, copies
of audited, consolidated financial statements, which shall include, without
limitation, balance sheets, statements of income and expenses and sources and
uses of funds of the Tenant and its subsidiaries for such calendar year, all
in reasonable detail and stating in comparative form the figures as of the
end of and for the previous calendar year and including appropriate
footnotes, prepared in accordance with generally accepted accounting
principles, and certified and audited by independent public accountants of
recognized standing reasonably satisfactory to the Landlord; provided,
however, that so long as Tenant is a publicly traded corporation, in lieu of
the foregoing Tenant shall provide Landlord with copies of Tenant's annual
report and 10K Filing when such documents are released to the public. Tenant
hereby covenants and warrants to Landlord that all financial information and
other descriptive information regarding Tenant's business, which has been or
shall be furnished to Landlord, is and shall be accurate and complete at the
time of delivery to Landlord.
36. PARKING. Tenant shall have the right to use the number of parking
spaces in the Common Area and the common area elsewhere in the Project,
collectively, which is in the same proportion to the total parking spaces as the
Rentable Area of the Premises is to the total rentable area in the Project,
which shall not be less than the parking required for Phase I by the City of
Mountain View (the "Minimum Parking"). Tenant shall have the right to use the
Minimum Parking either on the Common Area or, if a Reconfiguration or expansion
of the Project occurs, on the common area located in Phase I and/or Phase II.
These spaces shall be used in common with other tenants and occupants of the
Project, if any, subject to the CC&Rs and the Rules and Regulations. Tenant and
Landlord acknowledge that, (a) the City of Mountain View has approved portions
of the Common Area for landscape reserves (the "Landscape Reserves"), and (b)
Tenant has requested that a portion of the Common Area be improved with certain
recreational facilities (including sporting courts and facilities) (the
"Recreational Facilities"), and such Landscape Reserves and Recreational
Facilities are located on portions of the Common Area that could otherwise
accommodate additional parking. If at any time during the Term Tenant desires
to increase the parking on the Common Area by the removal or alteration of all
or a portion of the Recreational Facilities or Landscape Reserves, any such
demolition or alteration shall be
66
accomplished at Tenant's cost and expense, in accordance with the terms of
the Work Letter applicable to Tenant Modifications or as otherwise agreed by
Landlord.
37. MISCELLANEOUS.
(a) DEFINED TERMS. The term "Landlord" shall include Landlord and
its successors and assigns. In any case where this Lease is signed by more than
one person, the obligations hereunder shall be joint and several. The term
"Tenant" shall include Tenant and its successors and assigns.
(b) OTHER TERMS. Time is of the essence of this Lease and all of its
provisions. This Lease shall in all respects be governed by the laws of the
State of California. This Lease, together with its exhibits, contains all the
agreements of the parties hereto and supersedes any previous negotiations.
There have been no representations made by the Landlord or understandings made
between the parties other than those set forth in this Lease and its exhibits.
This Lease may not be modified except by a written instrument by the parties
hereto, except as expressly and specifically provided in Subparagraphs 1(d)
[Reconfiguration of Phase I] and 21(b) [Phase II Lease Default]. The paragraph
headings herein are for convenience of reference and shall in no way define,
increase, limit or describe the scope or intent of any provision of this Lease.
(c) QUIET ENJOYMENT. Upon Tenant paying the Base Rent and
Additional Charges and performing all of Tenant's obligations under this
Lease, Tenant may peacefully and quietly enjoy the Premises during the Term
as against all persons or entities lawfully claiming by or through Landlord;
subject, however, to the provisions of this Lease.
(d) SURVIVAL OF INDEMNITIES; IMMEDIATE OBLIGATION TO DEFEND. All
indemnities contained herein shall survive the expiration or earlier termination
of this Lease. With respect to each of the indemnities contained in this Lease,
the indemnitor has an immediate and independent obligation to defend the
indemnitee from any claim which actually or potentially falls within the
indemnity provision, which obligation arises at the time such claim is tendered
to the indemnitor by the indemnitee and continues at all times thereafter.
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38. REPRESENTATIONS AND WARRANTIES.
(a) LANDLORD'S REPRESENTATIONS AND WARRANTIES. Landlord represents
and warrants to Tenant that, (i) to Landlord's best knowledge, the Premises are
not now in violation of any applicable Laws other than Environmental Laws; (ii)
the zoning requirements currently applicable to the Premises permit the
permitted use under this Lease; and (iii) to Landlord's best knowledge, upon
substantial completion of the Base Building Improvements, the Premises will not
be in violation of any applicable Laws other than Environmental Laws (subject to
completion of the Tenant Improvements, to the extent such completion is required
for compliance with any Law). For purposes of this Paragraph 38, the term "to
Landlord's best knowledge" shall mean the actual knowledge of Xxxxxxx X. Xxxxxx,
III, Xxxx X. Xxxxxxxx and Xxxxx X. Xxxxxx ("Landlord's Representatives") after
reasonably appropriate and diligent inquiry in connection with the acquisitions
of the Land and construction of the Base Building Improvements. Landlord hereby
represent that Landlord's Representatives are the representatives of Landlord
with supervisory responsibilities concerning the Premises, the acquisition of
the Land and the construction of the Base Building Improvements who would, in
the ordinary course of their responsibilities, receive notice from persons or
entities of any of the matters described in the representations and warranties
in this Lease.
(b) TENANT'S REPRESENTATIONS AND WARRANTIES. Tenant represents and
warrants to Landlord that, to Tenant's best knowledge, upon substantial
completion of the Tenant Improvements, the Premises will not be in violation of
any applicable Laws other than Environmental Laws. For purposes of this
Paragraph 38, the term "to Tenant's best knowledge" shall mean the actual
knowledge of Xx Xxxxxxx, Xxxxx Xxxxx, Xxxxx Xxxx, Xxx Xxxxxx and Xxxxxxx
Xxxxxxxx ("Tenant's Representatives") after reasonably appropriate and diligent
inquiry in connection with construction of the Tenant Improvements. Tenant
hereby represents that Tenant's Representations are the representatives of
Tenant with supervisory responsibilities concerning the Premises, this Lease and
the construction of the Tenant Improvements who would, in the ordinary course of
their responsibilities, receive notice from persons or entities of any of the
matters described in the representations and warranties in this Lease.
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39. REAL ESTATE BROKERS. Each party represents that it has not had
dealings with any real estate broker, finder or other person with respect to
this Lease in any manner, except for any broker named in the Basic Lease
Information, whose fees or commission, if earned, shall be paid by the party
designated in the Basic Lease Information, in accordance with a separate
agreement with such party. Each party shall hold harmless the other party from
all damages resulting from any claims that may be asserted against the other
party by any other broker, finder or other person with whom the other party has
or purportedly has dealt.
40. HAZARDOUS MATERIALS LIABILITY. Tenant is aware that Phase I is
subject to remediation orders issued by the U.S. Environmental Protection Agency
("EPA"), as disclosed on Exhibit "L". In addition, Tenant acknowledges that
Tenant has received from Landlord a copy of the reports listed on Schedule 1 to
Exhibit "L", and has been given sufficient opportunity to review the reports
listed on Schedule 2 to Exhibit "L" which are located at Landlord's office (all
such reports being collectively defined as the "Environmental Reports"). In
addition, in connection with the remediation orders, the Clean-up Facilities and
related monitoring and remediation of Hazardous Materials, a Declaration of
Restrictions and Access Agreement (as such document may be modified from time to
time as provided in Paragraph 6 [Restrictions on Use], the "Declaration"), in
substantially the form attached hereto as Exhibit "C", encumbers or will
encumber Phase I and Phase II (including the Premises) and, regardless of when
it is recorded, will at all times be superior in priority to this Lease, and
Tenant's occupancy and use of the Premises may be restricted by the Declaration.
Landlord shall have the right to modify the Declaration during the Term as may
be reasonably required in connection with the remediation of Hazardous Materials
and Clean-Up Facilities, so long as such modification does not materially
adversely affect Tenant's permitted use of the Premises, Tenant's Minimum
Parking or Tenant's access to the Premises. If necessary, Tenant shall execute
such documents as are reasonably necessary to cause this Lease to become
subordinate to the Declaration, as it may be modified from time to time in
accordance with the preceding sentence.
(a) DEFINITIONS OF HAZARDOUS MATERIALS AND ENVIRONMENTAL LAWS. For
the purpose of this Lease, "Hazardous Materials" shall be defined, collectively,
as any and all substances, chemicals, wastes, sewage or other materials that are
69
now or hereafter regulated, controlled or prohibited by any local, state or
federal law or regulation requiring removal, warning or restrictions on the use,
generation, disposal or transportation thereof including, without limitation,
(a) any substance defined as a "hazardous substance", "hazardous material",
"hazardous waste", "toxic substance", or "air pollutant" in the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601, ET SEQ., the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, ET SEQ., the Resource Conservation and Recovery Act ("RCRA"), 42
U.S.C. Section 6901, ET SEQ., the Federal Water Pollution Control Act ("FWPCA"),
33 U.S.C. Section 1251 ET SEQ., the Clean Air Act ("CAA"), 42 U.S.C. Section
7401 ET SEQ., or the Toxic Substances Control Act ("TSCA"), 15 U.S.C. Section
2601, ET SEQ., all as previously amended and amended hereafter; and (b) any
hazardous substance, hazardous waste, toxic substance, toxic waste, air
pollutant, hazardous material, waste, chemical, or compound described in any
other federal, state, or local statute, ordinance, code, rule, regulation,
order, decree or other law now or at any time hereafter in effect regulating,
relating to or imposing liability or standards of conduct concerning any
hazardous, toxic, or dangerous substance, chemical, material, compound or waste.
As used herein, the term "Hazardous Materials" also means and includes, without
limitation, asbestos; flammable, explosive or radioactive materials; gasoline or
gasoline additives; oil; motor oil; waste oil; petroleum (including, without
limitation, crude oil or any component thereof); petroleum-based products;
paints and solvents; lead; cyanide; DDT; printing inks; acids; pesticides;
ammonium compounds; polychlorinated biphenyls; and other regulated chemical
products. The statutes, regulations, court and administrative agency decisions,
and other laws now or at any time hereafter in effect that govern or regulate
Hazardous Materials are herein collectively referred to as "Environmental Laws".
(b) TENANT INDEMNITY. Tenant releases Landlord from any liability
for, waives all claims against Landlord and shall indemnify, defend and hold
harmless the Landlord Parties against, any and all claims, suits, loss, costs
(including costs of investigation, clean up, monitoring, restoration and
reasonable attorney fees), damage or liability, whether foreseeable or
unforeseeable, by reason of property damage (including diminution in the value
of the property of the Landlord Parties), personal injury or death directly
arising from or related to Hazardous Materials released, manufactured,
discharged, disposed, used or
70
stored on, in, or under Phase I during the initial Term and any extensions of
this Lease, regardless of who caused the same, except for Hazardous Material
(i) which migrates through the air, groundwater or otherwise to Phase I
unless the Hazardous Material migrating through the air, soil or groundwater
to Phase I originated from a site where Tenant caused the contamination by
such Hazardous Material, or (ii) which was present on Phase I immediately
prior to the Occupancy Date and was not caused by Tenant, its employees,
invitees, subtenants, agents, assignees, licensees or servants. The
provisions of this Tenant Indemnity regarding Hazardous Materials shall
survive the termination of the Lease.
(c) LANDLORD INDEMNITY. Landlord releases Tenant from any liability
for, waives all claims against Tenant and shall indemnify, defend and hold
harmless Tenant, its officers, employees, and agents to the extent of Landlord's
interest in Phase I, against any and all actions by any governmental agency for
clean up of Hazardous Materials on or under Phase I, including costs of legal
proceedings, investigation, clean up, monitoring, and restoration, including
reasonable attorney fees, if, and to the extent, the Hazardous Materials occur
on Phase I under the following circumstances: (i) the Hazardous Materials are
not "Identified Hazardous Materials" or "Existing Hazardous Materials" (as both
terms are defined in the Seller Indemnity), and were released or disposed of on
property which was not at the time of such disposal or release leased, owned or
otherwise used or controlled by Tenant and such Hazardous Material migrated
through the air or groundwater to Phase I; or (ii) the contamination of Phase I
was caused by the release, disposal, use or storage of Hazardous Materials in,
on or about Phase I by Landlord, its employees, agents, licensees or servants.
The provisions of this Landlord Indemnity regarding Hazardous Materials shall
survive the termination of the Lease.
(d) SELLER INDEMNITY. It is a condition precedent to Tenant's
obligations under this Lease, and to Tenant's obligation to commence
construction of the Tenant Improvements pursuant to the Work Letter, that
Landlord will obtain from Seller an indemnity with respect to certain Hazardous
Materials existing on Phase I as of the date of Landlord's acquisition of Phase
I, in substantially the form attached hereto as Exhibit "Q" (the "Seller
Indemnity"), which directly indemnifies Tenant; provided, however, that Tenant
may, at its election, commence construction of Tenant Improvements before the
Seller Indemnity has been
71
obtained without waiving the foregoing condition with respect to Tenant's
obligations under this Lease.
(e) RELEASE OF LANDLORD. Notwithstanding any other provision of this
Lease, Tenant releases the Landlord Parties from any liability for, and waives
all claims against the Landlord Parties with respect to, the presence of
Hazardous Materials in, on or about Phase I prior to the Occupancy Date (except
claims and liability which are included in Landlord's indemnity contained in (c)
above and not covered by the Seller Indemnity). Tenant agrees that its recourse
with respect to any liability or claims released by this Paragraph shall be
limited to direct claims against Seller pursuant to the Seller Indemnity.
(f) TENANT'S DISCLOSURE OBLIGATIONS. Tenant represents that during
the Term it will not be a User (as such term is defined in the form of Seller
Indemnity attached as Exhibit "Q"). Except for immaterial amounts of toxic
materials incidental to office use (e.g. copier toner, cleaning supplies,
petroleum products in cars), hydraulic fluids used in Building Systems,
Hazardous Materials used in the operation of any generators, and those materials
listed on Exhibit "N", Tenant will not use any Hazardous Materials within Phase
I and shall comply with any applicable Environmental Laws and with the Seller
Indemnity as it relates to Tenant. Without limiting the foregoing, Tenant shall
not use any Hazardous Materials within Phase I in a manner that would reduce or
limit Seller's obligations under the Seller Indemnity. Tenant shall immediately
notify Landlord and Seller if and when Tenant learns or has reason to believe
there has been any release of Hazardous Materials in, on or about the Project
during the Term.
41. ARBITRATION OF DISPUTES.
ANY CONTROVERSY OR CLAIM ARISING OUT OF THE SPECIFIC PROVISIONS OF THE LEASE
LISTED BELOW, OR ANY OTHER PROVISION OF THIS LEASE THAT EXPRESSLY PROVIDES FOR
ARBITRATION PURSUANT TO THIS PARAGRAPH, OR A BREACH OF ANY SUCH PARAGRAPHS OR
PROVISIONS SOLELY BETWEEN LANDLORD AND TENANT, BUT NOT INCLUDING A DEFAULT WITH
RESPECT TO THE TIMELY PAYMENT OF BASE RENT AND ADDITIONAL CHARGES, SHALL BE
SETTLED BY ARBITRATION IN ACCORDANCE WITH THE RULES OF THE AMERICAN ARBITRATION
ASSOCIATION, AND JUDGMENT ON THE AWARD RENDERED BY THE ARBITRATOR(S) MAY BE
ENTERED IN ANY COURT HAVING JURISDICTION. THE PREVAILING PARTY IN SUCH
ARBITRATION SHALL BE ENTITLED TO ATTORNEYS' FEES AND COSTS. THE
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FOLLOWING PROVISIONS OF THIS LEASE SHALL BE SUBJECT TO ARBITRATION PURSUANT
TO THIS PARAGRAPH 41:
(1) SUBPARAGRAPH 1(c)(3) [PROJECT; COMMON AREAS; ACCESS AND COOPERATION], ONLY
WITH RESPECT TO MODIFICATIONS TO CC&RS;
(2) SUBPARAGRAPH 1(c)(4) [PROJECT; COMMON AREAS; ACCESS AND COOPERATION], ONLY
WITH RESPECT TO ACCESS, ENCUMBRANCES AND COOPERATION;
(3) SUBPARAGRAPH 1(d) [RECONFIGURATION OF PHASE I];
(4) PARAGRAPH 2 [OCCUPANCY AND USE], ONLY WITH RESPECT TO WHETHER TENANT'S USE
COMPLIES WITH THE USE SPECIFIED IN THE BASIC LEASE INFORMATION;
(5) SUBPARAGRAPHS 3(a) [TERM; OCCUPANCY DATE; EXPIRATION DATE] AND 3(c)
[OCCUPANCY BY TENANT], ONLY WITH RESPECT TO DETERMINATION OF THE OCCUPANCY
DATE;
(6) SUBPARAGRAPH 3(b) [INITIAL CONSTRUCTION], ONLY WITH RESPECT TO LANDLORD'S
ENFORCEMENT OF CONSTRUCTION WARRANTIES;
(7) SUBPARAGRAPH 3(e) [CONDITIONS; WINDOW DATES];
(8) SUBPARAGRAPH 3(f) [CREDIT TERMINATION RIGHT];
(9) SUBPARAGRAPH 4(d) [AUDIT RIGHTS];
(10) PARAGRAPH 5 [MANAGEMENT];
(11) PARAGRAPH 6 [RESTRICTIONS ON USE], ONLY WITH RESPECT TO MODIFICATIONS TO
EXHIBIT P AND/OR THE RESTRICTIVE DOCUMENTS;
(12) PARAGRAPH 7 [COMPLIANCE WITH LAWS];
(13) PARAGRAPH 8 [ADDITIONAL ALTERATIONS];
(14) PARAGRAPH 9 [REPAIRS AND MAINTENANCE];
(15) PARAGRAPH 11 [ASSIGNMENT AND SUBLETTING];
(16) SUBPARAGRAPHS 14(b) [NO EXCESSIVE LOAD] AND 14(c) [NO LIABILITY OF
LANDLORD];
(17) PARAGRAPH 18 [RULES AND REGULATIONS];
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(18) SUBPARAGRAPH 22(c) [CASUALTY AT END OF TERM], ONLY WITH RESPECT TO WHETHER
A SUBSTANTIAL PORTION OF A BUILDING IS DAMAGED OR DESTROYED;
(19) SUBPARAGRAPHS 22(d) [MUTUAL TERMINATION OPTION; INSURED CASUALTY] AND 22(e)
[DESTRUCTION WHERE NO PROCEEDS ARE AVAILABLE], ONLY WITH RESPECT LANDLORD'S
DETERMINATION OF THE LENGTH OF TIME TO RECONSTRUCT;
(20) SUBPARAGRAPH 23(b) [PARTIAL BUILDING; TERMINATION], ONLY WITH RESPECT TO
WHETHER THE PORTION TAKEN RENDERS THE REMAINING BUILDING UNSUITABLE FOR
EXISTING USE;
(21) SUBPARAGRAPH 23(e) [TAKING OF COMMON AREA];
(22) SUBPARAGRAPH 26(b) [DELIVERY AND RESTORATION OF PREMISES];
(23) PARAGRAPH 36 [PARKING];
(24) PARAGRAPH 42 [SIGNAGE]; AND
(25) ANY PROVISIONS OF THE WORK LETTER WHICH ARE EXPRESSLY MADE SUBJECT TO THIS
PARAGRAPH 41 THEREIN.
NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY
DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU
ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A
COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR
JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY
INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE
UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT
TO THIS ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION
TO NEUTRAL ARBITRATION.
CONSENT TO NEUTRAL ARBITRATION BY:
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______________ (LANDLORD): __________________(TENANT).
42. SIGNAGE. Tenant shall have the right to use a portion of the monument
sign located at the front of Phase I, as designated by Landlord and reasonably
acceptable to Tenant for purposes of attaching lettering identifying Tenant's
use and occupancy at the Project. Tenant shall be responsible for its
proportionate share of costs related to such signage, with each party using such
sign paying a proportionate share of such costs (based on space on the sign).
Such sign, and any other signage Tenant proposes to place on the Project, shall
be subject to approval from Landlord and applicable governing entities, and
shall not violate the Declaration, the CC&Rs, any ground lease, any Mortgage, or
any Rules and Regulations with respect to the Project.
43. OPTION TO RENEW. Tenant shall have the right to extend the Term for
one (1) period of five (5) years ("Extension Term") following the initial
Expiration Date, by giving written notice ("Exercise Notice") to Landlord at
least twelve (12) months prior to the Expiration Date, subject to the following
conditions: (i) no event of default is continuing under this Lease at the time
of the Exercise Notice or at the commencement of the Extension Term; and (ii)
Landlord has not delivered a notice of default to Tenant hereunder during the
twenty-four (24) month period immediately preceding the Exercise Notice
regardless of whether any such default was cured by Tenant within any applicable
grace or cure period; provided, however, that any such notice of default
relating to a non-monetary default which was disputed, in good faith, by Tenant
and ultimately determined (by agreement of the parties, arbitration or judicial
action) not to be a default shall not be considered for purposes of determining
whether such condition has been met.
44. RENT DURING EXTENSION TERM. Commencing on the first day of the
Extension Term, Tenant shall pay to Landlord throughout the Extension Term Base
Rent in the amount determined pursuant to this Paragraph 44. The Monthly Base
Rent during the five-year Extension Term shall be the greater of the Base Rent
paid during the last month of the immediately preceding Term or ninety-five
percent (95%) of the Fair Market Rental Value for the Premises as of the
commencement of the Extension Term, with the Fair Market Rental Value as
determined below:
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(a) DETERMINATION OF FAIR MARKET RENTAL VALUE. Within the later of
thirty (30) days after receipt of Tenant's Exercise Notice or eleven (11) months
prior to the Expiration Date, Landlord shall notify Tenant of Landlord's
estimate of the Fair Market Rental Value for the Premises, as determined below,
for determining Monthly Base Rent during the ensuing Extension Term. Within
fifteen (15) days after receipt of such notice from Landlord, Tenant shall
notify Landlord in writing that it (i) agrees with such Fair Market Rental Value
or (ii) disagrees with such Fair Market Rental Value. No response shall
constitute disagreement. If Tenant disagrees with Landlord's estimate of Fair
Market Rental Value for the Premises, then the parties shall meet and endeavor
to agree within fifteen (15) business days after Landlord receives Tenant's
notice described in the immediately preceding sentence. If the parties cannot
agree upon the Fair Market Rental Value within said fifteen (15) day period,
Tenant may make written demand upon Landlord for arbitration in accordance with
the following paragraph. 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 City of Mountain View (or another location mutually acceptable
to Landlord and Tenant) in accordance with the then prevailing rules of the
American Arbitration Association or its successor for arbitration or commercial
disputes, except to the extent the procedures mandated by said rules shall be
modified as follows:
(1) Tenant shall, by the applicable date specified therefor in
this Lease, make written demand upon Landlord pursuant to this Lease for
arbitration, specifying therein the name and address of the person to act as the
arbitrator on Tenant's behalf. The arbitrator shall be qualified as a real
estate appraiser, with at least five (5) years experience in appraising major
commercial property in Santa Xxxxx County and a member of a recognized society
of real estate appraisers, 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 timely and proper demand
for such arbitration (specifying the arbitrator to act on Tenant's behalf, as
aforesaid) shall constitute a waiver of the right thereto. Within ten (10)
business days after receipt of Tenant's demand for arbitration, Landlord shall
give written notice to Tenant pursuant to this
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Lease, 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. Notwithstanding the foregoing, upon
receipt of Tenant's demand for arbitration Landlord may, in its sole
discretion, deliver a revised estimate of the Fair Market Value of the
Premises, and within fifteen (15) days after receipt of such notice from
Landlord, Tenant shall notify Landlord in writing that it (i) agrees with
such revised Fair Market Rental Value, or (ii) disagrees with such revised
Fair Market Rental Value, with no response constituting agreement. If Tenant
disagrees with Landlord's Fair Market Value, then within ten (10) business
days after receipt of Tenant's notice of such disagreement Landlord shall
give Tenant written notice specifying Landlord's designated arbitrator as
provided in this paragraph above.
(2) If two (2) arbitrators are chosen pursuant to paragraph (1)
above, the arbitrators so chosen shall meet within ten (10) business days after
Landlord notifies Tenant of the appointment of Landlord's arbitrator as
aforesaid. If the two appraisers reach agreement on the Fair Market Rental
Value, that value shall be binding and conclusive upon the parties. If within
ten (10) business days after such first meeting the two arbitrators shall be
unable to agree upon a determination of Fair Market Rental Value, 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 Subparagraph 44(a)(1). If the first two arbitrators are
unable to agree upon such appointment within five (5) business days after
expiration of said ten (10) days period, the third arbitrator shall be selected
by Landlord and Tenant, if they can agree thereon, within a further period of
ten (10) business days. If Landlord and Tenant do not so agree, then either
party, on behalf of both, may request appointment of such a qualified person by
the then Chief Judge of the United States District Court having jurisdiction
over the City of San Xxxx, 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 (3) arbitrators shall decide the dispute if it
has not previously been resolved by following the procedure set forth in the
following paragraph.
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(3) If an issue cannot be resolved by agreement between the two
arbitrators selected by Landlord and Tenant or settlement between Landlord and
Tenant during the course of arbitration, the issue shall be resolved by the
three arbitrators in accordance with the following procedures. Within ten (10)
business days after appointment of the third arbitrator, each of the two
arbitrators selected by Landlord and Tenant shall state in writing his
determination of the Fair Market Rental Value supported by the reasons therefor
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, within ten (10) business days after submission to
the third arbitrator of the two proposed resolutions, which of the two proposed
resolutions most closely approximates the third arbitrator's determination of
Fair Market Rental Value. 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.
(4) If any arbitrator fails, refuses or is unable to act, his
successor shall be appointed by the party who originally appointed 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. Landlord and Tenant
shall each pay the fees and expenses of its respective arbitrator, if any, and
shall each pay half of the fees and expenses of the third arbitrator, if any.
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.
(5) The arbitrators shall have the right to consult experts and
competent authorities with factual information or evidence pertaining to a
determination of Fair Market Rental Value, but any such consultation shall be
made in the presence of both Landlord and Tenant with full right on their part
to cross-examine. The arbitrators shall render their decision and award in
writing with counterpart copies to Landlord and Tenant. The arbitrators shall
have no power to modify the provisions of this Lease.
(b) DEFINITION OF FAIR MARKET RENTAL VALUE. Wherever used throughout
this Paragraph 44 [Rent During Extension Term]
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the term "Fair Market Rental Value" shall mean the fair market rental value
of the Premises, using as a guide the monthly base rent (on a per rentable
square foot basis) which would be charged during the Extension Term
(including periodic increases during the Extension Term, if any) in a
comparable location in the Mountain View Area for comparable commercial space
of comparable size, in comparable condition, and of comparable quality as of
the time that the Extension Term commences, taking into account that the
Premises can be used either by a single tenant as a campus or by multiple
tenants, and with appropriate adjustments regarding taxes, insurance and
operating expenses as necessary to insure comparability to this Lease, as the
case may be. Without limiting the foregoing, the Fair Market Rental Value
shall reflect the amount and type of parking, existing utilities,
communications facilities and leasehold improvements (regardless of who paid
for them and with the assumption, for purposes of the determination of Fair
Market Rental Value, that they are fully usable by Tenant), proposed term of
lease, amount of space leased, extent of service provided or to be provided,
and any other relevant terms or conditions; provided, however that the Fair
Market Rental Value shall not reflect, or provide any discount for, the fact
that otherwise comparable leases vary with this Lease with respect to tenant
improvement allowances; phase-ins or early occupancy agreements; moving
costs; rebates; signing bonuses; early lease terminations; lease buy-outs;
free rent and other rent concessions; leasing commissions; and other related
costs.
(c) INTERIM RENT. If binding arbitration has not been completed
prior to the expiration of any preceding period for which Monthly Base Rent has
been determined, Tenant shall pay Monthly Base Rent at the greater of the Base
Rent paid during the last month of the immediately preceding Term or ninety-five
percent (95%) of the Fair Market Rental Value estimated by Landlord, with an
adjustment to be made once Fair Market Rental Value is ultimately determined by
binding arbitration. Such adjustment shall not result in a decrease of the
Monthly Base Rent for the Premises below the amount payable by Tenant as of the
period immediately preceding the ensuing Extension Term.
(d) LEASE TERMS CONTINUE. From and after the commencement of the
Extension Term, all of the other terms, covenants and conditions of the Lease
shall also apply; provided, however, that Tenant shall have no further rights to
extend the Term. No broker's commissions or allowance for new tenant
79
improvements will be payable by Landlord in connection with the Extension Term.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
date first above written.
LANDLORD
000 Xxxxx Xxxxxx Associates, L.P.,
a California limited partnership
By: Canada Corp.,
a California corporation,
Its General Partner
By: /s/ Xxxxxxx X. Xxxxxx III
_________________________
Its: _______________________
By: Virginia Land Company, Inc.,
a California corporation,
Its General Partner
By: /s/ Xxxx X. Xxxxxxxx
_________________________
Its:________________________
TENANT
Netscape Communications Corporation,
a Delaware corporation
By: /s/ Xxxxx Xxxxxx
________________________________
Xxxxx Xxxxxx
Its Chief Financial Officer
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LIST OF EXHIBITS
EXHIBIT "A" DESCRIPTION OF PHASE I
EXHIBIT "B" FORM OF CC&RS
EXHIBIT "C" FORM OF DECLARATION OF RESTRICTIONS AND ACCESS AGREEMENT
EXHIBIT "D" WORK LETTER
EXHIBIT "E" CERTIFICATE ESTABLISHING OCCUPANCY DATE
EXHIBIT "F" CONDITIONS
EXHIBIT "G" GENERAL CONTRACTOR'S CONSTRUCTION WARRANTIES
EXHIBIT "H" ESTOPPEL CERTIFICATE
EXHIBIT "I" [INTENTIONALLY DELETED]
EXHIBIT "J" RULES & REGULATIONS
EXHIBIT "K" REQUIRED CONDITION OF PREMISES UPON SURRENDER
EXHIBIT "L" LANDLORD'S HAZARDOUS MATERIALS DISCLOSURES
EXHIBIT "M" FORM OF LETTER OF CREDIT
EXHIBIT "N" TENANT'S HAZARDOUS MATERIALS DISCLOSURES
EXHIBIT "O" FORM OF HETCH HETCHY EASEMENT
EXHIBIT "P" RESTRICTIONS ON USE
EXHIBIT "IT "Q" SELLER'S INDEMNITY
EXHIBIT "R" MAINTENANCE STANDARDS AND SCHEDULE
[TO BE ATTACHED AFTER LEASE EXECUTION]
INDEX OF DEFINED TERMS
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Defined Term Paragraph
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Additional Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 4(a)(2)
AirProducts Easement . . . . . . . . . . . . . . . . . . . . . . . . . . 1(c)(3)
Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8(b)
Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11(a)
Base Building Improvements . . . . . . . . . . . . . . . . . . .2 of Work Letter
Base Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4(a)(1)
Base Rent Adjustments. . . . . . . . . . . . . . . . . . Basic Lease Information
Building . . . . . . . . . . . . . . . . . . . . .Basic Lease Information & 1(a)
Buildings . . . . . . . . . . . . . . . . . . . Basic Lease Information & 1(a)
Building Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9(b)
CAA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40(a)
CC&Rs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1(c)(3)
CERCLA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40(a)
Change Order for Tenant Modification(s). . . . . . . . . . . . .3 of Work Letter
Chronic Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21(f)
Clean-Up Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . 1(c)(2)
Common Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1(c)(2)
Common Area Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .5(b)
Completion Assurance . . . . . . . . . . . . . . . . . . . . . 11 of Work Letter
Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3(e)
1
Cost of Tenant Improvements. . . . . . . . . . . . . . . . . . . . . . . . 11(e)
Credit Termination Right . . . . . . . . . . . . . . . . . . . . . . . . . .3(f)
Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
Default Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4(e)
Draw Event . . . . . . . . . . . . . . . . . . . . . . 11(a)(iii) of Work Letter
Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40(a)
Environmental Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
EPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4(c)(1)(C)
Expense Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4(c)(1)(D)
Exercise Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Existing Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . 40(c)
Expiration Date . . . . . . . . . . . . . . . . . . . . Basic Lease Information
Extension Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Fair Market Rental Value . . . . . . . . . . . . . . . . . . . . . . . . . 44(b)
Force Majeure Events . . . . . . . . . . . . . . . . . . . . . . . . . . . 14(c)
FWPCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40(a)
Hazardous Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40(a)
Hetch Hetchy Easement . . . . . . . . . . . . . . . . . . . . . . . . . . .1(a)
Identified Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . 40(c)
Initial Window Date . . . . . . . . . . . . . . . . . . . . . . . . . . . .3(e)
Insolvency Proceeding. . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(a)
2
Land Improvements . . . . . . . . . . . . . . . . . . . . . . .2 of Work Letter
Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . .Recitals & 37(a)
Landlord Default Notice. . . . . . . . . . . . . . . . . . . . . . . . . . 21(d)
Landlord Delays . . . . . . . . . . . . . . . . . . . . . . . .8 of Work Letter
Landlord Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12(a)
Landlord's Contractor . . . . . . . . . . . . . . . . . . . . .3 of Work Letter
Landlord's Core Drawings . . . . . . . . . . . . . . . . . .5(a) of Work Letter
Landlord's Expense Statement . . . . . . . . . . . . . . . . . . . . .4(c)(3)(B)
Landlord's Plans . . . . . . . . . . . . . . . . . . . . . . . .2 of Work Letter
Landlord's Representatives . . . . . . . . . . . . . . . . . . . . . . . . 38(a)
Landlord's Tax Statement . . . . . . . . . . . . . . . . . . . . . . .4(c)(2)(A)
Landscape Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7(a)
Lease . . . . . . . . . . . . . . . . . . . . . . . . . Basic Lease Information
Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34(a)
Minimum Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Monthly Base Rent. . . . . . . . . . . . . . . . . . . . Basic Lease Information
Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Mortgagee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Occupancy Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3(a)
PacBell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26(b)
Permitted Alterations. . . . . . . . . . . . . . . . . . . . . . . . . . . .8(c)
3
Permitted Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11(g)
PG&E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26(b)
Phase I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(a)
Phase II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(b)
Phase II Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(b)
Phase II Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(b)
Phase II Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(b)
Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(a)
Project. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1(c)(1)
RCRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40(a)
Real Estate Taxes . . . . . . . . . . . . . . . . . . . . . . . . . .4(c)(1)(B)
Reconfiguration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(d)
Recreational Facilities. . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4(a)(2)
Rent Commencement Date . . . . . . . . . . . . . . . . . . . . . . . . . . .3(d)
Rentable Area . . . . . . . . . . . . . . . . . . . . . Basic Lease Information
Restrictive Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Required Modifications . . . . . . . . . . . . . . . . . . . 5(c) of Work Letter
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(a)
Seller Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40(d)
SFWD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(a)
SFWD Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1(c)(2)
Strategic Partner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11(h)
4
Sublease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11(a)
Substantially complete . . . . . . . . . . . . . . . . . . . . .9 of Work Letter
Sufficiently complete. . . . . . . . . . . . . . . . . . . . . . . . . . . .3(a)
Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23(a)
Tax Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4(c)(1)(A)
Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Recitals & 37(a)
Tenant Delays . . . . . . . . . . . . . . . . . . . . . . . . .7 of Work Letter
Tenant Improvements. . . . . . . . . . . . . . . . . . . . . . .1 of Work Letter
Tenant Modifications . . . . . . . . . . . . . . . . . . . . . .3 of Work Letter
Tenant Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12(b)
Tenant's Contractor . . . . . . . . . . . . . . . . . . . . 5(d) of Work Letter
Tenant's Plans . . . . . . . . . . . . . . . . . . . . . . . 5(a) of Work Letter
Tenant's Representatives . . . . . . . . . . . . . . . . . . . . . . . . . 38(b)
Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3(a)
Three Party Agreement . . . . . . . . . . . . . . . . . 11(a)(v) of Work Letter
Transfer Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11(g)
TSCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40(a)
Window Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3(e)
Work Letter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3(b)
Working Drawings . . . . . . . . . . . . . . . . . . . . . . 5(a) of Work Letter
5
TABLE OF CONTENTS
BASIC LEASE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . i
1. LEASED PREMISES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(a) Premises.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(b) Phase II Lease.. . . . . . . . . . . . . . . . . . . . . . . . . . 1
(c) Project; Common Areas; Access & Cooperation. . . . . . . . . . . 2
(1) Definition of Project.. . . . . . . . . . . . . . . . . . . . 2
(2) Definition of Common Area.. . . . . . . . . . . . . . . . . . 2
(3) Use of Common Area. . . . . . . . . . . . . . . . . . . . . . 2
(4) Landlord's Access.. . . . . . . . . . . . . . . . . . . . . . 3
(d) Reconfiguration of Phase I.. . . . . . . . . . . . . . . . . . . . 3
2. OCCUPANCY AND USE . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3. TERM AND POSSESSION . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(a) Term; Occupancy Date; Expiration Date. . . . . . . . . . . . . . . 5
(b) Initial Construction.. . . . . . . . . . . . . . . . . . . . . . . 5
(c) Occupancy By Tenant. . . . . . . . . . . . . . . . . . . . . . . . 6
(d) Rent Commencement Date; Certificate of Occupancy.. . . . . . . . . 6
(e) Conditions; Window Dates.. . . . . . . . . . . . . . . . . . . . . 7
(f) Credit Termination Right.. . . . . . . . . . . . . . . . . . . . . 8
4. RENT; RENT ADJUSTMENTS; ADDITIONAL CHARGES FOR EXPENSES AND TAXES.. . . 8
(a) Payment of Rent. . . . . . . . . . . . . . . . . . . . . . . . . . 8
(1) Monthly Base Rent.. . . . . . . . . . . . . . . . . . . . . . 8
(2) Other Rent. . . . . . . . . . . . . . . . . . . . . . . . . . 8
(3) Partial Months. . . . . . . . . . . . . . . . . . . . . . . . 8
(b) Adjustments in Base Rent.. . . . . . . . . . . . . . . . . . . . . 9
(c) Additional Charges for Expenses and Taxes. . . . . . . . . . . . . 9
(1) Definitions of Certain Additional Charges. . . . . . . . . . 9
(A) "Tax Year" . . . . . . . . . . . . . . . . . . . . . . . 9
(B) "Real Estate Taxes". . . . . . . . . . . . . . . . . . . 9
(C) "Expenses" . . . . . . . . . . . . . . . . . . . . . . . 10
(D) "Expense Year" . . . . . . . . . . . . . . . . . . . . . 12
(2) Payment of Real Estate Taxes. . . . . . . . . . . . . . . . 12
(A) Payment as Due . . . . . . . . . . . . . . . . . . . . . 12
(B) Impounds . . . . . . . . . . . . . . . . . . . . . . . . 12
(3) Payment of Expenses . . . . . . . . . . . . . . . . . . . . . 12
(A) Payment as Due . . . . . . . . . . . . . . . . . . . . . 12
(B) Monthly Payments . . . . . . . . . . . . . . . . . . . . .13
(4) Other.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1
(d) Audit Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(e) Late Charges; Default Rate . . . . . . . . . . . . . . . . . . . . 14
5. MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(a) Management of the Premises.. . . . . . . . . . . . . . . . . . . . 15
(b) Management of the Common Area. . . . . . . . . . . . . . . . . . . 15
(c) Third Party Management.. . . . . . . . . . . . . . . . . . . . . . 16
(d) Dispute of Assumption of Management. . . . . . . . . . . . . . . . 17
6. RESTRICTIONS ON USE . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7. COMPLIANCE WITH LAWS. . . . . . . . . . . . . . . . . . . . . . . . . . 18
(a) Tenant's Compliance Obligations. . . . . . . . . . . . . . . . . . 18
(b) Insurance Requirements.. . . . . . . . . . . . . . . . . . . . . . 19
(c) No Limitation on Obligations.. . . . . . . . . . . . . . . . . . . 19
8. ADDITIONAL ALTERATIONS. . . . . . . . . . . . . . . . . . . . . . . . . 19
(a) Landlord's Alterations . . . . . . . . . . . . . . . . . . . . . . 19
(b) Landlord's Consent to Tenant's Alterations. . . . . . . . . . . . 20
(c) Permitted Alterations. . . . . . . . . . . . . . . . . . . . . . . 20
(d) Requirements for Tenant Alterations. . . . . . . . . . . . . . . . 20
(e) Removal of Alterations and Restoration.. . . . . . . . . . . . . . 21
(f) Reimbursement of Landlord's Review Costs.. . . . . . . . . . . . . 22
9. REPAIR AND MAINTENANCE.. . . . . . . . . . . . . . . . . . . . . . . . . 22
(a) Landlord's Obligations.. . . . . . . . . . . . . . . . . . . . . . 22
(b) Tenant's Obligations.. . . . . . . . . . . . . . . . . . . . . . . 23
(c) Tenant's Obligations for Structural Maintenance. . . . . . . . . . 24
(d) Maintenance Service Contracts. . . . . . . . . . . . . . . . . . . 25
(e) Cure Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(f) No Liability of Landlord.. . . . . . . . . . . . . . . . . . . . . 26
10. LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
11. ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . . . . . . 27
(a) Restriction on Assignment and Subleasing.. . . . . . . . . . . . . 27
(b) Required Notice. . . . . . . . . . . . . . . . . . . . . . . . . . 27
(c) Landlord's Response To Proposed Assignment.. . . . . . . . . . . . 28
(d) Landlord's Response To Proposed Sublease.. . . . . . . . . . . . . 28
(e) Bonus Rent.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(f) Effect of Transfer.. . . . . . . . . . . . . . . . . . . . . . . . 29
(g) Permitted Transfer.. . . . . . . . . . . . . . . . . . . . . . . . 29
(h) Strategic Partners.. . . . . . . . . . . . . . . . . . . . . . . . 30
(i) Assumption by Transferee.. . . . . . . . . . . . . . . . . . . . . 30
2
(j) Effect on Extension Option.. . . . . . . . . . . . . . . . . . . . 31
12. INSURANCE AND INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . 31
(a) Release of Landlord. . . . . . . . . . . . . . . . . . . . . . . . 31
(b) Tenant Indemnity.. . . . . . . . . . . . . . . . . . . . . . . . . 32
(c) Tenant's Insurance Requirements. . . . . . . . . . . . . . . . . . 32
(1) Commercial General Liability Insurance. . . . . . . . . . . . 32
(2) Time Element Insurance. . . . . . . . . . . . . . . . . . . . 33
(3) Property Insurance. . . . . . . . . . . . . . . . . . . . . . 33
(4) Workers Compensation Insurance. . . . . . . . . . . . . . . . 33
(d) Survival.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(e) Landlord's Insurance Obligations.. . . . . . . . . . . . . . . . . 34
13. WAIVER OF SUBROGATION . . . . . . . . . . . . . . . . . . . . . . . . . 34
14. SERVICES AND UTILITIES. . . . . . . . . . . . . . . . . . . . . . . . . 35
(a) Tenant's Responsibility. . . . . . . . . . . . . . . . . . . . . . 35
(b) No Excessive Load. . . . . . . . . . . . . . . . . . . . . . . . . 36
(c) No Liability of Landlord.. . . . . . . . . . . . . . . . . . . . . 36
15. TENANT'S CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . 36
16. HOLDING OVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
17. SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
18. RULES AND REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . 38
19. RE-ENTRY BY LANDLORD. . . . . . . . . . . . . . . . . . . . . . . . . . 38
20. INSOLVENCY OR BANKRUPTCY. . . . . . . . . . . . . . . . . . . . . . . . 39
21. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(a) Tenant's Default.. . . . . . . . . . . . . . . . . . . . . . . . . 40
(b) Phase II Lease Default.. . . . . . . . . . . . . . . . . . . . . . 40
(c) Landlord's Remedies. . . . . . . . . . . . . . . . . . . . . . . . 41
(d) Landlord's Default.. . . . . . . . . . . . . . . . . . . . . . . . 41
(e) Tenant's Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 42
(1) Limitation on Remedies. . . . . . . . . . . . . . . . . . . . 42
(2) Remedy for Construction Default.. . . . . . . . . . . . . . . 42
(f) Chronic Default. . . . . . . . . . . . . . . . . . . . . . . . . . 43
22. DAMAGE AND DESTRUCTION. . . . . . . . . . . . . . . . . . . . . . . . . 43
(a) Restoration. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
3
(b) Insurance Proceeds.. . . . . . . . . . . . . . . . . . . . . . . . 43
(c) Casualty at End of Term. . . . . . . . . . . . . . . . . . . . . . 44
(d) Mutual Termination Option; Insured Casualty. . . . . . . . . . . . 44
(e) Destruction Where No Proceeds Are Available. . . . . . . . . . . . 44
(f) Proceeds Upon Termination. . . . . . . . . . . . . . . . . . . . . 45
(g) Rent Abatement.. . . . . . . . . . . . . . . . . . . . . . . . . . 45
(h) Waiver of Statutory Provisions.. . . . . . . . . . . . . . . . . . 46
23. EMINENT DOMAIN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
(a) Entire Building. . . . . . . . . . . . . . . . . . . . . . . . . . 46
(b) Partial Building; Termination. . . . . . . . . . . . . . . . . . . 46
(c) Partial Building; Restoration. . . . . . . . . . . . . . . . . . . 46
(d) End of Term Taking.. . . . . . . . . . . . . . . . . . . . . . . . 47
(e) Taking of Common Area. . . . . . . . . . . . . . . . . . . . . . . 47
(f) Award. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(g) Temporary Taking.. . . . . . . . . . . . . . . . . . . . . . . . . 48
(h) Waiver of Statutory Provisions.. . . . . . . . . . . . . . . . . . 48
24. SALE BY LANDLORD. . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
25. RIGHT OF LANDLORD TO PERFORM. . . . . . . . . . . . . . . . . . . . . . 49
26. OWNERSHIP OF IMPROVEMENTS; SURRENDER OF PREMISES. . . . . . . . . . . . 49
(a) Ownership of Tenant Improvements & Alterations.. . . . . . . . . . 49
(b) Delivery and Restoration of Premises.. . . . . . . . . . . . . . . 49
(c) No Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
27. WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
28. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
29. TAXES PAYABLE BY TENANT . . . . . . . . . . . . . . . . . . . . . . . . 51
30. ABANDONMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
31. SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . . . . . . . . . 52
32. ATTORNEY'S FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
33. LIGHT AND AIR.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
34. SECURITY DEPOSIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
(a) Letter of Credit.. . . . . . . . . . . . . . . . . . . . . . . . . 52
(b) Reduction After Occupancy. . . . . . . . . . . . . . . . . . . . . 53
4
(c) Further Reduction. . . . . . . . . . . . . . . . . . . . . . . . . 54
(d) Substitution of Cash Collateral. . . . . . . . . . . . . . . . . . 54
35. FINANCIAL INFORMATION.. . . . . . . . . . . . . . . . . . . . . . . . . 54
36. PARKING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
37. MISCELLANEOUS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(a) Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . .55
(b) Other Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
(c) Quiet Enjoyment. . . . . . . . . . . . . . . . . . . . . . . . . . .55
38. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . 56
(a) Landlord's Representations and Warranties. . . . . . . . . . . . . .56
(b) Tenant's Representations and Warranties. . . . . . . . . . . . . . .56
39. REAL ESTATE BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . 57
40. HAZARDOUS MATERIALS LIABILITY . . . . . . . . . . . . . . . . . . . . . 57
(a) Definitions of Hazardous Materials and Environmental Laws. . . . . 57
(b) Tenant Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . 58
(c) Landlord Indemnity.. . . . . . . . . . . . . . . . . . . . . . . . 58
(d) Seller Indemnity.. . . . . . . . . . . . . . . . . . . . . . . . . 59
(e) Release of Landlord. . . . . . . . . . . . . . . . . . . . . . . . 59
(f) Tenant's Disclosure Obligations. . . . . . . . . . . . . . . . . . 59
41. ARBITRATION OF DISPUTES . . . . . . . . . . . . . . . . . . . . . . . . 60
42. SIGNAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
43. OPTION TO RENEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
44. RENT DURING EXTENSION TERM. . . . . . . . . . . . . . . . . . . . . . . 62
(a) Determination of Fair Market Rental Value. . . . . . . . . . . . . 62
(b) Definition of Fair Market Rental Value.. . . . . . . . . . . . . . 65
(c) Interim Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . .65
(d) Lease Terms Continue . . . . . . . . . . . . . . . . . . . . . . . .65
5
EXHIBIT "D"
WORK LETTER
(PHASE I)
1. OBLIGATIONS OF LANDLORD AND TENANT. For each of the Buildings,
Landlord shall furnish and install the Base Building Improvements provided for
in Paragraph 2 at Landlord's expense. Tenant shall furnish and install, at
Tenant's expense, the interior improvements and Building Systems to complete
each of the Buildings ("Tenant Improvements"), as required by Tenant's Plans (as
defined in Subparagraph 5(a) below). Without limiting the generality of the
foregoing, the Tenant Improvements shall include, without limitation, the
electrical and telephone systems to be furnished by Tenant pursuant to
Subparagraph 4(a) below and the specific items listed on Schedule "D-2" attached
hereto. The quantity, quality, character and manner of installation of all of
the foregoing work shall be subject to the limitations imposed by any applicable
regulations, laws, ordinances, codes and rules.
2. BASE BUILDING IMPROVEMENTS. For each Building, Landlord shall furnish
an uninsulated industrial shell building ("Base Building Improvements") which
shall include the building exterior walls and windows, foundation, floors, roof
membrane, roof system, raised shell sprinklers, related structural components,
the items listed on Schedule "D-5" attached hereto, and one unenclosed secondary
stairwell in each Building. In addition, Landlord shall provide all base
hardscape and landscape features on the Premises, including parking areas, drive
aisles, landscaping, monuments for Tenant's signage (with project identification
lettering), directional signage, exterior lighting in the Common Area (other
than lighting for the Recreational Areas) and utilities stubbed in or to the
shell of each Building (except as provided in Paragraph 4 below)(collectively,
the "Land Improvements"). The scope and finishes of the Base Building
Improvements and the Land Improvements to be provided by Landlord will be as
shown in the construction drawings submitted by Landlord to the City of Mountain
View for approval, with such revisions as may be required by the City (such
drawings, as finally approved by the City of Mountain View, are referred to
herein as "Landlord's Plans"); provided that (i) any items specifically
designated herein as Tenant Improvements or Tenant
EXHIBIT D - PAGE 1 of 13
Modifications which are shown on Landlord's Plans shall not be included in
Base Building Improvements, and (ii) all items described in the right-hand
column on Schedule "D-4" attached hereto shall be deemed "Tenant
Modifications" (as defined in Paragraph 3 below) approved by Landlord or
Tenant Improvements, as applicable, and not Base Building Improvements or
Land Improvements notwithstanding their inclusion in Landlord's Plans.
3. TENANT MODIFICATIONS. Any changes to the Land Improvements or Base
Building Improvements requested by Tenant and approved by Landlord, in its sole
discretion, shall be defined herein as "Tenant Modifications". The Tenant
Modifications may include, without limitation, the following: (i) certain
recreational facilities (including sport courts and facilities) to be located on
portions of the Common Area, including the Recreational Facilities; (ii) early
installation of stub-ins for Tenant's electric, telephone and cable systems into
the shell, plumbing gut lines, footings and embeds for Tenant-required
structural items, and steel components related to Tenant's structural
reinforcement and design; (iii) any changes to the Land Improvements or Base
Building Improvements (including additional or different equipment and/or
modification of the base irrigation system) necessary to allow the landscape
irrigation system or any other system to use reclaimed, unpotable water from the
underground remediation facilities; (iv) changes to building glass or other
components of the Base Building Improvements; (v) excavations and installation
of components related to Tenant's elevators; and (vi) changes to the Land
Improvements, Base Building Improvements and/or Landlord's Plans that are
necessitated by applicable legal or construction requirements due to Tenant's
Plans, or that are otherwise requested by Tenant. All of Tenant's obligations
hereunder with respect to Tenant Improvements shall be applicable to any Tenant
Modifications, except as expressly provided herein. Tenant shall pay for the
incremental cost of any Tenant Modifications, and shall enter into a separate
agreement with Devcon Construction ("Landlord's Contractor") for such work.
Alternatively, Landlord may elect, for reasons of expediency and convenience, to
add any specific Tenant Modification(s) to its construction contract for Base
Building Improvements, in which event the applicable Tenant Modification(s)
shall be treated as a separate "Change Order for Tenant Modification(s)" under
Landlord's contract for the Land
EXHIBIT D - PAGE 2 of 13
Improvements and/or Base Building Improvements. Tenant shall be responsible
for all costs (which shall be evidenced by trade cost breakdowns by
Landlord's Contractor) resulting from any Change Order for Tenant
Modifications, including architectural, engineering and special testing
and/or inspection charges, and any special permits or fees. Tenant shall
reimburse Landlord for the full costs incurred by Landlord in connection with
any such Change Order. Such payments shall be made based on progress of
work, within twenty (20) days of receipt of a xxxx from Landlord together
with reasonably satisfactory documentation that the work covered by such xxxx
has been substantially complete. Upon completion of the Tenant Improvements,
Landlord shall reimburse Tenant for any net cost savings realized by Landlord
on its contract for Base Building Improvements and/or Land Improvements which
were attributable to Change Orders for Tenant Modifications. Such
reimbursement shall be made within thirty (30) days after receipt of Tenant's
billing and documentation.
EXHIBIT D - PAGE 3 of 13
4. ELECTRICAL SYSTEMS, TELEPHONE SYSTEMS AND DEDICATED COMMUNICATIONS
LINES.
(a) LANDLORD'S OBLIGATIONS. Landlord shall not be responsible for
furnishing electrical, telephone, or dedicated communications systems for any of
the Buildings. Landlord shall be responsible for the overhead conversion of the
PG&E and PacBell lines which cross Phase I and are midpoint between Xxxxx Street
and Xxxxxxx Road to below ground. If Landlord elects to put conduits in
Tenant's communication trench along the southern property line dividing Phase I
from the property located at 000 Xxxxx Xxxxxx, Xxxxxxxx will reimburse Tenant
for fifty percent (50%) of the cost incurred by Tenant for such trench, promptly
upon receipt of an invoice and reasonably acceptable documentation of such
costs.
(b) TENANT'S OBLIGATIONS. Tenant shall furnish and install, at
Tenant's expense, its telephone distribution system from the Pacific Xxxx point-
of-connection outside the Project to each Building. In addition, Tenant shall
furnish and install, at Tenant's expense, primary electrical service from PG&E's
point-of-connection (whether inside or outside the Project) to a substation
point on the Project, and an electrical distribution system from the substation
point to and throughout each of the Buildings, as necessary for Tenant's
intended use. The location of the substation and all conduits and other
portions of the electrical system, and of all portions of the telephone
distribution system and dedicated communications systems, shall be as designated
by Landlord. Tenant shall design and install such electrical and telephone
systems in a manner consistent with Tenant's restoration and reconfiguration
obligations upon expiration or termination of the Lease, which obligations are
described in Subparagraph 26(b) of the Lease.
(c) CREDIT DUE TENANT. Landlord shall credit to Tenant the actual
cost, as reasonably determined by Landlord, that Landlord would have incurred if
Landlord had furnished "power to panel" electrical service under a customary
supply arrangement where PG&E sells power on a retail basis rather than a
wholesale basis. Such amount shall be reduced by any costs incurred by Landlord
as a result of the work described in Subparagraph 4(a) above, including the cost
attributable to any
EXHIBIT D - PAGE 4 of 13
requirement by PG&E that Landlord modify any PG&E connections which serve
adjoining property through lines from the Project. Any net reimbursement
amount shall be paid by Landlord within thirty (30) days after Tenant
provides Landlord with written documentation satisfactory to Landlord that
(i) the Tenant Improvements (including the electrical distribution system)
and Tenant Modifications are substantially complete, and (ii) Tenant has
received unconditional lien waivers from Tenant's Contractor and any other
contractors and/or subcontractors with respect to all work on the electrical
distribution system.
(d) CREDIT FOR COMMUNICATIONS CONDUITS. Landlord shall credit to
Tenant the amount of Fifty-Four Thousand Dollars ($54,000) toward the cost of
Tenant's communication conduits on Phase I. Such amount shall be credited at
the same time and in the same manner as provided in Subparagraph 4(c) [Credit
Due Tenant] above.
5. TENANT IMPROVEMENTS.
(a) SPACE PLANS AND WORKING DRAWINGS. Tenant has approved Landlord's
core drawings and specifications, prepared by Xxxxxxx Xxxxxxxxx & Partners, Inc.
and as shown on Schedule "D-4" attached hereto, which locate placement of
bathroom cores, elevators, lobbies, electrical rooms, mechanical and HVAC units
and air supply shafts in each Building ("Landlord's Core Drawings"). Tenant
shall cause its architect and/or engineers to prepare (i) a space plan for the
Premises; (ii) complete architectural, mechanical, electrical, plumbing, and
other plans for the Tenant Improvements; (iii) specifications for Tenant's
mechanical system and electrical system; (iv) specifications for the HVAC system
using air-cool package systems; and (v) a list of building standards for
interior design (including, without limitation, the Building Systems), including
a schedule of all finishes. Items (ii), (iii), (iv) and (v) above are
collectively referred to herein as "Working Drawings". The building standards
must meet or exceed the Minimum Standards for Tenant Improvements attached
hereto as Schedule "D-1", and all operating components of the Building Systems
and related distribution systems to the Premises shall be national brand name
products, used in their customary manner, with a consistent track record for low
maintenance, durability and optimum functionality. The space
EXHIBIT D - PAGE 5 of 13
plan and Working Drawings shall comply with all applicable regulations, laws,
ordinances, codes and rules; provided that Tenant shall not be liable to
Landlord for any non-compliance of Tenant's space plan or Working Drawings
that directly results from non-compliance of Landlord's Core Drawings with
any laws, regulations, codes, ordinances or rules so long as Tenant notifies
Landlord promptly after Tenant obtains knowledge of any such non-compliance
by Landlord's Core Drawings, and Tenant shall have such additional time as
Landlord reasonably deems necessary to submit its space plan and/or Working
Drawings after making any necessary modifications to correct any
non-compliance resulting from Landlord's Core Drawings' non-compliance. In
addition, the space plan and Working Drawings shall provide for corridors,
lobbies, bathrooms, mechanical and electrical systems, and fire exits which
are designed to accommodate single or multi-tenant configurations in each
Building (including, without limitation, separate metering for utilities), in
conformance with Landlord's Core Drawings and in a design reasonably
acceptable to Landlord. The space plan and Working Drawings shall be
performed by Devcon Construction's architectural services, or another
architect mutually acceptable to Landlord and Tenant. On or before Xxxxx 0,
0000, Xxxxxx shall submit its space plan to Landlord, for Landlord's review
and approval, which approval shall not be unreasonably withheld or delayed so
long as such space plan reflects a configuration and design that reasonably
relates to the functional design of the applicable Building and incorporates
a logical pedestrian traffic flow. Within five (5) business days after such
submission, Landlord shall either approve or disapprove the space plan.
Tenant shall make any changes necessary in order to correct any item
identified by Landlord as grounds for its disapproval, and shall resubmit the
corrected space plan to Landlord within five (5) business days after
Landlord's disapproval. Within five (5) business days after Landlord
receives the revised space plan, Landlord shall approve or disapprove it.
This procedure shall be repeated until the space plan is finally approved by
Landlord and written approval has been delivered to Tenant. On or before May
1, 1997, Tenant shall submit its Working Drawings and a pallet of interior
colors and finishes to Landlord for Landlord's review and approval, which
approval shall not be unreasonably withheld or delayed so long as such
drawings and pallet conform to the requirements of this Subparagraph 5(a).
Landlord's approval or disapproval of
EXHIBIT D - PAGE 6 of 13
such Working Drawings and pallet, and Tenant's response thereto, shall follow
the procedure described above with respect to the space plan, except that
each time period shall be changed from five (5) business days to ten (10)
business days. All items finally approved by Landlord pursuant to this
Paragraph are referred to herein collectively as "Tenant's Plans".
(b) TENANT IMPROVEMENT COSTS. Tenant shall bear the cost of Tenant
Improvements, including, without limitation, costs in connection with space
planning, preparing Tenant's Plans, engineering, plan checking, special
inspections and testing, any consultants, and related permits and fees for
Tenant Improvements.
(c) ELECTION TO REQUIRE REMOVAL OF TENANT IMPROVEMENTS AND TENANT
MODIFICATIONS. In connection with its approval of Tenant's Plans, Landlord
shall designate in writing if any portion of the Tenant Improvements or Tenant
Modifications must be removed upon the expiration or sooner termination of this
Lease, together with a description of specific deletions, additions,
substitutions or modifications to such Tenant Improvements or Tenant
Modifications that Tenant must make in order for Landlord to not require their
removal (any such modifications, "Required Modifications"). If Landlord does
not make such designation in writing with respect to any portion of the Tenant
Improvements or Tenant Modifications, such portion of the Tenant Improvements or
Tenant Modifications may remain on the Premises upon the expiration or sooner
termination of the Lease. If Landlord designates any Tenant Improvements or
Tenant Modifications for removal, within five (5) business days after receipt of
such designation, Tenant shall either (i) resubmit Tenant's Plans with the
Required Modifications made, which plans shall be subject to Landlord's review
in accordance with Subparagraph 5(a), or (ii) notify Landlord of Tenant's intent
to proceed without making the Required Modifications. Tenant's failure to take
either action within such five (5) day period shall be deemed Tenant's election
to proceed without making the Required Modifications. If Landlord designates
that any Tenant Improvements or Tenant Modifications must be removed and Tenant
does not make the Required Modifications, upon the expiration or sooner
termination of the Term of the Lease Tenant shall upon demand by Landlord, at
Landlord's election, either (i) at
EXHIBIT D - PAGE 7 of 13
Tenant's sole cost and expense, forthwith and with all due diligence remove
any Tenant Improvements made by or for the account of Landlord which are
designated by Landlord to be removed, and restore the Premises to as near as
possible its original condition prior to the installation of such Tenant
Improvements or Tenant Modifications, subject to normal wear and tear, or
(ii) pay Landlord the reasonable estimated cost of such removal and
restoration.
(d) TENANT'S CONTRACTOR. Tenant shall use Devcon Construction as its
general contractor for all of the Tenant Improvements ("Tenant's Contractor").
Tenant shall use the same roofing contractor as Landlord. Tenant's
subcontractors and labor shall be subject to approval by Landlord (which
approval shall not be unreasonably withheld or delayed) and reasonable
administrative supervision by Tenant's Contractor. Tenant shall direct and
authorize Tenant's Contractor (with respect to Tenant Improvements) and
Landlord's contractor (with respect to Tenant Modifications not being made by
Change Order to Landlord's construction contract) to keep Landlord fully
informed of the construction process, and to provide Landlord with access to all
documentation and other information in either contractor's possession or control
regarding construction of the Tenant Improvements or the Tenant Modifications;
provided that Landlord shall not be obligated to monitor or inspect construction
of the Tenant Improvements or Tenant Modifications or any information in
connection therewith.
6. CONSTRUCTION OF TENANT IMPROVEMENTS AND TENANT MODIFICATIONS. After
the Occupancy Date has occurred and Tenant has received Landlord's approval of
Tenant's Plans, Tenant shall administer and diligently prosecute the
construction of Tenant Improvements in accordance with Tenant's Plans. All
Tenant Improvements and Tenant Modifications shall be constructed using union
labor. Landlord and Tenant shall cooperate, and shall cause their respective
contractors to cooperate, in a reasonable manner to coordinate work on Base
Building Improvements, Tenant Modifications and Tenant Improvements. However,
installation of all Tenant Improvements and Tenant Modifications shall comply
with Landlord's contractor's schedule and rules of the site, and shall not cause
Landlord's contractor to be dependent upon Tenant's work in order for Landlord's
contractor to complete the
EXHIBIT D - PAGE 8 of 13
Base Building Improvements. After the Occupancy Date, Tenant shall give
Landlord and Landlord's contractor, subcontractors and suppliers full access
and entry to the Premises in order to complete the Base Building Improvements
in accordance with any reasonable security procedures established by Tenant.
Landlord and Tenant shall each have the full benefit of all contractor
warranties.
7. TENANT DELAYS. If the conditions for establishing the Occupancy Date
or any other Condition are delayed due to a delay in constructing Land
Improvements or Base Building Improvements as a result of any of the following
(collectively, "Tenant Delays"), and such delay could not have been mitigated by
Landlord using commercially reasonable measures (provided that Landlord shall
have no obligation to mitigate delays caused by Tenant's failure to meet a
specific deadline set forth herein or in the construction schedule), then the
Initial Window Date for each Condition which has not been satisfied shall be
extended by the length of such delay, and the Rent Commencement Date shall be
adjusted to reflect what the Rent Commencement Date would have been if there had
been no Tenant Delays: (a) Tenant's failure to submit any component of Tenant's
Plans or any other items to be delivered under this Work Letter, on or before
the dates or time periods called for; (b) any Tenant Modifications which require
changes to the Base Building Improvements or Land Improvements; (c) Tenant's or
Tenant's Contractor's, subcontractors' or suppliers' failure to comply with
Landlord's contractor's schedule or rules of the site; (d) Tenant's changes to
Tenant's Plans after Landlord's approval thereof or other delays in Tenant's
construction of the Tenant Improvements (other than delays caused by Force
Majeure Events); or (e) interference by Tenant or Tenant's Contractor,
subcontractors or suppliers with construction of the Base Building Improvements
or Land Improvements by denying full access to the Buildings, causing labor
disputes or otherwise failing to comply with Paragraph 6 hereof. Landlord shall
give Tenant at least three (3) days prior notice if Landlord becomes aware that
Tenant is in danger of causing a Tenant Delay, and if Tenant takes appropriate
measures to prevent such delay within such three (3) day period, no adjustment
to any Initial Window Date or Rent Commencement Date shall be made; provided,
however, that if such delay was not reasonably foreseeable by Landlord, the
three (3) day period for
EXHIBIT D - PAGE 9 of 13
prior notice and opportunity to mitigate provided above shall be changed to
twenty-four (24) hours after Landlord becomes aware of such delay or
potential delay; and provided further, that no such notice shall be required
in order for such adjustment to be made if such delay results from Tenant's
failure to perform any obligation within a specific date or time period
(including, without limitation, any delay in delivery of Tenant's space plan
or Working Drawings or non-compliance with Landlord's contractor's schedule).
8. LANDLORD DELAYS. If substantial completion of the Tenant Improvements
is delayed as a result of any of the following, and such delay could not have
been mitigated by Tenant using commercially reasonable measures (collectively,
"Landlord Delays"), then the Rent Commencement Date shall be extended for a
period equal to any delay in substantial completion of the Tenant Improvements
directly resulting from such Landlord Delays: (a) unreasonable interference by
Landlord or Landlord's Contractor in connection with construction of the Base
Building Improvements; (b) Landlord's failure to respond to any request for
approval of any item by Tenant as required by this Work Letter, within the time
period specified herein; (c) Landlord's failure or delay in obtaining any
permits, approvals or consents of third parties with respect to the Base
Building Improvements which are Landlord's responsibility to obtain and which
must be obtained in order for Tenant to obtain any required permits, approvals
or consents of third parties with respect to the Tenant Improvements or Tenant
Modifications, but only to the extent that Tenant's ability to obtain such
permits, approvals or consents is delayed beyond the time Tenant would have
obtained same in the ordinary course of its construction but for Landlord's
delay; or (d) any material changes to Landlord's Core Drawings after their
approval by Tenant or Landlord's Plans after final approval by the City of
Mountain View (other than Tenant Modifications or changes required by third
parties) that directly affect Tenant's Plans or Tenant Improvements. Tenant
shall give Landlord at least three (3) days prior notice that Landlord is in
danger of causing a Landlord Delay, and if Landlord takes appropriate measures
to prevent such delay within such three (3) day period, no adjustment to the
Rent Commencement Date shall be made; provided, however, that if such delay was
not reasonably foreseeable by Tenant, the three (3) day period for prior notice
and opportunity
EXHIBIT D - PAGE 10 of 13
to mitigate provided above shall be changed to twenty-four (24) hours after
Tenant becomes aware of such delay or potential delay.
9. SUBSTANTIAL COMPLETION. For purposes of this Work Letter and the
Lease, (i) the Base Building Improvements and Land Improvements shall be deemed
"substantially complete" at such time as Landlord has completed the Base
Building Improvements and Land Improvements in accordance with Landlord's Plans
subject to completion and correction of items on Landlord's architect's punch
list, and certain other items which will not be completed until substantial
completion of the Tenant Improvements (such as items necessary to modify the
sprinklers in accordance with the Tenant Improvement package and certain
landscaping), and (ii) the Tenant Improvements and/or Tenant Modifications shall
be deemed "substantially complete" at such time as Tenant has completed work in
accordance with Tenant's Plans sufficient to obtain the signature of the
appropriate City of Mountain View building official that the Tenant Improvements
and/or Tenant Modifications have passed final inspection, subject only to the
completion or correction of items on Tenant's architect's punch list (and
exclusive of the installation of all telephone and other communications
facilities and equipment and other finish work or decorating work to be
performed by or for Tenant to the extent completion of such work is not required
for Tenant's receipt from the City of Mountain View of a certificate of
occupancy or a signed-off building permit, or its equivalent, for the applicable
Building).
10. INSURANCE. During the course of construction, Landlord and Tenant
shall require their respective contractors and architects to obtain and maintain
in force Commercial General Liability insurance (including, without limitation,
insurance against completed operations liability for losses occurring within
three (3) years after the completion of the Base Building Improvements or Tenant
Improvements, as applicable) with coverage for explosion, collapse, and
underground damage, against claims arising out of bodily injury, personal
injury, or death and from damage to or destruction of property of others,
including, without limitation, loss of use thereof, and including, without
limitation, the liability of Landlord, Tenant or the applicable contractor
arising out of the activities of all subcontractors,
EXHIBIT D - PAGE 11 of 13
and each of them, with a combined single limit of not less than Ten Million
Dollars ($10,000,000) for any one accident and/or occurrence and/or series of
accidents or occurrences arising out of any one event. Such insurance shall
include Broad Form Property Damage and Independent Contractors Coverage.
Such insurance shall be primary and not subject to any contribution from any
insurance carried by Landlord or Tenant. In addition, Tenant's architect, and
any contractors or subcontractors doing design/build for any portion of the
Tenant Improvements, shall carry Professional Liability Insurance (errors &
omissions), in an amount not less than $1,000,000, covering personal injury,
bodily injury and property damages, said coverage to be maintained for a
period of three (3) years after completion of Tenant Improvements. All such
insurance shall name the following parties as additional insured: Landlord,
Tenant, any Mortgagee, and any other contractors with respect to any of the
Base Building Improvements, Land Improvements, Tenant Modification or Tenant
Improvements.
11. COMPLETION ASSURANCE. The parties acknowledge and agree that (i)
Landlord will be acquiring the Land and obtaining a construction loan for the
Base Building Improvements in reliance on the Lease, including Tenant's
obligations to complete the Tenant Improvements and to pay for the Tenant
Improvements and Tenant Modifications as provided in this Work Letter, and (ii)
Landlord would not enter into the Lease unless such obligations are assured in
accordance with the terms of this Paragraph 11. Accordingly, Tenant has agreed
to provide assurance (the "Completion Assurance") for its obligations under this
Work Letter in accordance with this Paragraph 11.
(a) LETTER OF CREDIT: At such time as Landlord acquires the Land and
waives its Credit Termination Right, Tenant shall deliver to Landlord one or
more unconditional, irrevocable, transferable letter(s) of credit, in the
initial aggregate amount of Six Million Eight Hundred Twenty-Five Thousand One
Hundred Five Dollars ($6,825,105), issued by Bank of America NT & SA (or another
financial institution reasonably acceptable to Landlord), and in the form
attached hereto as Schedule "D-3".
(i) TERMS OF LETTER(S) OF CREDIT. The letter(s) of credit shall
have an original term of no less than one year
EXHIBIT D - PAGE 12 of 13
and automatic extensions until sixty (60) days after the later of Tenant's
satisfaction of all of its obligations under this Work Letter and the Rent
Commencement Date. The letter(s) of credit shall provide for partial draws.
Tenant shall keep the letter(s) of credit, at its expense, in full force and
effect during such time as security for Tenant's obligations to timely
construct the Tenant Improvements and pay for the Tenant Improvements and
Tenant Modification pursuant to, and in accordance with, the terms of this
Work Letter. The letter(s) of credit shall provide thirty (30) days' prior
written notice to Landlord of cancellation or material change thereof.
(ii) LANDLORD'S RIGHT TO DRAW. If a Draw Event (as defined
below) occurs, Landlord or its assignee, at its option, may present its written
demand for payment of the entire face amount of the letter(s) of credit and the
funds so obtained shall become due and payable to Landlord or its assignee.
Landlord or its assignee may use the funds so obtained to complete the Tenant
Improvements contemplated by this Work Letter or, in lieu of any portion
thereof, any other improvements or alterations to the Premises, so long as the
aggregate cost thereof does not exceed $35 per rentable square foot.
Alternatively, Landlord or its assignee may make partial draws on the letter of
credit as needed to pay for the Tenant Improvements or any other improvements or
alterations, subject to the above limitation. In addition, if a Draw Event
occurs, Landlord or its assignee, at its option, may draw on the letter(s) of
credit to pay for any Tenant Modifications. Upon Landlord's completion of the
Tenant Improvements (or any other improvements or alterations as provided
above), Landlord shall reimburse Tenant, at Tenant's request and subject to
Landlord's receipt of reasonable documentation, for any costs incurred by Tenant
prior to the Draw Event for construction of the Tenant Improvements, but only to
the extent of any remaining proceeds from the letter(s) of credit.
(iii) DEFINITION OF DRAW EVENT. A "Draw Event" shall mean
any of the following: (I) Tenant is the subject of an Insolvency Proceeding (as
defined in the Lease); provided, however, that if such proceeding is pursuant to
Chapter 11 of the United States Bankruptcy Code (as opposed to Chapter 7), a
Draw Event shall not be deemed to have occurred so long as (A) the
EXHIBIT D - PAGE 13 of 13
Lease and Work Letter are assumed by Tenant within sixty (60) days after the
order for relief is entered, (B) no other Draw Event has occurred, (C)
Tenant is not in breach of any other obligations under the Lease or this Work
Letter, and (D) no lien has been filed against Phase I arising out of any
work performed, material furnished or obligations incurred by Tenant which
has not been released prior to the commencement of such Insolvency
Proceeding; (II) Tenant terminates its construction contract with Tenant's
Contractor without Landlord's prior consent, or defaults under such
construction contract or any substitute thereof and does not cure such
default within the longer of the applicable cure period under such contract
or five (5) days after such default occurs; (III) the Lease is terminated by
Landlord due to a Tenant default before completion of the Tenant Improvements
and any Tenant Modifications; (IV) the letter(s) of credit are not extended
within thirty (30) days prior to their expiration; (V) Tenant fails to
deliver Tenant's space plan, Working Drawings, or any other item required to
be delivered pursuant to Paragraph 5(a) on or before the date specified for
such delivery; (VI) Tenant fails to commence construction of the Tenant
Improvements within ninety (90) days after the Occupancy Date (subject to
delay caused by Force Majeure Events); (VII) Tenant terminates the Lease
pursuant to Paragraph 22(d) prior to completion of the Tenant Improvements
and any Tenant Modifications, provided that in such event Tenant shall be
entitled to any insurance proceeds attributable to the Tenant Improvements
completed by Tenant prior to the casualty and Landlord shall be entitled to
the entire face amount of the letter(s) of credit; and (VIII) Tenant fails to
complete the Tenant Improvements within one hundred eighty (180) days after
the Occupancy Date (subject to delay caused by Force Majeure Events),
provided that if Landlord reasonably determines that Tenant is diligently
pursuing construction of the Tenant Improvements, Landlord shall allow Tenant
an additional thirty (30) days to complete the Tenant Improvements before a
"Draw Event" is deemed to occur.
(iv) RETURN OF LETTER(S) OF CREDIT. The letter(s) of credit
shall be returned to Tenant, and Tenant's obligations under this Paragraph 11
shall terminate, at such time as all of the following have occurred: (A) Tenant
has spent at least the face amount of the letter(s) of credit on the Tenant
Improvements
EXHIBIT D - PAGE 14 of 13
(not including the Tenant Improvements described in Paragraph 4(a)); (B)
Tenant has completed and paid for all Tenant Modifications; and (C) Tenant
has provided Landlord with the following items with respect to all of the
Tenant Improvements and all of the Tenant Modifications which are not made by
Change Order: (I) "as-built" drawings signed by either Tenant's architect or
contractor; (II) final punch list signed off by both Tenant and Landlord
and/or their architects; (III) written certification from Tenant's architect
and/or contractor that the Tenant Improvements and Tenant Modifications are
substantially complete in accordance with Tenant's Plans, and a copy of the
certificate of occupancy; and (IV) evidence satisfactory to Landlord and any
Mortgagee that all potential lien claimants have been fully paid and release
their lien claims, which evidence shall be sufficient for any Mortgagee to
obtain an acceptable endorsement to its title insurance policy insuring
lien-free completion of the Tenant Improvements and any Tenant Modifications.
(v) THREE PARTY AGREEMENT. At or prior to Tenant's delivery to
Landlord of the letter(s) of credit, Tenant shall enter into, and shall cause
Tenant's general contractor for the Tenant Improvements to enter into, an
agreement with Landlord, in form and substance reasonably satisfactory to
Landlord (the "Three Party Agreement"). The Three Party Agreement shall provide
that, if a Draw Event occurs, Landlord shall have the option to either (I)
terminate the existing contract for construction of Tenant Improvements, after
paying the general contractor for all completed work from the proceeds of the
letter(s) of credit, to the extent they are available to Landlord; or (II)
assume Tenant's obligations, to the extent they accrue after the Draw Event,
under the existing contract for construction of Tenant Improvements; or (III)
terminate the existing contract as provided in (I) above and enter into a new
contract with the general contractor for completion of the Tenant Improvements
or any other alterations or improvements to the Premises.
(b) ADDITIONAL OBLIGATIONS. The Completion Assurance described in
this Paragraph 11, and Tenant's obligations and Landlord's rights with respect
thereto, shall be in addition to any Letter of Credit or other security deposit
provided by Tenant
EXHIBIT D - PAGE 15 of 13
under the Lease pursuant to Paragraph 34 of the Lease. The amount of the
Completion Assurance shall not limit Tenant's obligations under this Work
Letter.
12. DISPUTE RESOLUTION. If Landlord and Tenant disagree about any issues
(including, without limitation, Tenant Delays and Landlord Delays) used to
determine the Occupancy Date, the Rent Commencement Date, any Initial Window
Date or the satisfaction of any Condition, and the parties are unable to resolve
that dispute within thirty (30) days after Tenant commences business operations
at the Premises, the dispute shall be submitted to arbitration for resolution
pursuant to Paragraph 41 [Arbitration of Disputes] of the Lease.
Notwithstanding the foregoing, during the pendency period of any arbitration
initiated pursuant to this Paragraph 12, Tenant shall pay Base Rent and
Additional Charges from and after the Rent Commencement Date as determined by
Landlord and, if such dispute affects any Condition or Initial Window Date,
Tenant may not exercise any termination right or action for damages in
connection therewith; provided, however, that such payment and/or inability to
terminate shall be without prejudice to the ultimate determination of that
issue.
13. DEFINED TERMS. All capitalized terms not defined in this Work Letter
shall have the meanings given them in the Lease.
EXHIBIT D - PAGE 16 of 13
SCHEDULE D-1
MINIMUM STANDARDS
FOR
TENANT IMPROVEMENTS
NETSCAPE COMMUNICATIONS CORPORATION
000 XXXXX XXXXXX - MOUNTAIN VIEW
PHASE I
RESTROOMS:
- Walls & Floors - Dal Tile or American Olean unglazed
mosaic 2"x 2" ceramic tile thinset
- Ceramic tile wainscot - 6'-0" high @ wet walls
- Stipple enamel painted xxx.xx. ceiling @ min. 9' high.
SINK TOPS:
- Tile, granite or Corian
DRINKING FOUNTAIN:
- Xxxx Model HWCF8-2 Dual Heights
URINAL:
- American Standard Allbrook Urinal 6541.132
LAVATORY:
- American Standard Ovalyn Under Counter 0470.013.
FAUCET:
- Kohler Triton K-7443-4B
TOILETS:
- Wall mounted American Standard Elongated Cadet 9468-018
with Xxxxx 115 PYV flush valve.
TOILET ACCESSORIES:
- Paper towel dispenser: Bobrick B38032
(Women's dual)
- Combination Unit, Toilet Seat Cover, Toilet Tissue:
- Bobrick B-3571 (Women's single)
- Bobrick B-357 (Women's dual)
- Bobrick B-3479 (Men's single)
- Bobrick B-3471 (Men's dual)
- Liquid Soap Dispenser: Brobrick B-822
(Counter Mounted)
- Recessed Feminine Napkin Brobrick B-3500
Dispenser:
- Grab Bar: Brobrick B-490-36
Brobrick B-490-48
MIRROR OVER SINKS:
- 1/4" thick float mirror wall-to-wall from light valance to
vanity splash.
P.L. TOILET PARTITIONS:
- Floor mounted. Additional specifications to be provided by Tenant, subject
to Landlord's approval.
JANITORIAL CLOSETS (BOTH FLOORS):
- Broom/mop holder
- Fiberglass floor sink
- 4'-0" high Marlite wainscot behind sink
LOBBY:
- Elevator Finishes/Features:
- Carpet
- 4500 lb. Front/Rear Service in Buildings 1 and 3;
Front service only in Building 2
- Wall panels - plastic laminate
- Ceiling/Lighting - Eggcrate
CEREMONIAL STAIRWAY:
- Carpet with or without pad
MISCELLANEOUS:
- Cafeteria & Health Club to be reviewed and approved
- ADA Compliance required throughout project
GENERAL TENANT IMPROVEMENT STANDARDS
ACOUSTICAL CEILINGS:
2 x 4 flat white T-Bar grid with drop-in ceiling tiles (rated as required).
Tenant may provide specifications for ceiling tiles, subject to Landlord's
approval. Compression post and seismic wires as required by code. All required
light wires.
Open ceiling plan permitted, subject to Landlord approval.
CARPET & RESILIENT FLOORING:
Carpet: 28 oz. loop pile glue down carpet
Base: 2" to 4" rubber base (top set base at resilient
floors).
Resilient: Xxxxxxxxx Stonetex
PAINT:
Two coats of paint over prime coat. Standard manufacturers are
Xxxxx Xxxxx, Xxxxxxxx or equal.
WALL COVERINGS:
Walls shall have a smooth finish.
Not otherwise specifically required by Landlord.
PLUMBING:
Coffee bar sinks with single handle faucets, 2 1/2 gallon
under counter hot water or other arrangements acceptable to Landlord.
HVAC:
Tenant to provide design by licensed mechanical engineer based on design
criteria by Super Symmetry. The design is subject to Landlord's approval.
FIRE SPRINKLERS:
Base Building Improvements include mains and up heads at the
structure. Tenant Improvements include all necessary drop
heads with semi-recessed chrome heads with white escutcheons.
Drop heads to be tile-centered where possible and otherwise placed in
aesthetically pleasing locations.
CASEWORK:
Base cabinets with Countertops - Flush overlay construction, plastic laminate
exteriors, drawers over doors, 6" drawer fronts,
one selply shelf adjustable on 32 mm pins, 4" back splash, 4" painted plywood
base, locking rail behind face frame between doors and drawers (no locks, unless
specifically requested), 2'-3" deep, 3'-0" high, polished chrome wire pulls,
hinges adjustable with 170 degrees opening, shelf span not to exceed 32",
countertops to be plywood under plastic laminate.
Wall Cabinets - Flush overlay construction laminate exteriors, mounted from 4'-
8" above finished floor to 7'-6" above finished floor, seal top with backing
material, two selply shelves adjustable on 32 mm pins, 3" apron at bottom,
brushed chrome wire pulls, hinges adjustable with 170 degree opening, shelf span
not to exceed 32".
Standard Plastics Laminates - Formica, Wilsonart or Nevamar.
DOORS, FRAMES, HARDWARE & GLASS:
Doors: 3'-0" x 9'0" x 1-3/4" solid core, prefinished wood
(wood veneer or paint grade, rated as required). Proposed upgrades
shall be submitted to Landlord for approval.
Frames: Brushed aluminum with clear finish (rated as
required). Sidelight frames integral with
door frame 2'-0" x 9'-0".
Hardware: Schlage lever hardware. Two
pair butts per door. Dome floor stops.
Closers, automatic flush bolts, astragals, and coordinators with
finish to be mutually acceptable to Tenant and Landlord.
Glass: 1/4" clear tempered or square wired glass where
required by code.
METAL FRAMING & DRYWALL:
Corridor walls and demising walls for bathrooms, elevator pits and
stairwell enclosures/1-Hr. construction with 3 5/8" 25 gauge metal studs,
24" on center to underside of structure with 5/8" sheetrock on each
side and R-11 batt insulation full height.
Tenant demising walls/full height (slab to structure) 3 5/8" 25 gauge
metal studs, 24" on center with R-11 insulation and 5/8" type "X"
sheetrock full height both sides (the height of the wall may be adjusted
for return air plenium).
Tenant interior walls/ceiling height (floor to underside of acoustical
ceiling), 3 5/8" 25 gauge studs, 24" on center with 5/8" sheetrock on
each side and J-mold at top.
Finish: Smooth (level 4) wall.
ELECTRICAL:
Light fixtures: 2' x 4' three lamp fixtures with 18 cell parabolic
lenses or other fixtures mutually acceptable to Tenant and Landlord.
Downlight and wall washers as accent lighting
in conference rooms and reception areas as appropriate.
Exit lights: Quantity as required by code, to be specified by Tenant subject to
Landlord's approval.
Outlets and switches: Private offices receive two duplex electrical
outlets, two telephone and data outlets (ring/string) and one dual light
switch. Conference rooms receive four duplex outlets, two telephone
and data outlets (ring/string) and one dual light switch. All other
rooms are addressed based on specific layouts. Any changes to the foregoing
specifications shall be subject to approval by Landlord.
EXTERIOR WINDOW COVERING:
1" horizontal mini-blinds at interior of each exterior window, top lock
controls.
Standard typical manufactures, Levelor, Xxxxxx-Xxxxxxx or equal. Color
to be consistent throughout the Premises and acceptable to Landlord.
Alternatives may be specified in some areas subject to Landlord's approval.
CEILINGS:
Ceiling height on all floors shall be a minimum of ten feet, except as otherwise
approved by Landlord.
All partitions shall be below the ceiling grid, except as specifically indicated
in Tenant's space plan and/or Working Drawings and approved by Landlord in
Landlord's sole discretion.
LIMITATION ON HARD WALL OFFICE:
No more than Fifty percent (50%) of the rentable floor area on any floor of any
Building shall be enclosed as hard wall office, unless approved by Landlord at
its sole discretion; provided, however, that Tenant may exceed this limitation
if Tenant agrees to reconfigure the affected floor to such standard upon
expiration or earlier termination of this Lease.
SOUND INSULATION:
Adequate sound insulation shall be provided for bathrooms, conference rooms and
copy rooms.
SCHEDULE D-2
CERTAIN TENANT IMPROVEMENTS
(1) Enunciator Panels (if and as required by the City of Mountain View)
(2) Electrical Rooms in each Building
January 23, 1997
LEASE AGREEMENT
(PHASE II)
by and between
000 Xxxxx Xxxxxx Associates, L.P.,
a California limited partnership
("LANDLORD")
and
Netscape Communications Corporation,
a Delaware corporation
("TENANT")
Dated as of January 23, 1997
--------------------------------------
2
BASIC LEASE INFORMATION
--------------------------------------------------------------------------------
Lease Date: January 23, 1997
LANDLORD: 000 Xxxxx Xxxxxx Associates, L.P.,
a California Limited Partnership
Landlord's Address: 000 Xxxxxxx
Xxxx Xxxx, XX 00000
TENANT: Netscape Communications Corporation,
a Delaware corporation
Tenant's Address: FOR NOTICE:
000 Xxxxxxxxxxx Xxx.
Xxxxxxxx Xxxx, XX 00000
Attn: Director, Real Estate
FOR BILLING:
000 Xxxxxxxxxxx Xxx.
Xxxxxxxx Xxxx, XX 00000
Attn: Director, Accounts Payable
Premises: Four (4) separate buildings to be constructed on the Land in
accordance with this Lease (each, a "Building" and
collectively, the "Buildings").
Phase II: The Buildings, land and improvements located in the area
shown on Exhibit "A" attached hereto.
Project: The Project shall consist of Phase I (as defined in
Subparagraph 1(c) [Phase I Lease]) and Phase II. The
Project may be expanded to include other land and
improvements, in accordance with Subparagraph 1(c) [Project;
Common Areas; Access & Cooperation].
1
Rentable Area of the Premises:Approximately 248,000 Rentable Square Feet
("Rentable Area"). Tenant agrees that Landlord may redetermine the Rentable
Area of the Premises at any time prior to the commencement of construction of
the Base Building Improvements and, upon receipt of written notice from Landlord
stating any change to the Rentable Area (which shall include a certification by
Landlord's architect that any remeasurement by Landlord of the Rentable Area is
based on the measurement method and procedure used to determine the Rentable
Area of the Phase I Premises under the Phase I Lease), the "Rentable Area" for
purposes of this Lease (including for purposes of calculating Rent) shall be
adjusted to reflect the changed Rentable Area; provided, however, that
notwithstanding any such change in the Rentable Area, for purposes of
calculating Rent under this Lease the Rentable Area shall be no less than
248,000 Rentable Square Feet.
Tenant's Use of the Premises:Tenant shall use the Premises for office,
distribution, research and development, and/or light manufacturing, and for no
other purposes.
Lease Term: Commencing on the Occupancy Date and ending on the
Expiration Date, with the right to extend for an additional
term of five (5) years in accordance with Paragraph 43
[Option to Renew].
Scheduled Occupancy Date:
March 1, 1998
Scheduled Rent Commencement Date:One Hundred Twenty (120) days after the
Occupancy Date.
Expiration Date: Fifteen (15) years and six (6) months after
the Rent Commencement Date ("Expiration Date").
Rent: Base Rent plus Additional Charges.
Monthly Base Rent: $1.40 per Rentable Square Foot of the
Rentable Area of the Premises ("Monthly Base Rent").
2
Base Rent Adjustments:On each anniversary of the Rent Commencement Date, the
Monthly Base Rent shall increase by $.05 per Rentable Square Foot ("Base Rent
Adjustments").
Security Deposit: Tenant shall provide and maintain a letter of credit or cash
collateral in the initial amount of Seven Million Five
Hundred Thousand Dollars ($7,500,000) as more specifically
provided in Paragraph 34 [Security Deposit], which amount
may be reduced during the Term in accordance with such
paragraph.
Guarantor of Lease: None
Broker: Cornish & Xxxxx
Broker's Fee or Commission Paid By:
Landlord
The foregoing Basic Lease Information is hereby incorporated into and made a
part of this Lease. Each reference in this Lease to any of the Basic Lease
Information shall mean the information hereinabove set forth and shall be
construed to incorporate all of the terms provided under the particular
paragraph pertaining to such information. In the event of any conflict between
any Basic Lease Information and any other portion of the Lease, the latter shall
control.
LANDLORD:
000 Xxxxx Xxxxxx Associates, L.P.,
a California limited partnership
By: Canada Corp.,
a California corporation,
Its General Partner
By: /s/ Xxxxxxx X. Xxxxxx III
-------------------------
3
Its:
-------------------------
By: Virginia Land Company, Inc.,
a California corporation,
Its General Partner
By: /s/ Xxxx X. Xxxxxxxx
--------------------------
Its:
-------------------------
4
TENANT:
Netscape Communications Corporation,
a Delaware corporation
By: /s/ Xxxxx Xxxxxx
---------------------------------
Xxxxx Xxxxxx
Its Chief Financial Officer
5
LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease") is made and entered into as of January
23, 1997, by and between 000 Xxxxx Xxxxxx Associates, L.P., a California
limited partnership (herein called "Landlord"), and Netscape Communications
Corporation, a Delaware corporation (herein called "Tenant").
1. LEASED PREMISES.
(a) PREMISES. Upon and subject to the terms, covenants and
conditions hereinafter set forth, Landlord agrees to lease to Tenant and Tenant
agrees to hire from Landlord those premises (the "Premises") comprising four (4)
entire buildings to be constructed as shown on Exhibit "A" attached hereto
(collectively, the "Buildings" and each individually, a "Building"). The
Buildings will be located on the parcel or parcels of real property shown on
Exhibit "A" (the "Land"). Landlord currently has the contractual right to
acquire title to the Land from Schlumberger Technology Corporation ("Seller").
The Buildings, together with the Land and associated improvements now or in the
future located on the Land are collectively referred to as "Phase II". Landlord
shall use commercially reasonable efforts to acquire the Land and construct the
Buildings in accordance with the terms and conditions of this Lease and the Work
Letter, provided that Tenant's rights and remedies for any breach of such
obligation shall be limited as provided in Subparagraphs 3(e) [Conditions;
Window Dates] and 21(e)(2) [Tenant's Remedies].
(b) CONDITIONS PRECEDENT; RIGHT OF FIRST NEGOTIATION.
(1) CONDITIONS PRECEDENT. Landlord shall have no obligation to
lease Phase II to Tenant unless and until the conditions precedent listed on
Exhibit "A-1" attached hereto (the "Conditions Precedent") have been satisfied
or waived by both Landlord and Tenant. If the Conditions Precedent have not
been satisfied on or before December 31, 1997, both Landlord and Tenant shall
have the option to terminate this Lease at any time thereafter until such
Conditions Precedent have been satisfied by delivery of written notice to the
other party, and upon such
1
termination the rights and obligations of the parties with respect to the
leasing of Phase II shall terminate, except for the rights of Tenant under
Subparagraph 1(b)(2) [Right of First Negotiation]. Upon any such
termination, Landlord shall promptly return to Tenant the Completion
Assurance and, after the Phase I Letter of Credit (as defined in Subparagraph
34(b) [Reduction after Phase I Occupancy]) has been provided by Tenant, any
undisbursed portion of the Letter of Credit.
(2) RIGHT OF FIRST NEGOTIATION. Notwithstanding the foregoing,
if the Conditions Precedent are subsequently satisfied prior to the earlier of
(i) the transfer of Phase II by Landlord to a third party; (ii) the termination
of the Phase I Lease; (iii) the assignment of the Phase I Lease or subletting by
Tenant of more than sixty percent (60%) of Phase I; or (iv) December 31, 1999,
then prior to offering to lease all or any portion of Phase II to any third
party, Landlord shall notify Tenant of the availability of Phase II (the
"Trigger Notice"). Tenant shall have five (5) business days following receipt
of the Trigger Notice to deliver written notice to Landlord of Tenant's desire
to negotiate to lease all (but not less than all) of Phase II. If Tenant
delivers its notice within such five day period, Tenant shall have the exclusive
right to negotiate with Landlord for twenty (20) calendar days after receipt of
the Trigger Notice for the lease of all (but not less than all) of Phase II.
Neither party shall be under any duty to enter into a lease of Phase II and, in
conducting such negotiations, neither party shall be bound by the terms and
conditions contained in this Lease or any other prior agreements or discussions.
If Tenant does not deliver its notice within such five day period, or if
Landlord and Tenant have not entered into a written contract of lease within the
twenty day negotiation period, Tenant's rights under this paragraph shall
terminate, and Landlord shall be free to lease all or any portion of Phase II to
one or more third parties on such terms and conditions as Landlord and such
parties shall agree. Tenant's rights under this paragraph are personal to
Tenant and are not assignable. In addition, Tenant's rights under this
paragraph shall not be binding on any purchaser, lender or other successor to
Landlord's interest in Phase II or any portion of the Project. Time is of the
essence of this paragraph.
2
(c) PHASE I LEASE. Landlord and Tenant have entered into a separate
lease (the "Phase I Lease") of three (3) buildings (the "Phase I Buildings") to
be constructed on land adjacent to Phase II (the "Phase I Land"), including the
right of Tenant to use certain improvements and facilities on such adjacent land
(such buildings, improvements, facilities and land collectively, "Phase I").
Landlord currently has the contractual right to acquire title (i) to the Phase I
Land other than the Hetch Hetchy Easement (as defined in the Phase I Lease) from
Seller, and (ii) to the Hetch Hetchy Easement from SFWD (as defined in the Phase
I Lease).
(d) PROJECT; COMMON AREAS; ACCESS & COOPERATION.
(1) DEFINITION OF PROJECT. The term "Project" shall mean Phase
I and Phase II. Subject to the requirements of Subparagraph 5(b) [Management of
Common Area], Landlord shall have the right, at any time and from time to time,
to expand the land and improvements which are included in the "Project" to
include any other property acquired by Landlord or its affiliates which is
contiguous to the Project (as such term is defined at any given time),
regardless of whether any such other property is leased to Tenant or leased to,
sold to or occupied by a third party or third parties. Landlord shall deliver
written notice to Tenant of Landlord's intent to expand the Project, identifying
the property and improvements which will be added to the Project.
(2) DEFINITION OF COMMON AREA. The term "Common Area" shall
mean all areas and facilities within Phase II located outside the perimeter
footings of the Buildings, including the landscaped areas, service areas,
parking areas, recreation areas, trash enclosures, plaza, walkways, driveways,
sidewalks, access and perimeter roads, and the like; but excluding from the
Common Area all monitoring xxxxx, slurry walls, extraction xxxxx, remediation
equipment, piping, and other equipment (collectively, the "Clean-up Facilities")
which have been or may be installed on the Project for the purpose of conducting
monitoring and remediation of Hazardous Materials. The Clean-up Facilities are
or will be owned and controlled by Seller.
(3) USE OF COMMON AREA. During any time that Tenant leases all
of the rentable area located in the Project, Tenant shall have the right to
exclusive use of the Common Area
3
(subject to an easement for underground pipelines and related above ground
facilities in favor of Air Products (the "AirProducts Easement"), and all
other existing and future easements, licenses and other rights and interests
in favor of or required by public utilities or public, governmental or
regulatory entities; rights of third parties pursuant to the Declaration and
the CC&Rs; and rights retained by Landlord pursuant to this Lease), and
Landlord shall not grant the right to use of the surface of the Common Area
to any other tenant, occupant or owner of any property located adjacent to
the Project. During any time that the Project includes any rentable area not
leased to Tenant, Tenant shall have the right to non-exclusive use of the
Common Area and any other common area located in the Project, together with
other tenants, occupants and owners of portions of the Project, subject to
the terms of this Lease. The operation and use of the Common Area shall be
governed by conditions, covenants and restrictions ("CC&Rs") between the
owners of portions of the Project, in the form attached hereto as Exhibit
"B", with such modifications as Landlord may reasonably determine to be
appropriate. The CC&Rs may be recorded against the Project by Landlord at
any time, at Landlord's election, and will at all times be superior in
priority to this Lease. Landlord shall have the right to make reasonable
modifications to the CC&Rs during the Term, including, without limitation, in
order to provide necessary or appropriate access over, across and from the
Common Area (including any roadways and drive aisles located thereon) to any
property which is included in the Project; provided that such modifications
do not materially adversely affect Tenant's use of the Premises, Minimum
Parking, or access to the Premises.
(4) LANDLORD ACCESS. Landlord shall have reasonable and
appropriate access across the Common Area to other land which is included, or
which Landlord intends to include, in the Project, at all reasonable times for
purposes of construction and development of the Project. In connection with the
development of other portions of the Project, Tenant shall cooperate with
Landlord in the establishment, execution and recordation of the CC&Rs and any
other conditions, covenants, restrictions, easements, licenses and/or other
rights and interests which encumber Phase II for the benefit of other portions
of the Project, and which are required in order to
4
provide sufficient parking for any portion of the Project or in connection
with other development requirements for any portion of the Project, provided
that such conditions, covenants, restrictions, easements, licenses, and/or
other rights and interests do not materially adversely affect Tenant's use of
the Premises, Minimum Parking or access to the Premises and Tenant shall not
be required to incur any out-of-pocket cost in connection with such
cooperation. Tenant shall execute and deliver any documents or instruments
reasonably required in connection therewith upon Landlord's request.
(e) RECONFIGURATION OF PHASE II. Landlord reserves the right,
without incurring any liability to Tenant and without constituting an eviction
(constructive or otherwise), and without entitling Tenant to any abatement of
Rent or to terminate this Lease or otherwise releasing Tenant from any of
Tenant's obligations under this Lease, to take any of the following actions
(each, a "Reconfiguration"):
(1) Reconfigure the property line between Phase I and Phase II,
even if such reconfiguration would cause a reduction in the size of the Land, so
long as the portions of the Land on which the Buildings (and any required
setbacks) are located are not affected by such action, the remaining Phase II
continues to be in compliance with all applicable Laws (as defined in
Subparagraph 7(a) [Tenant's Compliance Obligations]) (including, without
limitation, city parking requirements and other development approvals), Tenant's
use of the Premises as contemplated by this Lease is not impaired thereby, and
Tenant continues to have use of the Minimum Parking in accordance with Paragraph
36 [Parking];
(2) Subdivide the Land into two or more legal parcels, so long
as Tenant's use of the Premises as contemplated by this Lease is not impaired
thereby and Tenant continues to have use of the Minimum Parking in accordance
with Paragraph 36 [Parking].
Landlord shall deliver written notice to Tenant of Landlord's intent to
Reconfigure, identifying the portion of Phase II affected by the Reconfiguration
and including a new Exhibit "A" reflecting such Reconfiguration. Any
Reconfiguration shall be
5
effective on the date designated by Landlord in its notice to Tenant. On the
effective date of such Reconfiguration, the description of the Land shall
automatically be revised, and the terms and conditions of the original Lease
shall remain in full force and effect except that the revised Exhibit "A"
reflecting the location of the newly configured Land shall become part of
this Lease. From and after the date of such Reconfiguration, the term "Land"
shall mean the reconfigured space. The Base Rent shall not be revised as a
result of any Reconfiguration. Tenant shall cooperate with Landlord in any
subdivision or lot line adjustment process in connection with any
Reconfiguration, provided that Tenant shall not be required to incur any
out-of-pocket cost in connection with such cooperation. Upon Landlord's
request, Tenant shall execute and deliver any documents or instruments
reasonably required in connection with the Reconfiguration, or the amendment
of the Lease or any subdivision or lot line adjustment process in connection
therewith.
2. OCCUPANCY AND USE. Tenant shall use and occupy the Premises for the
purpose specified in the Basic Lease Information and for no other use or purpose
without the prior written consent of Landlord. Landlord may grant or withhold
consent to a proposed change of use in its sole discretion. Notwithstanding
anything in this Lease, Tenant's use and occupancy of the Premises and Common
Area will be subject at all times to the terms and conditions of the CC&Rs and
the Declaration.
3. TERM AND POSSESSION.
(a) TERM; OCCUPANCY DATE; EXPIRATION DATE. The term of this Lease
(the "Term") shall commence on the Occupancy Date and, unless sooner terminated
as herein provided, shall expire on the Expiration Date, provided that Tenant
shall have an option to extend the Term in accordance with the terms and
conditions of Paragraph 43 [Option to Renew]. "Occupancy Date" shall mean the
date on which (i) Landlord notifies Tenant in writing that the base building
shell for each of the Buildings is sufficiently complete such that Tenant's
contractor may commence construction of the Tenant Improvements (as defined in
the Work Letter), and (ii) Landlord has tendered possession of the Premises to
Tenant; provided, however, that Landlord and Tenant may mutually agree to an
earlier Occupancy Date. After the Occupancy Date, Landlord
6
shall reserve a continuing right to access the Premises to take all steps
required to complete the Base Building Improvements (as defined in the Work
Letter), and Tenant acknowledges that substantial work may be required by
Landlord to complete the Base Building Improvements after the Occupancy Date.
"Sufficiently complete" (as used in the preceding sentence) means that the
roof structure shall be in place, shell sprinklers shall be installed,
concrete floors shall be poured, and access shall be available for the
delivery and placement of construction materials. All of the rights and
obligations of the parties under this Lease (other than Tenant's obligation
to pay Base Rent and Additional Charges and Tenant's maintenance and repair
obligations with respect to portions of the Base Building Improvements which
are not substantially complete) shall commence on the Occupancy Date. At
Landlord's option, the Occupancy Date may be determined separately for each
Building, in which event the Rent Commencement Date will be determined
separately for each Building, but Base Rent Adjustments and the Expiration
Date for the entire Premises will be based on the last Occupancy Date to
occur. The parties anticipate that the Occupancy Date will occur on the
Scheduled Occupancy Date set forth in the Basic Lease Information. However,
except as provided in Subparagraphs 3(e) [Conditions; Window Dates] and
21(e)(2) [Tenant's Remedies], this Lease shall not be void or voidable as a
result of any delay in the Occupancy Date, nor shall Landlord be liable to
Tenant for any loss or damage resulting therefrom.
(b) INITIAL CONSTRUCTION. Completion of the Base Building
Improvements by Landlord and the Tenant Improvements by Tenant shall be
governed by the terms and conditions of the separate work letter ("Work
Letter") attached hereto as Exhibit "D". Tenant's obligation to construct
the Tenant Improvements pursuant to the Work Letter is independent of, and in
addition to, Tenant's obligation to pay Rent under this Lease. Landlord's
general contract for the Base Building Improvements (including the roof
membrane) will include or provide for the construction warranties described
in the provisions of such contract attached hereto as Exhibit "G". Upon
Tenant's request, Landlord shall use reasonable efforts to enforce any
warranties furnished to Landlord by Landlord's general contractor, Landlord's
architect, and any other persons in connection with the provision of labor
and/or material for the Base Building Improvements (including the
7
roof membrane). If Tenant is not satisfied with Landlord's actions in
enforcing such warranties, Tenant may upon written notice to Landlord take
any actions necessary in Tenant's reasonable judgment to enforce such
warranties directly, and Landlord shall take all commercially reasonable
action to cooperate with Tenant, including assigning to Tenant Landlord's
rights with respect to such warranties. Tenant acknowledges that Landlord
has not made any representation or warranty with respect to the construction
of the Base Building Improvements or the condition of the Premises or the
Common Area or with respect to the suitability or fitness of either for the
conduct of Tenant's permitted use or for any other purpose, except as may be
expressly and specifically provided herein.
(c) OCCUPANCY BY TENANT. Tenant shall be deemed to occupy the
Premises from and after the Occupancy Date. This Paragraph 3(c) shall not be
construed as an obligation of Tenant to continuously occupy the Premises.
Within five (5) days after the Occupancy Date, Landlord shall deliver to Tenant
a certificate confirming the Occupancy Date, in the form of Exhibit "E" hereto.
If Tenant does not agree with Landlord's determination of the Occupancy Date,
Tenant may submit such matter to arbitration in accordance with Paragraph 41
[Arbitration of Disputes], provided that prior to the resolution of such matter
by arbitration, the parties shall proceed under this Lease as if the Occupancy
Date were the date designated by Landlord, with any required adjustments to the
Rent Commencement Date made after the matter is ultimately determined by
arbitration.
(d) RENT COMMENCEMENT DATE; CERTIFICATE OF OCCUPANCY. Tenant's
obligation to pay Base Rent and Additional Charges hereunder shall commence on
the earlier to occur of (i) the Scheduled Rent Commencement Date set forth in
the Basic Lease Information, or (ii) the date on which Tenant has substantially
completed the Tenant Improvements for all of the Buildings (or, if Landlord
elects to determine the Occupancy Date for each Building separately pursuant to
Subparagraph 3(a), the date on which Tenant has substantially completed the
Tenant Improvements for the applicable Building) in accordance with the Work
Letter (the "Rent Commencement Date"). After substantial completion of the
Tenant Improvements (as defined in the Work Letter), Tenant
8
shall immediately apply for, and use best efforts to obtain within fifteen
(15) business days, a certificate of occupancy (or equivalent documentation)
for each Building. Tenant shall promptly deliver to Landlord copies of the
certificate(s) of occupancy.
(e) CONDITIONS; WINDOW DATES. The parties have set forth certain
events which must occur prior to or during the construction of the Buildings
(each, a "Condition"), together with an "Initial Window Date" for each
Condition, on Exhibit "F" attached hereto. If any Condition is not satisfied
on or before its Initial Window Date (subject to extension pursuant to
Paragraph 7 [Tenant Delays] of the Work Letter), Tenant shall have the option
to terminate this Lease by delivering written notice to Landlord within five
(5) business days after the applicable Initial Window Date; provided,
however, that the Initial Window Dates for the Occupancy Date and Substantial
Completion of Base Building Improvements shall be subject to extension (not
to exceed ninety (90) days) for any delay resulting from Force Majeure
Events. If Tenant does not elect to terminate this Lease during such period,
Tenant shall again have the option to terminate this Lease by delivering
written notice to Landlord within five (5) business days after the thirtieth
day following the applicable Initial Window Date, and each thirtieth day
thereafter (each such date, together with the Initial Window Date, a "Window
Date"), if the applicable Condition is not satisfied on or before any such
Window Date. If Tenant does not deliver written notice of termination to
Landlord within any such five day period after a Window Date, all rights and
obligations of the parties under this Lease shall continue notwithstanding
the delay in the satisfaction of any Condition. If any Condition is not
satisfied after the third Window Date with respect to such Condition, both
Landlord and Tenant shall have the option to terminate this Lease by
delivering written notice to the other party within five (5) business days
after the applicable Window Date, or within five (5) business days after each
Window Date thereafter in connection with such Condition; provided, however,
that Landlord shall not have the option to terminate this Lease pursuant to
this paragraph after Tenant has commenced construction of the Tenant
Improvements. If this Lease is terminated by Tenant pursuant to this
Subparagraph 3(e) after construction of the Tenant Improvements has
commenced, at
9
Landlord's option and upon Landlord's request, Tenant shall assign to
Landlord all of Tenant's rights under Tenant's general contract, architect
and/or engineer agreements and any other agreements with contractors or
suppliers in connection with the Tenant Improvements, and Landlord shall
assume Tenant's obligations under any such assigned agreements to the extent
such obligations arise from work or materials provided to the Premises after
termination of the Lease. In such event Tenant shall indemnify and hold the
Landlord Parties harmless from, and defend the Landlord Parties against, all
liens filed and claims made by any contractors, architects, subcontractors,
or suppliers who provided work or materials to the Premises prior to the
termination of the Lease in connection with the Tenant Improvements.
(f) CREDIT TERMINATION RIGHT. Notwithstanding any other provision of
this Lease, Landlord shall have the option to terminate this Lease (the "Credit
Termination Right") by delivering written notice to Tenant at any time before
the earlier to occur of (i) the closing of an acquisition and construction loan
to Landlord with respect to Phase II, on terms and conditions satisfactory to
Landlord, and (ii) December 31, 1997, if Tenant fails to meet the "Credit
Standards" (as defined below) at any time after the execution of this Lease.
For purposes of this Paragraph 3(f) and Paragraph 11(g)[Permitted Transfers],
the "Credit Standards" shall mean each of the following, as reflected in audited
financial statements (which include an unqualified certification by a licensed
certified pubic accountant reasonably acceptable to Landlord) provided to
Landlord: (a) a tangible net worth of at least One Hundred Eighty Million
Dollars ($180,000,000); (b) a ratio of current assets to current liabilities of
at least 1.75:1; (c) unencumbered and unrestricted cash and cash equivalents of
the greater of One Hundred Million Dollars ($100,000,000) or five percent (5%)
of Tenant's total assets; (d) a ratio of debt to equity (on an historic cost
basis) not in excess of 2:1; and (e) no operating losses (exclusive of losses
due to acquisitions) for the prior two (2) years (combined operations of pre-
existing entities). During the period of time from the execution of this Lease
until the expiration or earlier waiver by Landlord of the Credit Termination
Right, Tenant shall deliver to Landlord, on a quarterly basis, audited financial
statements as described in the
10
preceding sentence, sufficient for Landlord to monitor Tenant's compliance
with the Credit Standards. If Landlord determines that Tenant is not in
compliance with any Credit Standards at any time, Landlord shall deliver
written notice thereof to Tenant, but Landlord shall not exercise the Credit
Termination Right prior to the earlier of thirty (30) days after such notice
or December 31, 1997 (the "Credit Cure Period") so as to provide Tenant with
a period of time to take any appropriate measures to meet the Credit
Standards. If Tenant is not in compliance with the Credit Standards upon the
expiration of the Credit Cure Period, Landlord may elect, at any time
thereafter (and notwithstanding any subsequent cure by Tenant) until the
expiration of the Credit Termination Right, to terminate this Lease, and
during such period of time Landlord may take any action to market the
Premises to other tenants. Landlord shall not be liable to Tenant for any
termination of this Lease pursuant to the Credit Termination Right; provided
that if Landlord exercises its Credit Termination Right, Landlord shall
promptly return to Tenant the Completion Assurance and, after the Phase I
Letter of Credit (as defined in Subparagraph
34(b)[Reduction After Phase I Occupancy]) has been provided by Tenant, any
undisbursed portion of the Letter of Credit.
4. RENT; RENT ADJUSTMENTS; ADDITIONAL CHARGES FOR EXPENSES AND TAXES.
(a) PAYMENT OF RENT.
(1) MONTHLY BASE RENT. Commencing on the Rent Commencement
Date, Tenant shall pay to Landlord throughout the Term Base Rent in an amount
equal to the Monthly Base Rent specified in the Basic Lease Information
multiplied by the Rentable Area of the Premises, as specified in the Basic Lease
Information ("Base Rent"). Base Rent shall be payable by Tenant on or, at
Tenant's election, before the first day of each month, in advance, in lawful
money of the United States (without any prior demand therefor and without
deduction or offset whatsoever, except for abatement as may be expressly and
specifically provided for in Paragraphs 22 [Damage and Destruction] and 23
[Eminent Domain]), to Landlord at the address specified in the Basic Lease
Information or to such other firm or at such other place as Landlord may from
time to time designate in writing.
11
(2) OTHER RENT. Tenant shall pay all charges and other amounts
whatsoever as provided in this Lease ("Additional Charges") to Landlord at the
place where the Base Rent is payable, and Landlord shall have the same remedies
for a default in the payment of Additional Charges as for a default in the
payment of Base Rent. As used herein, the term "Rent" shall include all Base
Rent and Additional Charges (including, without limitation, Additional Charges
pursuant to Paragraph 5 [Management] and Paragraph 25 [Right of Landlord to
Perform]).
(3) PARTIAL MONTHS. If the Rent Commencement Date occurs on a
day other than the first day of a calendar month, or the Expiration Date occurs
on a day other than the last day of a calendar month, then the Base Rent and
Additional Charges for such fractional month shall be prorated by multiplying
the Monthly Base Rent by a fraction, the numerator of which shall be (A) the
actual number of days remaining in such month including and after the Rent
Commencement Date, if determining Rent for the fractional first month, or (B)
the actual number of days elapsed in such month prior to and including the
Expiration Date, if determining Rent for the fractional last month, and the
denominator of which shall be the actual number of days in such month.
(b) ADJUSTMENTS IN BASE RENT. The Monthly Base Rent under
Subparagraph 4(a)(1) [Monthly Base Rent] shall be adjusted as provided in the
Basic Lease Information.
(c) ADDITIONAL CHARGES FOR EXPENSES AND TAXES.
(1) DEFINITIONS OF CERTAIN ADDITIONAL CHARGES. For purposes of
this Subparagraph 4(c), the following terms shall have the meanings hereinafter
set forth:
(A) "TAX YEAR" shall mean each twelve (12) consecutive
month period commencing July 1st of the calendar year during which the Rent
Commencement Date of this Lease occurs.
(B) "REAL ESTATE TAXES" shall mean all taxes, assessments
and charges levied upon or with respect to Phase II or any personal property of
Landlord used in the
12
operation thereof, or Landlord's interest in Phase II or such personal
property. Real Estate Taxes shall include, without limitation, all general
real property taxes, possessory interest taxes, and general and special
assessments, charges, fees or assessments for transit (including, without
limitation, shuttle fees and roadways), housing, police, fire, utilities,
sewers, emergency response or other governmental services or purported
benefits to Phase II (provided, however, that any refunds of Real Estate
Taxes paid by Tenant shall be credited against Tenant's further obligation to
pay Real Estate Taxes during the Term or refunded to Tenant at the end of the
Term), service payments in lieu of taxes, and any tax, fee or excise on the
act of entering into this Lease, or any other lease of space in Phase II, or
on the use or occupancy of Phase II or any part thereof, or on the rent
payable under any lease or in connection with the business of renting space
in Phase II, that are now or hereafter levied or assessed against Landlord by
the United States of America, the State of California, or any political
subdivision, public corporation, district or any other political or public
entity, and shall also include any other tax, fee or other excise, however
described, that may be levied or assessed as a substitute for, or as an
addition to, in whole or in part, any other Real Estate Taxes, whether or not
now customary or in the contemplation of the parties on the date of this
Lease. Real Estate Taxes shall not include franchise, transfer, inheritance
or capital stock taxes or income taxes measured by the net income of Landlord
from all sources unless, due to a change in the method of taxation, any of
such taxes is levied or assessed against Landlord as a substitute for, or as
an addition to, in whole or in part, any other tax that would otherwise
constitute a Real Estate Tax. Additionally, Real Estate Taxes shall not
include any assessments or like charges to pay for any remediation of
contamination from any Hazardous Materials other than liens, assessments and
like charges resulting from Tenant's failure to pay any costs for which
Tenant has indemnified Landlord pursuant to Subparagraph 40(b)
[Tenant Indemnity]. Real Estate Taxes shall also include reasonable legal
fees, costs and disbursements incurred in connection with proceedings to
contest, determine or reduce Real Estate Taxes. If any assessments are
levied on Phase II and Landlord pays the assessment in full, Tenant shall
have no obligation to pay more than the amount of annual installments of
principal and interest that would become
13
due during the Lease Term had Landlord elected to pay the assessment in
installment payments.
(C) "EXPENSES" shall mean the total costs and reasonable
expenses paid or incurred by Landlord in connection with the management,
operation, maintenance and repair of Phase II, including, without limitation,
(i) the cost of fire, extended coverage, boiler, sprinkler, commercial general
liability, property, rent, earthquake, flood, and all other insurance obtained
by Landlord pursuant to Subparagraph 12(e) [Landlord's Insurance Obligations]
including, without limitation, insurance premiums and any deductible amounts
paid by Landlord; (ii) the cost of air conditioning, electricity, steam,
heating, mechanical, ventilating, water, gas, elevator systems and all other
utilities, the cost of supplies and equipment and maintenance and service
contracts in connection therewith, and the cost of refuse and recycling
services, parking lot sweeping and similar maintenance services; (iii) the cost
of repairs and general maintenance and cleaning; (iv) fees, charges and other
costs for any project engineers for the Project, and fees, charges and costs of
all independent contractors (including attorneys, accountants and consultants)
engaged by Landlord and related solely to the operation of Phase II (or, if any
such costs, fees and charges are attributable to other property managed by
Landlord, the portion of such costs, fees and charges allocable to Phase II, as
reasonably determined by Landlord); (v) the cost of any capital improvements
made to the Building or the Common Areas as required or permitted by this Lease
(including, without limitation, any costs incurred in order to comply with the
Declaration in connection with such improvements); (vi) a management fee for
Landlord's management and administrative services in connection with Phase II in
the amount of one-quarter of one percent (.25%) of Base Rent and Additional
Charges (excluding the management fee), subject to increase pursuant to
Paragraph 5 [Management]; (vii) any expenses allocated to Phase II under the
CC&Rs and expenses incurred by Landlord if Landlord (either itself or through
its agent) assumes management of the Premises and/or Common Area pursuant to
Paragraph 5 [Management]; and (viii) any other expenses of any other kind
whatsoever incurred in managing, operating, maintaining and repairing the
Premises and/or Common Areas. Notwithstanding anything to the contrary herein
contained, Expenses shall not include, and in no
14
event shall Tenant have any obligation to pay for pursuant to this
Subparagraph 4(c) or Subparagraph 9(b) [Repair and Maintenance; Tenant's
Obligations], (aa) the initial cost of the Base Building Improvements which
is to be paid by Landlord pursuant to the Work Letter with respect to any
Building or the Common Area; (bb) the cost of providing tenant improvements
to any other tenant in Phase II; (cc) debt service (including, but without
limitation, interest and principal) required to be made on debt incurred by
Landlord and relating to the Project; (dd) ground lease payments; (ee) the
portion of a management fee paid to Landlord or an affiliate in excess of
one-quarter of one percent (.25%) of the sum of Base Rent and Additional
Charges (excluding the management fee), subject to increase pursuant to
Paragraph 5 [Management]; (ff) the cost of special services, goods or
materials provided to any other tenant; (gg) depreciation; (hh) costs for
which Landlord has a right to receive reimbursement from others; (ii) costs
occasioned by Landlord's fraud or willful misconduct under applicable Laws;
(jj) costs to correct any construction defects in the original construction
of the Base Building Improvements for any of the Buildings or the Common
Area; (kk) costs arising from a disproportionate use of any utility or
service supplied by Landlord to any other occupant of the Project to the
extent that Landlord has the ability to charge such other tenant for said
costs under the terms of a lease comparable to terms governing said costs in
this Lease; (ll) environmental pollution remediation related costs (provided
that such exclusion shall not limit Tenant's indemnity pursuant to
Subparagraph 40(b) [Hazardous Materials, Tenant Indemnity]); (mm) any
maintenance, repair or replacement costs for which Landlord is responsible
pursuant to Subparagraph 9(a) [Repair and Maintenance; Landlord's Obligations];
(nn) advertising or promotional costs; (oo) leasing commissions; and (pp)
reserves for expenses. All costs and expenses shall be determined on a cash
basis, with accruals appropriate to Landlord's business. Expenses shall not
include specific costs incurred for the account of, separately billed to and
paid by specific tenants in Phase II.
(D) "EXPENSE YEAR" shall mean each twelve (12) consecutive
month period commencing January 1 of the calendar year during which the Rent
Commencement Date of the Lease occurs. Landlord, upon notice to Tenant, may
change the
15
Expense Year from time to time to any other twelve (12) consecutive month
period, and, in the event of any such change, Expenses shall be equitably
adjusted for the Expense Years involved in any such change.
(2) PAYMENT OF REAL ESTATE TAXES.
(A) PAYMENT AS DUE. With reasonable promptness after
Landlord has received the tax bills for any Tax Year, Landlord shall furnish
Tenant with a statement (herein called "Landlord's Tax Statement") setting forth
the amount of Real Estate Taxes for such Tax Year. Unless otherwise required
pursuant to clause (B) below, Tenant shall pay to Landlord actual Real Estate
Taxes in installments, twice each Tax Year, no later than fifteen (15) business
days prior to the due date of each Real Estate Tax installment.
(B) IMPOUNDS. Notwithstanding clause (A) above, if
required by any Mortgagee or, at Landlord's election, after any default by
Tenant in the timely payment of Real Estate Taxes, Tenant shall pay to Landlord
as Additional Charges one-twelfth (1/12th) of Real Estate Taxes for each Tax
Year on or before the first day of each month during such Tax Year, in advance,
in an amount reasonably estimated by Landlord and billed by Landlord to Tenant.
Landlord shall have the right initially to determine monthly estimates and to
revise such estimates from time to time. If the actual Real Estate Taxes for
such Tax Year (as shown on Landlord's Tax Statement) exceed the estimated Real
Estate Taxes paid by Tenant for such Tax Year, Tenant shall pay to Landlord the
difference between the amount paid by Tenant and the actual Real Estate Taxes
within fifteen (15) days after the receipt of Landlord's Tax Statement, and if
the total amount paid by Tenant for any such Tax Year shall exceed the actual
Real Estate Taxes for such Tax Year, such excess shall be credited against the
next installment of Real Estate Taxes due from Tenant to Landlord hereunder. If
it has been determined that Tenant has overpaid Real Estate Taxes during the
last year of the Lease Term, then Landlord shall reimburse Tenant for such
overage on or before the thirtieth (30th) day following the Expiration Date.
(3) PAYMENT OF EXPENSES.
16
(A) PAYMENT AS DUE. With reasonable promptness after
Landlord's receipt thereof, Landlord shall furnish Tenant with a copy of any
invoices with respect to Expenses. Unless otherwise required pursuant to clause
(B) below, Tenant shall pay to Landlord any Expenses no later than twenty (20)
days after receipt of the invoice with respect to such Expenses.
(B) MONTHLY PAYMENTS. Notwithstanding clause (A) above,
Tenant shall pay to Landlord as Additional Charges one-twelfth (1/12th) of the
Expenses for each Expense Year on or before the first day of each month of such
Expense Year, in advance, in an amount reasonably estimated by Landlord and
billed by Landlord to Tenant in any of the following events: (i) if required by
any Mortgagee (with respect to all or any particular Expenses); (ii) if Landlord
assumes management of the Premises and/or Common Area pursuant to Paragraph 5
[Management]; or (iii) at Landlord's election, after any default by Tenant in
the timely payment of Expenses. Landlord shall have the right initially to
determine monthly estimates and to revise such estimates from time to time.
With reasonable promptness after the expiration of each Expense Year, Landlord
shall furnish Tenant with a statement (herein called "Landlord's Expense
Statement"), setting forth in reasonable detail the Expenses for such Expense
Year. If the actual Expenses for such Expense Year exceed the estimated
Expenses paid by Tenant for such Expense Year, Tenant shall pay to Landlord the
difference between the amount paid by Tenant and the actual Expenses within
fifteen (15) days after the receipt of Landlord's Expense Statement, and if the
total amount paid by Tenant for any such Expense Year shall exceed the actual
Expenses for such Expense Year, such excess shall be credited against the next
installment of the estimated Expenses due from Tenant to Landlord hereunder or
if the Term has ended it shall be returned to Tenant within thirty (30) days.
If Tenant has overpaid Expenses during the last year of the Lease Term, then
Landlord shall reimburse Tenant for such overage on or before the thirtieth
(30th) day following the later of the Expiration Date or the end of the last
Expense Year. To the extent any item of Expenses is payable by Landlord in
advance of the period to which it is applicable (e.g. insurance and tax escrows
required by any Mortgagee), or to the extent that prepayment is customary for
the service or matter, Landlord may
17
(aa) include such items in Landlord's estimate for periods prior to the date
such item is to be paid by Landlord, and (bb) to the extent Landlord has not
collected the full amount of such item prior to the date such item is to be
paid by Landlord, Landlord may include the balance of such full amount in a
revised monthly estimate for Additional Charges.
(4) OTHER. If either the Rent Commencement Date or the
Expiration Date shall occur on a date other than the first day of a Tax Year
and/or Expense Year, Real Estate Taxes and Expenses for the Tax Year and/or
Expense Year in which the Rent Commencement Date or the Expiration Date occurs
shall be prorated.
(d) AUDIT RIGHTS. Within ninety (90) days after receipt of any
Landlord's Expense Statement or Landlord's Tax Statement, Tenant shall have the
right to audit, at Landlord's office located in the San Francisco Bay Area, at
Tenant's expense, Landlord's accounts and records relating to Expenses and Real
Estate Taxes. Such audit shall be conducted by an independent certified public
accountant approved by Landlord, which approval shall not be unreasonably
withheld so long as such accountant is not being paid on a contingency fee or
similar basis. If such audit reveals that Landlord has overcharged Tenant,
Tenant shall notify Landlord within one hundred twenty (120) days after the date
the applicable Landlord's Expense Statement or Landlord's Tax Statement was
received by Tenant. Landlord may dispute such audit by arbitration pursuant to
Paragraph 41 [Arbitration of Disputes]. If Landlord does not dispute such
amount, or if Tenant prevails in any such arbitration, the amount overcharged
shall be paid to Tenant within thirty (30) days thereafter, together with
interest thereon at the "prime rate" of interest announced by the WALL STREET
JOURNAL for Xxxxx Fargo Bank (or, if Xxxxx Fargo Bank ceases to exist, by
another bank mutually acceptable to Landlord and Tenant), from the date
Landlord's Expense Statement or Landlord's Tax Statement, as applicable, was
delivered to Tenant until payment of the overcharge is made to Tenant. In
addition, if Landlord's Expense Statement or Landlord's Tax Statement, as
applicable, exceeds the actual Expenses and Real Estate Taxes which should have
been charged to Tenant by more than five percent (5%), the cost of the audit
shall be paid by Landlord.
18
If Tenant fails to object to any Landlord's Expense Statement or Landlord's
Tax Statement within one hundred twenty (120) days after receipt thereof,
such statement shall be final and shall not be subject to any audit,
challenge or adjustment.
(e) LATE CHARGES; DEFAULT RATE. Tenant recognizes that late payment
of any Base Rent or Additional Charges will result in administrative expenses to
Landlord, the extent of which additional expense is extremely difficult and
economically impractical to ascertain. Tenant therefore agrees that if any Base
Rent or Additional Charges remain unpaid ten (10) days after such amount is due,
the amount of such unpaid Base Rent or Additional Charges shall be increased by
a late charge to be paid to Landlord by Tenant, as an Additional Charge, in an
amount equal to five percent (5%) (or such greater amount not to exceed six
percent (6%) if a higher rate is charged by any Mortgagee for a late payment of
a monthly mortgage payment) of the amount of the delinquent Base Rent or
Additional Charges. In addition, any outstanding Base Rent, Additional Charges,
late charges and other outstanding amounts shall accrue interest at an
annualized rate of the greater of 10% or The Ninth Circuit Federal Reserve
Discount Rate plus 5% (the "Default Rate"), until paid to Landlord. Tenant
agrees that such amount is a reasonable estimate of the loss and expense to be
suffered by Landlord as a result of such late payment by Tenant and may be
charged by Landlord to defray such loss and expense. The provisions of this
Subparagraph 4(d) shall not relieve Tenant of the obligation to pay Base Rent or
Additional Charges on or before the date they are due, or affect Landlord's
remedies pursuant to Subparagraph 21(c) [Landlord's Remedies] if any Base Rent
or Additional Charges are unpaid after they are due.
5. MANAGEMENT.
(a) MANAGEMENT OF THE PREMISES. Tenant shall act as property manager
for the Premises throughout the Term, at Tenant's cost and expense; provided,
however, that Landlord may elect, by delivery of written notice to Tenant, to
assume management of the Premises if (i) Tenant does not cure any breach of its
obligations under Paragraph 9 [Repair and Maintenance], as provided in
Subparagraph 9(e) [Cure Rights], or if Tenant is in "Chronic Default" (as
defined in Subparagraph 21(f) [Chronic
19
Default] of its obligations under Paragraph 9 [Repair and Maintenance]; or
(ii) at any time during the Term Tenant directly occupies less than sixty
percent (60%) of the Rentable Area of the Premises (provided, however, that
if Tenant subsequently occupies sixty percent (60%) or more of the Rentable
Area of the Premises, Tenant may elect by delivery of written notice to
Landlord, to resume management of the Premises on a date designated by Tenant
but no earlier than forty-five (45) days after Landlord's receipt of such
notice). If Landlord assumes the management of the Premises, Landlord agrees
that it will assume Tenant's maintenance, repair and replacement obligations
contained in Subparagraph 9(b), (c) and (d) [Repair and Maintenance], and
that all costs incurred by Landlord in connection therewith shall be deemed
Additional Charges payable by Tenant in accordance with Subparagraph 4(c)
[Additional Charges for Expenses and Taxes], subject to the limitations
contained in Paragraph 4(c). In addition, Landlord's monthly management fee
shall be increased from one quarter of one percent (.25%), to two percent
(2%) of Base Rent and Additional Charges, and Subparagraphs 4(c)(1)(C)(vi)
and (ee) shall be revised accordingly.
(b) MANAGEMENT OF THE COMMON AREA. Tenant shall act as property
manager for the Common Area throughout the Term, at Tenant's cost and expense;
provided, however, that Landlord may elect, by delivery of written notice to
Tenant, to assume management of the Common Area at any time during the Term if
(i) Tenant does not cure any breach of its obligations under Paragraph 9 [Repair
and Maintenance] as they relate to the Common Area, or if Tenant is in Chronic
Default of such obligations; or (ii) Landlord elects to manage the Common Area
together with the common area located on portions of the Project that are not
leased by Tenant. In addition, if Landlord assumes management of the Premises
pursuant to Subparagraph 5(a) [Management of the Premises], Landlord shall also
assume management of the Common Area. If Landlord assumes the management of the
Common Area, Landlord agrees that it will assume Tenant's maintenance, repair
and replacement obligations contained in Subparagraph 9(b), (c) and (d) [Repair
and Maintenance] to the extent they apply to Common Area, and that all costs
incurred by Landlord in connection therewith ("Common Area Expenses") shall be
deemed Additional Charges payable by Tenant in accordance with
20
Subparagraph 4(c) [Additional Charges for Expenses and Taxes]. In addition,
if Landlord assumes management of the Common Area independently of assuming
management of the Premises, Landlord's monthly management fee shall be
increased to two percent (2%) of Base Rent and Additional Charges, and
subparagraphs 4(c)(1)(c)(vi) and (ee) shall be revised accordingly. If
Landlord assumes management of the Common Area at any time that the entire
rentable area of the Project is not leased to Tenant, any Common Area
Expenses which are shared with other common areas in the Project (including,
without limitation, costs incurred by Landlord in connection with the Hetch
Hetchy Easement to the extent such costs are "Expenses" under the Phase I
Lease) shall be allocated among the tenants and occupants of the Project
based on the rentable area leased to or occupied by each such tenant or
occupant, divided by the total leased or occupied rentable area of the
Project.
(c) THIRD PARTY MANAGEMENT. At any time after Landlord has assumed
management of the Premises and/or Common Area pursuant to this Paragraph 5, if
Landlord does not cure any breach of its obligations (including any of Tenant's
obligations assumed by Landlord) under Paragraph 9 [Repair and Maintenance]
during the cure period provided in Subparagraph 21(d) [Landlord's Default], or
if Landlord is in Chronic Default of such obligations, Tenant may elect, by
delivery of written notice to Landlord, to require that a third party manager
assume management of the Premises and/or Common Area, as applicable. Within ten
(10) business days after receipt of Tenant's notice, Landlord shall provide to
Tenant a list of at least three (3) third party management companies which are
acceptable to Landlord, and Tenant shall chose one to manage the Premises and/or
Common Areas. Each of such proposed management companies shall be reputable,
with sufficient financial capability to perform the obligations of the Project
manager and with sufficient experience managing similar projects in the South
Bay Area, all in Landlord's reasonable judgment. After receipt of written
notice from Tenant designating the manager, Landlord shall use commercially
reasonable efforts to enter into a property management contract with such
manager in a timely manner. Tenant shall pay Landlord, as an Expense, any
management fee charged by such manager, in addition to Landlord's management fee
of .25%.
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(d) DISPUTE OF ASSUMPTION OF MANAGEMENT. If a dispute arises between
the parties in connection with the assumption of management by Landlord or a
third party management company, as applicable, pursuant to this Paragraph 5, and
such dispute is submitted to arbitration in accordance with Paragraph 41
[Arbitration of Disputes], prior to the resolution of such matter by arbitration
the disputed assumption of management shall proceed, with any required transfer
of management and/or other required adjustments made after the matter is
ultimately determined by arbitration.
6. RESTRICTIONS ON USE. Tenant acknowledges that the Premises and Common
Areas may not be used or operated in violation of the requirements of the
Declaration or the CC&Rs, and Hazardous Materials may not be used or located on
the Premises or Common Area in a manner which would adversely affect Landlord's
rights and benefits under the Seller Indemnity described in Subparagraph 40(d)
[Seller Indemnity] (all such documents are collectively referred to as the
"Restrictive Documents"); provided, however, that the parties agree that
Tenant's permitted use under this Lease and parking rights under Paragraph 36
[Parking] do not violate the Restrictive Documents. Landlord has listed certain
specific uses and activities that are prohibited on all or certain portions of
the Premises and Common Area pursuant to the Restrictive Documents on Exhibit
"P" attached hereto. In addition, Landlord shall have the right to modify
Exhibit "P" to add other restrictions on use and activities on the Premises and
Common Area under the Restrictive Documents, by written notice to Tenant, so
long as such restrictions do not materially adversely affect Tenant's permitted
use of the Premises, Tenant's Minimum Parking or Tenant's access to the
Premises. Tenant shall not use the Premises or Common Area in a manner in
violation of the requirements listed on Exhibit "P", as it may be amended by
Landlord from time to time in accordance with the preceding sentence, and upon
written notice from Landlord Tenant shall discontinue any such use of the
Premises or Common Area. In addition, Tenant shall not do or permit anything to
be done in or about the Premises or Common Area which will obstruct or interfere
with the Clean-up Facilities, or with the rights of any parties to the
Declaration or the CC&Rs or any other tenant or occupant in the Project, or
injure them, nor use or allow the
22
Premises or Common Area to be used for any unlawful purpose, nor shall Tenant
cause or maintain or permit any nuisance in, on or about the Premises or
Common Area. Tenant shall not commit or suffer the commission of any waste
in, on or about the Premises or Common Area. Landlord acknowledges that, for
purpose of this Paragraph, the existence of the Existing Hazardous Materials
(as defined in Paragraph 40 [Hazardous Materials Liability]) on the Project
on the Occupancy Date, and Tenant's failure to remediate such Existing
Hazardous Materials, shall not be a violation of Tenant's obligations under
this Paragraph 6 with respect to nuisance or waste.
7. COMPLIANCE WITH LAWS.
(a) TENANT'S COMPLIANCE OBLIGATIONS. Tenant shall promptly, at its
sole expense, maintain the Premises and Common Area, any Alterations permitted
hereunder and Tenant's use and operations thereon in strict compliance at all
times with all present and future laws, statutes, ordinances, resolutions,
regulations, proclamations, orders or decrees of any municipal, county, state or
federal government or other governmental or regulatory authority with
jurisdiction over the Project, or any portion thereof, whether currently in
effect or adopted in the future and whether or not in the contemplation of the
parties hereto (collectively, "Laws"). Such Laws shall include, without
limitation, all Laws relating to health and safety (including, without
limitation, the California Occupational Safety and Health Act of 1973 and the
California Safe Drinking Water and Toxic Enforcement Act of 1986, including
posting and delivery of notices required by such Laws with respect to the
Premises and Common Area) and disabled accessibility including, without
limitation, the Americans with Disabilities Act, 42 U.S.C. section 12101 ET
seq., Environmental Laws, and all present and future life safety, fire,
sprinkler, seismic retrofit, building code and municipal code requirements;
provided however, that Tenant's obligation to comply with Environmental Laws is
subject to the terms and conditions of Paragraph 40 [Hazardous Materials
Liability], and Tenant shall not be responsible for compliance with clean-up
provisions of any Environmental Laws except to the extent of any release caused
or permitted by the Tenant Parties or otherwise included in Tenant's indemnity
contained in Subparagraph 40(b) [Hazardous Materials Liability; Tenant
23
Indemnity]. Notwithstanding the foregoing, Tenant shall not be required to make
any structural alterations to the Base Building Improvements in order to comply
with Laws unless the requirement that such alterations be made is triggered by
any of the following (or, if such requirement results from the cumulative effect
of any of the following when added to other acts, omissions, negligence or
events, to the extent such alterations are required by any of the following):
(i) the installation, use or operation of the Tenant Improvements, any
Alterations, or any of Tenant's trade fixtures or personal property; (ii) the
acts, omissions or negligence of Tenant, or any of its servants, employees,
contractors, agents or licensees; or (iii) the particular use or particular
occupancy or manner of use or occupancy of the Premises or Common Area by
Tenant, or any of its servants, employees, contractors, agents or licensees.
The parties acknowledge and agree that Tenant's obligation to comply with all
Laws as provided in this paragraph (subject to the limitations contained herein)
is a material part of the bargained-for consideration under this Lease.
Tenant's obligations under this Paragraph shall include, without limitation, the
responsibility of Tenant to make substantial or structural repairs and
alterations to the Premises (including the Base Building Improvements, Tenant
Improvements, and any Alterations) to the extent provided above, regardless of,
among other factors, the relationship of the cost of curative action to the Rent
under this Lease, the length of the then remaining Term hereof, the relative
benefit of the repairs to Tenant or Landlord, the degree to which the curative
action may interfere with Tenant's use or enjoyment of the Premises, and the
likelihood that the parties contemplated the particular Law involved. Tenant
waives any rights now or hereafter conferred upon it by any existing or future
Law to terminate this Lease, to receive any abatement, diminution, reduction or
suspension of payment of Rent, or to compel Landlord to make any repairs to
comply with any such Laws, on account of any occurrence or situation arising
during the Term.
(b) INSURANCE REQUIREMENTS. Tenant shall not do or permit anything
to be done in or about the Project or bring or keep anything therein which will
cause a cancellation of any insurance on the Project or otherwise violate any
requirements, guidelines, conditions, rules or orders with respect to such
24
insurance. Tenant shall at its sole cost and expense promptly comply with the
requirements of the board of fire underwriters or other similar body now or
hereafter constituted relating to or affecting the condition, use or occupancy
of the Premises or the Common Area (other than in situations where compliance
involves repair, maintenance or replacement of items that Landlord is expressly
required to repair, maintain or replace under this Lease).
(c) NO LIMITATION ON OBLIGATIONS. The provisions of this Paragraph 7
shall in no way limit Tenant's maintenance, repair and replacement obligations
under Paragraph 9 [Repair and Maintenance], or Tenant's obligation to pay
Expenses under Paragraph 4(c) [Additional Charges for Expenses and Taxes]. The
judgment of any court of competent jurisdiction or the admission of Tenant in an
action against Tenant, whether Landlord is a party thereto or not, that Tenant
has so violated any such Law shall be conclusive of such violation as between
Landlord and Tenant.
8. ADDITIONAL ALTERATIONS.
(a) LANDLORD'S ALTERATIONS. After completion of the Base Building
Improvements, Landlord shall not be permitted to make or suffer to be made
any additional alterations, additions or improvements in, on or to the
Buildings or any part thereof without the prior written consent of Tenant,
except as may be required by Law or as expressly required or permitted by
this Lease.
(b) LANDLORD'S CONSENT TO TENANT'S ALTERATIONS. Tenant shall not
make or suffer to be made any additional alterations, additions or improvements
("Alterations") in, on or to the Premises or Common Area or any part thereof,
without the prior written consent of Landlord. Alterations do not include
initial construction of the Tenant Improvements. Failure of Landlord to give
its disapproval to any Alterations within fifteen (15) calendar days after
receipt of Tenant's written request for approval shall constitute approval by
Landlord of such Alterations so long as Tenant's request includes the following
statement in capitalized and boldfaced letters: BY FAILING TO RESPOND TO THIS
REQUEST WITHIN FIFTEEN DAYS, YOU WILL
25
BE DEEMED TO HAVE APPROVED THE TENANT'S INSTALLATION OF THE ALTERATIONS
DESCRIBED IN THIS REQUEST Any Alterations in, on or to the Premises or Common
Areas, except for Tenant's movable furniture and equipment, trade fixtures
and Alterations which may be removed without damage to the Premises, shall
become the property of Landlord upon their completion without compensation to
Tenant. Landlord shall not unreasonably withhold its consent to Alterations
that (i) do not materially affect the structure of the Buildings, the
Building Systems (as defined below) or the Buildings' security or other
systems; (ii) are not visible from the exterior of the Buildings; (iii) are
consistent with Tenant's permitted use hereunder; and (iv) comply with the
Declaration; the CC&Rs; any easements, licenses or other use agreements or
encumbrances on Landlord's title to the Land (including, without limitation,
any underground easements in favor of PG&E or AirProducts); and any Mortgage.
(c) PERMITTED ALTERATIONS. Notwithstanding Subparagraph 8(b),
Tenant may make Alterations to the Premises (but not the Common Area, or the
interior courtyard or roof of any Building) without Landlord's prior consent so
long as (x) such Alterations comply with items (i) through (iv) in Paragraph
8(b) [Landlord's Consent to Tenant's Alterations], (y) such Alterations do not
require underground digging, and (z) the cost of each such Alteration (or group
of Alterations, if occurring substantially at the same time and as part of a
single project) does not exceed Fifty Thousand Dollars ($50,000), and the cost
of all such Alterations in any twelve (12) month period during the Term in the
aggregate does not exceed One Hundred Thousand Dollars ($100,000) (any such
Alterations being defined herein as "Permitted Alterations").
(d) REQUIREMENTS FOR TENANT ALTERATIONS. Tenant shall make any
Alterations consented to or permitted under this Paragraph 8 at Tenant's sole
cost and expense, in compliance with the following requirements: (i) Alterations
(other than Permitted Alterations) shall be made in accordance with plans and
specifications reasonably approved by Landlord, and all Alterations shall be
made in accordance with the requirements of Paragraph 10 [Liens]; (ii) any
contractor or person selected by Tenant to make Alterations (other than
Permitted Alterations) must first be approved in writing by Landlord, in its
reasonable
26
discretion; (iii) Alterations shall be made in compliance with all applicable
Laws; (iv) Alterations shall not alter or interfere with the ceiling of any
Building (all partitions being below the ceiling grid, except in areas
designated by Landlord on plans and specifications), unless approved by
Landlord in its sole discretion; and (v) Alterations shall not cause more
than fifty percent (50%) of the rentable floor area on any floor in any
Building to be enclosed as hard wall office unless approved by Landlord in
its sole discretion; provided, however, that Tenant may make Alterations that
do not comply with the standards set forth in items (iv) and (v) above
(subject to any other applicable Landlord consent requirement) if Tenant
agrees to reconfigure the affected floor to such standard upon expiration or
earlier termination of this Lease. By making Alterations which do not comply
with the standards set forth in items (iv) and (v) above, Tenant shall be
deemed to have agreed to reconfigure the Premises upon expiration or
termination of the Lease as provided above unless Landlord specifically
agrees otherwise in writing. Upon completion of any Alterations (other than
Permitted Alterations), Tenant shall furnish Landlord with a complete set of
final as-built plans and specifications, at Tenant's cost and expense. If
Tenant fails to provide Landlord with any such final as-built plans and
specifications within one hundred twenty (120) days after completion of the
applicable Alterations, Landlord may, at Landlord's election, cause such
final as-built plans and specifications to be prepared at Tenant's cost and
expense, and the expenses thereof incurred by Landlord shall be reimbursed as
Additional Charges within thirty (30) days after submission of a xxxx or
statement therefor. With respect to items (i) and (ii) above, failure of
Landlord to give its disapproval to any plans and specifications or general
contractor within fifteen (15) calendar days after receipt of Tenant's
written request for approval shall constitute approval by Landlord of such
matters so long as Tenant's request includes the following statement in
capitalized and boldfaced letters: BY FAILING TO RESPOND TO THIS REQUEST
WITHIN FIFTEEN DAYS, YOU WILL BE DEEMED TO HAVE APPROVED THE PLANS AND
SPECIFICATIONS AND/OR GENERAL CONTRACTOR FOR TENANT'S ALTERATIONS DESCRIBED
IN THIS REQUEST.
(e) REMOVAL OF ALTERATIONS AND RESTORATION. Upon the expiration or
sooner termination of the Term, Tenant shall upon
27
demand by Landlord, at Landlord's election, either (i) at Tenant's sole cost
and expense, forthwith and with all due diligence remove any Alterations made
by or for the account of Tenant that are designated by Landlord to be removed
and restore the Premises to its original condition as of the Rent
Commencement Date, subject to normal wear and tear and the rights and
obligations of Tenant concerning casualty damage pursuant to Paragraph 22
[Damage and Destruction], or (ii) pay Landlord the reasonable estimated cost
thereof as required by Subparagraph 26(b)
[Delivery and Restoration of Premises]. Upon the written request of Tenant
prior to installation of any Alterations, Landlord shall notify Tenant of its
election to require that such Alterations must be removed upon the expiration
or sooner termination of this Lease, so long as such written request clearly
requests Landlord's election regarding the removal of such Alterations.
Landlord's failure to specifically notify Tenant of Landlord' election shall
be deemed Landlord's election to require removal of the Alterations upon
expiration of the Term, notwithstanding any deemed approval by Landlord of
the Alterations pursuant to this paragraph.
(f) REIMBURSEMENT OF LANDLORD'S REVIEW COSTS. Tenant shall reimburse
Landlord upon demand for any reasonable out-of-pocket expenses incurred by
Landlord in connection with the review of any Alterations made by Tenant,
including reasonable fees charged by Landlord's contractors or consultants to
review plans and specifications prepared by Tenant.
9. REPAIR AND MAINTENANCE.
(a) LANDLORD'S OBLIGATIONS. Landlord shall maintain, repair and
replace, at its sole cost and expense, the following, except as provided in
Subparagraph 9(c) [Tenant's Obligations for Structural Maintenance] below: (i)
the roof structure (but not the roof membrane) and structural portions of the
Buildings (including load bearing walls and foundations); (ii) all underground
plumbing owned by Landlord from the point of connection to the City of Mountain
View's main line to the point of entry into each of the Buildings; and (iii)
structural portions of the parking facilities in Phase II, to the extent the
required maintenance, repair or replacement results from defects in the original
design or construction of the parking facilities
28
(but not including resurfacing, pothole repair or a new slurry seal, if
required by use of the parking facilities or from other causes). Tenant
shall notify Landlord in writing within fifteen (15) days (or immediately by
telephone or facsimile in the event of emergency, with prompt confirmation
delivered in accordance with Paragraph 28 [Notices]) after Tenant becomes
aware of any circumstances which Tenant believes may trigger Landlord's
obligations under this Subparagraph 9(a). Landlord shall not be in breach of
its obligations under this Subparagraph 9(a) with respect to any particular
repair, replacement or maintenance requirement unless and until Landlord has
received such written notice from Tenant and had sufficient opportunity to
satisfy such obligations. Tenant shall be liable to Landlord for any
additional cost incurred by Landlord in satisfying such obligations, or any
damage to the Project, resulting from Tenant's failure to timely notify
Landlord of such circumstances as required by this paragraph.
(b) TENANT'S OBLIGATIONS. Tenant shall maintain, repair and replace,
at its sole cost and expense, all portions of the Premises and Common Areas
included in Phase II which are not Landlord's obligations under Subparagraph
9(a) [Landlord's Obligations], including, without limitation, (i) the roof
membrane and exterior of each Building, (ii) the Building systems for
electrical, mechanical, HVAC and plumbing and all controls appurtenant thereto
(collectively, "Building Systems"), (iii) parking areas, courtyards, sidewalks,
entry ways, lawns, landscaping and other similar facilities of the Buildings and
Common Areas, and (iv) the interior portion of the Buildings, the Tenant
Improvements, the Alterations, and any additional tenant improvements,
alterations or additions installed by or on behalf of Tenant within the
Premises. Phase II shall at all times be maintained by Tenant in the condition
of a first-class office and research and development park. Without limiting the
foregoing, certain portions of the Common Area, Building exteriors and Building
Systems shall be maintained in accordance with certain standards and a
maintenance schedule which shall be provided by Landlord to Tenant after
completion of the Base Building Improvements in accordance with commercially
reasonable recommendations of Landlord's landscaping and/or building
contractors, manufacturers and/or consultants. Tenant agrees to review the
maintenance standards and schedule proposed by
29
Landlord within ten (10) business days following the date they are submitted
by Landlord to Tenant and to notify Landlord, in writing, of any objections
to the standards and schedule, in Tenant's reasonable discretion. If Tenant
fails to notify Landlord of any objection within such ten (10) business day
period, Tenant shall be deemed to have approved the proposed standards and
schedule. If Tenant objects to the proposed standards and schedule and the
parties are unable to resolve Tenant's objections, either party may submit
such dispute to arbitration pursuant to Paragraph 41 [Arbitration of Disputes]
, provided that prior to the resolution of such matter by arbitration, Tenant
shall maintain the Project in accordance with Landlord's proposed standards
and schedule. The maintenance standard and schedule which are placed into
effect pursuant to this paragraph shall be added to the Lease as Exhibit "R",
and may be amended by Landlord from time to time during the Term, by
delivering written notice thereof to Tenant, subject to Tenant's approval in
its reasonable discretion in accordance with the procedure set forth in this
paragraph. Tenant's obligations under this Paragraph 9 include, without
limitation, the replacement, at Tenant's sole cost and expense, of any
portions of Phase II which are not Landlord's express responsibility under
Subparagraph 9(a) [Landlord's Obligations], if it would be commercially prudent
to replace, rather than repair, such portions of Phase II, regardless of
whether such replacement would be considered a capital expenditure. Tenant
hereby waives and releases its right to make repairs at Landlord's expense
under Sections 1941 and 1942 of the California Civil Code or under any
similar law, statute or ordinance now or hereafter in effect. In addition,
Tenant hereby waives and releases its right to terminate this Lease under
Section 1932(1) of the California Civil Code or under any similar law,
statute or ordinance now or hereafter in effect.
(c) TENANT'S OBLIGATIONS FOR STRUCTURAL MAINTENANCE. Notwithstanding
the provisions of Subparagraph 9(a) [Landlord's Obligations] and without
limiting Tenant's other obligations hereunder, Tenant shall bear the full cost
of structural repairs or maintenance to preserve the Buildings in good working
order and condition, to the extent such structural repair and/or maintenance is
required due to the following (except to the extent any claims arising from any
of the following are
30
reimbursed by insurance carried by Landlord, are covered by the waiver of
subrogation in Paragraph 13 [Waiver of Subrogation] or are otherwise provided
for in Paragraph 22 [Damage and Destruction]): (i) the installation, use or
operation of any Alterations or other modification to the Premises or Common
Area made by Tenant; (ii) the installation, use or operation of Tenant's
property or fixtures; (iii) the moving of Tenant's property or fixtures in
or out of any Building or in and about the Project; or (iv) the acts,
omissions or negligence of Tenant, or any of its servants, employees,
contractors, agents or licensees, or the particular use or particular
occupancy or manner of use or occupancy of the Premises or Common Area by
Tenant or any such person. In addition, if at any time during the Term
Hazardous Materials are released, discharged, or disposed of on any portion
of the Premises or Common Area, in violation of Tenant's obligations
hereunder, repairs of the storm drains and/or plumbing from the point of
connection to the City of Mountain View's main line to the point of entry
into each of the Buildings shall be excluded from Landlord's obligations
under Subparagraph 9(a). Tenant shall not cause or permit any disposal or
release of Hazardous Substances into the plumbing systems at the Project.
Prior to Tenant's performance of any structural repairs or maintenance
required under this paragraph, the parties shall agree on the scope of the
required structural repair or maintenance, and shall agree upon which
alternative method is appropriate if more than one alternative exists. If
the parties are unable to agree on the scope or alternative, despite
reasonable efforts, such dispute shall be submitted to arbitration pursuant
to Paragraph 41 [Arbitration of Disputes]; provided, however, that if the
failure to make any such structural repair or maintenance during the pendency
of such arbitration would have a material, detrimental effect on the
condition or operation of any Building, Tenant shall either (x) delay the
activity which would trigger the required structural repair or maintenance,
or (y) if such activity already has occurred or cannot be delayed, commence
and diligently pursue the required structural repair or maintenance based on
the scope and alternative (if more than one) specified by Landlord, with a
reasonable adjustment to be made by the parties after the matter is
ultimately determined by arbitration.
31
(d) MAINTENANCE SERVICE CONTRACTS. In connection with Tenant's
maintenance and repair obligations contained in this Xxxxxxxxx 0, Xxxxxx
shall, at its own cost and expense, enter into regularly scheduled preventive
maintenance service contracts with maintenance contractors approved by
Landlord, in its reasonable discretion, for servicing all hot and cold water,
heating, air conditioning and electrical systems, elevators and equipment
within Phase II, and shall provide copies of such contracts to Landlord. At
Landlord's option at any time in which Tenant is in default hereunder,
maintenance service contracts shall be prepaid by Tenant on an annual basis.
Tenant shall use commercially reasonable efforts to cause each maintenance
service contract to specifically name Landlord as a third party beneficiary,
with the right to receive copies of all notices delivered under such contract
and the ability to exercise Tenant's rights thereunder upon Tenant's default
under this Paragraph 9 or upon Landlord's assumption of management of the
Premises pursuant to Subparagraph 5(a) [Management of Premises], at
Landlord's election. If Tenant is unable, despite such efforts, to include
such rights in any maintenance service contract, Tenant agrees to itself
provide Landlord with copies of notices delivered under such contract, and at
Landlord's election Tenant shall assign Tenant's rights under such contract
to Landlord upon Landlord's assumption of management of the Premises.
(e) CURE RIGHTS. Tenant shall have a period of thirty (30) days from
the date of written notice from Landlord within which to cure any failure to
fulfill any of its obligations under this Paragraph 9; provided, however, that
if such failure is curable but cannot be cured within such thirty (30) day
period, Tenant shall have such additional time as may be reasonably required to
cure so long as Tenant commences such cure within the initial thirty (30) day
period and diligently prosecutes such cure to completion. If Tenant fails to
cure such failure as provided above, or in the event of an emergency which
materially adversely affects the Project, Landlord may, at Landlord's election,
cure such failure, at Tenant's cost and expense, and the expenses thereof
incurred by Landlord shall be reimbursed as Additional Charges within thirty
(30) days after submission of a xxxx or statement therefor. The remedies
described in this paragraph and in Paragraph 5 [Management] are cumulative and
32
constitute Landlord's exclusive remedies if Tenant fails to maintain, repair or
replace any portions of the Premises or Common Area in accordance with its
obligations under this Paragraph 9; provided, however, that nothing contained in
this Subparagraph 9(e) shall limit Landlord's right to receive reimbursement for
attorneys' fees or waive or affect Tenant's indemnity and insurance obligations
under this Lease and Landlord's rights to those indemnity and insurance
obligations.
(f) NO LIABILITY OF LANDLORD. There shall be no abatement of Rent
with respect to, and Landlord shall not be liable for any injury to or
interference with Tenant's business arising from, any repairs, maintenance,
alteration or improvement in or to any portion of the Project or the Clean-up
Facilities by any party, except as expressly and specifically provided in
Paragraph 22 [Damage and Destruction], provided, however that (i) Base Rent and
Additional Charges may be abated during the period of any interference to
Tenant's business which exceeds ninety (90) days, in proportion to the portion
of the Premises Tenant is unable to use, only if such interruption results from
an insured casualty such that proceeds are payable to Landlord under the rental
interruption insurance carried by Landlord pursuant to Subparagraph 12(e)
[Landlord's Insurance Obligations] and only to the extent of such proceeds
actually received by Landlord, and (ii) subject to the limitations on Tenant's
recourse against Landlord contained in Subparagraph 21(e) [Tenant's Remedies],
Landlord shall be liable for any actual damage to Tenant to the extent caused by
Landlord's gross negligence or willful misconduct in connection with any such
repairs, maintenance, alteration or improvement.
10. LIENS. Tenant shall keep the Project free from any liens arising out
of any work performed, material furnished or obligations incurred by Tenant. If
Tenant does not, within thirty (30) days following notice by Landlord of any
such lien, cause it to be released of record by payment or posting of a proper
bond (or such shorter period of time as may be required to avoid a default under
any Mortgage), Landlord shall have, in addition to all other remedies provided
herein and by law, the right, but not the obligation, to cause it to be released
by such means as Landlord deems proper, including payment of the claim giving
rise to such lien. All sums paid and expenses incurred by
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Landlord in connection therewith shall be considered Additional Charges and
shall be payable to Landlord by Tenant on demand, with interest at the
Default Rate. Landlord shall have the right at all times to post and keep
posted on the Premises and Common Area any notices permitted or required by
law or by any Mortgagee, for the protection of the Premises, the Buildings,
the Land, the Common Area, the Project, Landlord, any Mortgagee, and any
other party having an interest in any portion of the Project from mechanics'
and materialmen's liens. Tenant shall give Landlord at least five (5)
business days' prior notice of commencement of any construction on the
Premises or Common Area other than Permitted Alterations. This Paragraph 10
shall survive any termination of this Lease.
11. ASSIGNMENT AND SUBLETTING.
(a) RESTRICTION ON ASSIGNMENT AND SUBLEASING. Tenant shall not
directly or indirectly, voluntarily or by operation of law, (i) sell, assign,
encumber, pledge or otherwise transfer or hypothecate all or any part of the
Premises, the Tenant Improvements, or Tenant's leasehold estate hereunder
(collectively, "Assignment"), or (ii) sublet the Premises or any portion thereof
or otherwise permit the Premises to be occupied by anyone other than Tenant
(collectively, "Sublease"), without Landlord's prior written consent to each
Assignment or Sublease, which consent shall not be unreasonably withheld or
delayed by Landlord; provided, however, that Landlord may withhold its consent,
in its sole discretion, to any Assignment which affects less than the entire
Premises, or any Sublease which would result in more than two (2) separate
entities (including Tenant and any subtenants or other occupants) occupying any
floor in any Building. Without otherwise limiting the criteria upon which
Landlord may withhold its consent to any proposed Sublease or Assignment, if
Landlord withholds its consent where either (i) the creditworthiness of the
proposed Sublessee or Assignee is not reasonably acceptable to Landlord or any
Mortgagee, or (ii) the proposed Sublessee's or Assignee's use of the Premises is
not in compliance with the allowed Tenant's Use of the Premises as described in
the Basic Lease Information or, in Landlord's judgment, would require or result
in presence of Hazardous Materials on the Premises and/or Common Area in excess
of those described in Subparagraph 40(f) [Tenant's Disclosure
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Obligations], such withholding of consent shall be presumptively reasonable.
If Landlord consents to the Sublease or Assignment, Tenant may thereafter
enter into a valid Sublease or Assignment upon the terms and conditions set
forth in this Paragraph 11.
(b) REQUIRED NOTICE. If Tenant desires at any time to enter into
an Assignment of this Lease or a Sublease of the Premises or any portion
thereof, it shall first give written notice to Landlord containing (i) the
name of the proposed assignee, subtenant or occupant; (ii) a description of
the proposed assignee's, subtenant's, or occupant's business and activities
to be carried on in the Premises; (iii) the terms and provisions of the
proposed Assignment or Sublease; and (iv) such financial information as
Landlord may reasonably request concerning the proposed assignee, subtenant
or occupant.
(c) LANDLORD'S RESPONSE TO PROPOSED ASSIGNMENT. Within fifteen
(15) days after Landlord's receipt of the notice specified in Subparagraph
11(b) [Required Notice] with respect to an Assignment of Tenant's interest
under this Lease, Landlord may by written notice to Tenant elect to (i)
terminate this Lease, (ii) consent to the Assignment, or (iii) disapprove the
Assignment. Notwithstanding anything in this Subparagraph 11(c) to the
contrary, Landlord shall not have the right to terminate this Lease in
connection with any "Permitted Transfer" (as defined below).
(d) LANDLORD'S RESPONSE TO PROPOSED SUBLEASE. Within fifteen (15)
days after Landlord's receipt of the notice specified in Subparagraph 11(b)
[Required Notice] with respect to a Sublease, Landlord may by written notice to
Tenant elect to (i) sublease itself the portion of the Premises specified in
Tenant's notice; (ii) consent to the Sublease; or (iii) disapprove the Sublease.
Notwithstanding anything in this Subparagraph 11(d) to the contrary, Landlord
shall not have the rights set forth in (i) and (iii) of this Subparagraph 11(d)
in connection with any Sublease to a "Strategic Partner" (as defined below) in
compliance with Subparagraph 11(h) [Strategic Partners]. If Landlord elects to
Sublease from Tenant as described in clause (i) above, the Monthly Base Rent
payable by Landlord shall be the rent set forth in Tenant's notice (which shall
be allocated between Landlord and Tenant in accordance with Subparagraph 11(e)
35
[Bonus Rent]). If Landlord exercises the option set forth in clause (i) above
with respect to a portion of the Premises, Landlord shall have the right to
further sublease that portion of the Premises at Landlord's election without the
consent of Tenant.
(e) BONUS RENT. If Landlord consents to any Assignment or Sublease
pursuant to Subparagraph 11(c) [Landlord's Response To Proposed Assignment] or
Subparagraph 11(d) [Landlord's Response To Proposed Sublease], Tenant may within
one hundred twenty (120) days after Landlord's consent, but not later than the
expiration of said one hundred twenty (120) days, enter into such Assignment or
Sublease of the Premises or portion thereof upon the terms and conditions set
forth in the notice furnished by Tenant to Landlord pursuant to Subparagraph
11(b) [Required Notice]. However, fifty percent (50%) of any rent or other
consideration realized by Tenant under any such Assignment or Sublease in excess
of the Base Rent and Additional Charges payable hereunder (or the amount thereof
proportionate to the portion of the Premises subject to such Sublease or
Assignment) shall be paid to Landlord, after deducting therefrom the unamortized
Cost of Tenant Improvements (calculated as provided below) located on the
portion of the Premises subject to such Sublease or Assignment as of the
effective date of such Assignment or Sublease which are attributable to and
allocated in equal installments over the term of the Sublease or Assignment,
determined by assuming a useful life equal to fifteen (15) years and
amortization on a straight line basis (without interest), and after deducting
therefrom any customary brokers' commissions that Tenant has incurred in
connection with such Assignment or Sublease amortized on a straight line basis
(without interest) over the term of the Sublease or Assignment. Tenant shall,
not later than ninety (90) days after the Rent Commencement Date, deliver
evidence of the cost of the Tenant Improvements, which shall be acceptable to
Landlord in its reasonable discretion, for Landlord's use as the basis for
calculating the cost of the Tenant Improvements for purposes of this
Subparagraph 11(e) (such resulting calculation being referred to herein as the
"Cost of Tenant Improvements"). The Cost of Tenant Improvements shall be
allocated evenly over the Premises. Failure by Landlord to either consent or
refuse such consent to a proposed Assignment or
36
Sublease within the fifteen (15) day time period specified above shall be
deemed to be Landlord's consent thereto.
(f) EFFECT OF TRANSFER. Landlord's consent to any Assignment or
Sublease shall not relieve Tenant of any obligation to be performed by Tenant
under this Lease, whether arising before or after the Assignment or Sublease.
Landlord's consent to any Assignment or Sublease shall not relieve Tenant
from the obligation to obtain Landlord's express written consent to any other
Assignment or Sublease. Any Assignment or Sublease that is not in compliance
with this Paragraph 11 shall be void and, at the option of Landlord, shall
constitute a material default by Tenant under this Lease. The acceptance of
Base Rent or Additional Charges by Landlord from a proposed assignee or
sublessee shall not constitute the consent to such Assignment or Sublease by
Landlord.
(g) PERMITTED TRANSFER. The following shall be deemed a voluntary
Assignment of Tenant's interest in this Lease: (i) any dissolution, merger,
consolidation, or other reorganization of Tenant; and (ii) if the capital
stock of Tenant is not publicly traded, the sale or transfer of stock to one
person or entity possessing or controlling more than fifty percent (50%) of
the total combined voting power of all classes of Tenant's stock issued,
outstanding and entitled to vote for the election of directors.
Notwithstanding anything to the contrary contained in this Xxxxxxxxx 00,
Xxxxxx may enter into any of the following transfers (a "Permitted Transfer")
without Landlord's prior written consent: (1) Tenant may assign its interest
in the Lease to a corporation which results from a merger, consolidation or
other reorganization, so long as immediately following such transaction the
surviving corporation satisfies each of the Credit Standards; and (2) Tenant
may assign this Lease to a corporation which purchases or otherwise acquires
all or substantially all of the assets of Tenant, so long as immediately
following such transaction such acquiring corporation satisfies each of the
Credit Standards.
(h) STRATEGIC PARTNERS. Tenant may Sublease portions of the
Premises to Tenant's Strategic Partners (as defined below) without Landlord's
prior consent, subject to the following conditions: (1) after any such
Sublease, Tenant shall
37
continue to directly occupy at least eighty percent (80%) of the Rentable
Area in the Premises; and (2) Tenant shall provide Landlord with written
notice at least thirty (30) days' prior to any such Sublease including the
name of the Strategic Partner, the location of the subleased space, the name
and address of the Strategic Partner's agent for service of process and
delivery of notices under this Lease, and a certification by an officer of
Tenant that the subtenant is a "Strategic Partner" as defined in this
Subparagraph 11(h). Any Strategic Partner subleasing a portion of the
Premises shall maintain an agent for service of process and notice, and
notify Landlord of any changes in such agent, at all times during the term of
such sublease. The term "Strategic Partner" shall refer to any entity (i) in
which Tenant holds an unsubordinated ownership interest of at least ten
percent (10%), (ii) that is engaged in a business which Tenant believes to be
of strategic importance to its own business, and (iii) that Tenant
determines, in its reasonable business judgment, would benefit Tenant's
business by conducting its own business within Tenant's Premises.
(i) ASSUMPTION BY TRANSFEREE. Each assignee, sublessee or other
transferee, other than Landlord, shall assume all obligations of Tenant under
this Lease arising after the date of transfer, as provided in this Subparagraph
11(i), and shall be and remain liable jointly and severally with Tenant for the
payment of Base Rent and Additional Charges, and for the performance of all the
terms, covenants, conditions and agreements herein contained on Tenant's part to
be performed for the Term; provided, however, that the assignee, sublessee,
mortgagee, pledgee or other transferee shall be liable to Landlord for rent only
in the amount set forth in the Assignment or Sublease and shall only be required
to perform those obligations under the Lease to the extent that they relate to
the portion of the Premises subleased or interest in the Lease assigned. Any
Sublease or Assignment shall expressly provide that if this Lease terminates,
the subtenant or assignee will attorn to and become the tenant of the Landlord
at the option of Landlord if Landlord elects to recognize such assignment or
sublease upon such termination. No Assignment shall be binding on Landlord
unless the assignee or Tenant delivers to Landlord a counterpart of the
Assignment and an instrument that contains a covenant of assumption by the
assignee satisfactory in substance
38
and form to Landlord, consistent with the requirements of this Subparagraph
11(i), but the failure or refusal of the assignee to execute such instrument
of assumption shall not release or discharge the assignee from its liability
as set forth above.
(j) EFFECT ON EXTENSION OPTION. Notwithstanding any other provision
of this Lease, Tenant may not enter into any Sublease (including, without
limitation, a Sublease to a Strategic Partner) with a term which exceeds the
Expiration Date unless (i) the conditions to Tenant's right to extend the Term
contained in Paragraph 43 [Option to Renew] have been met at or prior to
Tenant's execution of such Sublease, and (ii) Tenant delivers its Exercise
Notice pursuant to Paragraph 43 [Option to Renew] at or prior to Tenant's
execution of such Sublease.
12. INSURANCE AND INDEMNIFICATION.
(a) RELEASE OF LANDLORD. Landlord shall not be liable to Tenant,
and Tenant hereby waives all claims against Landlord Parties for any injury
or damage to any person or property in or about the Premises or Common Area
by or from any cause whatsoever (other than the gross negligence or willful
misconduct of Landlord or its agents, servants, contractors or employees
(collectively, including Landlord, "Landlord Parties")), and without limiting
the generality of the foregoing, whether caused by water leakage of any
character from the roof, walls, or other portion of the Buildings or Common
Area, or caused by gas, fire, oil, electricity, or any cause whatsoever, in,
on, or about the Project or any part thereof (other than that caused by the
gross negligence or willful misconduct of Landlord Parties). Tenant
acknowledges that any casualty insurance carried by Landlord will not cover,
and Landlord shall not be responsible for, loss of income to Tenant or damage
to the Alterations in the Premises installed by Tenant or Tenant's personal
property located within the Premises, including, without limitation, during
construction of Base Building Improvements and Tenant Improvements. Tenant
shall be required to maintain the insurance described in Subparagraph 12(c)
[Tenant's Insurance Requirements]below during the Term.
(b) TENANT INDEMNITY. Except to the extent caused by the gross
negligence or willful misconduct of the Landlord
39
Parties, Tenant shall indemnify and hold the Landlord Parties harmless from
and defend the Landlord Parties against any and all claims or liability for
any injury or damage to any person or property whatsoever occurring in or on
the Premises. Tenant further agrees to indemnify and hold the Landlord
Parties harmless from, and defend the Landlord Parties against, any and all
claims, losses, or liabilities (including damage to Landlord's property)
arising from (x) any breach of this Lease by Tenant and/or (y) the conduct of
any work, business or activities of Tenant, its agents, servants, employees,
or invitees (collectively, including Tenant, "Tenant Parties"), in or about
the Project.
(c) TENANT'S INSURANCE REQUIREMENTS. Tenant shall procure at its
cost and expense and keep in effect during the Term (including, without
limitation, during the course of construction of Tenant Improvements) the
following insurance:
(1) COMMERCIAL GENERAL LIABILITY INSURANCE. A policy of
Commercial General Liability insurance written on an occurrence form, insuring
Landlord, any Mortgagee, Tenant, any manager under the CC&Rs, and any other
entity with an interest in any portion of the Common Area if designated by
Landlord, against any liability arising out of the ownership, use, occupancy,
maintenance, repair or improvement of the Premises or the Common Area and as
appurtenant thereto. Such insurance shall provide $5,000,000 combined single
limit for bodily injury and property damage. The limits of said insurance shall
not, however, limit the liability of the Tenant hereunder, and Tenant is
responsible for ensuring that the amount of liability insurance carried by
Tenant is sufficient for Tenant's purposes. Tenant may carry said insurance
under a blanket policy so long as "per location" liability aggregate limit is
maintained, satisfactory to Landlord. If Tenant shall fail to procure and
maintain said insurance, Landlord may, but shall not be required to, procure and
maintain same, but at the expense of Tenant. In addition, Landlord may elect,
at Landlord's sole option, to procure and maintain the liability insurance
required by this Subparagraph 12(c)(i) with respect to the Common Area, at the
expense of Tenant. Tenant shall deliver to Landlord prior to occupancy of the
Premises copies of policies of liability insurance required herein, and
certificates evidencing the existence and amounts of
40
such insurance which name as additional insured Landlord, any Mortgagee, any
manager under the CC&Rs, and any other entity with an interest in any portion
of the Common Areas if designated by Landlord, with evidence satisfactory to
Landlord and any such parties of payment of premiums. No policy shall be
cancelable or subject to reduction of coverage except after thirty (30) days'
prior written notice to Landlord. Tenant acknowledges and agrees that
insurance coverage carried by Landlord will not cover Tenant's property
within the Premises and that Tenant shall be responsible, at Tenant's sole
cost and expense, for providing insurance coverage for Tenant's movable
equipment, furnishings, trade fixtures and other personal property in or upon
the Premises and for any alterations, additions or improvements (other than
the initial construction of the Tenant Improvements) to or of the Premises or
any part thereof made by Tenant, in the event of damage or loss thereto from
any cause whatsoever.
(2) TIME ELEMENT INSURANCE. Business income and extra
expense insurance, insuring Tenant for a period of eighteen (18) months
against losses arising from the interruption of Tenant's business, and for
lost profits, and charges and expenses which continue but would have been
earned if the business had gone on without interruption, insuring against
such perils, in such form as is reasonably satisfactory to Landlord. Such
insurance should be without deductible and on an agreed amount basis with no
coinsurance payable.
(3) PROPERTY INSURANCE. Tenant shall maintain a policy or
policies of fire and property damage insurance under "special form" causes of
loss (formerly known as "all risk"), with an earthquake sprinkler leakage
endorsement, insuring the personal property, inventory, trade fixtures, and
if applicable boiler and machinery, within the Premises for the full
replacement value thereof. The proceeds from any of such policies shall be
used for the repair or replacement of such items so insured.
(4) WORKERS COMPENSATION INSURANCE. Tenant shall also
maintain a policy or policies of workers' compensation insurance and any
other employee benefit insurance sufficient to comply with all Laws.
41
Insurance required hereunder shall be in companies rated "A" VI or better in
"Best's Insurance Guide." Tenant shall deliver policies of such insurance or
certificates thereof to Landlord on or before the Occupancy Date, and thereafter
at least thirty (30) days before the expiration dates of expiring policies; and,
in the event Tenant shall fail to procure such insurance, or to deliver such
policies or certificates, Landlord may, at its option, procure same for the
account of Tenant, and the cost thereof shall be paid to Landlord as Additional
Charges within fifteen (15) days after delivery to Tenant of bills therefor.
(d) SURVIVAL. The provisions of this Paragraph 12 shall survive the
expiration or termination of this Lease with respect to any claims or liability
arising out of events occurring prior to such expiration or termination.
(e) LANDLORD'S INSURANCE OBLIGATIONS. Landlord shall purchase and
keep in force a policy or policies of liability, fire and property damage
insurance, including provisions allowing the payment of deductibles (which
shall be payable by Tenant pursuant to Subparagraph 4(c)) and pre-payment for
coverage up to one year, covering loss or damage to the Premises (including
the Tenant Improvements) and Common Area in the amount of the full
replacement value thereof, insuring direct physical loss or damage included
within the "special form" classification of coverage and flood and earthquake
insurance, if available, plus a policy of rental income insurance in the
amount of eighteen (18) months Base Rent and Additional Charges and, at
Landlord's election pursuant to Subparagraph 12(c)(i) [Commercial General
Liability Insurance], Commercial General Liability insurance for the Common
Area. At Tenant's request, Landlord shall include any specific Alterations
made in accordance with this Lease in such policies, provided that Tenant
provides Landlord with all information reasonably required by Landlord or its
insurer in connection with such Alterations. In addition, during the course
of construction of the Base Building Improvements and Tenant Improvements,
Landlord shall purchase and keep in force Comprehensive Builder's Risk/Course
of Construction insurance, with the same requirements as policies described
above but with appropriate adjustments to reflect that the Project is under
construction. Tenant shall pay to Landlord the cost of all such policy or
policies of insurance pursuant to Subparagraph 4(c)
42
[Additional Charges for Expenses and Taxes], except for the cost of
Builder's Risk/Course of Construction insurance which is attributable to
construction of the Base Building Improvements (as determined by Landlord, in
its reasonable discretion). If Landlord's insurance cost is increased due to
Tenant's use of the Premises, Tenant agrees to pay to Landlord the full cost of
such increase. Tenant shall have no interest in nor any right to the proceeds
of any insurance procured by Landlord for the Premises or the Common Area.
Notwithstanding the foregoing obligations of Landlord to carry insurance,
Landlord may modify the foregoing coverages if and to the extent it is
commercially reasonable to do so; provided, however, that such coverages shall
not be voluntarily reduced by Landlord without Tenant's prior consent.
13. WAIVER OF SUBROGATION. Notwithstanding anything to the contrary in
this Lease, to the extent that this waiver does not invalidate or impair their
respective insurance policies, the parties hereto release each other and their
respective contractors, subcontractors, agents, employees, successors, assignees
and subtenants, and any manager under the CC&Rs, from all liability for injury
to any person or damage to any property that is caused by or results from a risk
(i) which is actually insured against, to the extent of receipt of payment under
such policy (unless the failure to receive payment under any such policy results
from a failure of the insured party to comply with or observe the terms and
conditions of the insurance policy covering such liability, in which event, such
release shall not be so limited), (ii) which is required to be insured against
under this Lease or the Work Letter, or (iii) which would normally be covered by
the standard ISO "special" form of casualty insurance, without regard to the
negligence or willful misconduct of the entity so released. Landlord and Tenant
shall each obtain a similar waiver of subrogation requirement in their
respective construction contracts for the Base Building Improvements and Tenant
Improvements, respectively, and shall require that their respective contractors
obtain a similar waiver from all subcontractors of all tiers. Landlord and
Tenant shall each obtain, and shall cause their respective contractors and
subcontractors to obtain, from their respective insurers under all policies of
fire, theft and other property insurance maintained by either of them at any
time during the Term (including during the course of construction of the Base
Building
43
Improvements and the Tenant Improvements) insuring or covering the Project or
any portion thereof of its contents therein, a waiver of all rights of
subrogation which the insurer of one party might otherwise, if at all, have
against the other party, and Landlord and Tenant shall each indemnify the
other against any loss or expense, including reasonable attorneys' fees,
resulting from the failure to obtain such waiver.
14. SERVICES AND UTILITIES.
(a) TENANT'S RESPONSIBILITY. Subject to the provisions elsewhere
herein contained and to the Rules and Regulations, Tenant shall be responsible
for arranging for, and direct payment of any and all cost of, garbage pickup,
recycling, janitorial, security, landscape maintenance, street and parking lot
sweeping and resurfacing, transportation management programs, water,
electricity, gas, telephone, cable and digital communications equipment,
required inspections and testing of elevators, fire sprinklers and other life
safety equipment and Building Systems, and any and all other utilities and
services, and Tenant shall provide the maintenance, repair and replacement of
Building Systems in connection with such utilities and services as described in
Subparagraph 9(b) [Repair and Maintenance; Tenant's Obligations]. Without
limiting the foregoing, Tenant shall be responsible for the expense of
installation, operation, and maintenance of its electrical distribution system,
and telephone and other communications cabling, throughout Phase II, subject to
Paragraph 4 [Electrical Systems, Telephone Systems and Dedicated Communications
Lines] of the Work Letter. Landlord shall cooperate with Tenant's efforts to
arrange all such services. If Landlord assumes management of the Premises
pursuant to Subparagraph 5(a) [Management of the Premises], Tenant shall
cooperate fully with Landlord and abide by all the reasonable regulations and
requirements that Landlord may prescribe for the proper functioning and
protection of the Building Systems.
(b) NO EXCESSIVE LOAD. Tenant will not without the prior written
consent of Landlord, which consent shall not be unreasonably withheld or
delayed, use any apparatus or device in the Premises which, when used, puts an
excessive load on any Building or its structure or systems.
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(c) NO LIABILITY OF LANDLORD. Landlord shall not be in default
hereunder or be liable for any damages directly or indirectly resulting from,
nor shall Rent be abated by reason of, (i) the installation (but not including
installation which is Landlord's obligation pursuant to the Work Letter), use or
interruption of use of any equipment in connection with the foregoing utilities
and services; (ii) failure to furnish or delay in furnishing any services to be
provided by Landlord when such failure or delay is caused by Force Majeure
Events, or by the making of repairs or improvements to Phase II or any portion
thereof which are the responsibility of Landlord under this Lease; or (iii) the
limitation, curtailment, rationing or restriction on use of water or
electricity, gas or any other form of energy or any other service or utility
whatsoever serving Phase II or any Building; provided, however, that (aa) Base
Rent and Additional Charges may be abated during the period of any total
interruption of utilities to the Premises which exceeds thirty (30) days only if
such interruption results from an insured casualty such that proceeds are
payable to Landlord under the rental interruption insurance carried by Landlord
pursuant to Subparagraph 12(e) [Landlord's Insurance Obligations] and only to
the extent of such proceeds actually received by Landlord, and (bb) subject to
the limitations on Tenant's recourse against Landlord contained in Subparagraph
21(e) [Tenant's Remedies], Landlord shall be liable for any actual damage to
Tenant's property to the extent caused by Landlord's gross negligence or willful
misconduct in connection with the failure to furnish or delay in furnishing any
services to be provided by Landlord. For purposes of this Lease and the Work
Letter, "Force Majeure Events" shall mean Acts of God or the elements, Acts of
the government, labor disturbances of any character, and other similar
conditions, beyond the reasonable control of the party whose performance,
obligation or liability is excused or delayed by such event (collectively,
"Force Majeure Events").
15. TENANT'S CERTIFICATES. Tenant, at any time and from time to time,
within ten (10) days after written request from Landlord, will execute,
acknowledge and deliver to Landlord and, at Landlord's request, to any
prospective purchaser, ground or underlying lessor or Mortgagee of any part
of the Project or any other party acquiring an interest in Landlord, a
certificate of
45
Tenant substantially in the form attached as Exhibit "H" (with changes
required to make such certificate true). The certificate may also contain any
other information reasonably required by any such persons. It is intended
that any certificate of Tenant delivered pursuant to this Paragraph 15 may be
relied upon by Landlord and any prospective purchaser, ground or underlying
lessor or Mortgagee of any part of the Project or such other party. If
requested by Tenant, Landlord shall provide Tenant with a similar
certificate.
16. HOLDING OVER. If Tenant (directly or through any
successor-in-interest of Tenant) remains in possession of all or any portion
of the Premises after the expiration or termination of this Lease without the
consent of Landlord, Tenant's continued possession shall be on the basis of a
tenancy at the sufferance of Landlord. In such event, Tenant shall continue
to comply with or perform all the terms and obligations of Tenant under this
Lease, except that the Monthly Base Rent during Tenant's holding over shall
be the greater of the then-fair market rent for the Premises (as reasonably
determined by Landlord) or one hundred twenty-five percent (125%) of the
Monthly Base Rent payable in the last full month prior to the termination
hereof (and shall be increased in accordance with Subparagraph 4(b)
[Adjustments in Base Rent]). In addition to Rent, Tenant shall pay Landlord
for all damages proximately caused by reason of the Tenant's retention of
possession. Landlord's acceptance of Rent after such termination shall not
constitute a renewal of this Lease, and nothing contained in this provision
shall be deemed to waive Landlord's right of re-entry or any other right
hereunder or at law. Tenant acknowledges that, in Landlord's marketing and
re-leasing efforts for the Premises, Landlord is relying on Tenant's vacation
of the Premises on the Expiration Date. Accordingly, Tenant shall indemnify,
defend and hold Landlord harmless from and against all claims, liabilities,
losses, costs, expenses and damages arising or resulting directly or
indirectly from Tenant's failure to timely surrender the Premises, including
(i) any loss, cost or damages suffered by, any prospective tenant of all or
any part of the Premises, and (ii) Landlord's damages as a result of such
prospective tenant rescinding or refusing to enter into the prospective lease
of all or any portion of the Premises by reason of such failure of Tenant to
timely surrender the Premises.
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17. SUBORDINATION. Without the necessity of any additional document,
this Lease shall be subject and subordinate at all times to: (i) all ground
leases or underlying leases that may now exist or hereafter be executed
affecting any portion of the Premises or Common Area; and (ii) the lien of
any mortgage or deed of trust that may now exist or hereafter be executed in
any amount for which any portion of the Premises or Common Area or any ground
leases or underlying leases, or Landlord's interest or estate in any of said
items, is specified as security (any such lien being herein defined as a
"Mortgage" and the holder of any Mortgage being a "Mortgagee").
Notwithstanding the foregoing, Landlord shall have the right to subordinate
or cause to be subordinated any such ground leases or underlying leases or
any Mortgage to this Lease. If any ground lease or underlying lease
terminates, or any Mortgage is foreclosed or a conveyance in lieu of
foreclosure is made, for any reason, Tenant shall, notwithstanding any
subordination, attorn to and become the Tenant of the successor in interest
to Landlord at the option of such successor in interest. Notwithstanding
anything to the contrary contained herein, this Lease shall not be subject or
subordinate to any ground or underlying lease or to any lien, Mortgage, or
other security interest affecting the Premises, and Tenant shall not attorn
to the ground lessor, Mortgagee or other holder of the interest to which this
Lease would be subordinated unless such ground lessor, Mortgagee or holder
executes a reasonable recognition and non-disturbance agreement which
provides that Tenant shall be entitled to continue in possession of the
Premises on the terms and conditions of this Lease if and for so long as
Tenant fully performs all of its obligations hereunder. Tenant shall execute
and deliver upon demand by Landlord, and in the form requested by Landlord or
any Mortgagee and reasonably acceptable to Tenant, any additional documents
evidencing the priority or subordination of this Lease with respect to any
such ground leases or underlying leases or the lien of any such Mortgage.
Tenant shall execute, deliver and authorize recordation of any such documents
within twenty (20) days after Landlord's written request.
18. RULES AND REGULATIONS. Tenant shall faithfully observe and comply
with the rules and regulations attached to this Lease as Exhibit "J" and all
reasonable nondiscriminatory modifications thereof and additions thereto from
time to time put into effect
47
by Landlord, provided such rules and regulations do not unreasonably
interfere with Tenant's use of the Premises and the Common Areas as
contemplated by this Lease. In the event of an express and direct conflict
between the terms, covenants, agreements and conditions of this Lease and
those set forth in the rules and regulations, as modified and amended from
time to time by Landlord, this Lease shall control.
19. RE-ENTRY BY LANDLORD. Landlord reserves and shall at all reasonable
times have the right to re-enter the Premises and the Common Area (upon
reasonable prior notice (except in the case of an emergency), and subject to
Tenant's reasonable security precautions and the right of Tenant to accompany
Landlord at all times, if such entry is to the Premises) to inspect the same; to
supply any service to be provided by Landlord to Tenant hereunder (unless Tenant
is supplying such service); to show the Premises and Common Area to prospective
purchasers, Mortgagees or tenants (as to prospective tenants other than
prospective tenants of any recaptured space, only during the last twelve (12)
months of the initial Term or the last twenty-four (24) months of any Extension
Term); to post notices of nonresponsibility; to alter, improve or repair the
Premises and Common Area and any portion thereof as required or allowed by this
Lease or by law (and Landlord may for that purpose erect, use, and maintain
scaffolding, pipes, conduits, and other necessary structures in and through the
Premises and Common Area where reasonably required by the character of the work
to be performed); and to take, or allow other parties (including, without
limitation, government entities) to take, any actions contemplated by the
Declaration or the CC&Rs, or in connection with the remediation orders described
in Paragraph 40 [Hazardous Materials], the Clean-Up Facilities or related
monitoring or remediation of Hazardous Materials. Landlord shall not be liable
in any manner for any inconvenience, disturbance, loss of business, nuisance or
other damage arising from Landlord's or any third party's (including without
limitation pursuant to the Declaration or the CC&Rs) entry and acts pursuant to
this Paragraph 19. Tenant shall not be entitled to an abatement or reduction of
Base Rent or Additional Charges if Landlord exercises any rights reserved in
this paragraph. Tenant hereby waives any claim for damages for any injury or
inconvenience to or interference with Tenant's business, any loss of occupancy
or quiet enjoyment of the Premises, and any other
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loss occasioned thereby, except to the extent caused by Landlord's gross
negligence or willful misconduct. For each of the aforesaid purposes,
Landlord shall have the right to use any and all means which Landlord
reasonably determines are necessary or proper to open doors on the Premises
in an emergency in order to obtain entry to any portion of the Premises. Any
entry to the Premises, or portion thereof obtained by Landlord by any of said
means, or otherwise, shall not under any emergency circumstances be construed
or deemed to be a forcible or unlawful entry into, or a detainer of, the
Premises, or an eviction, actual or constructive, of Tenant from the Premises
or any portions thereof. Landlord shall use best efforts during re-entry to
not unreasonably interfere with Tenant's use of the Premises or its business
conducted therein.
20. INSOLVENCY OR BANKRUPTCY. The appointment of a receiver to take
possession of all or substantially all of the assets of Tenant, or an
assignment by Tenant for the benefit of creditors, or any action taken or
suffered by Tenant under any insolvency, bankruptcy, reorganization or other
debtor relief proceedings, (each of the foregoing, an "Insolvency
Proceeding"), whether now existing or hereafter amended or enacted, shall, at
Landlord's option, constitute a breach of this Lease by Tenant, unless a
petition in bankruptcy, receiver attachment, or other remedy pursued by a
third party is discharged within sixty (60) days. Upon the happening of any
such event (including the expiration of such 60 day period, if applicable) or
at any time thereafter, this Lease shall terminate five (5) days after
written notice of termination from Landlord to Tenant. In no event shall
this Lease be assigned or assignable by operation of law (except as provided
in Paragraph 11 [Assignment and Subletting]) or by voluntary or involuntary
bankruptcy proceedings or otherwise. In no event shall this Lease or any
rights or privileges hereunder be an asset of Tenant under any bankruptcy,
insolvency, reorganization or other debtor relief proceedings.
21. DEFAULT.
(a) TENANT'S DEFAULT. The failure to perform or honor any covenant,
condition or representation made under this Lease shall constitute a "default"
hereunder by Tenant upon expiration
49
of the appropriate grace period hereinafter provided, except as expressly and
specifically provided in Subparagraph 9(e) [Repair and Maintenance;
Cure Rights]. Tenant shall have a period of three (3) days from the date of
written notice from Landlord (which notice shall be in lieu of and not in
addition to the notice required by Section 1161 of the California Code of
Civil Procedure) within which to cure any default in the payment of Base Rent
or Additional Charges; provided, however, that Landlord shall not be required
to provide such notice more than twice during any four (4) year period during
the Term with respect to non-payment of Base Rent or Additional Charges, the
third such non-payment constituting default without requirement of notice.
Tenant shall have a period of thirty (30) days from the date of written
notice from Landlord (which notice shall be in lieu of and not in addition to
the notice required by Section 1161 of the California Code of Civil
Procedure) within which to cure any other curable default under this Lease;
provided, however, that with respect to any curable default other than the
payment of Base Rent or Additional Charges that cannot reasonably be cured
within thirty (30) days, the default shall not be deemed to be uncured if
Tenant commences to cure within thirty (30) days from Landlord's notice and
continues to prosecute diligently the curing thereof. Notwithstanding the
foregoing, (i) if a different cure period is specified elsewhere in this
Lease or the Work Letter with respect to any specific obligation of Tenant,
such specific cure period shall apply with respect to a default of such
obligation; (ii) the foregoing cure rights shall not extend the specified
time for compliance with any required delivery, approval or performance
obligation of Tenant under the Work Letter; and (iii) the foregoing cure
rights shall not apply to any Draw Event (as defined in the Work Letter).
(b) PHASE I LEASE DEFAULT. From and after substantial completion
of the Base Building Improvements, any default under the Phase I Lease by
Tenant or a subtenant of Tenant which is not cured within any applicable
grace or cure period provided therein shall constitute a default under this
Lease by Tenant; provided, however, that an Insolvency Proceeding with
respect to any subtenant shall not constitute a default hereunder by Tenant
so long as Tenant is not in breach of any monetary, maintenance and repair
obligations under the Phase I Lease and Tenant is not itself then the subject
of an Insolvency Proceeding. At any time
50
during the Term of this Lease, Landlord, in its sole discretion, may delete
this Subparagraph 21(b) from this Lease by delivering written notice thereof
to Tenant, without any further action required by Tenant. Upon request by
either party, the parties shall execute and deliver an amendment to this
Lease documenting any such deletion of this Paragraph by Landlord.
(c) LANDLORD'S REMEDIES. Upon an uncured default of this Lease by
Tenant, Landlord shall have the following rights and remedies in addition to any
other rights or remedies available to Landlord at law or in equity:
(1) The rights and remedies provided by California Civil Code,
Section 1951.2, including but not limited to, recovery of the worth at the time
of award of the amount by which the unpaid Base Rent and Additional Charges for
the balance of the Term after the time of award exceeds the amount of rental
loss for the same period that the Tenant proves could be reasonably avoided, as
computed pursuant to subsection (b) of said Section 1951.2;
(2) The rights and remedies provided by California Civil Code,
Section 1951.4, that allows Landlord to continue this Lease in effect and to
enforce all of its rights and remedies under this Lease, including the right to
recover Base Rent and Additional Charges as they become due, for so long as
Landlord does not terminate Tenant's right to possession. Acts of maintenance
or preservation, efforts to relet the Premises or the appointment of a receiver
upon Landlord's initiative to protect its interest under this Lease shall not
constitute a termination of Tenant's rights to possession;
(3) The right to terminate this Lease by giving notice to Tenant
in accordance with applicable law;
(4) If Landlord elects to terminate this Lease, the right and
power to enter the Premises and remove therefrom all persons and property, and
to store such property in a public warehouse or elsewhere at the cost of and for
the account of Tenant, and to sell such property and apply such proceeds
therefrom pursuant to applicable California law.
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(d) LANDLORD'S DEFAULT. Landlord shall have a period of thirty
(30) days from the date of written notice from Tenant of Landlord's default
(any such notice, a "Landlord Default Notice") to cure any default by
Landlord under this Lease; provided, however, that with respect to any
default that cannot reasonably be cured within thirty (30) days, the default
shall not be deemed to be uncured if Landlord commences to cure within thirty
(30) days from receipt of the Landlord Default Notice and continues to
prosecute diligently the curing thereof. Tenant agrees to give any
Mortgagee, by registered or certified mail, a copy of any Landlord Default
Notice served upon the Landlord, provided that prior to such notice Tenant
has been notified in writing of the address of such Mortgagee. If Landlord
fails to cure such default within the time provided for in this Lease, then
the Mortgagee shall have an additional thirty (30) days after the expiration
of such cure period within which to cure such default (provided that Tenant
notifies Mortgagee concurrently with Tenant's delivery of the Landlord
Default Notice to Landlord; otherwise, Mortgagee shall have thirty (30) days
from the later of the date on which it receives notice of the default from
Tenant and the expiration of Landlord's cure period). If such default cannot
be cured by Mortgagee within the cure period, Tenant may not exercise any of
its remedies so long as Mortgagee has commenced and is diligently pursuing
the remedies necessary to cure such default (including, but not limited to,
commencement of foreclosure proceedings, if necessary to effect such cure).
(e) TENANT'S REMEDIES.
(1) LIMITATION ON REMEDIES. If any default hereunder by
Landlord is not cured within the applicable cure period provided in Subparagraph
21(d) [Landlord's Default], Tenant's exclusive remedies shall be an action for
specific performance or action for actual damages. Tenant hereby waives the
benefit of any laws granting it (A) the right to perform Landlord's obligation,
or (B) the right to terminate this Lease or withhold Rent on account of any
Landlord default. Tenant shall look solely to Landlord's interest in Phase II
for the recovery of any judgment from Landlord. Landlord, or if Landlord is a
partnership, its partners whether general or limited, or if Landlord is a
corporation, its directors, officers or
52
shareholders, shall never be personally liable for any such judgment. Any
lien obtained to enforce such judgment and any levy of execution thereon
shall be subject and subordinate to any Mortgage (excluding any Mortgage
which was created as part of an effort to defraud creditors, i.e. a
fraudulent conveyance); provided, however that any such judgement and any
such levy of execution thereon shall not be subject or subordinated to any
Mortgage that is created or recorded in the Official Records of Santa Xxxxx
County after the date of the judgement giving rise to such lien.
Notwithstanding the foregoing limitation of recourse to Landlord's interest
in Phase II, Tenant shall have the right to recover from Landlord the full
amount of the Letter of Credit, the Completion Assurance, or any other
security deposit or letter of credit provided by Tenant to Landlord pursuant
to this Lease or the Work Letter, to the extent that it is drawn upon,
retained, or applied by Landlord in violation of this Lease or the Work
Letter.
(2) REMEDY FOR CONSTRUCTION DEFAULTS. Notwithstanding the
limitation of recourse to Landlord's interest in Phase II contained in
Subparagraph 21(e)(1) above (but without negating Tenant's right of recovery
with respect to any letter of credit or security deposit pursuant to the last
sentence of such paragraph), if Landlord fails to use commercially reasonable
efforts (taking into account any Force Majeure Events) to meet any Condition
prior to its Initial Window Date (as it may be extended pursuant to Paragraph
7 [Tenant Delays] of the Work Letter), Tenant's exclusive remedy shall be to
terminate this Lease pursuant to Subparagraph 3(c) [Conditions; Window Dates]
and commence an action for actual damages incurred by Tenant as a result of
such failure, up to a maximum aggregate sum of Five Hundred Thousand Dollars
($500,000).
(f) CHRONIC DEFAULT. A party shall be in "Chronic Default" under
this Lease at any time that the other party has delivered more than two (2)
notices of default to such party hereunder during the previous four (4) years,
regardless of whether such defaults were cured within any applicable grace or
cure period; provided, however, that any such notice of default relating to a
default which was disputed, in good faith, and ultimately determined (by
agreement of the parties, arbitration or judicial action) not to be a default
shall not be considered
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for purposes of determining whether a party is in Chronic Default.
22. DAMAGE AND DESTRUCTION
(a) RESTORATION. Subject to the termination rights set forth in
Subparagraph 22(c) [Casualty at End of Term] and Subparagraph 22(d) [Mutual
Termination Option], if the Premises or any portion thereof are damaged or
destroyed by fire or other casualty, Tenant will promptly give written notice
thereof to Landlord, and:
(1) Tenant, at Tenant's sole cost and expense, and pursuant to
the provisions of Paragraph 8 [Additional Alterations] and/or the Work Letter,
as applicable, will promptly repair, restore and rebuild the Tenant Improvements
and any Alterations as nearly as possible to the condition they were in
immediately prior to such damage or destruction or with such changes or
alterations as may be made pursuant to Paragraph 8 [Additional Alterations]; and
(2) to the extent that any such damage or destruction affects
the Base Building Improvements, Landlord shall repair the same at Landlord's
cost to the extent of Landlord's obligations under the Work Letter.
(b) INSURANCE PROCEEDS. Subject to the provisions of
Subparagraph 22(f) [Proceeds Upon Termination], all insurance proceeds recovered
by the Landlord on account of such damage or destruction, less the cost, if any,
to the Landlord of such recovery and/or of any repair to the Base Building
Improvements for which Landlord is responsible, shall be paid out from time to
time to or at the direction of Tenant to the extent required to repair, restore
and rebuild the Tenant Improvements and any Alterations covered by Landlord's
insurance as required by Subparagraph 22(a)(1) [Restoration], pursuant to
disbursement procedures established by Landlord and/or any Mortgagee. The
amount of available insurance proceeds shall not limit Tenant's or Landlord's
obligation to repair, restore and rebuild the Tenant Improvements and
Alterations and the Base Building Improvements, respectively, in accordance with
this Paragraph 22.
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(c) CASUALTY AT END OF TERM. Notwithstanding anything to the
contrary contained in this Lease, if during the twelve (12) months prior to
the expiration of the Term, any of the Buildings or a substantial portion
thereof are damaged or destroyed by fire or other casualty, either Tenant or
Landlord shall have the option to terminate this Lease with respect to the
affected Building as of the date of such damage or destruction by written
notice to the other party given within thirty (30) days after such damage or
destruction, in which event the Landlord shall make a proportionate refund to
the Tenant of such Rent as may have been paid in advance. For the purposes
of this paragraph, a "substantial portion" of a Building shall mean twenty
percent (20%) or more of the Rentable Area thereof. If neither party elects
to terminate this Lease, Landlord and/or Tenant shall repair, restore and
rebuild the Premises in accordance with Subparagraph 22(a) [Restoration].
(d) MUTUAL TERMINATION OPTION; INSURED CASUALTY. Notwithstanding
anything to the contrary contained herein, if at any time during the Term the
Base Building Improvements for any Building shall be damaged or destroyed to
the extent that, in Landlord's reasonable judgment, they cannot be
reconstructed within eighteen (18) months following the date such
reconstruction is commenced, either Landlord or Tenant shall have the right
to terminate this Lease as of the date of such damage or destruction with
respect to the affected Building by written notice to the other party.
Within forty-five (45) days after any damage or destruction described in this
Subparagraph 22(d), Landlord shall either terminate the Lease with respect to
the affected Building or deliver notice to Tenant advising of Landlord's
election not to so terminate. If Tenant is so notified, but Landlord does
not elect to terminate, Tenant may terminate this Lease as of the date of
such damage or destruction with respect to the affected Building by written
notice to Landlord given within forty-five (45) days after receipt of
Landlord's notice. If neither party elects to terminate this Lease, Landlord
and/or Tenant shall repair, restore and rebuild the Premises in accordance
with Subparagraph 22(a) [Restoration].
(e) DESTRUCTION WHERE NO PROCEEDS ARE AVAILABLE. Subject to Tenant's
termination right under Subparagraph 22(c) [Casualty at End of Term], in the
event of a total or partial
55
destruction of any Building (i) by a casualty of a type not required to be
insured against by Landlord under the terms of this Lease, or (ii) under
circumstances where Landlord has been required by any Mortgagee to utilize
substantially all of the insurance proceeds to pay down the Mortgage, which
destruction exceeds five percent (5%) of the replacement cost of the Base
Building Improvements, this Lease shall automatically terminate, unless (x)
Landlord elects to reconstruct the Base Building Improvements, and (y) the
damage can be reconstructed within eighteen (18) months following
commencement of reconstruction. If Landlord elects to reconstruct, the cost
incurred by Landlord for such reconstruction shall be amortized over the
useful life of the Base Building Improvements and such amortization shall be
reimbursed by Tenant to Landlord as an Additional Charge together with
interest at the prime rate of Xxxxx Fargo Bank plus two percent (2%)
(adjusted monthly); provided, however, that Tenant shall not be obligated to
pay for any portion of the useful life of the Base Building Improvements
which extends beyond the Expiration Date. If Landlord elects to reconstruct
the Base Building Improvements, Tenant shall be obligated to reconstruct the
Tenant Improvements, at Tenant's cost.
(f) PROCEEDS UPON TERMINATION. If this Lease is terminated under
Subparagraph 22(c) [Casualty at End of Term] or Subparagraph 22(d) [Mutual
Termination Option; Insured Casualty] with respect to any Building(s), Landlord
shall be entitled to retain any and all insurance proceeds arising out of the
damage or destruction (including, without limitation, proceeds attributable to
the Tenant Improvements), except for any portion of the award specifically
compensating Tenant for the loss of its personal property, equipment and trade
fixtures. If Landlord elects to terminate this Lease pursuant to Subparagraph
22(d), Landlord shall reimburse Tenant for the unamortized Cost of Tenant
Improvements (determined in accordance with Subparagraph 11(e)[Bonus Rent]) as
of the date of termination to the extent of available insurance proceeds (so
long as Landlord is in compliance with its obligations under Subparagraph 12(e)
[Landlord's Insurance Obligations] with respect to such insurance) after
deducting the cost to Landlord of recovery of such proceeds and/or repair to the
Base Building Improvements. Upon any termination, Tenant shall assign all of
its rights to any insurance proceeds to which it is entitled (except any
56
portion specifically compensating Tenant for the loss of its personal
property, equipment and trade fixtures) to Landlord and shall pay to Landlord
the amount of any deductible under any insurance policy attributable to the
casualty resulting in such termination.
(g) RENT ABATEMENT. In the event of an insured casualty, the Base
Rent and Additional Charges during the period from the date of the damage or
destruction until completion of the restoration, repair, replacement or
rebuilding shall be abated by an amount that is in the same ratio to the Base
Rent and Additional Charges as the area of the Premises rendered unusable for
the permitted use hereunder bears to the area of the Premises prior to the
damage or destruction, but only to the extent of the amount of proceeds
payable to Landlord (taking into account any applicable waiting period or
deductibles) under the rental interruption insurance required to be carried
by Landlord pursuant to Subparagraph 12(e)
[Landlord's Insurance Obligations].
(h) WAIVER OF STATUTORY PROVISIONS. Tenant hereby waives the
provisions of Section 1932.2, and Section 1933.4, of the Civil Code of
California, or any similar laws now or hereafter in effect, that would relieve
the Tenant from any obligation to pay Rent under this Lease due to any damage or
destruction.
23. EMINENT DOMAIN.
(a) ENTIRE BUILDING. If an entire Building shall be taken or
appropriated under the power of eminent domain or conveyed in lieu thereof (any
such event, a "Taking"), (i) this Lease and all right, title and interest of the
Tenant hereunder shall cease and come to an end on the date of vesting of title
pursuant to such Taking with respect to such Building, (ii) the Base Rent and
Additional Charges payable with respect to said Building shall be apportioned as
of the date of such vesting, and (iii) this Lease shall be and remain unaffected
with respect to any portion of the Premises not taken.
(b) PARTIAL BUILDING; TERMINATION. If there is a Taking of less than
an entire Building, this Lease shall
57
terminate as to the portion of the Building so taken upon vesting of title
pursuant to such Taking, and if, but only if, such Taking is so extensive
that it renders the remaining portion of such Building unsuitable for the use
being made of the Building on the date immediately preceding such Taking,
either the Tenant or the Landlord may terminate this Lease as to the
remainder of such Building by written notice to the other party not later
than thirty (30) days after the date of such vesting, specifying as the date
for termination a date not later than thirty (30) days after such notice. On
the date specified in such notice, (i) the term of this Lease and all right,
title and interest of Tenant hereunder shall cease with respect to said
Building, (ii) the Base Rent and Additional Charges payable with respect to
said Building shall be apportioned as of the date of such termination, and
(iii) this Lease shall be and remain unaffected with respect to any Building
not included in such Taking.
(c) PARTIAL BUILDING; RESTORATION. If there is a Taking of less
than an entire Building and this Lease is not terminated with respect to said
Building as provided in (b) above, this Lease shall terminate as to the
portion of the Building so taken upon vesting of title pursuant to such
Taking. In any such case, Landlord shall restore the Base Building
Improvements (to the extent of Landlord's obligations under the Work Letter)
for the portion of the Building continuing under this Lease at Landlord's
cost and expense; provided, however, that Landlord shall not be required to
repair or restore any injury or damage to the property of Tenant or to make
any repairs or restoration of any Tenant Improvements or Alterations
installed on the Premises by or at the expense of Tenant. Tenant shall, at
Tenant's sole cost and expense, promptly and pursuant to the provisions of
Paragraph 8 [Additional Alterations], restore those portions of the Tenant
Improvements and Alterations not so taken. Thereafter, the Base Rent and
Additional Charges to be paid under this Lease for the remainder of the Term
shall be proportionately reduced, such that thereafter the amounts to be paid
by Tenant with respect to such Building shall be in the ratio that the
portion of the Building not so taken bears to the total area of the Building
prior to such Taking.
(d) END OF TERM TAKING. If, during the twelve (12) months prior to
the expiration of the Term, there is a Taking of
58
a portion of the Building, both Landlord and Tenant shall have the option,
exercisable by written notice to the other party given within thirty (30)
days after such vesting of title, of terminating this Lease with respect to
said Building as of the date of vesting of title pursuant to the Taking, in
which event Landlord shall make a proportionate refund to Tenant of any Base
Rent and Additional Charges that have been paid in advance.
(e) TAKING OF COMMON AREA. If there is a Taking of any portion of
the Common Area which causes the Premises to violate parking requirements,
building setbacks or access requirements under any applicable Laws, Landlord
shall cure such non-compliance by any reasonable means (including, without
limitation, by a Reconfiguration). If Landlord determines that such violation is
not curable by reasonable means, Landlord shall have the option, exercisable by
written notice to Tenant of terminating this Lease as of the date of vesting of
title pursuant to the Taking. If Landlord does not terminate this Lease
pursuant to the preceding sentence and fails to commence to cure such violation
within thirty (30) days after such Taking, Tenant shall have the option,
exercisable by written notice to Landlord, of terminating this Lease as of the
date of vesting of title pursuant to the Taking. If this Lease is terminated
pursuant to this Subparagraph 23(e), Landlord shall make a proportionate refund
to Tenant of any Base Rent and Additional Charges that have been paid in
advance. In addition, if Landlord exercises its right to terminate this Lease
pursuant to this Subparagraph 23(e), Tenant shall be entitled to any portion of
any award paid in connection with such Taking which is received by Landlord and
which is attributable to the then unamortized value of the Tenant Improvements.
(f) AWARD. Landlord shall receive (and Tenant shall assign to
Landlord upon demand from Landlord) any income, rent, award or any interest
therein which may be paid in connection with any Taking, whether partial or
total, and whether or not either Landlord or Tenant exercises any right it
may have to terminate this Lease. Tenant shall have no claim against
Landlord for any part of such sum paid by virtue of the Taking, whether or
not attributable to the value of the unexpired term of this Lease. However,
Tenant shall be entitled to petition the condemning authority for the
following: (i) the then unamortized
59
value of any Tenant Improvements or Alterations paid for by Tenant which
Tenant is required to remove upon termination of the Lease; (ii) the value of
Tenant's trade fixtures; (iii) Tenant's relocation costs; and (iv) Tenant's
goodwill, loss of business and business interruption.
(g) TEMPORARY TAKING. Notwithstanding anything to the contrary
contained in this Paragraph 23, if there is a Taking of the temporary use or
occupancy of any part of the Premises during the Term, this Lease shall be and
remain unaffected by such Taking and Tenant shall continue to pay in full all
Base Rent and Additional Charges payable hereunder by Tenant during the Term.
In such event, Tenant shall be entitled to receive that portion of any award
which represents compensation for the use or occupancy of the Premises during
the Term, and Landlord shall be entitled to receive that portion of any award
which represents the cost of restoration of the Premises and the use and
occupancy of the Premises after the end of the Term. Notwithstanding the
foregoing, if Landlord determines in its reasonable judgment that any Taking of
the temporary use or occupancy of any part of the Premises will continue until
the end of the Term, either party may elect to terminate this Lease by written
notice to the other party at any time after Landlord has made such determination
and delivered written notice thereof to Tenant, and Landlord shall be entitled
to receive the entire award for the Taking, except for that portion which
represents compensation for the use or occupancy of the Premises during the
period of time prior to such termination.
(h) WAIVER OF STATUTORY PROVISIONS. Landlord and Tenant understand
and agree that the provisions of this Paragraph 23 are intended to govern fully
the rights and obligations of the parties in the event of a Taking of all or any
portion of the Premises. Accordingly, the parties each hereby waives any right
to terminate this Lease in whole or in part under Sections 1265.120 and 1265.130
of the California Code of Civil Procedure or under any similar Law now or
hereafter in effect.
24. SALE BY LANDLORD. Landlord shall not sell or otherwise convey its
interest in any portion of the Premises during the period of time from the
Landlord's acquisition of Phase II until substantial completion of the Base
Building Improvements, other
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than by foreclosure by, or a conveyance in lieu of foreclosure to, a
Mortgagee who has executed a recognition and non-disturbance agreement as
contemplated by Paragraph 17 [Subordination], or a subsequent conveyance by
such Mortgagee. If Landlord sells or otherwise conveys its interest in all
or any portion of the Premises, Landlord shall be relieved of its obligations
under the Lease with respect to the conveyed portion from and after the date
of sale or conveyance only when Landlord transfers the proportionate amount
of any security deposit of Tenant to its successor and the successor assumes
in writing the obligations to be performed by Landlord on and after the
effective date of the transfer, whereupon Tenant shall attorn to such
successor.
25. RIGHT OF LANDLORD TO PERFORM. All covenants and agreements to be
performed by Tenant under any of the terms of this Lease shall be performed
by Tenant at Tenant's sole cost and expense and without any abatement of Base
Rent or Additional Charges. If Tenant defaults in the payment of any sum of
money, other than Base Rent or Additional Charges, required to be paid by it
hereunder or fails to perform any other act on its part to be performed
hereunder, and such failure continues for ten (10) days after notice thereof
by Landlord (or such longer period as noted in Subparagraph 9(e) [Cure Rights]
or Subparagraph 21(a) [Tenant's Default], except in the event of emergency),
Landlord may, but shall not be obligated to, make any such payment or perform
any such act on Tenant's part to be made or performed as provided in this
Lease without waiving or releasing Tenant from any obligations of Tenant.
All sums so paid by Landlord and all reasonable and necessary incidental
costs incurred by Landlord in connection therewith, together with interest
thereon at the Default Rate from the date of such payment by Landlord, shall
be payable to Landlord on demand as Additional Charges.
26. OWNERSHIP OF IMPROVEMENTS; SURRENDER OF PREMISES.
(a) OWNERSHIP OF TENANT IMPROVEMENTS & ALTERATIONS. The Tenant
Improvements and any Alterations constructed on or affixed to the Premises by
or on behalf of Tenant pursuant to the terms and conditions of this Lease and
the Work Letter, except for Tenant's movable furniture and equipment, trade
fixtures and Alterations which can be removed without damage to the Premises,
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but including without limitation all electrical conduits and wiring and other
equipment located in such conduits, shall become Tenant's property upon their
completion, shall remain Tenant's property throughout the Term of this Lease
and shall become Landlord's property upon the expiration or earlier
termination of this Lease.
(b) DELIVERY AND RESTORATION OF PREMISES. At the end of the Term or
any renewal thereof or other sooner termination of this Lease, Tenant will
peaceably deliver to Landlord possession of the Premises, together with all
improvements or additions thereon (including, without limitation, the Tenant
Improvements and Alterations which Landlord does not require Tenant to remove
pursuant to Paragraph 8 [Additional Alterations] or the Work Letter), and all
electrical conduits, substructures, switches, and wiring located on or under the
Premises or Common Area and communications equipment, cable conduits and wiring,
and other related equipment located within any such conduits), in the same
condition as received or first installed, subject to normal wear and tear but in
the condition described on Exhibit "K" attached hereto, subject to the terms of
Paragraph 23 [Eminent Domain], and the rights and obligations of Landlord and
Tenant concerning casualty damage pursuant to Paragraph 22 [Damage and
Destruction]. At Landlord's election, in lieu of requiring Tenant to restore
the Premises (or any portion thereof) to the condition required by this
Paragraph, Landlord may require Tenant to pay Landlord the reasonable estimated
cost thereof. In addition, upon the termination of this Lease, Tenant shall
deliver the electrical facilities and distribution system and the telephone and
other communications facilities and equipment serving the Premises (including
each Building) in a condition and configuration acceptable at such time for
transfer of its ownership and control to Pacific Gas and Electric (or any
successor provider of electric services) ("PG&E") with respect to the electrical
distribution system, and in an appropriate and usable condition and
configuration for the provision of telephone and other communications services
by Pacific Xxxx (or any successor provider of local telephone services)
("PacBell") with respect to the communications facilities, such that each
Building may be separately metered for electric service and provided with
appropriate telephone and other communications service. Any repair, upgrading
or reconfiguration of the electrical
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distribution system or the telephone and other communications facilities and
equipment required in order to meet then-existing PG&E requirements or then
current PacBell communication standards, as applicable, shall be completed by
Tenant, at Tenant's expense, prior to the termination of the Lease (or, at
Landlord's election, Tenant shall pay Landlord the reasonable estimated cost
of such repair, upgrading or reconfiguration). Any cable or electrical or
communications conduits or other portions of Tenant's electrical distribution
system or communications system located throughout the Project shall not
create any easement, license or other property interest or right of any kind
in Tenant, other than Tenant's right to the use of such improvements pursuant
to the terms and conditions of this Lease, and such right shall not survive
the expiration or earlier termination of this Lease. Tenant may, upon the
termination of this Lease, remove all movable furniture, trade fixtures and
equipment belonging to Tenant which is not an integral part of any Building
System, at Tenant's sole cost, provided that Tenant repairs any damage caused
by such removal. Property not so removed shall be deemed abandoned by
Tenant, and title to the same shall thereupon pass to Landlord. Upon request
by Landlord, and unless otherwise agreed to in writing by Landlord pursuant
to Paragraph 8 [Additional Alterations] or the Work Letter, Tenant shall
either (i) remove, at Tenant's sole cost, any or all Tenant Improvements and
Alterations to the Premises installed by or at the expense of Tenant and all
movable furniture and equipment belonging to Tenant which may be left by
Tenant and repair any damage resulting from such removal, or (ii) pay
Landlord the reasonable estimated cost thereof.
(c) NO MERGER. The voluntary or other surrender of this Lease by
Tenant, or a mutual cancellation thereof, shall not work a merger, and shall, at
the option of Landlord, terminate all or any existing subleases or subtenancies,
or may, at the option of Landlord, operate as an assignment to it of any or all
such subleases or subtenancies.
27. WAIVER. If either Landlord or Tenant waives the performance of any
term, covenant or condition contained in this Lease, such waiver shall not be
deemed to be a waiver of any subsequent breach of the same or any other term,
covenant or condition contained herein. Furthermore, the acceptance of Base
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Rent or Additional Charges by Landlord shall not constitute a waiver of any
preceding breach by Tenant of any term, covenant or condition of this Lease,
regardless of Landlord's knowledge of such preceding breach at the time Landlord
accepted such Base Rent or Additional Charges. Failure by Landlord to enforce
any of the terms, covenants or conditions of this Lease for any length of time
shall not be deemed to waive or to decrease the right of Landlord to insist
thereafter upon strict performance by Tenant. Waiver by Landlord of any term,
covenant or condition contained in this Lease may only be made by a written
document signed by Landlord.
28. NOTICES. Except as otherwise expressly provided in this Lease, and
except for routine bills or invoices for Base Rent or Additional Charges
delivered by Landlord pursuant to Paragraph 4 [Rent] which Landlord may elect to
deliver by first class U.S. mail, any bills, statements, notices, demands,
requests or other communications given or required to be given under this Lease
shall be effective only if rendered or given in writing, sent by certified mail
(return receipt requested), reputable overnight carrier, or delivered
personally, (i) to Tenant at Tenant's address set forth in the Basic Lease
Information, or (ii) to Landlord at Landlord's address set forth in the Basic
Lease Information; or (iii) to such other address as either Landlord or Tenant
may designate as its new address for such purpose by notice given to the other
in accordance with the provisions of this Paragraph 28. Any xxxx, statement,
notice, demand, request or other communication shall be deemed to have been
rendered or given on the date the return receipt indicates delivery of or
refusal of delivery if sent by certified mail, the day upon which recipient
accepts and signs for delivery from a reputable overnight carrier or on the date
a reputable overnight carrier indicates refusal of delivery, upon the date
personal delivery is made, or three (3) days after mailed by first class U.S.
mail.
29. TAXES PAYABLE BY TENANT. Prior to delinquency Tenant shall pay all
taxes levied or assessed upon Tenant's equipment, furniture, fixtures and other
personal property located in or about the Premises. If the assessed value of
Landlord's property is increased by the inclusion therein of a value placed upon
Tenant's equipment, furniture, fixtures or other personal
64
property, Tenant shall pay to Landlord, upon written demand, the taxes so
levied against Landlord, or the proportion thereof resulting from said
increase in assessment.
30. ABANDONMENT. Tenant shall not abandon the Premises and cease
performing its financial and maintenance obligations under this Lease at any
time during the Term. If Tenant abandons and ceases performing its financial and
maintenance obligations under this Lease, or surrenders the Premises or is
dispossessed by process of law or otherwise, any personal property belonging to
Tenant and left on the Premises shall, at the option of Landlord, be deemed to
be abandoned and title thereto shall thereupon pass to Landlord. Notwithstanding
anything to the contrary contained herein, Tenant may not vacate the Premises if
such would result in a termination of Landlord's insurance. Upon Tenant's
request, Landlord will ask its insurer if such vacation of the Premises would
result in termination of its current insurance policy. Solely for purposes of
this Paragraph 30, Tenant shall not be deemed to have abandoned the Premises
solely because Tenant is not occupying the Premises.
31. SUCCESSORS AND ASSIGNS. Subject to the provisions of Paragraphs 11
[Assignment and Subletting] and 24 [Sale by Landlord], the terms, covenants and
conditions contained herein shall be binding upon and inure to the benefit of
the parties hereto and their respective legal and personal representatives,
successors and assigns.
32. ATTORNEY'S FEES. If Tenant or Landlord brings any action for any
relief against the other, declaratory or otherwise, arising out of this Lease,
including any suit by Landlord for the recovery of Base Rent or Additional
Charges or possession of the Premises, the losing party shall pay to the
prevailing party a reasonable sum for attorney's fees, which shall be deemed to
have accrued on the commencement of such action and shall be paid whether or not
the action is prosecuted to judgment.
33. LIGHT AND AIR. Tenant covenants and agrees that no diminution of
light, air or view by any structure which may hereafter be erected (whether
or not by Landlord) shall entitle Tenant to any reduction of Rent under this
Lease, result in any
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liability of Landlord to Tenant, or in any other way affect this Lease or
Tenant's obligations hereunder.
34. SECURITY DEPOSIT.
(a) LETTER OF CREDIT. Pursuant to the Phase I Lease, at such time as
Landlord acquires the Phase I Land and the Credit Termination Right under the
Phase I Lease expires or is waived by Landlord, Tenant shall deliver to Landlord
an unconditional, irrevocable, transferable letter of credit, in the amount of
Seven Million Five Hundred Thousand Dollars ($7,500,000), issued by Bank of
America NT & SA, or another financial institution reasonably acceptable to
Landlord, in the form attached hereto as Exhibit "M", with an original term of
no less than one year and automatic extensions through the end of the Term of
this Lease and sixty (60) days thereafter (the "Letter of Credit"). Tenant
shall keep the Letter of Credit, at its expense, in full force and effect until
the sixtieth (60th) day after the Expiration Date or other termination of this
Lease, to insure the faithful performance by Tenant of all of the covenants,
terms and conditions of this Lease (as well as the Phase I Lease, until the
credit reduction pursuant to Paragraph 34(b) [Reduction After Phase I Occupancy]
occurs), including, without limitation, Tenant's obligations to repair, replace
or maintain the Premises and to maintain the Letter of Credit, and Tenant's
payment obligations with respect to Tenant Modifications (as defined in the Work
Letter) being made by Change Order to Landlord's construction contract. The
Letter of Credit shall provide thirty (30) days' prior written notice to
Landlord of cancellation or material change thereof, and shall further provide
that, in the event of any nonextension of the Letter of Credit at least thirty
(30) days prior to its expiration, the entire face amount shall be payable to
Landlord, and Landlord shall hold any funds so obtained as the security deposit
required under this Lease. Such funds so obtained by Landlord, or any unused
portion thereof, shall be returned to Tenant upon replacement of the Letter of
Credit. If Landlord uses any portion of any cash security deposit to cure any
default by Tenant hereunder, Tenant shall replenish the security deposit to the
original amount within ten (10) days of notice from Landlord. Tenant's failure
to do so shall become a material default under this Lease. Landlord shall keep
any cash security funds separate from its general funds, and
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shall invest such cash security at Tenant's reasonable direction, and any
interest actually earned by Landlord on such cash security shall be paid to
Tenant on a quarterly basis within ten (10) business days after receipt
thereof by Landlord. If an uncured or incurable default occurs under this
Lease, or if Tenant is the subject of an Insolvency Proceeding, Landlord may
present its written demand for payment of the entire face amount of the
Letter of Credit and the funds so obtained shall be paid to, or as otherwise
directed by, Landlord. Landlord may retain such funds to the extent required
to compensate Landlord for damages incurred, or to reimburse Landlord as
provided herein, in connection with any such default, and any remaining funds
shall be held as a cash security deposit.
(b) REDUCTION AFTER PHASE I OCCUPANCY. If Tenant has not defaulted
under this Lease or the Phase I Lease, the face amount of the Letter of Credit
may be reduced to (or a replacement Letter of Credit may be provided in the
amount of) Four Million Two Hundred Thirty Thousand Dollars ($4,230,000) when
all of the following have occurred: (i) Tenant has completed and paid the entire
cost of all Tenant Improvements and Tenant Modifications to be provided under
the Phase I Lease, and fully discharged any mechanics' or materialmen's liens
against the Premises in connection with such Tenant Improvements and Tenant
Modifications, (ii) Tenant is conducting business at Phase I, and (iii) Tenant
is providing a separate letter of credit (the "Phase I Letter of Credit") in the
amount of Three Million Two Hundred Seventy Thousand Dollars ($3,270,000) to
secure Tenant's obligations under the Phase I Lease.
(c) FURTHER REDUCTION. The face amount of the Letter of Credit
may be reduced to Two Million One Hundred Fifteen Thousand Dollars
($2,115,000) on the eighth (8th) anniversary of the Rent Commencement Date,
so long as (i) Tenant is not in default under the Lease on such date, and
(ii) Tenant is not in Chronic Default under this Lease on such date. In
addition, the face amount of the Letter of Credit may be reduced to an amount
equal to one month's Base Rent when Tenant can establish to Landlord's
reasonable satisfaction that Tenant has achieved annual net income of at
least Fifty Million Dollars ($50,000,000), as reflected in audited financial
statements (which include an unqualified certification by a licensed
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certified public accountant reasonably acceptable to Landlord), for either
(x) three consecutive years, or (y) three out of four consecutive years.
(d) SUBSTITUTION OF CASH COLLATERAL. In lieu of, or in replacement
of, the Letter of Credit, Tenant may deliver to Landlord at any time during the
Term a cash security deposit in the face amount required of the Letter of
Credit, provided that Landlord shall have no additional liability or reduced
benefits from that which Landlord would have if Tenant provided a Letter of
Credit. All terms, conditions and requirements with respect to the Letter of
Credit contained in this Paragraph 34, including, without limitation,
application of proceeds, reduction of amount, and investment requirements for
cash security, shall apply to any such cash security deposit.
35. FINANCIAL INFORMATION. Tenant will furnish to the Landlord within
ninety (90) days after the end of each calendar year, copies of audited,
consolidated financial statements, which shall include, without limitation,
balance sheets, statements of income and expenses and sources and uses of funds
of the Tenant and its subsidiaries for such calendar year, all in reasonable
detail and stating in comparative form the figures as of the end of and for the
previous calendar year and including appropriate footnotes, prepared in
accordance with generally accepted accounting principles, and certified and
audited by independent public accountants of recognized standing reasonably
satisfactory to the Landlord; provided, however, that so long as Tenant is a
publicly traded corporation, in lieu of the foregoing Tenant shall provide
Landlord with copies of Tenant's annual report and 10K Filing when such
documents are released to the public. Tenant hereby covenants and warrants to
Landlord that all financial information and other descriptive information
regarding Tenant's business, which has been or shall be furnished to Landlord,
is and shall be accurate and complete at the time of delivery to Landlord.
36. PARKING. Tenant shall have the right to use the number of parking
spaces in the Common Area and the common area elsewhere in the Project,
collectively, which is in the same proportion to the total parking spaces as
the Rentable Area of the Premises is to the total rentable area in the
Project, which
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shall not be less than the parking required for Phase II by the City of
Mountain View (the "Minimum Parking"). Tenant shall have the right to use the
Minimum Parking either on the Common Area or on the common area located in Phase
I and/or Phase II. These spaces shall be used in common with other tenants and
occupants of the Project, if any, subject to the CC&Rs and the Rules and
Regulations. Tenant and Landlord acknowledge that the City of Mountain View has
approved portions of the Common Area for landscape reserves (the "Landscape
Reserves"), and such Landscape Reserves are located on portions of the Common
Area that could otherwise accommodate additional parking. If at any time during
the Term Tenant desires to increase the parking on the Common Area by the
removal or alteration of all or a portion of the Landscape Reserves, any such
demolition or alteration shall be accomplished at Tenant's cost and expense, in
accordance with the terms of the Work Letter applicable to Tenant Modifications
or as otherwise agreed by Landlord.
37. MISCELLANEOUS.
(a) DEFINED TERMS. The term "Landlord" shall include Landlord and
its successors and assigns. In any case where this Lease is signed by more than
one person, the obligations hereunder shall be joint and several. The term
"Tenant" shall include Tenant and its successors and assigns.
(b) OTHER TERMS. Time is of the essence of this Lease and all of its
provisions. This Lease shall in all respects be governed by the laws of the
State of California. This Lease, together with its exhibits, contains all the
agreements of the parties hereto and supersedes any previous negotiations.
There have been no representations made by the Landlord or understandings made
between the parties other than those set forth in this Lease and its exhibits.
This Lease may not be modified except by a written instrument by the parties
hereto, except as expressly and specifically provided in Subparagraphs 1(e)
[Reconfiguration of Phase II] and 21(b) [Phase I Lease Default]. The paragraph
headings herein are for convenience of reference and shall in no way define,
increase, limit or describe the scope or intent of any provision of this Lease.
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(c) QUIET ENJOYMENT. Upon Tenant paying the Base Rent and
Additional Charges and performing all of Tenant's obligations under this
Lease, Tenant may peacefully and quietly enjoy the Premises during the Term
as against all persons or entities lawfully claiming by or through Landlord;
subject, however, to the provisions of this Lease.
(d) SURVIVAL OF INDEMNITIES; IMMEDIATE OBLIGATION TO DEFEND. All
indemnities contained herein shall survive the expiration or earlier termination
of this Lease. With respect to each of the indemnities contained in this Lease,
the indemnitor has an immediate and independent obligation to defend the
indemnitee from any claim which actually or potentially falls within the
indemnity provision, which obligation arises at the time such claim is tendered
to the indemnitor by the indemnitee and continues at all times thereafter.
38. REPRESENTATIONS AND WARRANTIES.
(a) LANDLORD'S REPRESENTATIONS AND WARRANTIES. Landlord
represents and warrants to Tenant that, (i) to Landlord's best knowledge, the
Premises are not now in violation of any applicable Laws other than
Environmental Laws; (ii) the zoning requirements currently applicable to the
Premises permit the permitted use under this Lease; and (iii) to Landlord's
best knowledge, upon substantial completion of the Base Building
Improvements, the Premises will not be in violation of any applicable Laws
other than Environmental Laws (subject to completion of the Tenant
Improvements, to the extent such completion is required for compliance with
any Law). For purposes of this Paragraph 38, the term "to Landlord's best
knowledge" shall mean the actual knowledge of Xxxxxxx X. Xxxxxx, III, Xxxx X.
Xxxxxxxx and Xxxxx X. Xxxxxx ("Landlord's Representatives") after reasonably
appropriate and diligent inquiry in connection with the acquisitions of the
Land and construction of the Base Building Improvements. Landlord hereby
represent that Landlord's Representatives are the representatives of Landlord
with supervisory responsibilities concerning the Premises, the acquisition of
the Land and the construction of the Base Building Improvements who would, in
the ordinary course of their responsibilities, receive notice from persons or
entities
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of any of the matters described in the representations and warranties in this
Lease.
(b) TENANT'S REPRESENTATIONS AND WARRANTIES. Tenant represents and
warrants to Landlord that, to Tenant's best knowledge, upon substantial
completion of the Tenant Improvements, the Premises will not be in violation of
any applicable Laws other than Environmental Laws. For purposes of this
Paragraph 38, the term "to Tenant's best knowledge" shall mean the actual
knowledge of Xx Xxxxxxx, Xxxxx Xxxxx, Xxxxx Xxxx, Xxx Xxxxxx and Xxxxxxx
Xxxxxxxx ("Tenant's Representatives"), after reasonably appropriate and diligent
inquiry in connection with construction of the Tenant Improvements. Tenant
hereby represents that Tenant's Representatives are the representatives of
Tenant with supervisory responsibilities concerning the Premises, this Lease and
the construction of the Tenant Improvements who would, in the ordinary course of
their responsibilities, receive notice from persons or entities of any of the
matters described in the representations and warranties in this Lease.
39. REAL ESTATE BROKERS. Each party represents that it has not had
dealings with any real estate broker, finder or other person with respect to
this Lease in any manner, except for any broker named in the Basic Lease
Information, whose fees or commission, if earned, shall be paid by the party
designated in the Basic Lease Information, in accordance with a separate
agreement with such party. Each party shall hold harmless the other party from
all damages resulting from any claims that may be asserted against the other
party by any other broker, finder or other person with whom the other party has
or purportedly has dealt.
40. HAZARDOUS MATERIALS LIABILITY. Tenant is aware that Phase II is
subject to remediation orders issued by the U.S. Environmental Protection
Agency ("EPA"), as disclosed on Exhibit "L". In addition, Tenant
acknowledges that Tenant has received from Landlord a copy of the reports
listed on Schedule 1 to Exhibit "L", and has been given sufficient
opportunity to review the reports listed on Schedule 2 to Exhibit "L" which
are located at Landlord's office (all such reports being collectively defined
as the "Environmental Reports"). In addition, in connection
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with the remediation orders, the Clean-up Facilities and related monitoring
and remediation of Hazardous Materials, a Declaration of Restrictions and
Access Agreement (as such document may be modified from time to time as
provided in Paragraph 6 [Restrictions on Use], the "Declaration"), in
substantially the form attached hereto as Exhibit "C", encumbers or will
encumber Phase I and Phase II (including the Premises) and, regardless of
when it is recorded, will at all times be superior in priority to this Lease,
and Tenant's occupancy and use of the Premises may be restricted by the
Declaration. Landlord shall have the right to modify the Declaration during
the Term as may be reasonably required in connection with the remediation of
Hazardous Materials and Clean-Up Facilities, so long as such modification
does not materially adversely affect Tenant's Permitted Use of the Premises,
Tenant's Minimum Parking or Tenant's access to the Premises. If necessary,
Tenant shall execute such documents as are reasonably necessary to cause this
Lease to become subordinate to the Declaration, as it may be modified from
time to time in accordance with the preceding sentence.
(a) DEFINITIONS OF HAZARDOUS MATERIALS AND ENVIRONMENTAL LAWS. For
the purpose of this Lease, "Hazardous Materials" shall be defined, collectively,
as any and all substances, chemicals, wastes, sewage or other materials that are
now or hereafter regulated, controlled or prohibited by any local, state or
federal law or regulation requiring removal, warning or restrictions on the use,
generation, disposal or transportation thereof including, without limitation,
(a) any substance defined as a "hazardous substance", "hazardous material",
"hazardous waste", "toxic substance", or "air pollutant" in the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601, ET SEQ., the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, ET SEQ., the Resource Conservation and Recovery Act ("RCRA"), 42
U.S.C. Section 6901, ET SEQ., the Federal Water Pollution Control Act ("FWPCA"),
33 U.S.C. Section 1251 ET SEQ., the Clean Air Act ("CAA"), 42 U.S.C. Section
7401 ET SEQ., or the Toxic Substances Control Act ("TSCA"), 15 U.S.C. Section
2601, ET SEQ., all as previously amended and amended hereafter; and (b) any
hazardous substance, hazardous waste, toxic substance, toxic waste, air
pollutant, hazardous material, waste, chemical, or compound described in any
other federal, state, or local statute, ordinance, code, rule,
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regulation, order, decree or other law now or at any time hereafter in effect
regulating, relating to or imposing liability or standards of conduct
concerning any hazardous, toxic, or dangerous substance, chemical, material,
compound or waste. As used herein, the term "Hazardous Materials" also means
and includes, without limitation, asbestos; flammable, explosive or
radioactive materials; gasoline or gasoline additives; oil; motor oil; waste
oil; petroleum (including, without limitation, crude oil or any component
thereof); petroleum-based products; paints and solvents; lead; cyanide; DDT;
printing inks; acids; pesticides; ammonium compounds; polychlorinated
biphenyls; and other regulated chemical products. The statutes, regulations,
court and administrative agency decisions, and other laws now or at any time
hereafter in effect that govern or regulate Hazardous Materials are herein
collectively referred to as "Environmental Laws".
(b) TENANT INDEMNITY. Tenant releases Landlord from any liability
for, waives all claims against Landlord and shall indemnify, defend and hold
harmless the Landlord Parties against, any and all claims, suits, loss, costs
(including costs of investigation, clean up, monitoring, restoration and
reasonable attorney fees), damage or liability, whether foreseeable or
unforeseeable, by reason of property damage (including diminution in the
value of the property of the Landlord Parties), personal injury or death
directly arising from or related to Hazardous Materials released,
manufactured, discharged, disposed, used or stored on, in, or under Phase II
during the initial Term and any extensions of this Lease, regardless of who
caused the same, except for Hazardous Material (i) which migrates through the
air, groundwater or otherwise to Phase II unless the Hazardous Material
migrating through the air, soil or groundwater to Phase II originated from a
site where Tenant caused the contamination by such Hazardous Material, or
(ii) which was present on Phase II immediately prior to the Occupancy Date
and was not caused by Tenant, its employees, invitees, subtenants, agents,
assignees, licensees or servants. The provisions of this Tenant Indemnity
regarding Hazardous Materials shall survive the termination of the Lease.
(c) LANDLORD INDEMNITY. Landlord releases Tenant from any liability
for, waives all claims against Tenant and shall
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indemnify, defend and hold harmless Tenant, its officers, employees, and
agents to the extent of Landlord's interest in Phase II, against any and all
actions by any governmental agency for clean up of Hazardous Materials on or
under Phase II, including costs of legal proceedings, investigation, clean
up, monitoring, and restoration, including reasonable attorney fees, if, and
to the extent, the Hazardous Materials occur on Phase II under the following
circumstances: (i) the Hazardous Materials are not "Identified Hazardous
Materials" or "Existing Hazardous Materials" (as both terms are defined in
the Seller Indemnity), and were released or disposed of on property which was
not at the time of such disposal or release leased, owned or otherwise used
or controlled by Tenant and such Hazardous Material migrated through the air
or groundwater to Phase II; or (ii) the contamination of Phase II was caused
by the release, disposal, use or storage of Hazardous Materials in, on or
about Phase II by Landlord, its employees, agents, licensees or servants.
The provisions of this Landlord Indemnity regarding Hazardous Materials shall
survive the termination of the Lease.
(d) SELLER INDEMNITY. It is a condition precedent to Tenant's
obligations under this Lease, and to Tenant's obligation to commence
construction of the Tenant Improvements pursuant to the Work Letter, that
Landlord will obtain from Seller an indemnity with respect to certain Hazardous
Materials existing on Phase II as of the date of Landlord's acquisition of Phase
II, in substantially the form attached hereto as Exhibit "Q" (the "Seller
Indemnity"), which directly indemnifies Tenant; provided, however, that Tenant
may, at its election, commence construction of Tenant Improvements before the
Seller Indemnity has been obtained without waiving the foregoing condition with
respect to Tenant's obligations under this Lease.
(e) RELEASE OF LANDLORD. Notwithstanding any other provision of this
Lease, Tenant releases the Landlord Parties from any liability for, and waives
all claims against the Landlord Parties with respect to, the presence of
Hazardous Materials in, on or about Phase II prior to the Occupancy Date (except
claims and liability which are included in Landlord's indemnity contained in (c)
above and not covered by the Seller Indemnity). Tenant agrees that its recourse
with respect to any
74
liability or claims released by this Paragraph shall be limited to direct
claims against Seller pursuant to the Seller Indemnity.
(f) TENANT'S DISCLOSURE OBLIGATIONS. Tenant represents that during
the Term it will not be a User (as such term is defined in the form of Seller
Indemnity attached as Exhibit "Q"). Except for immaterial amounts of toxic
materials incidental to office use (e.g. copier toner, cleaning supplies,
petroleum products in cars), hydraulic fluids used in Building Systems,
Hazardous Materials used in the operation of any generators, and those materials
listed on Exhibit "N", Tenant will not use any Hazardous Materials within Phase
II and shall comply with any applicable Environmental Laws and with the Seller
Indemnity as it relates to Tenant. Without limiting the foregoing, Tenant shall
not use any Hazardous Materials within Phase II in a manner that would reduce or
limit Seller's obligations under the Seller Indemnity. Tenant shall immediately
notify Landlord and Seller if and when Tenant learns or has reason to believe
there has been any release of Hazardous Materials in, on or about the Project
during the Term.
41. ARBITRATION OF DISPUTES.
ANY CONTROVERSY OR CLAIM ARISING OUT OF THE SPECIFIC PROVISIONS OF THE LEASE
LISTED BELOW, OR ANY OTHER PROVISION OF THIS LEASE THAT EXPRESSLY PROVIDES FOR
ARBITRATION PURSUANT TO THIS PARAGRAPH, OR A BREACH OF ANY SUCH PARAGRAPHS OR
PROVISIONS SOLELY BETWEEN LANDLORD AND TENANT, BUT NOT INCLUDING A DEFAULT WITH
RESPECT TO THE TIMELY PAYMENT OF BASE RENT AND ADDITIONAL CHARGES, SHALL BE
SETTLED BY ARBITRATION IN ACCORDANCE WITH THE RULES OF THE AMERICAN ARBITRATION
ASSOCIATION, AND JUDGMENT ON THE AWARD RENDERED BY THE ARBITRATOR(S) MAY BE
ENTERED IN ANY COURT HAVING JURISDICTION. THE PREVAILING PARTY IN SUCH
ARBITRATION SHALL BE ENTITLED TO ATTORNEYS' FEES AND COSTS. THE FOLLOWING
PROVISIONS OF THIS LEASE SHALL BE SUBJECT TO ARBITRATION PURSUANT TO THIS
PARAGRAPH 41:
(1) SUBPARAGRAPH 1(c)(3) [PROJECT; COMMON AREAS; ACCESS AND COOPERATION], ONLY
WITH RESPECT TO MODIFICATIONS TO CC&RS;
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(2) SUBPARAGRAPH 1(c)(4) [PROJECT; COMMON AREAS; ACCESS AND COOPERATION], ONLY
WITH RESPECT TO ACCESS, ENCUMBRANCES AND COOPERATION;
(3) SUBPARAGRAPH 1(d) [RECONFIGURATION OF PHASE II];
(4) PARAGRAPH 2 [OCCUPANCY AND USE], ONLY WITH RESPECT TO WHETHER TENANT'S USE
COMPLIES WITH THE USE SPECIFIED IN THE BASIC LEASE INFORMATION;
(5) SUBPARAGRAPHS 3(a) [TERM; OCCUPANCY DATE; EXPIRATION DATE] AND 3(c)
[OCCUPANCY BY TENANT], ONLY WITH RESPECT TO DETERMINATION OF THE OCCUPANCY
DATE;
(6) SUBPARAGRAPH 3(b) [INITIAL CONSTRUCTION], ONLY WITH RESPECT TO LANDLORD'S
ENFORCEMENT OF CONSTRUCTION WARRANTIES;
(7) SUBPARAGRAPH 3(e) [CONDITIONS; WINDOW DATES];
(8) SUBPARAGRAPH 3(f) [CREDIT TERMINATION RIGHT];
(9) SUBPARAGRAPH 4(d) [AUDIT RIGHTS];
(10) PARAGRAPH 5 [MANAGEMENT];
(11) PARAGRAPH 6 [RESTRICTIONS ON USE], ONLY WITH RESPECT TO MODIFICATIONS TO
EXHIBIT P AND/OR THE RESTRICTIVE DOCUMENTS;
(12) PARAGRAPH 7 [COMPLIANCE WITH LAWS];
(13) PARAGRAPH 8 [ADDITIONAL ALTERATIONS];
(14) PARAGRAPH 9 [REPAIRS AND MAINTENANCE];
(15) PARAGRAPH 11 [ASSIGNMENT AND SUBLETTING];
(16) SUBPARAGRAPHS 14(b) [NO EXCESSIVE LOAD] AND 14(c) [NO LIABILITY OF
LANDLORD];
(17) SUBPARAGRAPH 18 [RULES AND REGULATIONS];
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(18) SUBPARAGRAPH 22(c) [CASUALTY AT END OF TERM], ONLY WITH RESPECT TO WHETHER
A SUBSTANTIAL PORTION OF A BUILDING IS DAMAGED OR DESTROYED;
(19) SUBPARAGRAPHS 22(d) [MUTUAL TERMINATION OPTION; INSURED CASUALTY] AND 22(e)
[DESTRUCTION WHERE NO PROCEEDS ARE AVAILABLE], ONLY WITH RESPECT LANDLORD'S
DETERMINATION OF THE LENGTH OF TIME TO RECONSTRUCT;
(20) SUBPARAGRAPH 23(b) [PARTIAL BUILDING; TERMINATION], ONLY WITH RESPECT TO
WHETHER THE PORTION TAKEN RENDERS THE REMAINING BUILDING UNSUITABLE FOR
EXISTING USE;
(21) SUBPARAGRAPH 23(e) [TAKING OF COMMON AREA];
(22) SUBPARAGRAPH 26(b) [DELIVERY AND RESTORATION OF PREMISES];
(23) PARAGRAPH 36 [PARKING];
(24) PARAGRAPH 42 [SIGNAGE]; AND
(25) ANY PROVISIONS OF THE WORK LETTER WHICH ARE EXPRESSLY MADE SUBJECT TO THIS
PARAGRAPH 41 THEREIN.
NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY
DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU
ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A
COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR
JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY
INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE
UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT
TO THIS ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION
TO NEUTRAL ARBITRATION.
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CONSENT TO NEUTRAL ARBITRATION BY:
______________ (LANDLORD): __________________(TENANT).
42. SIGNAGE. Tenant shall have the right to use a portion of the monument
sign located at the front of Phase I, as designated by Landlord and reasonably
acceptable to Tenant for purposes of attaching lettering identifying Tenant's
use and occupancy at the Project. Tenant shall be responsible for its
proportionate share of costs related to such signage, with each party using such
sign paying a proportionate share of such costs (based on space on the sign).
Such sign, and any other signage Tenant proposes to place on the Project, shall
be subject to approval from Landlord and applicable governing entities, and
shall not violate the Declaration, the CC&Rs, any ground lease, any Mortgage, or
any Rules and Regulations with respect to the Project.
43. OPTION TO RENEW. Tenant shall have the right to extend the Term for
one (1) period of five (5) years ("Extension Term") following the initial
Expiration Date, by giving written notice ("Exercise Notice") to Landlord at
least twelve (12) months prior to the Expiration Date, subject to the following
conditions: (i) no event of default is continuing under this Lease at the time
of the Exercise Notice or at the commencement of the Extension Term; and (ii)
Landlord has not delivered a notice of default to Tenant hereunder during the
twenty-four (24) month period immediately preceding the Exercise Notice
regardless of whether any such default was cured by Tenant within any applicable
grace or cure period; provided, however, that any such notice of default
relating to a non-monetary default which was disputed, in good faith, by Tenant
and ultimately determined (by agreement of the parties, arbitration or judicial
action) not to be a default shall not be considered for purposes of determining
whether such condition has been met.
44. RENT DURING EXTENSION TERM. Commencing on the first day of the
Extension Term, Tenant shall pay to Landlord throughout the Extension Term Base
Rent in the amount determined pursuant to this Paragraph 44. The Monthly Base
Rent during the five-year Extension Term shall be the greater of the Base Rent
paid during the last month of the immediately preceding Term or
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ninety-five percent (95%) of the Fair Market Rental Value for the Premises as
of the commencement of the Extension Term, with the Fair Market Rental Value
as determined below:
(a) DETERMINATION OF FAIR MARKET RENTAL VALUE. Within the later of
thirty (30) days after receipt of Tenant's Exercise Notice or eleven (11) months
prior to the Expiration Date, Landlord shall notify Tenant of Landlord's
estimate of the Fair Market Rental Value for the Premises, as determined below,
for determining Monthly Base Rent during the ensuing Extension Term. Within
fifteen (15) days after receipt of such notice from Landlord, Tenant shall
notify Landlord in writing that it (i) agrees with such Fair Market Rental Value
or (ii) disagrees with such Fair Market Rental Value. No response shall
constitute disagreement. If Tenant disagrees with Landlord's estimate of Fair
Market Rental Value for the Premises, then the parties shall meet and endeavor
to agree within fifteen (15) business days after Landlord receives Tenant's
notice described in the immediately preceding sentence. If the parties cannot
agree upon the Fair Market Rental Value within said fifteen (15) day period,
Tenant may make written demand upon Landlord for arbitration in accordance with
the following paragraph. 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 City of Mountain View (or another location mutually acceptable
to Landlord and Tenant) in accordance with the then prevailing rules of the
American Arbitration Association or its successor for arbitration or commercial
disputes, except to the extent the procedures mandated by said rules shall be
modified as follows:
(1) Tenant shall, by the applicable date specified therefor in
this Lease, make written demand upon Landlord pursuant to this Lease for
arbitration, specifying therein the name and address of the person to act as the
arbitrator on Tenant's behalf. The arbitrator shall be qualified as a real
estate appraiser, with at least five (5) years experience in appraising major
commercial property in Santa Xxxxx County and a member of a recognized society
of real estate appraisers, who would qualify as an expert witness over objection
to give opinion testimony addressed to the issue in a court of
79
competent jurisdiction. Failure on the part of Tenant to make a timely and
proper demand for such arbitration (specifying the arbitrator to act on
Tenant's behalf, as aforesaid) shall constitute a waiver of the right
thereto. Within ten (10) business days after receipt of Tenant's demand for
arbitration, Landlord shall give written notice to Tenant pursuant to this
Lease, 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. Notwithstanding the foregoing, upon
receipt of Tenant's demand for arbitration Landlord may, in its sole
discretion, deliver a revised estimate of the Fair Market Value of the
Premises, and within fifteen (15) days after receipt of such notice from
Landlord, Tenant shall notify Landlord in writing that it (i) agrees with
such revised Fair Market Rental Value, or (ii) disagrees with such revised
Fair Market Rental Value, with no response constituting agreement. If Tenant
disagrees with Landlord's Fair Market Value, then within ten (10) business
days after receipt of Tenant's notice of such disagreement Landlord shall
give Tenant written notice specifying Landlord's designated arbitrator as
provided in this paragraph above.
(2) If two (2) arbitrators are chosen pursuant to paragraph (1)
above, the arbitrators so chosen shall meet within ten (10) business days after
Landlord notifies Tenant of the appointment of Landlord's arbitrator as
aforesaid. If the two appraisers reach agreement on the Fair Market Rental
Value, that value shall be binding and conclusive upon the parties. If within
ten (10) business days after such first meeting the two arbitrators shall be
unable to agree upon a determination of Fair Market Rental Value, 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 Subparagraph 44(a)(1). If the first two arbitrators are
unable to agree upon such appointment within five (5) business days after
expiration of said ten (10) days period, the third arbitrator shall be selected
by Landlord and Tenant, if they can agree thereon, within a further period of
ten (10) business days. If Landlord and Tenant do not so agree, then
80
either party, on behalf of both, may request appointment of such a qualified
person by the then Chief Judge of the United States District Court having
jurisdiction over the City of San Xxxx, 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 (3) arbitrators shall
decide the dispute if it has not previously been resolved by following the
procedure set forth in the following paragraph.
(3) If an issue cannot be resolved by agreement between the two
arbitrators selected by Landlord and Tenant or settlement between Landlord and
Tenant during the course of arbitration, the issue shall be resolved by the
three arbitrators in accordance with the following procedures. Within ten (10)
business days after appointment of the third arbitrator, each of the two
arbitrators selected by Landlord and Tenant shall state in writing his
determination of the Fair Market Rental Value supported by the reasons therefor
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, within ten (10) business days after submission to
the third arbitrator of the two proposed resolutions, which of the two proposed
resolutions most closely approximates the third arbitrator's determination of
Fair Market Rental Value. 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.
(4) If any arbitrator fails, refuses or is unable to act, his
successor shall be appointed by the party who originally appointed 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. Landlord and Tenant
shall each pay the fees and expenses of its respective arbitrator, if any, and
shall each pay half of the fees and expenses of the third arbitrator, if any.
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.
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(5) The arbitrators shall have the right to consult experts and
competent authorities with factual information or evidence pertaining to a
determination of Fair Market Rental Value, but any such consultation shall be
made in the presence of both Landlord and Tenant with full right on their part
to cross-examine. The arbitrators shall render their decision and award in
writing with counterpart copies to Landlord and Tenant. The arbitrators shall
have no power to modify the provisions of this Lease.
(b) DEFINITION OF FAIR MARKET RENTAL VALUE. Wherever used throughout
this Paragraph 44 [Rent During Extension Term] the term "Fair Market Rental
Value" shall mean the fair market rental value of the Premises, using as a guide
the monthly base rent (on a per rentable square foot basis) which would be
charged during the Extension Term (including periodic increases during the
Extension Term, if any) in a comparable location in the Mountain View Area for
comparable commercial space of comparable size, in comparable condition, and of
comparable quality as of the time that the Extension Term commences, taking into
account that the Premises can be used either by a single tenant as a campus or
by multiple tenants, and with appropriate adjustments regarding taxes, insurance
and operating expenses as necessary to insure comparability to this Lease, as
the case may be. Without limiting the foregoing, the Fair Market Rental Value
shall reflect the amount and type of parking, existing utilities, communications
facilities and leasehold improvements (regardless of who paid for them and with
the assumption, for purposes of the determination of Fair Market Rental Value,
that they are fully usable by Tenant), proposed term of lease, amount of space
leased, extent of service provided or to be provided, and any other relevant
terms or conditions; provided, however that the Fair Market Rental Value shall
not reflect, or provide any discount for, the fact that otherwise comparable
leases vary with this Lease with respect to tenant improvement allowances;
phase-ins or early occupancy agreements; moving costs; rebates; signing bonuses;
early lease terminations; lease buy-outs; free rent and other rent concessions;
leasing commissions; and other related costs.
(c) INTERIM RENT. If binding arbitration has not been completed prior
to the expiration of any preceding period for
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which Monthly Base Rent has been determined, Tenant shall pay Monthly Base
Rent at the greater of the Base Rent paid during the last month of the
immediately preceding Term or ninety-five percent (95%) of the Fair Market
Rental Value estimated by Landlord, with an adjustment to be made once Fair
Market Rental Value is ultimately determined by binding arbitration. Such
adjustment shall not result in a decrease of the Monthly Base Rent for the
Premises below the amount payable by Tenant as of the period immediately
preceding the ensuing Extension Term.
(d) LEASE TERMS CONTINUE. From and after the commencement of the
Extension Term, all of the other terms, covenants and conditions of the Lease
shall also apply; provided, however, that Tenant shall have no further rights to
extend the
83
Term. No broker's commissions or allowance for new tenant improvements will be
payable by Landlord in connection with the Extension Term.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
date first above written.
LANDLORD
000 Xxxxx Xxxxxx Associates, L.P.,
a California limited partnership
By: Canada Corp.,
a California corporation,
Its General Partner
By: /s/ Xxxxxxx X. Xxxxxx III
-------------------------
Its:
-----------------------
By: Virginia Land Company, Inc.,
a California corporation,
Its General Partner
By: /s/ Xxxx X. Xxxxxxxx
-------------------------
Its:
------------------------
TENANT
Netscape Communications Corporation,
a Delaware corporation
By: /s/ Xxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx
Its Chief Financial Officer
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LIST OF EXHIBITS
EXHIBIT "A" DESCRIPTION OF PHASE II
EXHIBIT "A-1" CONDITIONS PRECEDENT
EXHIBIT "B" FORM OF CC&RS
EXHIBIT "C" FORM OF DECLARATION OF RESTRICTIONS AND ACCESS AGREEMENT
EXHIBIT "D" WORK LETTER
EXHIBIT "E" CERTIFICATE ESTABLISHING OCCUPANCY DATE
EXHIBIT "F" CONDITIONS
EXHIBIT "G" GENERAL CONTRACTOR'S CONSTRUCTION WARRANTIES
EXHIBIT "H" ESTOPPEL CERTIFICATE
EXHIBIT "I" [INTENTIONALLY DELETED]
EXHIBIT "J" RULES & REGULATIONS
EXHIBIT "K" REQUIRED CONDITION OF PREMISES UPON SURRENDER
EXHIBIT "L" LANDLORD'S HAZARDOUS MATERIALS DISCLOSURES
EXHIBIT "M" FORM OF LETTER OF CREDIT
EXHIBIT "N" TENANT'S HAZARDOUS MATERIALS DISCLOSURES
EXHIBIT "O" [INTENTIONALLY DELETED]
EXHIBIT "P" RESTRICTIONS ON USE
EXHIBIT "IT "Q" SELLER'S INDEMNITY
EXHIBIT "R" MAINTENANCE STANDARDS AND SCHEDULE
[TO BE ATTACHED AFTER LEASE EXECUTION]
TABLE OF CONTENTS
BASIC LEASE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . i
1. LEASED PREMISES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(a) Premises.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(b) Conditions Precedent; Right of First Negotiation . . . . . . . . . 1
(1) Conditions Precedent. . . . . . . . . . . . . . . . . . . . . . 1
(2) Right of First Negotiation. . . . . . . . . . . . . . . . . . . 1
(c) Phase I Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(d) Project; Common Areas; Access & Cooperation. . . . . . . . . . . 2
(e) Reconfiguration of Phase II. . . . . . . . . . . . . . . . . . . . 4
2. OCCUPANCY AND USE . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3. TERM AND POSSESSION . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(a) Term; Occupancy Date; Expiration Date. . . . . . . . . . . . . . . 5
(b) Initial Construction.. . . . . . . . . . . . . . . . . . . . . . . 6
(c) Occupancy By Tenant. . . . . . . . . . . . . . . . . . . . . . . . 7
(d) Rent Commencement Date; Certificate of Occupancy.. . . . . . . . . 7
(e) Conditions; Window Dates.. . . . . . . . . . . . . . . . . . . . . 7
(f) Credit Termination Right.. . . . . . . . . . . . . . . . . . . . . 8
4. RENT; RENT ADJUSTMENTS; ADDITIONAL CHARGES FOR EXPENSES AND TAXES.. . . 9
(a) Payment of Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(1) Monthly Base Rent . . . . . . . . . . . . . . . . . . . . . . . 9
(2) Other Rent. . . . . . . . . . . . . . . . . . . . . . . . . . .10
(3) Partial Months. . . . . . . . . . . . . . . . . . . . . . . . .10
(b) Adjustments in Base Rent.. . . . . . . . . . . . . . . . . . . . . 10
(c) Additional Charges for Expenses and Taxes. . . . . . . . . . . . . 10
(1) Definitions of Certain Additional Charges. . . . . . . . . . 10
(a) "Tax Year" . . . . . . . . . . . . . . . . . . . . . . . 10
(b) "Real Estate Taxes". . . . . . . . . . . . . . . . . . . 10
(c) "Expenses" . . . . . . . . . . . . . . . . . . . . . . . 11
(d) "Expense Year" . . . . . . . . . . . . . . . . . . . . . 13
(2) Payment of Real Estate Taxes. . . . . . . . . . . . . . . . . .13
(a) Payment as Due . . . . . . . . . . . . . . . . . . . . . .13
(b) Impounds . . . . . . . . . . . . . . . . . . . . . . . . .13
(3) Payment of Expenses.. . . . . . . . . . . . . . . . . . . . . .14
(a) Payment as Due. . . . . . . . . . . . . . . . . . . . . . .14
(b) Monthly Payments. . . . . . . . . . . . . . . . . . . . . .14
(4) Other.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(d) Audit Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(e) Late Charges; Default Rate . . . . . . . . . . . . . . . . . . . . 15
1
5. MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(a) Management of the Premises.. . . . . . . . . . . . . . . . . . . . 16
(b) Management of the Common Area. . . . . . . . . . . . . . . . . . . 17
(c) Third Party Management.. . . . . . . . . . . . . . . . . . . . . . 17
(d) Dispute of Assumption of Management. . . . . . . . . . . . . . . . 18
6. RESTRICTIONS ON USE . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7. COMPLIANCE WITH LAWS. . . . . . . . . . . . . . . . . . . . . . . . . . 19
(a) Tenant's Compliance Obligations. . . . . . . . . . . . . . . . . . 19
(b) Insurance Requirements.. . . . . . . . . . . . . . . . . . . . . . 20
(c) No Limitation on Obligations.. . . . . . . . . . . . . . . . . . . 20
8.ADDITIONAL ALTERATIONS 21
(a) Landlord's Alterations.. . . . . . . . . . . . . . . . . . . . . . 21
(b) Landlord's Consent to Tenant's Alterations. . . . . . . . . . . . 21
(c) Permitted Alterations. . . . . . . . . . . . . . . . . . . . . . . 21
(d) Requirements for Tenant Alterations. . . . . . . . . . . . . . . . 22
(e) Removal of Alterations and Restoration.. . . . . . . . . . . . . . 23
(f) Reimbursement of Landlord's Review Costs.. . . . . . . . . . . . . 23
9. REPAIR AND MAINTENANCE.. . . . . . . . . . . . . . . . . . . . . . . . . 23
(a) Landlord's Obligations.. . . . . . . . . . . . . . . . . . . . . . 23
(b) Tenant's Obligations.. . . . . . . . . . . . . . . . . . . . . . . 24
(c) Tenant's Obligations for Structural Maintenance. . . . . . . . . . 25
(d) Maintenance Service Contracts. . . . . . . . . . . . . . . . . . . 26
(e) Cure Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(f) No Liability of Landlord.. . . . . . . . . . . . . . . . . . . . . 27
10. LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11. ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . . . . . . 28
(a) Restriction on Assignment and Subleasing.. . . . . . . . . . . . . 28
(b) Required Notice. . . . . . . . . . . . . . . . . . . . . . . . . . 29
(c) Landlord's Response To Proposed Assignment.. . . . . . . . . . . . 29
(d) Landlord's Response To Proposed Sublease.. . . . . . . . . . . . . 29
(e) Bonus Rent.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(f) Effect of Transfer.. . . . . . . . . . . . . . . . . . . . . . . . 30
(g) Permitted Transfer.. . . . . . . . . . . . . . . . . . . . . . . . 31
(h) Strategic Partners.. . . . . . . . . . . . . . . . . . . . . . . . 31
(i) Assumption by Transferee.. . . . . . . . . . . . . . . . . . . . . 31
(j) Effect on Extension Option.. . . . . . . . . . . . . . . . . . . . 32
2
12. INSURANCE AND INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . 32
(a) Release of Landlord. . . . . . . . . . . . . . . . . . . . . . . . 32
(b) Tenant Indemnity.. . . . . . . . . . . . . . . . . . . . . . . . . 33
(c) Tenant's Insurance Requirements. . . . . . . . . . . . . . . . . . 33
(1) Commercial General Liability Insurance. . . . . . . . . . . . .33
(2) Time Element Insurance. . . . . . . . . . . . . . . . . . . . .34
(3) Property Insurance. . . . . . . . . . . . . . . . . . . . . . .34
(4) Workers Compensation Insurance. . . . . . . . . . . . . . . . .34
(d) Survival.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(e) Landlord's Insurance Obligations.. . . . . . . . . . . . . . . . . 35
13. WAIVER OF SUBROGATION . . . . . . . . . . . . . . . . . . . . . . . . . 35
14. SERVICES AND UTILITIES. . . . . . . . . . . . . . . . . . . . . . . . . 36
(a) Tenant's Responsibility. . . . . . . . . . . . . . . . . . . . . . 36
(b) No Excessive Load. . . . . . . . . . . . . . . . . . . . . . . . . 37
(c) No Liability of Landlord.. . . . . . . . . . . . . . . . . . . . . 37
15. TENANT'S CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . 37
16. HOLDING OVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
17. SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
18. RULES AND REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . 39
19. RE-ENTRY BY LANDLORD. . . . . . . . . . . . . . . . . . . . . . . . . . 39
20. INSOLVENCY OR BANKRUPTCY. . . . . . . . . . . . . . . . . . . . . . . . 40
21. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
(a) Tenant's Default.. . . . . . . . . . . . . . . . . . . . . . . . . 41
(b) Phase I Lease Default. . . . . . . . . . . . . . . . . . . . . . . 42
(c) Landlord's Remedies. . . . . . . . . . . . . . . . . . . . . . . . 42
(d) Landlord's Default.. . . . . . . . . . . . . . . . . . . . . . . . 43
(e) Tenant's Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 43
(1) Limitation on Remedies. . . . . . . . . . . . . . . . . . . . .43
(2) Remedy for Construction Defaults. . . . . . . . . . . . . . . .44
(f) Chronic Default. . . . . . . . . . . . . . . . . . . . . . . . . . .44
22. DAMAGE AND DESTRUCTION. . . . . . . . . . . . . . . . . . . . . . . . . 44
(a) Restoration. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3
(b) Insurance Proceeds.. . . . . . . . . . . . . . . . . . . . . . . . 45
(c) Casualty at End of Term. . . . . . . . . . . . . . . . . . . . . . 45
(d) Mutual Termination Option; Insured Casualty. . . . . . . . . . . . 45
(e) Destruction Where No Proceeds Are Available. . . . . . . . . . . . .46
(f) Proceeds Upon Termination. . . . . . . . . . . . . . . . . . . . . 46
(g) Rent Abatement.. . . . . . . . . . . . . . . . . . . . . . . . . . 47
(h) Waiver of Statutory Provisions.. . . . . . . . . . . . . . . . . . 47
23. EMINENT DOMAIN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(a) Entire Building. . . . . . . . . . . . . . . . . . . . . . . . . . 47
(b) Partial Building; Termination. . . . . . . . . . . . . . . . . . . 47
(c) Partial Building; Restoration. . . . . . . . . . . . . . . . . . . 48
(d) End of Term Taking.. . . . . . . . . . . . . . . . . . . . . . . . 48
(e) Taking of Common Area. . . . . . . . . . . . . . . . . . . . . . . 48
(f) Award. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
(g) Temporary Taking.. . . . . . . . . . . . . . . . . . . . . . . . . 49
(h) Waiver of Statutory Provisions.. . . . . . . . . . . . . . . . . . 50
24. SALE BY LANDLORD. . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
25. RIGHT OF LANDLORD TO PERFORM. . . . . . . . . . . . . . . . . . . . . . 50
26. OWNERSHIP OF IMPROVEMENTS; SURRENDER OF PREMISES. . . . . . . . . . . . 51
(a) Ownership of Tenant Improvements & Alterations.. . . . . . . . . . 51
(b) Delivery and Restoration of Premises.. . . . . . . . . . . . . . . 51
(c) No Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
27. WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
28. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
29. TAXES PAYABLE BY TENANT . . . . . . . . . . . . . . . . . . . . . . . . 53
30. ABANDONMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
31. SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . . . . . . . . . 54
32. ATTORNEY'S FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
33. LIGHT AND AIR.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
34. SECURITY DEPOSIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(a) Letter of Credit.. . . . . . . . . . . . . . . . . . . . . . . . . 54
4
(b) Reduction After Phase I Occupancy. . . . . . . . . . . . . . . . . 55
(c) Further Reduction. . . . . . . . . . . . . . . . . . . . . . . . . 55
(d) Substitution of Cash Collateral. . . . . . . . . . . . . . . . . . 56
35. FINANCIAL INFORMATION.. . . . . . . . . . . . . . . . . . . . . . . . . 56
36. PARKING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
37. MISCELLANEOUS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
(a) Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . .57
(b) Other Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
(c) Quiet Enjoyment. . . . . . . . . . . . . . . . . . . . . . . . . . .57
(d) Survival of Indemnities; Immediate Obligation
To Defend. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
38. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . 58
(a) Landlord's Representations and Warranties. . . . . . . . . . . . . .58
(b) Tenant's Representations and Warranties. . . . . . . . . . . . . . .58
39. REAL ESTATE BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . 59
40. HAZARDOUS MATERIALS LIABILITY . . . . . . . . . . . . . . . . . . . . . 59
(a) Definitions of Hazardous Materials and Environmental Laws. . . . . 59
(b) Tenant Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . 60
(c) Landlord Indemnity.. . . . . . . . . . . . . . . . . . . . . . . . 61
(d) Seller Indemnity.. . . . . . . . . . . . . . . . . . . . . . . . . 61
(e) Release of Landlord. . . . . . . . . . . . . . . . . . . . . . . . 61
(f) Tenant's Disclosure Obligations. . . . . . . . . . . . . . . . . . 62
41. ARBITRATION OF DISPUTES.. . . . . . . . . . . . . . . . . . . . . . . . 62
42. SIGNAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
43. OPTION TO RENEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
44. RENT DURING EXTENSION TERM. . . . . . . . . . . . . . . . . . . . . . . 65
(a) Determination of Fair Market Rental Value. . . . . . . . . . . . . .65
(b) Definition of Fair Market Rental Value . . . . . . . . . . . . . . .67
(c) Interim Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . .68
(d) Lease Terms Continue . . . . . . . . . . . . . . . . . . . . . . . .68
5
INDEX OF DEFINED TERMS
Defined Term Paragraph
------------ ---------
Additional Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 4(a)(2)
AirProducts Easement . . . . . . . . . . . . . . . . . . . . . . . . . . 1(d)(3)
Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8(b)
Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11(a)
Base Building Improvements . . . . . . . . . . . . . . . . . . .2 of Work Letter
Base Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4(a)(1)
Base Rent Adjustments. . . . . . . . . . . . . . . . . . Basic Lease Information
Building . . . . . . . . . . . . . . . . . . . . .Basic Lease Information & 1(a)
Buildings . . . . . . . . . . . . . . . . . . . Basic Lease Information & 1(a)
Building Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9(b)
CAA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40(a)
CC&Rs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1(d)(3)
CERCLA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40(a)
Change Order for Tenant Modification(s). . . . . . . . . . . . .3 of Work Letter
Chronic Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21(f)
Clean-Up Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . 1(d)(2)
Common Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1(d)(2)
Common Area Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .5(b)
Completion Assurance . . . . . . . . . . . . . . . . . . . . . 11 of Work Letter
Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3(e)
1
Cost of Tenant Improvements. . . . . . . . . . . . . . . . . . . . . . . . 11(e)
Credit Cure Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3(f)
Credit Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3(f)
Credit Termination Right . . . . . . . . . . . . . . . . . . . . . . . . . .3(f)
Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
Default Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4(e)
Draw Event . . . . . . . . . . . . . . . . . . . . . . 11(a)(iii) of Work Letter
Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40(a)
Environmental Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
EPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4(c)(1)(C)
Expense Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4(c)(1)(D)
Exercise Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Existing Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . 40(c)
Expiration Date . . . . . . . . . . . . . . . . . . . . Basic Lease Information
Extension Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Fair Market Rental Value . . . . . . . . . . . . . . . . . . . . . . . . . 44(b)
Force Majeure Events . . . . . . . . . . . . . . . . . . . . . . . . . . . 14(c)
FWPCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40(a)
Hazardous Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40(a)
Hetch Hetchy Easement . . . . . . . . . . . . . . . . . . . . . . . . . . .1(c)
Identified Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . 40(c)
2
Initial Window Date . . . . . . . . . . . . . . . . . . . . . . . . . . . .3(e)
Insolvency Proceeding. . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(a)
Land Improvements . . . . . . . . . . . . . . . . . . . . . . .2 of Work Letter
Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . .Recitals & 37(a)
Landlord Default Notice. . . . . . . . . . . . . . . . . . . . . . . . . . 21(d)
Landlord Delays . . . . . . . . . . . . . . . . . . . . . . . .8 of Work Letter
Landlord Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12(a)
Landlord's Contractor . . . . . . . . . . . . . . . . . . . . .3 of Work Letter
Landlord's Core Drawings . . . . . . . . . . . . . . . . . .5(a) of Work Letter
Landlord's Expense Statement . . . . . . . . . . . . . . . . . . . . .4(c)(3)(b)
Landlord's Plans . . . . . . . . . . . . . . . . . . . . . . . .2 of Work Letter
Landlord's Representatives . . . . . . . . . . . . . . . . . . . . . . . . 38(a)
Landlord's Tax Statement . . . . . . . . . . . . . . . . . . . . . . .4(c)(2)(A)
Landscape Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7(a)
Lease . . . . . . . . . . . . . . . . . . . . . . . . . Basic Lease Information
Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34(a)
Minimum Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Monthly Base Rent. . . . . . . . . . . . . . . . . . . . Basic Lease Information
Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
3
Mortgagee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Occupancy Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3(a)
PacBell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26(b)
Permitted Alterations. . . . . . . . . . . . . . . . . . . . . . . . . . . .8(c)
Permitted Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11(g)
PG&E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26(b)
Phase I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(c)
Phase II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(a)
Phase I Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(c)
Phase I Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(c)
Phase I Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(c)
Phase I Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . 34(b)
Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(a)
Project. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1(c)(1)
RCRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40(a)
Real Estate Taxes . . . . . . . . . . . . . . . . . . . . . . . . . .4(c)(1)(b)
Reconfiguration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(e)
Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4(a)(2)
Rent Commencement Date . . . . . . . . . . . . . . . . . . . . . . . . . . .3(d)
Rentable Area . . . . . . . . . . . . . . . . . . . . . Basic Lease Information
Restrictive Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4
Required Modifications . . . . . . . . . . . . . . . . . . . 5(c) of Work Letter
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(a)
Seller Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40(d)
SFWD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1(c)
Strategic Partner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11(h)
Sublease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11(a)
Substantially complete . . . . . . . . . . . . . . . . . . . . .9 of Work Letter
Sufficiently complete. . . . . . . . . . . . . . . . . . . . . . . . . . . .3(a)
Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23(a)
Tax Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4(c)(1)(A)
Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Recitals & 37(a)
Tenant Delays . . . . . . . . . . . . . . . . . . . . . . . . .7 of Work Letter
Tenant Improvements. . . . . . . . . . . . . . . . . . . . . . .1 of Work Letter
Tenant Modifications . . . . . . . . . . . . . . . . . . . . . .3 of Work Letter
Tenant Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12(b)
Tenant's Contractor . . . . . . . . . . . . . . . . . . . . 5(d) of Work Letter
Tenant's Plans . . . . . . . . . . . . . . . . . . . . . . . 5(a) of Work Letter
Tenant's Representatives . . . . . . . . . . . . . . . . . . . . . . . . . 38(b)
Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3(a)
Three Party Agreement . . . . . . . . . . . . . . . . . 11(a)(v) of Work Letter
TSCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40(a)
Window Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3(e)
5
Work Letter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3(b)
Working Drawings . . . . . . . . . . . . . . . . . . . . . . 5(a) of Work Letter
6
EXHIBIT "D" {PRIVATE}
WORK LETTER
(PHASE II)
1. OBLIGATIONS OF LANDLORD AND TENANT. For each of the Buildings,
Landlord shall furnish and install the Base Building Improvements provided
for in Paragraph 2 at Landlord's expense. Tenant shall furnish and install,
at Tenant's expense, the interior improvements and Building Systems to
complete each of the Buildings ("Tenant Improvements"), as required by
Tenant's Plans (as defined in Subparagraph 5(a) below). Without limiting the
generality of the foregoing, the Tenant Improvements shall include, without
limitation, the electrical and telephone systems to be furnished by Tenant
pursuant to Subparagraph 4(a) below and the specific items listed on Schedule
"D-2" attached hereto. The quantity, quality, character and manner of
installation of all of the foregoing work shall be subject to the limitations
imposed by any applicable regulations, laws, ordinances, codes and rules.
2. BASE BUILDING IMPROVEMENTS. For each Building, Landlord shall
furnish an uninsulated industrial shell building ("Base Building
Improvements") which shall include the building exterior walls and windows,
foundation, floors, roof membrane, roof system, raised shell sprinklers,
related structural components, the items listed on Schedule "D-5" attached
hereto, and one unenclosed secondary stairwell in each Building. In
addition, Landlord shall provide all base hardscape and landscape features on
the Premises, including parking areas, drive aisles, landscaping, monuments
for Tenant's signage (with project identification lettering), directional
signage, exterior lighting in the Common Area, and utilities stubbed in or to
the shell of each Building (except as provided in Paragraph 4
below)(collectively, the "Land Improvements"). The scope and finishes of the
Base Building Improvements and the Land Improvements to be provided by
Landlord will be substantially similar to those required under the Phase I
Work Letter for the Base Building Improvements and the Land Improvements
being provided by Landlord on Phase I. The construction drawings for the
Base Building Improvements and, as appropriate, the Land
EXHIBIT D - PAGE 1 OF 13
Improvements that the Landlord submits to the City of Mountain View for
approval, with such revisions as may be required by the City, are referred to
herein in the form finally approved by the City as "Landlord's Plans".
3. TENANT MODIFICATIONS. Any changes to the Land Improvements or Base
Building Improvements requested by Tenant and approved by Landlord, in its
sole discretion, shall be defined herein as "Tenant Modifications". The
Tenant Modifications may include, without limitation, the following: (i)
early installation of stub-ins for Tenant's electric, telephone and cable
systems into the shell, plumbing gut lines, footings and embeds for
Tenant-required structural items, and steel components related to Tenant's
structural reinforcement and design; (ii) any changes to the Land
Improvements or Base Building Improvements (including additional or different
equipment and/or modification of the base irrigation system) necessary to
allow the landscape irrigation system or any other system to use reclaimed,
unpotable water from the underground remediation facilities; (iii) changes to
building glass or other components of the Base Building Improvements; (iv)
excavations and installation of components related to Tenant's elevators; and
(v) changes to the Land Improvements, Base Building Improvements and/or
Landlord's Plans that are necessitated by applicable legal or construction
requirements due to Tenant's Plans, or that are otherwise requested by
Tenant. All of Tenant's obligations hereunder with respect to Tenant
Improvements shall be applicable to any Tenant Modifications, except as
expressly provided herein. Tenant shall pay for the incremental cost of any
Tenant Modifications, and shall enter into a separate agreement with Devcon
Construction ("Landlord's Contractor") for such work. Alternatively,
Landlord may elect, for reasons of expediency and convenience, to add any
specific Tenant Modification(s) to its construction contract for Base
Building Improvements, in which event the applicable Tenant Modification(s)
shall be treated as a separate "Change Order for Tenant Modification(s)"
under Landlord's contract for the Land Improvements and/or Base Building
Improvements. Tenant shall be responsible for all costs (which shall be
evidenced by trade cost breakdowns by Landlord's Contractor) resulting from
any Change Order for Tenant Modifications, including architectural,
engineering and special testing and/or inspection charges, and any special
permits or
EXHIBIT D - PAGE 2 OF 13
fees. Tenant shall reimburse Landlord for the full costs incurred by
Landlord in connection with any such Change Order. Such payments shall be
made based on progress of work, within twenty (20) days of receipt of a xxxx
from Landlord together with reasonably satisfactory documentation that the
work covered by such xxxx has been substantially complete. Upon completion
of the Tenant Improvements, Landlord shall reimburse Tenant for any net cost
savings realized by Landlord on its contract for Base Building Improvements
and/or Land Improvements which were attributable to Change Orders for Tenant
Modifications. Such reimbursement shall be made within thirty (30) days
after receipt of Tenant's billing and documentation.
4. ELECTRICAL SYSTEMS, TELEPHONE SYSTEMS AND DEDICATED
COMMUNICATIONS LINES.
(a) LANDLORD'S OBLIGATIONS. Landlord shall not be responsible
for furnishing electrical, telephone, or dedicated communications systems for
any of the Buildings. Landlord shall be responsible for the overhead
conversion of the PG&E, PacBell and TCI Cable lines on Phase II along Xxxxxxx
Road to below ground.
(b) TENANT'S OBLIGATIONS. Tenant shall furnish and install, at
Tenant's expense, its telephone distribution system from the Pacific Xxxx
point-of-connection outside the Project to each Building. In addition,
Tenant shall furnish and install, at Tenant's expense, primary electrical
service from PG&E's point-of-connection (whether inside or outside the
Project) to a substation point on the Project, and an electrical distribution
system from the substation point to and throughout each of the Buildings, as
necessary for Tenant's intended use. The location of the substation and all
conduits and other portions of the electrical system, and of all portions of
the telephone distribution system and dedicated communications systems, shall
be as designated by Landlord. Tenant shall design and install such
electrical and telephone systems in a manner consistent with Tenant's
restoration and reconfiguration obligations upon expiration or termination of
the Lease, which obligations are described in Subparagraph 26(b) of the
Lease.
EXHIBIT D - PAGE 3 OF 13
(c) CREDIT DUE TENANT. Landlord shall credit to Tenant the
actual cost, as reasonably determined by Landlord, that Landlord would have
incurred if Landlord had furnished "power to panel" electrical service under
a customary supply arrangement where PG&E sells power on a retail basis
rather than a wholesale basis. Such amount shall be reduced by any costs
incurred by Landlord as a result of the work described in Subparagraph 4(a)
above, including the cost attributable to any requirement by PG&E that
Landlord modify any PG&E connections which serve adjoining property through
lines from the Project. Any net reimbursement amount shall be paid by
Landlord within thirty (30) days after Tenant provides Landlord with written
documentation satisfactory to Landlord that (i) the Tenant Improvements
(including the electrical distribution system) and Tenant Modifications are
substantially complete, and (ii) Tenant has received unconditional lien
waivers from Tenant's Contractor and any other contractors and/or
subcontractors with respect to all work on the electrical distribution
system.
(d) CREDIT FOR COMMUNICATIONS CONDUITS. Landlord shall credit to
Tenant the amount of Sixty-Two Thousand Two Hundred Dollars ($62,200) toward
the cost of Tenant's communication conduits on Phase II. Such amount shall
be credited at the same time and in the same manner as provided in
Subparagraph 4(c) [Credit Due Tenant] above.
5. TENANT IMPROVEMENTS.
(a) SPACE PLANS AND WORKING DRAWINGS. Landlord shall provide
Tenant with Landlord's core drawings and specifications, prepared by Xxxxxxx
Xxxxxxxxx & Partners, Inc. or another architect selected by Landlord, which
locate placement of bathroom cores, elevators, lobbies, electrical rooms,
mechanical and HVAC units and air supply shafts in each Building ("Landlord's
Core Drawings"). Tenant shall cause its architect and/or engineers to
prepare (i) a space plan for the Premises; (ii) complete architectural,
mechanical, electrical, plumbing, and other plans for the Tenant
Improvements; (iii) specifications for Tenant's mechanical system and
electrical system; (iv) specifications for the HVAC system using air-cool
package systems; and (v) a list of building standards for interior design
(including, without limitation, the Building Systems), including
EXHIBIT D - PAGE 4 OF 13
a schedule of all finishes. Items (ii), (iii), (iv) and (v) above are
collectively referred to herein as "Working Drawings". The building
standards must meet or exceed the Minimum Standards for Tenant Improvements
attached hereto as Schedule "D-1", and all operating components of the
Building Systems and related distribution systems to the Premises shall be
national brand name products, used in their customary manner, with a
consistent track record for low maintenance, durability and optimum
functionality. The space plan and Working Drawings shall comply with all
applicable regulations, laws, ordinances, codes and rules; provided that
Tenant shall not be liable to Landlord for any non-compliance of Tenant's
space plan or Working Drawings that directly results from non-compliance of
Landlord's Core Drawings with any laws, regulations, codes, ordinances or
rules so long as Tenant notifies Landlord promptly after Tenant obtains
knowledge of any such non-compliance by Landlord's Core Drawings, and Tenant
shall have such additional time as Landlord reasonably deems necessary to
submit its space plan and/or Working Drawings after making any necessary
modifications to correct any non-compliance resulting from Landlord's Core
Drawings' non-compliance. In addition, the space plan and Working Drawings
shall provide for corridors, lobbies, bathrooms, mechanical and electrical
systems, and fire exits which are designed to accommodate single or
multi-tenant configurations in each Building (including, without limitation,
separate metering for utilities), in conformance with Landlord's Core
Drawings and in a design reasonably acceptable to Landlord. The space plan
and Working Drawings shall be performed by Devcon Construction's
architectural services, or another architect mutually acceptable to Landlord
and Tenant. On or before July 1, 1997, Tenant shall submit its space plan to
Landlord, for Landlord's review and approval, which approval shall not be
unreasonably withheld or delayed so long as such space plan reflects a
configuration and design that reasonably relates to the functional design of
the applicable Building and incorporates a logical pedestrian traffic flow.
Within five (5) business days after such submission, Landlord shall either
approve or disapprove the space plan. Tenant shall make any changes
necessary in order to correct any item identified by Landlord as grounds for
its disapproval, and shall resubmit the corrected space plan to Landlord
within five (5) business days after Landlord's disapproval. Within five (5)
business days after Landlord receives the revised space plan,
EXHIBIT D - PAGE 5 OF 13
Landlord shall approve or disapprove it. This procedure shall be repeated
until the space plan is finally approved by Landlord and written approval has
been delivered to Tenant. On or before September 1, 1997, Tenant shall
submit its Working Drawings and a pallet of interior colors and finishes to
Landlord for Landlord's review and approval, which approval shall not be
unreasonably withheld or delayed so long as such drawings and pallet conform
to the requirements of this Subparagraph 5(a). Landlord's approval or
disapproval of such Working Drawings and pallet, and Tenant's response
thereto, shall follow the procedure described above with respect to the space
plan, except that each time period shall be changed from five (5) business
days to ten (10) business days. All items finally approved by Landlord
pursuant to this Paragraph are referred to herein collectively as "Tenant's
Plans".
(b) TENANT IMPROVEMENT COSTS. Tenant shall bear the cost of
Tenant Improvements, including, without limitation, costs in connection with
space planning, preparing Tenant's Plans, engineering, plan checking, special
inspections and testing, any consultants, and related permits and fees for
Tenant Improvements.
(c) ELECTION TO REQUIRE REMOVAL OF TENANT IMPROVEMENTS AND
TENANT MODIFICATIONS. In connection with its approval of Tenant's Plans,
Landlord shall designate in writing if any portion of the Tenant Improvements
or Tenant Modifications must be removed upon the expiration or sooner
termination of this Lease, together with a description of specific deletions,
additions, substitutions or modifications to such Tenant Improvements or
Tenant Modifications that Tenant must make in order for Landlord to not
require their removal (any such modifications, "Required Modifications"). If
Landlord does not make such designation in writing with respect to any
portion of the Tenant Improvements or Tenant Modifications, such portion of
the Tenant Improvements or Tenant Modifications may remain on the Premises
upon the expiration or sooner termination of the Lease. If Landlord
designates any Tenant Improvements or Tenant Modifications for removal,
within five (5) business days after receipt of such designation, Tenant shall
either (i) resubmit Tenant's Plans with the Required Modifications made,
which plans shall be subject to Landlord's review in accordance with
EXHIBIT D - PAGE 6 OF 13
Subparagraph 5(a), or (ii) notify Landlord of Tenant's intent to proceed
without making the Required Modifications. Tenant's failure to take either
action within such five (5) day period shall be deemed Tenant's election to
proceed without making the Required Modifications. If Landlord designates
that any Tenant Improvements or Tenant Modifications must be removed and
Tenant does not make the Required Modifications, upon the expiration or
sooner termination of the Term of the Lease Tenant shall upon demand by
Landlord, at Landlord's election, either (i) at Tenant's sole cost and
expense, forthwith and with all due diligence remove any Tenant Improvements
made by or for the account of Landlord which are designated by Landlord to be
removed, and restore the Premises to as near as possible its original
condition prior to the installation of such Tenant Improvements or Tenant
Modifications, subject to normal wear and tear, or (ii) pay Landlord the
reasonable estimated cost of such removal and restoration.
(d) TENANT'S CONTRACTOR. Tenant shall use Devcon Construction
as its general contractor for all of the Tenant Improvements ("Tenant's
Contractor"). Tenant shall use the same roofing contractor as Landlord.
Tenant's subcontractors and labor shall be subject to approval by Landlord
(which approval shall not be unreasonably withheld or delayed) and reasonable
administrative supervision by Tenant's Contractor. Tenant shall direct and
authorize Tenant's Contractor (with respect to Tenant Improvements) and
Landlord's contractor (with respect to Tenant Modifications not being made by
Change Order to Landlord's construction contract) to keep Landlord fully
informed of the construction process, and to provide Landlord with access to
all documentation and other information in either contractor's possession or
control regarding construction of the Tenant Improvements or the Tenant
Modifications; provided that Landlord shall not be obligated to monitor or
inspect construction of the Tenant Improvements or Tenant Modifications or
any information in connection therewith.
6. CONSTRUCTION OF TENANT IMPROVEMENTS AND TENANT MODIFICATIONS.
After the Occupancy Date has occurred and Tenant has received Landlord's
approval of Tenant's Plans, Tenant shall administer and diligently prosecute
the construction of Tenant Improvements in accordance with Tenant's Plans.
All Tenant
EXHIBIT D - PAGE 7 OF 13
Improvements and Tenant Modifications shall be constructed using union labor.
Landlord and Tenant shall cooperate, and shall cause their respective
contractors to cooperate, in a reasonable manner to coordinate work on Base
Building Improvements, Tenant Modifications and Tenant Improvements.
However, installation of all Tenant Improvements and Tenant Modifications
shall comply with Landlord's contractor's schedule and rules of the site, and
shall not cause Landlord's contractor to be dependent upon Tenant's work in
order for Landlord's contractor to complete the Base Building Improvements.
After the Occupancy Date, Tenant shall give Landlord and Landlord's
contractor, subcontractors and suppliers full access and entry to the
Premises in order to complete the Base Building Improvements in accordance
with any reasonable security procedures established by Tenant. Landlord and
Tenant shall each have the full benefit of all contractor warranties.
7. TENANT DELAYS. If the conditions for establishing the Occupancy
Date or any other Condition are delayed due to a delay in constructing Land
Improvements or Base Building Improvements as a result of any of the
following (collectively, "Tenant Delays"), and such delay could not have been
mitigated by Landlord using commercially reasonable measures (provided that
Landlord shall have no obligation to mitigate delays caused by Tenant's
failure to meet a specific deadline set forth herein or in the construction
schedule), then the Initial Window Date for each Condition which has not been
satisfied shall be extended by the length of such delay, and the Rent
Commencement Date shall be adjusted to reflect what the Rent Commencement
Date would have been if there had been no Tenant Delays: (a) Tenant's failure
to submit any component of Tenant's Plans or any other items to be delivered
under this Work Letter, on or before the dates or time periods called for,
unless such delay results directly from Landlord's delay in providing
Landlord's Core Drawings; (b) any Tenant Modifications which require changes
to the Base Building Improvements or Land Improvements; (c) Tenant's or
Tenant's Contractor's, subcontractors' or suppliers' failure to comply with
Landlord's contractor's schedule or rules of the site; (d) Tenant's changes
to Tenant's Plans after Landlord's approval thereof or other delays in
Tenant's construction of the Tenant Improvements (other than delays caused by
Force Majeure Events); or (e) interference by Tenant or Tenant's Contractor,
EXHIBIT D - PAGE 8 OF 13
subcontractors or suppliers with construction of the Base Building
Improvements or Land Improvements by denying full access to the Buildings,
causing labor disputes or otherwise failing to comply with Paragraph 6
hereof. Landlord shall give Tenant at least three (3) days prior notice if
Landlord becomes aware that Tenant is in danger of causing a Tenant Delay,
and if Tenant takes appropriate measures to prevent such delay within such
three (3) day period, no adjustment to any Initial Window Date or Rent
Commencement Date shall be made; provided, however, that if such delay was
not reasonably foreseeable by Landlord, the three (3) day period for prior
notice and opportunity to mitigate provided above shall be changed to
twenty-four (24) hours after Landlord becomes aware of such delay or
potential delay; and provided further, that no such notice shall be required
in order for such adjustment to be made if such delay results from Tenant's
failure to perform any obligation within a specific date or time period
(including, without limitation, any delay in delivery of Tenant's space plan
or Working Drawings or non-compliance with Landlord's contractor's schedule).
8. LANDLORD DELAYS. If substantial completion of the Tenant
Improvements is delayed as a result of any of the following, and such delay
could not have been mitigated by Tenant using commercially reasonable
measures (collectively, "Landlord Delays"), then the Rent Commencement Date
shall be extended for a period equal to any delay in substantial completion
of the Tenant Improvements directly resulting from such Landlord Delays: (a)
unreasonable interference by Landlord or Landlord's Contractor in connection
with construction of the Base Building Improvements; (b) Landlord's failure
to respond to any request for approval of any item by Tenant as required by
this Work Letter, within the time period specified herein; (c) Landlord's
failure or delay in obtaining any permits, approvals or consents of third
parties with respect to the Base Building Improvements which are Landlord's
responsibility to obtain and which must be obtained in order for Tenant to
obtain any required permits, approvals or consents of third parties with
respect to the Tenant Improvements or Tenant Modifications, but only to the
extent that Tenant's ability to obtain such permits, approvals or consents is
delayed beyond the time Tenant would have obtained same in the ordinary
course of its construction but for Landlord's delay; or (d) any material
changes to Landlord's Core Drawings after their approval
EXHIBIT D - PAGE 9 OF 13
by Tenant or Landlord's Plans after final approval by the City of Mountain
View (other than Tenant Modifications or changes required by third parties)
that directly affect Tenant's Plans or Tenant Improvements. Tenant shall
give Landlord at least three (3) days prior notice that Landlord is in danger
of causing a Landlord Delay, and if Landlord takes appropriate measures to
prevent such delay within such three (3) day period, no adjustment to the
Rent Commencement Date shall be made; provided, however, that if such delay
was not reasonably foreseeable by Tenant, the three (3) day period for prior
notice and opportunity to mitigate provided above shall be changed to
twenty-four (24) hours after Tenant becomes aware of such delay or potential
delay.
9. SUBSTANTIAL COMPLETION. For purposes of this Work Letter and the
Lease, (i) the Base Building Improvements and Land Improvements shall be
deemed "substantially complete" at such time as Landlord has completed the
Base Building Improvements and Land Improvements in accordance with
Landlord's Plans subject to completion and correction of items on Landlord's
architect's punch list, and certain other items which will not be completed
until substantial completion of the Tenant Improvements (such as items
necessary to modify the sprinklers in accordance with the Tenant Improvement
package and certain landscaping), and (ii) the Tenant Improvements and/or
Tenant Modifications shall be deemed "substantially complete" at such time as
Tenant has completed work in accordance with Tenant's Plans sufficient to
obtain the signature of the appropriate City of Mountain View building
official that the Tenant Improvements and/or Tenant Modifications have passed
final inspection, subject only to the completion or correction of items on
Tenant's architect's punch list (and exclusive of the installation of all
telephone and other communications facilities and equipment and other finish
work or decorating work to be performed by or for Tenant to the extent
completion of such work is not required for Tenant's receipt from the City of
Mountain View of a certificate of occupancy or a signed-off building permit,
or its equivalent, for the applicable Building).
10. INSURANCE. During the course of construction, Landlord and
Tenant shall require their respective contractors and architects to obtain
and maintain in force Commercial General
EXHIBIT D - PAGE 10 OF 13
Liability insurance (including, without limitation, insurance against
completed operations liability for losses occurring within three (3) years
after the completion of the Base Building Improvements or Tenant
Improvements, as applicable) with coverage for explosion, collapse, and
underground damage, against claims arising out of bodily injury, personal
injury, or death and from damage to or destruction of property of others,
including, without limitation, loss of use thereof, and including, without
limitation, the liability of Landlord, Tenant or the applicable contractor
arising out of the activities of all subcontractors, and each of them, with a
combined single limit of not less than Ten Million Dollars ($10,000,000) for
any one accident and/or occurrence and/or series of accidents or occurrences
arising out of any one event. Such insurance shall include Broad Form
Property Damage and Independent Contractors Coverage. Such insurance shall
be primary and not subject to any contribution from any insurance carried by
Landlord or Tenant. In addition, Tenant's architect, and any contractors or
subcontractors doing design/build for any portion of the Tenant Improvements,
shall carry Professional Liability Insurance (errors & omissions) insurance,
in an amount not less than $1,000,000, covering personal injury, bodily
injury and property damages, said coverage to be maintained for a period of
three (3) years after completion of Tenant Improvements. All such insurance
shall name the following parties as additional insured: Landlord, Tenant,
any Mortgagee, and any other contractors with respect to any of the Base
Building Improvements, Land Improvements, Tenant Modification or Tenant
Improvements.
11. COMPLETION ASSURANCE. The parties acknowledge and agree that
(i) Landlord will be acquiring the Land and obtaining a construction loan for
the Base Building Improvements in reliance on the Lease, including Tenant's
obligations to complete the Tenant Improvements and to pay for the Tenant
Improvements and Tenant Modifications as provided in this Work Letter, and
(ii) Landlord would not enter into the Lease unless such obligations are
assured in accordance with the terms of this Paragraph 11. Accordingly,
Tenant has agreed to provide assurance (the "Completion Assurance") for its
obligations under this Work Letter in accordance with this Paragraph 11.
EXHIBIT D - PAGE 11 OF 13
(a) LETTER OF CREDIT: At such time as Landlord acquires the
Phase I Land and waives its Credit Termination Right under the Phase I Lease,
and simultaneously with Tenant's delivery of the Completion Assurance
pursuant to the Work Letter attached to the Phase I Lease, Tenant shall
deliver to Landlord one or more unconditional, irrevocable, transferable
letter(s) of credit, in the initial aggregate amount equal to Thirty-Five
Dollars ($35) per rentable square foot of the Rentable Area (as it may be
determined as of the date the Completion Assurance is delivered to Landlord),
issued by Bank of America NT & SA (or another financial institution
reasonably acceptable to Landlord), and in the form attached hereto as
Schedule "D-3".
(i) TERMS OF LETTER(S) OF CREDIT. The letter(s) of credit
shall have an original term of no less than one year and automatic extensions
until sixty (60) days after the later of Tenant's satisfaction of all of its
obligations under this Work Letter and the Rent Commencement Date. The
letter(s) of credit shall provide for partial draws. Tenant shall keep the
letter(s) of credit, at its expense, in full force and effect during such
time as security for Tenant's obligations to timely construct the Tenant
Improvements and pay for the Tenant Improvements and Tenant Modification
pursuant to, and in accordance with, the terms of this Work Letter. The
letter(s) of credit shall provide thirty (30) days' prior written notice to
Landlord of cancellation or material change thereof.
(ii) LANDLORD'S RIGHT TO DRAW. If a Draw Event (as
defined below) occurs, Landlord or its assignee, at its option, may present
its written demand for payment of the entire face amount of the letter(s) of
credit and the funds so obtained shall become due and payable to Landlord or
its assignee. Landlord or its assignee may use the funds so obtained to
complete the Tenant Improvements contemplated by this Work Letter or, in lieu
of any portion thereof, any other improvements or alterations to the
Premises, so long as the aggregate cost thereof does not exceed $35 per
rentable square foot. Alternatively, Landlord or its assignee may make
partial draws on the letter of credit as needed to pay for the Tenant
Improvements or any other improvements or alterations, subject to the above
limitation. In addition, if a Draw Event occurs, Landlord or its assignee,
at its option, may draw on the letter(s) of credit to
EXHIBIT D - PAGE 12 OF 13
pay for any Tenant Modifications. Upon Landlord's completion of the Tenant
Improvements (or any other improvements or alterations as provided above),
Landlord shall reimburse Tenant, at Tenant's request and subject to
Landlord's receipt of reasonable documentation, for any costs incurred by
Tenant prior to the Draw Event for construction of the Tenant Improvements,
but only to the extent of any remaining proceeds from the letter(s) of
credit.
(iii) DEFINITION OF DRAW EVENT. A "Draw Event" shall mean
any of the following: (I) Tenant is the subject of an Insolvency Proceeding
(as defined in the Lease); provided, however, that if such proceeding is
pursuant to Chapter 11 of the United States Bankruptcy Code (as opposed to
Chapter 7), a Draw Event shall not be deemed to have occurred so long as (A)
the Lease and Work Letter are assumed by Tenant within sixty (60) days after
the order for relief is entered, (B) no other Draw Event has occurred, (C)
Tenant is not in breach of any other obligations under the Lease or this Work
Letter, and (D) no lien has been filed against Phase II arising out of any
work performed, material furnished or obligations incurred by Tenant which
has not been released prior to the commencement of such Insolvency
Proceeding; (II) Tenant terminates its construction contract with Tenant's
Contractor without Landlord's prior consent, or defaults under such
construction contract or any substitute thereof and does not cure such
default within the longer of the applicable cure period under such contract
or five (5) days after such default occurs; (III) the Lease is terminated by
Landlord due to a Tenant default before completion of the Tenant Improvements
and any Tenant Modifications; (IV) the letter(s) of credit are not extended
within thirty (30) days prior to their expiration; (V) Tenant fails to
deliver Tenant's space plan, Working Drawings, or any other item required to
be delivered pursuant to Paragraph 5(a) on or before the date specified for
such delivery; (VI) Tenant fails to commence construction of the Tenant
Improvements within ninety (90) days after the Occupancy Date (subject to
delay caused by Force Majeure Events); (VII) Tenant terminates the Lease
pursuant to Paragraph 22(d) prior to completion of the Tenant Improvements
and any Tenant Modifications, provided that in such event Tenant shall be
entitled to any insurance proceeds attributable to the Tenant Improvements
completed by Tenant prior to the casualty and
EXHIBIT D - PAGE 13 OF 13
Landlord shall be entitled to the entire face amount of the letter(s) of
credit; and (VIII) Tenant fails to complete the Tenant Improvements within
one hundred eighty (180) days after the Occupancy Date (subject to delay
caused by Force Majeure Events), provided that if Landlord reasonably
determines that Tenant is diligently pursuing construction of the Tenant
Improvements, Landlord shall allow Tenant an additional thirty (30) days to
complete the Tenant Improvements before a "Draw Event" is deemed to occur.
(iv) RETURN OF LETTER(S) OF CREDIT. The letter(s) of
credit shall be returned to Tenant, and Tenant's obligations under this
Paragraph 11 shall terminate, at such time as all of the following have
occurred: (A) Tenant has spent at least the face amount of the letter(s) of
credit on the Tenant Improvements (not including the Tenant Improvements
described in Paragraph 4(a)); (B) Tenant has completed and paid for all
Tenant Modifications; and (C) Tenant has provided Landlord with the following
items with respect to all of the Tenant Improvements and all of the Tenant
Modifications which are not made by Change Order: (I) "as-built" drawings
signed by either Tenant's architect or contractor; (II) final punch list
signed off by both Tenant and Landlord and/or their architects; (III) written
certification from Tenant's architect and/or contractor that the Tenant
Improvements and Tenant Modifications are substantially complete in
accordance with Tenant's Plans, and a copy of the certificate of occupancy;
and (IV) evidence satisfactory to Landlord and any Mortgagee that all
potential lien claimants have been fully paid and release their lien claims,
which evidence shall be sufficient for any Mortgagee to obtain an acceptable
endorsement to its title insurance policy insuring lien-free completion of
the Tenant Improvements and any Tenant Modifications.
(v) THREE PARTY AGREEMENT. At or prior to Tenant's
delivery to Landlord of the letter(s) of credit, Tenant shall enter into, and
shall cause Tenant's general contractor for the Tenant Improvements to enter
into, an agreement with Landlord, in form and substance reasonably
satisfactory to Landlord (the "Three Party Agreement"). The Three Party
Agreement shall provide that, if a Draw Event occurs, Landlord shall have the
option to either (I) terminate the existing
EXHIBIT D - PAGE 14 OF 13
contract for construction of Tenant Improvements, after paying the general
contractor for all completed work from the proceeds of the letter(s) of
credit, to the extent they are available to Landlord; or (II) assume Tenant's
obligations, to the extent they accrue after the Draw Event, under the
existing contract for construction of Tenant Improvements; or (III) terminate
the existing contract as provided in (I) above and enter into a new contract
with the general contractor for completion of the Tenant Improvements or any
other alterations or improvements to the Premises.
(b) ADDITIONAL OBLIGATIONS. The Completion Assurance described
in this Paragraph 11, and Tenant's obligations and Landlord's rights with
respect thereto, shall be in addition to any Letter of Credit or other
security deposit provided by Tenant under the Lease pursuant to Paragraph 34
of the Lease. The amount of the Completion Assurance shall not limit
Tenant's obligations under this Work Letter.
12. DISPUTE RESOLUTION. If Landlord and Tenant disagree about any
issues (including, without limitation, Tenant Delays and Landlord Delays)
used to determine the Occupancy Date, the Rent Commencement Date, any Initial
Window Date or the satisfaction of any Condition, and the parties are unable
to resolve that dispute within thirty (30) days after Tenant commences
business operations at the Premises, the dispute shall be submitted to
arbitration for resolution pursuant to Paragraph 41 [Arbitration of Disputes]
of the Lease. Notwithstanding the foregoing, during the pendency period of
any arbitration initiated pursuant to this Paragraph 12, Tenant shall pay
Base Rent and Additional Charges from and after the Rent Commencement Date as
determined by Landlord and, if such dispute affects any Condition or Initial
Window Date, Tenant may not exercise any termination right or action for
damages in connection therewith; provided, however, that such payment and/or
inability to terminate shall be without prejudice to the ultimate
determination of that issue.
13. DEFINED TERMS. All capitalized terms not defined in this Work
Letter shall have the meanings given them in the Lease.
EXHIBIT D - PAGE 15 OF 13
SCHEDULE D-1
MINIMUM STANDARDS
FOR
TENANT IMPROVEMENTS
NETSCAPE COMMUNICATIONS CORPORATION
000 XXXXX XXXXXX - MOUNTAIN VIEW
PHASE II
RESTROOMS:
- Walls & Floors - Dal Tile or American Olean unglazed
mosaic 2"x 2" ceramic tile thinset
- Ceramic tile wainscot - 6'-0" high @ wet walls
- Stipple enamel painted xxx.xx. ceiling @ min. 9' high.
SINK TOPS:
- Tile, granite or Corian
DRINKING FOUNTAIN:
- Xxxx Model HWCF8-2 Dual Heights
URINAL:
- American Standard Allbrook Urinal 6541.132
LAVATORY:
- American Standard Ovalyn Under Counter 0470.013.
FAUCET:
- Kohler Triton K-7443-4B
TOILETS:
- Wall mounted American Standard Elongated Cadet 9468-018
with Xxxxx 115 PYV flush valve.
TOILET ACCESSORIES:
- Paper towel dispenser: Bobrick B38032
(Women's dual)
- Combination Unit, Toilet Seat Cover, Toilet Tissue:
- Bobrick B-3571 (Women's single)
- Bobrick B-357 (Women's dual)
- Bobrick B-3479 (Men's single)
- Bobrick B-3471 (Men's dual)
- Liquid Soap Dispenser: Brobrick B-822
(Counter Mounted)
- Recessed Feminine Napkin Brobrick B-3500
Dispenser:
- Grab Bar: Brobrick B-490-36
Brobrick B-490-48
MIRROR OVER SINKS:
- 1/4" thick float mirror wall-to-wall from light valance to
vanity splash.
P.L. TOILET PARTITIONS:
- Floor mounted. Additional specifications to be provided by Tenant,
subject to Landlord's approval.
JANITORIAL CLOSETS (BOTH FLOORS):
- Broom/mop holder
- Fiberglass floor sink
- 4'-0" high Marlite wainscot behind sink
LOBBY:
- Elevator Finishes/Features:
- Carpet
- 4500 lb. Front/Rear Service
- Wall panels - plastic laminate
- Ceiling/Lighting - Eggcrate
CEREMONIAL STAIRWAY:
- Carpet with or without pad
MISCELLANEOUS:
- Cafeteria & Health Club to be reviewed and approved
- ADA Compliance required throughout project
GENERAL TENANT IMPROVEMENT STANDARDS
ACOUSTICAL CEILINGS:
2 x 4 flat white T-Bar grid with drop-in ceiling tiles (rated as required).
Tenant may provide specifications for ceiling tiles, subject to Landlord's
approval. Compression post and seismic wires as required by code. All
required light wires.
Open ceiling plan permitted, subject to Landlord's approval.
CARPET & RESILIENT FLOORING:
Carpet: 28 oz. loop pile glue down carpet
Base: 2" to 4" rubber base (top set base at resilient
floors).
Resilient: Xxxxxxxxx Stonetex
PAINT:
Two coats of paint over prime coat. Standard manufacturers are
Xxxxx Xxxxx, Xxxxxxxx or equal.
WALL COVERINGS:
Walls shall have a smooth finish.
Not otherwise specifically required by Landlord.
PLUMBING:
Coffee bar sinks with single handle faucets, 2 1/2 gallon under counter hot
water or other arrangements acceptable to Landlord.
HVAC:
Tenant to provide design by licensed mechanical engineer based on design
criteria by Super Symmetry. The design is subject to Landlord's approval.
FIRE SPRINKLERS:
Base Building Improvements include mains and up heads at the structure.
Tenant Improvements include all necessary drop heads with semi-recessed
chrome heads with white escutcheons. Drop heads to be tile-centered where
possible and otherwise placed in aesthetically pleasing locations.
CASEWORK:
Base cabinets with Countertops - Flush overlay construction, plastic laminate
exteriors, drawers over doors, 6" drawer fronts, one selply shelf adjustable
on 32 mm pins, 4" back splash, 4" painted plywood base, locking rail behind
face frame between doors and drawers (no locks, unless specifically
requested), 2'-3" deep, 3'-0" high, polished chrome wire pulls, hinges
adjustable with 170 degrees opening, shelf span not to exceed 32",
countertops to be plywood under plastic laminate.
Wall Cabinets - Flush overlay construction laminate exteriors, mounted from
4'-8" above finished floor to 7'-6" above finished floor, seal top with
backing material, two selply shelves adjustable on 32 mm pins, 3" apron at
bottom, brushed chrome wire pulls, hinges adjustable with 170 degree opening,
shelf span not to exceed 32".
Standard Plastics Laminates - Formica, Wilsonart or Nevamar.
DOORS, FRAMES, HARDWARE & GLASS:
Doors: 3'-0" x 9'0" x 1-3/4" solid core, prefinished wood
(wood veneer or paint grade, rated as required).
Proposed upgrades shall be submitted to Landlord for approval.
Frames: Brushed aluminum with clear finish (rated as
required). Sidelight frames integral with
door frame 2'-0" x 9'-0".
Hardware: Schlage lever hardware. Two pair butts per door. Dome floor stops.
Closers, automatic flush bolts, astragals, and coordinators with
finish to be mutually acceptable to Tenant and Landlord.
Glass: 1/4" clear tempered or square wired glass where
required by code.
METAL FRAMING & DRYWALL:
Corridor walls and demising walls for bathrooms, elevator pits and stairwell
enclosures/1-Hr. construction with 3 5/8" 25 gauge metal studs, 24" on center
to underside of structure with 5/8" sheetrock on each side and R-11 batt
insulation full height.
Tenant demising walls/full height (slab to structure) 3 5/8" 25 gauge metal
studs, 24" on center with R-11 insulation and 5/8" type "X" sheetrock full
height both sides (the height of the wall may be adjusted for return air
plenium).
Tenant interior walls/ceiling height (floor to underside of acoustical
ceiling), 3 5/8" 25 gauge studs, 24" on center with 5/8" sheetrock on each
side and J-mold at top.
Finish: Smooth (level 4) wall.
ELECTRICAL:
Light fixtures: 2' x 4' three lamp fixtures with 18 cell parabolic lenses or
other fixtures mutually acceptable to Tenant and Landlord.
Downlight and wall washers as accent lighting in conference rooms and
reception areas as appropriate.
Exit lights: Quantity as required by code, to be specified by Tenant subject
to Landlord's approval.
Outlets and switches: Private offices receive two duplex electrical outlets,
two telephone and data outlets (ring/string) and one dual light switch.
Conference rooms receive four duplex outlets, two telephone and data outlets
(ring/string) and one dual light switch. All other
rooms are addressed based on specific layouts. Any changes to the foregoing
specifications shall be subject to approval by Landlord.
EXTERIOR WINDOW COVERING:
1" horizontal mini-blinds at interior of each exterior window, top lock
controls. Standard typical manufactures, Levelor, Xxxxxx-Xxxxxxx or equal.
Color to be consistent throughout the Premises and acceptable to Landlord.
Alternatives may be specified in some areas subject to Landlord's approval.
CEILINGS:
Ceiling height on all floors shall be a minimum of ten feet, except as
otherwise approved by Landlord.
All partitions shall be below the ceiling grid, except as specifically
indicated in Tenant's space plan and/or Working Drawings and approved by
Landlord in Landlord's sole discretion.
LIMITATION ON HARD WALL OFFICE:
No more than Fifty percent (50%) of the rentable floor area on any floor of
any Building shall be enclosed as hard wall office, unless approved by
Landlord at its sole discretion; provided, however, that Tenant may exceed
this limitation if Tenant agrees to reconfigure the affected floor to such
standard upon expiration or earlier termination of this Lease.
SOUND INSULATION:
Adequate sound insulation shall be provided for bathrooms, conference rooms
and copy rooms.
SCHEDULE D-2
CERTAIN TENANT IMPROVEMENTS
(1) Enunciator Panels (if and as required by the City of Mountain View)
(2) Electrical Rooms in each Building
