OFFICE LEASE AGREEMENT
THIS OFFICE LEASE AGREEMENT (the "Lease") is made and entered into as of
the 27th day of February, 2003, by and between CA-SHORELINE TECHNOLOGY PARK
LIMITED PARTNERSHIP, a Delaware limited partnership ("Landlord") and ACTEL
CORPORATION, a California corporation ("Tenant").
I. Basic Lease Information.
A. "Building 2051" shall mean the building located at 0000 Xxxxxxxx
Xxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx and commonly known as Shoreline
Technology Park Building 8. "Building 2061" shall mean the building
located at 0000 Xxxxxxxx Xxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx and commonly
known as Shoreline Technology Park Building 9. "Building" and
"Buildings" shall each mean, collectively, the 2051 Building and the
2061 Building.
B. "Rentable Square Footage of the Buildings" is deemed to be 158,352
square feet.
C. "Premises" shall mean the area shown on Exhibit A to this Lease. The
Premises are comprised of the Buildings. The "Rentable Square Footage
of the Premises" is deemed to be 158,352 square feet. All corridors
and restroom facilities located on any full floor of the Buildings
shall be considered part of the Premises. Landlord and Tenant
stipulate and agree that the Rentable Square Footage of the Building
and the Rentable Square Footage of the Premises are correct and shall
not be remeasured.
D. "Base Rent":
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Annual Rate Annual Monthly
Period Per Square Foot Base Rent Base Rent
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Months 1 - 15 $14.76 $2,337,275.52 $194,772.96
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Months 16 - 27 $15.20 $2,406,950.40 $200,579.20
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Months 28 - 39 $15.66 $2,479,792.32 $206,649.36
----------------------------- -------------------------- --------------------- ---------------------
Months 40 - 51 $16.13 $2,554,217.76 $212,851.48
----------------------------- -------------------------- --------------------- ---------------------
Months 52 - 63 $16.61 $2,630,226.72 $219,185.56
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Months 64 - 75 $17.11 $2,709,402.72 $225,783.56
----------------------------- -------------------------- --------------------- ---------------------
Months 76 - 87 $17.62 $2,790,162.24 $232,513.52
----------------------------- -------------------------- --------------------- ---------------------
Months 88 - 99 $18.15 $2,874,088.80 $239,507.40
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Months 100 - 111 $18.69 $2,959,598.88 $246,633.24
----------------------------- -------------------------- --------------------- ---------------------
Months 112 - 123 $19.25 $3,048,276.00 $254,023.00
----------------------------- -------------------------- --------------------- ---------------------
E. "Tenant's Pro Rata Share": that amount expressed by a percentage,
equal to the number of square feet included in the Premises divided by
the number of square feet in the Building (i.e., as of the date of
this Lease, 100.00%).
"Tenant's Monthly Expense and Tax Payment": $61,757.28, which is
Tenant's Pro Rata Share of the monthly estimated Expenses and monthly
estimated Taxes (as more fully described in, and subject to adjustment
as described in, Article IV below).
F. "Term": A period of 123 months. The Term shall commence on November 1,
2003 (the "Commencement Date") and, unless terminated early in
accordance with this Lease, end on January 31, 2014 (the "Termination
Date"). Notwithstanding the foregoing, the Commencement Date shall be
extended beyond November 1, 2003 only as a result of an event of Force
Majeure which results in an actual delay of Substantial Completion of
the Initial Alterations beyond September 1, 2003 and/or for any actual
delay in Substantial Completion of the Initial Alterations beyond
September 1, 2003 which delay results directly from an act or omission
by Landlord; provided, however, that Tenant shall provide to Landlord
prior written notice of such delay at the time it occurs (but in no
event later than 2 Business Days thereafter) and Landlord shall have
one Business Day after its receipt of Tenant's notice to cure such
delay prior to the extension of the Commencement Date beyond November
1, 2003. Promptly after the Commencement Date, Landlord and Tenant
shall enter into a commencement letter agreement in the form attached
as Exhibit C.
G. Tenant allowances: Up to $8,687,190.72 and $20,140.00, as each is more
fully described in the Work Letter attached hereto as Exhibit D.
H. "Security Deposit": The sum of $500,000.00, in the form of a letter of
credit, as more fully described in Article VI of this Lease.
I. Intentionally Omitted.
J. "Broker": Collectively, C.B. Xxxxxxx Xxxxx Corporate Services (as
Tenant's broker) and Cornish & Xxxxx (as Landlord's broker).
K. "Permitted Use": General office, semiconductor development, light
manufacturing, research and development and, subject to Landlord's
prior written approval, which approval shall not be unreasonably
withheld, all other legal uses.
L. "Notice Addresses":
Tenant:
On and after the Commencement Date, notices shall be sent to Tenant at
the Premises, Attention: Facilities Manager, with a copy to General
Counsel.
With a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Chair of Real Estate Group
If any additional person listed above fails to receive the copy of the
notice of Tenant default, the validity of the notice served on Tenant
shall not be affected thereby.
Prior to the Commencement Date, notices shall be sent to Tenant at the
following address:
Actel Corporation
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Facilities Manager and General Counsel
Landlord: With a copy to:
CA-Shoreline Technology Park Limited Equity Xxxxxx
Xxxxxxxxxxx Xxx Xxxxx Xxxxxxxxx Xxxxx
c/o Equity Office Suite 2100
0000 Xxx Xxxxxxxxx Xxxxx, Xxxxx 000 Xxxxxxx, Xxxxxxxx 00000
Xxxxx Xxxxx, Xxxxxxxxxx 00000 Attention: Regional Counsel
Attention: Property Manager - San Xxxx Region
If any additional person listed above fails to receive the copy of the
notice of a Landlord breach of this Lease, the validity of the notice
served on Landlord shall not be affected thereby.
M. "Business Day(s)" are Monday through Friday of each week, exclusive of
New Year's Day, Presidents' Day, Xxxxxx Xxxxxx Xxxx, Xx. Day, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day
("Holidays").
N. "Landlord Work" means the work that Landlord is obligated to perform
in the Premises pursuant to a separate work letter agreement (the
"Work Letter") attached as Exhibit D.
O. "Law(s)" means all applicable statutes, codes, ordinances, orders,
rules and regulations of any municipal or governmental entity.
P. "Normal Business Hours" for the Building are 7:00 A.M. to 6:00 P.M. on
Business Days.
Q. "Property" means the Buildings and the parcel(s) of land on which they
are located and, at Landlord's discretion, the landscaping, the
parking facilities and all other improvements owned by Landlord and
serving the Buildings and the tenants thereof and the parcel(s) of
land on which they are located.
R. "Project" means that certain office project commonly known as
"Shoreline Technology Park", which currently includes the buildings
located at 0000 Xxxxxxxx Xxxxx ("Shoreline Technology Park Building
1"), 2021 Stierlin Court ("Shoreline Technology Park Building 2"),
2023 Stierlin Court ("Shoreline Technology Park Building 3"), 2025
Stierlin Court ("Shoreline Technology Park Building 5"), 2027 Stierlin
Court ("Shoreline Technology Park Building 6"), 2029 Stierlin Court
("Shoreline Technology Park Building 7"), 2051 Stierlin Court
("Shoreline Technology Park Building 8"), 2061 Stierlin Court
("Shoreline Technology Park Building 9"), 2071 Stierlin Court
("Shoreline Technology Park Building 10"), 2081 Stierlin Court
("Shoreline Technology Park Building 11"), 2081 Stierlin Court
("Shoreline Technology Park Building 11.5"), and 0000 Xxxxxxxx Xxxxx
("Shoreline Technology Park Building 12"), the Property and the
Exterior Common Areas (defined below), and, at Landlord's option, the
parking facilities serving the Project, all of which are located in
Mountain View, California. Notwithstanding the foregoing, Landlord and
Tenant agree that the definition of the Project may change from time
to time if Landlord elects to add or remove buildings or parcels of
land to or from the Project. In such event, the definition of
"Project" shall be deemed to be amended without any further action of
the parties herein to reflect such addition or deletion of building(s)
or parcels of land to or from the Project. In the event that Landlord
adds or removes buildings or parcels of land to or from the Project,
such modification of the Project shall not unreasonably and adversely
(i) interfere with Tenant's use of the Premises, or (ii) diminish
Tenant's parking rights as provided in the Parking Agreement attached
hereto as Exhibit F.
S. "Exterior Common Areas" mean those areas of the Project and/or the
Property which are not located within the Buildings or any other
building and which are provided and maintained for the use and benefit
of Landlord and tenants of the Building (if any) and/or the Project
generally and the employees, invitees and licensees of Landlord and
such tenants, including, without limitation, any parking garage,
artificial xxxxx, xxxxxxxx, xxxxx, xxxxx, xxxxxxxxx, sidewalks,
surface parking and landscapes, if any, and any recreation areas,
including, but not limited to, that certain recreation area (the
"Recreational Area") which is maintained by Landlord in the area
between Shoreline Technology Park Building 3 and Shoreline Technology
Park Building 5. As of the date of this Lease, the Recreational Areas
include the following: a tennis court, basketball court, softball
diamond, barbecue area and picnic tables. Notwithstanding the
foregoing to the contrary, the tenants' right to use the Recreational
Area shall be subject to the right of the City of Mountain View
("City") to require, pursuant to that certain Deferred Parking
Agreement by and between WRC Properties, Inc. a Delaware corporation
and the City of Mountain View dated as of June 1, 1989 (the "City
Parking Agreement"), that a portion of the Recreational Area be paved
and used for parking purposes at a time to be determined at the
discretion of the City.
T. "Initial Alterations" means the work that Tenant is obligated to
perform in the Premises pursuant to the Work Letter attached as
Exhibit D.
II. Lease Grant.
Landlord leases the Premises to Tenant and Tenant leases the Premises from
Landlord, together with the right in common with others to use any portions of
the Property that are designated by Landlord for the common use of tenants and
others, such as sidewalks, amenities, unreserved parking areas, common
corridors, elevator foyers, restrooms, vending areas, and lobby areas
(collectively, the "Common Areas").
III. Adjustment of Commencement Date; Possession.
A. The Landlord Work and the Initial Alterations shall each be
accomplished in a good and workmanlike manner and shall be deemed to
be "Substantially Complete" on the date that all Landlord Work or the
Initial Alterations, as the case may be, has been performed, other
than any details of construction, mechanical adjustment or any other
similar matter, the noncompletion of which does not materially
interfere with Tenant's use of the Premises. The Commencement Date and
Termination Date shall be determined by Section I.F.
B. Subject to the express terms of this Lease, the Premises are accepted
by Tenant in "as is" condition and configuration. The parties
acknowledge and agree that there are no representations or warranties
by Landlord regarding the condition of the Premises, the Building or
the Project, except to the extent expressly stated herein. Except to
the extent caused by Tenant, any Tenant Party or any Tenant Related
Party, as of the date of Substantial Completion of the Landlord Work
(but expressly excluding the Initial Alterations or any portions of
the Premises to the extent such portions are damaged, removed or
affected by the Initial Alterations), the base Building electrical,
heating, ventilation and air conditioning, mechanical and plumbing
systems of the Premises and all currently existing interior
improvements (excluding the UPS and the Cable Trays, as such terms are
defined in Sections V and VI, respectively, in Exhibit E to this
Lease) of the Premises and the landscaping, lighting, drainage,
sprinkler systems, water features of the Exterior Common Area and
located proximate to the Buildings (subject to the terms of this
Section III.B below), and, to Landlord's actual knowledge, the sewer
system of the Project, shall be in good order and satisfactory
condition. If the foregoing are not in good working order as provided
above, Landlord shall be responsible for repairing or restoring same
at its cost and expense. For purposes of this Section, "Landlord's
actual knowledge" shall be deemed to mean and limited to the current
actual knowledge of Xxxxx Xxxx at the time of execution of the Lease
and not any implied, imputed, or constructive knowledge of said
individual or of Landlord or any Landlord Related Parties and without
any independent investigation or inquiry having been made or any
implied duty to investigate or make any inquiries; it being understood
and agreed that such individual shall have no personal liability in
any manner whatsoever hereunder or otherwise related to the
transactions contemplated hereby. Landlord's obligation with respect
to the condition of the water features of the Exterior Common Area
located proximate to the Buildings shall only apply to the extent that
the same continue to exist in the same order as of the date of this
Lease. Landlord's obligation as stated above with respect to such
water features shall in no event apply in the event that the water
features are removed and/or replaced. Notwithstanding anything
contained herein to the contrary, Tenant shall have 24 months from the
completion of Landlord Work in which to discover and notify Landlord
of any latent defects in the Landlord Work and the base Building
systems. Landlord shall be responsible for the correction (including
the costs thereof) of any latent defects with respect to which it
received timely notice from Tenant. Landlord shall be responsible for
correcting any violations of Laws in effect as of the date of this
Lease and as interpreted in Santa Xxxxx County and, if applicable, by
the City of Mountain View, with respect to the Premises and the
Exterior Common Areas. Further, Landlord shall be responsible for
correcting any violations of Laws in effect as of the date of this
Lease and as interpreted in Santa Xxxxx County and, if applicable, by
the City of Mountain View, with respect to the Premises and the
Exterior Common Areas which violations arise solely and directly as a
result of the construction of the Landlord Work and/or the Initial
Alterations but only to the extent any such compliance requirement
relates to normal and customary general office and manufacturing
improvements located in the Premises (as opposed to improvements which
are specialized for Tenant's specific use of the Premises).
Notwithstanding the foregoing, Landlord shall have the right to
contest any alleged violation in good faith, including, without
limitation, the right to apply for and obtain a waiver or deferment of
compliance, the right to assert any and all defenses allowed by Laws
and the right to appeal any decisions, judgments or rulings to the
fullest extent permitted by Laws; provided, however, that such contest
shall in no event adversely affect Tenant's ability to Substantially
Complete the Initial Alterations in a timely manner or Tenant's use of
the Premises. Landlord, after the exhaustion of any and all rights to
appeal or contest, will make all repairs, additions, alterations or
improvements necessary to comply with the terms of any final order or
judgment. Notwithstanding anything to the contrary contained herein,
Tenant, not Landlord, shall be responsible for the costs and expenses
of the correction of any violations that arise out of the specific
nature of Tenant's business in the Premises, the acts or omissions of
Tenant (excluding filing for permits related to the Initial
Alterations), its agents, employees, invitees or contractors, Tenant's
arrangement of any furniture, equipment or other property in the
Premises, any repairs, alterations, additions or improvements
performed by or on behalf of Tenant (other than the Landlord Work and
excluding filing for permits related to the Initial Alterations) and
any design or configuration of the Premises specifically requested by
Tenant after being informed that such design or configuration may not
be in strict compliance with any such Laws.
If Landlord has not delivered the Premises to Tenant before the
Required Delivery Date (defined below), Tenant, as its sole remedy
(unless Landlord willfully refused to deliver the Premises to Tenant
in bad faith and without cause), may terminate this Lease by giving
Landlord written notice of termination on or before the date which is
5 Business Days after the Required Delivery Date. In such event, this
Lease shall be deemed null and void and of no further force and effect
and Landlord shall promptly refund any prepaid Rent and Security
Deposit previously advanced by Tenant under this Lease and, at such
time, the parties hereto shall have no further responsibilities or
obligations to each other with respect to this Lease. The "Required
Delivery Date" shall mean 10 Business Days following the date upon
which this Lease is fully executed and delivered by the parties hereto
and all prepaid Rent and Security Deposits (including the Letter of
Credit as defined in Article VI) required of Tenant under this Lease
are delivered to Landlord.
C. If Tenant takes possession of the Premises before the Commencement
Date, such possession shall be subject to the terms and conditions of
this Lease except that Tenant shall not be required to pay Rent
(defined in Section IV.A.) or pay any charges or fees related to
utilities and Tenant's use of freight elevators to Landlord for such
period prior to the Commencement Date. Subject to the terms of this
Section III.C., Landlord grants Tenant the right to enter the
Premises, following full execution of this Lease and delivery of any
required prepaid Rent and Security Deposits to Landlord, at Tenant's
sole risk, for the purpose of performing the Initial Alterations (as
defined in Exhibit D to this Lease) and installing equipment,
furnishings and other personalty and, for no more than a total of 60
days, operate Tenant's business at the Premises.
If Tenant Substantially Completes the Initial Alterations prior to
September 1, 2003, Tenant shall be required to pay Rent commencing on
the 61st day thereafter at the initial rental rates described in
Section I.D but, notwithstanding the foregoing and subject to the
terms of Section I.F, in no event shall Tenant's obligation to pay
Rent hereunder commence after November 1, 2003.
IV. Rent.
A. Payments. As consideration for this Lease, Tenant shall pay Landlord,
without any setoff or deduction, Base Rent and Additional Rent in
accordance with the terms and conditions of this Lease. "Additional
Rent" means all sums (exclusive of Base Rent) that Tenant is required
to pay Landlord. Additional Rent and Base Rent are sometimes
collectively referred to as "Rent". Tenant shall pay and be liable for
all rental, sales and use taxes (but excluding income taxes), if any,
imposed upon or measured by Rent under applicable Law. Base Rent and
recurring monthly charges of Additional Rent shall be due and payable
in advance on the first day of each calendar month without notice or
demand, provided that the installment of Base Rent for the fourth full
calendar month of the Term (following the Base Rent and Expenses
Abatement Period) shall be payable upon the execution of this Lease by
Tenant. All other items of Rent shall be due and payable by Tenant on
or before 30 days after billing by Landlord. All payments of Rent
shall be by good and sufficient check or by other means (such as
automatic debit or electronic transfer) acceptable to Landlord. If
Tenant fails to pay any item or installment of Rent when due, Tenant
shall pay Landlord an administration fee equal to 5% of the past due
Rent, provided that Tenant shall be entitled to written notice and a
grace period of 5 days for the first late payment of Rent in a given
calendar year and a grace period of 5 days for the second late payment
of Rent in a given calendar year (without benefit of written notice
from Landlord). If the Term commences on a day other than the first
day of a calendar month or terminates on a day other than the last day
of a calendar month, the monthly Base Rent and Tenant's Pro Rata Share
of Expenses (defined in Section IV.C.) and Taxes (defined in Section
IV.D.) for the month shall be prorated based on the number of days in
such calendar month. Landlord's acceptance of less than the correct
amount of Rent shall be considered a payment on account of the
earliest Rent due. No endorsement or statement on a check or letter
accompanying a check or payment shall be considered an accord and
satisfaction, and either party may accept the check or payment without
prejudice to that party's right to recover the balance or pursue other
available remedies. Tenant's covenant to pay Rent is independent of
every other covenant in this Lease.
B. Payment of Tenant's Pro Rata Share of Expenses and Taxes. Tenant shall
pay Tenant's Pro Rata Share of the total amount of Expenses (defined
in Section IV.C.) and Taxes (defined in Section IV.D) for each
calendar year during the Term. Landlord shall provide Tenant with a
good faith estimate of the total amount of Expenses and Taxes for each
calendar year during the Term. On or before the first day of each
month, Tenant shall pay to Landlord a monthly installment equal to
one-twelfth of Tenant's Pro Rata Share of Landlord's estimate of the
total amount of Expenses and Taxes, which initial monthly sum is
defined in Section I.E. above as the "Tenant's Monthly Expense and Tax
Payment". If Landlord determines that its good faith estimate was
incorrect by a material amount, Landlord may provide Tenant with a
revised estimate. After its receipt of the revised estimate, Tenant's
Monthly Expense and Tax Payment shall be based upon the revised
estimate. If Landlord does not provide Tenant with an estimate of the
total amount of Expenses and Taxes by January 1 of a calendar year,
Tenant shall continue to pay monthly installments based on the
previous year's estimate until Landlord provides Tenant with the new
estimate. Upon delivery of the new estimate, an adjustment shall be
made for any month for which Tenant paid monthly installments based on
the previous year's estimate. Tenant shall pay Landlord the amount of
any underpayment within 30 days after receipt of the new estimate. Any
overpayment shall be refunded to Tenant within 30 days or credited
against the next due future installment(s) of Rent.
As soon as is practical following the end of each calendar year,
Landlord shall furnish Tenant with a reasonably detailed statement of
the actual amount of Expenses and Taxes for the prior calendar year
and Tenant's Pro Rata Share of the actual amount of Expenses and Taxes
for the prior calendar year. Landlord shall use reasonable efforts to
furnish the statement of actual Expenses on or before June 1 of the
calendar year immediately following the calendar year to which the
statement applies. If the estimated amount of Expenses and Taxes for
the prior calendar year is more than the actual amount of Expenses and
Taxes for the prior calendar year, Landlord shall apply any
overpayment by Tenant against Rent due or next becoming due, provided
if the Term expires before the determination of the overpayment,
Landlord shall refund any overpayment to Tenant after first deducting
the amount of Rent due. If the estimated amount of Expenses and Taxes
for the prior calendar year is less than the actual amount of Expenses
and Taxes for such prior year, Tenant shall pay Landlord, within 30
days after its receipt of the statement of Expenses and Taxes, any
underpayment for the prior calendar year.
C. Expenses Defined. "Expenses" means the sum of (i) all direct and
indirect costs and expenses incurred by Landlord in each calendar year
in connection with operating, maintaining, repairing, and managing the
Buildings and the Property (including any costs and expenses in
connection with operating, maintaining, repairing and managing the
Exterior Common Areas located on the Property to the extent such costs
and expenses are not deemed to be costs and expenses of the Project as
a whole), and (ii) the Buildings' and the Property's allocable
percentage of (a) all costs of operating, maintaining, repairing and
managing the Project (including any costs and expenses in connection
with operating, maintaining, repairing and managing the Exterior
Common Areas located on the Project to the extent such costs and
expenses are not specifically allocated to and payable by individual
buildings within the Project), (b) all costs, fees or other amounts
payable to any association established for the benefit of the Project
and/or other properties, and (c) all fees payable to the company or
association, if applicable, managing the parking areas within the
Project, including, but not limited to:
1. Labor costs, including, wages, salaries, social security and
employment taxes, medical and other types of insurance, uniforms,
training, and retirement and pension plans for personnel at or
below the level of general manager.
2. Management fees, and the Buildings' share of the cost of
equipping and maintaining a management office (at fair market
rent as reasonably determined by Landlord), accounting and
bookkeeping services, legal fees not attributable to leasing or
collection activity, and other administrative costs. Landlord, by
itself or through an affiliate, shall have the right to directly
perform or provide any services under this Lease (including
management services). However, in no event shall the aggregate
management fees for the Buildings exceed 1.5% of the Base Rent
for the Buildings.
3. The cost of services, including amounts paid to service providers
and the rental and purchase cost of parts, supplies, tools and
equipment.
4. Premiums and deductibles paid by Landlord for insurance,
including workers compensation, fire and extended coverage,
earthquake, general liability, rental loss, elevator, boiler and
other insurance customarily carried from time to time by owners
of comparable office buildings. Notwithstanding the foregoing,
Tenant's Pro Rata Share of insurance deductibles shall not exceed
$500,000.00 in the aggregate for any one event, which amount
shall be included in Tenant's Pro Rata Share of Expenses over up
to a five (5) year period with the amount paid by Tenant not to
exceed $100,000.00 in any 12 month period of the Term; provided,
however, that the foregoing limitation on Tenant's obligation to
pay its Pro Rata Share of insurance deductibles during the Term
shall not apply to any event which results from the active
negligence or willful misconduct of Tenant or any of its agents,
employees, invitees or contractors.
Further, notwithstanding the foregoing, Tenant's Pro Rata Share
of premiums for earthquake insurance only shall not increase by
more than 20% per calendar year on a compounding and cumulative
basis over the course of the Term. In other words, Tenant's Pro
Rata Share of premiums for earthquake insurance for the second
calendar year of the Term shall not exceed 120% of the
Controllable Expenses for the first calendar year of the Term.
Tenant's Pro Rata Share of premiums for earthquake insurance for
the third calendar year of the Term shall not exceed 120% of the
limit on Tenant's Pro Rata Share of premiums for earthquake
insurance for the second calendar year of the Term, etc. By way
of illustration, if Tenant's Pro Rata Share of premiums for
earthquake insurance was $10.00 per rentable square foot for the
first calendar year of the Term, then Tenant's Pro Rata Share of
premiums for earthquake insurance for the second calendar year of
the Term shall not exceed $12.00 per rentable square foot, and
Tenant's Pro Rata Share of premiums for earthquake insurance for
the third calendar year of the Term shall not exceed $14.40 per
rentable square foot. The foregoing cap on Tenant's Pro Rata
Share of premiums for earthquake insurance shall in no event
apply if Tenant, pursuant to Article XV, exercises its right to
require Landlord to carry earthquake insurance.
5. The Buildings' share of allocable Electrical Costs (defined
below) and charges for water, gas, steam and sewer, but excluding
those charges for which Landlord is reimbursed by tenants.
"Electrical Costs" means: (a) charges paid by Landlord for
electricity (and, during such time Tenant is the Sole Tenant of
the Building and contracts directly for such service, only
respecting the Exterior Common Areas and, during such time that
Tenant is not the Sole Tenant of the Building or Tenant does not
directly contract for such service, respecting the Exterior
Common Areas and the Common Areas of the Buildings); and (b)
costs incurred in connection with an energy management program
for the Buildings and the Project.
6. The amortized cost of capital improvements (as distinguished from
replacement parts or components installed in the ordinary course
of business) made to the Buildings or Project which are: (a)
performed primarily to reduce operating expense costs or
otherwise improve the operating efficiency of the Buildings or
Project; or (b) required to comply with any Laws that are
enacted, or first interpreted to apply to the Buildings or
Project, after the date of this Lease. The cost of capital
improvements shall be amortized by Landlord over the lesser of
the Payback Period (defined below) or the useful life of the
capital improvement as reasonably determined by Landlord.
"Payback Period" means the reasonably estimated period of time
that it takes for the operating cost savings in clause (a) above
resulting from a capital improvement to equal the total cost of
the capital improvement. The amortized cost of capital
improvements may, at Landlord's option, include actual or imputed
interest at the rate that Landlord would reasonably be required
to pay to finance the cost of the capital improvement.
7. The Buildings' allocable share of fees, costs and expenses
relating to operating, managing, owning, repairing and
maintaining the parking facilities servicing the Building or
Project, and the Recreational Area (defined in Section I.S.
above) or any other fitness facilities, conference center(s), or
other amenities (if any) in the Project.
If Landlord incurs Expenses for the Building, the Property or the
Project together with one or more other buildings or properties,
whether pursuant to a reciprocal easement agreement, common area
agreement or otherwise, the shared costs and expenses shall be
equitably prorated and apportioned between the Building, the
Property and the Project and the other buildings or properties.
Expenses shall not include: the cost of capital improvements
(except as set forth in Section IV.C.6 above); depreciation;
interest (except as provided above for the amortization of
capital improvements); amortization (except as set forth in
Section IV.C.6 above); principal payments of mortgage and other
non-operating debts of Landlord; the cost of repairs or other
work to the extent Landlord is reimbursed by insurance (or would
have been reimbursed by insurance had Landlord carried the
insurance required to be carried by Landlord under this Lease) or
condemnation proceeds; costs in connection with leasing space in
the Building, including brokerage commissions, brochures and
marketing supplies, legal fees in negotiating and preparing lease
documents, and construction, improvement and decorating costs in
preparing space for initial occupancy by a specific tenant; lease
concessions, including rental abatements and construction
allowances, granted to specific tenants; costs incurred in
connection with the sale, financing or refinancing of the
Building, including brokerage commissions, attorneys' and
accountants' fees, closing costs, title insurance premiums,
transfer taxes and interest charges; fines, interest and
penalties incurred due to the late payment of Taxes (defined in
Section IV.D), or Expenses or any other sums required to be paid
by Landlord; organizational expenses associated with the creation
and operation of the entity which constitutes Landlord; or any
penalties or damages that Landlord pays to Tenant under this
Lease or to other tenants in the Buildings or Project under their
respective leases.
The following items are also excluded from Expenses:
(a) Sums (other than management fees, it being agreed that the
management fees included in Expenses are as described in
Section IV.C.2 above) paid to subsidiaries or other
affiliates of Landlord for services on or to the Property,
Building and/or Premises, but only to the extent that the
costs of such services exceed the competitive cost for such
services rendered by persons or entities of similar skill,
competence and experience.
(b) Any fines, penalties or interest resulting from the
negligence or willful misconduct of the Landlord or its
agents, contractors, or employees or any other occupant of
the Building or the Project.
(c) Advertising and promotional expenditures.
(d) Landlord's charitable and political contributions.
(e) Ground lease rental.
(f) Attorney's fees and other expenses incurred in connection
with negotiations or disputes with prospective tenants or
tenants or other occupants of the Project (including
violations of Law by any other tenant of the Project).
(g) The cost or expense of any services or benefits provided
generally to other tenants in the Project and not provided
or available to Tenant.
(h) All costs of purchasing or leasing major sculptures,
paintings or other major works or objects of art (as opposed
to decorations purchased or leased by Landlord for display
in the Common Areas of the Building).
(i) Any expenses for which Landlord has received actual
reimbursement (other than through Expenses).
(j) Costs incurred by Landlord in connection with the correction
of defects in design and original construction of the
Buildings or Property and costs incurred by Landlord for the
repair of structural defects in the Buildings.
(k) Costs incurred (less costs of recovery) for any items to the
extent covered by a manufacturer's, materialman's, vendor's
or contractor's warranty (a "Warranty").
(l) Any costs, fines or penalties incurred due to violations by
Landlord of any Law which was in effect (and as interpreted)
as of the date of this Lease.
(m) The cost of complying with any Laws in effect (and as
enforced) on the Commencement Date, provided that if any
portion of the Building that was in compliance with all
applicable Laws on the Commencement Date becomes out of
compliance due to normal wear and tear, the cost of bringing
such portion of the Building into compliance shall be
included in Expenses unless otherwise excluded pursuant to
the terms hereof.
(n) Any cost or expense related to the removal, cleaning,
abatement or remediation of Hazardous Materials (as defined
in Exhibit E to this Lease) in or about the Building, Common
Area or Property, including, without limitation, hazardous
substances in the ground water or soil, except to the extent
such nonmaterial removal, cleaning, abatement or remediation
is incidental to the general repair and maintenance of the
Building, Common Area or Property.
(o) 50% of any increases in real estate taxes due to a one-time
sale or transfer of ownership of the Buildings in which the
Premises are located during the first thirty-six (36) months
of the original Term of this Lease.
(p) The cost of repairs and maintenance equitably allocated by
Landlord to other buildings in the Project.
(q) Intentionally omitted.
(r) Repairs, maintenance and replacement of the heating,
ventilating and air conditioning units servicing the 2051
Building in excess of normal repair and maintenance (as
defined below) until the day following substantial
completion of the HVAC Replacement Work (as defined in
Section IX.B of this Lease) with respect to the 2051
Building; and repairs, maintenance and replacement of the
heating, ventilating and air conditioning units servicing
the 2061 Building in excess of normal repair and maintenance
until the day following substantial completion of the HVAC
Replacement Work with respect to the 2061 Building; provided
that the foregoing carve out from Expenses shall in no event
apply to the extent that any such items are covered under
Tenant's Service Contract. For purposes of the foregoing,
"normal repair and maintenance" shall mean the repair and/or
replacement of filters, belts, fan shafts, bearings, damper
motors, damper linkage, condenser fan motors, contactors,
pressure switches, gas valves, hot surface ignition systems,
refrigerant, refrigeration oil and pump seals. "Normal
repair and maintenance" expressly excludes the repair or
replacement of compressors, evaporator and condenser coils,
variable frequency drives, evaporator and supply fan motors,
electronic control boards or heat exchangers or any single
repair to any one heating, ventilating and air conditioning
unit servicing the Premises costing in excess of $2,500.00.
(s) Any income, capital levy, capital stock, succession,
transfer, franchise, gift, estate or inheritance tax.
(t) Insurance deductibles in excess of the amounts provided in
Section IV.C.4 of this Lease (except to the extent such
limitation does not apply pursuant to the terms of this
Lease).
(u) Subject to the terms and conditions of Article XVII of this
Lease, the costs of repair or replacement of the Buildings
or the Project resulting from fire, earthquake and other
casualty except with respect to Tenant's Pro Rata Share of
insurance deductibles (subject to any limitations thereon as
expressly stated herein) and as otherwise stated in this
Lease.
(v) The costs of repair, maintenance and/or replacement of the
elevators in the Buildings in excess of $5,000.00 in any 12
month period of the Term.
(w) Costs respecting the structural and underground portions of
the Premises and the Property, including underground
utilities of the Project (including sewer lines and storm
drains).
(x) Taxes to the extent equitably allocated by Landlord to other
buildings in the Project.
(y) The cost of insurance to the extent equitably allocated by
Landlord to other buildings in the Project.
(z) The costs for repairs and replacements beyond normal wear
and tear to the Premises, the Buildings and the Project, as
reasonably determined by Landlord, which are not caused or
exacerbated directly or indirectly by Tenant or any Tenant
Party during the first 12 months of the initial Lease Term
only.
If Tenant is not the Sole Tenant of the Building (either the 2051
Building or the 2061 Building, as the case may be), in the event
that either the 2051 Building and/or the 2061 Building is not at
least 95% occupied during any calendar year or if Landlord is not
supplying services to at least 95% of the total rentable square
footage of either of the 2051 Building and/or the 2061 Building,
as the case may be, at any time during a calendar year, Expenses
shall, at Landlord's option, be determined as if the 2051
Building and/or the 2061 Building, as the case may be, had been
95% occupied and Landlord had been supplying services to 95% of
the total rentable square footage of either the 2051 Building
and/or the 2061 Building, as the case may be, during that
calendar year. In the event that Tenant is not occupying a
material portion of the Premises and, as a result, Landlord may
adjust Expenses for the Building in accordance with the concept
described in this Paragraph, Landlord shall equitably adjust
Tenant's Pro Rata Share of Expenses accordingly. In no event
shall Landlord be entitled to a reimbursement from tenants for
Expenses and Taxes in excess of 100% of the costs actually paid
or incurred by Landlord in any applicable calendar year. The
extrapolation of Expenses under this Section shall be performed
by appropriately adjusting the cost of those components of
Expenses that are impacted by changes in the occupancy of the
Building.
Landlord agrees to act in a commercially reasonable manner in
incurring Expenses, taking into consideration the class and the
quality of the Building.
D. Taxes Defined. "Taxes" shall mean: (1) all real estate taxes and other
assessments on the Buildings and/or Property, and the Buildings' and
Property's share of such taxes and assessments relating to the
Project, including, but not limited to, assessments for special
improvement districts and building improvement districts, taxes and
assessments levied in substitution or supplementation in whole or in
part of any such taxes and assessments and the Building's and
Property's share of any real estate taxes and assessments under any
reciprocal easement agreement, common area agreement or similar
agreement as to the Building, Property and/or Project; (2) the
Buildings' and Project's share of all personal property taxes for
property that is owned by Landlord and used in connection with the
operation, maintenance and repair of the Building, Property or the
Project to the extent such personal property is used to operate,
maintain and repair the Building, Property and Project; and (3) all
commercially reasonable costs and fees incurred in connection with
seeking reductions in any tax liabilities described in (1) and (2),
including, without limitation, any such costs incurred by Landlord for
compliance, review and appeal of tax liabilities. Without limitation,
Taxes shall not include any income, capital levy, franchise, capital
stock, gift, estate or inheritance tax. If an assessment is payable in
installments, Taxes for the year shall include the amount of the
installment and any interest due and payable during that year. For all
other real estate taxes, Taxes for that year shall, at Landlord's
election, include either the amount accrued, assessed or otherwise
imposed for the year or the amount due and payable for that year,
provided that Landlord's election shall be applied consistently
throughout the Term. In the event that during the Term Landlord
receives any credit or rebate on Taxes from any public authority with
respect to the Premises to the extent applicable to the Term and of
which Tenant has paid Tenant's Pro Rata Share, Tenant shall be
entitled to a Rent credit or, at Landlord's option, refund of Tenant's
Pro Rata Share of such credit or rebate after first deducting any of
Landlord's costs and expenses in obtaining such credit or rebate. Such
Rent credit or refund, at Landlord's option, shall be credited against
future installments of Rent or refunded to Tenant within 45 days of
Landlord's receipt of the credit or rebate.
E. Audit Rights. Tenant may, within 18 months after receiving Landlord's
reasonably detailed statement of Expenses, give Landlord written
notice ("Review Notice") that Tenant intends to review Landlord's
records of the Expenses for that calendar year. Within a reasonable
time after receipt of the Review Notice, Landlord shall make all
pertinent records available for inspection at one of Landlord's
management offices located in the San Xxxx, Santa Xxxxx, Mountain
View, Xxxxxxxx geographic area, which records are reasonably necessary
for Tenant to conduct its review. If any records are maintained at a
location other than the office of the Building, Tenant may either
inspect the records at such other location or pay for the reasonable
cost of copying and shipping the records. If Tenant retains an agent
to audit Landlord's records, the agent must be with a CPA firm
licensed to do business in California and not paid on a contingency
basis. Tenant shall be solely responsible for all costs, expenses and
fees incurred for the audit. However, notwithstanding the foregoing,
if the audit determines that in the aggregate Expenses for the
Building for the year in question were less than stated by more than
5%, Landlord, within 30 days after its receipt of paid invoices
therefor from Tenant, shall reimburse Tenant for the reasonable
amounts paid by Tenant to third parties in connection with such review
by Tenant. Likewise, if the audit determines that Expenses for the
calendar year are greater than reported, Tenant shall pay Landlord the
amount of any underpayment within 30 days. Within 90 days after the
records are made available to Tenant, Tenant shall have the right to
give Landlord written notice (an "Objection Notice") stating in
reasonable detail any objection to Landlord's statement of Expenses
for that year. If Tenant fails to give Landlord an Objection Notice
within the 90 day period or fails to provide Landlord with a Review
Notice within the 18 month period described above, Tenant shall be
deemed to have approved Landlord's statement of Expenses and shall be
barred from raising any claims regarding the Expenses for that year.
If Tenant provides Landlord with a timely Objection Notice, Landlord
and Tenant shall work together in good faith to resolve any issues
raised in Tenant's Objection Notice. If Landlord and Tenant determine
that Expenses for the calendar year are less than reported, Landlord
shall provide Tenant with a credit against the next installment of
Rent in the amount of the overpayment by Tenant. Likewise, if Landlord
and Tenant determine that Expenses for the calendar year are greater
than reported, Tenant shall pay Landlord the amount of any
underpayment within 30 days.
If Tenant provides Landlord with a timely Review Notice, commences an
audit and if the audit determines that Expenses for the calendar year
are less than reported, Landlord shall provide Tenant with a credit
against the next installment of Rent in the amount of the overpayment
by Tenant. Likewise, if the audit determines that Expenses for the
calendar year are greater than reported, Tenant shall pay Landlord the
amount of any underpayment within 30 days. The records obtained by
Tenant pursuant to this Section IV.E shall be treated as confidential.
In no event shall Tenant be permitted to examine Landlord's records or
to dispute any statement of Expenses unless Tenant has paid and
continues to pay all Rent when due.
V. Compliance with Laws; Use.
The Premises shall be used only for the Permitted Use and for no other use
whatsoever. Tenant shall not use or permit the use of the Premises for any
purpose which is illegal, dangerous to persons or property or which, in
Landlord's reasonable opinion, unreasonably disturbs any other tenants of the
Building or the Project or interferes with the operation of the Building or the
Project. Subject to the express terms and conditions of this Lease, Tenant shall
comply with all Laws, including the Americans with Disabilities Act, regarding
the operation of Tenant's business and the use, condition, configuration and
occupancy of the Premises. Tenant, within 10 days after receipt, shall provide
Landlord with copies of any notices it receives regarding a violation or alleged
violation of any Laws. Tenant shall comply with the rules and regulations of the
Building attached as Exhibit B and such other reasonable rules and regulations
adopted by Landlord from time to time; provided, however that such other
reasonable rules and regulations shall not unreasonably and adversely (i)
interfere with Tenant's use of the Premises, or (ii) diminish Tenant's parking
rights as provided in the Parking Agreement attached hereto as Exhibit F. Tenant
shall also cause its agents, contractors, subcontractors, employees, customers,
and subtenants to comply with all rules and regulations. Landlord shall not
knowingly discriminate against Tenant in Landlord's enforcement of the rules and
regulations. Except to the extent caused by Tenant's or any of its employees',
invitees', contractors' and/or agents' negligence or willful misconduct, Tenant
shall not be liable for any of the costs and expenses, if any, associated with
Landlord's or any other party's compliance with the City Parking Agreement.
To the extent the railing located on the balcony of the second floor of the 2061
Building violates applicable Laws and the City of Mountain View has
affirmatively and specifically required compliance therewith (collectively, the
"Compliance Requirement"), Landlord shall, at its sole cost and expense, perform
the work necessary to make the railing comply with Laws within 60 days following
the date Landlord receives actual knowledge of the Compliance Requirement. The
cost and expense to perform any such work shall not be allocated toward the ADA
Costs Cap. Notwithstanding the foregoing, to the extent the same does not delay
Tenant's construction schedule with respect to the Initial Alterations, Landlord
shall have the right to contest the Compliance Requirement in good faith,
including, without limitation, the right to apply for and obtain a waiver or
deferment of compliance, the right to assert any and all defenses allowed by
Laws and the right to appeal any decisions, judgments or rulings to the fullest
extent permitted by Laws.
VI. Security Deposit.
The Security Deposit, if any, shall be delivered to Landlord upon the
execution of this Lease by Tenant and shall be held by Landlord without
liability for interest (unless required by Law) as security for the performance
of Tenant's obligations. The Security Deposit is not an advance payment of Rent
or a measure of Tenant's liability for damages. Landlord may, from time to time,
without prejudice to any other remedy, use all or a portion of the Security
Deposit to the extent necessary to satisfy past due Rent or to cure any uncured
default by Tenant beyond applicable cure periods. If Landlord uses the Security
Deposit, Tenant shall on demand restore the Security Deposit to its original
amount. Landlord shall return any unapplied portion of the Security Deposit to
Tenant within 45 days after the later to occur of: (1) the determination of
Tenant's Pro Rata Share of Expenses and Taxes for the final year of the Term;
(2) the date Tenant surrenders possession of the Premises to Landlord in
accordance with this Lease; or (3) the Termination Date. If Landlord transfers
its interest in the Premises, Landlord shall assign the Security Deposit to the
transferee (to the extent the same has not been applied pursuant to the terms
and conditions of this Lease) and, following the assignment, Landlord shall have
no further liability for the return of the Security Deposit. Landlord shall not
be required to keep the Security Deposit separate from its other accounts.
Tenant hereby waives the provisions of Section 1950.7 of the California Civil
Code, or any similar or successor Laws now or hereinafter in effect. If Tenant
is not in default at the termination of this Lease, Landlord shall return any
unapplied balance of the Security Deposit to Tenant within 45 days after Tenant
surrenders the Premises to Landlord in accordance with this Lease. In addition
to any other deductions Landlord is entitled to make pursuant to the terms
hereof, Landlord shall have the right to make a good faith estimate of any
unreconciled Expenses and/or Taxes as of the Termination Date and to deduct any
anticipated shortfall from the Security Deposit. Such estimate shall be final
and binding upon Tenant and Landlord.
The Security Deposit may be in the form of an irrevocable letter of credit (the
"Letter of Credit"), which Letter of Credit shall: (a) be in the amount of
$500,000.00; (b) be issued on the form attached hereto as Exhibit G; (c) name
Landlord as its beneficiary; and (d) be drawn on an FDIC insured financial
institution satisfactory to Landlord. Landlord hereby approves Xxxxx Fargo Bank
as an FDIC insured financial institution satisfactory to the Landlord. The
Letter of Credit (and any renewals or replacements thereof) shall be for a term
of not less than 1 year. Tenant agrees that it shall from time to time, as
necessary, whether as a result of a draw on the Letter of Credit by Landlord
pursuant to the terms hereof or as a result of the expiration of the Letter of
Credit then in effect, renew or replace the original and any subsequent Letter
of Credit so that a Letter of Credit, in the amount required hereunder, is in
effect until a date which is at least 60 days after the Termination Date of the
Lease. If Tenant fails to furnish such renewal or replacement at least 60 days
prior to the stated expiration date of the Letter of Credit then held by
Landlord, Landlord may draw upon such Letter of Credit and hold the proceeds
thereof (and such proceeds need not be segregated) as a Security Deposit
pursuant to the terms of this Article VI. Any renewal or replacement of the
original or any subsequent Letter of Credit shall meet the requirements for the
original Letter of Credit as set forth above, except that such replacement or
renewal shall be issued by an FDIC insured financial institution satisfactory to
the Landlord at the time of the issuance thereof.
If Landlord draws on the Letter of Credit as permitted in this Lease or the
Letter of Credit, then, upon demand of Landlord, Tenant shall restore the amount
available under the Letter of Credit to its original amount by providing
Landlord with an amendment to the Letter of Credit evidencing that the amount
available under the Letter of Credit has been restored to its original amount.
In the alternative, Tenant may provide Landlord with cash, to be held by
Landlord in accordance with this Article, equal to the restoration amount
required under the Letter of Credit.
VII. Services to be Furnished by Landlord.
A. Services to the Building and Premises shall be provided as follows:
1. If Tenant is leasing 100% of the rentable area in the Building or
if Tenant's Pro Rata Share, as defined in Section I.E. above, is
100% (in either event, for purposes of this Lease, Tenant shall
be deemed the "Sole Tenant of the Building"), Landlord shall make
available to the exterior of each of the 2051 Building and the
2061 Building (but shall not be responsible for actually
providing) the following services: (a) Water service for use in
the lavatories on each floor on which the Premises are located;
(b) Heat and air conditioning for the comfortable use of the
Premises by Tenant; (c) Electricity to the Premises for its use,
in accordance with and subject to the terms and conditions in
Article X; and (d) gas for boilers of the Buildings and water
heaters, if any. Notwithstanding the foregoing, Tenant shall
contract directly for the provision of all of the foregoing
services. If Tenant is the Sole Tenant of the Building, in
addition to the foregoing, Tenant shall provide at its cost the
following services: (i) Janitor service on Business Days; (ii)
pest control service for the Common Areas of the Building; and
(iii) refuse collection for the Building. Landlord shall be
responsible for washing the exterior windows of the Buildings no
less than two times annually, the cost thereof shall be part of
Expenses. Tenant shall maintain and repair the Premises in
accordance with the terms of Section IX.A.
If by mutual agreement between Landlord and Tenant, or by
operation of law or otherwise, Tenant is not the Sole Tenant of
the Building or is otherwise not required to provide the above
services, then, at Landlord's request and, at Landlord's option,
as a condition to Landlord providing the services described in
Section VII.A.2 below, Tenant shall transfer to Landlord any
utility accounts and/or service contracts (including, without
limitation, any maintenance service agreements entered into by
Tenant, as described in Section IX.A. below or otherwise)
relating to all or any of the services to be provided by Landlord
described in Section VII.A.2. below, and Tenant shall otherwise
cooperate with Landlord in transferring control of, and
responsibility for, such services from Tenant to Landlord. Tenant
shall remain liable for all sums incurred in connection with such
accounts or service contracts relating to the period prior to the
date such accounts and service contracts are transferred to, and
assumed by, Landlord.
2. If Tenant is not the Sole Tenant of the Building (as defined in
Section VII.A.1. above), subject to the terms of the second
paragraph of Section VII.A.1. above, Landlord agrees to provide
the following services: (a) Water service for use in the
lavatories on each floor on which the Premises are located; (b)
Heat and air conditioning in season during Normal Business Hours
at such temperatures and in such amounts as are standard for
comparable buildings or as required by governmental authority,
provided that, Tenant, upon such advance notice as is reasonably
required by Landlord, shall have the right to receive HVAC
service during hours other than Normal Business Hours and Tenant
shall pay Landlord the standard charge for the additional service
as reasonably determined by Landlord from time to time; (c)
Janitor service on Business Days, provided if Tenant's use, floor
covering or other improvements require special services in excess
of the standard services for the Building, Tenant shall pay the
additional cost attributable to the special services; (d)
Electricity to the Premises for general office use, in accordance
with and subject to the terms and conditions in Article X; (e)
gas for boilers of the Building and water heaters serving the
Building generally, if any; (f) pest control service for the
Common Areas of the Building; (g) refuse collection for the
Building; (h) such other services as Landlord reasonably
determines are necessary or appropriate for the Building, the
Property or the Project; and (i) elevator service for the
Buildings.
B. Landlord's failure to furnish, or any interruption or termination of,
services required to be provided or made available by Landlord
pursuant to this Lease due to the application of Laws, the failure of
any equipment, the performance of repairs, improvements or
alterations, or the occurrence of any event or cause beyond the
reasonable control of Landlord (a "Service Failure") shall not render
Landlord liable to Tenant, constitute a constructive eviction of
Tenant, give rise to an abatement of Rent, nor relieve Tenant from the
obligation to fulfill any covenant or agreement. However, if the
Premises, or a portion of the Premises, is made reasonably unusable
for the Permitted Use for a period in excess of 3 consecutive Business
Days as a result of a Service Failure (other than a Service Failure in
connection with Tenant's failure to perform Tenant's obligations under
this Lease, in which event Tenant shall not be entitled to any
abatement or other remedy), then Tenant, as its sole remedy (subject
to the last sentence of this Section VII.B), shall be entitled to
receive an abatement of Rent payable hereunder during the period
beginning on the 4th consecutive Business Day of the Service Failure
and ending on the day the service has been restored. If the entire
Premises has not been rendered untenantable by the Service Failure,
the amount of abatement that Tenant is entitled to receive shall be
prorated based upon the percentage of the Premises rendered reasonably
unusable for the Permitted Use and not used by Tenant. In no event,
however, shall Landlord be liable to Tenant for any loss or damage,
including the theft of Tenant's Property (defined in Article XV),
arising out of or in connection with the failure of any security
services, security personnel or security equipment. In the event a
Service Failure is caused by the gross negligence, active negligence
or willful misconduct of Landlord or Landlord's agents or contractors,
such abatement of Base Rent shall not be Tenant's sole remedy but the
parties hereto acknowledge and agree that Tenant shall not be entitled
to receive more than Tenant's actual damages; it being agreed that,
notwithstanding anything to the contrary contained herein, Tenant
hereby waives any claim it may otherwise have for consequential,
special or indirect damages as a result of the above.
VIII. Leasehold Improvements.
All improvements (excluding Tenant's Property as defined in Article XV of
this Lease) to the Premises (collectively, "Leasehold Improvements") shall be
owned by Landlord and shall remain upon the Premises without compensation to
Tenant. However, Landlord, by written notice to Tenant within 30 days prior to
the Termination Date, may require Tenant to remove, at Tenant's expense: (1)
Cable (defined in Section IX.A) installed by or for the exclusive benefit of
Tenant and located in the Premises or other portions of the Building; and (2)
any Leasehold Improvements that are performed by or for the benefit of Tenant
and, in Landlord's reasonable judgment, are of a nature that would require
removal and repair costs that are materially in excess of the removal and repair
costs associated with standard office improvements (collectively referred to as
"Required Removables"). No sooner than 180 days prior to the Termination Date,
Tenant may request in writing that Landlord identify the then existing Required
Removables that are required by Landlord to be removed by Tenant.
Notwithstanding the foregoing, Tenant shall not be required to remove any
portion of the Landlord Work shown on the Plans as of the date of this Lease, as
such terms are defined in Exhibit D. Without limitation, it is agreed that
Required Removables include internal stairways, raised floors, personal baths
and showers, vaults, rolling file systems and structural alterations and
modifications of any type. The Required Removables designated by Landlord shall
be removed by Tenant before the Termination Date, provided that upon prior
written notice to Landlord, Tenant may remain in the Premises for up to 5 days
after the Termination Date for the sole purpose of removing the Required
Removables. Tenant's possession of the Premises shall be subject to all of the
terms and conditions of this Lease, including the obligation to pay Rent on a
per diem basis at the rate in effect for the last month of the Term. Tenant
shall repair damage caused by the installation or removal of Required
Removables. If Tenant fails to remove any Required Removables or perform related
repairs in a timely manner, Landlord, at Tenant's expense, may remove and
dispose of the Required Removables and perform the required repairs. Tenant,
within 30 days after receipt of an invoice, shall reimburse Landlord for the
reasonable costs incurred by Landlord.
IX. Repairs and Alterations.
A. Tenant's Repair Obligations. Tenant shall, at its sole cost and
expense, promptly perform all maintenance and repairs to the Premises
that are not Landlord's express responsibility under this Lease, and
shall keep the Premises in good condition and repair, reasonable wear
and tear and damage from casualty and condemnation (subject to the
terms of Articles XVII and XVIII) excepted. Tenant's repair
obligations include, without limitation, repairs to: (1) floor
covering; (2) interior partitions; (3) doors; (4) the interior side of
demising walls; (5) electronic, phone and data cabling and related
equipment (collectively, "Cable") that is installed by or for the
exclusive benefit of Tenant and located in the Premises or other
portions of the Building; (6) supplemental air conditioning units,
private showers and kitchens, including hot water heaters, plumbing,
and similar facilities serving Tenant exclusively; (7) Alterations
performed by contractors retained by Tenant, including related HVAC
balancing; and (8) so long as Tenant is the Sole Tenant of the
Building, heating, ventilating and air conditioning systems and
equipment serving the Building. In addition and notwithstanding
anything to the contrary contain in Section IX.B below, if Tenant is
the Sole Tenant of the Building (as defined in Section VII.A.1.),
Tenant's repair obligations shall also include, without limitation,
the following: (a) mechanical (including HVAC), electrical, plumbing
and fire/life safety systems serving the Buildings in general
(including any equipment related thereto and located upon the roof of
the Building); (b) the interior Common Areas of the Buildings
(Landlord shall maintain the exterior Common Areas of the Buildings in
accordance with its obligations as provided in Section IX.B below);
and (c) exterior windows of the Building (excluding a failure of the
window panes resulting from outspray from the water features of the
Exterior Common Areas (i.e., water fountains) or exterior sprinklers,
the repair costs thereof to be borne by Landlord). All work shall be
performed in accordance with the rules and procedures described in
Section IX.C. below. If Tenant fails to make any repairs to the
Premises for more than 15 days after notice from Landlord (although
notice shall not be required if there is an emergency), Landlord may
make the repairs, and Tenant shall pay the reasonable cost of the
repairs to Landlord within 30 days after receipt of an invoice,
together with an administrative charge in an amount equal to 5% of the
cost of the repairs. Notwithstanding the foregoing, if the repair to
be performed by Tenant cannot reasonably be completed within 15 days
after Landlord's notice to Tenant, Landlord shall not exercise its
right to make such repair on Tenant's behalf so long as Tenant
commences such repair within 5 days after notice from Landlord and is
diligently pursuing the same to completion.
If, pursuant to the terms of this Lease, Tenant is responsible for the
repair and maintenance of the heating, ventilating and air
conditioning units servicing the Premises, within 30 days following
Landlord's receipt of written demand therefor accompanied by
documented evidence of any such expense, Landlord shall reimburse
Tenant for the costs of repairs, maintenance and replacement of the
heating, ventilating and air conditioning units servicing the 2051
Building in excess of normal repair and maintenance (as defined in
Section IV.C.7(r)) until the day following substantial completion of
the HVAC Replacement Work (as defined in Section IX.B of this Lease)
with respect to the 2051 Building and for the costs of repairs,
maintenance and replacement of the heating, ventilating and air
conditioning units servicing the 2061 Building in excess of normal
repair and maintenance until the day following substantial completion
of the HVAC Replacement Work with respect to the 2061 Building;
provided that Landlord's obligation to reimburse Tenant as provided
above shall in no event apply to the extent that any such items are
covered under Tenant's Service Contract. For purposes of the
foregoing, "normal repair and maintenance" shall have the same meaning
as given in Section IV.C.7(r).
If Tenant is the Sole Tenant of the Building (as defined in Section
VII.A.1. above) Tenant, at Tenant's own expense, shall procure and
maintain in full force and effect, a maintenance/service contract(s)
(the "Service Contract"), in a form and with a maintenance contractor
reasonably approved by Landlord, providing for the service,
maintenance and repair of all (i) heating, ventilating and air
conditioning systems and equipment, (ii) fire/life safety systems and
equipment, and (iii) if required by Landlord, any other plumbing,
electrical or mechanical systems and equipment serving the Building.
The service contract(s) must include all services suggested by the
equipment manufacturer within the operation/maintenance manual
relating to such equipment and systems and must become effective and a
copy thereof delivered to Landlord within thirty (30) days after the
Commencement Date with respect to items (i) and (ii) above, or within
30 days after requested by Landlord with respect to item (iii) above.
Tenant shall follow all reasonable recommendations of said contractor
for the maintenance and repair of the equipment and systems covered by
the Service Contract. The Service Contract shall provide that the
contractor shall perform regularly scheduled inspections, preventative
maintenance and service on the covered equipment and systems, and that
having made such inspections, said contractor shall furnish a complete
report of any defective conditions found to be existing with respect
to such equipment, together with any recommendations for maintenance,
repair and/or replacement thereof. Said report shall be furnished to
Tenant with a copy to Landlord. Landlord may, upon notice to Tenant,
enter into such a service contract on behalf of Tenant or perform the
work and in either case charge Tenant the cost thereof along with a
reasonable amount for Landlord's overhead.
Notwithstanding the foregoing, except to the extent caused by Tenant
or any of Tenant's agents, employees, contractors or invitees, to the
extent that any single capital improvement (as distinguished from
replacement parts or components installed in the ordinary course of
business) must be made to properly repair, maintain, or replace any
portion of the Premises for which Tenant is responsible (including,
without limitation, Tenant's responsibility to comply with Laws as
expressly provided in this Lease), and the cost of such single capital
improvement exceeds $25,000.00 (an "Amortizable Capital Improvement"),
so long as Tenant occupies 50% of the Premises, Tenant may elect to
pay the amortized portions of the cost of any such Amortizable Capital
Improvement which costs shall be amortized by Landlord over the lesser
of the Payback Period (as defined in this Lease) or the useful life of
the capital improvement as reasonably determined by Landlord.
Landlord shall, on Tenant's behalf and at no cost to Landlord,
diligently and reasonably enforce existing warranties and guarantees
that cover any of Tenant's repair and maintenance obligations under
this Lease; provided, however, that the foregoing shall in no event
reduce or otherwise diminish Tenant's obligations under the terms and
conditions of this Lease. To the extent a repair and maintenance
obligation under this Lease is Tenant's responsibility and Landlord is
the beneficiary of an existing and unexpired warranty or guaranty,
Tenant shall not be obligated for the costs and expenses which are
expressly covered by any such warranty and or guaranty (excluding any
required contributions), whether or not Landlord actually receives the
benefit thereof; provided, however, the foregoing shall not apply in
the event and to the extent that Tenant or any Tenant Party
invalidates, disqualifies or performs any act or omission that
adversely affects the validity and /or effectiveness or enforceability
of any such warranty and/or guaranty.
Notwithstanding anything to the contrary contained herein, during the
first 12 months of the initial Lease Term only, Landlord, not Tenant
shall be responsible for any costs for repairs and replacements beyond
normal wear and tear to the Premises, the Buildings and the Project,
as reasonably determined by Landlord, except to the extent caused or
exacerbated directly or indirectly by Tenant or any Tenant Party.
B. Landlord's Repair Obligations. Except to the extent the same is a
Tenant obligation pursuant to the terms of this Lease, Landlord shall
keep and maintain in good repair and working order (and in a manner
consistent with comparable Class A office and research and development
buildings (as defined below)) and make repairs to and perform
maintenance upon: (1) structural elements of the Building (including,
without limitation, the foundation and exterior and load bearing
walls); (2) mechanical (including HVAC), electrical, plumbing,
underground utilities (including sewer and storm drain) and fire/life
safety systems serving the Building in general; (3) Exterior Common
Areas; (4) the roof of the Building; (5) exterior windows of the
Building; and (6) elevators serving the Building. For purposes of the
foregoing, "Class A office and research and development buildings"
shall mean the buildings and projects owned by Landlord or any of its
affiliates and located in the San Xxxx (Mineta) International Airport
geographic area. Landlord shall promptly make repairs (considering the
nature and urgency of the repair) for which Landlord is responsible.
Tenant hereby waives any and all rights under and benefits of
subsection 1 of Section 1932, and Sections 1941 and 1942 of the
California Civil Code, or any similar or successor Laws now or
hereinafter in effect.
Landlord may, at its option and its sole cost and expense, replace the
heating, ventilating and air conditioning units located in each of the
2051 Building and in the 2061 Building (the "HVAC Replacement Work").
Landlord and Tenant agree to cooperate with each other in order to
enable the HVAC Replacement Work to be performed in a timely manner
and with as little inconvenience to the operation of Tenant's business
as is reasonably possible. Except in the event Tenant is directly
responsible for all of the costs and expenses associated with the
maintenance, repair and replacement of the heating, ventilating and
air conditioning units and the mechanical equipment related thereto,
upon substantial completion of the HVAC Replacement Work in the 2051
Building, Tenant shall be responsible for Tenant's Pro Rata Share of
all of the costs and expenses associated with the maintenance, repair
and replacement of the heating, ventilating and air conditioning units
and the mechanical equipment related thereto located the 2051 Building
(including material repairs and replacements). Except in the event
Tenant is directly responsible for all of the costs and expenses
associated with the maintenance, repair and replacement of the
heating, ventilating and air conditioning units and the mechanical
equipment related thereto, upon substantial completion of the HVAC
Replacement Work in the 2061 Building, Tenant shall be responsible for
Tenant's Pro Rata Share of all of the costs and expenses associated
with the maintenance, repair and replacement of the heating,
ventilating and air conditioning units located in the 2061 Building
(including material repairs and replacements). The foregoing in no
event reduces or modifies Tenant's rights and obligations with respect
to Amortizable Capital Improvements.
C. Alterations. Tenant shall not make alterations, additions or
improvements to the Premises or install any Cable in the Project
outside of the Premises (collectively referred to as "Alterations")
without first obtaining the written consent of Landlord in each
instance, which consent shall not be unreasonably withheld or delayed.
However, Landlord's consent shall not be required for any Alteration
that satisfies all of the following criteria (a "Cosmetic
Alteration"): (1) is of a cosmetic nature such as painting,
wallpapering, hanging pictures and installing carpeting; (2) is not
visible from the exterior of the Premises or Building; (3) will not
affect the systems or structure of the Building or the Project; and
(4) does not require work to be performed inside the walls or above
the ceiling of the Premises. However, even though consent is not
required, the performance of Cosmetic Alterations shall be subject to
all the other provisions of this Section IX.C. Notwithstanding the
foregoing, and so long as Tenant leases no less than 50% of the
Premises as initially stated herein, Tenant shall have the right,
without consent of, but upon at least ten (10) business days' prior
written notice to Landlord, to make non-structural, non-Cosmetic
Alterations within the interior of the Premises, which do not impair
the value of the Building or affect the Building systems, and which
cost, in the aggregate, less than One Hundred Thousand Dollars
($100,000.00) in any twelve (12) month period during the Term of this
Lease, provided that such Alterations shall nevertheless be subject to
all of the remaining requirements of this Section IX.C other than the
requirement of Landlord's prior consent. Prior to starting work,
Tenant shall furnish Landlord with plans and specifications reasonably
acceptable to Landlord; names of contractors reasonably acceptable to
Landlord (provided that Landlord may designate specific contractors
with respect to Building systems); copies of contracts; necessary
permits and approvals; evidence of contractor's and subcontractor's
insurance in amounts reasonably required by Landlord; and a lien and
completion bond and/or removal bond if reasonably required by Landlord
pursuant to the terms hereof. Landlord hereby agrees that it shall not
require a lien and completion bond or a removal bond with respect to
the Initial Alterations. It shall be deemed reasonable for Landlord to
require a lien and completion bond if the subject Alteration shall
cost in the aggregate $1,000,000.00 or more, and at or about the time
Tenant commences performance of an Alteration, Tenant's tangible net
worth is less than $50,000,000.00. Conversely, if the cost of the
Alteration is less than $1,000,000.00 in the aggregate or if Tenant's
tangible net worth is equal to or greater than $50,000,000.00 at or
about the time Tenant commences performance of such Alteration,
Landlord shall not require Tenant to provide a lien and completion
bond for the subject Alteration. Further it shall be deemed reasonable
for Landlord to require a removal bond if at or about the time Tenant
commences performance of an Alteration, Tenant's tangible net worth is
less than $50,000,000.00 and the costs and expenses associated with
the removal of such Alteration, together with other Alterations or
improvements of which, pursuant to the terms of this Lease, Landlord
may require or has indicated that it will require removal upon the
expiration or earlier termination of this Lease, collectively, exceeds
$100,000.00. Conversely, if the costs and expenses associated with the
removal of such Alteration, together with other Alterations or
improvements of which, pursuant to the terms of this Lease, Landlord
may require or has indicated that it will require removal upon the
expiration or earlier termination of this Lease, collectively, is less
than $100,000.00 or if Tenant's tangible net worth is equal to or
greater than $50,000,000.00 at or about the time Tenant commences
performance of such Alteration, Landlord shall not require Tenant to
provide a removal bond for the subject Alteration. Alternatively, if
Landlord is entitled to request a lien and completion bond and/or a
removal bond in accordance with the foregoing, Tenant may elect to
instead provide a letter of credit (in conformance with the
requirements set forth in Article VI of this Lease for the Letter of
Credit) in the amount equal to the completion costs of the subject
Alteration and/or the removal costs of the subject Alteration,
together with other Alterations or improvements of which, pursuant to
the terms of this Lease, Landlord may require or has indicated that it
will require removal upon the expiration or earlier termination of
this Lease, as the case may be. If Landlord has indicated or by the
terms hereof is deemed to have indicated that Tenant shall not be
obligated to remove any such Alteration at the expiration or earlier
termination of this Lease, Landlord shall not be entitled to require
Tenant to provide a removal bond with respect to the same. Changes to
the plans and specifications must also be submitted to Landlord for
its approval, which shall not be unreasonably withheld. Alterations
shall be constructed in a good and workmanlike manner using materials
of a quality that is at least equal to the quality designated by
Landlord as the minimum standard for the Building. Landlord may
designate reasonable rules, regulations and procedures for the
performance of work in the Building and the Project and, to the extent
reasonably necessary to avoid disruption to the occupants of the
Building (if any) and the Project, shall have the right to designate
the time when Alterations may be performed. Tenant shall reimburse
Landlord within 30 days after receipt of an invoice for sums paid by
Landlord for third party examination of Tenant's plans for
non-Cosmetic Alterations. In addition, within 30 days after receipt of
an invoice from Landlord, Tenant shall pay Landlord a fee for
Landlord's oversight and coordination of any non-Cosmetic Alterations
as follows: (i) With respect to an Alteration which costs less than
$25,000.00, Landlord shall not charge Tenant an oversight and
coordination fee, (ii) With respect to an Alteration the cost of which
is equal to or in excess of $25,000.00 up to and including
$100,000.00, an oversight and coordination fee equal to 3% of the cost
of such non-Cosmetic Alteration; (iii) With respect to an Alteration
the cost of which is in excess of $100,000.00 up to and including
$250,000.00, an oversight and coordination fee equal to 4% of the cost
of such non-Cosmetic Alteration; (iv) With respect to an Alteration
the cost of which is in excess of $250,000.00 up to and including
$500,000.00, an oversight and coordination fee equal to 3% of the cost
of such non-Cosmetic Alteration; and (v) With respect to an Alteration
the cost of which is in excess of $500,000.00, an oversight and
coordination fee equal to 2% of the cost of such non-Cosmetic
Alteration. The foregoing oversight and coordination fee shall not
apply to the Initial Alterations. Upon completion, Tenant shall
furnish "as-built" plans (except for Cosmetic Alterations), completion
affidavits, full and final waivers of lien in recordable form, and
receipted bills covering all labor and materials. Tenant shall assure
that the Alterations comply with all insurance requirements and Laws.
Landlord's approval of an Alteration shall not be a representation by
Landlord that the Alteration complies with applicable Laws or will be
adequate for Tenant's use. Landlord shall respond to Tenant's written
request for consent for a proposed Alteration within 15 Business Days
following Landlord's receipt thereof plus any documents or materials
or other items reasonably necessary for Landlord to fully consider
Tenant's request. Notwithstanding anything to the contrary contained
herein, so long as Tenant's written request for consent for a proposed
Alteration contains the following statement in large, bold and capped
font "PURSUANT TO SECTION IX.C OF THE LEASE, IF LANDLORD CONSENTS TO
THE SUBJECT ALTERATION, LANDLORD SHALL NOTIFY TENANT IN WRITING
WHETHER OR NOT LANDLORD WILL REQUIRE SUCH ALTERATION TO BE REMOVED AT
THE EXPIRATION OR EARLIER TERMINATION OF THE LEASE", at the time
Landlord gives its consent for any Alterations, Tenant shall also be
notified whether or not Landlord will require that such Alterations be
removed upon the expiration or earlier termination of this Lease.
Notwithstanding anything to the contrary contained in this Lease, and
except with respect to any portion of the Initial Alterations which
are not considered a Required Removable as defined in Article VIII of
this Lease, at the expiration or earlier termination of this Lease and
otherwise in accordance with Article XXX hereof, Tenant shall be
required to remove all Alterations made to the Premises except for any
such Alterations which Landlord expressly indicates or is deemed to
have indicated shall not be required to be removed from the Premises
by Tenant. If Tenant's written notice does not strictly comply with
the foregoing and if Landlord fails to so notify Tenant, it shall be
assumed that Landlord will require their removal. If Landlord fails to
respond to Tenant's written request within such 15 Business Day period
described above, and if the reasonable removal costs of the subject
Alteration is less than $100,000.00, Landlord shall be deemed to have
approved such Alteration; provided, however, notwithstanding the
foregoing, regardless of such deemed consent to any Alteration,
Landlord shall remain entitled to require any such Alteration to be
removed from the Premises at expiration or early termination of this
Lease in accordance with the terms hereof. If Landlord fails to
respond to Tenant's written request within such 15 Business Day period
described above, and if the reasonable removal costs of the subject
Alteration is equal to or more than $100,000.00, Landlord shall be
deemed to have disapproved such Alteration.
Subject to the terms of this Section IX.C, Landlord shall not
unreasonably withhold, condition or delay consent to the following
improvements in, and so long as Tenant is the Sole Tenant of the
Building, outside or under the Premises: (a) installation of fixtures,
sheds, containers, equipment (including trade fixtures that are
attached to the real estate), conduits, Cabling, pads, enclosures,
security cameras and systems components, lighting, benches, tables,
chairs, umbrellas, sports courts and other outdoor amenities of a
nature that is consistent with the Project, equipment on either of the
rooftops (so long as the same is not visible from the ground and does
not interfere with any of Landlord's HVAC equipment located on such
roof as of the date of this Lease). Further, Landlord's fee for
oversight and coordination shall not apply to the foregoing.
X. Use of Electrical Services by Tenant.
A. Electricity used by Tenant in the Premises shall be paid for by Tenant
by separate charge billed by the applicable utility company and
payable directly by Tenant. Electrical service to the Premises may be
furnished by one or more companies providing electrical generation,
transmission and distribution services, and the cost of electricity
may consist of several different components or separate charges for
such services, such as generation, distribution and stranded cost
charges. Landlord shall have the exclusive right to select any company
providing electrical service to the Premises, to aggregate the
electrical service for the Property and Premises with other buildings,
to purchase electricity through a broker and/or buyers group and to
change the providers and manner of purchasing electricity; provided,
however, that the foregoing shall not apply so long as Tenant is the
Sole Tenant of the Building, in which event, Tenant may select a
company to provide electrical service to the Premises at no cost to
Landlord and so long as Landlord shall have no obligation to make any
alterations or improvements to the Project in connection therewith.
B. Tenant's use of electrical service shall not exceed, either in
voltage, rated capacity, or overall load, Tenant's Pro Rata Share of
the electrical capacity of the Building. In the event that Tenant is
not the Sole Tenant of the Building, Landlord shall have the right to
separately meter electrical usage for the Premises and to measure
electrical usage by survey or other commonly accepted methods.
XI. Entry by Landlord.
Subject to the terms hereof, Landlord, its agents, contractors and
representatives may enter the Premises to inspect the Premises, to clean and
make repairs, alterations or additions to the Premises, and to conduct or
facilitate repairs, alterations or additions to any portion of the Building or
the Project, including other tenants' premises (if any), and, during the final
12 months of the Term (as the same may be extended), show the Premises to
prospective tenants. Except in emergencies or to provide janitorial and other
Building services after Normal Business Hours (to the extent that the same is or
becomes a Landlord obligation under the terms of this Lease), Landlord shall
provide Tenant with no less than 24 hours prior notice of entry into the
Premises, which may be given orally. If reasonably necessary for the protection
and safety of Tenant and its employees, Landlord shall have the right to
temporarily close all or a portion of the Premises to perform repairs,
alterations and additions. However, except in emergencies, Landlord will not
close the Premises if the work can reasonably be completed on weekends and after
Normal Business Hours. Entry by Landlord shall not constitute constructive
eviction or entitle Tenant to an abatement or reduction of Rent.
Notwithstanding the foregoing, Tenant, at its own expense, may designate all or
a portion of the Premises as a "Secured Area" and provide its own locks to such
area ("Secured Area"). Tenant need not furnish Landlord with a key, but upon the
Termination Date or earlier expiration or termination of Tenant's right to
possession, Tenant shall surrender all such keys to Landlord. If Landlord must
gain access to a Secured Area in a non-emergency situation (i.e., to perform
Landlord's maintenance and repair obligations within the Premises), Landlord
shall contact Tenant in writing or orally, and Landlord and Tenant shall arrange
a mutually agreed upon time for Landlord to have such access, no less than 24
hours thereafter. Landlord shall comply with all reasonable security measures
pertaining to the Secured Area. If Landlord determines in its sole discretion
that an emergency in the Building or the Premises, including, without
limitation, a suspected fire or flood, requires Landlord to gain access to the
Secured Area, Tenant hereby authorizes Landlord to forcibly enter the Secured
Area. In such event, Landlord shall have no liability whatsoever to Tenant, and
Tenant shall pay all reasonable expenses incurred by Landlord in repairing or
reconstructing any entrance, corridor, door or other portions of the Premises
damaged as a result of a forcible entry by Landlord. Landlord shall have no
obligation to provide either janitorial service or cleaning in the Secured Area.
XII. Assignment and Subletting.
A. Except in connection with a Permitted Transfer (defined in Section
XII.E. below), Tenant shall not assign, sublease, transfer or encumber
any interest in this Lease or allow any third party to use any portion
of the Premises (collectively or individually, a "Transfer") without
the prior written consent of Landlord, which consent shall not be
unreasonably withheld if Landlord does not elect to exercise its
termination rights under Section XII.B below. Tenant's written request
for consent shall conspicuously contain the following statement in
large, bold and capped font: "LANDLORD SHALL RESPOND TO THIS REQUEST
FROM TENANT WITHIN 10 BUSINESS DAYS FOLLOWING LANDLORD'S RECEIPT OF
THIS NOTICE TOGETHER WITH THE DOCUMENTS AND OTHER MATERIAL REQUIRED OF
TENANT PURSUANT TO SECTION XII.B OF THE LEASE.". Without limitation,
it is agreed that Landlord's consent shall not be considered
unreasonably withheld if: (1) Landlord reasonably determines that the
proposed subtenant or proposed assignee cannot reasonably be expected
to be able to perform its obligations under the sublease or this
Lease, as the case may be; (2) the proposed transferee's business is
not suitable for the Project considering the business of the other
tenants and the prestige of the Project; (3) the proposed transferee
is a governmental agency or occupant of the Property or the Project,
provided that Landlord will not withhold its consent solely because
the transferee is a government agency if the Transfer would not impose
any additional obligations on Landlord or result in an excessive
amount of foot traffic to and from the Premises or an excessive amount
of people per square foot within the Premises; (4) Tenant is in
default after the expiration of the notice and cure periods in this
Lease; or (5) any portion of the Premises, the Building or the Project
would likely become subject to additional or different Laws as a
consequence of the proposed Transfer, unless Tenant agrees to pay all
costs and expenses incurred by Landlord as a result thereof, and
Landlord shall have the right to collect from Tenant, in advance, such
amounts as Landlord may reasonably require as advance payment of all
or a portion of such costs and expenses. Notwithstanding the above,
Landlord will not withhold its consent solely because the proposed
subtenant or assignee is an occupant of the Property or the Project if
Landlord does not have space available for lease in the Property or
the Project that is comparable to the space Tenant desires to sublet
or assign. Landlord shall be deemed to have comparable space if it
has, or will have, space available that is approximately the same
size, similar location (i.e., within the same general area of the
Project), general layout and level of improvement as the space Tenant
desires to sublet or assign within 3 months of the proposed
commencement of the proposed sublease or assignment. Tenant hereby
waives the provisions of Section 1995.310 of the California Civil
Code, or any similar or successor Laws, now or hereinafter in effect,
and all other remedies, including, without limitation, any right at
law or equity to terminate this Lease, on its own behalf and, to the
extent permitted under all applicable Laws, on behalf of the proposed
transferee. Any attempted Transfer in violation of this Article shall,
at Landlord's option, be void. Consent by Landlord to one or more
Transfer(s) shall not operate as a waiver of Landlord's rights to
approve any subsequent Transfers. In no event shall any Transfer or
Permitted Transfer release or relieve Tenant from any obligation under
this Lease.
B. As part of its request for Landlord's consent to a Transfer, Tenant
shall provide Landlord with financial statements for the proposed
transferee, a complete copy of the proposed assignment, sublease and
other contractual documents and such other information as Landlord may
reasonably request. If Tenant's written request for Landlord's consent
contains the statement required in Section XII.A above, Landlord
shall, by written notice to Tenant within 10 Business Days of its
receipt of the required information and documentation, either: (1)
consent to the Transfer by the execution of a consent agreement in a
form reasonably designated by Landlord or reasonably refuse to consent
to the Transfer in writing; or (2) exercise its right to terminate
this Lease with respect to the entire Premises, if Tenant is proposing
to assign the Lease, or with respect to the portion of the Premises
that Tenant is proposing to sublet, (a), if the proposed sublease
term, with or without renewal options relating thereto, is for more
than 50% of the then remaining Term of this Lease (as the same may
have been extended), and (b) if the proposed sublease (if approved)
would collectively result in greater than 50,000 rentable square feet
of the Premises being subject to sublease. In the event of any such
termination, Landlord shall be liable for the costs and expenses of
demising the portion of the Premises recaptured by Landlord. Any such
termination shall be effective on the proposed effective date of the
Transfer for which Tenant requested consent. In the case of a
sublease, if a proposed Transfer regards a portion of the Premises
covering less than 3,000 rentable square feet, and Landlord has failed
to respond within the 10 Business Day period described above, Landlord
shall be deemed to have approved such proposed Transfer. In the case
of a sublease, if a proposed Transfer regards a portion of the
Premises covering 3,000 rentable square feet or more, and Landlord has
failed to respond within the 10 Business Day period described above,
Tenant may, within 2 Business Days after the expiration of the 10
Business Day period, provide Landlord with a second written request
for consent. If Tenant fails to so provide a second written notice,
Landlord shall be deemed to have disapproved such proposed Transfer.
Such second request shall identify the proposed Transfer with
particularity (i.e., transferee, subject portion of the Premises, term
of sublease), indicate the date the first request (plus all required
documentation and additional information as described in this Section
XII.B above) was delivered to Landlord, and shall conspicuously
contain the following statement in large, bold capped font: "THIS IS
TENANT'S SECOND WRITTEN REQUEST FOR LANLDORD'S CONSENT TO THE SUBJECT
PROPOSED TRANSFER. PURSUANT TO SECTION XII.B OF THE LEASE, LANDLORD
SHALL RESPOND TO THIS REQUEST FROM TENANT WITHIN 5 DAYS FOLLOWING
LANDLORD'S RECEIPT OF THIS NOTICE. FAILURE BY LANDLORD TO SO RESPOND
SHALL BE DEEMED APPROVAL OF TENANT'S REQUEST OF THE PROPOSED
TRANSFER." If Tenant's second written request complies with the
foregoing terms and Landlord fails to respond within such 5 day
period, Landlord shall be deemed to have approved such proposed
Transfer. Tenant shall pay Landlord a review fee equal to the actual
costs, expenses and attorney fees, including costs attributable to
time expended by in house counsel, accountants or other personnel of
Landlord, incurred for Landlord's review of any Permitted Transfer or
requested Transfer, including the preparation and negotiation of any
consent required of Landlord related thereto. Notwithstanding the
foregoing, such costs and expenses shall not exceed $3,000.00.
C. Except with respect to any Permitted Transfers, Related Transfers and
Consent Required Transfers (as such terms are defined in either
Sections XII.D or XII.E below), Tenant shall pay Landlord 50% of all
rent and other consideration which Tenant receives as a result of a
Transfer that is in excess of the Rent payable to Landlord for the
portion of the Premises and Term covered by the Transfer. Tenant shall
pay Landlord for Landlord's share of any excess within 30 days after
Tenant's receipt of such excess consideration. Tenant may deduct from
the excess all reasonable and customary expenses directly incurred by
Tenant attributable to the Transfer (other than Landlord's review
fee), including brokerage fees, legal fees, construction costs and
Vacancy Costs related solely to the Transfer. For purposes hereof,
"Vacancy Costs" shall mean an amount not to exceed 3 months of Base
Rent and Tenant's Share of Expenses and Taxes to the extent applicable
to the subject portion of the Premises which is covered by the subject
sublease (the "Sublease Space") but only to the extent Tenant has paid
such Rent to Landlord for the Sublease Space and the Sublease Space
was vacated and not used or occupied by any party and Tenant, while
making reasonable and good faith efforts to sublease the Sublease
Space, was reasonably unable to do so. Landlord may request and Tenant
shall provide any reasonable information necessary to determine if
Tenant is entitled to deduct Vacancy Costs as described above. If
Tenant is in Monetary Default (defined in Section XIX.A. below),
Landlord may require that all sublease payments be made directly to
Landlord, in which case Tenant shall receive a credit against Rent in
the amount of any payments received (less Landlord's share of any
excess).
D. Except as provided below with respect to a Permitted Transfer, if
Tenant is a corporation, a transfer of corporate shares by sale,
assignment, bequest, inheritance, operation of law or other
disposition (including such a transfer to or by a receiver or trustee
in federal or state bankruptcy, insolvency or other proceedings)
resulting in a change in the present control of such corporation or
any of its parent corporations by the person or persons owning a
majority of said corporate shares, shall constitute a Transfer for
purposes of this Lease. The foregoing shall not apply so long as: (i)
Tenant is an entity whose outstanding stock is listed on a recognized
security exchange, or if at least 80% of its voting stock is owned by
another entity, the voting stock of which is so listed, or (ii) to a
single transfer (or series of related transfers that are part of the
same general transaction and which proximately occur) of all or
substantially all of the capital stock of Tenant to one recipient
(whether an individual or an entity). The foregoing also shall not
apply to the infusion of additional equity capital in Tenant or an
initial public offering of equity securities of Tenant under the
Securities Act of 1933, as amended, which results in Tenant's stock
being traded on a national securities exchange, including, but not
limited to, the NYSE, the NASDAQ Stock Market or the NASDAQ Small Cap
Market System. If Tenant is a limited liability company, partnership,
or similar entity, and if the entity which owns or controls a majority
of the voting shares/rights at any time changes for any reason
(including but not limited to a merger, consolidation or
reorganization), such change of ownership or control shall constitute
a Transfer. To the extent that any Transfer described in this Section
XII.D does require Landlord's prior consent as provided herein (a
"Consent Required Transfer"), Landlord shall not unreasonably withhold
its consent (as such standard of consent is described in Section XII.A
above) and, in such event and with respect to the specific Consent
Required Transfer only, Landlord hereby waives its right to recapture
the Premises as provided in Section XII.B above. If Landlord
determines it may reasonably withhold consent to such Consent Required
Transfer, Landlord hereby agrees that if within 10 days after Landlord
withholds its consent to a Consent Required Transfer, Tenant provides
to Landlord a written notice indicating Tenant elects to provide to
Landlord the Reimbursement Fee and the Assignment Security Deposit (as
each term is defined below) and, concurrently with the closing of any
such transaction, Tenant provides to Landlord: (x) a reimbursement fee
(the "Reimbursement Fee") in an amount equal to $1,091,000.00 per each
12 month period then remaining on the initial Term of this Lease (plus
any portion of any 12 month period then remaining on the initial Term
of this Lease determined on a pro rata basis), which amount reimburses
Landlord for its leasing costs and expenses associated with this Lease
(but expressly does not include any rents) and (y) a letter of credit
in accordance with the terms and conditions of Article VI of this
Lease in an amount equal to 12 months of Base Rent and Additional Rent
at the rates then in effect (the "Assignment Security Deposit")
pursuant to the terms of this Lease, then Landlord shall approve such
Consent Required Transfer (subject to Landlord's receipt of each of
the Assignment Security Deposit and the Reimbursement Fee as provided
above). Landlord shall hold the Assignment Security Deposit as a part
of the Security Deposit in accordance with Article VI of this Lease.
For illustration purposes only, if 42 months were remaining of the
initial Term at the time of a Consent Required Transfer, the
Reimbursement Fee would equal $3,818,500.00 ($1,091,000.00 multiplied
by 3.5). At Landlord's election, Tenant shall provide to Landlord the
Reimbursement Fee in the form of either: (1) a good and sufficient
cashier's check or wire transfer to an account indicated in writing by
Landlord, or (2) a letter of credit. In the event Landlord requires
Tenant to provide a letter of credit, such letter of credit shall
comply with the terms and conditions of Article VI of this Lease and
shall expressly state that Landlord may draw down the entire
outstanding amount thereof upon demand by Landlord and without
inquiry.
E. So long as Tenant is not entering into the Permitted Transfer for the
purpose of avoiding or otherwise circumventing the remaining terms of
this Article XII, Tenant may assign its entire interest under this
Lease, without the consent of Landlord, to (i) an affiliate,
subsidiary, or parent of Tenant, or a corporation, partnership or
other legal entity wholly owned by Tenant (collectively, an
"Affiliated Party"), or (ii) a successor to Tenant by purchase,
merger, consolidation or reorganization, provided that all of the
following conditions are satisfied (each such Transfer a "Permitted
Transfer" and any transferee of such Permitted Transfer, a "Permitted
Transferee"): (1) Tenant is not in default under this Lease beyond any
applicable cure periods; (2) the Permitted Use does not allow the
Premises to be used for retail purposes; (3) Tenant shall give
Landlord written notice at least 10 days prior to the effective date
of the proposed Permitted Transfer; (4) with respect to a proposed
Permitted Transfer to an Affiliated Party, Tenant continues to have a
tangible net worth equal to no less than $65,000,000.00; and (5) with
respect to a purchase, merger, consolidation or reorganization or any
Permitted Transfer which results in Tenant ceasing to exist as a
separate legal entity, (a) Tenant's successor shall own all or
substantially all of the assets of Tenant, and (b) Tenant's successor
shall have a tangible net worth which is no less than $65,000,000.00.
Tenant's notice to Landlord shall include information and
documentation showing that each of the above conditions has been
satisfied. If requested by Landlord, Tenant's successor shall sign a
commercially reasonable form of assumption agreement. As used herein,
(A) "parent" shall mean a company which owns a majority of Tenant's
voting equity; (B) "subsidiary" shall mean an entity wholly owned by
Tenant or at least 51% of whose voting equity is owned by Tenant; and
(C) "affiliate" shall mean an entity controlled, controlling or under
common control with Tenant.
In the event Tenant's proposed Transfer does not satisfy either
requirement (4) above or (5)(b) above, as the case may be, but
satisfies all other requirements of a Permitted Transfer (a "Related
Transfer"), Landlord shall have a right to consent to such Related
Transfer in accordance with the terms of this Article XII; provided,
however, that in such event Landlord shall waive its right to
recapture the subject portion of the Premises to the extent such right
arises by the terms of this Lease. If Landlord determines it may
reasonably withhold consent to such Related Transfer, Landlord hereby
agrees that if Tenant provides to Landlord a letter of credit in
accordance with the terms and conditions of Article VI of this Lease,
or other credit enhancement as reasonably required by Landlord (the
"Additional Security Deposit"), in an amount equal to 12 months of
Base Rent and Additional Rent at the rates then in effect pursuant to
the terms of this Lease, Landlord shall approve such Related Transfer
(subject to Landlord's receipt of the Additional Security Deposit).
Landlord shall hold the Additional Security Deposit as a part of the
Security Deposit in accordance with Article VI of this Lease.
F. Notwithstanding anything in this Article XII to the contrary, Tenant
shall be permitted from time to time to permit its independent
contractors ("Approved Users") to temporarily occupy space within the
Premises in order to make such independent contractors more accessible
to Tenant, provided that (a) Tenant does not separately demise such
space; (b) the Approved Users shall not occupy, in the aggregate, more
than 10% of the rentable area in the Premises; (c) the Approved Users
occupy space in the Premises for the Permitted Use and for no other
purpose; (d) all Approved Users shall be independent contractors of
Tenant and shall occupy space in the Premises only so long as such
Approved Users is an independent contractor of Tenant; and (e) Tenant
notifies Landlord, in writing, of the identity of any such Approved
Users prior to occupancy of any portion of the Premises by such
Approved Users. If any Approved Users occupy any portion of the
Premises as described herein, it is agreed that (i) the Approved Users
must comply with all provisions of this Lease, and a default by any
Approved User shall be deemed a default by Tenant under this Lease;
(ii) all notices required of Landlord under this Lease shall be
forwarded only to Tenant in accordance with the terms of this Lease
and in no event shall Landlord be required to send any notices to any
Approved Users; (iii) in no event shall any use or occupancy of any
portion of the Premises by any Approved User release or relieve Tenant
from any of its obligations under this Lease; (iv) the Approved User
and its employees, contractors and invitees visiting or occupying
space in the Premises shall be deemed contractors of Tenant for
purposes of Tenant's indemnification obligations in Article XIV; and
(v) in no event shall the occupancy of any portion of the Premises by
Approved Users be deemed to create a landlord/tenant relationship
between Landlord and such Approved Users, and, in all instances,
Tenant shall be considered the sole tenant under the Lease
notwithstanding the occupancy of any portion of the Premises by the
Approved Users.
XIII. Liens.
Tenant shall not permit mechanic's or other liens to be placed upon the
Premises, Building, Property, Project or Tenant's leasehold interest in
connection with any work or service done or purportedly done by or for benefit
of Tenant. If a lien is so placed, Tenant shall, within 20 days of notice from
Landlord of the filing of the lien, fully discharge the lien by settling the
claim which resulted in the lien or by bonding or insuring over the lien in the
manner prescribed by the applicable lien Law. If Tenant fails to discharge the
lien, then, in addition to any other right or remedy of Landlord, Landlord may
bond or insure over the lien or otherwise discharge the lien. Tenant shall
reimburse Landlord for any amount paid by Landlord to bond or insure over the
lien or discharge the lien, including, without limitation, reasonable attorneys'
fees (if and to the extent permitted by Law) within 30 days after receipt of an
invoice from Landlord.
XIV. Indemnity and Waiver of Claims.
A. Except to the extent caused by the negligence or willful misconduct of
Landlord or any Landlord Related Parties (defined below), Tenant shall
indemnify, defend and hold Landlord, its trustees, members,
principals, beneficiaries, partners, officers, directors, employees,
Mortgagee(s) (defined in Article XXVI) and agents ("Landlord Related
Parties") harmless against and from all liabilities, obligations,
damages, penalties, claims, actions, costs, charges and expenses,
including, without limitation, reasonable attorneys' fees and other
professional fees (if and to the extent permitted by Law), which may
be imposed upon, incurred by or asserted against Landlord or any of
the Landlord Related Parties and arising out of or in connection with
any damage or injury occurring in the Premises or any acts or
omissions (including violations of Law) of Tenant, the Tenant Related
Parties (defined below) or any of Tenant's transferees, contractors or
licensees.
B. Except to the extent caused by the negligence or willful misconduct of
Tenant or any Tenant Related Parties (defined below), Landlord shall
indemnify, defend and hold Tenant, its trustees, members, principals,
beneficiaries, partners, officers, directors, employees and agents
("Tenant Related Parties") harmless against and from all liabilities,
obligations, damages, penalties, claims, actions, costs, charges and
expenses, including, without limitation, reasonable attorneys' fees
and other professional fees (if and to the extent permitted by Law),
which may be imposed upon, incurred by or asserted against Tenant or
any of the Tenant Related Parties and arising out of or in connection
with the acts or omissions (including violations of Law) of Landlord,
the Landlord Related Parties or any of Landlord's contractors.
C. Landlord and the Landlord Related Parties shall not be liable for, and
Tenant waives, all claims for loss or damage to Tenant's business or
loss, theft or damage to Tenant's Property or the property of any
person claiming by, through or under Tenant resulting from: (1) wind
or weather; (2) the failure of any sprinkler, heating or
air-conditioning equipment, any electric wiring or any gas, water or
steam pipes; (3) the backing up of any sewer pipe or downspout; (4)
the bursting, leaking or running of any tank, water closet, drain or
other pipe; (5) water, snow or ice upon or coming through the roof,
skylight, stairs, doorways, windows, walks or any other place upon or
near the Buildings or the Project; (6) any act or omission of any
party other than Landlord or Landlord Related Parties; and (7) any
causes not reasonably within the control of Landlord. Tenant shall
insure itself against such losses under Article XV below.
XV. Insurance.
Tenant shall carry and maintain the following insurance ("Tenant's
Insurance"), at its sole cost and expense: (1) Commercial General Liability
Insurance applicable to the Premises and its appurtenances providing, on an
occurrence basis, a minimum combined single limit of $2,000,000.00; (2)
Property/Business Interruption Insurance written on an All Risk or Special
Perils form, with coverage for broad form water damage including earthquake
sprinkler leakage, at replacement cost value and with a replacement cost
endorsement covering all of Tenant's business and trade fixtures, equipment,
movable partitions, furniture, merchandise and other personal property within
the Premises and any Leasehold Improvements performed by or for the benefit of
Tenant ("Tenant's Property"); (3) Workers' Compensation Insurance as required by
the state in which the Premises is located and in amounts as may be required by
applicable statute; and (4) Employers Liability Coverage of at least
$1,000,000.00 per occurrence. Any company writing any of Tenant's Insurance
shall have an A.M. Best rating of not less than A-VIII. All Commercial General
Liability Insurance policies shall name Tenant as a named insured and Landlord
(or any successor), the managing agent for the Building, and their respective
members, principals, beneficiaries, partners, officers, directors, employees,
and agents, and other designees of Landlord as the interest of such designees
shall appear, as additional insureds. All policies of Tenant's Insurance shall
contain endorsements that the insurer(s) shall endeavor to give Landlord and its
designees at least 30 days' advance written notice of any material change,
cancellation, termination or lapse of insurance; provided, however, that in any
event, Tenant shall provide such 30 day advance written notice to Landlord.
Tenant shall provide Landlord with a certificate of insurance evidencing
Tenant's Insurance prior to the earlier to occur of the Commencement Date or the
date Tenant is provided with possession of the Premises for any reason, and upon
renewals at least 15 days prior to the expiration of the insurance coverage.
Landlord shall maintain so called All Risk or Special Perils form property
insurance on the Buildings at replacement cost value, as reasonably estimated by
Landlord. Except as specifically provided to the contrary, the limits of either
party's' insurance shall not limit such party's liability under this Lease. In
the event that during the Term Landlord elects not to maintain earthquake
insurance on the Buildings at replacement cost value, as reasonably estimated by
Landlord, and such coverage is commercially available, Tenant may, but is not
obligated to, require Landlord to carry such coverage at Tenant's sole cost and
expense (the cost of which Tenant shall pay to Landlord no less than 10 days
prior to the due date(s) under such policy and otherwise as Additional Rent);
provided, however, in the event maintaining such earthquake insurance has any
adverse impact on Landlord's business practices, including, without limitation,
Landlord's policies regarding risk management issues, as the same is determined
by Landlord in its sole discretion, or results in an increase in other costs to
and/or expenses of Landlord, Tenant's right to require Landlord to carry such
coverage shall not apply. Notwithstanding the foregoing, if (i) maintaining such
earthquake insurance results in a temporary increase only in other costs to
and/or expenses of Landlord which increase shall immediately cease upon
termination of such earthquake insurance (and in no event shall such increased
costs continue beyond the early termination of this Lease or the expiration of
the Term of this Lease, as the same may be extended), and (ii) Tenant agrees to,
becomes responsible for and pays all such increased costs and expenses (Tenant
shall pay such costs to Landlord as Additional Rent), Tenant may require
Landlord to carry such earthquake insurance in accordance with the terms hereof.
The foregoing shall in no event modify or amend Tenant's obligations with
respect to its obligations for the payment of deductibles or premiums in general
as provided in this Lease.
XVI. Subrogation.
Notwithstanding anything in this Lease to the contrary, Landlord and Tenant
hereby waive, and shall cause their respective insurance carriers to waive, any
and all rights of recovery, claim, action or causes of action against the other
and their respective trustees, principals, beneficiaries, partners, officers,
directors, agents, and employees, by subrogation or otherwise, to the extent the
same is insured against (or is required to be insured against under the terms
hereof) for any loss or damage that may occur to Landlord or Tenant or any party
claiming by, through or under Landlord or Tenant, as the case may be, with
respect to Tenant's Property, the Premises, the Building, the Project, any
additions or improvements to the Premises, the Building or the Project, or any
contents thereof, including all rights of recovery, claims, actions or causes of
action arising out of the negligence of Landlord or any Landlord Related Parties
or the negligence of Tenant or any Tenant Related Parties, which loss or damage
is (or would have been, had the insurance required by this Lease been carried)
covered by property damage insurance.
XVII. Casualty Damage.
A. If all or any part of the Premises is damaged by fire or other
casualty, Tenant shall immediately notify Landlord in writing. During
any period of time that all or a material portion of the Premises is
rendered reasonably unusable for the Permitted Use as a result of a
fire or other casualty, the Rent shall xxxxx for the portion of the
Premises that is reasonably unusable for the Permitted Use and not
used by Tenant. Landlord, by notice to Tenant within 90 days after the
date of the casualty, shall have the right to terminate this Lease if:
(1) the Premises have been materially damaged and there is less than 2
years of the Term remaining on the date of the casualty; (2) any
Mortgagee (as defined in Article XXVI of this Lease) requires that the
insurance proceeds be applied to the payment of the mortgage debt; or
(3) subject to the last sentence of this Section XVII.A, a material
uninsured loss to the Building occurs. Notwithstanding the foregoing,
with respect to clauses (2) and (3) above, by providing written notice
to Landlord (the "Election Notice") within 10 days following the date
Landlord notifies Tenant: (i) that a Mortgagee requires that the
insurance proceeds be applied to the payment of the mortgage debt, or
(ii) of Landlord's determination that a casualty results in a material
uninsured loss, as the case may be (and which notice Landlord shall
provide to Tenant within a reasonable period of time following
Landlord's determination thereof), Tenant may elect to pay the entire
shortfall of all costs and expenses directly and indirectly related to
the restoration of the Buildings in accordance with the terms of this
Lease, including the costs of permits (the "Restoration Funds") and,
following Landlord's receipt of the Restoration Funds, Landlord shall
have no right to terminate this Lease. If Tenant elects to pay for the
restoration of the Buildings, Tenant shall deliver to Landlord the
Restoration Funds within 30 days following the date Tenant delivers
its Election Notice to Landlord. For purposes of this paragraph, an
uninsured loss to the Building shall mean a casualty not covered by
the insurance coverages required in this Lease, whether or not a party
hereto maintained such insurance coverage. Notwithstanding the
foregoing, Landlord will not be entitled to terminate this Lease
solely because there is less than 2 years on the Term if Tenant has an
exercisable right to renew or extend the Term and Tenant, within 10
days after receipt of Landlord's notice of termination, validly
exercises such right. The foregoing shall not prohibit Landlord from
exercising its right to terminate for any of the other reasons set
forth herein. Landlord shall not in bad faith terminate this Lease
pursuant to the terms of this Section XVII.A solely for the purpose of
replacing Tenant with a successor tenant. If Landlord does not
terminate this Lease, Landlord shall commence and proceed with
reasonable diligence to repair and restore the Building and the
Leasehold Improvements (excluding any Alterations that were performed
by Tenant in violation of this Lease). However, in no event shall
Landlord be required to spend more than the insurance proceeds
received by Landlord (including deductible amounts) provided that
Landlord carries the insurance required of Landlord pursuant to the
terms of this Lease. Landlord shall not be liable for any loss or
damage to Tenant's Property or to the business of Tenant resulting in
any way from the fire or other casualty or from the repair and
restoration of the damage. Landlord and Tenant hereby waive the
provisions of any Law relating to the matters addressed in this
Article, and agree that their respective rights for damage to or
destruction of the Premises shall be those specifically provided in
this Lease. Notwithstanding anything to the contrary contained in this
Article XVII, if the total out of pocket cost to restore the 2051
Building and the 2061 Building, collectively, is less than $500,000.00
in the aggregate, then Landlord shall not be entitled to terminate
this Lease as provided in each of clause (2) and clause (3) above.
In the event that Landlord is entitled to terminate this Lease as
provided herein and the circumstances are such that the entire 2061
Building shall be made unusable for the Permitted Use by fire or other
casualty but the 2051 Building has not been damaged by such casualty
and remains usable for the Permitted Use, Landlord shall not terminate
this Lease with respect to the 2051 Building only so long as,
notwithstanding anything to the contrary contained herein, Landlord
shall not incur any out of pocket costs or expenses in order to
continue this Lease in effect solely with respect to the 2051 Building
(the "Lease Continuation Costs"). If Landlord would incur any such
Lease Continuation Costs and, consequently, elects to terminate this
Lease, Landlord shall notify Tenant in writing of its election thereof
(Landlord's "Casualty Termination Notice"); provided, however, that
Tenant may elect to pay all such costs by providing written notice
thereof to Landlord within 5 days following Tenant's receipt of
Landlord's Casualty Termination Notice and, by further delivering to
Landlord the Lease Continuation Costs within 10 days following
Tenant's receipt of Landlord's Casualty Termination Notice and, in
such event, Landlord shall not terminate this Lease with respect to
the 2051 Building.
B. If all or any portion of the Premises shall be made unusable for the
Permitted Use by fire or other casualty, Landlord shall, with
reasonable promptness, cause an architect or general contractor
selected by Landlord to provide Landlord and Tenant with a reasonable
written estimate of the amount of time required to substantially
complete the repair and restoration of the Premises using standard
working methods ("Completion Estimate"). If the Completion Estimate
indicates that the Premises cannot be repaired and restored so that
Tenant may use the Premises for the Permitted Use within 365 days from
the date of the casualty, then regardless of anything in Section
XVII.A above to the contrary, either party shall have the right to
terminate this Lease by giving written notice to the other of such
election within 10 days after receipt of the Completion Estimate.
Notwithstanding the foregoing, if the Completion Estimate indicates
that the Premises cannot be repaired and restored so that Tenant may
use the Premises for the Permitted Use within 365 days from the date
of the casualty, within 10 days following its receipt of the
Completion Estimate, Tenant may elect in writing to pay all Rent due
pursuant to the terms of this Lease arising during the period of
reconstruction following the expiration of such 365 day period
described above through substantial completion of the restoration of
the Buildings (the "Casualty Rent Period") and, in such event, this
Lease shall not terminate and Landlord shall diligently and in good
faith perform the related restoration work. If, during the Casualty
Rent Period, Landlord shall receive any rental interruption insurance
proceeds, the amount of such insurance proceeds shall be credited
against Tenant's obligation to pay Rent during such period.
Notwithstanding anything to the contrary contained herein, Tenant
shall not have the right to terminate this Lease if the fire or
casualty was caused by the gross negligence or intentional misconduct
of Tenant, Tenant Related Parties or any of Tenant's transferees,
contractors or licensees.
Notwithstanding the foregoing, if Tenant was entitled to but elected
not to exercise its right to terminate the Lease and Landlord does not
substantially complete the repair and restoration of the Premises
within 30 days after the expiration of the estimated period of time
set forth in the Completion Estimate, which period shall be extended
for a period of up to 75 days to the extent of any Reconstruction
Delays, then Tenant may terminate this Lease by written notice to
Landlord within 15 days after the expiration of such period, as the
same may be extended. For purposes of this Lease, the term
"Reconstruction Delays" shall mean: (i) any delays caused by the
insurance adjustment process; (ii) any delays caused by Tenant; and
(iii) any delays caused by events of Force Majeure.
C. The provisions of this Lease, including this Article XVII, constitute
an express agreement between Landlord and Tenant with respect to any
and all damage to, or destruction of, all or any part of the Premises,
the Building, the Property or the Project, and any Laws, including,
without limitation, Sections 1932(2) and 1933(4) of the California
Civil Code, with respect to any rights or obligations concerning
damage or destruction in the absence of an express agreement between
the parties, and any similar or successor Laws now or hereinafter in
effect, shall have no application to this Lease or any damage or
destruction to all or any part of the Premises, the Building, the
Property or the Project.
XVIII. Condemnation.
If the whole of the Premises or at least seventy-five percent (75%)
thereof, should be taken or condemned for any public use under any Law, or by
right of eminent domain, or by private purchase in lieu thereof (a "Taking"),
and the Taking would prevent or materially interfere with the Permitted Use of
the Premises, either party shall have the right to terminate this Lease at its
option. If the whole of the 2051 Building or at least seventy-five percent (75%)
thereof (or such other portion of the 2051 Building which would prohibit Tenant
from lawfully occupying at least twenty-five percent (25%) of the 2051 Building)
or the whole of the 2061 Building or at least seventy-five percent (75%) thereof
(or such other portion of the 2061 Building which would prohibit Tenant from
lawfully occupying at least twenty-five percent (25%) of the 2061 Building),
should be the subject of a Taking, and the Taking would prevent or materially
and adversely interfere with the Permitted Use of the 2051 Building or the 2061
Building, as the case may be, either party shall have the right to terminate
this Lease at its option with respect to the Building so taken. In order to
exercise its right to terminate the Lease, Landlord or Tenant, as the case may
be, must provide written notice of termination to the other within 45 days after
the terminating party first receives notice of the Taking. Any such termination
shall be effective as of the date the physical taking of the Premises or the
portion of the Building, Property or Project occurs. If this Lease is not
terminated, the Rentable Square Footage of the Building, the Rentable Square
Footage of the Premises, the Building's allocable percentage of the Project and
Tenant's Pro Rata Share shall, if applicable, be appropriately adjusted. In
addition, Rent for any portion of the Premises taken or condemned shall be
abated during the unexpired Term of this Lease effective when the physical
taking of the portion of the Premises occurs. All compensation awarded for a
Taking, or sale proceeds, shall be the property of Landlord, any right to
receive compensation or proceeds being expressly waived by Tenant. However,
Tenant shall have the right to claim separately from the condemning authority
such compensation as may be recoverable by Tenant in its own right for the
unamortized cost of the Leasehold Improvements constructed and paid for by
Tenant, for Tenant's personal property and trade fixtures, and for moving and
restoration costs incurred by Tenant, and for any loss of goodwill, if any, so
long as it does not prejudice or reduce Landlord's claim against or award from
the condemning authority. Tenant hereby waives any and all rights it might
otherwise have pursuant to Section 1265.130 of the California Code of Civil
Procedure, or any similar or successor Laws.
XIX. Events of Default.
Tenant shall be considered to be in default of this Lease upon the
occurrence of any of the following events of default:
A. Tenant's failure to pay when due all or any portion of the Rent, if
the failure continues for 3 Business Days after written notice to
Tenant ("Monetary Default"). The parties agree that any notice of
default required under this Lease may be delivered to Tenant
concurrently with any notice of default required by applicable Law.
B. Tenant's failure (other than a Monetary Default) to comply with any
term, provision or covenant of this Lease, if the failure is not cured
within 30 days after written notice to Tenant. However, if Tenant's
failure to comply cannot reasonably be cured within 30 days, Tenant
shall be allowed additional time as is reasonably necessary to cure
the failure so long as: (1) Tenant commences to cure the failure
within 30 days, and (2) Tenant diligently pursues a course of action
that will cure the failure and bring Tenant back into compliance with
the Lease. However, if Tenant's failure to comply creates a hazardous
condition, Tenant shall immediate consult with Landlord and Landlord
may elect, at Tenant's sole cost and expense, to (i) require Tenant to
perform whatever remediation, safety procedures or other work that is
necessary to protect persons and property from harm as a result of
such hazardous condition as determined by Landlord, or (ii) Landlord
shall perform such work. Tenant shall reimburse Landlord for all costs
and expenses associated with the foregoing within 30 days following
demand by Landlord.
C. Tenant becomes insolvent, makes a transfer in fraud of creditors or
makes an assignment for the benefit of creditors, or admits in writing
its inability to pay its debts when due.
D. The filing of any voluntary petition in bankruptcy by Tenant, or the
filing of an involuntary petition by Tenant's creditors, which
involuntary petition remains undischarged for a period of thirty (30)
days. If under applicable law, the trustee in bankruptcy or Tenant has
the right to affirm this Lease and continue to perform the obligations
of Tenant hereunder, such trustee or Tenant shall, in such time period
as may be permitted by the bankruptcy court having jurisdiction, cure
all defaults of Tenant hereunder outstanding as of the date of the
affirmance of this Lease and provide to Landlord such adequate
assurances as may be necessary to ensure Landlord of the continued
performance of Tenant's obligations under this Lease. Notwithstanding
anything herein to the contrary, to the extent that the United States
Bankruptcy Code supersedes any of the provisions of this Article XIX
or stays the enforcement of any of Landlord's remedies under Article
XX, the United States Bankruptcy Code shall control.
E Intentionally Omitted.
F. Intentionally Omitted.
XX. Remedies.
A. Upon the occurrence of any event or events of default under this Lease
as described in Article XIX above, Landlord shall have the option to
pursue any one or more of the following remedies without any notice
(except as expressly prescribed herein) or demand whatsoever (and
without limiting the generality of the foregoing, Tenant hereby
specifically waives notice and demand for payment of Rent or other
obligations, except for those notices specifically required pursuant
to the terms of Article XIX or this Article XX, including Section XX.H
below, and waives any and all other notices or demand requirements
imposed by applicable law):
1. Terminate this Lease and Tenant's right to possession of the
Premises and recover from Tenant an award of damages equal to the
sum of the following:
(a) The Worth at the Time of Award of the unpaid Rent which had
been earned at the time of termination;
(b) The Worth at the Time of Award of the amount by which the
unpaid Rent which would have been earned after termination
until the time of award exceeds the amount of such Rent loss
that Tenant affirmatively proves could have been reasonably
avoided;
(c) The Worth at the Time of Award of the amount by which the
unpaid Rent for the balance of the Term after the time of
award exceeds the amount of such Rent loss that Tenant
affirmatively proves could be reasonably avoided;
(d) Any other amount necessary to compensate Landlord for all
the detriment either proximately caused by Tenant's failure
to perform Tenant's obligations under this Lease or which in
the ordinary course of things would be likely to result
therefrom; and
(e) All such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time under
applicable law.
The "Worth at the Time of Award" of the amounts referred to in
parts (a) and (b) above, shall be computed by allowing interest
at the lesser of a per annum rate equal to: (i) the greatest per
annum rate of interest permitted from time to time under
applicable law, or (ii) the Prime Rate plus 5%. For purposes
hereof, the "Prime Rate" shall be the per annum interest rate
publicly announced as its prime or base rate by a federally
insured bank selected by Landlord in the State of California. The
"Worth at the Time of Award" of the amount referred to in part
(c), above, shall be computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus 1%;
2. Employ the remedy described in California Civil Code ss. 1951.4
(Landlord may continue this Lease in effect after Tenant's breach
and abandonment and recover Rent as it becomes due, if Tenant has
the right to sublet or assign, subject only to reasonable
limitations); or
3. Notwithstanding Landlord's exercise of the remedy described in
California Civil Code ss. 1951.4 in respect of an event or events
of default, at such time thereafter as Landlord may elect in
writing, Landlord may terminate this Lease and Tenant's right to
possession of the Premises and recover an award of damages as
provided above in Paragraph XX.A.1.
B. The subsequent acceptance of Rent hereunder by Landlord shall not be
deemed to be a waiver of any preceding breach by Tenant of any term,
covenant or condition of this Lease, other than the failure of Tenant
to pay the particular Rent so accepted, regardless of Landlord's
knowledge of such preceding breach at the time of acceptance of such
Rent. No waiver by Landlord of any breach hereof shall be effective
unless such waiver is in writing and signed by Landlord.
C. LANDLORD AND TENANT EACH HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED
BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR
RELATING TO THIS LEASE.
D. No right or remedy herein conferred upon or reserved to Landlord is
intended to be exclusive of any other right or remedy, and each and
every right and remedy shall be cumulative and in addition to any
other right or remedy given hereunder or now or hereafter existing by
agreement, applicable law or in equity. In addition to other remedies
provided in this Lease, Landlord shall be entitled, to the extent
permitted by applicable law, to injunctive relief, or to a decree
compelling performance of any of the covenants, agreements, conditions
or provisions of this Lease, or to any other remedy allowed to
Landlord at law or in equity. Forbearance by Landlord to enforce one
or more of the remedies herein provided upon an event of default shall
not be deemed or construed to constitute a waiver of such default.
E. If Tenant is in default beyond any applicable notice and cure periods,
then, to the extent permitted by Law, Landlord shall be entitled to
receive interest on any unpaid item of Rent at a rate equal to the
lesser of the maximum rate permitted by Law or the Prime Rate plus 4%
per annum. For purposes hereof, the "Prime Rate" shall be the per
annum interest rate publicly announced as its prime or base rate by a
federally insured bank selected by Landlord in the state in which the
Building is located.
F. This Article XX shall be enforceable to the maximum extent such
enforcement is not prohibited by applicable law, and the
unenforceability of any portion thereof shall not thereby render
unenforceable any other portion.
G. Landlord shall use commercially reasonable efforts to mitigate
Landlord's damages in the event of a default on the part of Tenant.
H. Service of any statutory notices required in connection with any
rights of the parties hereto shall be completed in a manner mandated
by the applicable Law, including California Code of Civil Procedure
Section 1162 or any similar or successor statute.
XXI. Limitation of Liability.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, THE
LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD) TO TENANT SHALL BE LIMITED
TO THE INTEREST OF LANDLORD IN THE PROPERTY. TENANT SHALL LOOK SOLELY TO
LANDLORD'S INTEREST IN THE PROPERTY FOR THE RECOVERY OF ANY JUDGMENT OR AWARD
AGAINST LANDLORD. NEITHER LANDLORD NOR ANY LANDLORD RELATED PARTY SHALL BE
PERSONALLY LIABLE FOR ANY JUDGMENT OR DEFICIENCY. BEFORE FILING SUIT FOR AN
ALLEGED DEFAULT BY LANDLORD, TENANT SHALL GIVE LANDLORD AND THE MORTGAGEE(S)
(DEFINED IN ARTICLE XXVI BELOW) WHOM TENANT HAS BEEN NOTIFIED HOLD MORTGAGES
(DEFINED IN ARTICLE XXVI BELOW) ON THE PROPERTY, BUILDING OR PREMISES, NOTICE
AND REASONABLE TIME TO CURE THE ALLEGED DEFAULT. FOR PURPOSES HEREOF, "INTEREST
OF LANDLORD IN THE PROPERTY" SHALL INCLUDE RENTS DUE FROM TENANTS, INSURANCE
PROCEEDS, PROCEEDS FROM CONDEMNATION OR EMINENT DOMAIN PROCEEDINGS (PRIOR TO THE
DISTRIBUTION OF SAME TO ANY PARTNER OR SHAREHOLDER OF LANDLORD OR ANY OTHER
THIRD PARTY AND PROCEEDS FROM THE SALE OF THE PROPERTY; PROVIDED, HOWEVER, THAT
WITH RESPECT TO PROCEEDS FROM THE SALE OF THE PROPERTY, LANDLORD'S LIABILITY
SHALL EXTEND ONLY TO CLAIMS WHICH ARISE DURING LANDLORD'S PERIOD OF OWNERSHIP
(SO LONG AS ANY SUCH CLAIM IS SUBSEQUENTLY ADJUDICATED) AND DURING THE TERM OF
THIS LEASE BUT ONLY AFTER LANDLORD FIRST APPLIES ANY SUCH SALE PROCEEDS TO ANY
OUTSTANDING MORTGAGES AND/OR ANY OTHER ENCUMBRANCES EXISTING UPON OR OTHERWISE
AFFECTING THE PROPERTY (INCLUDING ANY GROUND LEASE PAYMENTS) AND ANY TAX
LIABILITY RESPECTING THE PROPERTY.
XXII. No Waiver.
Either party's failure to declare a default immediately upon its
occurrence, or delay in taking action for a default shall not constitute a
waiver of the default, nor shall it constitute an estoppel. Either party's
failure to enforce its rights for a default shall not constitute a waiver of its
rights regarding any subsequent default. Receipt by Landlord of Tenant's keys to
the Premises shall not constitute an acceptance or surrender of the Premises.
XXIII. Quiet Enjoyment.
Tenant shall, and may peacefully have, hold and enjoy the Premises, subject
to the terms of this Lease, provided Tenant pays the Rent and fully performs all
of its covenants and agreements. This covenant and all other covenants of
Landlord shall be binding upon Landlord and its successors only during its or
their respective periods of ownership of the Building, and shall not be a
personal covenant of Landlord or the Landlord Related Parties.
XXIV. Tenant's Right to Perform Certain Landlord Obligations.
If Landlord defaults in performing any of its non-structural repair and
maintenance obligations to the Premises as expressly stated in this Lease and
such default creates a risk of imminent injury to person or substantial property
damage or unreasonably and materially interferes with Tenant's ability to
conduct its business at the Premises, and such default is not remedied by
Landlord within 30 days after Tenant shall have given Landlord notice specifying
such default, and in the case of any such default which cannot with due
diligence and in good faith be cured within 30 days, within such additional
period, if any, as may be reasonably required to cure such default with due
diligence and in good faith (it being intended that, in connection with any such
default which is not susceptible of being cured with due diligence and in good
faith within 30 days, the time within which Landlord is required to cure such
default shall be extended for such additional period as may be necessary for the
curing thereof with due diligence and in good faith), then Tenant, without being
obligated to do so and without thereby waiving the default, shall have the
right, but not the obligation, to perform the nonstructural repair or
maintenance obligation which Landlord failed to perform as Landlord's agent. The
full amount of the cost and expense so incurred by Tenant shall be paid by
Landlord to Tenant, within 30 days after demand therefor. Tenant shall give
advance notice by telephone to the individual from time to time designated by
Landlord to receive such notice of Tenant's intention to exercise its rights
under this Article in the case of an emergency.
XXV. Holding Over.
Except for any permitted occupancy by Tenant under Article VIII, if Tenant
fails to surrender the Premises at the expiration or earlier termination of this
Lease, occupancy of the Premises after the termination or expiration shall be
that of a tenancy at sufferance. During the first 60 days of any such holdover,
Tenant shall pay an amount equal to 150% of the Base Rent and 100% of Additional
Rent due for the period immediately preceding the holdover, calculated and
payable on a per day basis for each day in such initial 60 day period that
Tenant holds over in the Premises. Thereafter, commencing on the 61st day of any
such holdover, Tenant shall pay an amount (on a per calendar month basis without
reduction for partial calendar months during the remainder of the holdover)
equal to 150% of the greater of: (1) the sum of the Base Rent and Additional
Rent due for the period immediately preceding the holdover; or (2) the fair
market gross rental for the Premises as reasonably determined by Landlord.
Notwithstanding the foregoing, Tenant shall only be liable for 100% of Base Rent
and Additional Rent on a per diem basis for the 5 day period following the
expiration of this Lease if Tenant remains in possession of the Premises for the
sole purpose of removing the Required Removables as provided in Article VII of
this Lease. No holdover by Tenant or payment by Tenant after the expiration or
early termination of this Lease shall be construed to extend the Term or prevent
Landlord from immediate recovery of possession of the Premises by summary
proceedings or otherwise. In addition to the payment of the amounts provided
above, if Landlord is unable to deliver possession of the Premises to a new
tenant, or to perform improvements for a new tenant, as a result of Tenant's
holdover and Tenant fails to vacate the Premises within 15 days after Landlord
notifies Tenant of Landlord's inability to deliver possession, or perform
improvements, Tenant shall be liable to Landlord for all damages, including,
without limitation, consequential damages, that Landlord suffers from the
holdover.
XXVI. Subordination to Mortgages; Estoppel Certificate.
Tenant accepts this Lease subject and subordinate to any mortgage(s),
deed(s) of trust, ground lease(s) or other lien(s) or encumbrances now or
subsequently arising upon the Premises, the Building, the Property or the
Project, and to renewals, modifications, refinancings and extensions thereof
(collectively referred to as a "Mortgage"). The party having the benefit of a
Mortgage shall be referred to as a "Mortgagee". This clause shall be
self-operative, but upon request from a Mortgagee, Tenant shall execute a
commercially reasonable subordination agreement in favor of the Mortgagee. In
lieu of having the Mortgage be superior to this Lease, a Mortgagee shall have
the right at any time to subordinate its Mortgage to this Lease. If requested by
a successor-in-interest to all or a part of Landlord's interest in the Lease,
Tenant shall, without charge, attorn to the successor-in-interest. Landlord and
Tenant shall each, within 10 days after receipt of a written request from the
other, execute and deliver an estoppel certificate to those parties as are
reasonably requested by the other (including a Mortgagee or prospective
purchaser). The estoppel certificate shall include a statement certifying that
this Lease is unmodified (except as identified in the estoppel certificate) and
in full force and effect, describing the dates to which Rent and other charges
have been paid, representing that, to such party's actual knowledge, there is no
default (or stating the nature of the alleged default) and indicating other
matters with respect to the Lease that may reasonably be requested.
Notwithstanding the foregoing in this Article to the contrary, as a condition
precedent to the future subordination of this Lease to a future Mortgage,
Landlord shall be required to provide Tenant with a non-disturbance,
subordination, and attornment agreement in favor of Tenant from any Mortgagee
who comes into existence after the Commencement Date. Such non-disturbance,
subordination, and attornment agreement in favor of Tenant shall provide that,
so long as Tenant is paying the Rent due under the Lease and is not otherwise in
default under the Lease beyond any applicable cure period, its right to
possession and the other terms of the Lease shall remain in full force and
effect. Such non-disturbance, subordination, and attornment agreement may
include other commercially reasonable provisions in favor of the Mortgagee,
including, without limitation, additional time on behalf of the Mortgagee to
cure defaults of the Landlord and provide that (a) neither Mortgagee nor any
successor-in-interest shall be bound by (i) any payment of the Base Rent,
Additional Rent, or other sum due under this Lease for more than 1 month in
advance or (ii) any amendment or modification of the Lease made without the
express written consent of Mortgagee or any successor-in-interest; (b) neither
Mortgagee nor any successor-in-interest will be liable for (i) any act or
omission or warranties of any prior landlord (including Landlord), but excluding
any Landlord default to the extent the same continues following transfer of
title of the Building, the Property or the Project (as the case may be) to the
Mortgagee (ii) the breach of any warranties or obligations relating to
construction of improvements on the Property or any tenant finish work performed
or to have been performed by any prior landlord (including Landlord), or (iii)
the return of any security deposit, except to the extent such deposits have been
received by Mortgagee; and (c) neither Mortgagee nor any successor-in-interest
shall be subject to any offsets or defenses which Tenant might have against any
prior landlord (including Landlord).
As of the date of this Lease, there is no Mortgage or deed of trust encumbering
Landlord's title to the Property.
XXVII. Attorneys' Fees.
If either party institutes a suit against the other for violation of or to
enforce any covenant or condition of this Lease, or if either party intervenes
in any suit in which the other is a party to enforce or protect its interest or
rights, the prevailing party shall be entitled to all of its costs and expenses,
including, without limitation, reasonable attorneys' fees.
XXVIII. Notice.
If a demand, request, approval, consent or notice (collectively referred to
as a "notice") shall or may be given to either party by the other, the notice
shall be in writing and delivered by hand or sent by registered or certified
mail with return receipt requested, or sent by overnight or same day courier
service at the party's respective Notice Address(es) set forth in Article I,
except that if Tenant has vacated the Premises (or if the Notice Address for
Tenant is other than the Premises, and Tenant has vacated such address) without
providing Landlord a new Notice Address, Landlord may serve notice in any manner
described in this Article or in any other manner permitted by Law. Each notice
shall be deemed to have been received or given on the earlier to occur of actual
delivery or the date on which delivery is refused, or, if Tenant has vacated the
Premises or the other Notice Address of Tenant without providing a new Notice
Address, 3 days after notice is deposited in the U.S. mail or with a courier
service in the manner described above. Either party may, at any time, change its
Notice Address (other than to a post office box address) by giving the other
party written notice of the new address in the manner described in this Article.
Service of any statutory notices required in connection with any rights of the
parties hereto shall be completed in a manner mandated by the applicable Law,
including California Code of Civil Procedure Section 1162 or any similar or
successor statute.
XXIX. Excepted Rights.
This Lease does not grant any rights to light or air over or about the
Building or the Project. Landlord excepts and reserves exclusively to itself the
use of: (1) roofs, (2) telephone, electrical and janitorial closets, (3)
equipment rooms, Building risers or similar areas that are used by Landlord for
the provision of Building services, (4) rights to the land and improvements
below the floor of the Premises, (5) the improvements and air rights above the
Premises, (6) the improvements and air rights outside the demising walls of the
Premises, and (7) the areas within the Premises used for the installation of
utility lines and other installations serving occupants of the Building or the
Project; provided, however, that so long as Tenant is the Sole Tenant of the
Building, clauses (1) through and including clause (3) and clause (7) shall have
no force and effect. So long as Tenant is the Sole Tenant of the 2051 Building,
the following shall apply: (a) Tenant shall have exclusive access to the
telephone, electrical, and janitorial closets and equipment rooms in the 2051
Building, subject to Landlord's rights under Article IX; (b) Tenant shall have
access to the Building's riser system or alternative space in the 2051 Building
for the installation of cabling and other equipment exclusive of any other
tenants of the Project; (c) Tenant shall be permitted access to the
telecommunications closets of the 2051 Building exclusive of any other tenants
of the Project. If Tenant is not the Sole Tenant of the 2051 Building, Tenant
shall not have exclusive access to the telephone, electrical, and janitorial
closets and equipment rooms in the 2051 Building, but, instead, Tenant shall
have access thereto to the extent reasonably necessary for Tenant's use of the
Premises. So long as Tenant is the Sole Tenant of the 2061 Building, the
following shall apply: (x) Tenant shall have exclusive access to the telephone,
electrical, and janitorial closets and equipment rooms in the 2061 Building,
subject to Landlord's rights under Article IX; (y) Tenant shall have access to
the Building's riser system or alternative space in the 2061 Building for the
installation of cabling and other equipment exclusive of any other tenants of
the Project; (z) Tenant shall be permitted access to the telecommunications
closets of the 2061 Building exclusive of any other tenants of the Project. If
Tenant is not the Sole Tenant of the 2061 Building, Tenant shall not have
exclusive access to the telephone, electrical, and janitorial closets and
equipment rooms in the 2061 Building, but, instead, Tenant shall have access
thereto to the extent reasonably necessary for Tenant's use of the Premises.
Reference is made to Section IX (Tenant's Roof Rights) of Exhibit E (Additional
Provisions) to this Lease. Upon expiration or earlier termination of this Lease
or Tenant's right to possession of the Premises, Tenant, at Tenant's cost, if
requested by Landlord, shall remove all cabling and conduit from the riser
system or other portions of the Building outside of the Premises. No sooner than
180 days prior to the Termination Date, Tenant may request in writing that
Landlord identify the then existing cabling and conduit in the riser system or
other portions of the Building outside of the Premises that is required by
Landlord to be removed by Tenant and Landlord shall respond to such request
within 60 days following Landlord's receipt thereof; provided, however, that in
the event Landlord fails to so respond to Tenant's request, Landlord shall be
deemed to require all then existing cabling and conduit in the riser system or
other portions of the Building outside of the Premises be removed. Landlord has
the right to change the Building's or Project's name or address. Landlord hereby
agrees to provide to Tenant 60 days notice prior to making any change to the
address of either the 2051 Building or the 2061 Building. Landlord also has the
right to make such other changes to the Building, Property and Project as
Landlord deems appropriate, provided the changes do not materially and adversely
affect (A) Tenant's use of the Premises for the Permitted Use, and (B) Tenant's
parking rights described in Exhibit F attached hereto. Landlord shall also have
the right (but not the obligation) to temporarily close the Building if Landlord
reasonably determines that there is an imminent danger of significant damage to
the Building or of personal injury to Landlord's employees or the occupants of
the Building. The circumstances under which Landlord may temporarily close the
Building shall include, without limitation, electrical interruptions, hurricanes
and civil disturbances. A closure of the Building under such circumstances shall
not constitute a constructive eviction nor entitle Tenant to an abatement or
reduction of Rent.
XXX. Surrender of Premises.
At the expiration or earlier termination of this Lease or Tenant's right of
possession of the Premises, Tenant shall remove Tenant's Property (defined in
Article XV) from the Premises, and quit and surrender the Premises to Landlord,
broom clean, and in good order, condition and repair, ordinary wear and tear
and, subject to any of Tenant's obligations as described in Articles XVII and
XVIII of this Lease, damage by condemnation, fire or other casualty excepted.
Tenant shall also be required to remove the Required Removables in accordance
with Article VIII and any Alterations required by Landlord to be removed (or
otherwise deemed required by Landlord to be removed) pursuant to Section IX.C of
this Lease. If Tenant fails to remove any of Tenant's Property within 5 days
after the termination of this Lease or of Tenant's right to possession,
Landlord, at Tenant's sole cost and expense, shall be entitled (but not
obligated) to remove and store Tenant's Property. Landlord shall not be
responsible for the value, preservation or safekeeping of Tenant's Property.
Tenant shall pay Landlord, upon demand, the expenses and storage charges
incurred for Tenant's Property. In addition, if Tenant fails to remove Tenant's
Property from the Premises or storage, as the case may be, within 30 days after
written notice, Landlord may deem all or any part of Tenant's Property to be
abandoned, and title to Tenant's Property shall be deemed to be immediately
vested in Landlord.
XXXI. Miscellaneous.
A. This Lease and the rights and obligations of the parties shall be
interpreted, construed and enforced in accordance with the Laws of the
State of California and Landlord and Tenant hereby irrevocably consent
to the jurisdiction and proper venue of such state. If any term or
provision of this Lease shall to any extent be invalid or
unenforceable, the remainder of this Lease shall not be affected, and
each provision of this Lease shall be valid and enforced to the
fullest extent permitted by Law. The headings and titles to the
Articles and Sections of this Lease are for convenience only and shall
have no effect on the interpretation of any part of the Lease.
B. Tenant shall not record this Lease or any memorandum without
Landlord's prior written consent.
C. Landlord and Tenant hereby waive any right to trial by jury in any
proceeding based upon a breach of this Lease.
D. Whenever a period of time is prescribed for the taking of an action by
Landlord or Tenant, the period of time for the performance of such
action shall be extended by the number of days that the performance is
actually delayed due to strikes, acts of God, shortages of labor or
materials, war, civil disturbances and other causes beyond the
reasonable control of the performing party ("Force Majeure"). However,
events of Force Majeure shall not extend any period of time for the
payment of Rent or other sums payable by either party or any period of
time for the written exercise of an option or right by either party.
E. In the event Landlord transfers title to the Buildings or the Project
or otherwise restructures the ownership and title to all or a portion
of its real property (including properties owned by any affiliate of
Landlord), Landlord shall transfer and assign all of its rights and
obligations under this Lease and in the Building, Property and/or
Project referred to herein to the transferee of Landlord's interest in
the Building, Property and/or Project, as the case may be, and upon
such transfer Landlord shall be released from any further obligations
accruing hereunder (subject to the terms and conditions of Article XXI
of this Lease), and Tenant agrees to look solely to the successor in
interest of Landlord for the performance of such obligations, provided
that, any successor pursuant to a voluntary, third-party transfer (but
not as part of an involuntary transfer resulting from a foreclosure or
deed in lieu thereof) shall have assumed Landlord's obligations under
this Lease either by contractual obligation, assumption agreement or
by operation of law, and further provided that Landlord and its
successors, as the case may be, shall remain liable after their
respective periods of ownership with respect to any sums due in
connection with a breach or default by such party that arose during
such period of ownership by such party.
F. Tenant represents that it has dealt directly with and only with the
Broker as a broker in connection with this Lease. Tenant shall
indemnify and hold Landlord and the Landlord Related Parties harmless
from all claims of any other brokers claiming to have represented
Tenant in connection with this Lease. Landlord agrees to indemnify and
hold Tenant and the Tenant Related Parties harmless from all claims of
any brokers claiming to have represented Landlord in connection with
this Lease.
Equity Office Properties Management Corp. ("EOPMC") is an affiliate of
Landlord and represents only the Landlord in this transaction. Any
assistance rendered by any agent or employee of EOPMC in connection
with this Lease or any subsequent amendment or modification hereto has
been or will be made as an accommodation to Tenant solely in
furtherance of consummating the transaction on behalf of Landlord, and
not as agent for Tenant.
G. Tenant covenants, warrants and represents that: (1) each individual
executing, attesting and/or delivering this Lease on behalf of Tenant
is authorized to do so on behalf of Tenant; (2) this Lease is binding
upon Tenant; and (3) Tenant is duly organized and legally existing in
the state of its organization and is qualified to do business in the
State of California. If there is more than one Tenant, or if Tenant is
comprised of more than one party or entity, the obligations imposed
upon Tenant shall be joint and several obligations of all the parties
and entities. Notices, payments and agreements given or made by, with
or to any one person or entity shall be deemed to have been given or
made by, with and to all of them.
H. Time is of the essence with respect to Tenant's exercise of any
expansion, renewal or extension rights granted to Tenant. This Lease
shall create only the relationship of landlord and tenant between the
parties, and not a partnership, joint venture or any other
relationship. This Lease and the covenants and conditions in this
Lease shall inure only to the benefit of and be binding only upon
Landlord and Tenant and their permitted successors and assigns.
I. The expiration of the Term, whether by lapse of time or otherwise,
shall not relieve either party of any obligations which accrued prior
to or which may continue to accrue after the expiration or early
termination of this Lease. Without limiting the scope of the prior
sentence, it is agreed that Tenant's obligations under Articles IV,
VIII, XIV, XX, XXV and XXX and Landlord's obligations under Article
XIV shall survive the expiration or early termination of this Lease.
J. Landlord has delivered a copy of this Lease to Tenant for Tenant's
review only, and the delivery of it does not constitute an offer to
Tenant or an option. This Lease shall not be effective against any
party hereto until an original copy of this Lease has been signed and
delivered by all parties hereto.
K. All understandings and agreements previously made between the parties
are superseded by this Lease, and neither party is relying upon any
warranty, statement or representation not contained in this Lease.
This Lease may be modified only by a written agreement signed by
Landlord and Tenant.
L. Except to the extent prohibited by any applicable Securities and
Exchange Commission requirements, or any applicable Federal or State
securities laws, Tenant, within 15 days after request, shall provide
Landlord with its most recent audited financial statement and such
other information as Landlord may reasonably request in order to
create a "business profile" of Tenant and determine Tenant's ability
to fulfill its obligations under this Lease. Landlord, however, shall
not require Tenant to provide such information unless Landlord is
requested to produce the information in connection with a proposed
financing or sale of the Building. Upon written request by Tenant,
Landlord shall enter into a commercially reasonable confidentiality
agreement covering any confidential information that is disclosed by
Tenant.
M. If Tenant fails to perform any of its obligations under this Lease
within any period required under this Lease, Landlord shall have the
right, but not the obligation, with 3 days prior written notice
(except in the case of any dangerous condition or emergency, in which
case no notice shall be required) to perform or cause to be performed
such obligations on behalf and at the expense of Tenant, and Tenant
agrees to reimburse Landlord, as Additional Rent, upon demand, for any
expense which Landlord may incur in thus affecting compliance with
Tenant's obligations under this Lease together with interest at the
lesser of the maximum rate permitted by Law or the Prime Rate (as
defined in Article XX) plus 4% per annum.
N. This Lease shall be subject to the terms and conditions of (a)
Declaration Of Covenants, Conditions And Restrictions Of Shoreline
Technology Park ("Declaration") imposing certain covenants, conditions
and restrictions on the use and management of Shoreline Technology
Park, (b) the Bylaws ("Bylaws") of Shoreline Park Association
("Association"), a California nonprofit mutual benefit corporation
charged with the responsibility of managing Shoreline Technology Park
in accordance with the Declaration, Articles Of Incorporation of the
Association ("Articles") and the Bylaws, and (c) the rules ("Rules")
adopted from time to time by the Association in accordance with the
Declaration providing for restrictions on the use of Shoreline
Technology Park. The Declaration, Bylaws, Articles and Rules are
collectively referred to herein as the "Governing Documents". Any
failure to comply with the Governing Documents (after the expiration
of the applicable notice and cure period hereunder) shall be a default
under the terms of this Lease.
XXXII. Entire Agreement.
This Lease, including the following exhibits and attachments which are
hereby incorporated into and made a part of this Lease, constitute the entire
agreement between the parties and supersede all prior agreements and
understandings related to the Premises, including all lease proposals, letters
of intent and other documents: Exhibit A (Outline and Location of Premises),
Exhibit B (Building Rules and Regulations), Exhibit C (Commencement Letter),
Exhibit D (Work Letter), Exhibit E (Additional Provisions), Exhibit F (Parking
Agreement), Exhibit G (Form of Letter of Credit); and Exhibit H (Offering
Space).
[SIGNATURES ARE ON FOLLOWING PAGE]
Landlord and Tenant have executed this Lease as of the day and year first
above written.
LANDLORD:
CA-SHORELINE TECHNOLOGY PARK LIMITED PARTNERSHIP,
a Delaware limited partnership
By: EOM GP, L.L.C., a Delaware limited liability
company, its general partner
By: Equity Office Management, L.L.C.,
a Delaware limited liability company,
its non-member manager
By: /s/ Xxxx X. Xxxxxxxx
--------------------
Name: Xxxx X. Xxxxxxxx
Title: Regional Senior Vice President
TENANT:
ACTEL CORPORATION, a California corporation
By: /s/ Xxx X. Xxxxxxxx
-------------------
Name: Xxx X. Xxxxxxxx
Title: VP of Finance, CFO
By: /s/ Xxxxx X. Van De Hey
-----------------------
Name: Xxxxx X. Van De Hey
Title: VP & General Counsel and Secretary
