Building Lease Agreements between WHTS Freedom Circle Partners LLC, Landlord
and PMC-Sierra, Inc., Tenant, with amendment dated April 7, 2000 and addition
dated July 20, 2000.
LEASE
WHTS FREEDOM CIRCLE PARTNERS, L.L.C.,
a Delaware limited liability company,
Landlord
and
PMC - SIERRA, INC.,
a Delaware corporation,
Tenant
for
Mission Towers I
3975 Freedom Circle Drive
Santa Clara, California
February ____, 2000
TABLE OF CONTENTS
Page
ARTICLE 1 BASIC LEASE PROVISIONS...........................................
ARTICLE 2 PREMISES, TERM, RENT.............................................
ARTICLE 3 USE AND OCCUPANCY................................................
ARTICLE 4 CONDITION OF THE PREMISES........................................
ARTICLE 5 ALTERATIONS......................................................
ARTICLE 6 REPAIRS..........................................................
ARTICLE 7 INCREASES IN TAXES AND OPERATING EXPENSES........................
ARTICLE 8 REQUIREMENTS OF LAW..............................................
ARTICLE 9 SUBORDINATION....................................................
ARTICLE 10 SERVICES........................................................
ARTICLE 11 INSURANCE; PROPERTY LOSS OR DAMAGE..............................
ARTICLE 12 EMINENT DOMAIN..................................................
ARTICLE 13 ASSIGNMENT AND SUBLETTING.......................................
ARTICLE 14 ACCESS TO PREMISES..............................................
ARTICLE 15 DEFAULT.........................................................
ARTICLE 16 LANDLORD'S RIGHT TO CURE; FEES AND EXPENSES.....................
ARTICLE 17 NO REPRESENTATIONS BY LANDLORD; LANDLORD'S APPROVAL.............
ARTICLE 18 END OF TERM.....................................................
ARTICLE 19 QUIET ENJOYMENT.................................................
ARTICLE 20 NO SURRENDER; NO WAIVER.........................................
ARTICLE 21 WAIVER OF TRIAL BY JURY; COUNTERCLAIM...........................
ARTICLE 22 NOTICES.........................................................
ARTICLE 23 RULES AND REGULATIONS...........................................
ARTICLE 24 BROKER..........................................................
ARTICLE 25 INDEMNITY.......................................................
ARTICLE 26 MISCELLANEOUS...................................................
ARTICLE 27 SECURITY DEPOSIT................................................
ARTICLE 28 PARKING.........................................................
ARTICLE 29 RENEWAL TERM....................................................
ARTICLE 30 ROOF SPACE AND SATELLITE ANTENNA................................
ARTICLE 31 GENERATOR.......................................................
ARTICLE 32 SIGNAGE.........................................................
Schedule of Exhibits
Exhibit A-1 Floor Plan of the First Floor
Exhibit A-2 Floor Plan of the Second Floor
Exhibit A-3 Floor Plan of the Third Floor
Exhibit A-4 Floor Plan of the Fourth Floor
Exhibit A-5 Floor Plan of the Fifth Floor
Exhibit B Definitions
Exhibit C Work Letter
Exhibit D Design Standards
Exhibit E Cleaning Specifications
Exhibit F Rules and Regulations
Exhibit G Development Specifications
Exhibit H Base Building Work
Exhibit I Form of Letter of Credit
LEASE
THIS LEASE is made as of the ____ day of February, 2000
("Effective Date"), between WHTS freedom circle towers, l.l.c. ("Landlord"), a
Delaware limited liability company, and pmc - sierra, inc. ("Tenant"), a
Delaware corporation.
Landlord and Tenant hereby agree as follows:
ARTICLE 1
BASIC LEASE PROVISIONS
PREMISES The entire first, second, third, fourth and fifth floors of
the Building, as more particularly shown on Exhibits A-1,
A-2, A-3, A-4 and A-5.
BUILDING The building, fixtures, equipment and other improvements and
appurtenances now located or hereafter erected, located or
placed upon the land known as Mission Towers I, 3975 Freedom
Circle Drive, Santa Clara, California.
BUILDING TWO The building, fixtures, equipment and other improvements
and appurtenances now located or hereafter erected, located
or placed upon the land known as Mission Towers II, 3985
Freedom Circle Drive, Santa Clara, California.
PROJECT The Building, Building Two and the Garage together with all
related Common Areas.
GARAGE The parking structure, fixtures and other improvements and
appurtenances now located or hereafter erected, located or
placed upon the land known as Mission Towers I, 3975 Freedom
Circle Drive, Santa Clara, California.
REAL PROPERTY The Building, together with the plot of land upon which it
stands.
SCHEDULED
DELIVERY DATE July 1, 2000.
SCHEDULED
COMMENCEMENT DATE October 1, 2000.
COMMENCEMENT DATE The later to occur of (a) the Scheduled Commencement Date,
and (b) the 90th calendar day following the date of
Landlord's tender of possession of the Premises with the
Base Building Work Substantially Complete.
RENT COMMENCEMENT
DATE The Commencement Date.
EXPIRATION DATE The date which is the last day of the month in which the
10th anniversary of the Commencement Date occurs, or the
last day of any renewal or extended term, if the Term of
this Lease is extended in accordance with any express
provision hereof.
TERM The period commencing on the Commencement Date and ending on
the Expiration Date.
PERMITTED USES Offices for the transaction of Tenant's business in keeping
with Comparable Buildings, including the operation of an
electronic verification lab within the Premises and a
shipping and receiving area adjacent to the Building loading
dock.
TENANT'S
PROPORTIONATE
SHARE 38.6926%
AREA OF BUILDING 282,084 rentable square feet (253,901 usable square feet).
AREA OF PREMISES Floor 1: 12,763 rentable square feet
(11,488 usable square feet).
Floor 2: 21,813 rentable square feet
(19,634 usable square feet).
Floor 3: 24,856 rentable square feet
(22,373 usable square feet).
Floor 4: 24,856 rentable square feet
(22,373 usable square feet).
Floor 5: 24,856 rentable square feet
(22,373 usable square feet)
Total: 109,146 rentable square feet
(98,241 usable square feet).
FIXED RENT Period Per Annum Per Month
------ --------- ---------
Year 1 $3,777,465.60 $314,788.80
Year 2 $3,909,676.92 $325,806.41
Year 3 $4,046,515.68 $337,209.64
Year 4 $4,188,143.52 $349,011.96
Year 5 $4,334,728.68 $361,227.39
Year 6 $4,486,444.08 $373,870.34
Year 7 $4,643,469.72 $386,955.81
Year 8 $4,805,991.12 $400,499.26
Year 9 $4,974,200.88 $414,516.74
Year 10 $5,148,297.84 $429,024.82
ADDITIONAL RENT All sums other than Fixed Rent payable by Tenant to
Landlord under this Lease, including Tenant's Tax Payment,
Tenant's Operating Payment, late charges, overtime or excess
service charges, damages, and interest and other costs
related to Tenant's failure to perform any of its
obligations under this Lease.
RENT Fixed Rent and Additional Rent, collectively.
INTEREST RATE The lesser of (i) 4% per annum above the then-current
Base Rate, and (ii) the maximum rate permitted by applicable
law.
SECURITY DEPOSIT $2,500,000, subject to reduction in accordance with Section
27.5.
TENANT'S ADDRESS
FOR NOTICES Until Tenant commences business operations
from the Premises:
PMC - Sierra, Inc.
8555 Baxter Place, Suite 105
Burnaby, British Columbia V5A4V7
Canada
Attn: Geraldine Jones
Thereafter:
PMC - Sierra, Inc.
3975 Freedom Circle Drive
Santa Clara, California 95054
Attn: Vice President - Administration
LANDLORD'S ADDRESS
FOR NOTICES WHTS Freedom Circle Partners, L.L.C.
c/o Tishman Speyer Properties, L.P.
444 Castro Street
Mountain View, California 94041
Attn: Property Manager
Copies to:
WHTS Freedom Circle Partners, L.L.C.
c/o Tishman Speyer Properties, L.P.
520 Madison Avenue
New York, New York 10022
Attn: Chief Financial Officer
and:
Tishman Speyer Properties, L.P.
520 Madison Avenue
New York, New York 10022
Attn: General Counsel
and:
Goldman, Sachs & Co.
100 Crescent Court, Suite 1000
Dallas, Texas 75201
Attention: Mr. Paul Milosevich
and:
Whitehall Street Real Estate Limited Partnership IX
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Mr. Steven M. Feldman
TENANT'S BROKER Colliers International.
LANDLORD'S BROKER Cornish & Carey Commercial
LANDLORD'S AGENT Tishman Speyer Properties, L.P. or any other
person designated at any time and from
time to time by Landlord as Landlord's Agent.
Landlord's contribution $3,274,380.00.
All capitalized terms used in this Lease without definition are defined in
Exhibit B.
ARTICLE 2
PREMISES, TERM, RENT
Lease of Premises. Subject to the terms of this Lease, Landlord leases
to Tenant and Tenant leases from Landlord the Premises for the Term. In
addition, Landlord grants to Tenant the right to use, on a non-exclusive basis
and in common with other tenants, the Common Areas.
Rentable Area. Subject to adjustment as herein provided, the rentable
square footage of the Premises and the Building are agreed to be the numbers of
square feet respectively specified in the Basic Lease Information. The "usable
area" of the Premises and Building has been calculated and determined in
accordance with the "Standard Method for Measuring Floor Area in Office
Buildings," ANSI/BOMA Z65.1-1996, as published by the Building Owners and
Managers Association International (the "BOMA Standard"). The rentable square
footage of the Building and the Premises are determined by multiplying the
usable area of the Premises and Building by 111.10% (the "Load Factor"), which
Load Factor is agreed to by Landlord and Tenant. If Tenant wishes to verify that
the usable area of the Premises and the Building (as determined in accordance
with BOMA Standards) are as set forth in the Basic Lease Information, then at
any time prior to the Commencement Date Tenant shall have the right to cause an
independent architect or space planner to verify Landlord's square footage
numbers, which determination shall be subject to Landlord's reasonable approval.
If the final rentable square footage of the Premises as so determined is
different then as set forth in the Basic Lease Information, the Fixed Rent,
Tenant's Proportionate Share and Landlord's Contribution shall be appropriately
adjusted.
Commencement Date. Upon the Effective Date, the terms and provisions
hereof shall be fully binding on Landlord and Tenant prior to the occurrence of
the Commencement Date. The Term of this Lease shall commence on the Commencement
Date. Unless sooner terminated or extended as hereinafter provided, the Term
shall end on the Expiration Date. If Landlord does not tender possession of the
Premises to Tenant on or before the Scheduled Delivery Date, for any reason
whatsoever, Landlord shall not be liable for any damage thereby, this Lease
shall not be void or voidable thereby, and the Term shall not commence until the
90th calendar day after Landlord tenders possession of the Premises to Tenant in
the condition required by Article 4. No failure to tender possession of the
Premises to Tenant on or before the Scheduled Delivery Date shall affect any
other obligations of Tenant hereunder; provided, however, that if Landlord fails
to tender possession of the Premises to Tenant on or before September 1, 2000,
then, except to the extent caused by Unavoidable Delays, Tenant shall receive
for each day of delay thereafter with respect to the Premises a credit against
Fixed Rent in an amount equal to $8,000.00 per day. Landlord shall use its
commercially reasonable efforts to cause the Base Building Work to be
Substantially Complete on or before the Commencement Date. The Base Building
Work shall be deemed to be "Substantially Complete" upon the date by which there
remains no incomplete or defective item of the Base Building Work that would
materially adversely affect Tenant's intended use of the Premises and that
Landlord has obtained (or as of the Commencement Date will have obtained) all
necessary permits and approvals from Governmental Authorities with respect to
the Base Building Work required for the legal occupancy of the Premises for the
Permitted Use (subject to Substantial Completion by Tenant of the Initial
Installations). Once the Commencement Date is determined, Landlord and Tenant
shall execute an agreement stating the Commencement Date and Expiration Date,
but the failure to do so will not affect the determination of such dates.
Payment of Rent. Tenant shall pay to Landlord, without notice or
demand, and without any set-off, counterclaim, abatement or deduction
whatsoever, except as may be expressly set forth in this Lease, in lawful money
of the United States by wire transfer of funds or by check drawn upon a bank
approved by Landlord, (i) Fixed Rent in equal monthly installments, in advance,
on the first day of each month during the Term, commencing on the Rent
Commencement Date, and (ii) Additional Rent, at the times and in the manner set
forth in this Lease.
First Month's Rent. Tenant shall pay one month's Fixed Rent upon the
execution of this Lease ("Advance Rent"). If the Rent Commencement Date is on
the first day of a month, the Advance Rent shall be credited towards the first
month's Fixed Rent payment. If the Rent Commencement Date is not the first day
of a month, then on the Rent Commencement Date Tenant shall pay Fixed Rent for
the period from the Rent Commencement Date through the last day of such month,
and the Advance Rent shall be credited towards Fixed Rent for the next
succeeding calendar month.
ARTICLE 3
USE AND OCCUPANCY
Tenant shall use and occupy the Premises for the Permitted
Uses and for no other purpose. Tenant shall not use or occupy or permit the use
or occupancy of any part of the Premises in a manner constituting a Prohibited
Use. If Tenant uses the Premises for a purpose constituting a Prohibited Use,
violating any Requirement, or causing the Building to be in violation of any
Requirement, then Tenant shall promptly discontinue such use upon notice of such
violation. Tenant, at its expense, shall procure and at all times maintain and
comply with the terms and conditions of all licenses and permits required for
the lawful conduct of the Permitted Uses in the Premises.
ARTICLE 4
CONDITION OF THE PREMISES
As of the Effective Date, Landlord is causing construction of
the core and shell of the Building and Garage. Attached hereto as Exhibit G and
incorporated herein by reference is a list of the drawings and specifications
for the design and construction of the Building (collectively the "Development
Specifications"). The Development Specifications have previously been made
available to Tenant for its review. Landlord, at its sole cost and expense,
shall complete construction of the Building: (a) in substantial accordance with
the Development Specifications; and (b) in a good workmanlike manner, to a
general standard of construction equal to or greater than that of other
Comparable Buildings. At the time of Landlord's tender of possession of the
Premises, those portions of the Base Building Work, as more particularly
described on Exhibit H, which are necessary to be completed for the orderly and
effective construction of the Initial Installations shall be Substantially
Complete. Subject to the foregoing, Tenant shall: (a) accept possession of the
Premises in its then "As-Is" condition, and (b) except for Landlord's
Contribution, Landlord has no obligation to perform any work, supply any
materials, incur any expense or make any alterations or improvements to prepare
the Premises for Tenant's occupancy. Tenant's occupancy of any part of the
Premises shall be conclusive evidence, as against Tenant, that Landlord has
Substantially Completed the Base Building Work, Tenant has accepted possession
of the Premises in its then current condition and at the time such possession
was taken, the Premises and the Building were in a good and satisfactory
condition as required by this Lease except for latent defects in the Base
Building Work not visually discoverable by Tenant upon a reasonably diligent
inspection and subject to the completion by Landlord of any "punch list" items
or similar corrective work; provided, however, that Landlord shall have no
obligation to correct latent defects not reported to Landlord in writing within
12 months of the acceptance of the Premises by Tenant. Landlord, at Landlord's
sole cost and expense and not as a deduction or offset from the amount of
Landlord's Contribution or as part of Operating Expenses, shall be responsible
for ensuring that, as of the Commencement Date, the Base Building Work
(including the roof and all Building Systems) is in good working condition and
repair, free from any known code violations and in compliance with all
Requirements. In addition, in accordance with the terms and provisions of
Section 6.1 below, Landlord shall be responsible for the correction of any
latent or patent defects in the Landlord Repair Areas (as hereinafter defined)
at any time during this Term of the Lease or any extension thereof. Landlord
agrees to exercise commercially reasonable efforts to enforce any and all
construction, design and materials warranties obtained by Landlord with respect
to the Base Building Work ("Construction Warranties"). No provision of this
Article 4 shall diminish Landlord's obligations under Section 6.1 below.
ARTICLE 5
ALTERATIONS
Tenant's Alterations. (a) Tenant shall not make any alterations,
additions or other physical changes in or about the Premises (collectively,
"Alterations") other than decorative Alterations such as painting, wall
coverings and floor coverings (collectively, "Decorative Alterations"), without
Landlord's prior consent, which consent shall not be unreasonably withheld so
long as such Alterations (i) are non-structural and do not affect any Building
Systems, (ii) affect only the Premises and are not visible from outside of the
Premises, (iii) do not affect the certificate of occupancy issued for the
Building or the Premises, and (iv) do not violate any Requirement.
Notwithstanding the foregoing, Tenant may perform Alterations without Landlord's
prior approval, if the cost to perform such work does not exceed $10,000 and
provided the same (i) are non-structural and do not affect any Building Systems,
(ii) affect only the Premises and are not visible from outside of the Premises,
(iii) do not affect the certificate of occupancy issued for the Building or the
Premises, and (iv) do not violate any Requirement.
Plans and Specifications. Prior to making any Alterations,
Tenant, at its expense, shall (i) submit to Landlord for its approval, detailed
plans and specifications ("Plans") of each proposed Alteration (other than
Decorative Alterations), and with respect to any Alteration affecting any
Building System, evidence that the Alteration has been designed by, or reviewed
and approved by, Landlord's designated engineer for the affected Building
System, (ii) obtain all permits, approvals and certificates required by any
Governmental Authorities, (iii) furnish to Landlord duplicate original policies
or certificates of worker's compensation (covering all persons to be employed by
Tenant, and Tenant's contractors and subcontractors in connection with such
Alteration) and commercial general liability (including property damage
coverage) insurance and Builder's Risk coverage (as described in Article 11) all
in such form, with such companies, for such periods and in such amounts as
Landlord may reasonably require, naming Landlord, Landlord's Agent any Lessor
and any Mortgagee as additional insureds, and (iv) with respect to any
Alterations individually costing at least $500,000, furnish to Landlord
reasonably satisfactory evidence of Tenant's ability to complete and to fully
pay for such Alterations (other than the Initial Installations and Decorative
Alterations). Tenant shall give Landlord not less than 5 Business Days' notice
prior to performing any Decorative Alteration, which notice shall contain a
description of such Decorative Alteration.
Governmental Approvals. Tenant, at its expense, shall, as and
when required, promptly obtain certificates of partial and final approval of
such Alterations required by any Governmental Authority and shall furnish
Landlord with copies thereof, together with "as-built" Plans for such
Alterations prepared on an AutoCAD Computer Assisted Drafting and Design System
(or such other system or medium as Landlord may accept), using naming
conventions issued by the American Institute of Architects in June, 1990 (or
such other naming conventions as Landlord may accept) and magnetic computer
media of such record drawings and specifications translated in DFX format or
another format acceptable to Landlord.
Manner and Quality of Alterations. All Alterations shall be performed
(a) in a good and workmanlike manner and free from defects, (b) substantially in
accordance with the Plans, and by contractors approved by Landlord, and (c) in
compliance with all Requirements, the terms of this Lease and all construction
procedures and regulations then prescribed by Landlord. All materials and
equipment shall be of first quality and at least equal to the applicable
standards for the Building then established by Landlord, and no such materials
or equipment (other than Tenant's Property) shall be subject to any lien or
other encumbrance.
Removal of Tenant's Property. Tenant's Property shall remain the
property of Tenant and Tenant may remove the same at any time on or before the
Expiration Date. On or prior to the Expiration Date, Tenant shall, unless
otherwise directed by Landlord, at Tenant's expense, remove any Specialty
Alteration and close up any slab penetrations in the Premises. Tenant shall
repair and restore, in a good and workmanlike manner, any damage to the Premises
or the Building caused by Tenant's removal of any Specialty Alterations or
Tenant's Property or by the closing of any slab penetrations, and upon default
thereof, Tenant shall reimburse Landlord, on demand, for Landlord's cost of
repairing and restoring such damage. Any Above Building Standard Installations
(as hereinafter defined) or Tenant's Property not so removed shall be deemed
abandoned and Landlord may remove and dispose of same, and repair and restore
any damage caused thereby, at Tenant's cost and without accountability to
Tenant. Tenant shall not be required to remove any of the Initial Installations
or any subsequent Alterations unless, in either case, the same constitute
Specialty Alterations which Landlord advises Tenant must be removed at the time
consent thereto was granted. Concurrently with the issuance of its consent to
the performance of the Initial Installations or of any Alterations, Landlord
will notify Tenant whether any such component of the Initial Installations or
any such Alterations, or any material component thereof (including, without
limitation, any oversized or exposed conduit) not expressly included within the
definition of Specialty Alterations is considered by Landlord to be such.
Mechanic's Liens. Tenant, at its expense, shall discharge any lien or
charge filed against the Real Property in connection with any work done or
claimed to have been done by or on behalf of, or materials furnished or claimed
to have been furnished to, Tenant, within 10 days after Tenant's receipt of
notice thereof by payment, filing the bond required by law or otherwise in
accordance with law.
Labor Relations. Tenant shall not employ, or permit the employment of,
any contractor, mechanic or laborer, or permit any materials to be delivered to
or used in the Building, if, in Landlord's sole judgment, such employment,
delivery or use will interfere or cause any conflict with other contractors,
mechanics or laborers engaged in the construction, maintenance or operation of
the Building by Landlord, Tenant or others. If such interference or conflict
occurs, upon Landlord's request, Tenant shall cause all contractors, mechanics
or laborers causing such interference or conflict to leave the Building
immediately.
Tenant's Costs. Tenant shall pay promptly to Landlord, upon demand, all
out-of-pocket costs actually incurred by Landlord in connection with Tenant's
Alterations, including costs incurred in connection with (a) Landlord's review
of the Alterations (including review of requests for approval thereof) which
costs reimbursable by Tenant shall not exceed $1,500 per request for consent and
(b) the provision of Building personnel during the performance of any
Alteration, to operate elevators or otherwise to facilitate Tenant's
Alterations. In addition, if Tenant's Alterations cost more than $100,000.00,
Tenant shall pay to Landlord, upon demand, an administrative fee in an amount
equal to 1% of the total cost of such Alterations.
Tenant's Equipment. Tenant shall provide notice to Landlord prior to
moving any heavy machinery, heavy equipment, freight, bulky matter or fixtures
(collectively, "Equipment") into or out of the Building and shall pay to
Landlord any costs actually incurred by Landlord in connection therewith. If
such Equipment requires special handling, Tenant agrees (a) to employ only
persons holding all necessary licenses to perform such work, (b) all work
performed in connection therewith shall comply with all applicable Requirements
and (c) such work shall be done only during hours designated by Landlord.
Legal Compliance. The approval of Plans, or consent by Landlord to the
making of any Alterations, does not constitute Landlord's representation that
such Plans or Alterations comply with any Requirements. Landlord shall not be
liable to Tenant or any other party in connection with Landlord's approval of
any Plans, or Landlord's consent to Tenant's performing any Alterations. If any
Alterations made by or on behalf of Tenant, require Landlord to make any
alterations or improvements to any part of the Building in order to comply with
any Requirements, Tenant shall pay all costs and expenses incurred by Landlord
in connection with such alterations or improvements.
Floor Load. Tenant shall not place a load upon any floor of the
Premises that exceeds 100 pounds per square foot "live load" on the ground floor
and 80 pounds per square foot "live load" on the upper floors. Landlord reserves
the right to reasonably designate the position of all Equipment which Tenant
wishes to place within the Premises, and to place reasonable limitations on the
weight thereof consistent with the floor loads described above.
ARTICLE 6
REPAIRS
Landlord's Repair and Maintenance. Landlord shall operate, maintain
and, except as provided in Section 6.2 hereof, make all necessary repairs (both
structural and nonstructural) to the structural portions of the Building and the
Premises (including without limitation, the roof, foundation, floor slab,
exterior walls and load bearing walls), (ii) the Building Systems, and (iii) the
Common Areas, in conformance with standards applicable to Comparable Buildings
(collectively, the "Landlord Repair Areas").
Tenant's Repair and Maintenance. Tenant shall promptly, at its expense
and in compliance with Article 5, make all nonstructural repairs to the Premises
and the fixtures, equipment and/or and appurtenances therein (collectively,
"Building Fixtures") as and when needed to preserve the Premises in good working
order and condition, except for reasonable wear and tear and damage from
condemnation or casualty. All damage to the Building or to any portion thereof,
or to any Building Fixtures requiring structural or nonstructural repair caused
by or resulting from any act, omission, neglect or improper conduct of or the
moving of Tenant's Property or Equipment into, within or out of the Premises by
a Tenant Party, shall be repaired at Tenant's expense by (i) Tenant, if the
required repairs are nonstructural in nature and do not affect any Building
System, or (ii) Landlord, if the required repairs are structural in nature,
involve replacement of exterior window glass or affect any Building System. All
Tenant repairs shall be of good quality utilizing new construction materials. If
Tenant fails after 10 days' notice (or such shorter period as may be required in
an emergency) to proceed with due diligence to make any repairs required to be
made by Tenant, Landlord may make such repairs and all costs and expenses
incurred by Landlord on account thereof, plus interest thereon at the Interest
Rate, shall be paid by Tenant within 10 days after delivery of an invoice
therefor.
Interruptions Due to Repairs. Landlord reserves the right to make all
changes, alterations, additions, improvements, repairs or replacements to the
Real Property, including the Building Systems (collectively, "Restorative
Work"), as Landlord deems necessary or desirable, provided that in no event
shall the level of any Building service decrease in any material respect from
the level required of Landlord in this Lease as a result thereof (other than
temporary changes in the level of such services during the performance of any
such Restorative Work). Landlord shall use reasonable efforts to minimize
interference with Tenant's use and occupancy of the Premises during the
performance of such Restorative Work. There shall be no Rent abatement or
allowance to Tenant for a diminution of rental value, no actual or constructive
eviction of Tenant, in whole or in part, no relief from any of Tenant's other
obligations under this Lease, and no liability on the part of Landlord by reason
of inconvenience, annoyance or injury to business arising from Landlord, Tenant
or others performing, or failing to perform, any Restorative Work. Landlord
shall use its commercially reasonable efforts to restore any interruption of
access, use or services as soon as reasonably possible. Notwithstanding any
contrary provision of this Lease, if Tenant is prevented from using for the
conduct of its business, and does not use for the conduct of its business, the
Premises or any material portion thereof, for 15 consecutive Business Days (the
"Eligibility Period") as a result of (i) any construction, repair, maintenance
or alteration performed by Landlord after the Commencement Date and not
necessitated by the negligence or willful misconduct of any Tenant Party, or
(ii) the failure in any material respect of Landlord or its agents or
contractors to provide to the Premises any of the utilities and services
required to be provided under this Lease (including Article 10 below) and not
caused by the negligence or willful misconduct of any Tenant Party or otherwise
due to the occurrence of a casualty or condemnation, (iii) any failure to
provide access to the Premises and not caused by the negligence or willful
misconduct of any Tenant Party or otherwise due to the occurrence of a casualty
or condemnation, or (iv) because of the presence of Hazardous Materials in, on
or around the Building, the Premises or the Real Property which were not caused
or introduced by any Tenant Party and which Hazardous Materials pose a material
and significant health risk to occupants of the Premises, then, in any and all
such events, Tenant's obligation to pay Fixed Rent, Tenant's Operating Payment
and Tenant's Tax Payment shall be abated or reduced, as the case may be, from
and after the first (1st) day following the last day of the Eligibility Period
and continuing for such time that Tenant continues to be so prevented from using
for the conduct of its business, and does not so use for the conduct of its
business, the Premises or a material portion thereof, in the proportion that the
rentable square feet of the portion of the Premises that Tenant is prevented
from using, and does not so use, bears to the total rentable square feet of the
Premises.
ARTICLE 7
INCREASES IN TAXES AND OPERATING EXPENSES
Definitions. For the purposes of this Article 7, the following terms
shall have the meanings set forth below:
"Assessed Valuation" shall mean the amount for which the Real
Property is assessed by the County Assessor of Santa Clara for the purpose of
imposition of Taxes.
"Comparison Year" shall mean any calendar year all or any
portion of which occurs during the Term.
"Operating Expenses" shall mean the aggregate of all costs and
expenses, without duplication, paid or incurred by or on behalf of Landlord in
connection with the ownership, operation, repair and maintenance of the Real
Property, including capital improvements only if such capital improvement either
(i) is reasonably intended to result in a reduction in Operating Expenses (as
for example, a labor-saving improvement) provided, the amount included in
Operating Expenses in any Comparison Year shall not exceed an amount equal to
the savings reasonably anticipated to result from the installation and operation
of such improvement, and/or (ii) is made during any Comparison Year in
compliance with Requirements. Such capital improvements shall be amortized (with
interest at the Base Rate) on a straight-line basis over the useful life of such
capital improvement as Landlord shall reasonably determine, and the amount
included in Operating Expenses in any Comparison Year shall be equal to the
annual amortized amount. Operating Expenses shall not include any Excluded
Expenses. If during all or part of any Comparison Year, Landlord shall not
furnish any particular item(s) of work or service (which would otherwise
constitute an Operating Expense) to any leasable portions of the Building for
any reason but continues to furnish or provide such work or services to the
Premises, then, for purposes of computing Operating Expenses for such period,
the amount included in Operating Expenses for such period shall be increased by
an amount equal to the costs and expenses that would have been reasonably
incurred by Landlord during such period if Landlord had furnished such item(s)
of work or service to such portion of the Building. In determining the amount of
Operating Expenses for any Comparison Year, if less than 95% of the Building
rentable area is occupied by tenants at any time during any such Comparison
Year, Operating Expenses shall be determined for such Comparison Year to be an
amount equal to the like expenses which would normally be expected to be
incurred had such occupancy been 95% throughout such Comparison Year.
Tenant understands and acknowledges that, from time to time
during the Term, the Building may be operated by Landlord as part of the
Project, comprising the Building, the Garage and Common Areas adjacent to the
Building and Building Two. For purposes of this Article 7, the Building and
Building Two are sometimes hereinafter jointly referred to as the "Project."
Landlord shall have the right, from time to time during the Term, to operate the
Project in an integrated fashion, and to include within Operating Expenses and
Real Property Taxes a reasonable allocation of the amount of Operating Expenses
and Real Property Taxes paid or incurred by Landlord with respect to the
Project. During such periods of time as Landlord so elects, "Tenant's
Proportionate Share" shall mean the product of (a) the rentable area of the
Premises, and (b) a fraction, the numerator of which is one and the denominator
of which is the rentable area of the Project. In addition, during such periods
of time as Landlord does not elect to determine Operating Expenses and Real
Property Taxes on a Project-wide basis, Operating Expenses and Real Estate Taxes
for the Building shall include a reasonable allocation of such costs and
expenses as Landlord may incur in the maintenance, operation, administration and
repair of the Garage and the Common Areas servicing the Project.
"Statement" shall mean a reasonably detailed statement (by
major categories of expenditures) containing the amount of Operating Expenses
and Taxes for any Comparison Year and the amount of Tenant's Operating Payment
and Tax Payment for any such Comparison Year, including a summary of the
calculations used to arrive at such amounts.
"Taxes" shall mean (i) all real estate taxes, assessments,
sewer and water rents, rates and charges and other governmental levies,
impositions or charges, whether general, special, ordinary, extraordinary,
foreseen or unforeseen, which may be assessed, levied or imposed upon all or any
part of the Real Property, and (ii) all expenses (including reasonable
attorneys' fees and disbursements and experts' and other witnesses' fees)
incurred in contesting any of the foregoing or the Assessed Valuation of the
Real Property. Taxes shall not include (x) interest or penalties incurred by
Landlord as a result of Landlord's late payment of Taxes, or (y) franchise or
net income taxes imposed upon Landlord. If Landlord elects to pay any assessment
in annual installments, then (i) such assessment shall be deemed to have been so
divided and to be payable in the maximum number of installments permitted by
law, and (ii) there shall be deemed included in Taxes for each Comparison Year
the installments of such assessment becoming payable during such Comparison
Year, together with interest payable to the taxing authority during such
Comparison Year on such installments and on all installments thereafter becoming
due as provided by law, all as if such assessment had been so divided. If at any
time the methods of taxation prevailing on the Effective Date shall be altered
so that in lieu of or as an addition to the whole or any part of Taxes, there
shall be assessed, levied or imposed (1) a tax, assessment, levy, imposition or
charge based on the income or rents received from the Real Property whether or
not wholly or partially as a capital levy or otherwise, (2) a tax, assessment,
levy, imposition or charge measured by or based in whole or in part upon all or
any part of the Real Property and imposed upon Landlord, (3) a license fee
measured by the rents, or (4) any other tax, assessment, levy, imposition,
charge or license fee however described or imposed, then all such taxes,
assessments, levies, impositions, charges or license fees or the part thereof so
measured or based shall be deemed to be Taxes.
Tenant's Tax Payment. (a) Tenant shall pay to Landlord Tenant's
Proportionate Share of the Taxes payable for any Comparison Year ("Tenant's Tax
Payment"). On or about the start of each Comparison Year, Landlord shall furnish
to Tenant a Statement of the Taxes. Tenant shall pay Tenant's Tax Payment to
Landlord, in monthly installments, on the first day of each month during each
Comparison Year, an amount equal to 1/12 of Tenant's Tax Payment due for each
Comparison Year. If there is any increase or decrease in Taxes payable for any
Comparison Year, whether levied during or after such Comparison Year, Landlord
may furnish a revised Statement for such Comparison Year, Tenant's Tax Payment
for such Comparison Year shall be adjusted and, within 10 Business Days after
delivery of such revised Statement (a) with respect to any increase in Taxes
payable for such Comparison Year, Tenant shall pay such increase in Tenant's Tax
Payment to Landlord, or (b) with respect to any decrease in Taxes payable for
such Comparison Year, Landlord shall credit such decrease in Tenant's Tax
Payment against the next installment of Rent payable by Tenant.
Only Landlord may institute proceedings to reduce the
Assessed Valuation of the Real Property and the filings of any such proceeding
by Tenant without Landlord's consent shall constitute an Event of Default. If
Landlord receives a refund of Taxes for any Comparison Year, Landlord shall
credit against subsequent payments of Rent due hereunder, an amount equal to
Tenant's Proportionate Share of the refund, net of any expenses incurred by
Landlord in achieving such refund, which amount shall not exceed Tenant's Tax
Payment paid for such Comparison Year. Landlord shall not be obligated to file
any application or institute any proceeding seeking a reduction in Taxes or the
Assessed Valuation.
Tenant shall be responsible for any applicable occupancy or
rent tax now in effect or hereafter enacted and, if payable by Landlord, Tenant
shall promptly pay such amounts to Landlord, upon Landlord's demand.
Tenant's Operating Payment. (a) Tenant shall pay to Landlord Tenant's
Proportionate Share of the Operating Expenses payable for any Comparison Year
("Tenant's Operating Payment"). For each Comparison Year, Landlord shall furnish
to Tenant a statement setting forth Landlord's reasonable estimate of Tenant's
Operating Payment for such Comparison Year (the "Estimate"). Tenant shall pay to
Landlord on the 1st day of each month during such Comparison Year an amount
equal to 1/12 of Landlord's estimate of Tenant's Operating Payment for such
Comparison Year. If Landlord furnishes an Estimate for a Comparison Year
subsequent to the commencement thereof, then (a) until the 1st day of the month
following the month in which the Estimate is furnished to Tenant, Tenant shall
pay to Landlord on the 1st day of each month an amount equal to the monthly sum
payable by Tenant to Landlord under this Section 7.3 during the last month of
the preceding Comparison Year, (b) promptly after the Estimate is furnished to
Tenant or together therewith, Landlord shall give notice to Tenant stating
whether the installments of Tenant's Operating Payment previously made for such
Comparison Year were greater or less than the installments of Tenant's Operating
Payment to be made for such Comparison Year in accordance with the Estimate, and
(i) if there shall be a deficiency, Tenant shall pay the amount thereof within
10 Business Days after demand therefor, or (ii) if there shall have been an
overpayment, Landlord shall credit the amount thereof against subsequent
payments of Rent due hereunder, and (c) on the 1st day of the month following
the month in which the Estimate is furnished to Tenant, and on the 1st day of
each month thereafter throughout the remainder of such Comparison Year, Tenant
shall pay to Landlord an amount equal to 1/12 of Tenant's Operating Payment
shown on the Estimate.
On or before May 1st of each Comparison Year, Landlord shall
furnish to Tenant a Statement for the immediately preceding Comparison Year. If
the Statement shows that the sums paid by Tenant under Section 7.3(a) exceeded
the actual amount of Tenant's Operating Payment for such Comparison Year,
Landlord shall credit the amount of such excess against subsequent payments of
Rent due hereunder. If the Statement shows that the sums so paid by Tenant were
less than Tenant's Operating Payment for such Comparison Year, Tenant shall pay
the amount of such deficiency within 10 Business Days after delivery of the
Statement to Tenant.
Non-Waiver; Disputes. (a) Landlord's failure to render any Statement on
a timely basis with respect to any Comparison Year shall not prejudice
Landlord's right to thereafter render a Statement with respect to such
Comparison Year or any subsequent Comparison Year, nor shall the rendering of a
Statement prejudice Landlord's right to thereafter render a corrected Statement
for that Comparison Year.
Each Statement sent to Tenant shall be conclusively binding
upon Tenant unless Tenant (i) pays to Landlord when due the amount set forth in
such Statement, without prejudice to Tenant's right to dispute such Statement,
and (ii) within 90 days after such Statement is sent, sends a notice to Landlord
objecting to such Statement and specifying the reasons therefor. Tenant agrees
that Tenant will not employ, in connection with any dispute under this Lease,
any person who is to be compensated in whole or in part, on a contingency fee
basis. If the parties are unable to resolve any dispute as to the correctness of
such Statement within 30 days following such notice of objection, either party
may refer the issues raised to one of the "Big Five" public accounting firms
selected by Landlord and reasonably acceptable to Tenant, and the decision of
such accountants shall be conclusively binding upon Landlord and Tenant. In
connection therewith, Tenant and such accountants shall execute and deliver to
Landlord a confidentiality agreement, in form and substance reasonably
satisfactory to Landlord, whereby such parties agree not to disclose to any
third party any of the information obtained in connection with such review.
Tenant shall pay the fees and expenses relating to such procedure, unless such
accountants determine that Landlord overstated Operating Expenses by more than
5% for such Comparison Year, in which case Landlord shall pay such fees and
expenses.
Final Year of Term. If the Expiration Date occurs on a date other than
December 31st, any Additional Rent under this Article 7 for the Comparison Year
in which such Expiration Date occurs shall be apportioned on the basis of the
number of days in the period from January 1st to the Expiration Date. Upon the
expiration or earlier termination of this Lease, any Additional Rent under this
Article 7 shall be paid or reimbursed as appropriate (unless Tenant then has an
outstanding payable to Landlord) within 30 days after submission of the
Statement.
Net Lease. This Lease is designed as a "net lease," and the provisions
in this Lease for payment by Tenant of its share of Operating Expenses and Taxes
are intended to pass on to Tenant and reimburse Landlord for Tenant's
Proportionate Share of all costs and expenses incurred in connection with the
management, operation, maintenance or repair of the Real Property except as
otherwise expressly herein provided.
ARTICLE 8
REQUIREMENTS OF LAW
Section 8.1 Compliance with Requirements.
Tenant's Compliance. Tenant, at its expense, shall comply with
all Requirements applicable to the Premises and with the terms and provisions of
the CC&R's applicable to Tenant; provided, however, that Tenant shall not be
obligated to comply with any Requirements requiring any structural alterations
to the Building unless the application of such Requirements arises from (i) the
specific manner and nature of Tenant's use or occupancy of the Premises, as
distinct from general office use, (ii) Alterations made by Tenant, or (iii) a
breach by Tenant of any provisions of this Lease. Any such repairs or
alterations shall be made at Tenant's expense by Tenant (1) in compliance with
Article 5 if such repairs or alterations are nonstructural and do not affect any
Building System, or (2) by Landlord if such repairs or alterations are
structural or affect any Building System. If Tenant obtains knowledge of any
failure to comply with any Requirements applicable to the Premises, Tenant shall
give Landlord prompt notice thereof.
Hazardous Materials. Tenant shall not cause or permit (i) any
Hazardous Materials to be brought into the Building or Garage, (ii) the storage
or use of Hazardous Materials in any manner not permitted by any Requirements,
or (iii) the escape, disposal or release of any Hazardous Materials within or in
the vicinity of the Real Property. Nothing herein shall be deemed to prevent
Tenant's use of any Hazardous Materials customarily used in the ordinary course
of office work, provided such use is in accordance with all Requirements. Tenant
shall be responsible, at its expense, for all matters directly or indirectly
based on, or arising or resulting from the presence of Hazardous Materials on
the Real Property which is caused or permitted by a Tenant Party. Tenant shall
provide to Landlord copies of all communications received by Tenant with respect
to any Requirements relating to Hazardous Materials, and/or any claims made in
connection therewith. Landlord or its agents may perform environmental
inspections of the Premises at any time. Under no circumstances shall Tenant be
liable to Landlord for any losses, costs, claims, liabilities and damages
(including attorneys' and consultants' fees) of every type and nature, directly
or indirectly arising out of or in connection with any Hazardous Materials
present at any time on or about the Land, or the soils, air, improvements,
groundwater or surface water thereof, or the violation of any Requirements
relating to any such Hazardous Materials, except to the extent that any of the
foregoing actually results from the release or emission of Hazardous Materials
by any Tenant Party.
Landlord's Compliance. Landlord shall comply with (or cause to
be complied with) all Requirements applicable to the Building which are not the
obligation of Tenant, to the extent that non-compliance would materially impair
Tenant's use and occupancy of the Premises for the Permitted Uses.
Landlord's Insurance. Tenant shall not cause or permit any
action or condition that would (i) invalidate or conflict with Landlord's
insurance policies, (ii) violate applicable rules, regulations and guidelines of
the Fire Department, Fire Insurance Rating Organization or any other authority
having jurisdiction over the Building, (iii) cause an increase in the premiums
of fire insurance for the Building over that payable with respect to Comparable
Buildings, or (iv) result in Landlord's insurance companies' refusing to insure
the Building or any property therein in amounts and against risks as reasonably
determined by Landlord. If fire insurance premiums increase as a result of
Tenant's failure to comply with the provisions of this Section 8.1, Tenant shall
promptly cure such failure and shall reimburse Landlord for the increased fire
insurance premiums paid by Landlord as a result of such failure by Tenant.
Fire and Life Safety. If the Fire Insurance Rating Organization or any
Governmental Authority or any of Landlord's insurers requires or recommends any
modifications and/or alterations be made or any additional equipment be supplied
in connection with the sprinkler system or fire alarm and life-safety system
serving the Building by reason of (i) the specific manner and nature of Tenant's
use of the Premises, as distinct from general office use, (ii) Alterations made
by Tenant, or (iii) a breach by Tenant of any provisions of this Lease, Landlord
(to the extent outside of the Premises) or Tenant (to the extent within the
Premises) shall make such modifications and/or Alterations, and supply such
additional equipment, in either case at Tenant's expense.
ARTICLE 9
SUBORDINATION
Subordination and Attornment. (a) This Lease is subject and subordinate
to all Mortgages and Superior Leases, and, at the request of any Mortgagee or
Lessor, Tenant shall attorn to such Mortgagee or Lessor, its successors in
interest or any purchaser in a foreclosure sale.
If a Lessor or Mortgagee or any other person or entity shall
succeed to the rights of Landlord under this Lease, whether through possession
or foreclosure action or the delivery of a new lease or deed, then at the
request of the successor landlord and upon such successor landlord's written
agreement to accept Tenant's attornment and to recognize Tenant's interest under
this Lease, Tenant shall be deemed to have attorned to and recognized such
successor landlord as Landlord under this Lease. The provisions of this Section
9.1 are self-operative and require no further instruments to give effect hereto;
provided, however, that Tenant shall promptly execute and deliver any instrument
that such successor landlord may reasonably request (i) evidencing such
attornment, (ii) setting forth the terms and conditions of Tenant's tenancy, and
(iii) containing such other terms and conditions as may be required by such
Mortgagee or Lessor, provided such terms and conditions do not increase the
Rent, materially increase Tenant's obligations or materially and adversely
affect Tenant's rights under this Lease. Upon such attornment this Lease shall
continue in full force and effect as a direct lease between such successor
landlord and Tenant upon all of the terms, conditions and covenants set forth in
this Lease except that such successor landlord shall not be
(i) liable for any act or omission of Landlord (except to
the extent such act or omission continues beyond the date
when such successor landlord succeeds to Landlord's interest
and Tenant gives notice of such act or omission);
(ii) subject to any defense, claim, counterclaim, set-off or
offsets which Tenant may have against Landlord;
(iii) bound by any prepayment of more than one month's Rent
to any prior landlord;
(iv) bound by any obligation to make any payment to Tenant
which was required to be made prior to the time such
successor landlord succeeded to Landlord's interest;
(v) bound by any obligation to perform any work or to make
improvements to the Premises except for (x) repairs and
maintenance required to be made by Landlord under this
Lease, and (y) repairs to the Premises as a result of damage
by fire or other casualty or a partial condemnation pursuant
to the provisions of this Lease, but only to the extent that
such repairs can reasonably be made from the net proceeds of
any insurance or condemnation awards, respectively, actually
made available to such successor landlord;
(vi) bound by any modification, amendment or renewal of this
Lease made without successor landlord's consent;
(vii) liable for the repayment of any security deposit or
surrender of any letter of credit, unless and until such
security deposit actually is paid or such letter of credit
is actually delivered to such successor landlord; or
(viii) liable for the payment of any unfunded tenant
improvement allowance, refurbishment allowance or similar
obligation.
Tenant shall from time to time within 10 Business Days of
request from Landlord execute and deliver any documents or instruments that may
be reasonably required by any Mortgagee or Lessor to effectuate any
subordination.
Mortgage or Superior Lease Defaults. Any Mortgagee may elect that this
Lease shall have priority over the Mortgage and, upon notification to Tenant by
such Mortgagee, this Lease shall be deemed to have priority over such Mortgage,
regardless of the date of this Lease. In connection with any financing of the
Real Property, Tenant shall consent to any reasonable modifications of this
Lease requested by any lending institution, provided such modifications do not
increase the Rent, materially increase the obligations, or materially and
adversely affect the rights, of Tenant under this Lease.
Tenant's Termination Right. As long as any Superior Lease or Mortgage
exists, Tenant shall not seek to terminate this Lease by reason of any act or
omission of Landlord until (a) Tenant shall have given notice of such act or
omission to all Lessors and/or Mortgagees, and (b) a reasonable period of time
shall have elapsed following the giving of notice of such default and the
expiration of any applicable notice or grace periods (unless such act or
omission is not capable of being remedied within a reasonable period of time),
during which period such Lessors and/or Mortgagees shall have the right, but not
the obligation, to remedy such act or omission and thereafter diligently proceed
to so remedy such act or obligation. If any Lessor or Mortgagee elects to remedy
such act or omission of Landlord, Tenant shall not seek to terminate this Lease
so long as such Lessor or Mortgagee is proceeding with reasonable diligence to
effect such remedy.
Provisions. The provisions of this Article 9 shall (a) inure to the
benefit of Landlord, any future owner of the Building or the Real Property,
Lessor or Mortgagee and any sublessor thereof and (b) apply notwithstanding
that, as a matter of law, this Lease may terminate upon the termination of any
such Superior Lease or Mortgage.
Non-Disturbance Agreements. Landlord hereby agrees to use commercially
reasonable efforts to obtain for Tenant a subordination, non-disturbance and
attornment agreement from all Mortgagees and Lessors from time to time, in the
standard form customarily employed by such Mortgagee and/or Lessor (which shall
be commercially reasonable) and (i) shall provide that this Lease shall not be
terminated so long as Tenant is not in default under this Lease, and (ii) shall
recognize Tenant's rights under this Lease (an "SNDA"), provided that Landlord
shall have no liability to Tenant in the event that it is unable to obtain any
such SNDA. Tenant shall reimburse Landlord, within 10 days after demand
therefor, for Landlord's out-of-pocket costs, including reasonable attorney's
fees and disbursements, incurred in connection with such efforts except with
respect to the SNDA from Guaranty Federal Bank which shall be at Landlord's sole
cost. Landlord represents that, as of the Effective Date hereof, there are no
existing Superior Leases and the only existing Mortgagee is Guaranty Federal
Bank. If Landlord fails to deliver to Tenant a SNDA from Guaranty Federal Bank
within 45 days after the execution and delivery of this Lease by Landlord and
Tenant, Tenant shall have the right, to be exercised, if at all, within 10 days
following the expiration of such 45-day period, to terminate this Lease.
ARTICLE 10
SERVICES
Electricity. Subject to any Requirements or any public utility rules or
regulations governing energy consumption, Landlord shall make or cause to be
made, customary arrangements with utility companies and/or public service
companies to furnish electric current to the Premises for Tenant's use in
accordance with the Design Standards. If Landlord reasonably determines by the
use of an electrical consumption survey or by other reasonable means that Tenant
is using electric current (including overhead fluorescent fixtures) in excess of
.60 kilowatt hours per square foot of usable area in the Premises per month, as
determined on an annualized basis ("Excess Electrical Usage"), then Landlord
shall have the right to charge Tenant an amount equal to Landlord's reasonable
estimate of Tenant's Excess Electrical Usage, and shall have the further right
to install an electric current meter, sub-meter or check meter in the Premises
(a "Meter") to measure the amount of electric current consumed in the Premises.
The cost of such Meter special conduits, wiring and panels needed in connection
therewith and the installation, maintenance and repair thereof shall be paid by
Tenant. Tenant shall pay to Landlord, from time to time, but no more frequently
than monthly, for its Excess Electrical Usage at the Premises. The rate to be
paid by Tenant for submetered electricity shall not exceed the amount paid by
Landlord to the supplier of such service, together with any taxes or other
charges in connection therewith. If Tenant so requests, Tenant shall have the
right to install, at its sole cost and expense, meters on each floor of the
Premises to measure Tenant's electrical consumption within the Premises and, in
such event, Tenant shall pay Landlord monthly for the cost of electricity
consumed within the Premises and Landlord shall exclude from Operating Expenses
the cost of electricity so consumed within the leased premises of other tenants
of the Building.
Excess Electricity. Tenant shall at all times comply with the rules and
regulations of the utility company supplying electricity to the Building. Tenant
shall not use any electrical equipment which, in Landlord's reasonable judgment,
would exceed the capacity of the electrical equipment serving the Premises. If
Landlord determines that Tenant's electrical requirements necessitate
installation of any additional risers, feeders or other electrical distribution
equipment (collectively, "Electrical Equipment"), or if Tenant provides Landlord
with evidence reasonably satisfactory to Landlord of Tenant's need for excess
electricity and requests that additional Electrical Equipment be installed,
Landlord shall, at Tenant's expense, install such additional Electrical
Equipment, provided that Landlord, in its sole judgment, determines that (a)
such installation is practicable and necessary, (b) such additional Electrical
Equipment is permissible under applicable Requirements, and (c) the installation
of such Electrical Equipment will not cause permanent damage to the Building or
the Premises, cause or create a hazardous condition, entail excessive or
unreasonable alterations, interfere with or limit electrical usage by other
tenants or occupants of the Building or exceed the limits of the switchgear or
other facilities serving the Building, or require power in excess of that
available from the utility company serving the Building. Any costs incurred by
Landlord in connection therewith shall be paid by Tenant within 10 days after
the rendition of a bill therefor.
Elevators. Landlord shall provide passenger and freight elevator
service to the Premises 24 hours per day, 7 days per week; provided, however,
Landlord may limit elevator service during times other than Ordinary Business
Hours.
Heating. Ventilation and Air Conditioning. Landlord shall furnish to
the Premises heating, ventilation and air-conditioning ("HVAC") in accordance
with the Design Standards set forth in Exhibit D during Ordinary Business Hours.
Landlord shall have access to all air-cooling, fan, ventilating and machine
rooms and electrical closets and all other mechanical installations of Landlord
(collectively, "Mechanical Installations"), and Tenant shall not construct
partitions or other obstructions which may interfere with Landlord's access
thereto or the moving of Landlord's equipment to and from the Mechanical
Installations. No Tenant Party shall at any time enter the Mechanical
Installations or tamper with, adjust, or otherwise affect such Mechanical
Installations. Landlord shall not be responsible if the HVAC System fails to
provide cooled or heated air, as the case may be, to the Premises in accordance
with the Design Standards by reason of (i) any equipment installed by, for or on
behalf of Tenant, which has an electrical load in excess of the average
electrical load and human occupancy factors for the HVAC System as designed, or
(ii) any rearrangement of partitioning or other Alterations made or performed
by, for or on behalf of Tenant. Tenant shall cooperate with Landlord and shall
abide by the rules and regulations which Landlord may reasonably prescribe for
the proper functioning and protection of the HVAC System.
Overtime Freight Elevators and HVAC. The Fixed Rent does not include
any charge to Tenant for the furnishing of any freight elevator service or HVAC
to the Premises during any periods other than Ordinary Business Hours ("Overtime
Periods"). If Tenant desires any such services during Overtime Periods, Tenant
shall deliver notice to the Building office requesting such services at least 24
hours prior to the time Tenant requests such services to be provided; provided,
however, that Landlord shall use reasonable efforts to arrange such service on
such shorter notice as Tenant shall provide. If Landlord furnishes freight
elevator or HVAC service during Overtime Periods, Tenant shall pay to Landlord
the cost thereof at the then established rates for such services in the
Building.
Cleaning. Landlord shall cause the Premises (excluding any portions
thereof used for the storage, preparation, service or consumption of food or
beverages) to be cleaned, substantially in accordance with the standards set
forth in Exhibit E. Any areas of the Premises requiring additional cleaning such
as areas used for preparation or consumption of food, private bathrooms,
computer rooms, mail rooms and trading floors shall be cleaned, at Tenant's
expense, by Landlord's cleaning contractor, at rates which shall be competitive
with rates of other cleaning contractors providing comparable services to
Comparable Buildings. Landlord's cleaning contractor and its employees shall
have access to the Premises at all times except during Ordinary Business Hours.
Water. Landlord shall provide water in the core lavatories on each
floor of the Building. If Tenant requires water for any additional purposes,
Tenant shall pay for the cost of bringing water to the Premises and Landlord may
install a meter to measure the water. Tenant shall pay the cost of such
installation, and for all maintenance, repairs and replacements thereto, and for
the reasonable charges of Landlord for the water consumed.
Refuse Removal. Landlord shall provide refuse removal services at the
Building. Tenant shall pay to Landlord, within 10 Business Days after delivery
of an invoice therefor, Landlord's reasonable charge for such removal to the
extent that the refuse generated by Tenant exceeds the refuse customarily
generated by general office tenants. Tenant shall not dispose of any refuse in
the Common Areas, and if Tenant does so, Tenant shall be liable for Landlord's
reasonable charge for such removal.
Directory. The lobby shall contain a computerized directory wherein the
Building's tenants shall be listed with a capacity for up to 25 listings per
floor for Tenant and others permitted to occupy the Premises hereunder. Tenant
shall be entitled to a proportionate share of such listings, based on the
rentable square footage of the Premises. From time to time, but not more
frequently than monthly, Landlord shall reprogram the computerized directory to
reflect such changes in the listings therein as Tenant shall request.
Service Interruptions. Landlord reserves the right to suspend any
service when necessary, by reason of Unavoidable Delays, accidents or
emergencies, or for Restorative Work which, in Landlord's reasonable judgment,
are necessary or appropriate until such Unavoidable Delay, accident or emergency
shall cease or such Restorative Work is completed and Landlord shall not be
liable for any interruption, curtailment or failure to supply services. Landlord
shall use reasonable efforts to minimize interference with Tenant's use and
occupancy of the Premises as a result of any such failure, defect or
interruption of, or change in the supply, character and/or quantity of,
electrical service and to restore any such services, remedy such situation and
minimize any interference with Tenant's business. Subject to Section 6.3, the
exercise of any such right or the occurrence of any such failure by Landlord
shall not constitute an actual or constructive eviction, in whole or in part,
entitle Tenant to any compensation, abatement or diminution of Rent, relieve
Tenant from any of its obligations under this Lease, or impose any liability
upon Landlord by reason of inconvenience to Tenant, or interruption of Tenant's
business, or otherwise. Landlord shall not be liable in any way to Tenant for
any failure, defect or interruption of, or change in the supply, character
and/or quantity of, electrical service furnished to the Premises for any reason
except if attributable to the gross negligence or willful misconduct of Landlord
or its agents or contractors.
ARTICLE 11
INSURANCE; PROPERTY LOSS OR DAMAGE
Tenant's Insurance. (a) Tenant, at its expense, shall obtain and keep
in full force and effect during the Term:
(i) a policy of commercial general liability insurance on an
occurrence basis against claims for personal injury, death
and/or property damage occurring in or about the Real
Property, under which Tenant is named as the insured and
Landlord, Landlord's Agent and any Lessors and any
Mortgagees whose names have been furnished to Tenant are
named as additional insureds (the "Insured Parties"). Such
insurance shall provide primary coverage without
contribution from any other insurance carried by or for the
benefit of the Insured Parties, and Tenant shall obtain
blanket broad-form contractual liability coverage to insure
its indemnity obligations set forth in Article 26. The
minimum limits of liability shall be a combined single limit
with respect to each occurrence in an amount of not less
than $5,000,000; provided, however, that Landlord shall
retain the right to require Tenant to increase such coverage
on no more than two occasions during the initial Term of
this Lease to that amount of insurance which in Landlord's
reasonable judgment is then being customarily required by
landlords for similar office space in Comparable Buildings.
The deductible or self insured retention for such policy
shall not exceed $10,000;
(ii)insurance against loss or damage by fire, and such other
risks and hazards as are insurable under then available
standard forms of "all risk" property insurance policies
with extended coverage, insuring Tenant's Property and all
Alterations and improvements to the Premises (including the
initial installations) to the extent such Alterations and
improvements exceed the cost of the improvements typically
performed in connection with the initial occupancy of
tenants in the Building ("Building Standard Installations"),
for the full insurable value thereof or replacement cost
thereof, having a deductible amount, if any not in excess of
$25,000;
(iii) during the performance of any Alteration, until
completion thereof, Builder's Risk insurance on an "all
risk" basis and on a completed value form including a
Permission to Complete and Occupy endorsement, for full
replacement value covering the interest of Landlord and
Tenant (and their respective contractors and subcontractors)
in all work incorporated in the Building and all materials
and equipment in or about the Premises;
(iv)Workers' Compensation Insurance, as required by law;
(v) Business Interruption Insurance; and
(vi)such other insurance in such amounts as the Insured
Parties may reasonably require from time to time.
All insurance required to be carried by Tenant (i) shall
contain a provision that (x) no act or omission of Tenant shall affect or limit
the obligation of the insurance company to pay the amount of any loss sustained,
and (y) shall be noncancellable and/or no material change in coverage shall be
made thereto unless the Insured Parties receive 30 days' prior notice of the
same, by certified mail, return receipt requested, and (ii) shall be effected
under valid and enforceable policies issued by reputable insurers permitted to
do business in the State of California and rated in Best's Insurance Guide, or
any successor thereto as having a "Best's Rating" of "A-" and a "Financial Size
Category" of at least "X" or, if such ratings are not then in effect, the
equivalent thereof or such other financial rating as Landlord may at any time
consider appropriate.
On or prior to the Commencement Date, Tenant shall deliver to
Landlord appropriate policies of insurance, including evidence of waivers of
subrogation required to be carried pursuant to this Article 11 (the "Policies").
Evidence of each renewal or replacement of the Policies shall be delivered by
Tenant to Landlord at least 10 days prior to the expiration of the Policies. In
lieu of the Policies, Tenant may deliver to Landlord a certification from
Tenant's insurance company (on the form currently designated "Acord 27", or the
equivalent) which shall be binding on Tenant's insurance company, and which
shall expressly provide that such certification (i) conveys to the Insured
Parties all the rights and privileges afforded under the Policies as primary
insurance, and (ii) contains an unconditional obligation of the insurance
company to advise all Insured Parties in writing by certified mail, return
receipt requested, at least 30 days in advance of any termination or change to
the Policies that would affect the interest of any of the Insured Parties.
Landlord's Insurance. Landlord shall, from and after the Effective Date
and until the Expiration Date, maintain in effect the following insurance: (i)
fire and "all risk" insurance providing coverage in the event of fire,
vandalism, malicious mischief and all other risks normally covered by "all risk"
policies in the area of the Building, covering the Building (excluding the
property required to be insured by Tenant pursuant to Section 11.1) in an amount
not less than 95% of the full replacement value (less commercially reasonable
deductibles which as of the Effective Date is $25,000.00 but is subject to
periodic change over the Term) of the Building excluding foundations, footings
and other below-grade structural elements; and (ii) commercial general liability
insurance or the equivalent in the amount of at least $5,000,000.00, against
claims of bodily injury, personal injury or property damage arising out of
Landlord's operations, assumed liabilities, contractual liabilities, or use of
the Building and Common Areas. Such insurance may be carried under blanket or
umbrella insurance policies. Upon written request from Tenant, but no more than
one time during any calendar year, Landlord shall provide Tenant with evidence
that Landlord is carrying the insurance Landlord is required to maintain
pursuant to this Section 11.2.
Waiver of Subrogation. Landlord and Tenant shall each procure an
appropriate clause in or endorsement to any property insurance covering the Real
Property and personal property, fixtures and equipment located therein, wherein
the insurer waives subrogation or consents to a waiver of right of recovery, and
notwithstanding anything to the contrary in this Lease Landlord and Tenant
hereby release and waive all claims against the other for any loss or damage to
its property or the property of others resulting from fire or other hazards to
the extent covered by such property insurance or would normally be covered by
standard "all risk" property insurance; provided, however, that the release,
discharge, exoneration and covenant not to sue contained herein shall be limited
by and be coextensive with the terms and provisions of the waiver of subrogation
or waiver of right of recovery. Tenant acknowledges that Landlord shall not
carry insurance on, and shall not be responsible for, (i) damage to any Above
Building Standard Installations, (ii) Tenant's Property, and (iii) any loss
suffered by Tenant due to interruption of Tenant's business.
Restoration. (a) If the Premises are damaged by fire or other casualty,
or if the Building is damaged such that Tenant is deprived of reasonable access
to the Premises, the damage shall be repaired by Landlord, to substantially the
condition of the Premises prior to the damage, subject to the provisions of any
Mortgage or Superior Lease, but Landlord shall have no obligation to repair or
restore (i) Tenant's Property or (ii) except as provided in Section 11.3(b), any
Above Building Standard Installations. So long as Tenant is not in default
beyond applicable grace or notice provisions in the payment or performance of
its obligations under this Section 11.3, and provided Tenant timely delivers to
Landlord either Tenant's Restoration Payment (as hereinafter defined) or the
Restoration Security (as hereinafter defined) or Tenant expressly waives any
obligation of Landlord to repair or restore any of Tenant's Above Building
Standard Installations, then until the restoration of the Premises is
Substantially Completed or would have been Substantially Completed but for
Tenant Delay, Fixed Rent, Tenant's Tax Payment and Tenant's Operating Payment
shall be reduced in the proportion by which the area of the part of the Premises
which is not usable (or accessible ) and is not used by Tenant bears to the
total area of the Premises.
As a condition precedent to Landlord's obligation to repair
or restore any Above Building Standard Installations, Tenant shall (i) pay to
Landlord upon demand a sum ("Tenant's Restoration Payment") equal to the amount,
if any, by which (A) the cost, as estimated by a reputable independent
contractor designated by Landlord, of repairing and restoring all Alterations
and Initial Installations in the Premises to their condition prior to the
damage, exceeds (B) the cost of restoring the Premises with Building Standard
Installations, or (ii) furnish to Landlord security (the "Restoration Security")
in form and amount reasonably acceptable to Landlord to secure Tenant's
obligation to pay all costs in excess of restoring the Premises with Building
Standard Installations. If Tenant shall fail to deliver to Landlord either (1)
Tenant's Restoration Payment or the Restoration Security, as applicable, or (2)
a waiver by Tenant, in form satisfactory to Landlord, of all of Landlord's
obligations to repair or restore any of the Above Building Standard
Installations, in either case within 15 days after Landlord's demand therefor,
Landlord shall have no obligation to restore any Above Building Standard
Installations and Tenant's abatement of Fixed Rent, Tenant's Tax Payment and
Tenant's Operating Payment shall cease when the restoration of the Premises
(other than any Above Building Standard Installations) is Substantially
Complete.
Landlord's Termination Right. Notwithstanding anything to the contrary
contained in Section 11.3, if the Premises are totally damaged or are rendered
wholly untenantable, or if the Building shall be so damaged that, in Landlord's
reasonable opinion, substantial alteration, demolition, or reconstruction of the
Building shall be required (whether or not the Premises are so damaged or
rendered untenantable) and the estimated period for the repair or restoration of
the Premises or the Building set forth in the Restoration Notice (as hereinafter
defined) is more than 12 months from the date of such damage or (ii) under the
provisions of any Mortgage or Superior Lease, Landlord shall be unable so to
restore the Premises or Tenant's reasonable access to the Premises, then in such
event, Landlord may, not later than 60 days following the date of the damage,
terminate this Lease by notice to Tenant, provided that if the Premises are not
damaged, Landlord may not terminate this Lease unless Landlord similarly
terminates the leases of other tenants in the Building aggregating at least 75%
of the portion of the Building occupied for office purposes immediately prior to
such damage. If this Lease is so terminated, (a) the Term shall expire upon the
30th day after such notice is given, (b) Tenant shall vacate the Premises and
surrender the same to Landlord, (c) Tenant's liability for Rent shall cease as
of the date of the damage, and (d) any prepaid Rent for any period after the
date of the damage shall be refunded by Landlord to Tenant.
Tenant's Termination Right. If the Premises are totally damaged and are
thereby rendered wholly untenantable, or if the Building shall be so damaged
that Tenant is deprived of reasonable access to the Premises, and if Landlord
elects to restore the Premises, Landlord shall, within 60 days following the
date of the damage, cause a contractor or architect selected by Landlord to give
notice (the "Restoration Notice") to Tenant of the date by which such contractor
or architect estimates the restoration of the Premises (excluding any Above
Building Standard Installations) shall be Substantially Completed. If (i) such
date, as set forth in the Restoration Notice, is more than 12 months from the
date of such damage and if Landlord has not elected to terminate this Lease
pursuant to Section 11.4, then Tenant shall have the right to terminate this
Lease by giving notice to Landlord not later than 30 days following delivery of
the Restoration Notice to Tenant, or (ii) Landlord elects not to terminate this
Lease pursuant to Section 11.4, but fails to Substantially Complete the repair
or restoration of the Premises or the Building, as applicable, within 12 months
from the date of damage or destruction, Tenant, upon not less than 30 days'
prior written notice, may elect to terminate this Lease (either such notice in
(i) or (ii), a "Termination Notice"). If Tenant delivers a Termination Notice,
unless, with respect to a Termination Notice delivered pursuant to clause (ii)
of the preceding sentence, Landlord within such 30-day period Substantially
Completes such repair or restoration, this Lease shall be deemed to have
terminated as of the date of the giving of the Termination Notice, in the manner
set forth in the second sentence of Section 11.4.
Final 12 Months. Notwithstanding anything to the contrary in this
Article 11, if any damage during the final 12 months of the Term (including
extensions thereof) renders the Premises wholly untenantable, either Landlord or
Tenant may terminate this Lease by notice to the other party within 30 days
after the occurrence of such damage and this Lease shall expire on the 30th day
after the date of such notice. For purposes of this Section 11.6, the Premises
shall be deemed wholly untenantable if Tenant shall be precluded from using more
than 50% of the Premises for the conduct of its business and Tenant's inability
to so use the Premises is reasonably expected to continue for more than 90 days.
Landlord's Liability. Any Building employee to whom any property shall
be entrusted by or on behalf of Tenant shall be deemed to be acting as Tenant's
agent with respect to such property and neither Landlord nor its agents shall be
liable for any damage to such property, or for the loss of or damage to any
property of Tenant by theft or otherwise. None of the Insured Parties shall be
liable for any injury or damage to persons or property or interruption of
Tenant's business resulting from fire or other casualty, any damage caused by
other tenants or persons in the Building or Garage or by construction of any
private, public or quasi-public work, or any latent defect in the Premises or in
the Building or Garage (except that Landlord shall be required to repair the
same to the extent provided in Article 5). No penalty shall accrue for delays
which may arise by reason of adjustment of fire insurance on the part of
Landlord or Tenant, or for any Unavoidable Delays arising from any repair or
restoration of any portion of the Real Property, provided that Landlord shall
use reasonable efforts to minimize interference with Tenant's use and occupancy
of the Premises during the performance of any such repair or restoration.
ARTICLE 12
EMINENT DOMAIN
Section 12.1 Taking.
Total Taking. If all or substantially all of the Real
Property, the Building or the Premises shall be acquired or condemned for any
public or quasi-public purpose (a "Taking"), this Lease shall terminate and the
Term shall end as of the date of the vesting of title and Rent shall be prorated
and adjusted as of such date.
Partial Taking. Upon a Taking of only a part of the Real
Property, the Building or the Premises then, except as hereinafter provided in
this Article 12, this Lease shall continue in full force and effect, provided
that from and after the date of the vesting of title, Fixed Rent and Tenant's
Proportionate Share shall be modified to reflect the reduction of the Premises
and/or the Building as a result of such Taking.
Landlord's Termination Right. Whether or not the Premises are
affected, Landlord may, by notice to Tenant, within 60 days following the date
upon which Landlord receives notice of the Taking of all or a portion of the
Real Property, the Building or the Premises, terminate this Lease, provided that
Landlord elects to terminate leases (including this Lease) affecting at least
75% of the rentable area of the Building.
Tenant's Termination Right. If the part of the Real Property
so Taken contains more than 20% of the total area of the Premises occupied by
Tenant immediately prior to such Taking, or if, by reason of such Taking, Tenant
no longer has reasonable means of access to the Premises or Tenant's use of the
Premises is materially and adversely affected thereby, Tenant may terminate this
Lease by notice to Landlord given within 30 days following the date upon which
Tenant is given notice of such Taking. If Tenant so notifies Landlord, this
Lease shall end and expire upon the 30th day following the giving of such
notice. If a part of the Premises shall be so Taken and this Lease is not
terminated in accordance with this Section 12.1 Landlord, without being required
to spend more than it collects as an award, shall, subject to the provisions of
any Mortgage or Superior Lease, restore that part of the Premises not so Taken
to a self-contained rental unit substantially equivalent (with respect to
character, quality, appearance and services) to that which existed immediately
prior to such Taking, excluding Tenant's Property and any Above Building
Standard Installations.
Apportionment of Rent. Upon any termination of this Lease
pursuant to the provisions of this Article 12, Rent shall be apportioned as of,
and shall be paid or refunded up to and including, the date of such termination.
Awards. Upon any Taking, Landlord shall receive the entire award for
any such Taking, and Tenant shall have no claim against Landlord or the
condemning authority for the value of any unexpired portion of the Term or
Tenant's Alterations; and Tenant hereby assigns to Landlord all of its right in
and to such award. Nothing contained in this Article 12 shall be deemed to
prevent Tenant from making a separate claim in any condemnation proceedings for
the then value of any Tenant's Property or Alterations or Initial Installations
paid for by Tenant included in such Taking and for any moving expenses, provided
any such award is in addition to, and does not result in a reduction of, the
award made to Landlord.
Temporary Taking. If all or any part of the Premises is Taken
temporarily during the Term for any public or quasi-public use or purpose,
Tenant shall give prompt notice to Landlord and the Term shall not be reduced or
affected in any way and Tenant shall continue to pay all Rent payable by Tenant
without reduction or abatement and to perform all of its other obligations under
this Lease, except to the extent prevented from doing so by the condemning
authority, and Tenant shall be entitled to receive any award or payment from the
condemning authority for such use, which shall be received, held and applied by
Tenant as a trust fund for payment of the Rent falling due.
ARTICLE 13
ASSIGNMENT AND SUBLETTING
Section 13.1 Consent Requirements.
No Assignment or Subletting. Except as expressly set forth
herein, Tenant shall not assign, mortgage, pledge, encumber, or otherwise
transfer this Lease, whether by operation of law or otherwise, and shall not
sublet, or permit, or suffer the Premises or any part thereof to be used or
occupied by others (whether for desk space, mailing privileges or otherwise),
without Landlord's prior consent in each instance. Any assignment, sublease,
mortgage, pledge, encumbrance or transfer in contravention of the provisions of
this Article 13 shall be void and shall constitute an Event of Default.
Collection of Rent. If, without Landlord's consent when
required under this Article 13, this Lease is assigned, or any part of the
Premises is sublet or occupied by anyone other than Tenant or this Lease is
encumbered (by operation of law or otherwise), Landlord may collect rent from
the assignee, subtenant or occupant, and apply the net amount collected to the
Rent herein reserved. No such collection shall be deemed a waiver of the
provisions of this Article 13, an acceptance of the assignee, subtenant or
occupant as tenant, or a release of Tenant from the performance of Tenant's
covenants hereunder, and in all cases Tenant shall remain fully liable for its
obligations under this Lease.
Further Assignment/Subletting. Landlord's consent to any
assignment or subletting shall not relieve Tenant from the obligation to obtain
Landlord's consent to any further assignment or subletting. Except for a person
or entity who acquired an interest in the Premises directly from the initial
Tenant named herein, no subtenant shall be permitted subtenant assign or
encumber its sublease or further sublet any portion of its sublet space, or
otherwise suffer or permit any portion of the sublet space to be used or
occupied by others.
Tenant's Notice. If Tenant desires to assign this Lease or sublet all
or any portion of the Premises other than to a Permitted Transferee in a
transaction for which Landlord's consent is required hereunder, Tenant shall
give notice thereof to Landlord, which shall be accompanied by (a) with respect
to an assignment of this Lease, the date Tenant desires the assignment to be
effective, and (b) with respect to a sublet of all or a part of the Premises, a
description of the portion of the Premises to be sublet. Such notice shall be
deemed an offer from Tenant to Landlord of the right, at Landlord's option, (1)
with respect to a sublease for a term expiring no earlier than 6 months prior to
the Expiration Date, to terminate this Lease with respect to such space as
Tenant proposes to sublease (the "Partial Space"), upon the terms and conditions
hereinafter set forth, or (2) if the proposed transaction is an assignment of
this Lease, to terminate this Lease. Such option may be exercised by notice from
Landlord to Tenant within 30 days after delivery of Tenant's notice. If Landlord
exercises its option to terminate all or a portion of this Lease, (a) this Lease
shall end and expire with respect to all or a portion of the Premises, as the
case may be, on the date that such assignment or sublease was to commence, (b)
Rent shall be apportioned, paid or refunded as of such date, (c) the amount of
the Security Deposit shall be reduced to an amount equal to the product of (x)
the amount of the Security Deposit and (y) a ratio, the numerator of which is
the number of rentable square feet in the remaining portion of the Premises and
the denominator of which is the number of rentable square feet in the Premises
immediately prior to Landlord's exercise of such option, (d) Tenant, upon
Landlord's request, shall enter into an amendment of this Lease ratifying and
confirming such total or partial termination, and setting forth any appropriate
modifications to the terms and provisions hereof, and (e) Landlord shall be free
to lease the Premises (or any part thereof) to Tenant's prospective assignee or
subtenant. If Landlord exercises such option, Landlord shall pay all costs to
make the Partial Space a self-contained rental unit.
Conditions to Assignment/Subletting. (a) If Landlord does not exercise
its termination option provided under Section 13.2, and provided that no Event
of Default then exists, Landlord's consent to the proposed assignment or
subletting shall not be unreasonably withheld or delayed. Such consent shall be
granted or denied within 20 days after delivery to Landlord of (i) a true and
complete statement reasonably detailing the identity of the proposed assignee or
subtenant ("Transferee"), the nature of its business and its proposed use of the
Premises, (ii) current financial information with respect to the Transferee,
including its most recent financial statements, and (iii) any other information
Landlord may reasonably request, provided that:
(A) in Landlord's reasonable judgment, the Transferee is
engaged in a business or activity, and the Premises will be
used in a manner, which (1) is in keeping with the then
standards of the Building, (2) is for the Permitted Uses,
and (3) does not violate any restrictions set forth in this
Lease, any Mortgage or Superior Lease or any negative
covenant as to use of the Premises required by any other
lease in the Building;
(B) the Transferee is reputable with sufficient financial
means to perform all of its obligations under this Lease or
the sublease, as the case may be;
(C) the Transferee is not a person or entity (or affiliate
of a person or entity) with whom Landlord is then or has
been within the prior 6 months negotiating in connection
with the rental of space in the Building;
(D) there shall be not more than 3 subtenants in each floor
of the Premises;
(E) the aggregate consideration to be paid by the Transferee
under the terms of the proposed sublease shall not be less
than 90% of the fixed rent at which Landlord is then
offering to lease other space in the Building (the "Market
Sub-rent") determined as though the Premises were vacant and
taking into account (1) the length of the term of the
proposed sublease, (2) any rent concessions granted to
Transferee, and (3) the cost of any Alterations being
performed for the Transferee; provided, however, that if
after a period of 60 days Tenant is unable to consummate a
sublease transaction for an amount at least equal to the
Market Subrent; then for the first 30 days thereafter Tenant
may advertise the Space at a rental rate no less than eighty
percent (80%) of the Market Subrent, for the next 30 days at
seventy percent (70%) of the Market Subrent and thereafter
at such other rental rate as Tenant may determine;
(F) Tenant shall, upon demand, reimburse Landlord for all
reasonable expenses incurred by Landlord in connection with
such assignment or sublease, including any investigations as
to the acceptability of the Transferee and all legal costs
reasonably incurred in connection with the granting of any
requested consent, which investigation and legal costs shall
not exceed the aggregate amount of $2,500 ("Expense Limit");
provided, however, that such Expense Limit shall not apply
to any assignment or sublease in connection with the
bankruptcy or reorganization of Tenant or that involves an
amendment to this Lease, and all costs reasonably incurred
in reviewing any plans and specifications for Alterations
proposed to be made in connection therewith;
(G) Subject to (F) above, Tenant shall not publicly
advertise the availability of the Premises at a rental rate
less than the Market Sub-rent; and
(H) the Transferee shall not be entitled, directly or
indirectly, to diplomatic or sovereign immunity, regardless
of whether the Transferee agrees to waive such diplomatic or
sovereign immunity, and shall be subject to the service of
process in, and the jurisdiction of the courts of, the
County of Santa Clara and State of California.
Within 15 days after Landlord's receipt of Tenant's notice, Landlord shall give
written notice to Tenant of consent to the proposed transfer, or specify in
writing and with reasonable particularly the basis for withholding its consent.
If Landlord fails to so advise Tenant prior to the expiration of such 15-day
period, Tenant shall deliver a second notice to Landlord, stating in bold type
on the front page thereof "URGENT -- DELAY NOTICE" and if Landlord fails to
respond within 5 days thereafter, Landlord's consent shall be deemed granted.
With respect to each and every subletting and/or assignment
approved by Landlord under the provisions of this Lease:
(i) the form of the proposed assignment or sublease shall be
reasonably satisfactory to Landlord;
(ii) no sublease shall be for a term ending later than one
day prior to the Expiration Date;
(iii) no Transferee shall take possession of any part of the
Premises, until an executed counterpart of such sublease or
assignment has been delivered to Landlord and approved by
Landlord as provided in Section 13.3(a);
(iv)if an Event of Default occurs prior to the effective
date of such assignment or subletting and be continuing yet
uncured on the date that would otherwise be such effective
date, then Landlord's consent thereto, if previously
granted, shall be immediately deemed revoked without further
notice to Tenant, and any such assignment or subletting
deemed unconsented shall constitute a further Event of
Default hereunder; and
(v) each sublease shall be subject and subordinate to this
Lease and to the matters to which this Lease is or shall be
subordinate; and Tenant and each Transferee shall be deemed
to have agreed that upon the occurrence and during the
continuation of an Event of Default hereunder, Tenant has
hereby assigned to Landlord, and Landlord may, at its
option, accept such assignment of, all right, title and
interest of Tenant as sublandlord under such sublease,
together with all modifications, extensions and renewals
thereof then in effect and such Transferee shall, at
Landlord's option, attorn to Landlord pursuant to the then
executory provisions of such sublease, except that Landlord
shall not be (A) liable for any previous act or omission of
Tenant under such sublease, (B) subject to any counterclaim,
offset or defense not expressly provided in such sublease,
which theretofore accrued to such Transferee against Tenant,
(C) bound by any previous modification of such sublease not
consented to by Landlord or by any prepayment of more than
one month's rent, (D) bound to return such Transferee's
security deposit, if any, except to the extent Landlord
shall receive actual possession of such deposit and such
Transferee shall be entitled to the return of all or any
portion of such deposit under the terms of its sublease, or
(E) obligated to make any payment to or on behalf of such
Transferee, or to perform any work in the subleased space or
the Building, or in any way to prepare the subleased space
for occupancy, beyond Landlord's obligations under this
Lease. The provisions of this Section 13.3(b)(v) shall be
self-operative, and no further instrument shall be required
to give effect to this provision, provided that the
Transferee shall execute and deliver to Landlord any
instruments Landlord may reasonably request to evidence and
confirm such subordination and attornment.
Binding on Tenant; Indemnification of Landlord. Notwithstanding any
assignment or subletting or any acceptance of rent by Landlord from any
Transferee, Tenant shall remain fully liable for the payment of all Rent due and
for the performance of all the covenants, terms and conditions contained in this
Lease on Tenant's part to be observed and performed, and any default under any
term, covenant or condition of this Lease by any Transferee or anyone claiming
under or through any Transferee shall be deemed to be a default under this Lease
by Tenant. Except for claims for personal injury or property damage caused by
the gross negligence or willful misconduct of Landlord or its employees or
agents, Tenant shall indemnify, defend, protect and hold harmless Landlord from
and against any and all Losses resulting from any claims that may be made
against Landlord by the Transferee or anyone claiming under or through any
Transferee or by any brokers or other persons claiming a commission or similar
compensation in connection with the proposed assignment or sublease,
irrespective of whether Landlord shall give or decline to give its consent to
any proposed assignment or sublease, or if Landlord shall exercise any of its
options under this Article 13.
Tenant's Failure to Complete. If Landlord consents to a proposed
assignment or sublease and Tenant fails to execute and deliver to Landlord such
assignment or sublease within 90 days after the giving of such consent, then
Tenant shall again comply with all of the provisions and conditions of Section
13.2 before assigning this Lease or subletting all or part of the Premises.
Profits. If Tenant enters into any assignment or sublease permitted
hereunder or consented to by Landlord, Tenant shall, within 60 days of
Landlord's consent to such assignment or sublease, deliver to Landlord a list of
Tenant's reasonable third-party brokerage fees, legal fees and architectural
fees paid or to be paid in connection with such transaction and any actual costs
incurred by Tenant in separately demising and otherwise improving for the
transferee the subleased space (collectively, "Transaction Costs"), together
with a list of all of Tenant's Property to be transferred to such Transferee.
The Transaction Costs shall be amortized, on a straight-line basis, over the
term of any sublease. Tenant shall deliver to Landlord evidence of the payment
of such Transaction Costs promptly after the same are paid. In consideration of
such assignment or subletting, Tenant shall pay to Landlord:
In the case of an assignment, on the effective date of the
assignment, 50% of all sums and other consideration paid to Tenant by the
Transferee for or by reason of such assignment (including sums paid for the sale
or rental of Tenant's Property, less, in the case of a sale thereof, the then
fair market value, or in the case of the rental thereof, the then fair rental
value thereof, as reasonably determined by Landlord) after first deducting the
Transaction Costs; or
In the case of a sublease, 50% of any consideration payable
under the sublease to Tenant by the Transferee which exceeds on a per square
foot basis the Fixed Rent accruing during the term of the sublease in respect of
the subleased space (together with any sums paid for the sale or rental of
Tenant's Property, less, in the case of the sale thereof, the then fair market
value, or in the case of the rental thereof, the then fair rental value thereof,
as reasonably determined by Landlord) after first deducting the monthly
amortized amount of Transaction Costs. The sums payable under this clause shall
be paid by Tenant to Landlord monthly as and when paid by the subtenant to
Tenant.
Section 13.7 Transfers.
Related Entities. If Tenant is a corporation, the transfer (by
one or more transfers) of a majority of the stock of Tenant shall be deemed a
voluntary assignment of this Lease; provided, however, that the provisions of
this Article 13 shall not apply to the transfer of shares of stock of Tenant if
and so long as Tenant is publicly traded on a nationally recognized stock
exchange. For purposes of this Section 13.7 the term "transfers" shall be deemed
to include the issuance of new stock which results in a majority of the stock of
Tenant being held by a person or entity which does not hold a majority of the
stock of Tenant on the Effective Date. If Tenant is a limited liability company,
partnership, trust, or any other legal entity, the transfer (by one or more
transfers) of a majority of the beneficial ownership interests in such entity,
however characterized, shall be deemed a voluntary assignment of this Lease. The
provisions of Sections 13.1 and 13.6 shall not apply to transactions with a
corporation into or with which Tenant is merged or consolidated or to which
substantially all of Tenant's assets are transferred (each, a "Permitted
Transferee") so long as (i) such transfer was made for a legitimate independent
business purpose and not for the purpose of transferring this Lease, (ii) the
successor to Tenant has a net worth computed in accordance with generally
accepted accounting principles at least equal to the net worth of Tenant
immediately prior to such merger, consolidation or transfer, and (iii) proof
satisfactory to Landlord of such net worth is delivered to Landlord no later
than 10 days after the effective date of any such transaction. Section 13.6 or
the termination right as provided in Section 13.2 shall not apply to any of the
foregoing transfers whether or not the foregoing net worth text is satisfied.
Tenant may also, upon prior notice to Landlord, permit any corporation or other
business entity which controls, is controlled by, or is under common control
with the original Tenant (a "Related Corporation") to sublet all or part of the
Premises for the Permitted Uses, provided the Related Corporation is in
Landlord's reasonable judgment of a character and engaged in a business which is
in keeping with the standards for the Building and for so long as such entity
remains a Related Corporation. Such sublease shall not be deemed to vest in any
such Related Corporation any right or interest in this Lease nor shall it
relieve, release, impair or discharge any of Tenant's obligations hereunder. For
the purposes hereof, "control" shall be deemed to mean ownership of not less
than 50% of all of the voting stock of such corporation or not less than 50% of
all of the legal and equitable interest in any other business entity if Tenant
is not a corporation. Notwithstanding the foregoing, Tenant shall have no right
to assign this Lease or sublease all or any portion of the Premises without
Landlord's consent pursuant to this Section 13.7 if Tenant is not the initial
Tenant herein named or a person or entity who acquired Tenant's interest in this
Lease in a transaction approved by Landlord.
Applicability. The limitations set forth in this Section 13.7
shall apply to Transferee(s) and guarantor(s) of this Lease, if any, and any
transfer by any such entity in violation of this Section 13.7 shall be a
transfer in violation of Section 13.1.
Modifications, Takeover Agreements. Any modification,
amendment or extension of a sublease and/or any other agreement by which a
landlord of a building other than the Building agrees to assume the obligations
of Tenant under this Lease shall be deemed a sublease for the purposes of
Section 13.1 hereof.
Assumption of Obligations. No assignment or transfer shall be effective
unless and until the Transferee executes, acknowledges and delivers to Landlord
an agreement in form and substance reasonably satisfactory to Landlord whereby
the assignee (a) assumes Tenant's obligations under this Lease and (b) agrees
that, notwithstanding such assignment or transfer, the provisions of Section
13.1 hereof shall be binding upon it in respect of all future assignments and
transfers.
Tenant's Liability. The joint and several liability of Tenant and any
successors-in-interest of Tenant and the due performance of Tenant's obligations
under this Lease shall not be discharged, released or impaired by any agreement
or stipulation made by Landlord, or any grantee or assignee of Landlord,
extending the time, or modifying any of the terms and provisions of this Lease,
or by any waiver or failure of Landlord, or any grantee or assignee of Landlord,
to enforce any of the terms and provisions of this Lease.
Listings in Building Directory. The listing of any name other than that
of Tenant on the doors of the Premises, the Building directory or elsewhere
shall not vest any right or interest in this Lease or in the Premises, nor be
deemed to constitute Landlord's consent to any assignment or transfer of this
Lease or to any sublease of the Premises or to the use or occupancy thereof by
others. Any such listing shall constitute a privilege revocable in Landlord's
reasonable discretion by notice to Tenant.
Lease Disaffirmance or Rejection. If at any time after an assignment by
Tenant named herein, this Lease is not affirmed or is rejected in any bankruptcy
proceeding or any similar proceeding, or upon a termination of this Lease due to
any such proceeding, Tenant named herein, upon request of Landlord given after
such disaffirmance, rejection or termination (and actual notice thereof to
Landlord in the event of a disaffirmance or rejection or in the event of
termination other than by act of Landlord), shall (a) pay to Landlord all Rent
and other charges due and owing by the assignee to Landlord under this Lease to
and including the date of such disaffirmance, rejection or termination, and (b)
as "tenant," enter into a new lease of the Premises with Landlord for a term
commencing on the effective date of such disaffirmance, rejection or termination
and ending on the Expiration Date, at the same Rent and upon the then executory
terms, covenants and conditions contained in this Lease, except that (i) the
rights of Tenant named herein under the new lease shall be subject to the
possessory rights of the assignee under this Lease and the possessory rights of
any persons claiming through or under such assignee or by virtue of any statute
or of any order of any court, (ii) such new lease shall require all defaults
existing under this Lease to be cured by Tenant named herein with due diligence,
and (iii) such new lease shall require Tenant named herein to pay all Rent
which, had this Lease not been so disaffirmed, rejected or terminated, would
have become due under the provisions of this Lease after the date of such
disaffirmance, rejection or termination with respect to any period prior
thereto. If Tenant named herein defaults in its obligations to enter into such
new lease for a period of 10 days after Landlord's request, then, in addition to
all other rights and remedies by reason of default, either at law or in equity,
Landlord shall have the same rights and remedies against Tenant named herein as
if it had entered into such new lease and such new lease had thereafter been
terminated as of the commencement date thereof by reason of Tenant's default
thereunder.
ARTICLE 14
ACCESS TO PREMISES
Landlord's Access. (a) Landlord, Landlord's agents and utility service
providers servicing the Building may erect, use and maintain concealed ducts,
pipes and conduits in and through the Premises provided such use does not cause
the usable area of the Premises to be reduced beyond a de minimis amount.
Landlord shall promptly repair any damage to the Premises caused by any work
performed pursuant to this Article 14.
Landlord, any Lessor or Mortgagee and any other party
designated by Landlord and their respective agents shall have the right to enter
the Premises at all reasonable times, upon not less than 24 hours prior
telephonic notice except in the case of emergency, to examine the Premises, to
show the Premises to prospective purchasers, Mortgagees, Lessors or, during the
last 15 months of the Term, tenants and their respective agents and
representatives or others, to perform Restorative Work to the Premises or the
Building, and Landlord shall be allowed to take all material into the Premises
that may be required for the performance of such Restorative Work without the
same constituting an actual or constructive eviction of Tenant in whole or in
part and without any abatement of Rent; provided, however, that all such work
shall be done as promptly as reasonably possible and so as to cause as little
interference to Tenant as reasonably possible and shall be subject to the
provisions of Section 14.4 below.
All parts (except surfaces facing the interior of the
Premises) of all walls, windows and doors bounding the Premises, all balconies,
terraces and roofs adjacent to the Premises, all space in or adjacent to the
Premises used for shafts, stacks, stairways, mail chutes, conduits and other
mechanical facilities, Building Systems; Building facilities and Common Areas
are not part of the Premises, and Landlord shall have the use thereof and access
thereto through the Premises for the purposes of Building operation,
maintenance, alteration and repair.
Alterations to Real Property. Landlord has the right at any time to (a)
change the name, number or designation by which the Building is commonly known,
and (b) alter the Building and Garage to change the arrangement or location of
entrances or passageways, doors and doorways, corridors, elevators, stairs,
toilets or other Common Areas without any such acts constituting an actual or
constructive eviction and without incurring any liability to Tenant, so long as
such changes do not deprive Tenant of access to the Premises. Landlord shall not
exercise any of its rights pursuant to this Section 14.2, to the extent doing so
would unreasonably interfere with Tenant's use of the Premises or Garage.
Light and Air. If at any time any windows of the Premises are
temporarily darkened or covered over by reason of any Restorative Work, any of
such windows are permanently darkened or covered over due to any Requirement or
there is otherwise a diminution of light, air or view by another structure which
may hereinafter be erected (whether or not by Landlord), Landlord shall not be
liable for any damages and Tenant shall not be entitled to any compensation or
abatement of any Rent, nor shall the same release Tenant from its obligations
hereunder or constitute an actual or constructive eviction.
Tenant's Security Requirements. Landlord acknowledges that Tenant has
advised Landlord that Tenant's business at the Premises involves sensitive
information and operations and that Tenant has security requirements to protect
such information and operations. Landlord and any person entering the Premises
with, at the direction of or under the authority of, Landlord shall, subject to
Tenant's compliance with its obligations pursuant to this Section 14.4, follow
Tenant's commercially reasonable security requirements, which include the
requirement that all persons entering the Premises be attended by a
representative of Tenant, Tenant shall make a representative available upon
24-hours prior telephone notice by Landlord. Tenant acknowledges that to the
extent Tenant does not facilitate Landlord's access to the Premises or certain
portions thereof, Landlord shall be absolved from the obligation to perform any
services within such portion of the Premises including cleaning services. In the
event of an emergency that could cause damage to health, safety or property
Landlord shall use good faith efforts to follow Tenant's security requirements
and in such event Landlord will be required to give only such notice that it in
good faith believes is feasible under the circumstances and need not wait to be
accompanied by Tenant or its employees or representatives (although these
parties may still accompany Landlord if they are available and wish to do so).
ARTICLE 15
DEFAULT
Tenant's Defaults. Each of the following events shall be an "Event of
Default" hereunder:
Tenant fails to pay when due any installment of Rent and such
default shall continue for 5 days after notice of such default is given to
Tenant, except that if Landlord shall have given 2 such notices during any
calendar year of the Term, Tenant shall not be entitled to any further notice of
its delinquency in the payment of any installment of rent until the expiration
of such calendar year without Tenant having defaulted in any such payment; or
Tenant fails to observe or perform any other term, covenant
or condition of this Lease and such failure continues for more than 30 days (10
days with respect to a default under Article 3) after notice by Landlord to
Tenant of such default, or if such default (other than a default under Article
3) is of a nature that it cannot be completely remedied within 30 days, failure
by Tenant to commence to remedy such failure within said 30 days, and thereafter
diligently prosecute to completion all steps necessary to remedy such default,
provided in all events the same is completed within 90 days; or
if Landlord applies or retains any part of the Security
Deposit, and Tenant fails to deposit with Landlord the amount so applied or
retained by Landlord, or to provide Landlord with a replacement Letter of Credit
(as hereinafter defined), if applicable, within 5 days after notice by Landlord
to Tenant stating the amount applied or retained.
Landlord's Remedies. (a) Upon the occurrence of an Event of Default,
Landlord, at its option, and without limiting the exercise of any other right or
remedy Landlord may have on account of such Event of Default, and without any
further demand or notice, may give to Tenant 3 days' notice of termination of
this Lease, in which event this Lease and the Term shall come to an end and
expire (whether or not the Term shall have commenced) upon the expiration of
such 3 day period with the same force and effect as if the date set forth in the
notice was the Expiration Date stated herein; and Tenant shall then quit and
surrender the Premises to Landlord, but Tenant shall remain liable for damages
as provided in this Article 15, and/or, to the extent permitted by law, Landlord
may remove all persons and property from the Premises, which property shall be
stored by Landlord at a warehouse or elsewhere at the risk, expense and for the
account of Tenant.
If Landlord elects to terminate this Lease, pursuant to
Section 1951.2 of the California Civil Code, Landlord shall be entitled to
recover from Tenant the aggregate of:
(i) The worth at the time of award of the unpaid Rent and
charges equivalent to Rent earned as of the date of the
termination hereof;
(ii)The worth at the time of award of the amount by which
the unpaid Rent and charges equivalent to Rent which would
have been earned after the date of termination hereof until
the time of award exceeds the amount of such rental loss
that Tenant proves could have been reasonably avoided;
(iii) The worth at the time of award of the amount by which
the unpaid Rent and charges equivalent to Rent for the
balance of the Term after the time of award exceeds the
amount of such rental loss that Tenant proves could have
been reasonably avoided;
(iv) Any other amount necessary to compensate Landlord for
the detriment proximately caused by Tenant's failure to
perform its obligations under this Lease or which, in the
ordinary course of things, would be likely to result
therefrom; and
(v) Any other amount which Landlord may hereafter be
permitted to recover from Tenant to compensate Landlord for
the detriment caused by Tenant's default.
For the purposes of this Section 15.2(b), the "time of award" shall mean the
date upon which the judgment in any action brought by Landlord against Tenant by
reason of such Event of Default is entered or such earlier date as the court may
determine; the "worth at the time of award" of the amounts referred to in
Sections 15.2(b)(i) and 15.2(b)(ii) shall be computed by allowing interest on
such amounts at the Interest Rate; and the "worth at the time of award" of the
amount referred to in Section 15.2(b)(iii) 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% per annum. Tenant agrees that such charges shall be
recoverable by Landlord under California Code of Civil Procedure Section 1174(b)
or any similar, successor or related provision of law.
Recovering Rent as It Comes Due. Upon any Event of Default, in addition
to any other remedies available to Landlord at law or in equity or under this
Lease, Landlord shall have the remedy described in California Civil Code Section
1951.4. Accordingly, if Landlord does not elect to terminate this Lease,
Landlord may, from time to time, enforce all of its rights and remedies under
this Lease, including the right to recover all Rent as it becomes due. Such
remedy may be exercised by Landlord without prejudice to its right thereafter to
terminate this Lease in accordance with the other provisions contained in this
Article 15. Landlord's reentry to perform acts of maintenance or preservation
of, or in connection with efforts to relet, the Premises, or any portion
thereof, or the appointment of a receiver upon Landlord's initiative to protect
Landlord's interest under this Lease shall not terminate Tenant's right to
possession of the Premises or any portion thereof and, until Landlord elects to
terminate this Lease, this Lease shall continue in full force and Landlord may
pursue all its remedies hereunder. Nothing in this Article 15 shall be deemed to
affect Landlord's right to indemnification, under the indemnification clauses
contained in this Lease, for Losses arising from events occurring prior to the
termination of this Lease.
General. (a) All rights, powers and remedies of Landlord hereunder and
under any other agreement now or hereafter in force between Landlord and Tenant
shall be cumulative and not alternative and shall be in addition to all rights,
powers and remedies given to Landlord at law or in equity. The exercise of any
one or more of such rights or remedies shall not impair Landlord's right to
exercise any other right or remedy including any and all rights and remedies of
Landlord under California Civil Code Section 1951.8, California Code of Civil
Procedure Section 1161 et seq., or any similar, successor or related
Requirements.
If, after Tenant's abandonment of the Premises, Tenant leaves
behind any of Tenant's Property, then Landlord shall store such Tenant's
Property at a warehouse or any other location at the risk, expense and for the
account of Tenant, and such property shall be released only upon Tenant's
payment of such charges, together with moving and other costs relating thereto
and all other sums due and owing under this Lease. If Tenant does not reclaim
such Tenant's Property within the period permitted by law, Landlord may sell
such Tenant's Property in accordance with law and apply the proceeds of such
sale to any sums due and owing hereunder, or retain said Property, granting
Tenant credit against sums due and owing hereunder for the reasonable value of
such Property.
To the extent permitted by law, Tenant hereby waives all
provisions of, and protections under, any Requirement to the extent same are
inconsistent and in conflict with specific terms and provisions hereof.
Interest. If any payment of Rent is not paid when due, interest shall
accrue on such payment, from the date such payment became due until paid at the
Interest Rate. Tenant acknowledges that late payment by Tenant of Rent will
cause Landlord to incur costs not contemplated by this Lease, the exact amount
of such costs being extremely difficult and impracticable to fix. Such costs
include, without limitation, processing and accounting charges, and late charges
that maybe imposed on Landlord by the terms of any note secured by a Mortgage
covering the Premises, Therefore, in addition to interest, if any amount is not
paid when due, a late charge equal to 5% of such amount shall be assessed;
provided, however, that on 2 occasions during any calendar year of the Term,
Landlord shall give Tenant notice of such late payment and Tenant shall have a
period of 5 days thereafter in which to make such payment before any late charge
is assessed. Such interest and late charges are separate and cumulative and are
in addition to and shall not diminish or represent a substitute for any of
Landlord's rights or remedies under any other provision of this Lease.
Other Rights of Landlord. If Tenant fails to pay any Additional Rent
when due, Landlord, in addition to any other right or remedy, shall have the
same rights and remedies as in the case of a default by Tenant in the payment of
Fixed Rent. If Tenant is in arrears in the payment of Rent, Tenant waives
Tenant's right, if any, to designate the items against which any payments made
by Tenant are to be credited, and Landlord may apply any payments made by Tenant
to any items Landlord sees fit, regardless of any request by Tenant. Landlord
reserves the right, without liability to Tenant and without constituting any
claim of constructive eviction, to suspend furnishing or rendering to Tenant any
supplemental or overtime property, material, labor, utility or other service,
which Landlord is not obligated to furnish or render in accordance with Article
10, in the event that (but only for so long as) Tenant is in arrears in paying
Landlord for such items for more than 30 days after notice from Landlord to
Tenant demanding the payment of such arrears.
Landlord's Default. Landlord shall not be in default hereunder unless
Landlord fails to perform any obligation required of Landlord under the terms of
this Lease within a reasonable time, but in no event later than 30 days after
written notice by Tenant to Landlord, specifying the nature of Landlord's
failure to perform. If, however, the nature of Landlord's obligation is such
that more than 30 days are reasonably required for performance, than Landlord
shall not be in default hereunder if Landlord commences performance within such
30 day period and thereafter diligently prosecutes such cure to completion. If
Landlord at the expiration of such notice and cure periods has failed to cure
such default, then, subject to the exculpatory provisions of Section 26.3
hereof, Tenant may pursue any of its legal or equitable remedies, but Tenant
shall have no right to otherwise terminate this Lease.
ARTICLE 16
LANDLORD'S RIGHT TO CURE; FEES AND EXPENSES
If Tenant defaults in the performance of its obligations under
this Lease, Landlord, without waiving such default, may perform such obligations
at Tenant's expense: (a) immediately, and without notice, in the case of
emergency or if the default (i) materially interferes with the use by any other
tenant of the Building, (ii) materially interferes with the efficient operation
of the Building, (iii) results in a violation of any Requirement, or (iv)
results or will result in a cancellation of any insurance policy maintained by
Landlord, and (b) in any other case if such default continues after 10 days from
the date Landlord gives notice of Landlord's intention to perform the defaulted
obligation. All costs and expenses incurred by Landlord in connection with any
such performance by it and all costs and expenses, including reasonable counsel
fees and disbursements, incurred by Landlord in any action or proceeding
(including any unlawful detainer proceeding) brought by Landlord to enforce any
obligation of Tenant under this Lease and/or right of Landlord in or to the
Premises, shall be paid by Tenant to Landlord on demand, with interest thereon
at the Interest Rate from the date incurred by Landlord. Except as expressly
provided to the contrary in this Lease, all costs and expenses which, pursuant
to this Lease are incurred by Landlord and payable to Landlord by Tenant, and
all charges, amounts and sums payable to Landlord by Tenant for any property,
material, labor, utility or other services which, pursuant to this Lease or at
the request and for the account of Tenant, are provided, furnished or rendered
by Landlord, shall become due and payable by Tenant to Landlord in accordance
with the terms of the bills rendered by Landlord to Tenant.
ARTICLE 17
NO REPRESENTATIONS BY LANDLORD; LANDLORD'S APPROVAL
No Representations. Except as expressly set forth herein, Landlord and
Landlord's agents have made no warranties, representations, statements or
promises with respect to the Building, the Real Property or the Premises and no
rights, easements or licenses are acquired by Tenant by implication or
otherwise. Tenant is entering into this Lease after full investigation and is
not relying upon any statement or representation made by Landlord not embodied
in this Lease.
No Money Damages. Wherever in this Lease Landlord's consent or approval
is required, Landlord hereby acknowledges its duty to act in each such case
consistent with a covenant of good faith and fair dealing (but Landlord shall
not otherwise be subject to a "reasonableness" standard where Landlord has not
expressly agreed herein to not unreasonably withhold its consent or approval).
If Landlord refuses to grant such consent or approval, whether or not Landlord
expressly agreed that such consent or approval would not be unreasonably
withheld, Tenant shall not make, and Tenant hereby waives, any claim for money
damages (including any claim by way of set-off, counterclaim or defense) based
upon Tenant's claim or assertion that Landlord unreasonably withheld or delayed
its consent or approval. Tenant's sole remedy shall be an action or proceeding
to enforce such provision, by specific performance, injunction or declaratory
judgment. In no event shall Landlord be liable for, and Tenant, on behalf of
itself and all other Tenant Parties, hereby waives any claim for, any indirect,
consequential or punitive damages, including loss or profits or business
opportunity, arising under or in connection with this Lease. Notwithstanding the
foregoing, Tenant's waiver set forth in the second sentence of this Section 17.2
shall not apply to any final non-appealable judgment (or a judgment that is in
fact not appealed) that Tenant obtains from a court of competent jurisdiction
that Landlord acted in bad faith in making its determination to withhold its
consent or approval.
Reasonable Efforts. For purposes of this Lease, "reasonable efforts" by
Landlord shall not include an obligation to employ contractors or labor at
overtime or other premium pay rates or to incur any other overtime costs or
additional expenses whatsoever.
ARTICLE 18
END OF TERM
Expiration. Upon the expiration or other termination of this Lease,
Tenant shall quit and surrender the Premises to Landlord vacant, broom clean and
in good order and condition, ordinary wear and tear and damage for which Tenant
is not responsible under the terms of this Lease excepted, and Tenant shall
remove all of Tenant's Property and Tenant's Alterations as may be required
pursuant to Article 5.
Holdover Rent. Landlord and Tenant recognize that Landlord's damages
resulting from Tenant's failure to timely surrender possession of the Premises
may be substantial, may exceed the amount of the Rent payable hereunder, and
will be impossible to accurately measure. Accordingly, if possession of the
Premises is not surrendered to Landlord on the Expiration Date or sooner
termination of this Lease, in addition to any other rights or remedies Landlord
may have hereunder or at law, Tenant shall (a) pay to Landlord for each month
(or any portion thereof) during which Tenant holds over in the Premises after
the Expiration Date or sooner termination of this Lease, in addition to all
Additional Rent, (i) for the first month, a sum equal to 150% of the Fixed Rent
payable under this Lease for the last full calendar month of the Term ("Final
Fixed Rent" and thereafter 200% of such Final Fixed Rent, (b) be liable to
Landlord for (i) any payment or rent concession which Landlord may be required
to make to any tenant obtained by Landlord for all or any part of the Premises
(a "New Tenant") in order to induce such New Tenant not to terminate its lease
by reason of the holding-over by Tenant, and (ii) the loss of the benefit of the
bargain if any New Tenant shall terminate its lease by reason of the
holding-over by Tenant, and (c) if any such nonconsensual holding-over continues
for more than 30 days, indemnify Landlord against all claims for actual damages
(but in no event any consequential damages) by any New Tenant. No holding-over
by Tenant, nor the payment to Landlord of the amounts specified above, shall
operate to extend the Term hereof. Nothing herein contained shall be deemed to
permit Tenant to retain possession of the Premises after the Expiration Date or
sooner termination of this Lease, and no acceptance by Landlord of payments from
Tenant after the Expiration Date or sooner termination of this Lease shall be
deemed to be other than on account of the amount to be paid by Tenant in
accordance with the provisions of this Section 18.2.
ARTICLE 19
QUIET ENJOYMENT
Provided this Lease is in full force and effect and no Event
of Default then exists, Tenant may peaceably and quietly enjoy the Premises
without hindrance by Landlord or any person lawfully claiming through or under
Landlord, subject to the terms and conditions of this Lease and to all Superior
Leases and Mortgages.
ARTICLE 20
NO SURRENDER; NO WAIVER
No Surrender or Release. No act or thing done by Landlord or Landlord's
agents or employees during the Term shall be deemed an acceptance of a surrender
of the Premises, and no provision of this Lease shall be deemed to have been
waived by Landlord, unless such waiver is in writing and is signed by Landlord.
No Waiver. The failure of either party to seek redress for violation
of, or to insist upon the strict performance of, any covenant or condition of
this Lease, or any of the Rules and Regulations, shall not be construed as a
waiver or relinquishment for the future performance of such obligations of this
Lease or the Rules and Regulations, or of the right to exercise such election
but the same shall continue and remain in full force and effect with respect to
any subsequent breach, act or omission. The receipt by Landlord of any Rent
payable pursuant to this Lease or any other sums with knowledge of the breach of
any covenant of this Lease shall not be deemed a waiver of such breach. No
payment by Tenant or receipt by Landlord of a lesser amount than the monthly
Rent herein stipulated shall be deemed to be other than a payment on account of
the earliest stipulated Rent, or as Landlord may elect to apply such payment,
nor shall any endorsement or statement on any check or any letter accompanying
any check or payment as Rent be deemed an accord and satisfaction, and Landlord
may accept such check or payment without prejudice to Landlord's right to
recover the balance of such Rent or pursue any other remedy provided in this
Lease.
ARTICLE 21
WAIVER OF TRIAL BY JURY; COUNTERCLAIM
Jury Trial Waiver. THE PARTIES HEREBY AGREE THAT THIS LEASE CONSTITUTES
A WRITTEN CONSENT TO WAIVER OF TRIAL BY JURY PURSUANT TO THE PROVISIONS OF
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 631 AND EACH PARTY DOES HEREBY
CONSTITUTE AND APPOINT THE OTHER PARTY ITS TRUE AND LAWFUL ATTORNEY-IN-FACT,
WHICH APPOINTMENT IS COUPLED WITH AN INTEREST, AND EACH PARTY DOES HEREBY
AUTHORIZE AND EMPOWER THE OTHER PARTY, IN THE NAME, PLACE AND STEAD OF SUCH
PARTY, TO FILE THIS LEASE WITH THE CLERK OR JUDGE OF ANY COURT OF COMPETENT
JURISDICTION AS A STATUTORY WRITTEN CONSENT TO WAIVER OF TRIAL BY JURY.
LANDLORD'S INITIALS: _____ TENANT'S INITIALS: _____
Waiver of Counterclaim. If Landlord commences any summary proceeding
against Tenant, Tenant will not interpose any counterclaim of any nature or
description in any such proceeding (unless failure to impose such counterclaim
would preclude Tenant from asserting in a separate action the claim which is the
subject of such counterclaim), and will not seek to consolidate such proceeding
with any other action which may have been or will be brought in any other court
by Tenant.
ARTICLE 22
NOTICES
Except as otherwise expressly provided in this Lease, all
consents, notices, demands, requests, approvals or other communications given
under this Lease shall be in writing and shall be deemed sufficiently given or
rendered if delivered by hand (provided a signed receipt is obtained) or if sent
by registered or certified mail (return receipt requested) or by a nationally
recognized overnight delivery service making receipted deliveries, addressed to
Landlord and Tenant as set forth in Article 1, and to any Mortgagee or Lessee
who shall require copies of notices and whose address is provided to Tenant, or
to such other address(es) as Landlord, Tenant or any Mortgagee or Lessor may
designate as its new address(es) for such purpose by notice given to the other
in accordance with the provisions of this Article 22. Any such approval,
consent, notice, demand, request or other communication shall be deemed to have
been given on the date of receipted delivery, refusal to accept delivery or when
delivery is first attempted but cannot be made due to a change of address for
which no notice is given or 3 Business Days after it shall have been mailed as
provided in this Article 22, whichever is earlier.
ARTICLE 23
RULES AND REGULATIONS
All Tenant Parties shall observe and comply with the Rules and
Regulations, as supplemented or amended from time to time. Landlord reserves the
right, from time to time, to adopt additional Rules and Regulations and to amend
the Rules and Regulations then in effect. Nothing contained in this Lease shall
impose upon Landlord any obligation to enforce the Rules and Regulations or
terms, covenants or conditions in any other lease against any other Building
tenant, and Landlord shall not be liable to Tenant for violation of the same by
any other tenant, its employees, agents, visitors or licensees, provided that
Landlord shall enforce the Rules or Regulations against Tenant and all other
tenants of the Building in a non-discriminatory fashion.
ARTICLE 24
BROKER
Landlord has retained Landlord's Agent as leasing agent in
connection with this Lease and Landlord will be solely responsible for any fee
that may be payable to Landlord's Agent. Landlord agrees to pay a commission to
Tenant's Broker pursuant to a separate agreement. Each of Landlord and Tenant
represents and warrants to the other that it has not dealt with any broker in
connection with this Lease other than Landlord's Agent, Landlord's Broker and
Tenant's Broker and that no other broker, finder or like entity procured or
negotiated this Lease or is entitled to any fee or commission in connection
herewith. Each of Landlord and Tenant shall indemnify, defend, protect and hold
the other party harmless from and against any and all Losses which the
indemnified party may incur by reason of any claim of or liability to any
broker, finder or like agent (other than Landlord's Agent, Landlord's Broker and
Tenant's Broker) arising out of any dealings claimed to have occurred between
the indemnifying party and the claimant in connection with this Lease, and/or
the above representation being false.
ARTICLE 25
INDEMNITY
Tenant's Indemnity. Tenant shall not do or permit to be done any act or
thing upon the Premises or the Real Property which may subject Landlord to any
liability or responsibility for injury, damages to persons or property or to any
liability by reason of any violation of any Requirement, and shall exercise such
control over the Premises as to fully protect Landlord against any such
liability. Except to the extent of the gross negligence or willful misconduct of
Landlord or its agents or contractors, Tenant shall indemnify, defend, protect
and hold harmless each of the Indemnitees from and against any and all Losses,
resulting from any claims (i) against the Indemnitees arising from any act,
omission or negligence of (A) all Tenant Parties or (B) both Landlord and
Tenant, provided, however, that Tenant's liability hereunder with respect to
matters judicially determined to have arisen out of the negligence of Landlord,
which determination shall not be subject to appeal, shall be limited to the
amount of insurance coverage carried by Tenant pursuant to Article 11, (ii)
against the Indemnitees arising from any accident, injury or damage whatsoever
caused to any person or to the property of any person and occurring in or about
the Premises, and (iii) against the Indemnitees resulting from any breach,
violation or nonperformance of any covenant, condition or agreement of this
Lease on the part of Tenant to be fulfilled, kept, observed or performed.
Landlord's Indemnity. Landlord shall indemnify, defend and hold
harmless Tenant from and against all Losses incurred by Tenant arising from any
accident, injury or damage whatsoever caused to any person or the property of
any person in or about the Common Areas and with respect to claims for personal
injury, the Premises, to the extent attributable to the gross negligence or
willful misconduct of Landlord or its employees, agents or contractors.
Defense and Settlement. If any claim, action or proceeding is made or
brought against any Indemnitee, then upon demand by an Indemnitee, Tenant, at
its sole cost and expense, shall resist or defend such claim, action or
proceeding in the Indemnitee's name (if necessary), by attorneys approved by the
Indemnitee, which approval shall not be unreasonably withheld (attorneys for
Tenant's insurer shall be deemed approved for purposes of this Section 25.3).
Notwithstanding the foregoing, an Indemnitee may retain its own attorneys to
participate or assist in defending any claim, action or proceeding involving
potential liability in excess of the amount available under Tenant's liability
insurance carried under Section 11.1 for such claim and Tenant shall pay the
reasonable fees and disbursements of such attorneys. If Tenant fails to
diligently defend or if there is a legal conflict or other conflict of interest,
then Landlord may retain separate counsel at Tenant's expense. Notwithstanding
anything herein contained to the contrary, Tenant may direct the Indemnitee to
settle any claim, suit or other proceeding provided that (a) such settlement
shall involve no obligation on the part of the Indemnitee other than the payment
of money, (b) any payments to be made pursuant to such settlement shall be paid
in full exclusively by Tenant at the time such settlement is reached, (c) such
settlement shall not require the Indemnitee to admit any liability, and (d) the
Indemnitee shall have received an unconditional release from the other parties
to such claim, suit or other proceeding.
ARTICLE 26
MISCELLANEOUS
Delivery. This Lease shall not be binding upon Landlord or Tenant
unless and until Landlord shall have executed and delivered a fully executed
copy of this Lease to Tenant.
Transfer of Real Property. In the event of the sale, conveyance,
assignment or transfer (collectively, a "Transfer") by such Landlord (or upon
any subsequent landlord after the Transfer by such subsequent landlord) of its
interest in the Building or the Real Property, as the case may be, such Landlord
shall be entirely freed and relieved of all covenants and obligations of
Landlord hereunder accruing from and after the date of Transfer, provided the
transferee of Landlord's interest (or that of such subsequent Landlord) in the
Building or the Real Property, as the case may be, has assumed in writing all
obligations under this Lease arising from and after the date of Transfer.
Limitation on Liability. The liability of Landlord for Landlord's
obligations under this Lease shall be limited to Landlord's interest in the Real
Property and Landlord's interest in the net proceeds from the sale thereof and
Tenant shall not look to any other property or assets of Landlord or the
property or assets of any direct or indirect partner, member, manager,
shareholder, director, officer, principal, employee or agent of Landlord
(collectively, the "Parties") in seeking either to enforce Landlord's
obligations under this Lease or to satisfy a judgment for Landlord's failure to
perform such obligations; and none of the Parties shall be personally liable for
the performance of Landlord's obligations under this Lease.
Rent. All amounts payable by Tenant to or on behalf of Landlord under
this Lease, whether or not expressly denominated Fixed Rent, Tenant's Tax
Payment, Tenant's Operating Payment, Additional Rent or Rent, shall constitute
rent for the purposes of Section 502(b)(6) of the United States Bankruptcy Code.
Entire Document. This Lease (including any Schedules and Exhibits
referred to herein and all supplementary agreements provided for herein)
contains the entire agreement between the parties and all prior negotiations and
agreements are merged into this Lease. All of the Schedules and Exhibits
attached hereto are incorporated in and made a part of this Lease, provided that
in the event of any inconsistency between the terms and provisions of this Lease
and the terms and provisions of the Schedules and Exhibits hereto, the terms and
provisions of this Lease shall control.
Governing Law. This Lease shall be governed in all respects by the laws
of the State of California.
Unenforceability. If any provision of this Lease, or its application to
any Person or circumstance, shall ever be held to be invalid or unenforceable,
then in each such event the remainder of this Lease or the application of such
provision to any other Person or any other circumstance (other than those as to
which it shall be invalid or unenforceable) shall not be thereby affected, and
each provision hereof shall remain valid and enforceable to the fullest extent
permitted by law.
Lease Disputes. (a) Tenant agrees that all disputes arising, directly
or indirectly, out of or relating to this Lease, and all actions to enforce this
Lease, shall be dealt with and adjudicated in the state courts of the State of
California or the United States District Court for the Northern District of
California and for that purpose hereby expressly and irrevocably submits itself
to the jurisdiction of such courts. Tenant agrees that so far as is permitted
under applicable law, this consent to personal jurisdiction shall be
self-operative and no further instrument or action, other than service of
process in one of the manners specified in this Lease, or as otherwise permitted
by law, shall be necessary in order to confer jurisdiction upon it in any such
court.
To the extent that Tenant has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property,
Tenant irrevocably waives such immunity in respect of its obligations under this
Lease.
Landlord's Agent. Unless Landlord delivers written notice to Tenant to
the contrary, Landlord's Agent is authorized to act as Landlord's agent in
connection with the performance of this Lease, and Tenant shall direct all
correspondence and requests to, and shall be entitled to rely upon
correspondence received from Landlord's Agent. Tenant acknowledges that
Landlord's Agent is acting solely as agent for Landlord in connection with the
foregoing; and neither Landlord's Agent nor any of its direct or indirect
partners, members, managers, officers, shareholders, directors, employees,
principals, agents or representatives shall have any liability to Tenant in
connection with the performance of this Lease, and Tenant waives any and all
claims against any and all of such parties (other than Landlord) arising out of,
or in any way connected with, this Lease, the Building or the Real Property.
Estoppel. Within 10 Business Days following request from Landlord, any
Mortgagee or any Lessor, Tenant shall deliver to Landlord a statement executed
and acknowledged by Tenant, in form reasonably satisfactory to Landlord, (a)
stating the Commencement Date, the Rent Commencement Date and the Expiration
Date, and that this Lease is then in full force and effect and has not been
modified (or if modified, setting forth all modifications), (b) setting forth
the date to which the Fixed Rent and any Additional Rent have been paid,
together with the amount of monthly Fixed Rent and Additional, Rent then
payable, (c) stating whether or not, to Tenant's current actual knowledge,
Landlord is in default under this Lease, and, if Landlord is in default, setting
forth the specific nature of all such defaults, (d) stating the amount of the
Security Deposit, if any, under this Lease, (e) stating whether there are any
subleases or assignments affecting the Premises, (f) stating the address of
Tenant to which all notices and communications under the Lease shall be sent,
and (g) responding to any other matters reasonably requested by Landlord, such
Mortgagee or such Lessor. Tenant acknowledges that any statement delivered
pursuant to this Section 26.10 may be relied upon by any purchaser or owner of
the Real Property or the Building, or all or any portion of Landlord's interest
in the Real Property or the Building or any Superior Lease, or by any Mortgagee,
or assignee thereof or by any Lessor, or assignee thereof.
Certain Interpretational Rules. For purposes of this Lease, whenever
the words "include", "includes", or "including" are used, they shall be deemed
to be followed by the words "without limitation" and, whenever the circumstances
or the context requires, the singular shall be construed as the plural, the
masculine shall be construed as the feminine and/or the neuter and vice versa.
This Lease shall be interpreted and enforced without the aid of any canon,
custom or rule of law requiring or suggesting construction against the party
drafting or causing the drafting of the provision in question. The captions in
this Lease are inserted only as a matter of convenience and for reference and in
no way define, limit or describe the scope of this Lease or the intent of any
provision hereof.
Parties Bound. The terms, covenants, conditions and agreements
contained in this Lease shall bind and inure to the benefit of Landlord and
Tenant and, except as otherwise provided in this Lease, to their respective
legal representatives, successors, and assigns.
Memorandum of Lease. This Lease shall not be recorded; however, at
either party's request, Landlord and Tenant shall promptly execute, acknowledge
and deliver a memorandum with respect to this Lease sufficient for recording and
either party may record the Memorandum provided that if Tenant so request that
such memorandum be recorded, prior to such recordation Tenant shall execute,
acknowledge and deliver to Landlord a quitclaim deed for the Building and the
underlying real property together with Tenant's irrevocable instructions that
such quitclaim deed may be recorded upon the expiration or earlier termination
of this Lease.
Counterparts. This Lease may be executed in 2 or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute but one instrument.
Survival. All obligations and liabilities of Landlord or Tenant to the
other which accrued before the expiration or other termination of this Lease,
and all such obligations and liabilities which by their nature or under the
circumstances can only be, or by the provisions of this Lease may be, performed
after such expiration or other termination, shall survive the expiration or
other termination of this Lease. Without limiting the generality of the
foregoing, the rights and obligations of the parties with respect to any
indemnity under this Lease, and with respect to any Rent and any other amounts
payable under this Lease, shall survive the expiration or other termination of
this Lease.
Code Waivers. Tenant hereby waives any and all rights under and
benefits of Subsection 1 of Section 1931, 1932(2), Subdivision 2, 1933,
Subdivision 4, 1941 and 1942 of the California Civil Code, Section 1265.130 of
the California Code of Civil Procedure (allowing either party to petition a
court to terminate a lease in the event of a partial taking), and Section
1174(c) of the California Code of Civil Procedure and Section 1951.7 of the
California Civil Code (providing for Tenant's right to satisfy a judgment in
order to prevent a forfeiture of this Lease or requiring Landlord to deliver
written notice to Tenant of any reletting of the Premises), and any similar law,
statute or ordinance now or hereinafter in effect.
Inability to Perform. This Lease and the obligation of Tenant to pay
Rent and to perform all of the other covenants and agreements of Tenant
hereunder shall not be affected, impaired or excused by any Unavoidable Delays.
Landlord shall use reasonable efforts to promptly notify Tenant of any
Unavoidable Delay which prevents Landlord from fulfilling any of its obligations
under this Lease.
Transportation Demand Management Program. If, during the Term, the City
of Santa Clara so requires, then Tenant shall institute and maintain for its
employees working at the Building a Transportation Demand Management Program
("TDMP") which shall involve, as so required, measures such as shuttle services,
carpool matching, guaranteed ride home program and employee subsidies for travel
costs. Upon request of Landlord, Tenant shall report to Landlord and the City of
Santa Clara on the status of Tenant's TDMP.
Reasonable Expenditures. Notwithstanding anything to the contrary set
forth herein, any expenditure by a party permitted or required under this Lease,
for which such party is entitled to and does demand reimbursement from the other
party, shall be entitled to the fair market value of the good and services
involved, shall be reasonably incurred, and shall be reasonably substantiated by
reasonable supporting documentary evidence available for inspection and review
by the other party upon reasonable prior written request and during normal
business hours.
ARTICLE 27
SECURITY DEPOSIT
Security Deposit. Tenant shall deposit the Security Deposit with
Landlord upon the execution of this Lease in cash or check as security for the
faithful performance and observance by Tenant of the terms, covenants and
conditions of this Lease.
Letter of Credit. In lieu of a cash or check Security Deposit, Tenant
may deliver the Security Deposit to Landlord in the form of a clean,
irrevocable, non-documentary and unconditional letter of credit (the "Letter of
Credit") issued by and drawable upon any commercial bank which is a member of
the New York Clearing House Association or other bank reasonably satisfactory to
Landlord, trust company, national banking association or savings and loan
association with offices for banking purposes in the City of San Francisco (the
"Issuing Bank"), which has outstanding unsecured, uninsured and unguaranteed
indebtedness, or shall have issued a letter of credit or other credit facility
that constitutes the primary security for any outstanding indebtedness (which is
otherwise uninsured and unguaranteed), that is then rated, without regard to
qualification of such rating by symbols such as "+" or "-" or numerical
notation, "Aa" or better by Moody's Investors Service and "AA" or better by
Standard & Poor's Rating Service, and has combined capital, surplus and
undivided profits of not less than $500,000,000. Landlord hereby approves of
Canadian Imperial Bank of Commerce as an Issuing Bank and the form of Letter of
Credit attached hereto as Exhibit I. Such Letter of Credit shall (a) name
Landlord as beneficiary, (b) be in the amount of the Security Deposit, (c) have
a term of not less than one year, (d) permit multiple drawings, (e) be fully
transferable by Landlord without the payment of any fees or charges by Landlord,
and (f) otherwise be in form and content reasonably satisfactory to Landlord. If
upon any transfer of the Letter of Credit, any fees or charges shall be so
imposed, then such fees or charges shall be payable solely by Tenant and the
Letter of Credit shall so specify. The Letter of Credit shall provide that it
shall be deemed automatically renewed, without amendment, for consecutive
periods of one year each thereafter during the Term (and in no event shall the
Letter of Credit expire prior to the 45th day following the Expiration Date)
unless the Issuing Bank sends a notice (the "Non-Renewal Notice") to Landlord by
certified mail, return receipt requested, not less than 45 days next preceding
the then expiration date of the Letter of Credit stating that the Issuing Bank
has elected not to renew the Letter of Credit. Landlord shall have the right,
upon receipt of the Non-Renewal Notice, to draw the full amount of the Letter of
Credit, by sight draft on the Issuing Bank, and shall thereafter hold or apply
the cash proceeds of the Letter of Credit pursuant to the terms of this Article
27, until Tenant delivers to Landlord a substitute Letter of Credit which meets
the requirements of this Section 27.2. The Issuing Bank shall agree with all
drawers, endorsers and bona fide holders that drafts drawn under and in
compliance with the terms of the Letter of Credit and accompanied by a
certificate signed by an authorized officer of Landlord (not in their individual
capacity, but solely as an officer of Landlord) under penalty of perjury, that
to such person's knowledge, information and belief, a default of Tenant beyond
all applicable notice and cure periods has occurred and is continuing and that
Landlord is entitled under the Lease to draw the amount being drawn, will be
duly honored upon presentation to the Issuing Bank at an office location in San
Francisco, California. The Letter of Credit shall be subject in all respects to
the Uniform Customs and Practice for Documentary Credits (1993 revision),
International Chamber of Commerce Publication No. 500.
Application of Security. If an Event of Default by Tenant occurs in the
payment or performance of any of the terms, covenants or conditions of this
Lease, including the payment of Rent, Landlord may apply or retain the whole or
any part of the cash Security Deposit or may notify the Issuing Bank and
thereupon receive all or a portion of the Security Deposit represented by the
Letter of Credit and use, apply, or retain the whole or any part of such
proceeds, as the case may be, to the extent required for the payment of any
Fixed Rent or any other sum as to which Tenant is in default beyond applicable
notice and cure periods including (i) any sum which Landlord may expend or may
be required to expend by reason of Tenant's default beyond applicable notice and
cure periods, and/or (i) any damages to which Landlord is entitled pursuant to
this Lease, whether such damages accrue before or after summary proceedings or
other reentry by Landlord. If Landlord applies any part of the Security Deposit,
Tenant, upon demand, shall deposit with Landlord the amount so applied or
retained so that Landlord shall have the full Security Deposit on hand at all
times during the Term. Except for portions of the Security Deposit so applied by
Landlord and not re-posted by Tenant, the Security Deposit shall be returned to
Tenant after the Expiration Date and after delivery of possession of the
Premises to Landlord in the manner required by this Lease.
Transfer. Upon a sale or other transfer of the Real Property or the
Building, or any financing of Landlord's interest therein, Landlord shall have
the right to transfer the Security Deposit to its transferee or lender. With
respect to the Letter of Credit, within 5 days after notice of such transfer or
financing, Tenant, at its sole cost, shall arrange for the transfer of the
Letter of Credit to the new landlord or the lender, as designated by Landlord in
the foregoing notice or have the Letter of Credit reissued in the name of the
new landlord or the lender. Upon such Transfer Tenant shall look solely to the
new landlord or lender for the return of such cash Security Deposit or Letter of
Credit and the provisions hereof shall apply to every transfer or assignment
made of the Security Deposit to a new landlord. Except in connection with an
assignment of this Lease to a Permitted Transferee, Tenant shall not assign or
encumber or attempt to assign or encumber the cash Security Deposit or Letter of
Credit and neither Landlord nor its successors or assigns shall be bound by any
such action or attempted assignment, or encumbrance.
Reduction. If Tenant (a) has not, on more than 2 occasions during the
12-month period preceding the applicable Reduction Date (as hereinafter
defined), failed to pay Fixed Rent within 5 days of receiving written notice of
nonpayment, and (b) no Event of Default then exists, then, provided that Tenant
complies with the provisions of this Section 27.5, (i) on the 3rd anniversary of
the Commencement Date and on each annual anniversary thereafter (in each case,
the "Reduction Date"), the Security Deposit shall be reduced by $600,000;
provided that in no event shall the amount of the Security Deposit ever be less
than $600,000 (the "Reduction Minimum"). The Security Deposit shall be reduced
as follows: (A) if the Security Deposit is in the form of cash, Landlord shall,
within 10 Business Days following notice by Tenant to Landlord that Tenant is
entitled to reduce the Security Deposit pursuant to this Section 27.5, deliver
to Tenant the amount by which the Security Deposit is reduced, or (B) if the
Security Deposit is in the form of a Letter of Credit, Tenant shall deliver to
Landlord an amendment to the Letter of Credit (which amendment must be
reasonably acceptable to Landlord in all respects), reducing the amount of the
Letter of Credit by the amount of the permitted reduction, and Landlord shall
execute the amendment and such other documents as are reasonably necessary to
reduce the amount of the Letter of Credit in accordance with the terms hereof.
If Tenant delivers to Landlord an amendment to the Letter of Credit in
accordance with the terms hereof, Landlord shall, within 10 Business Days after
delivery of such amendment, either (1) provide its reasonable objections to such
amendment or (2) execute such amendment of the Letter of Credit in accordance
with the terms hereof.
ARTICLE 28
PARKING
Located adjacent to the Building is the Garage serving the
Building. Except as otherwise provided below, the Garage is open 24 hours a day,
7 days a week to tenants and their Building employees holding valid Building
entry cards. The Garage allows monthly parking with unlimited 24 hours access
with the Building's entry cards. Visitor parking is available during Ordinary
Business Hours. During the Term of this Lease and subject to Unavoidable Delays,
Landlord shall make available or cause to be available to Tenant through-out the
Term 3.77 unreserved parking spaces per 1,000 rentable square feet of the
Premises at no additional cost to Tenant.
Tenant shall at all times comply with (and the provisions
hereof shall be expressly subject to) all applicable Requirements regarding the
use of the Garage. Landlord reserves the right to adopt, modify and enforce
reasonable rules (the "Garage Rules") governing the use of the Garage from time
to time, including any key card, sticker or other identification or entrance
system. Landlord may refuse to permit any person who violates any such Garage
Rules to park in the Garage, and any violation of the Rules shall subject the
car to removal, at such person's expense from the Garage. The use of all parking
spaces shall be solely for use by Tenant's employees (or the employees of a
permitted subtenant) working in the Building.
The unreserved parking spaces hereunder may be provided on an
unreserved valet parking basis. Tenant acknowledges that Landlord may arrange
for the Garage to be operated by an independent contractor. Accordingly, Tenant
acknowledges that if Landlord is not the operator of the Garage Landlord shall
have no liability for claims arising through acts or omissions of such
independent contractor except to the extent due to Landlord's, or its agents' or
contractors' gross negligence or willful misconduct. Except when caused by the
gross negligence or criminal acts of Landlord or Landlord's Agent or their
respective employees, agents or contractors, Landlord shall have no liability
whatsoever for any damage to property or any other items located in the Garage,
nor for any personal injuries or death arising out of any matter relating to the
Garage, and in all events, Tenant agrees to look first to its insurance carrier
for payment of any losses sustained in connection with any use of the Garage and
secondly to the operator of the Garage. Landlord reserves the right to assign
specific spaces, and to reserve spaces for visitors, small cars, handicapped
persons and for other tenants, guests of tenants or other parties, and Tenant
shall not park in any such assigned or reserved spaces. Landlord also reserves
the right to close all or any portion of the Garage in order to make repairs or
perform maintenance services, or to alter, modify, re-stripe or renovate the
Garage, or if required by casualty, condemnation or Unavoidable Delay. In such
event, Landlord shall use its reasonable efforts to complete such maintenance or
repair as soon as reasonably possible.
Tenant agrees to acquaint all persons to whom Tenant assigns
parking space of any Garage Rules promulgated by Landlord with respect to the
Garage and the parking privileges granted to Tenant herein.
ARTICLE 29
RENEWAL TERM
Renewal Term. Tenant shall have the right to renew the Term for all of
the Premises for one renewal term of 5 years (the "Renewal Term") which shall
commence on the day following the expiration of the initial Term and end on the
5th anniversary of the Expiration Date, unless the Renewal Term shall sooner
terminate pursuant to any of the terms of this Lease or otherwise. The Renewal
Term shall commence only if (a) Tenant shall have notified Landlord in writing
of Tenant's exercise of such renewal right at least 15 months prior to the
Expiration Date, (b) at the time of the exercise of such right and immediately
prior to the Expiration Date, no event of Default shall have occurred and be
continuing hereunder, and (c) PMC-Sierra, Inc. and/or Related Entities shall be
in occupancy of at least 70% of the Premises at the time such notice is given.
Time is of the essence with respect to the giving of the notice of Tenant's
exercise of the renewal option. The Renewal Term shall be upon all of the
agreements, terms, covenants and conditions hereof binding upon Tenant, except
that the Fixed Rent (as defined in Section 1.1) shall be determined as provided
in Section 29.2 and Tenant shall have no further right to renew the Term. Upon
the commencement of the Renewal Term, (A) the Renewal Term shall be added to and
become part of the Term (but shall not be considered part of the initial Term),
(B) any reference to "this Lease", to the "Term", the "term of this Lease" or
any similar expression shall be deemed to include the Renewal Term, and (C) the
expiration of the Renewal Term shall become the Expiration Date.
Renewal Term Rent. If the Term shall be renewed as provided in Section
29.1, the annual Fixed Rent payable during the Renewal Term shall be equal to
the greater of (a) the annual fair market rental value of the Premises (the
"Fair Market Value") as of the day immediately following the expiration of the
initial Term (the "Calculation Date"), and (b) the amount of Fixed Rent payable
by Tenant during the last year of the initial Term. Any dispute between the
parties as to the annual fair market rental value shall be resolved by
arbitration as provided in Section 29.3 hereof. For purposes hereof, the "Fair
Market Value" shall mean the rent at which tenants, as of the commencement of
the Renewal Term, will be leasing non-sublease space on a "triple-net" basis
comparable in size, location and quality to the Premises, for a comparable term,
and considering all other factors relevant to the determination of Fair Market
Value, which comparable space is located in Comparable Buildings. Within 30 days
following Landlord's receipt of the Exercise Notice, Landlord shall advise
Tenant in writing of Landlord's determination of Fair Market Value (the "Rent
Notice"). Within 30 days of Tenant's receipt of Landlord's Rent Notice, Tenant
shall advise Landlord in writing whether Tenant accepts Landlord's determination
of Fair Market Value, elects to rescind Tenant's exercise of the renewal option
or elects to have the determination of Fair Market Value be resolved by
arbitration as provided in Section 29.3 hereof. Tenant's failure to so advise
Landlord of its election within such 30-day period shall constitute Tenant's
acceptance of Landlord's determination of Fair Market Value. If Tenant timely
elects to rescind its exercise of the renewal option, the Term of this Lease
shall end on the Expiration Date. If the Fixed Rent payable during the Renewal
Term has not been determined prior to the commencement thereof, Tenant shall pay
Fixed Rent in an amount equal to the fair market rental value for the Premises
as determined by Landlord (the "Interim Rent"). Upon final determination of the
Fixed Rent for the Renewal Term, Tenant shall commence paying such Fixed Rent as
so determined, and within 10 days after such determination Tenant shall pay any
deficiency in prior payments of Fixed Rent or, if the Fixed Rent as so
determined shall be less than the Interim Rent, Tenant shall be entitled to a
credit against the next succeeding installments of Fixed Rent in an amount equal
to the difference between each installment of Interim Rent and the Fixed Rent as
so determined which should have been paid for such installment until the total
amount of the over payment has been recouped.
Arbitration. If Tenant shall dispute Landlord's determination of Fair
Market Value pursuant to Section 29.2, Tenant shall give notice to Landlord of
such dispute within 10 days of Tenant's receipt of Landlord's determination, and
such dispute shall be determined by a single arbitrator appointed in accordance
with the American Arbitration Association Real Estate Valuation Arbitration
Proceeding Rules. The arbitrator shall be impartial and shall have not less than
10 years' experience in the County of Santa Clara in a calling related to the
leasing of commercial office space in office buildings comparable to the
Building, and the fees of the arbitrator shall be shared by Landlord and Tenant.
Within 15 days following the appointment of the arbitrator, Landlord and Tenant
shall attend a hearing before the arbitrator at which each party shall submit a
report setting forth its determination of the Fair Market Value of the Premises
for the Renewal Term, together with such information on comparable rentals and
such other evidence as such party shall deem relevant. The arbitrator shall,
within 30 days following such hearing and submission of evidence, render his or
her decision by selecting the determination of Fair Market Value submitted by
either Landlord or Tenant which, in the judgment of the arbitrator, most nearly
reflects the Fair Market Value of the Premises for the Renewal Term, provided,
however, that Tenant shall have the right, by written notice to Landlord, to
terminate the exercise of its renewal option, within ten (10) days of receipt of
the judgment of the arbitrator. If Tenant elects to so terminate its option,
then the (a) Expiration Date shall be the later to occur of (a) the Expiration
Date, and (b) the 450th day following the date of Tenant's termination notice,
(b) Tenant shall pay the fees of the arbitrator, and (c) the Fixed Rent payable
for any period of time beyond the stated Expiration Date shall be 103% of the
Fixed Rent payable for the final month of the Initial Term. The arbitrator shall
have no power or authority to select any Fair Market Value other than a Fair
Market Value submitted by Landlord or Tenant, and the decision of the arbitrator
shall be final and binding upon Landlord and Tenant.
ARTICLE 30
ROOF SPACE AND SATELLITE ANTENNA
Tenant is hereby granted, subject to Article 5 hereof and the
provisions of this Article 30 and such other requirements as shall be imposed by
Landlord and at no additional cost to Tenant, the right to install, secure,
maintain, replace and operate on the roof (the "Roof") of the Building in an
area reasonably designated by Landlord and reasonably acceptable to Tenant of
not more than 100 square feet (the "Roof Space"), a communications transmitter,
receiver or other supplemental equipment (the "Antenna"). The dimensions of the
Antenna shall be subject to Landlord's approval. In addition, also subject to
Article 5 and the provisions of this Article 30, Tenant shall have the right to
install cables leading from the Antenna to the Premises at Tenant's sole cost
and expense and in a location, manner, material and size as shall be approved by
Landlord.
Tenant shall diligently service, repair, paint and maintain the
Antenna, including, without limitation, all electrical wires, guide wires and
conduits related thereto.
No signs, whether temporary or permanent, shall be affixed, installed
or attached to the Antenna or the Roof other than those required by
Requirements. All signs required, if any, and the location thereof, shall be
first approved in writing by Landlord.
In the performance of any installation, alteration, repair,
maintenance, removal and/or any other work with respect to the Roof Space or the
Antenna, Tenant shall comply with all of the applicable provisions of this Lease
including, without limitation, those set forth in Articles 5, 6 (with respect to
any damage to the roof caused by Tenant), 8, 11 and 25, and the provisions of
this Article 30 shall be applicable to the Roof Space as if the Roof Space was
part of the Premises.
Any and all taxes, filing fees, charges or license fees imposed upon
Landlord by virtue of the existence and/or use of the Antenna (including those
shown to be specifically related to any increase in the assessed valuation of
the Building attributable to the Antenna), whether imposed by any local, state
and/or federal government or any agency thereof, shall be exclusively borne by
Tenant. Landlord agrees to cooperate reasonably with Tenant in any necessary
applications for any necessary license or permits provided Landlord incurs no
expense or liability in so doing.
During Ordinary Business Hours and upon reasonable advance notice to
Landlord, Monday through Friday (exclusive of Building holidays), Tenant may
have access to the Roof Space for the sole purpose of servicing and maintaining
the Antenna. Landlord shall have the right (in its sole discretion) to have its
representative(s) accompany Tenant whenever it services or maintains the
Antenna. At all other times, Landlord may keep the entrances to the Roof Space
locked. Tenant shall not have any tools and/or materials stored in the Roof
Space, and Tenant's employees and independent contractors shall close and lock
the entrance door to the Roof when leaving the same. If Tenant shall require
access any of the Roof Space, at times other than those specified in the first
sentence of this Section 30.6, then except in the case of an emergency, Tenant
shall give Landlord at least two full business days prior written notice of such
requirement and shall pay all reasonable costs incurred by Landlord in
connection therewith, including, without limitation, any compensation paid to
Building employees or any independent contractors of Landlord.
On or before the termination of this Lease, Tenant shall remove the
Antenna and any and all appurtenant cables, wires, and other equipment and
repair and restore the Roof and any other damage caused to the Building as a
result of such removal. Such repair and restoration work shall proceed with due
diligence and dispatch and shall be completed prior to the Expiration Date. Any
holes, damage or injury in or to the Roof and/or Building arising out of or
connected to the removal of the Antenna and any or all appurtenant cables,
wires, and other equipment shall be promptly and duly repaired and restored by
Tenant at Tenant's sole cost and expense.
During the Term, Tenant shall inspect the Antenna at least once a
month. Tenant shall be solely responsible for preserving the water tight
integrity of the Roof as may be caused by, or relates to, the installation,
maintenance, operation and repair of the Antenna. Tenant shall be responsible
for all leaks in the Roof arising out of or connected to its installation.
Tenant's Antenna shall not exceed the applicable load-bearing capacity of the
Roof Space.
(a) If, at any time during the Term, Landlord, in its judgment, shall
determine that it is necessary to move the Antenna to another area of the Roof
Space, then Landlord may give notice thereof to Tenant (which notice shall have
annexed thereto a plan on which such other area of the Roof Space (the
"Substitute Space") shall be substantially identified by hatching or otherwise).
The Substitute Space with respect to the Antenna shall not be located in an area
of the Roof in which the Antenna's reception would differ in a materially
adverse way from the Antenna's reception in the initial Roof Space. Within 30
days of receipt of Landlord's notice (or, if a governmental permit is required
to be obtained for installation of the Antenna on the Substitute Space, then,
within 30 days of the obtaining of such permit (which Tenant shall make prompt
application for, with Landlord's reasonable cooperation), Landlord, at its sole
cost (but subject to recoupment pursuant to Article 8 above) shall move the
Antenna to the Substitute Space which shall then become the Roof Space hereunder
and the original Roof Space shall be deleted from the coverage of this Lease.
Tenant's operation or use of the Antenna shall not
unreasonably prevent or unreasonably interfere with the operation or use of any
equipment of (i) any present or future tenant or occupant of the Building or
Building Two, or (ii) Landlord. If, at any time during the Term hereof, Landlord
shall reasonably determine that the Antenna causes such interference with
equipment of any such present or future tenant or occupant or of Landlord, then
Landlord may so notify Tenant, and Landlord may require Tenant to replace the
Antenna with another antenna which would not cause such interference (the
"Replacement"). Tenant, within 30 days of receipt of such notice or, if a
government permit is required to install the Replacement, then within 30 days of
the obtaining of such permit (which Tenant shall make prompt application for,
with Landlord's cooperation but at no cost to Landlord), shall replace the
Antenna with the new non-interfering Replacement which shall then be deemed to
be the Antenna hereunder.
Tenant agrees that Landlord has made no warranties or representations
as to the condition or suitability of the Roof Space or the Building (or the
electricity available to the Roof Space) for the installation, use, maintenance
or operation of the Antenna, and Tenant agrees to accept same in its "as is"
condition and without any work or alterations to be made by Landlord.
ARTICLE 31
GENERATOR
Tenant is hereby granted at no additional cost to Tenant, subject to
Article 5 hereof and the provisions of this Article 31 and such other
requirements as shall be reasonably imposed by Landlord, the right to install,
secure, maintain, replace and operate in the location as reasonably determined
on the lower level of its Garage (the "Space"), a 150 kilowatt diesel powered
emergency electric generator and a 200 gallon diesel fuel "ready tank" together
with all ancillary equipment, mountings, piping, duct work, venting, conduit,
wiring and support, including, without limitation, the emergency electric riser
and emergency fuel pumps, as shall be reasonably necessary for the operation
thereof, (collectively the "Generator"). Any parking spaces which are displaced
by the Space shall be in reduction of the number of spaces required to be
provided to Tenant in accordance with Article 28.
Tenant is also granted at no additional cost to Tenant, subject to
Article 5 hereof and the provisions of this Article 31 and such other
requirements as may be reasonably imposed by Landlord, the right to install,
operate and maintain in shaft space to be reasonably designated by Landlord, an
electric riser from the Space to the electric closets serving the Premises in
order to bring electric power from the Generator to such electric closets.
Tenant shall diligently service, repair, paint and maintain the
Generator, including, without limitation, all electrical wires, guide wires and
conduits related thereto.
No signs, whether temporary or permanent, shall be affixed, installed
or attached to the Generator or the Space other than those required by
Requirements. All signs required, if any, and the location thereof, shall be
first approved in writing by Landlord.
In the performance of any installation, alteration, repair,
maintenance, removal and/or any other work with respect to the Space or the
Generator, Tenant shall comply with all of the applicable provisions of this
Lease including, without limitation, those set forth in Articles 5, 6 (with
respect to any damage to the Garage cause by Tenant's installation, use,
maintenance and repair of the Generator), 8, 11 and 25, and the provisions of
this Article shall be applicable to the Space as if the Space was part of the
Premises.
Any and all taxes, filing fees, charges or license fees imposed upon
Landlord by virtue of the existence and/or use of the Generator (including those
shown to be specifically related to any increase in the assessed valuation of
the Building attributable to the Generator), whether imposed by any local, state
and/or federal government or any agency thereof, shall be exclusively borne by
Tenant. Landlord agrees to cooperate reasonably with Tenant in any necessary
applications for any necessary license or permits provided Landlord incurs no
expense or liability in so doing.
During Ordinary Business Hours and upon reasonable advance notice to
Landlord, Monday through Friday (exclusive of Building holidays), and at any
time in the event of an emergency, Tenant may have access to the Space for the
sole purpose of servicing and maintaining the Generator. Tenant shall not have
any tools and/or materials stored in the Space. If Tenant shall require access
to the Space at times other than those specified in the first sentence of this
Section 31.7, then except in the case of an emergency, Tenant shall give
Landlord at least 2 full business days prior written notice of such requirement
and shall pay all reasonable costs incurred by Landlord in connection therewith,
including, without limitation, any compensation paid to Building employees or
any independent contractors of Landlord.
During the Term, Tenant shall inspect the Generator at least once a
month. The Generator shall not exceed the load-bearing capacity of the Space.
(a) If, at any time during the Term, Landlord, in its judgment, shall
determine that it is necessary to move the Generator to another area of the
Garage, then Landlord may give notice thereof to Tenant (which notice shall have
annexed thereto a plan on which such other area (the "Substitute Space") shall
be substantially identified by hatching or otherwise). Within 30 days of receipt
of Landlord's notice (or, if a governmental permit is required to be obtained
for installation of the Generator in the Substitute Space, then, within 30 days
of the obtaining of such permit (which Tenant shall make prompt application for,
with Landlord's reasonable cooperation), Landlord, at its sole cost (but subject
to recoupment pursuant to Article 7 above) shall move the Generator to the
Substitute Space (with only a commercially reasonable lapse of service) which
shall then become the Space hereunder and the original Space shall be deleted
from the coverage of this Lease.
Tenant's operation or use of the Generator shall not
unreasonably prevent or unreasonably interfere with the operation or use of any
equipment of any present or future tenant or occupant of the Building, Building
Two or of Landlord. Testing of the Generator shall be performed during
non-business hours exclusive of Sundays. If, at any time during the term hereof,
Landlord shall reasonably determine that the Generator causes such interference
with other equipment, then Landlord may so notify Tenant, and Landlord may
require Tenant to replace the Generator with another generator which would not
cause such interference (the "Replacement"). Tenant, within 30 days of receipt
of such notice or, if a government permit is required to install the
Replacement, then within 30 days of the obtaining of such permit (which Tenant
shall make prompt application for, with Landlord's cooperation but at no cost to
Landlord), shall replace the Generator with the new non-interfering Replacement
which shall then be deemed to be the Generator hereunder.
Tenant agrees that Landlord has made no warranties or representations
as to the condition or suitability of the Space or the Building (or the
electricity available to the Space) for the installation, use, maintenance or
operation of the Generator, and Tenant agrees to accept same in its "as is"
condition and without any work or alterations to be made by Landlord.
ARTICLE 32
SIGNAGE
From and after the Effective Date, Landlord shall use its
commercially reasonable efforts to obtain the approval of the City of Santa
Clara to the erection of a monument sign on the Real Property (the "Monument
Sign") and, if such approval is granted, Landlord shall use its commercially
reasonable efforts to substantially complete construction of the Monument Sign
by the Commencement Date. The size, location, configuration and design of the
Monument Sign shall be as determined by Landlord in its sole discretion. If
constructed, Tenant shall be entitled to it Proportionate Share of space on the
Monument Sign to place upon the Monument Sign (in the location as determined by
Landlord) and at Tenant's sole cost and expense, Tenant's corporate logo design
identifying Tenant's occupancy at the Building. In addition, subject to the
receipt of Landlord's approval, which approval shall not be unreasonably
withheld, Tenant shall have the right to install, at its sole cost and expense,
identifying signage of a size no greater than 10 square feet to be located on
the interior wall of the ground floor of the Building adjacent to Tenant's
entryway to the Premises. Tenant shall also be entitled to install identifying
signage on each of the other floors of the Premises.
* * * * *
IN WITNESS WHEREOF, Landlord and Tenant have executed this
Lease as of the day and year first above written.
LANDLORD: TENANT:
WHTS FREEDOM CIRCLE PARTNERS II, L.L.C., PMC - SIERRA, INC.,
a Delaware limited liability company a Delaware corporation
By: Tishman Speyer/Travelers Real Estate Venture, L.P.,
a Delaware limited partnership By:___________________
By: Tishman Speyer/Travelers Associates, Its:__________________
a Delaware limited partnership
Its general partner By: __________________
By: TSCE Venture Corp., a Delaware corporation
Its general partner Its:__________________
By: ___________________________
Its:________________________
and
By: Whitehall Street Real Estate Limited Partnership IX, a
Delaware limited partnership, its managing member
By: Whitehall Advisors, L.L.C. IX, Inc., a Delaware
limited liability company, its general partner
By: Whitehall IX/X, Inc., a Delaware corporation,
its managing member
By: ___________________________
Its:___________________________
EXHIBIT A-1
Floor Plan of the First Floor
The floor plan which follows is intended solely to identify the general location
of the Premises, and should not be used for any other purpose. All areas,
dimensions and locations are approximate, and any physical conditions indicated
may not exist as shown.
EXHIBIT A-2
Floor Plan of the Second Floor
The floor plan which follows is intended solely to identify the general location
of the Premises, and should not be used for any other purpose. All areas,
dimensions and locations are approximate, and any physical conditions indicated
may not exist as shown.
EXHIBIT A-3
Floor Plan of the Third Floor
The floor plan which follows is intended solely to identify the general location
of the Premises, and should not be used for any other purpose. All areas,
dimensions and locations are approximate, and any physical conditions indicated
may not exist as shown.
EXHIBIT A-4
Floor Plan of the Fourth Floor
The floor plan which follows is intended solely to identify the general location
of the Premises, and should not be used for any other purpose. All areas,
dimensions and locations are approximate, and any physical conditions indicated
may not exist as shown.
EXHIBIT A-5
Floor Plan of the Fifth Floor
The floor plan which follows is intended solely to identify the general location
of the Premises, and should not be used for any other purpose. All areas,
dimensions and locations are approximate, and any physical conditions indicated
may not exist as shown.
EXHIBIT B
Definitions
Base Rate: The annual rate of interest publicly announced
from time to time by Citibank, N.A., or its successor, in New York, New York as
its "base rate" (or such other term as may be used by Citibank, N.A., from time
to time, for the rate presently referred to as its "base rate").
Building Systems: The mechanical, electrical, plumbing,
sanitary, sprinkler, heating, ventilation and air conditioning, security,
life-safety, elevator and other service systems or facilities of the Building
which is installed by Landlord as part of the Base Building Work.
Business Days: All days, excluding Saturdays, Sundays and all
days observed by either the State in which the Building is located, the Federal
Government or the labor unions servicing the Building as legal holidays.
Code: The Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder, as amended.
Common Areas: The lobby, plaza and sidewalk areas and other
similar areas of general access and the areas on individual multi-tenant floors
in the Building devoted to corridors, elevator lobbies, restrooms, and other
similar facilities serving the Premises.
Comparable Buildings: First-class office buildings of
comparable age and quality in Santa Clara, California.
CC&R's: That certain Agreement Containing Covenants Running
with the Land, dated January 7, 1997, by and between Richard T. Peery, Trustee,
or his successor trustee, under Trust Agreement, dated July 20, 1997 (Richard T.
Peery Separate Property Trust), as amended, and John Arrillaga, Trustee, or his
successor trustee, under Trust Agreement, dated July 20, 1997 (the Arrillaga
Family Trust), as amended, and BNP Leasing Corporation, recorded on January 7,
1997, as Document Number 13571632 in the Official Records of Santa Clara County,
California.
Excluded Expenses: (a) Taxes; (b) franchise or income taxes
imposed upon Landlord; (c) mortgage amortization and interest; (d) leasing
commissions; (e) the cost of tenant installations and decorations incurred in
connection with preparing space for any Building tenant, including workletters
and concessions; (f) rent under Superior Leases, if any; (g) management fees
equal to the greater of (A) 3% of the gross rentals and other revenues collected
for the Real Property, and (B) fees charged by Landlord or related entities for
the management by any of them of other first class properties in the area of the
Building; (h) wages, salaries and benefits paid to any persons above the grade
of Building Manager and their immediate supervisor; (i) legal and accounting
fees relating to (A) disputes with tenants, prospective tenants or other
occupants of the Building, (B) disputes with purchasers, prospective purchasers,
mortgagees or prospective mortgagees of the Building or the Real Property or any
part of either, or (C) negotiations of leases, contracts of sale or mortgages;
(j) costs of services provided to other tenants of the Building on a
"rent-inclusion" basis which are not provided to Tenant on such basis; (k) costs
that are reimbursed out of insurance, warranty or condemnation proceeds, or
which are reimbursable by Tenant or other tenants other than pursuant to an
expense escalation clause; (l) costs in the nature of penalties or fines; (m)
costs for services, supplies or repairs paid to any related entity in excess of
costs that would be payable in an "arm's length" or unrelated situation for
comparable services, supplies or repairs; (n) allowances, concessions or other
costs and expenses of improving or decorating any demised or demisable space in
the Building; (o) appraisal, advertising and promotional expenses in connection
with leasing of the Building; (p) the costs of installing, operating and
maintaining a specialty improvement, including a cafeteria, lodging or private
dining facility, or an athletic, luncheon or recreational club unless Tenant is
permitted to make use of such facility without additional cost or on a
subsidized basis consistent with other users; (q) any costs or expenses
(including fines, interest, penalties and legal fees) arising out of Landlord's
failure to timely pay Operating Expenses or Taxes; (r) costs incurred in
connection with the removal, encapsulation or other treatment of asbestos or any
other Hazardous Materials; (s) the cost of capital improvements other than those
expressly included in Operating Expenses pursuant to Section 7.1; (t) costs
occasioned by the grossly negligent act or omission or violation of Requirements
by Landlord, any other occupant of the Building, or their respective agents,
employees or contractors; (u) costs of correcting defects in, or significant
design error relating to, the initial design or condition of the Building; (v)
costs incurred to comply with any Requirements applicable to the Premises, the
Building or the Project on the Commencement Date; (w) costs (i) arising from the
disproportionate use of any utility or service supplied by Landlord to any other
occupant of the Project or (ii) associated with utilities or services of a type
not provided to Tenant; (x) except for any amortization or depreciation charges
expressly provided for in this Lease as includable in Operating Expenses,
depreciation charges or contributions to capital replacement reserves; (y)
except for costs and expenses incurred for insuring, securing and maintenance
and repair of objects of art on or about the Real Property for which Landlord is
responsible, costs for the acquisition of objects of art; (z) costs specifically
allocated to Mission Towers II; (aa) insurance costs for coverage not
customarily carried by owners of Comparable Buildings (provided that in all
events Operating Expenses shall include the premium for earthquake insurance and
such other insurance which any Mortgagee requires to be carried); (ab) increases
in insurance costs caused by the activities of another occupant of the Project;
(ac) the amount of any deductible carried by Landlord's insurance policies
respecting the Building which exceed $150,000, or with respect to earthquake
insurance, 5% of the replacement value of the Building; and (ad) capital costs
for repair, maintenance and replacement of structural portions of the Building.
Governmental Authority: The United States of America, the City
of Santa Clara, County of Santa Clara, or State of California, or any political
subdivision, agency, department, commission, board, bureau or instrumentality of
any of the foregoing, now existing or hereafter created, having jurisdiction
over the Real Property.
Hazardous Materials: Any substances, materials or wastes
currently or in the future deemed or defined in any Requirement as "hazardous
substances," "toxic substances," "contaminants," "pollutants" or words of
similar import.
HVAC Systems: The Building System designed to provide heating,
ventilation and air conditioning.
Indemnitees: Landlord, Landlord's Agent, each Mortgagee and
Lessor, and each of their respective direct and indirect partners, officers,
shareholders, directors, members, managers, trustees, beneficiaries, employees,
principals, contractors, servants, agents, and representatives.
Lessor: A lessor under a Superior Lease.
Losses: Any and all losses, liabilities, damages, claims,
judgments, fines, suits, demands, costs, interest and expenses of any kind or
nature (including reasonable attorneys' fees and disbursements) incurred in
connection with any claim, proceeding or judgment and the defense thereof, and
including all costs of repairing any damage to the Premises, the Building or the
Garage or the appurtenances of any of the foregoing to which a particular
indemnity and hold harmless agreement applies.
Mortgage(s): Any mortgage, trust indenture or other financing
document which may now or hereafter affect the Premises, the Real Property, the
Building or any Superior Lease and the leasehold interest created thereby, and
all renewals, extensions, supplements, amendments, modifications, consolidations
and replacements thereof or thereto, substitutions therefor, and advances made
thereunder.
Mortgagee(s): Any mortgagee, trustee or other holder of a
Mortgage.
Ordinary Business Hours: 6:00 a.m. to 6:00 p.m. on Business
Days and from 9:00 a.m. to 12:00 p.m. on Saturdays which are not observed as
legal holidays by the Federal Government or the labor unions servicing the
Building.
Prohibited Use: Any use or occupancy of the Premises that in
Landlord's reasonable judgment would: (a) cause damage to the Building or any
equipment, facilities or other systems therein; (b) impair the appearance of the
Building; (c) interfere with the efficient and economical maintenance, operation
and repair of the Premises or the Building or the equipment, facilities or
systems thereof; (d) adversely affect any service provided to, and/or the use
and occupancy by, any Building tenant or occupants; (e) violate the certificate
of occupancy issued for the Premises or the Building; (f) materially and
adversely affect the first-class image of the Building or (g) result in protests
or civil disorder or commotions at, or other disruptions of the normal business
activities in, the Building. Prohibited Use also includes the use of any part of
the Premises for: (i) a restaurant or bar; (ii) the preparation, consumption,
storage, manufacture or sale of food or beverages (except in connection with
vending machines (provided that each machine, where necessary, shall have a
waterproof pan thereunder and be connected to a drain) and/or warming kitchens
installed for the use of Tenant's employees only), liquor, tobacco or drugs;
(iii) the business of photocopying, multilith or offset printing (except
photocopying in connection with Tenant's own business); (iv) a school or
classroom; (v) lodging or sleeping; (vi) the operation of retail facilities
(meaning a business whose primary patronage arises from the generalized
solicitation of the general public to visit Tenant's offices in person without a
prior appointment) of a savings and loan association or retail facilities of any
financial, lending, securities brokerage or investment activity; (vii) a payroll
office; (viii) a barber, beauty or manicure shop; (ix) an employment agency or
similar enterprise; (x) offices of any Governmental Authority, any foreign
government, the United Nations, or any agency or department of the foregoing;
(xi) the manufacture, retail sale, storage of merchandise or auction of
merchandise, goods or property of any kind to the general public which could
reasonably be expected to create a volume of pedestrian traffic substantially in
excess of that normally encountered in the Premises; (xii) the rendering of
medical, dental or other therapeutic or diagnostic services; or (xiii) any
illegal purposes or any activity constituting a nuisance. Landlord agrees and
acknowledges that Tenant will have an electronic verification lab within the
Premises and a small shipping and receiving area on the first floor adjacent to
the Building's loading dock, and neither of the same shall constitute a
Prohibited Use.
Requirements: All present and future laws, rules, orders,
ordinances, regulations, statutes, requirements, codes and executive orders,
extraordinary and ordinary of (i) all Governmental Authorities, including the
Americans With Disabilities Act, 42 U.S.C. ss.12,101 (et seq.), and any law of
like import, and all rules, regulations and government orders with respect
thereto, and any of the foregoing relating to Hazardous Materials, environmental
matters, public health and safety matters, (ii) any applicable fire rating
bureau or other body exercising similar functions, affecting the Real Property
or the maintenance, use or occupation thereof, or any street, avenue or sidewalk
comprising a part of or in front thereof or any vault in or under the same,
(iii) all requirements of all insurance bodies affecting the Premises, and (iv)
utility service providers.
Rules and Regulations: The rules and regulations annexed to
and made a part of this Lease as Exhibit F, as they may be modified from time to
time by Landlord.
Specialty Alterations: Alterations which are not standard
office installations such as full-service kitchens, executive bathrooms, raised
computer floors, computer installations, safe deposit boxes, vaults, libraries
or file rooms requiring reinforcement of floors, internal staircases, conveyors,
dumbwaiters, and other Alterations of a similar character (excluding, however,
small kitchens not requiring venting or grease traps and file rooms not
requiring the reinforcement of floors).
Substantial Completion: As to any construction performed by
any party in the Premises, including the Initial Installations, any Alterations,
or Landlord's Work, "Substantial Completion" or "Substantially Completed" means
that such work has been completed, as reasonably determined by Landlord's
architect, in accordance with (a) the provisions of this Lease applicable
thereto, (b) the plans and specifications for such work, and (c) all applicable
Requirements, except for minor details of construction, decoration and
mechanical adjustments, if any, the noncompletion of which does not materially
interfere with Tenant's use of the Premises or which in accordance with good
construction practices should be completed after the completion of other work in
the Premises or Building.
Superior Lease(s): Any ground or underlying lease of the Real
Property or any part thereof heretofore or hereafter made by Landlord and all
renewals, extensions, supplements, amendments, modifications, consolidations,
and replacements thereof.
Tenant Party: Tenant and any subtenants or occupants of the
Premises and their respective agents, contractors, subcontractors, employees,
invitees or licensees.
Tenant's Property: Tenant's movable fixtures and movable
partitions, telephone and other equipment, computer systems, trade fixtures,
furniture, furnishings, and other items of personal property which are removable
without material damage to the Building.
Unavoidable Delays: Landlord's inability to fulfill or delay
in fulfilling any of its obligations under this Lease expressly or impliedly to
be performed by Landlord or Landlord's inability to make or delay in making any
repairs, additions, alterations, improvements or decorations or Landlord's
inability to supply or delay in supplying any equipment or fixtures, if
Landlord's inability or delay is due to or arises by reason of strikes, labor
troubles or by accident, or by any cause whatsoever beyond reasonable Landlord's
control, including governmental preemption in connection with a national
emergency, Requirements or shortages, or unavailability of labor, fuel, steam,
water, electricity or materials, or delays caused by Tenant or other tenants,
mechanical breakdown, acts of God, enemy action, civil commotion, fire or other
casualty.
EXHIBIT C
Work Letter
1. Proposed and Final Plans.
(a) Tenant shall cause to be prepared and delivered to
Landlord, for Landlord's approval, the following proposed drawings ("Proposed
Plans") for all improvements Tenant desires to complete or have completed in the
Premises (the "Initial Installations"):
(i) Architectural drawings (consisting of floor construction
plan, ceiling lighting and layout, power, and telephone
plan).
(ii)Mechanical drawings (consisting of HVAC, sprinkler,
electrical, telephone, and plumbing).
(iii) Finish schedule (consisting of wall finishes and floor
finishes and miscellaneous details).
(b) All architectural drawings shall be prepared at Tenant's
sole expense by a licensed architect employed by Tenant and approved by
Landlord, which approval shall not be unreasonably withheld, delayed or
conditioned. Tenant shall deliver two sets of reproducible architectural
drawings to Landlord. All mechanical drawings shall be prepared at Tenant's sole
expense by a licensed engineer designated by Landlord, whom Tenant shall employ.
Tenant shall reimburse Landlord for all reasonable out-of-pocket costs incurred
by Landlord in reviewing the Proposed Plans except for drawings prepared by
Landlord's designated engineers, consultants or Essential Subs (as hereinafter
defined).
(c) Within 15 days after Landlord's receipt of the
architectural drawings, Landlord shall approve or disapprove such drawings, and
if disapproved, Landlord shall advise Tenant of any changes or additional
information required to obtain Landlord's approval.
(d) Within 15 days after receipt of mechanical drawings,
Landlord shall approve or disapprove such drawings, and if disapproved, Landlord
shall advise Tenant of any changes required to obtain Landlord's approval.
(e) If Landlord disapproves of, or requests additional
information regarding the Proposed Plans, Tenant shall, within 10 days
thereafter, revise the Proposed Plans disapproved by Landlord and resubmit such
plans to Landlord or otherwise provide such additional information to Landlord.
Landlord shall, within 15 days after receipt of Tenant's revised plans, approve
or disapprove such drawings, and if disapproved, Landlord shall advise Tenant of
any additional changes which may be required to obtain Landlord's approval. If
Landlord disapproves the revised plans specifying the reason therefor, or
requests further additional information, Tenant shall, within 10 days of receipt
of Landlord's required changes, revise such plans and resubmit them to Landlord
or deliver to Landlord such further information as Landlord has requested.
Landlord shall, again within 15 days after receipt of Tenant's revised plans,
approve or disapprove such drawings, and if disapproved, Landlord shall advise
Tenant of further changes, if any, required for Landlord's approval. This
process shall continue until Landlord has approved Tenant's revised Proposed
Plans. "Final Plans" shall mean the Proposed Plans, as revised, which have been
approved by Landlord and Tenant in writing. In connection with the exercise of
its approval rights pursuant to Section 1 hereof, Landlord agrees not to
withhold its approval unreasonably withheld or delayed so long as such Initial
Installations (i) are non-structural and do not affect any Building Systems,
(ii) affect only the Premises and are not visible from outside of the Premises,
(iii) do not affect the certificate of occupancy issued for the Building or the
Premises, and (iv) do not violate any Requirement. If Landlord's approval to any
of the Proposed Plans or the Final Plans is not approved or disapproved within
15 days following Tenant's request for consent, and Landlord fails to so advise
Tenant within 5 days following receipt of a second notice labeled in bold
letters "URGENT -- DELAY NOTICE", Landlord's consent shall be deemed granted. In
addition, so long as the Initial Installations as proposed by Tenant are in
reasonable conformance with customary office space in Comparable Buildings,
Landlord shall not withhold its consent on aesthetic grounds.
(f) All Proposed Plans and Final Plans shall comply with all
applicable Requirements. Neither review nor approval by Landlord of the Proposed
Plans and resulting Final Plans shall constitute a representation or warranty by
Landlord that such plans either (i) are complete or suitable for their intended
purpose, or (ii) comply with applicable Requirements, it being expressly agreed
by Tenant that Landlord assumes no responsibility or liability whatsoever to
Tenant or to any other person or entity for such completeness, suitability or
compliance. Tenant shall not make any changes in the Final Plans without
Landlord's prior approval, which shall not be unreasonably withheld or delayed;
provided that Landlord may, in the exercise of its sole and absolute discretion,
disapprove any proposed changes adversely affecting the Building's structure,
systems, equipment or the appearance or value of the Building. Landlord and
Tenant shall confer and negotiate in good faith to reach agreement on
modifications to the Final Plans.
(g) Tenant acknowledges that certain portions of the Base
Building Work may not be Substantially Complete at the time Landlord tenders
possession of the Premises to Tenant. For purposes of completing the Initial
Installations, Landlord shall use its commercially reasonable efforts to cause
the completion of the Base Building Work in a manner which does not unreasonably
interfere with Tenant's performance of its Initial Installations. Landlord
agrees to use reasonable efforts to complete all such Base Building Work in the
Premises on or before the Commencement Date, subject to Unavoidable Delay. At
the time of Landlord's tender of possession of the Premises to Tenant those
portions of the Base Building Work which are necessary to be completed for the
orderly and efficient progress of the Initial Installation shall be
Substantially Completed.
2. Performance of the Initial Installations.
(a) Filing of Final Plans, Permits. Tenant, at its sole cost
and expense, shall file the Final Plans with the Governmental Authorities having
jurisdiction over the Initial Installations. Tenant shall furnish Landlord with
copies of all documents submitted to all such Governmental Authorities and with
the authorizations to commence work and the permits for the Initial
Installations issued by such Governmental Authorities. Tenant shall not commence
the Initial Installations until the required governmental authorizations for
such work are obtained and delivered to Landlord.
(b) Landlord Approval of Contractors. Tenant shall enter
into a contract for construction of the Initial Installations with a general
contractor reasonably acceptable to Landlord (the "General Contractor").
Tenant's construction contract with the General Contractor shall be subject to
Landlord's prior approval, which approval shall not be unreasonably withheld.
The General Contractor shall be responsible for all required construction,
management and supervision. In addition, Tenant shall only utilize for purposes
of mechanical, electrical, structural, sprinkler, fire and life safety and those
contractors as specifically designated by Landlord (collectively, the "Essential
Subs"), which list of Essential Subs shall include 3 names each for those
Essential Subs engaged in mechanical, electrical or structural contracting and 1
Essential Sub for fire alarm and life safety. Tenant shall submit to Landlord
not less than 10 days prior to commencement of construction the following
information and items:
(i) The names and addresses of the other subcontractors, and
subsubcontractors (collectively, together with the General
Contractor and Essential Subs, the "Tenant's Contractors")
Tenant intends to employ in the construction of the Initial
Installations. Landlord shall have the right to approve or
disapprove Tenant's Contractors, and Tenant shall employ, as
Tenant's Contractors, only those persons or entities
approved by Landlord. Landlord shall not unreasonably
withhold its approval to any of Tenant's Contractors. All
contractors and subcontractors engaged by or on behalf of
Tenant for the Premises shall be licensed contractors,
possessing good labor relations, capable of performing
quality workmanship and working in harmony with Landlord's
contractors and subcontractors and with other contractors
and subcontractors on the job site. All work shall be
coordinated with any general construction work in the
Building.
(ii)The scheduled commencement date of construction, the
estimated date of completion of construction work, fixturing
work, and date of occupancy of the Premises by Tenant.
(iii) Itemized statement of estimated construction cost,
including permits and fees, architectural, engineering, and
contracting fees.
(iv)Certified copies of insurance policies or certificates
of insurance as hereinafter described.Tenant shall not
permit Tenant's Contractors to commence work until the
required insurance has been obtained and certified copies of
policies or certificates have been delivered to Landlord.
(c) Access to Premises. Tenant, its employees, designers,
contractors and workmen shall have access to the Premises prior to the
Commencement Date to construct the Initial Installations, provided that Tenant
and its employees, agents, contractors, and suppliers only access the Premises
via the Building freight elevator, work in reasonable harmony and do not
unreasonably interfere with the performance of other work in the Building by
Landlord, Landlord's contractors, other tenants or occupants of the Building
(whether or not the terms of their respective leases have commenced) or their
contractors. If at any time such entry shall cause, or in Landlord's reasonable
judgment threaten to cause, such disharmony or interference, Landlord may
terminate such permission upon 24 hours' notice to Tenant, and thereupon, Tenant
or its employees, agents, contractors, and suppliers causing such disharmony or
interference shall immediately withdraw from the Premises and the Building until
Landlord determines such disturbance no longer exists.
(d) Landlord's Right to Perform. Landlord shall have the
right, but not the obligation, to perform, on behalf of and for the account of
Tenant, subject to reimbursement by Tenant, any of the Initial Installations
which (i) Landlord reasonably deems necessary to be done on an emergency basis,
(ii) pertains to structural components or the general Building systems, or (iii)
pertains to the erection of temporary safety barricades or signs during
construction. Except in case of emergency, Landlord shall give prior reasonable
written notice to Tenant of its intention to perform such work.
(e) Warranties. On completion of the Initial Installations,
Tenant shall provide Landlord with copies of all warranties of at least one year
duration on all the Initial Installations. At Landlord's request, Tenant shall
enforce, at Tenant's expense, all guarantees and warranties made and/or
furnished to Tenant with respect to the Initial Installations.
(f) Protection of Building. All work performed by Tenant
shall be performed with a minimum of interference with other tenants and
occupants of the Building and shall conform to the Rules and Regulations and
those rules and regulations governing construction in the Building as Landlord
or Landlord's Agent may impose. Tenant will take all reasonable and customary
precautionary steps to protect its facilities and the facilities of others
affected by the Initial Installations and to properly police same and Landlord
shall have no responsibility for any loss by theft or otherwise. Construction
equipment and materials are to be located in confined areas and delivery and
loading of equipment and materials shall be done at such reasonable locations
and at such time as Landlord shall direct so as not to burden the operation of
the Building. Landlord shall advise Tenant in advance of any special delivery
and loading dock requirements. Tenant shall at all times keep the Premises and
adjacent areas free from accumulations of waste materials or rubbish caused by
its suppliers, contractors or workmen. Landlord may require daily clean-up if
required for fire prevention and life safety reasons or applicable laws and
reserves the right to do clean-up at the expense of Tenant if Tenant fails to
comply with Landlord's cleanup requirements. At the completion of the Initial
Installations, Tenant's Contractors shall forthwith remove all rubbish and all
tools, equipment and surplus materials from and about the Premises and Building.
Any damage caused by Tenant's Contractors to any portion of the Building or to
any property of Landlord or other tenants shall be repaired forthwith after
written notice from Landlord to its condition prior to such damage by Tenant at
Tenant's expense.
(g) Compliance by all Tenant Contractors. Tenant shall
impose and enforce all terms hereof on Tenant's Contractors and its designers,
architects and engineers. Landlord shall have the right to order Tenant or any
of Tenant's Contractors, designers, architects or engineers who willfully
violate the provisions of this Workletter to cease work and remove himself or
itself and his or its equipment and employees from the Building.
(h) Accidents, Notice to Landlord. Tenant's Contractors
shall assume responsibility for the prevention of accidents to its agents and
employees and shall take all reasonable safety precautions with respect to the
work to be performed and shall comply with all reasonable safety measures
initiated by the Landlord and with all applicable Requirements for the safety of
persons or property. Tenant shall advise the Tenant's Contractors to report to
Landlord any injury to any of its agents or employees and shall furnish Landlord
a copy of the accident report filed with its insurance carrier within 3 days of
its occurrence.
(i) Required Insurance. Tenant shall cause Tenant's
Contractors to secure, pay for, and maintain during the performance of the
construction of the Initial Installations, insurance in the following minimum
coverages and limits of liability:
(i) Workmen's Compensation and Employer's Liability
Insurance as required by Requirements.
(ii)Commercial General Liability Insurance (including
Owner's and Contractors' Protective Liability) in an amount
not less than $2,000,000 per occurrence, whether involving
bodily injury liability (or death resulting therefrom) or
property damage liability or a combination thereof with a
minimum aggregate limit of $2,000,000, and with umbrella
coverage with limits not less than $10,000,000. Such
insurance shall provide for explosion and collapse,
completed operations coverage with a two-year extension
after completion of the work, and broad form blanket
contractual liability coverage and shall insure Tenant's
Contractors against any and all claims for bodily injury,
including death resulting therefrom and damage to the
property of others and arising from its operations under the
contracts whether such operations are performed by Tenant's
Contractors, or by anyone directly or indirectly employed by
any of them.
(iii) Business Automobile Liability Insurance, including the
ownership, maintenance, and operation of any automotive
equipment, owned, hired, or non-owned in an amount not less
than $500,000 for each person in one accident, and
$1,000,000 for injuries sustained by two or more persons in
any one accident and property damage liability in an amount
not less than $1,000,000 for each accident. Such insurance
shall insure Tenant's Contractors against any and all claims
for bodily injury, including death resulting therefrom, and
damage to the property of others arising from its operations
under the contracts, whether such operations are performed
by Tenant's Contractors, or by anyone directly or indirectly
employed by any of them.
(iv)"All-risk" builder's risk insurance upon the entire
Initial Installations to the full insurance value thereof.
Such insurance shall include the interest of Landlord and
Tenant (and their respective contractors and subcontractors
of any tier to the extent of any insurable interest therein)
in the Initial Installations and shall insure against the
perils of fire and extended coverage and shall include
"all-risk" builder's risk insurance for physical loss or
damage including, without duplication of coverage, theft,
vandalism, and malicious mischief. If portions of the
Initial Installations are stored off the site of the
Building or in transit to such site are not covered under
such "all-risk" builder's risk insurance, then Tenant shall
effect and maintain similar property insurance on such
portions of the Initial Installations. Any loss insured
under such "all-risk" builder's risk insurance is to be
adjusted with Landlord and Tenant and made payable to
Landlord as trustee for the insureds, as their interest may
appear, subject to the agreement reached by such parties in
interest, or in the absence of any such agreement, then in
accordance with a final, nonappealable order of a court of
competent jurisdiction. If after such loss no other special
agreement is made, the decision to replace or not replace
any such damaged the Initial Installations shall be made in
accordance with the terms and provisions of the Lease
including, this Workletter. The waiver of subrogation
provisions contained in the Lease shall apply to the
"all-risk" builder's risk insurance policy to be obtained by
Tenant pursuant to this paragraph (iv).
All policies (except the Workmen's Compensation policy) shall
be endorsed to include as additional named insureds Landlord and its officers,
employees, and agents, Landlord's contractors, Landlord's architect, Tishman
Speyer Properties, L.P., any Mortgages and Superior Lessors and such additional
persons as Landlord may designate. Such endorsements shall also provide that all
additional insured parties shall be given 30 days' prior written notice of any
reduction, cancellation, or nonrenewal of coverage by certified mail, return
receipt requested (except that 10 days' notice shall be sufficient in the case
of cancellation for nonpayment of premium) and shall provide that the insurance
coverage afforded to the additional insured parties thereunder shall be primary
to any insurance carried independently by such additional insured parties. At
Tenant's request, Landlord shall furnish a list of names and addresses of
parties to be named as additional insureds. The insurance policies required
hereunder shall be considered as the primary insurance and shall not call into
contribution any insurance then maintained by Landlord. Additionally, where
applicable, such policy shall contain a cross liability and severability of
interest clause.
To the fullest extent permitted by law, except to the extent
of the gross negligence or willful misconduct of Landlord or its employees,
agents or contractors, Tenant (and Tenant's Contractors) shall indemnify and
hold harmless the Indemnitees from and against all Losses necessitated by
activities of the indemnifying party's contractors, bodily injury to persons or
damage to property of the Indemnitees arising out of or resulting from the
performance of work by the indemnifying party or its contractors. The foregoing
indemnity shall be in addition to the insurance requirements set forth above and
shall not be in discharge or substitution of the same, and shall not be limited
in any way by any limitations on the amount or type of damages, compensation or
benefits payable by or for Tenant's Contractors under Workers' or Workmen's
Compensation Acts, Disability Benefit Acts or other Employee Benefit Acts.
(j) Quality of Work. The Initial Installations shall be
constructed in a first-class workmanlike manner using only good grades of
material and in compliance with the Final Plans, all insurance requirements,
applicable laws and ordinances and rules and regulations of governmental
departments or agencies and the rules and regulations adopted by Landlord for
the Building.
(k) "As-Built" Plans. Upon completion of the Initial
Installations, Tenant shall furnish Landlord with "as built" plans for the
Premises, final waivers of lien for the Initial Installations, a detailed
breakdown of the costs of the Initial Installations (which may be in the form of
an owner's affidavit) and evidence of payment reasonably satisfactory to
Landlord, and an occupancy permit for the Premises. The "as-built" plans shall
be prepared on an AutoCAD Computer Assisted Drafting and Design System (or such
other system or medium as Landlord may accept), using naming conventions issued
by the American Institute of Architects in June, 1990 (or such other naming
conventions as Landlord may accept) and magnetic computer media of such record
drawings and specifications translated in DFX format or another format
acceptable to Landlord.
(l) Mechanics' Liens. Tenant shall not permit any of the
Tenant's Contractors to place any lien upon the Building, and if any such lien
is placed upon the Building, Tenant shall within 10 days of notice thereof,
cause such lien to be discharged of record, by bonding or otherwise. If Tenant
shall fail to cause any such lien to be discharged, Landlord shall have the
right to have such lien discharged and Landlord's expense in so doing, including
bond premiums, reasonable legal fees and filing fees, shall be immediately due
and payable by Tenant.
3. Payment of Costs of the Initial Installations.
(a) Subject to Landlord's Contribution as provided in
Paragraph 3(b) below, the Initial Installations shall be installed by Tenant at
Tenant's sole cost and expense. The cost of the Initial Installations shall
include, and Tenant agrees to pay Landlord for, the following costs ("Landlord's
Costs"): (i) the cost of all work performed by Landlord on behalf of Tenant and
for all materials and labor furnished on Tenant's behalf, (ii) the cost of any
services provided to Tenant or Tenant's Contractors including but not limited to
the cost for rubbish removal, hoisting, and utilities to the extent not included
in general conditions charges by the general contractor, and (iii) a supervision
fee equal to 3% of Landlord's Contribution. Landlord may render bills to Tenant
monthly for Landlord's Costs (provided that the supervision fee shall be billed
based on the cost of the Initial Installations performed during the period in
question). All bills shall be due and payable no later than the 30th day after
delivery of such bills to Tenant. Landlord shall be responsible for, Tenant
shall have no responsibility for, and Landlord's Contribution shall not be used
for (a) costs incurred to remove Hazardous Materials from the Premises present
within the Premises at the time possession thereof is tendered to Tenant, and
(b) costs to bring the Base Building Work into compliance with applicable
Requirements applicable to the Base Building Work as of the Effective Date.
(b) Landlord shall pay to Tenant an amount not to exceed
Landlord's Contribution toward the cost of the Initial Installations, provided
as of the date on which Landlord is required to make payment thereof, (i) the
Lease is in full force and effect, and (ii) no Event of Default then exists.
Tenant shall pay all costs of the Initial Installations in excess of Landlord's
Contribution. Landlord's Contribution shall be payable solely on account of
labor directly related to the Initial Installations and materials delivered to
the Premises in connection with the Initial Installations, except that Tenant
may apply up to 10% of Landlord's Contribution to pay "soft costs", consisting
of architectural, consulting, engineering and legal fees, and furniture and
equipment (exclusive of computer equipment) acquired for use in the Premises,
incurred in connection with the Initial Installations. Tenant shall not be
entitled to receive any portion of Landlord's Contribution not actually expended
by Tenant in the performance of the Initial Installations in accordance with
this Workletter, nor shall Tenant have any right to apply any unexpended portion
of Landlord's Contribution as a credit against Rent or any other obligation of
Tenant under the Lease. Upon the completion of the Initial Installations and
satisfaction of the conditions set forth below, or upon the occurrence of the
date which is twelve months after the Commencement Date (which date shall be
extended by reason of strikes, labor trouble or any other similar cause beyond
Tenant's control in performing the Initial Installations), whichever first
occurs, any amount of Landlord's Contribution which has not been previously
disbursed shall be retained by Landlord; provided, however, that notwithstanding
anything contained herein to the contrary, such retained amounts shall continue
to be held for the benefit of Tenant by Landlord if Tenant delivers a notice to
Landlord prior to satisfaction of the conditions set forth below that it is in
dispute with any contractors, subcontractors, vendors or other providers of
service and refuses to make payments at such time or if any contracts provide
for retainage which has not then been finally paid.
(c) Landlord shall make progress payments to Tenant on a
monthly basis, for the work performed during the previous month, less a
retainage of 10% of each progress payment ("Retainage"). Each of Landlord's
progress payments shall be limited to an amount equal to the aggregate amounts
(reduced by the Retainage) theretofore paid by Tenant (as certified by an
officer of Tenant and by Tenant's independent architect) to Tenant's
contractors, subcontractors and material suppliers which have not been subject
to previous disbursements from Landlord's Contribution that fraction of the
total amount of such payment, the numerator of which is the amount of Landlord's
Contribution, and the denominator of which is the total contract price (or, if
there is no specified or fixed contract price for the Initial Installations,
then Landlord's reasonable estimate thereof) for the performance of all of the
Initial Installations shown on all plans and specifications approved by
Landlord. Provided that Tenant delivers requisitions to Landlord on or prior to
the 10th day of any month, such progress payments shall be made within 30 days
next following the delivery to Landlord of requisitions therefor, signed by the
chief financial officer of Tenant, which requisitions shall set forth the names
of each contractor and subcontractor to whom payment is due, and the amount
thereof, and shall be accompanied by (i) with the exception of the first
requisition, copies of conditional waivers and releases of lien upon progress
payment in the form prescribed in the Requirements from all contractors,
subcontractors, and material suppliers covering all work and materials which
were the subject of previous progress payments by Landlord and Tenant, (ii) a
written certification from Tenant's architect that the work for which the
requisition is being made has been completed substantially in accordance with
the Final Plans and (iii) such other documents and information as Landlord may
reasonably request, including in connection with title drawdowns and
endorsements. Any requisition made following the 10th day of any month shall be
paid no later than the last day of the month following the month in which such
requisitions are made. Landlord shall disburse the Retainage (and any portion of
the Landlord Contribution expended by Tenant but unpaid by Landlord) upon
submission by Tenant to Landlord of Tenant's requisition therefor accompanied by
all documentation required under this Section 3(c), together with (A) proof of
the satisfactory completion of all required inspections and issuance of any
required approvals, permits and sign-offs for the Initial Installation by
Governmental Authorities having jurisdiction thereover, (B) final "as-built"
plans and specifications for the Initial Installations as required pursuant to
Section 2(k) and (C) issuance of final, unconditional lien waivers and releases
in the form prescribed by the Requirements by all contractors, subcontractors
and material suppliers covering all of the Initial Installations.
Notwithstanding anything to the contrary set forth in this Section 3(c), if
Tenant does not timely (or otherwise bond-over any such lien in accordance with
Section 2(l) above) pay any contractor or supplier as required by this
provision, then if necessary to prevent the imposition of any mechanics lien
Landlord shall have the right, but not the obligation, to pay, following 5
Business Days notice to Tenant, to such contractor or supplier all sums so due
from Tenant, and Tenant agrees the same shall be deemed Additional Rent and
shall be paid by Tenant within 10 days after Landlord delivers to Tenant an
invoice therefor.
4. Miscellaneous.
(a) All defined terms as used herein shall have the meanings
ascribed to them in the Lease.
(b) Tenant agrees that, in connection with the Initial
Installations and its use of the Premises prior to the commencement of the Term
of the Lease, Tenant shall have those duties and obligations with respect
thereto that it has pursuant to the Lease during the Term, except the obligation
for payment of rent, and further agrees that Landlord shall not be liable in any
way for injury, loss, or damage which may occur to any of the Initial
Installations or installations made in the Premises, or to any personal property
placed therein, the same being at Tenant's sole risk.
(c) Except as expressly set forth herein or in the Lease,
Landlord has no other agreement with Tenant and Landlord has no other obligation
to do any other work or pay any amounts with respect to the Premises. Any other
work in the Premises which may be permitted by Landlord pursuant to the terms
and conditions of the Lease shall be done at Tenant's sole cost and expense and
in accordance with the terms and conditions of the Lease.
(d) This Workletter shall not be deemed applicable to any
additional space added to the original Premises at any time or from time to
time, whether by any options under the Lease or otherwise, or to any portion of
the original Premises or any additions thereto in the event of a renewal or
extension of the initial term of the Lease, whether by any options under the
Lease or otherwise, unless expressly so provided in the Lease or any amendment
or supplement thereto.
(e) The failure by Tenant to pay any monies due Landlord
pursuant to this Workletter within the time period herein stated shall be deemed
a default under the terms of the Lease for which Landlord shall be entitled to
exercise all remedies available to Landlord for nonpayment of Rent (subject,
however, to applicable notice and cure periods as set forth in the Lease). All
late payments shall bear interest pursuant to Section 15.6 of the Lease.
EXHIBIT D
Design Standards
(a) HVAC. The Building HVAC System serving the Premises shall
maintain average temperatures within the Premises during the hours of 6:00 a.m.
to 6:00 p.m. on Business Days of (i) not less than 70(0) F. during the heating
season when the outdoor temperature is 34(0) F. or more and (ii) not more than
75(0) F. and 50% humidity + 5% during the cooling season, when the outdoor
temperatures are at 86(0) F. dry bulb and 68(0) F. wet bulb, with, in the case
of clauses (i) and (ii), a population load per floor of not more than one person
per 150 square feet of useable area, other than in dining and other special use
areas per floor for all purposes, and shades fully drawn and closed, including
lighting and power, and to provide at least .15 CFM of outside ventilation per
square foot of rentable area. Use of the Premises, or any part thereof, in a
manner exceeding the foregoing design conditions or rearrangement of
partitioning after the initial preparation of the Premises which interferes with
normal operation of the air-conditioning service in the Premises may require
changes in the air-conditioning system serving the Premises at Tenant's expense.
(b) Electrical. The Building Electrical System serving the
Premises shall provide
(i) 1 1/2watts per usable square foot of high voltage
(480/277 volt) connected load/lighting to each floor
(ii) 4 watts per usable square foot of low voltage (120/280
volts) connected load/convenience power to each floor
(iii) 4 1/2watts per usable square foot connected
load/mechanical to each floor
EXHIBIT E
Cleaning Specifications
GENERAL CLEANING
NIGHTLY
General Offices:
1. All hard surfaced flooring to be swept using approved dustdown preparation.
2. Carpet sweep all carpets, moving only light furniture (desks, file
cabinets, etc. not to be moved).
3. Hand dust and wipe clean all furniture, fixtures and window sills.
4. Empty all waste receptacles and remove wastepaper.
5. Wash clean all Building water fountains and coolers.
6. Sweep all private stairways.
Lavatories:
7. Sweep and wash all floors, using proper disinfectants.
8. Wash and polish all mirrors, shelves, bright work and enameled surfaces.
9. Wash and disinfect all basins, bowls and urinals.
10. Wash all toilet seats.
11. Hand dust and clean all partitions, tile walls, dispensers and receptacles
in lavatories and restrooms.
12. Empty paper receptacles, fill receptacles and remove wastepaper.
13. Fill toilet tissue holders.
14. Empty and clean sanitary disposal receptacles.
WEEKLY
15. Vacuum all carpeting and rugs.
16. Dust all door louvers and other ventilating louvers within a person's
normal reach.
17. Wipe clean all brass and other bright work.
18. Wax all hard surface flooring
QUARTERLY
High dust premises complete including the following:
19. Dust all pictures, frames, charts, graphs and similar wall hangings not
reached in nightly cleaning.
20. Dust all vertical surfaces, such as walls, partitions, doors, door frames
and other surfaces not reached in nightly cleaning.
21. Dust all venetian blinds.
22. Wash all windows.
EXHIBIT F
Rules and Regulations
1. Nothing shall be attached to the outside walls of the Building. No curtains,
blinds, shades, screens or other obstructions shall be attached to or hung in or
used in connection with any exterior window or entry door of the Premises,
without the prior consent of Landlord.
2. No sign, advertisement, notice or other lettering visible from the exterior
of the Premises shall be exhibited, inscribed, painted or affixed to any part of
the Premises without the prior written consent of Landlord. All lettering on
doors shall be inscribed, painted or affixed in a size, color and style
acceptable to Landlord.
3. The grills, louvers, skylights, windows and doors that reflect or admit light
and/or air into the Premises or Common Areas shall not be covered or obstructed
by Tenant, nor shall any articles be placed on the window sills, radiators or
convectors. 4. Landlord shall have the right to prohibit any advertising by any
Tenant which, in Landlord's opinion, tends to impair the reputation of the
Building, and upon written notice from Landlord, Tenant shall refrain from or
discontinue such advertising. 5. The sidewalks, entrances, passages, courts,
elevators, vestibules, stairways, corridors or halls shall not be obstructed or
encumbered by any Tenant or used for any purposes other than ingress of egress
to and from the Premises and for delivery of merchandise and equipment in a
prompt and efficient manner, using elevators and passageways designated for such
delivery by Landlord. 6. Except in those areas designated by Tenant as "security
areas," all locks or bolts of any kind shall be operable by the Building's
Master Key. No locks shall be placed upon any of the doors or windows by Tenant,
nor shall any changes be made in locks or the mechanism thereof which shall make
such locks inoperable by the Building's Master Key. Tenant shall, upon the
termination of its Lease, deliver to Landlord all keys of stores, offices and
lavatories, either furnished to or otherwise procured by Tenant and in the event
of the loss of any keys furnished by Landlord, Tenant shall pay to Landlord the
cost thereof. 7. Tenant shall keep the entrance door to the Premises closed at
all times.
8. All movement in or out of any freight, furniture, boxes, crates or any other
large object or matter of any description must take place during such times and
in such elevators as Landlord may prescribe. Landlord reserves the right to
inspect all articles to be brought into the Building and to exclude from the
Building all articles which violate any of these Rules and Regulations or the
Lease of which these Rules and Regulations are a part. Landlord may require that
any person leaving the public areas of the Building with any article to submit a
pass, signed by an authorized person, listing each article being removed, but
the establishment and enforcement of such requirement shall not impose any
responsibility on Landlord for the protection of any Tenant against the removal
of property from the Premises.
9. All hand trucks shall be equipped with rubber tires, side guards and such
other safeguards as Landlord may require. 10. None of Tenant's employees,
visitors or contractors shall be permitted to have access to the Building's
roof, mechanical, electrical or telephone rooms without permission from
Landlord.
11. Tenant shall not lay floor tile, or other similar floor covering so that the
same shall come in direct contact with the concrete floor of the Premises and,
if such floor covering is desired to be used, an interlining of builder's
deadening felt shall be first affixed to the floor by a paste or other material,
soluble in water; the use of cement or other similar adhesive material being
expressly prohibited.
12. Tenant shall not permit or suffer the Premises to be occupied or used in a
manner offensive or objectionable to Landlord or other occupants of the Building
by reason of noise, odors, vibrations or interfere in any way with other tenants
or those having business therein.
13. Tenant shall not employ any person or persons other than the janitor of
Landlord for the purpose of cleaning the Premises, unless otherwise reasonably
agreed to by Landlord. Tenant shall not cause any unnecessary labor by reason of
such Tenant's carelessness or indifference in the preservation of good order and
cleanliness.
14. Tenant shall store all its trash and recyclables within its Premises. No
material shall be disposed of which may result in a violation of any
Requirement. All refuse disposal shall be made only though entry ways and
elevators provided for such purposes and at such times as Landlord shall
designate. Tenant shall use the Building's hauler.
15. Except in connection with Decorative Alterations, Tenant shall not mark,
paint, drill into or in any way deface any part of the Building, except with the
prior written consent of Landlord in the case of the Premises, which consent
shall not be unreasonably withheld. No boring, cutting or stringing of wires
shall be permitted, except with prior reasonable consent of Landlord, and as
Landlord may direct.
16. The water and wash closets, electrical closets, mechanical rooms, fire
stairs and other plumbing fixtures shall not be used for any purposes other than
those for which they were constructed and no sweepings, rubbish, rags, acids or
other substances shall be deposited therein. All damages resulting from any
misuse of the fixtures shall be borne by Tenant where a Tenant Party caused the
same.
17. Tenant, before closing and leaving the Premises at any time, shall see that
all lights, water faucets, etc. are turned off. All entrance doors in the
Premises shall be kept locked by Tenant when the Premises are not in use. 18. No
bicycles, in-line roller skates, vehicles or animals of any kind (except for
seeing eye dogs) shall be brought into or kept by any Tenant in or about the
Premises or the Building.
19. Canvassing or soliciting in the Building is prohibited.
20. Employees of Landlord or Landlord's Agent shall not perform any work or do
anything outside of the regular duties, unless under special instructions from
the office of Landlord or in response to any emergency condition. 21. Tenant is
responsible for the delivery and pick up of all mail from the United States Post
Office. 22. Landlord reserves the right to exclude from the Building during
other than Ordinary Business Hours all persons who do not present a valid
Building pass. Tenant shall be responsible for all persons for whom a pass shall
be issued at the request of Tenant and shall be liable to Landlord for all acts
of such persons.
23. Landlord shall not be responsible to Tenant or to any other person for the
non-observance or violation of these Rules and Regulations by any other tenant
or other person. Tenant shall be deemed to have read Rules and Regulations and
to have agreed to abide by them as a condition to its occupancy of the Premises.
exhibit g
Development Specifications
exhibit h
Base Building Work
base building work by Landlord
A. All site work, including landscaping, parking and site utilities.
B. Main building lobby including:
(i) All surfaces finished
(ii) Lighting
(iii) All doors, hardware and glazing installed.
C. Required building exit corridors on the first floor complete on the inside
including all finishes, doors and hardware, glazing and lighting.
D. Typical, elevator vestibule, fire taped.
E. Elevator cabs complete, including all finishes, doors, hardware and
lighting.
F. Building stairs complete, including all finishes, doors and lighting.
G. Building mechanical equipment room, including doors, hardware and lighting.
H. Building electrical rooms, including doors, hardware and lighting.
I. Building telephone closets (less paint and backboard), including all
finishes, doors, hardware and lighting.
J. Restrooms complete, including all finishes, doors and hardware, lighting,
plumbing, fixtures, life safety devices, partitions and accessories
installed to meet code and ADA.
K. HVAC ducts and piping distributed to each floor stubbed out of the shafts.
L. Main power distribution brought to each floor.
M. Fire sprinklers and fire protection on each floor as required per code for
base building installed to an open plan.
N. Main telecommunications route to each floor.
O. Provision of one dedicated 4-inch conduit from the main electrical room on
the first level of the Building to each of the electrical closets within
the Premises.
P. Cable TV service and fiber optics brought to the Building.
Q. 120/208 Volt 3-Phase 4-wire power to electrical room on each floor. 2
panels with 84 circuits on each floor; additional circuits or 277/480 Volt
power available at Tenant's cost.
R. Centralized computer security system monitoring all doors, service areas,
elevators, and select building stairwells.
S. Demising walls fire taped and ready for tenant finish; exterior walls
insulated.
T. Exterior windows tinted and equiped with horizontal venetian blinds.
Exhibit I
425 LEXINGTON AVENUE, NEW YORK, 10017
February 1, 2000
exhibit i
ISSUE DATE: February 1, 2000
EXPIRY DATE: January 30, 2001
IRREVOCABLE STANDBY LETTER OF CREDIT NO. SYN-00-10006
Beneficiary: Applicant:
- ------------ ---------
WHTS Freedom Circle Partners, L.L.C. PMC-Sierra, Inc.
c/o Tishman Speyer Properties, L.P.
520 Madison Avenue
New York, NY 10022
ATT: GENERAL COUNSEL
We hereby establish our Irrevocable Standby Letter of Credit No. SYN-00-10006 in
your favor for a principal amount of USD 2,500,000.00 (Two Million Five Hundred
Thousand and 00/100 U.S. Dollars), available at Canadian Imperial Bank of
Commerce, 425 Lexington Avenue, New York, New York 10017, by payment against
your drafts at sight (in the form of Exhibit A attached hereto) to be
accompanied by:
1. This Original Letter of Credit and all amendments, if any;
2. An affidavit, purportedly signed by an authorized officer of the
Beneficiary, under penalty of perjury stating:
"(1) A default of PMC-Sierra, Inc. beyond applicable notice and cure periods has
occurred and is continuing under that certain lease (the "Lease") dated February
1, 2000 between PMC-Sierra, Inc. as Tenant and the Beneficiary hereunder as
Landlord ("Landlord"), and (2) Landlord is entitled under the Lease to draw the
amount being drawn."
OR
"Notice of non renewal of Canadian Imperial Bank of Commerce
Irrevocable Letter of Credit SYN-00-10006 has been received by
the Beneficiary and a replacement letter of credit has not
been received by the Beneficiary within 15 business days of
the expiry date. Beneficiary hereby instructs Canadian
Imperial Bank of Commerce to pay the draft amount to
_________________ at _________."
This Letter of Credit may be transferred upon presentation to us of a signed
transfer form in the form of Annex 1 accompanied by this Letter of Credit, in
which the Beneficiary irrevocably transfers to such transferee all of its rights
hereunder, whereupon we agree to either issue a substitute letter of credit to
such successor (which designates the transferee as beneficiary, and with all
references to "you" referring to it and is otherwise in the same form as this
letter of credit and is also transferable) or endorse such transfer on the
reverse of this Letter of Credit.
Partial drawings are permitted.
It is a condition of this Irrevocable Standby Letter of Credit that it is
automatically extended without amendment for successive periods of one year from
the then relevant expiration date, but in no event later than September 30,2010
unless we notify you by registered Mail or overnight courier at least 30 days
prior to the then relevant expiration date to the effect that we elect not to
extend this Irrevocable Standby Letter of Credit for any further periods. In the
event this credit is not extended for an additional period as provided above,
you may draw as provided for above.
Except as expressly stated herein, this undertaking is not
subject to any agreements, requirements or qualification. Our obligation under
this letter of credit is our individual obligation and is on no way contingent
upon reimbursement with respect thereto or upon our ability to perfect any lien,
security interest or any other reimbursement.
All correspondence shall be addressed to Canadian Imperial Bank of Commerce, 425
Lexington Avenue, New York, NY 10017, USA, Attention: Agency Services, and shall
mention this Letter of Credit number.
All drafts so drawn must be marked "Drawn under Irrevocable Letter of Credit No.
SYN-00-10006, dated January 31, 2000.
This Letter of Credit is subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision) International Chamber of Commerce
Publication No. 500, and shall be deemed to be a contract made under, and as to
matters not governed by the UCP, shall be governed and construed in accordance
with the laws of the State of New York and applicable U.S. law.
Sincerely,
Canadian Imperial Bank of Commerce
- ---------------------------------- ------------------------------------
Authorized Signatory Countersigned
- ---------------------------------- ------------------------------------
Beneficiary's Approval Applicant's Approval
ANNEX 1
Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, New York 10017
Reference is made to Canadian Imperial Bank of Commerce Letter of Credit
SYN-00-10006.
The undersigned, as beneficiary hereby irrevocably transfers to ___________,
(the "Transferee") all rights of the undersigned to draw under the Letter of
Credit.
Very truly yours,
--------------------------------
WHTS Freedom Circle Partners, L.L.C.
Exhibit A
for value received
pay at sight by wire transfer in immediately available funds to
_____________________ the sum of U.s. $______________ drawn under irrevocable
letter of credit no. _______________, dated ___________, 2000___, issued by
_______________________________.
to: [CIBC]
----------------------------
New York, New York
lease
WHTS freedom circle partners ii, l.l.c.,
a Delaware limited liability company,
Landlord
and
pmc - sierra, inc.,
a Delaware corporation,
Tenant
for
Mission Towers II
3985 Freedom Circle Drive
Santa Clara, California
July 20, 2000
TABLE OF CONTENTS
Page
ARTICLE 1 BASIC LEASE PROVISIONS............................................
ARTICLE 2 PREMISES, TERM, RENT..............................................
ARTICLE 3 USE AND OCCUPANCY.................................................
ARTICLE 4 CONDITION OF THE PREMISES.........................................
ARTICLE 5 ALTERATIONS.......................................................
ARTICLE 6 REPAIRS...........................................................
ARTICLE 7 INCREASES IN TAXES AND OPERATING EXPENSES.........................
ARTICLE 8 REQUIREMENTS OF LAW...............................................
ARTICLE 9 SUBORDINATION.....................................................
ARTICLE 10 SERVICES.........................................................
ARTICLE 11 INSURANCE; PROPERTY LOSS OR DAMAGE...............................
ARTICLE 12 EMINENT DOMAIN...................................................
ARTICLE 13 ASSIGNMENT AND SUBLETTING........................................
ARTICLE 14 ACCESS TO PREMISES...............................................
ARTICLE 15 DEFAULT..........................................................
ARTICLE 16 LANDLORD'S RIGHT TO CURE; FEES AND EXPENSES......................
ARTICLE 17 NO REPRESENTATIONS BY LANDLORD; LANDLORD'S APPROVAL..............
ARTICLE 18 END OF TERM......................................................
ARTICLE 19 QUIET ENJOYMENT..................................................
ARTICLE 20 NO SURRENDER; NO WAIVER..........................................
ARTICLE 21 WAIVER OF TRIAL BY JURY; COUNTERCLAIM............................
ARTICLE 22 NOTICES..........................................................
ARTICLE 23 RULES AND REGULATIONS............................................
ARTICLE 24 BROKER...........................................................
ARTICLE 25 INDEMNITY........................................................
ARTICLE 26 MISCELLANEOUS....................................................
ARTICLE 27 SECURITY DEPOSIT.................................................
ARTICLE 28 PARKING..........................................................
ARTICLE 29 RENEWAL TERM.....................................................
ARTICLE 30 ROOF SPACE AND SATELLITE ANTENNA.................................
ARTICLE 31 [Intentionally Deleted]..........................................
ARTICLE 32 SIGNAGE..........................................................
Schedule of Exhibits
Exhibit A-1 Floor Plan of the First Floor
Exhibit A-2 Floor Plan of the Second Floor
Exhibit A-3 Floor Plan of the Third Floor
Exhibit A-4 Floor Plan of the Fourth Floor
Exhibit A-5 Floor Plan of the Fifth Floor
Exhibit A-6 Floor Plan of the Sixth Floor
Exhibit B Definitions
Exhibit C Work Letter
Exhibit D Design Standards
Exhibit E Cleaning Specifications
Exhibit F Rules and Regulations
Exhibit G Development Specifications
Exhibit H Base Building Work
Exhibit I Form of Letter of Credit
LEASE
THIS LEASE is made as of the ____ day of June, 2000
("Effective Date"), between WHTS freedom circle towers II, l.l.c. ("Landlord"),
a Delaware limited liability company, and pmc - sierra, inc. ("Tenant"), a
Delaware corporation.
Landlord and Tenant hereby agree as follows:
ARTICLE 1
BASIC LEASE PROVISIONS
PREMISES The entire first, second, third, fourth, fifth and sixth
floors of the Building, as more particularly shown on
Exhibits A-1, A-2, A-3, A-4, A-5 and A-6.
BUILDING The building, fixtures, equipment and other improvements and
appurtenances to be hereafter erected, located or placed
upon the land known as Mission Towers II, 3985 Freedom
Circle Drive, Santa Clara, California.
BUILDING ONE The building, fixtures, equipment and other improvements
and appurtenances now located or hereafter erected, located
or placed upon the land known as Mission Towers I, 3975
Freedom Circle Drive, Santa Clara, California.
PROJECT The Building, Building One and the Garage together with all
related Common Areas.
GARAGE The parking structure, fixtures and other improvements and
appurtenances now located or hereafter erected, located or
placed upon the land known as Mission Towers I, 3975 Freedom
Circle Drive, Santa Clara, California.
REAL PROPERTY The Building, together with the plot of land upon which it
stands.
SCHEDULED DELIVERY
DATE July 1, 2001.
SCHEDULED
COMMENCEMENT DATE October 1, 2001.
COMMENCEMENT DATE The later to occur of (a) the Scheduled Commencement Date,
and (b) the 90th calendar day following the date of
Landlord's tender of possession of the Premises with the
Base Building Work at a stage of completion so as to permit
Tenant's Contractors to commence construction of the Initial
Installation without unreasonable delay or interference.
RENT COMMENCEMENT
DATE The Commencement Date.
EXPIRATION DATE The date which is the last day of the month in which the
10th anniversary of the Commencement Date occurs, or the
last day of any renewal or extended term, if the Term of
this Lease is extended in accordance with any express
provision hereof.
TERM The period commencing on the Commencement Date and ending on
the Expiration Date.
PERMITTED USES Offices for the transaction of Tenant's business in keeping
with Comparable Buildings, including the operation of an
electronic verification lab within the Premises and a
shipping and receiving area adjacent to the Building loading
dock.
TENANT'S
PROPORTIONATE
SHARE 47.5043%
AREA OF BUILDING 282,080 rentable square feet (253,901 usable square feet).
AREA OF PREMISES Floor 1: 12,763 rentable square feet
(11,488 usable square feet).
Floor 2: 21,813 rentable square feet
(19,634 usable square feet).
Floor 3: 24,856 rentable square feet
(22,373 usable square feet).
Floor 4: 24,856 rentable square feet
(22,373 usable square feet).
Floor 5: 24,856 rentable square feet
(22,373 usable square feet)
Floor 6: 24,856 rentable square feet
(22,373 usable square feet)
Total: 134,000 rentable square feet
(120,614 usable square feet).
FIXED RENT Period Per Annum Per Month
------ --------- ---------
Year 1 $7,236,000.00 $603,000.00
Year 2 $7,489,260.00 $624,105.00
Year 3 $7,751,384.10 $645,948.68
Year 4 $8,022,682.54 $668,556.88
Year 5 $8,303,476.43 $691,956.37
Year 6 $8,594,098.11 $716,174.84
Year 7 $8,894,891.54 $741,240.96
Year 8 $9,206,212.75 $767,184.40
Year 9 $9,528,430.19 $794,035.85
Year 10 $9,861,925.25 $821,827.10
ADDITIONAL RENT All sums other than Fixed Rent payable by Tenant to
Landlord under this Lease, including Tenant's Tax Payment,
Tenant's Operating Payment, late charges, overtime or excess
service charges, damages, and interest and other costs
related to Tenant's failure to perform any of its
obligations under this Lease.
RENT Fixed Rent and Additional Rent, collectively.
INTEREST RATE The lesser of (i) 4% per annum above the then-current Base
Rate, and (ii) the maximum rate permitted by applicable law.
SECURITY DEPOSIT $2,000,000, subject to reduction in accordance with Section
27.5.
TENANT'S ADDRESS
FOR NOTICES Until Tenant commences business operations from the
Premises:
PMC - Sierra, Inc.
8555 Baxter Place, Suite 105
Burnaby, British Columbia V5A4V7
Canada
Attn: Geraldine Jones
Thereafter:
PMC - Sierra, Inc.
3975 Freedom Circle Drive
Santa Clara, California 95054
Attn: Vice President - Administration
LANDLORD'S ADDRESS
FOR NOTICES WHTS Freedom Circle Partners II, L.L.C.
c/o Tishman Speyer Properties, L.P.
444 Castro Street
Mountain View, California 94041
Attn: Property Manager
Copies to:
WHTS Freedom Circle Partners II, L.L.C.
c/o Tishman Speyer Properties, L.P.
520 Madison Avenue
New York, New York 10022
Attn: Chief Financial Officer
and:
Tishman Speyer Properties, L.P.
520 Madison Avenue
New York, New York 10022
Attn: General Counsel
and:
Goldman, Sachs & Co.
100 Crescent Court, Suite 1000
Dallas, Texas 75201
Attention: Mr. Paul Milosevich
and:
Whitehall Street Real Estate Limited Partnership IX
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Mr. Steven M. Feldman
TENANT'S BROKER Colliers International.
LANDLORD'S BROKER Cornish & Carey Commercial
LANDLORD'S AGENT Tishman Speyer Properties, L.P. or any other person
designated at any time and from time to time by Landlord as
Landlord's Agent.
LANDLORD'S
CONTRIBUTION 4,020,000.00.
All capitalized terms used in this Lease without definition are defined in
Exhibit B.
ARTICLE 2
PREMISES, TERM, RENT
Section 2.1 Lease of Premises. Subject to the terms of this Lease, Landlord
leases to Tenant and Tenant leases from Landlord the Premises for the Term. In
addition, Landlord grants to Tenant the right to use, on a non-exclusive basis
and in common with other tenants, the Common Areas.
Section 2.2 Rentable Area. Subject to adjustment as herein provided, the
rentable square footage of the Premises and the Building are agreed to be the
numbers of square feet respectively specified in the Basic Lease Information.
The "usable area" of the Premises and Building has been calculated and
determined in accordance with the "Standard Method for Measuring Floor Area in
Office Buildings," ANSI/BOMA Z65.1-1996, as published by the Building Owners and
Managers Association International (the "BOMA Standard"). The rentable square
footage of the Building and the Premises are determined by multiplying the
usable area of the Premises and Building by 111.10% (the "Load Factor"), which
Load Factor is agreed to by Landlord and Tenant. If Tenant wishes to verify that
the usable area of the Premises and the Building (as determined in accordance
with BOMA Standards) are as set forth in the Basic Lease Information, then at
any time prior to the Commencement Date Tenant shall have the right to cause an
independent architect or space planner to verify Landlord's square footage
numbers, which determination shall be subject to Landlord's reasonable approval.
If the final rentable square footage of the Premises as so determined is
different then as set forth in the Basic Lease Information, the Fixed Rent,
Tenant's Proportionate Share and Landlord's Contribution shall be appropriately
adjusted.
Section 2.3 Commencement Date. Upon the Effective Date, the terms and provisions
hereof shall be fully binding on Landlord and Tenant prior to the occurrence of
the Commencement Date. The Term of this Lease shall commence on the Commencement
Date. Unless sooner terminated or extended as hereinafter provided, the Term
shall end on the Expiration Date. If Landlord does not tender possession of the
Premises to Tenant on or before the Scheduled Delivery Date, for any reason
whatsoever, Landlord shall not be liable for any damage thereby, this Lease
shall not be void or voidable thereby, and the Term shall not commence until the
90th calendar day after Landlord tenders possession of the Premises to Tenant in
the condition required by Article 4. No failure to tender possession of the
Premises to Tenant on or before the Scheduled Delivery Date shall affect any
other obligations of Tenant hereunder; provided, however, that if Landlord fails
to tender possession of the Premises to Tenant on or before March 1, 2002, then,
except to the extent caused by Unavoidable Delays, Tenant shall receive for each
day of delay thereafter with respect to the Premises a credit against Fixed Rent
in an amount equal to $20,100.00 per day. If Landlord, despite its commercially
reasonable efforts, is unable to Commence Construction by November 30, 2000,
Landlord, upon written notice to Tenant delivered prior to December 15, 2000,
shall have the right to terminate this Lease. For purposes of this Section 2.2,
the term "Commences Construction" shall mean the date Landlord's pile-driving
subcontractor mobilizes its pile-driving equipment on the Real Property.
Landlord shall use its commercially reasonable efforts to cause the Base
Building Work to be Substantially Complete on or before the Commencement Date.
The Base Building Work shall be deemed to be "Substantially Complete" upon the
date by which there remains no incomplete or defective item of the Base Building
Work that would materially adversely affect Tenant's intended use of the
Premises and that Landlord has obtained (or as of the Commencement Date will
have obtained) all necessary permits and approvals from Governmental Authorities
with respect to the Base Building Work required for the legal occupancy of the
Premises for the Permitted Use (subject to Substantial Completion by Tenant of
the Initial Installations). Once the Commencement Date is determined, Landlord
and Tenant shall execute an agreement stating the Commencement Date and
Expiration Date, but the failure to do so will not affect the determination of
such dates.
Section 2.4 Payment of Rent. Tenant shall pay to Landlord, without notice or
demand, and without any set-off, counterclaim, abatement or deduction
whatsoever, except as may be expressly set forth in this Lease, in lawful money
of the United States by wire transfer of funds or by check drawn upon a bank
approved by Landlord, (i) Fixed Rent in equal monthly installments, in advance,
on the first day of each month during the Term, commencing on the Rent
Commencement Date, and (ii) Additional Rent, at the times and in the manner set
forth in this Lease.
Section 2.5 First Month's Rent. Tenant shall pay one month's Fixed Rent upon the
execution of this Lease ("Advance Rent"). If the Rent Commencement Date is on
the first day of a month, the Advance Rent shall be credited towards the first
month's Fixed Rent payment. If the Rent Commencement Date is not the first day
of a month, then on the Rent Commencement Date Tenant shall pay Fixed Rent for
the period from the Rent Commencement Date through the last day of such month,
and the Advance Rent shall be credited towards Fixed Rent for the next
succeeding calendar month.
ARTICLE 3
USE AND OCCUPANCY
Tenant shall use and occupy the Premises for the Permitted
Uses and for no other purpose. Tenant shall not use or occupy or permit the use
or occupancy of any part of the Premises in a manner constituting a Prohibited
Use. If Tenant uses the Premises for a purpose constituting a Prohibited Use,
violating any Requirement, or causing the Building to be in violation of any
Requirement, then Tenant shall promptly discontinue such use upon notice of such
violation. Tenant, at its expense, shall procure and at all times maintain and
comply with the terms and conditions of all licenses and permits required for
the lawful conduct of the Permitted Uses in the Premises.
ARTICLE 4
CONDITION OF THE PREMISES
Landlord shall use its reasonable efforts to commence
construction of the core and shell of the Building and the expansion of the
Garage on or about August 14, 2000. Attached hereto as Exhibit G and
incorporated herein by reference is a list of the drawings and specifications
for the design and construction of the Building (collectively the "Development
Specifications"). The Development Specifications have previously been made
available to Tenant for its review. Landlord, at its sole cost and expense,
shall complete construction of the Building: (a) in substantial accordance with
the Development Specifications; and (b) in a good workmanlike manner, to a
general standard of construction equal to or greater than that of other
Comparable Buildings. At the time of Landlord's tender of possession of the
Premises, those portions of the Base Building Work, as more particularly
described on Exhibit H, which are necessary to be completed for the orderly and
effective construction of the Initial Installations shall be Substantially
Complete. Subject to the foregoing, Tenant shall: (a) accept possession of the
Premises in its then "As-Is" condition, and (b) except for Landlord's
Contribution, Landlord has no obligation to perform any work, supply any
materials, incur any expense or make any alterations or improvements to prepare
the Premises for Tenant's occupancy. Tenant's occupancy of any part of the
Premises shall be conclusive evidence, as against Tenant, that Landlord has
Substantially Completed the Base Building Work, Tenant has accepted possession
of the Premises in its then current condition and at the time such possession
was taken, the Premises and the Building were in a good and satisfactory
condition as required by this Lease except for latent defects in the Base
Building Work not visually discoverable by Tenant upon a reasonably diligent
inspection and subject to the completion by Landlord of any "punch list" items
or similar corrective work; provided, however, that Landlord shall have no
obligation to correct latent defects not reported to Landlord in writing within
12 months of the acceptance of the Premises by Tenant. Landlord, at Landlord's
sole cost and expense and not as a deduction or offset from the amount of
Landlord's Contribution or as part of Operating Expenses, shall be responsible
for ensuring that, as of the Commencement Date, the Base Building Work
(including the roof and all Building Systems) is in good working condition and
repair, free from any known code violations and in compliance with all
Requirements. In addition, in accordance with the terms and provisions of
Section 6.1 below, Landlord shall be responsible for the correction of any
latent or patent defects in the Landlord Repair Areas (as hereinafter defined)
at any time during this Term of the Lease or any extension thereof. Landlord
agrees to exercise commercially reasonable efforts to enforce any and all
construction, design and materials warranties obtained by Landlord with respect
to the Base Building Work ("Construction Warranties"). No provision of this
Article 4 shall diminish Landlord's obligations under Section 6.1 below.
ARTICLE 5
ALTERATIONS
Section 5.1 Tenant's Alterations. (a) (a) Tenant shall not make any alterations,
additions or other physical changes in or about the Premises (collectively,
"Alterations") other than decorative Alterations such as painting, wall
coverings and floor coverings (collectively, "Decorative Alterations"), without
Landlord's prior consent, which consent shall not be unreasonably withheld so
long as such Alterations (i) are non-structural and do not affect any Building
Systems, (ii) affect only the Premises and are not visible from outside of the
Premises, (iii) do not affect the certificate of occupancy issued for the
Building or the Premises, and (iv) do not violate any Requirement.
Notwithstanding the foregoing, Tenant may perform Alterations without Landlord's
prior approval, if the cost to perform such work does not exceed $10,000 and
provided the same (i) are non-structural and do not affect any Building Systems,
(ii) affect only the Premises and are not visible from outside of the Premises,
(iii) do not affect the certificate of occupancy issued for the Building or the
Premises, and (iv) do not violate any Requirement.
(b) Plans and Specifications. Prior to making any Alterations, Tenant,
at its expense, shall (i) submit to Landlord for its approval, detailed plans
and specifications ("Plans") of each proposed Alteration (other than Decorative
Alterations), and with respect to any Alteration affecting any Building System,
evidence that the Alteration has been designed by, or reviewed and approved by,
Landlord's designated engineer for the affected Building System, (ii) obtain all
permits, approvals and certificates required by any Governmental Authorities,
(iii) furnish to Landlord duplicate original policies or certificates of
worker's compensation (covering all persons to be employed by Tenant, and
Tenant's contractors and subcontractors in connection with such Alteration) and
commercial general liability (including property damage coverage) insurance and
Builder's Risk coverage (as described in Article 11) all in such form, with such
companies, for such periods and in such amounts as Landlord may reasonably
require, naming Landlord, Landlord's Agent any Lessor and any Mortgagee as
additional insureds, and (iv) with respect to any Alterations individually
costing at least $500,000, furnish to Landlord reasonably satisfactory evidence
of Tenant's ability to complete and to fully pay for such Alterations (other
than the Initial Installations and Decorative Alterations). Tenant shall give
Landlord not less than 5 Business Days' notice prior to performing any
Decorative Alteration, which notice shall contain a description of such
Decorative Alteration.
(c) Governmental Approvals. Tenant, at its expense, shall, as and when
required, promptly obtain certificates of partial and final approval of such
Alterations required by any Governmental Authority and shall furnish Landlord
with copies thereof, together with "as-built" Plans for such Alterations
prepared on an AutoCAD Computer Assisted Drafting and Design System (or such
other system or medium as Landlord may accept), using naming conventions issued
by the American Institute of Architects in June, 1990 (or such other naming
conventions as Landlord may accept) and magnetic computer media of such record
drawings and specifications translated in DFX format or another format
acceptable to Landlord.
Section 5.2 Manner and Quality of Alterations. All Alterations shall be
performed (a) in a good and workmanlike manner and free from defects, (b)
substantially in accordance with the Plans, and by contractors approved by
Landlord, and (c) in compliance with all Requirements, the terms of this Lease
and all construction procedures and regulations then prescribed by Landlord. All
materials and equipment shall be of first quality and at least equal to the
applicable standards for the Building then established by Landlord, and no such
materials or equipment (other than Tenant's Property) shall be subject to any
lien or other encumbrance.
Section 5.3 Removal of Tenant's Property. Tenant's Property shall remain the
property of Tenant and Tenant may remove the same at any time on or before the
Expiration Date. On or prior to the Expiration Date, Tenant shall, unless
otherwise directed by Landlord, at Tenant's expense, remove any Specialty
Alteration and close up any slab penetrations in the Premises. Tenant shall
repair and restore, in a good and workmanlike manner, any damage to the Premises
or the Building caused by Tenant's removal of any Specialty Alterations or
Tenant's Property or by the closing of any slab penetrations, and upon default
thereof, Tenant shall reimburse Landlord, on demand, for Landlord's cost of
repairing and restoring such damage. Any Above Building Standard Installations
(as hereinafter defined) or Tenant's Property not so removed shall be deemed
abandoned and Landlord may remove and dispose of same, and repair and restore
any damage caused thereby, at Tenant's cost and without accountability to
Tenant. Tenant shall not be required to remove any of the Initial Installations
or any subsequent Alterations unless, in either case, the same constitute
Specialty Alterations which Landlord advises Tenant must be removed at the time
consent thereto was granted. Concurrently with the issuance of its consent to
the performance of the Initial Installations or of any Alterations, Landlord
will notify Tenant whether any such component of the Initial Installations or
any such Alterations, or any material component thereof (including, without
limitation, any oversized or exposed conduit) not expressly included within the
definition of Specialty Alterations is considered by Landlord to be such.
Section 5.4 Mechanic's Liens. Tenant, at its expense, shall discharge any lien
or charge filed against the Real Property in connection with any work done or
claimed to have been done by or on behalf of, or materials furnished or claimed
to have been furnished to, Tenant, within 10 days after Tenant's receipt of
notice thereof by payment, filing the bond required by law or otherwise in
accordance with law.
Section 5.5 Labor Relations. Tenant shall not employ, or permit the employment
of, any contractor, mechanic or laborer, or permit any materials to be delivered
to or used in the Building, if, in Landlord's sole judgment, such employment,
delivery or use will interfere or cause any conflict with other contractors,
mechanics or laborers engaged in the construction, maintenance or operation of
the Building by Landlord, Tenant or others. If such interference or conflict
occurs, upon Landlord's request, Tenant shall cause all contractors, mechanics
or laborers causing such interference or conflict to leave the Building
immediately.
Section 5.6 Tenant's Costs. Tenant shall pay promptly to Landlord, upon demand,
all out-of-pocket costs actually incurred by Landlord in connection with
Tenant's Alterations, including costs incurred in connection with (a) Landlord's
review of the Alterations (including review of requests for approval thereof)
which costs reimbursable by Tenant shall not exceed $1,500 per request for
consent and (b) the provision of Building personnel during the performance of
any Alteration, to operate elevators or otherwise to facilitate Tenant's
Alterations. In addition, if Tenant's Alterations cost more than $100,000.00,
Tenant shall pay to Landlord, upon demand, an administrative fee in an amount
equal to 1% of the total cost of such Alterations.
Section 5.7 Tenant's Equipment. Tenant shall provide notice to Landlord prior to
moving any heavy machinery, heavy equipment, freight, bulky matter or fixtures
(collectively, "Equipment") into or out of the Building and shall pay to
Landlord any costs actually incurred by Landlord in connection therewith. If
such Equipment requires special handling, Tenant agrees (a) to employ only
persons holding all necessary licenses to perform such work, (b) all work
performed in connection therewith shall comply with all applicable Requirements
and (c) such work shall be done only during hours designated by Landlord.
Section 5.8 Legal Compliance. The approval of Plans, or consent by Landlord to
the making of any Alterations, does not constitute Landlord's representation
that such Plans or Alterations comply with any Requirements. Landlord shall not
be liable to Tenant or any other party in connection with Landlord's approval of
any Plans, or Landlord's consent to Tenant's performing any Alterations. If any
Alterations made by or on behalf of Tenant, require Landlord to make any
alterations or improvements to any part of the Building in order to comply with
any Requirements, Tenant shall pay all costs and expenses incurred by Landlord
in connection with such alterations or improvements.
Section 5.9 Floor Load. Tenant shall not place a load upon any floor of the
Premises that exceeds 100 pounds per square foot "live load" on the ground floor
and 80 pounds per square foot "live load" on the upper floors. Landlord reserves
the right to reasonably designate the position of all Equipment which Tenant
wishes to place within the Premises, and to place reasonable limitations on the
weight thereof consistent with the floor loads described above.
ARTICLE 6
REPAIRS
Section 6.1 Landlord's Repair and Maintenance. Landlord shall operate, maintain
and, except as provided in Section 6.2 hereof, make all necessary repairs (both
structural and nonstructural) to the structural portions of the Building and the
Premises (including without limitation, the roof, foundation, floor slab,
exterior walls and load bearing walls), (ii) the Building Systems, and (iii) the
Common Areas, in conformance with standards applicable to Comparable Buildings
(collectively, the "Landlord Repair Areas").
Section 6.2 Tenant's Repair and Maintenance. Tenant shall promptly, at its
expense and in compliance with Article 5, make all nonstructural repairs to the
Premises and the fixtures, equipment and/or and appurtenances therein
(collectively, "Building Fixtures") as and when needed to preserve the Premises
in good working order and condition, except for reasonable wear and tear and
damage from condemnation or casualty. All damage to the Building or to any
portion thereof, or to any Building Fixtures requiring structural or
nonstructural repair caused by or resulting from any act, omission, neglect or
improper conduct of or the moving of Tenant's Property or Equipment into, within
or out of the Premises by a Tenant Party, shall be repaired at Tenant's expense
by (i) Tenant, if the required repairs are nonstructural in nature and do not
affect any Building System, or (ii) Landlord, if the required repairs are
structural in nature, involve replacement of exterior window glass or affect any
Building System. All Tenant repairs shall be of good quality utilizing new
construction materials. If Tenant fails after 10 days' notice (or such shorter
period as may be required in an emergency) to proceed with due diligence to make
any repairs required to be made by Tenant, Landlord may make such repairs and
all costs and expenses incurred by Landlord on account thereof, plus interest
thereon at the Interest Rate, shall be paid by Tenant within 10 days after
delivery of an invoice therefor.
Section 6.3 Interruptions Due to Repairs. Landlord reserves the right to make
all changes, alterations, additions, improvements, repairs or replacements to
the Real Property, including the Building Systems (collectively, "Restorative
Work"), as Landlord deems necessary or desirable, provided that in no event
shall the level of any Building service decrease in any material respect from
the level required of Landlord in this Lease as a result thereof (other than
temporary changes in the level of such services during the performance of any
such Restorative Work). Landlord shall use reasonable efforts to minimize
interference with Tenant's use and occupancy of the Premises during the
performance of such Restorative Work. There shall be no Rent abatement or
allowance to Tenant for a diminution of rental value, no actual or constructive
eviction of Tenant, in whole or in part, no relief from any of Tenant's other
obligations under this Lease, and no liability on the part of Landlord by reason
of inconvenience, annoyance or injury to business arising from Landlord, Tenant
or others performing, or failing to perform, any Restorative Work. Landlord
shall use its commercially reasonable efforts to restore any interruption of
access, use or services as soon as reasonably possible. Notwithstanding any
contrary provision of this Lease, if Tenant is prevented from using for the
conduct of its business, and does not use for the conduct of its business, the
Premises or any material portion thereof, for 15 consecutive Business Days (the
"Eligibility Period") as a result of (i) any construction, repair, maintenance
or alteration performed by Landlord after the Commencement Date and not
necessitated by the negligence or willful misconduct of any Tenant Party, or
(ii) the failure in any material respect of Landlord or its agents or
contractors to provide to the Premises any of the utilities and services
required to be provided under this Lease (including Article 10 below) and not
caused by the negligence or willful misconduct of any Tenant Party or otherwise
due to the occurrence of a casualty or condemnation, (iii) any failure to
provide access to the Premises and not caused by the negligence or willful
misconduct of any Tenant Party or otherwise due to the occurrence of a casualty
or condemnation, or (iv) because of the presence of Hazardous Materials in, on
or around the Building, the Premises or the Real Property which were not caused
or introduced by any Tenant Party and which Hazardous Materials pose a material
and significant health risk to occupants of the Premises, then, in any and all
such events, Tenant's obligation to pay Fixed Rent, Tenant's Operating Payment
and Tenant's Tax Payment shall be abated or reduced, as the case may be, from
and after the first (1st) day following the last day of the Eligibility Period
and continuing for such time that Tenant continues to be so prevented from using
for the conduct of its business, and does not so use for the conduct of its
business, the Premises or a material portion thereof, in the proportion that the
rentable square feet of the portion of the Premises that Tenant is prevented
from using, and does not so use, bears to the total rentable square feet of the
Premises.
ARTICLE 7
INCREASES IN TAXES AND OPERATING EXPENSES
Section 7.1 Definitions. For the purposes of this Article 7, the following terms
shall have the meanings set forth below:
(a) "Assessed Valuation" shall mean the amount for which the Real
Property is assessed by the County Assessor of Santa Clara for the purpose of
imposition of Taxes.
(b) "Comparison Year" shall mean any calendar year all or any portion
of which occurs during the Term.
(c) "Operating Expenses" shall mean the aggregate of all costs and
expenses, without duplication, paid or incurred by or on behalf of Landlord in
connection with the ownership, operation, repair and maintenance of the Real
Property, including capital improvements only if such capital improvement either
(i) is reasonably intended to result in a reduction in Operating Expenses (as
for example, a labor-saving improvement) provided, the amount included in
Operating Expenses in any Comparison Year shall not exceed an amount equal to
the savings reasonably anticipated to result from the installation and operation
of such improvement, and/or (ii) is made during any Comparison Year in
compliance with Requirements. Such capital improvements shall be amortized (with
interest at the Base Rate) on a straight-line basis over the useful life of such
capital improvement as Landlord shall reasonably determine, and the amount
included in Operating Expenses in any Comparison Year shall be equal to the
annual amortized amount. Operating Expenses shall not include any Excluded
Expenses. If during all or part of any Comparison Year, Landlord shall not
furnish any particular item(s) of work or service (which would otherwise
constitute an Operating Expense) to any leasable portions of the Building for
any reason but continues to furnish or provide such work or services to the
Premises, then, for purposes of computing Operating Expenses for such period,
the amount included in Operating Expenses for such period shall be increased by
an amount equal to the costs and expenses that would have been reasonably
incurred by Landlord during such period if Landlord had furnished such item(s)
of work or service to such portion of the Building. In determining the amount of
Operating Expenses for any Comparison Year, if less than 95% of the Building
rentable area is occupied by tenants at any time during any such Comparison
Year, Operating Expenses shall be determined for such Comparison Year to be an
amount equal to the like expenses which would normally be expected to be
incurred had such occupancy been 95% throughout such Comparison Year.
Tenant understands and acknowledges that, from time to time during the
Term, the Building may be operated jointly by Landlord and the owner of Building
One as part of the Project, comprising the Building, the Garage and Common Areas
adjacent to the Building and Building One. For purposes of this Article 7, the
Building and Building One are sometimes hereinafter jointly referred to as the
"Project." Landlord shall have the right, from time to time during the Term, to
operate the Project in an integrated fashion, and to include within Operating
Expenses and Real Property Taxes a reasonable allocation of the amount of
Operating Expenses and Real Property Taxes paid or incurred by Landlord and the
owner of Building One with respect to the Project. During such periods of time
as Landlord so elects, "Tenant's Proportionate Share" shall mean the product of
(a) the rentable area of the Premises, and (b) a fraction, the numerator of
which is one and the denominator of which is the rentable area of the Project.
In addition, during such periods of time as Landlord does not elect to determine
Operating Expenses and Real Property Taxes on a Project-wide basis, Operating
Expenses and Real Estate Taxes for the Building shall include a reasonable
allocation of such costs and expenses as Landlord may incur in the maintenance,
operation, administration and repair of the Garage and the Common Areas
servicing the Project.
(d) "Statement" shall mean a reasonably detailed statement (by major
categories of expenditures) containing the amount of Operating Expenses and
Taxes for any Comparison Year and the amount of Tenant's Operating Payment and
Tax Payment for any such Comparison Year, including a summary of the
calculations used to arrive at such amounts.
(e) "Taxes" shall mean (i) all real estate taxes, assessments, sewer
and water rents, rates and charges and other governmental levies, impositions or
charges, whether general, special, ordinary, extraordinary, foreseen or
unforeseen, which may be assessed, levied or imposed upon all or any part of the
Real Property, and (ii) all expenses (including reasonable attorneys' fees and
disbursements and experts' and other witnesses' fees) incurred in contesting any
of the foregoing or the Assessed Valuation of the Real Property. Taxes shall not
include (x) interest or penalties incurred by Landlord as a result of Landlord's
late payment of Taxes, or (y) franchise or net income taxes imposed upon
Landlord. If Landlord elects to pay any assessment in annual installments, then
(i) such assessment shall be deemed to have been so divided and to be payable in
the maximum number of installments permitted by law, and (ii) there shall be
deemed included in Taxes for each Comparison Year the installments of such
assessment becoming payable during such Comparison Year, together with interest
payable to the taxing authority during such Comparison Year on such installments
and on all installments thereafter becoming due as provided by law, all as if
such assessment had been so divided. If at any time the methods of taxation
prevailing on the Effective Date shall be altered so that in lieu of or as an
addition to the whole or any part of Taxes, there shall be assessed, levied or
imposed (1) a tax, assessment, levy, imposition or charge based on the income or
rents received from the Real Property whether or not wholly or partially as a
capital levy or otherwise, (2) a tax, assessment, levy, imposition or charge
measured by or based in whole or in part upon all or any part of the Real
Property and imposed upon Landlord, (3) a license fee measured by the rents, or
(4) any other tax, assessment, levy, imposition, charge or license fee however
described or imposed, then all such taxes, assessments, levies, impositions,
charges or license fees or the part thereof so measured or based shall be deemed
to be Taxes. As of the Effective Date, the Real Property comprises one legal
parcel, which Landlord anticipates subdividing in order to create a separate
legal parcel upon which the Building will be constructed. Concurrently with the
development of the Building, the existing Garage (the "Building I Garage
Improvements") will be expanded to provide necessary parking for the Building.
Notwithstanding anything set forth in this Lease to the contrary, Taxes shall
not include any real property taxes or assessments attributable to the real
property upon which the Building I Garage Improvements sit, the Building I
Garage Improvements, the Building One land or Building One.
Section 7.2 Tenant's Tax Payment. (a) Tenant shall pay to Landlord Tenant's
Proportionate Share of the Taxes payable for any Comparison Year ("Tenant's Tax
Payment"). On or about the start of each Comparison Year, Landlord shall furnish
to Tenant a Statement of the Taxes. Tenant shall pay Tenant's Tax Payment to
Landlord, in monthly installments, on the first day of each month during each
Comparison Year, an amount equal to 1/12 of Tenant's Tax Payment due for each
Comparison Year. If there is any increase or decrease in Taxes payable for any
Comparison Year, whether levied during or after such Comparison Year, Landlord
may furnish a revised Statement for such Comparison Year, Tenant's Tax Payment
for such Comparison Year shall be adjusted and, within 10 Business Days after
delivery of such revised Statement (a) with respect to any increase in Taxes
payable for such Comparison Year, Tenant shall pay such increase in Tenant's Tax
Payment to Landlord, or
(b) with respect to any decrease in Taxes payable for such Comparison
Year, Landlord shall credit such decrease in Tenant's Tax Payment against the
next installment of Rent payable by Tenant. (b) Only Landlord may institute
proceedings to reduce the Assessed Valuation of the Real Property and the
filings of any such proceeding by Tenant without Landlord's consent shall
constitute an Event of Default. If Landlord receives a refund of Taxes for any
Comparison Year, Landlord shall credit against subsequent payments of Rent due
hereunder, an amount equal to Tenant's Proportionate Share of the refund, net of
any expenses incurred by Landlord in achieving such refund, which amount shall
not exceed Tenant's Tax Payment paid for such Comparison Year. Landlord shall
not be obligated to file any application or institute any proceeding seeking a
reduction in Taxes or the Assessed Valuation.
(c) Tenant shall be responsible for any applicable occupancy or rent
tax now in effect or hereafter enacted and, if payable by Landlord, Tenant shall
promptly pay such amounts to Landlord, upon Landlord's demand.
Section 7.3 Tenant's Operating Payment. (a) Tenant shall pay to Landlord
Tenant's Proportionate Share of the Operating Expenses payable for any
Comparison Year ("Tenant's Operating Payment"). For each Comparison Year,
Landlord shall furnish to Tenant a statement setting forth Landlord's reasonable
estimate of Tenant's Operating Payment for such Comparison Year (the
"Estimate"). Tenant shall pay to Landlord on the 1st day of each month during
such Comparison Year an amount equal to 1/12 of Landlord's estimate of Tenant's
Operating Payment for such Comparison Year. If Landlord furnishes an Estimate
for a Comparison Year subsequent to the commencement thereof, then (a) until the
1st day of the month following the month in which the Estimate is furnished to
Tenant, Tenant shall pay to Landlord on the 1st day of each month an amount
equal to the monthly sum payable by Tenant to Landlord under this Section 7.3
during the last month of the preceding Comparison Year, (b) promptly after the
Estimate is furnished to Tenant or together therewith, Landlord shall give
notice to Tenant stating whether the installments of Tenant's Operating Payment
previously made for such Comparison Year were greater or less than the
installments of Tenant's Operating Payment to be made for such Comparison Year
in accordance with the Estimate, and (i) if there shall be a deficiency, Tenant
shall pay the amount thereof within 10 Business Days after demand therefor, or
(ii) if there shall have been an overpayment, Landlord shall credit the amount
thereof against subsequent payments of Rent due hereunder, and (c) on the 1st
day of the month following the month in which the Estimate is furnished to
Tenant, and on the 1st day of each month thereafter throughout the remainder of
such Comparison Year, Tenant shall pay to Landlord an amount equal to 1/12 of
Tenant's Operating Payment shown on the Estimate.
(b) On or before May 1st of each Comparison Year, Landlord shall
furnish to Tenant a Statement for the immediately preceding Comparison Year. If
the Statement shows that the sums paid by Tenant under Section 7.3(a) exceeded
the actual amount of Tenant's Operating Payment for such Comparison Year,
Landlord shall credit the amount of such excess against subsequent payments of
Rent due hereunder. If the Statement shows that the sums so paid by Tenant were
less than Tenant's Operating Payment for such Comparison Year, Tenant shall pay
the amount of such deficiency within 10 Business Days after delivery of the
Statement to Tenant.
Section 7.4 Non-Waiver; Disputes. (a) Landlord's failure to render any Statement
on a timely basis with respect to any Comparison Year shall not prejudice
Landlord's right to thereafter render a Statement with respect to such
Comparison Year or any subsequent Comparison Year, nor shall the rendering of a
Statement prejudice Landlord's right to thereafter render a corrected Statement
for that Comparison Year.
(b) Each Statement sent to Tenant shall be conclusively binding upon
Tenant unless Tenant (i) pays to Landlord when due the amount set forth in such
Statement, without prejudice to Tenant's right to dispute such Statement, and
(ii) within 90 days after such Statement is sent, sends a notice to Landlord
objecting to such Statement and specifying the reasons therefor. Tenant agrees
that Tenant will not employ, in connection with any dispute under this Lease,
any person who is to be compensated in whole or in part, on a contingency fee
basis. If the parties are unable to resolve any dispute as to the correctness of
such Statement within 30 days following such notice of objection, either party
may refer the issues raised to one of the "Big Five" public accounting firms
selected by Landlord and reasonably acceptable to Tenant, and the decision of
such accountants shall be conclusively binding upon Landlord and Tenant. In
connection therewith, Tenant and such accountants shall execute and deliver to
Landlord a confidentiality agreement, in form and substance reasonably
satisfactory to Landlord, whereby such parties agree not to disclose to any
third party any of the information obtained in connection with such review.
Tenant shall pay the fees and expenses relating to such procedure, unless such
accountants determine that Landlord overstated Operating Expenses by more than
5% for such Comparison Year, in which case Landlord shall pay such fees and
expenses.
Section 7.5 Final Year of Term. If the Expiration Date occurs on a date other
than December 31st, any Additional Rent under this Article 7 for the Comparison
Year in which such Expiration Date occurs shall be apportioned on the basis of
the number of days in the period from January 1st to the Expiration Date. Upon
the expiration or earlier termination of this Lease, any Additional Rent under
this Article 7 shall be paid or reimbursed as appropriate (unless Tenant then
has an outstanding payable to Landlord) within 30 days after submission of the
Statement.
Section 7.6 Net Lease. This Lease is designed as a "net lease," and the
provisions in this Lease for payment by Tenant of its share of Operating
Expenses and Taxes are intended to pass on to Tenant and reimburse Landlord for
Tenant's Proportionate Share of all costs and expenses incurred in connection
with the management, operation, maintenance or repair of the Real Property
except as otherwise expressly herein provided.
ARTICLE 8
REQUIREMENTS OF LAW
Section 8.1 Compliance with Requirements.
(a) Tenant's Compliance. Tenant, at its expense, shall comply with all
Requirements applicable to the Premises and with the terms and provisions of the
CC&R's applicable to Tenant; provided, however, that Tenant shall not be
obligated to comply with any Requirements requiring any structural alterations
to the Building unless the application of such Requirements arises from (i) the
specific manner and nature of Tenant's use or occupancy of the Premises, as
distinct from general office use, (ii) Alterations made by Tenant, or (iii) a
breach by Tenant of any provisions of this Lease. Any such repairs or
alterations shall be made at Tenant's expense by Tenant (1) in compliance with
Article 5 if such repairs or alterations are nonstructural and do not affect any
Building System, or (2) by Landlord if such repairs or alterations are
structural or affect any Building System. If Tenant obtains knowledge of any
failure to comply with any Requirements applicable to the Premises, Tenant shall
give Landlord prompt notice thereof.
(b) Hazardous Materials. Tenant shall not cause or permit (i) any
Hazardous Materials to be brought into the Building or Garage, (ii) the storage
or use of Hazardous Materials in any manner not permitted by any Requirements,
or (iii) the escape, disposal or release of any Hazardous Materials within or in
the vicinity of the Real Property. Nothing herein shall be deemed to prevent
Tenant's use of any Hazardous Materials customarily used in the ordinary course
of office work, provided such use is in accordance with all Requirements. Tenant
shall be responsible, at its expense, for all matters directly or indirectly
based on, or arising or resulting from the presence of Hazardous Materials on
the Real Property which is caused or permitted by a Tenant Party. Tenant shall
provide to Landlord copies of all communications received by Tenant with respect
to any Requirements relating to Hazardous Materials, and/or any claims made in
connection therewith. Landlord or its agents may perform environmental
inspections of the Premises at any time. Under no circumstances shall Tenant be
liable to Landlord for any losses, costs, claims, liabilities and damages
(including attorneys' and consultants' fees) of every type and nature, directly
or indirectly arising out of or in connection with any Hazardous Materials
present at any time on or about the Land, or the soils, air, improvements,
groundwater or surface water thereof, or the violation of any Requirements
relating to any such Hazardous Materials, except to the extent that any of the
foregoing actually results from the release or emission of Hazardous Materials
by any Tenant Party.
(c) Landlord's Compliance. Landlord shall comply with (or cause to be
complied with) all Requirements applicable to the Building which are not the
obligation of Tenant, to the extent that non-compliance would materially impair
Tenant's use and occupancy of the Premises for the Permitted Uses.
(d) Landlord's Insurance. Tenant shall not cause or permit any action
or condition that would (i) invalidate or conflict with Landlord's insurance
policies, (ii) violate applicable rules, regulations and guidelines of the Fire
Department, Fire Insurance Rating Organization or any other authority having
jurisdiction over the Building, (iii) cause an increase in the premiums of fire
insurance for the Building over that payable with respect to Comparable
Buildings, or (iv) result in Landlord's insurance companies' refusing to insure
the Building or any property therein in amounts and against risks as reasonably
determined by Landlord. If fire insurance premiums increase as a result of
Tenant's failure to comply with the provisions of this Section 8.1, Tenant shall
promptly cure such failure and shall reimburse Landlord for the increased fire
insurance premiums paid by Landlord as a result of such failure by Tenant.
Section 8.2 Fire and Life Safety. If the Fire Insurance Rating Organization or
any Governmental Authority or any of Landlord's insurers requires or recommends
any modifications and/or alterations be made or any additional equipment be
supplied in connection with the sprinkler system or fire alarm and life-safety
system serving the Building by reason of (i) the specific manner and nature of
Tenant's use of the Premises, as distinct from general office use, (ii)
Alterations made by Tenant, or (iii) a breach by Tenant of any provisions of
this Lease, Landlord (to the extent outside of the Premises) or Tenant (to the
extent within the Premises) shall make such modifications and/or Alterations,
and supply such additional equipment, in either case at Tenant's expense.
ARTICLE 9
SUBORDINATION
Section 9.1 Subordination and Attornment. (a) (a) This Lease is subject and
subordinate to all Mortgages and Superior Leases, and, at the request of any
Mortgagee or Lessor, Tenant shall attorn to such Mortgagee or Lessor, its
successors in interest or any purchaser in a foreclosure sale.
(b) If a Lessor or Mortgagee or any other person or entity shall
succeed to the rights of Landlord under this Lease, whether through possession
or foreclosure action or the delivery of a new lease or deed, then at the
request of the successor landlord and upon such successor landlord's written
agreement to accept Tenant's attornment and to recognize Tenant's interest under
this Lease, Tenant shall be deemed to have attorned to and recognized such
successor landlord as Landlord under this Lease. The provisions of this Section
9.1 are self-operative and require no further instruments to give effect hereto;
provided, however, that Tenant shall promptly execute and deliver any instrument
that such successor landlord may reasonably request (i) evidencing such
attornment, (ii) setting forth the terms and conditions of Tenant's tenancy, and
(iii) containing such other terms and conditions as may be required by such
Mortgagee or Lessor, provided such terms and conditions do not increase the
Rent, materially increase Tenant's obligations or materially and adversely
affect Tenant's rights under this Lease. Upon such attornment this Lease shall
continue in full force and effect as a direct lease between such successor
landlord and Tenant upon all of the terms, conditions and covenants set forth in
this Lease except that such successor landlord shall not be
(i) liable for any act or omission of Landlord (except to the
extent such act or omission continues beyond the date when such successor
landlord succeeds to Landlord's interest and Tenant gives notice of such act or
omission);
(ii) subject to any defense, claim, counterclaim, set-off or
offsets which Tenant may have against Landlord;
(iii) bound by any prepayment of more than one month's Rent to
any prior landlord;
(iv) bound by any obligation to make any payment to Tenant which
was required to be made prior to the time such successor landlord succeeded to
Landlord's interest;
(v) bound by any obligation to perform any work or to make
improvements to the Premises except for (x) repairs and maintenance required to
be made by Landlord under this Lease, and (y) repairs to the Premises as a
result of damage by fire or other casualty or a partial condemnation pursuant to
the provisions of this Lease, but only to the extent that such repairs can
reasonably be made from the net proceeds of any insurance or condemnation
awards, respectively, actually made available to such successor landlord;
(vi) bound by any modification, amendment or renewal of this
Lease made without successor landlord's consent;
(vii) liable for the repayment of any security deposit or
surrender of any letter of credit, unless and until such security deposit
actually is paid or such letter of credit is actually delivered to such
successor landlord; or
(viii) liable for the payment of any unfunded tenant improvement
allowance, refurbishment allowance or similar obligation.
(c) Tenant shall from time to time within 10 Business Days of request
from Landlord execute and deliver any documents or instruments that may be
reasonably required by any Mortgagee or Lessor to effectuate any subordination.
Section 9.2 Mortgage or Superior Lease Defaults. Any Mortgagee may elect that
this Lease shall have priority over the Mortgage and, upon notification to
Tenant by such Mortgagee, this Lease shall be deemed to have priority over such
Mortgage, regardless of the date of this Lease. In connection with any financing
of the Real Property, Tenant shall consent to any reasonable modifications of
this Lease requested by any lending institution, provided such modifications do
not increase the Rent, materially increase the obligations, or materially and
adversely affect the rights, of Tenant under this Lease.
Section 9.3 Tenant's Termination Right. As long as any Superior Lease or
Mortgage exists, Tenant shall not seek to terminate this Lease by reason of any
act or omission of Landlord until (a) Tenant shall have given notice of such act
or omission to all Lessors and/or Mortgagees, and (b) a reasonable period of
time shall have elapsed following the giving of notice of such default and the
expiration of any applicable notice or grace periods (unless such act or
omission is not capable of being remedied within a reasonable period of time),
during which period such Lessors and/or Mortgagees shall have the right, but not
the obligation, to remedy such act or omission and thereafter diligently proceed
to so remedy such act or obligation. If any Lessor or Mortgagee elects to remedy
such act or omission of Landlord, Tenant shall not seek to terminate this Lease
so long as such Lessor or Mortgagee is proceeding with reasonable diligence to
effect such remedy.
Section 9.4 Provisions. The provisions of this Article 9 shall (a) inure to the
benefit of Landlord, any future owner of the Building or the Real Property,
Lessor or Mortgagee and any sublessor thereof and (b) apply notwithstanding
that, as a matter of law, this Lease may terminate upon the termination of any
such Superior Lease or Mortgage.
ARTICLE 10
SERVICES
Section 10.1 Electricity. Subject to any Requirements or any public utility
rules or regulations governing energy consumption, Landlord shall make or cause
to be made, customary arrangements with utility companies and/or public service
companies to furnish electric current to the Premises for Tenant's use in
accordance with the Design Standards. If Landlord reasonably determines by the
use of an electrical consumption survey or by other reasonable means that Tenant
is using electric current (including overhead fluorescent fixtures) in excess of
.60 kilowatt hours per square foot of usable area in the Premises per month, as
determined on an annualized basis ("Excess Electrical Usage"), then Landlord
shall have the right to charge Tenant an amount equal to Landlord's reasonable
estimate of Tenant's Excess Electrical Usage, and shall have the further right
to install an electric current meter, sub-meter or check meter in the Premises
(a "Meter") to measure the amount of electric current consumed in the Premises.
The cost of such Meter special conduits, wiring and panels needed in connection
therewith and the installation, maintenance and repair thereof shall be paid by
Tenant. Tenant shall pay to Landlord, from time to time, but no more frequently
than monthly, for its Excess Electrical Usage at the Premises. The rate to be
paid by Tenant for submetered electricity shall not exceed the amount paid by
Landlord to the supplier of such service, together with any taxes or other
charges in connection therewith. If Tenant so requests, Tenant shall have the
right to install, at its sole cost and expense, meters on each floor of the
Premises to measure Tenant's electrical consumption within the Premises and, in
such event, Tenant shall pay Landlord monthly for the cost of electricity
consumed within the Premises and Landlord shall exclude from Operating Expenses
the cost of electricity so consumed within the leased premises of other tenants
of the Building.
Section 10.2 Excess Electricity. Tenant shall at all times comply with the rules
and regulations of the utility company supplying electricity to the Building.
Tenant shall not use any electrical equipment which, in Landlord's reasonable
judgment, would exceed the capacity of the electrical equipment serving the
Premises. If Landlord determines that Tenant's electrical requirements
necessitate installation of any additional risers, feeders or other electrical
distribution equipment (collectively, "Electrical Equipment"), or if Tenant
provides Landlord with evidence reasonably satisfactory to Landlord of Tenant's
need for excess electricity and requests that additional Electrical Equipment be
installed, Landlord shall, at Tenant's expense, install such additional
Electrical Equipment, provided that Landlord, in its sole judgment, determines
that (a) such installation is practicable and necessary, (b) such additional
Electrical Equipment is permissible under applicable Requirements, and (c) the
installation of such Electrical Equipment will not cause permanent damage to the
Building or the Premises, cause or create a hazardous condition, entail
excessive or unreasonable alterations, interfere with or limit electrical usage
by other tenants or occupants of the Building or exceed the limits of the
switchgear or other facilities serving the Building, or require power in excess
of that available from the utility company serving the Building. Any costs
incurred by Landlord in connection therewith shall be paid by Tenant within 10
days after the rendition of a bill therefor.
Section 10.3 Elevators. Landlord shall provide passenger and freight elevator
service to the Premises 24 hours per day, 7 days per week; provided, however,
Landlord may limit elevator service during times other than Ordinary Business
Hours.
Section 10.4 Heating. Ventilation and Air Conditioning. Landlord shall furnish
to the Premises heating, ventilation and air-conditioning ("HVAC") in accordance
with the Design Standards set forth in Exhibit D during Ordinary Business Hours.
Landlord shall have access to all air-cooling, fan, ventilating and machine
rooms and electrical closets and all other mechanical installations of Landlord
(collectively, "Mechanical Installations"), and Tenant shall not construct
partitions or other obstructions which may interfere with Landlord's access
thereto or the moving of Landlord's equipment to and from the Mechanical
Installations. No Tenant Party shall at any time enter the Mechanical
Installations or tamper with, adjust, or otherwise affect such Mechanical
Installations. Landlord shall not be responsible if the HVAC System fails to
provide cooled or heated air, as the case may be, to the Premises in accordance
with the Design Standards by reason of (i) any equipment installed by, for or on
behalf of Tenant, which has an electrical load in excess of the average
electrical load and human occupancy factors for the HVAC System as designed, or
(ii) any rearrangement of partitioning or other Alterations made or performed
by, for or on behalf of Tenant. Tenant shall cooperate with Landlord and shall
abide by the rules and regulations which Landlord may reasonably prescribe for
the proper functioning and protection of the HVAC System.
Section 10.5 Overtime Freight Elevators and HVAC. The Fixed Rent does not
include any charge to Tenant for the furnishing of any freight elevator service
or HVAC to the Premises during any periods other than Ordinary Business Hours
("Overtime Periods"). If Tenant desires any such services during Overtime
Periods, Tenant shall deliver notice to the Building office requesting such
services at least 24 hours prior to the time Tenant requests such services to be
provided; provided, however, that Landlord shall use reasonable efforts to
arrange such service on such shorter notice as Tenant shall provide. If Landlord
furnishes freight elevator or HVAC service during Overtime Periods, Tenant shall
pay to Landlord the cost thereof at the then established rates for such services
in the Building.
Section 10.6 Cleaning. Landlord shall cause the Premises (excluding any portions
thereof used for the storage, preparation, service or consumption of food or
beverages) to be cleaned, substantially in accordance with the standards set
forth in Exhibit E. Any areas of the Premises requiring additional cleaning such
as areas used for preparation or consumption of food, private bathrooms,
computer rooms, mail rooms and trading floors shall be cleaned, at Tenant's
expense, by Landlord's cleaning contractor, at rates which shall be competitive
with rates of other cleaning contractors providing comparable services to
Comparable Buildings. Landlord's cleaning contractor and its employees shall
have access to the Premises at all times except during Ordinary Business Hours.
Section 10.7 Water. Landlord shall provide water in the core lavatories on each
floor of the Building. If Tenant requires water for any additional purposes,
Tenant shall pay for the cost of bringing water to the Premises and Landlord may
install a meter to measure the water. Tenant shall pay the cost of such
installation, and for all maintenance, repairs and replacements thereto, and for
the reasonable charges of Landlord for the water consumed.
Section 10.8 Refuse Removal. Landlord shall provide refuse removal services at
the Building. Tenant shall pay to Landlord, within 10 Business Days after
delivery of an invoice therefor, Landlord's reasonable charge for such removal
to the extent that the refuse generated by Tenant exceeds the refuse customarily
generated by general office tenants. Tenant shall not dispose of any refuse in
the Common Areas, and if Tenant does so, Tenant shall be liable for Landlord's
reasonable charge for such removal.
Section 10.9 Directory. The lobby shall contain a computerized directory wherein
the Building's tenants shall be listed with a capacity for up to 25 listings per
floor for Tenant and others permitted to occupy the Premises hereunder. Tenant
shall be entitled to a proportionate share of such listings, based on the
rentable square footage of the Premises. From time to time, but not more
frequently than monthly, Landlord shall reprogram the computerized directory to
reflect such changes in the listings therein as Tenant shall request.
Section 10.10 Service Interruptions. Landlord reserves the right to suspend any
service when necessary, by reason of Unavoidable Delays, accidents or
emergencies, or for Restorative Work which, in Landlord's reasonable judgment,
are necessary or appropriate until such Unavoidable Delay, accident or emergency
shall cease or such Restorative Work is completed and Landlord shall not be
liable for any interruption, curtailment or failure to supply services. Landlord
shall use reasonable efforts to minimize interference with Tenant's use and
occupancy of the Premises as a result of any such failure, defect or
interruption of, or change in the supply, character and/or quantity of,
electrical service and to restore any such services, remedy such situation and
minimize any interference with Tenant's business. Subject to Section 6.3, the
exercise of any such right or the occurrence of any such failure by Landlord
shall not constitute an actual or constructive eviction, in whole or in part,
entitle Tenant to any compensation, abatement or diminution of Rent, relieve
Tenant from any of its obligations under this Lease, or impose any liability
upon Landlord by reason of inconvenience to Tenant, or interruption of Tenant's
business, or otherwise. Landlord shall not be liable in any way to Tenant for
any failure, defect or interruption of, or change in the supply, character
and/or quantity of, electrical service furnished to the Premises for any reason
except if attributable to the gross negligence or willful misconduct of Landlord
or its agents or contractors.
ARTICLE 11
INSURANCE; PROPERTY LOSS OR DAMAGE
Section 11.1 Tenant's Insurance. (a) Tenant, at its expense, shall obtain and
keep in full force and effect during the Term:
(i) a policy of commercial general liability insurance on an
occurrence basis against claims for personal injury, death and/or property
damage occurring in or about the Real Property, under which Tenant is named as
the insured and Landlord, Landlord's Agent and any Lessors and any Mortgagees
whose names have been furnished to Tenant are named as additional insureds (the
"Insured Parties"). Such insurance shall provide primary coverage without
contribution from any other insurance carried by or for the benefit of the
Insured Parties, and Tenant shall obtain blanket broad-form contractual
liability coverage to insure its indemnity obligations set forth in Article 26.
The minimum limits of liability shall be a combined single limit with respect to
each occurrence in an amount of not less than $5,000,000; provided, however,
that Landlord shall retain the right to require Tenant to increase such coverage
on no more than two occasions during the initial Term of this Lease to that
amount of insurance which in Landlord's reasonable judgment is then being
customarily required by landlords for similar office space in Comparable
Buildings. The deductible or self insured retention for such policy shall not
exceed $10,000;
(ii) insurance against loss or damage by fire, and such other
risks and hazards as are insurable under then available standard forms of "all
risk" property insurance policies with extended coverage, insuring Tenant's
Property and all Alterations and improvements to the Premises (including the
initial installations) to the extent such Alterations and improvements exceed
the cost of the improvements typically performed in connection with the initial
occupancy of tenants in the Building ("Building Standard Installations"), for
the full insurable value thereof or replacement cost thereof, having a
deductible amount, if any not in excess of $25,000;
(iii) during the performance of any Alteration, until completion
thereof, Builder's Risk insurance on an "all risk" basis and on a completed
value form including a Permission to Complete and Occupy endorsement, for full
replacement value covering the interest of Landlord and Tenant (and their
respective contractors and subcontractors) in all work incorporated in the
Building and all materials and equipment in or about the Premises;
(iv) Workers' Compensation Insurance, as required by law;
(v) Business Interruption Insurance; and
(vi) such other insurance in such amounts as the Insured Parties
may reasonably require from time to time.
(b) All insurance required to be carried by Tenant (i) shall contain a
provision that (x) no act or omission of Tenant shall affect or limit the
obligation of the insurance company to pay the amount of any loss sustained, and
(y) shall be noncancellable and/or no material change in coverage shall be made
thereto unless the Insured Parties receive 30 days' prior notice of the same, by
certified mail, return receipt requested, and (ii) shall be effected under valid
and enforceable policies issued by reputable insurers permitted to do business
in the State of California and rated in Best's Insurance Guide, or any successor
thereto as having a "Best's Rating" of "A-" and a "Financial Size Category" of
at least "X" or, if such ratings are not then in effect, the equivalent thereof
or such other financial rating as Landlord may at any time consider appropriate.
(c) On or prior to the Commencement Date, Tenant shall deliver to
Landlord appropriate policies of insurance, including evidence of waivers of
subrogation required to be carried pursuant to this Article 11 (the "Policies").
Evidence of each renewal or replacement of the Policies shall be delivered by
Tenant to Landlord at least 10 days prior to the expiration of the Policies. In
lieu of the Policies, Tenant may deliver to Landlord a certification from
Tenant's insurance company (on the form currently designated "Acord 27", or the
equivalent) which shall be binding on Tenant's insurance company, and which
shall expressly provide that such certification (i) conveys to the Insured
Parties all the rights and privileges afforded under the Policies as primary
insurance, and (ii) contains an unconditional obligation of the insurance
company to advise all Insured Parties in writing by certified mail, return
receipt requested, at least 30 days in advance of any termination or change to
the Policies that would affect the interest of any of the Insured Parties.
Section 11.2 Landlord's Insurance. Landlord shall, from and after the Effective
Date and until the Expiration Date, maintain in effect the following insurance:
(i) fire and "all risk" insurance providing coverage in the event of fire,
vandalism, malicious mischief and all other risks normally covered by "all risk"
policies in the area of the Building, covering the Building (excluding the
property required to be insured by Tenant pursuant to Section 11.1) in an amount
not less than 95% of the full replacement value (less commercially reasonable
deductibles which as of the Effective Date is $25,000.00 but is subject to
periodic change over the Term) of the Building excluding foundations, footings
and other below-grade structural elements; and (ii) commercial general liability
insurance or the equivalent in the amount of at least $5,000,000.00, against
claims of bodily injury, personal injury or property damage arising out of
Landlord's operations, assumed liabilities, contractual liabilities, or use of
the Building and Common Areas. Such insurance may be carried under blanket or
umbrella insurance policies. Upon written request from Tenant, but no more than
one time during any calendar year, Landlord shall provide Tenant with evidence
that Landlord is carrying the insurance Landlord is required to maintain
pursuant to this Section 11.2.
Section 11.3 Waiver of Subrogation. Landlord and Tenant shall each procure an
appropriate clause in or endorsement to any property insurance covering the Real
Property and personal property, fixtures and equipment located therein, wherein
the insurer waives subrogation or consents to a waiver of right of recovery, and
notwithstanding anything to the contrary in this Lease Landlord and Tenant
hereby release and waive all claims against the other for any loss or damage to
its property or the property of others resulting from fire or other hazards to
the extent covered by such property insurance or would normally be covered by
standard "all risk" property insurance; provided, however, that the release,
discharge, exoneration and covenant not to sue contained herein shall be limited
by and be coextensive with the terms and provisions of the waiver of subrogation
or waiver of right of recovery. Tenant acknowledges that Landlord shall not
carry insurance on, and shall not be responsible for, (i) damage to any Above
Building Standard Installations, (ii) Tenant's Property, and (iii) any loss
suffered by Tenant due to interruption of Tenant's business.
Section 11.4 Restoration. (a) If the Premises are damaged by fire or other
casualty, or if the Building is damaged such that Tenant is deprived of
reasonable access to the Premises, the damage shall be repaired by Landlord, to
substantially the condition of the Premises prior to the damage, subject to the
provisions of any Mortgage or Superior Lease, but Landlord shall have no
obligation to repair or restore (i) Tenant's Property or (ii) except as provided
in Section 11.3(b), any Above Building Standard Installations. So long as Tenant
is not in default beyond applicable grace or notice provisions in the payment or
performance of its obligations under this Section 11.3, and provided Tenant
timely delivers to Landlord either Tenant's Restoration Payment (as hereinafter
defined) or the Restoration Security (as hereinafter defined) or Tenant
expressly waives any obligation of Landlord to repair or restore any of Tenant's
Above Building Standard Installations, then until the restoration of the
Premises is Substantially Completed or would have been Substantially Completed
but for Tenant Delay, Fixed Rent, Tenant's Tax Payment and Tenant's Operating
Payment shall be reduced in the proportion by which the area of the part of the
Premises which is not usable (or accessible ) and is not used by Tenant bears to
the total area of the Premises.
(b) As a condition precedent to Landlord's obligation to repair or
restore any Above Building Standard Installations, Tenant shall (i) pay to
Landlord upon demand a sum ("Tenant's Restoration Payment") equal to the amount,
if any, by which (A) the cost, as estimated by a reputable independent
contractor designated by Landlord, of repairing and restoring all Alterations
and Initial Installations in the Premises to their condition prior to the
damage, exceeds (B) the cost of restoring the Premises with Building Standard
Installations, or (ii) furnish to Landlord security (the "Restoration Security")
in form and amount reasonably acceptable to Landlord to secure Tenant's
obligation to pay all costs in excess of restoring the Premises with Building
Standard Installations. If Tenant shall fail to deliver to Landlord either (1)
Tenant's Restoration Payment or the Restoration Security, as applicable, or (2)
a waiver by Tenant, in form satisfactory to Landlord, of all of Landlord's
obligations to repair or restore any of the Above Building Standard
Installations, in either case within 15 days after Landlord's demand therefor,
Landlord shall have no obligation to restore any Above Building Standard
Installations and Tenant's abatement of Fixed Rent, Tenant's Tax Payment and
Tenant's Operating Payment shall cease when the restoration of the Premises
(other than any Above Building Standard Installations) is Substantially
Complete.
Section 11.5 Landlord's Termination Right. Notwithstanding anything to the
contrary contained in Section 11.3, if the Premises are totally damaged or are
rendered wholly untenantable, or if the Building shall be so damaged that, in
Landlord's reasonable opinion, substantial alteration, demolition, or
reconstruction of the Building shall be required (whether or not the Premises
are so damaged or rendered untenantable) and the estimated period for the repair
or restoration of the Premises or the Building set forth in the Restoration
Notice (as hereinafter defined) is more than 12 months from the date of such
damage or (ii) under the provisions of any Mortgage or Superior Lease, Landlord
shall be unable so to restore the Premises or Tenant's reasonable access to the
Premises, then in such event, Landlord may, not later than 60 days following the
date of the damage, terminate this Lease by notice to Tenant, provided that if
the Premises are not damaged, Landlord may not terminate this Lease unless
Landlord similarly terminates the leases of other tenants in the Building
aggregating at least 75% of the portion of the Building occupied for office
purposes immediately prior to such damage. If this Lease is so terminated, (a)
the Term shall expire upon the 30th day after such notice is given, (b) Tenant
shall vacate the Premises and surrender the same to Landlord, (c) Tenant's
liability for Rent shall cease as of the date of the damage, and (d) any prepaid
Rent for any period after the date of the damage shall be refunded by Landlord
to Tenant.
Section 11.6 Tenant's Termination Right. If the Premises are totally damaged and
are thereby rendered wholly untenantable, or if the Building shall be so damaged
that Tenant is deprived of reasonable access to the Premises, and if Landlord
elects to restore the Premises, Landlord shall, within 60 days following the
date of the damage, cause a contractor or architect selected by Landlord to give
notice (the "Restoration Notice") to Tenant of the date by which such contractor
or architect estimates the restoration of the Premises (excluding any Above
Building Standard Installations) shall be Substantially Completed. If (i) such
date, as set forth in the Restoration Notice, is more than 12 months from the
date of such damage and if Landlord has not elected to terminate this Lease
pursuant to Section 11.4, then Tenant shall have the right to terminate this
Lease by giving notice to Landlord not later than 30 days following delivery of
the Restoration Notice to Tenant, or (ii) Landlord elects not to terminate this
Lease pursuant to Section 11.4, but fails to Substantially Complete the repair
or restoration of the Premises or the Building, as applicable, within 12 months
from the date of damage or destruction, Tenant, upon not less than 30 days'
prior written notice, may elect to terminate this Lease (either such notice in
(i) or (ii), a "Termination Notice"). If Tenant delivers a Termination Notice,
unless, with respect to a Termination Notice delivered pursuant to clause (ii)
of the preceding sentence, Landlord within such 30-day period Substantially
Completes such repair or restoration, this Lease shall be deemed to have
terminated as of the date of the giving of the Termination Notice, in the manner
set forth in the second sentence of Section 11.4.
Section 11.7 Final 12 Months. Notwithstanding anything to the contrary in this
Article 11, if any damage during the final 12 months of the Term (including
extensions thereof) renders the Premises wholly untenantable, either Landlord or
Tenant may terminate this Lease by notice to the other party within 30 days
after the occurrence of such damage and this Lease shall expire on the 30th day
after the date of such notice. For purposes of this Section 11.6, the Premises
shall be deemed wholly untenantable if Tenant shall be precluded from using more
than 50% of the Premises for the conduct of its business and Tenant's inability
to so use the Premises is reasonably expected to continue for more than 90 days.
Section 11.8 Landlord's Liability. Any Building employee to whom any property
shall be entrusted by or on behalf of Tenant shall be deemed to be acting as
Tenant's agent with respect to such property and neither Landlord nor its agents
shall be liable for any damage to such property, or for the loss of or damage to
any property of Tenant by theft or otherwise. None of the Insured Parties shall
be liable for any injury or damage to persons or property or interruption of
Tenant's business resulting from fire or other casualty, any damage caused by
other tenants or persons in the Building or Garage or by construction of any
private, public or quasi-public work, or any latent defect in the Premises or in
the Building or Garage (except that Landlord shall be required to repair the
same to the extent provided in Article 5). No penalty shall accrue for delays
which may arise by reason of adjustment of fire insurance on the part of
Landlord or Tenant, or for any Unavoidable Delays arising from any repair or
restoration of any portion of the Real Property, provided that Landlord shall
use reasonable efforts to minimize interference with Tenant's use and occupancy
of the Premises during the performance of any such repair or restoration.
ARTICLE 12
EMINENT DOMAIN
Section 12.1 Taking.
(a) Total Taking. If all or substantially all of the Real Property, the Building
or the Premises shall be acquired or condemned for any public or quasi-public
purpose (a "Taking"), this Lease shall terminate and the Term shall end as of
the date of the vesting of title and Rent shall be prorated and adjusted as of
such date.
(b) Partial Taking. Upon a Taking of only a part of the Real Property, the
Building or the Premises then, except as hereinafter provided in this Article
12, this Lease shall continue in full force and effect, provided that from and
after the date of the vesting of title, Fixed Rent and Tenant's Proportionate
Share shall be modified to reflect the reduction of the Premises and/or the
Building as a result of such Taking.
(c) Landlord's Termination Right. Whether or not the Premises are affected,
Landlord may, by notice to Tenant, within 60 days following the date upon which
Landlord receives notice of the Taking of all or a portion of the Real Property,
the Building or the Premises, terminate this Lease, provided that Landlord
elects to terminate leases (including this Lease) affecting at least 75% of the
rentable area of the Building.
(d) Tenant's Termination Right. If the part of the Real Property so Taken
contains more than 20% of the total area of the Premises occupied by Tenant
immediately prior to such Taking, or if, by reason of such Taking, Tenant no
longer has reasonable means of access to the Premises or Tenant's use of the
Premises is materially and adversely affected thereby, Tenant may terminate this
Lease by notice to Landlord given within 30 days following the date upon which
Tenant is given notice of such Taking. If Tenant so notifies Landlord, this
Lease shall end and expire upon the 30th day following the giving of such
notice. If a part of the Premises shall be so Taken and this Lease is not
terminated in accordance with this Section 12.1 Landlord, without being required
to spend more than it collects as an award, shall, subject to the provisions of
any Mortgage or Superior Lease, restore that part of the Premises not so Taken
to a self-contained rental unit substantially equivalent (with respect to
character, quality, appearance and services) to that which existed immediately
prior to such Taking, excluding Tenant's Property and any Above Building
Standard Installations.
(e) Apportionment of Rent. Upon any termination of this Lease pursuant to the
provisions of this Article 12, Rent shall be apportioned as of, and shall be
paid or refunded up to and including, the date of such termination.
Section 12.2 Awards. Upon any Taking, Landlord shall receive the entire award
for any such Taking, and Tenant shall have no claim against Landlord or the
condemning authority for the value of any unexpired portion of the Term or
Tenant's Alterations; and Tenant hereby assigns to Landlord all of its right in
and to such award. Nothing contained in this Article 12 shall be deemed to
prevent Tenant from making a separate claim in any condemnation proceedings for
the then value of any Tenant's Property or Alterations or Initial Installations
paid for by Tenant included in such Taking and for any moving expenses, provided
any such award is in addition to, and does not result in a reduction of, the
award made to Landlord.
Section 12.3 Temporary Taking. If all or any part of the Premises is Taken
temporarily during the Term for any public or quasi-public use or purpose,
Tenant shall give prompt notice to Landlord and the Term shall not be reduced or
affected in any way and Tenant shall continue to pay all Rent payable by Tenant
without reduction or abatement and to perform all of its other obligations under
this Lease, except to the extent prevented from doing so by the condemning
authority, and Tenant shall be entitled to receive any award or payment from the
condemning authority for such use, which shall be received, held and applied by
Tenant as a trust fund for payment of the Rent falling due.
ARTICLE 13
ASSIGNMENT AND SUBLETTING
Section 13.1 Consent Requirements.
(a) No Assignment or Subletting. Except as expressly set forth herein, Tenant
shall not assign, mortgage, pledge, encumber, or otherwise transfer this Lease,
whether by operation of law or otherwise, and shall not sublet, or permit, or
suffer the Premises or any part thereof to be used or occupied by others
(whether for desk space, mailing privileges or otherwise), without Landlord's
prior consent in each instance. Any assignment, sublease, mortgage, pledge,
encumbrance or transfer in contravention of the provisions of this Article 13
shall be void and shall constitute an Event of Default.
(b) Collection of Rent. If, without Landlord's consent when required under this
Article 13, this Lease is assigned, or any part of the Premises is sublet or
occupied by anyone other than Tenant or this Lease is encumbered (by operation
of law or otherwise), Landlord may collect rent from the assignee, subtenant or
occupant, and apply the net amount collected to the Rent herein reserved. No
such collection shall be deemed a waiver of the provisions of this Article 13,
an acceptance of the assignee, subtenant or occupant as tenant, or a release of
Tenant from the performance of Tenant's covenants hereunder, and in all cases
Tenant shall remain fully liable for its obligations under this Lease.
(c) Further Assignment/Subletting. Landlord's consent to any assignment or
subletting shall not relieve Tenant from the obligation to obtain Landlord's
consent to any further assignment or subletting. Except for a person or entity
who acquired an interest in the Premises directly from the initial Tenant named
herein, no subtenant shall be permitted subtenant assign or encumber its
sublease or further sublet any portion of its sublet space, or otherwise suffer
or permit any portion of the sublet space to be used or occupied by others.
Section 13.2 Tenant's Notice. If Tenant desires to assign this Lease or sublet
all or any portion of the Premises other than to a Permitted Transferee in a
transaction for which Landlord's consent is required hereunder, Tenant shall
give notice thereof to Landlord, which shall be accompanied by (a) with respect
to an assignment of this Lease, the date Tenant desires the assignment to be
effective, and (b) with respect to a sublet of all or a part of the Premises, a
description of the portion of the Premises to be sublet. Such notice shall be
deemed an offer from Tenant to Landlord of the right, at Landlord's option, (1)
with respect to a sublease for a term expiring no earlier than 6 months prior to
the Expiration Date, to terminate this Lease with respect to such space as
Tenant proposes to sublease (the "Partial Space"), upon the terms and conditions
hereinafter set forth, or (2) if the proposed transaction is an assignment of
this Lease, to terminate this Lease. Such option may be exercised by notice from
Landlord to Tenant within 30 days after delivery of Tenant's notice. If Landlord
exercises its option to terminate all or a portion of this Lease, (a) this Lease
shall end and expire with respect to all or a portion of the Premises, as the
case may be, on the date that such assignment or sublease was to commence, (b)
Rent shall be apportioned, paid or refunded as of such date, (c) the amount of
the Security Deposit shall be reduced to an amount equal to the product of (x)
the amount of the Security Deposit and (y) a ratio, the numerator of which is
the number of rentable square feet in the remaining portion of the Premises and
the denominator of which is the number of rentable square feet in the Premises
immediately prior to Landlord's exercise of such option, (d) Tenant, upon
Landlord's request, shall enter into an amendment of this Lease ratifying and
confirming such total or partial termination, and setting forth any appropriate
modifications to the terms and provisions hereof, and (e) Landlord shall be free
to lease the Premises (or any part thereof) to Tenant's prospective assignee or
subtenant. If Landlord exercises such option, Landlord shall pay all costs to
make the Partial Space a self-contained rental unit.
Section 13.3 Conditions to Assignment/Subletting. (a) (a) If Landlord does not
exercise its termination option provided under Section 13.2, and provided that
no Event of Default then exists, Landlord's consent to the proposed assignment
or subletting shall not be unreasonably withheld or delayed. Such consent shall
be granted or denied within 20 days after delivery to Landlord of (i) a true and
complete statement reasonably detailing the identity of the proposed assignee or
subtenant ("Transferee"), the nature of its business and its proposed use of the
Premises, (ii) current financial information with respect to the Transferee,
including its most recent financial statements, and (iii) any other information
Landlord may reasonably request, provided that:
(A) in Landlord's reasonable judgment, the Transferee is engaged in a
business or activity, and the Premises will be used in a
manner, which (1) is in keeping with the then standards of the
Building, (2) is for the Permitted Uses, and (3) does not violate any
restrictions set forth in this Lease, any Mortgage or Superior Lease or
any negative covenant as to use of the Premises required by any other
lease in the Building;
(B) the Transferee is reputable with sufficient financial means to perform
all of its obligations under this Lease or the sublease, as the case
may be;
(C) the Transferee is not a person or entity (or affiliate of a person or
entity) with whom Landlord is then or has been within the prior 6
months negotiating in connection with the rental of space in the
Building;
(D) there shall be not more than 3 subtenants in each floor of the
Premises;
(E) the aggregate consideration to be paid by the Transferee under the
terms of the proposed sublease shall not be less than 90% of the fixed
rent at which Landlord is then offering to lease other space in the
Building (the "Market Sub-rent") determined as though the Premises were
vacant and taking into account (1) the length of the term of the
proposed sublease, (2) any rent concessions granted to Transferee, and
(3) the cost of any Alterations being performed for the Transferee;
provided, however, that if after a period of 60 days Tenant is unable
to consummate a sublease transaction for an amount at least equal to
the Market Subrent; then for the first 30 days thereafter Tenant may
advertise the Space at a rental rate no less than eighty percent (80%)
of the Market Subrent, for the next 30 days at seventy percent (70%) of
the Market Subrent and thereafter at such other rental rate as Tenant
may determine;
(F) Tenant shall, upon demand, reimburse Landlord for all reasonable
expenses incurred by Landlord in connection with such assignment or
sublease, including any investigations as to the acceptability of the
Transferee and all legal costs reasonably incurred in connection with
the granting of any requested consent, which investigation and legal
costs shall not exceed the aggregate amount of $2,500 ("Expense
Limit"); provided, however, that such Expense Limit shall not apply to
any assignment or sublease in connection with the bankruptcy or
reorganization of Tenant or that involves an amendment to this Lease,
and all costs reasonably incurred in reviewing any plans and
specifications for Alterations proposed to be made in connection
therewith;
(G) Subject to (F) above, Tenant shall not publicly advertise the
availability of the Premises at a rental rate less than the Market
Sub-rent; and
(H) the Transferee shall not be entitled, directly or indirectly, to
diplomatic or sovereign immunity, regardless of whether the Transferee
agrees to waive such diplomatic or sovereign immunity, and shall be
subject to the service of process in, and the jurisdiction of the
courts of, the County of Santa Clara and State of California.
Within 15 days after Landlord's receipt of Tenant's notice, Landlord shall give
written notice to Tenant of consent to the proposed transfer, or specify in
writing and with reasonable particularly the basis for withholding its consent.
If Landlord fails to so advise Tenant prior to the expiration of such 15-day
period, Tenant shall deliver a second notice to Landlord, stating in bold type
on the front page thereof "URGENT -- DELAY NOTICE" and if Landlord fails to
respond within 5 days thereafter, Landlord's consent shall be deemed granted.
(b) With respect to each and every subletting and/or assignment approved by
Landlord under the provisions of this Lease:
(i) the form of the proposed assignment or sublease shall be
reasonably satisfactory to Landlord;
(ii) no sublease shall be for a term ending later than one day prior
to the Expiration Date;
(iii) no Transferee shall take possession of any part of the Premises,
until an executed counterpart of such sublease or assignment has been delivered
to Landlord and approved by Landlord as provided in Section 13.3(a);
(iv) if an Event of Default occurs prior to the effective date of such
assignment or subletting and be continuing yet uncured on the date that would
otherwise be such effective date, then Landlord's consent thereto, if previously
granted, shall be immediately deemed revoked without further notice to Tenant,
and any such assignment or subletting deemed unconsented shall constitute a
further Event of Default hereunder; and
(v) each sublease shall be subject and subordinate to this Lease and
to the matters to which this Lease is or shall be subordinate; and Tenant and
each Transferee shall be deemed to have agreed that upon the occurrence and
during the continuation of an Event of Default hereunder, Tenant has hereby
assigned to Landlord, and Landlord may, at its option, accept such assignment
of, all right, title and interest of Tenant as sublandlord under such sublease,
together with all modifications, extensions and renewals thereof then in effect
and such Transferee shall, at Landlord's option, attorn to Landlord pursuant to
the then executory provisions of such sublease, except that Landlord shall not
be (A) liable for any previous act or omission of Tenant under such sublease,
(B) subject to any counterclaim, offset or defense not expressly provided in
such sublease, which theretofore accrued to such Transferee against Tenant, (C)
bound by any previous modification of such sublease not consented to by Landlord
or by any prepayment of more than one month's rent, (D) bound to return such
Transferee's security deposit, if any, except to the extent Landlord shall
receive actual possession of such deposit and such Transferee shall be entitled
to the return of all or any portion of such deposit under the terms of its
sublease, or (E) obligated to make any payment to or on behalf of such
Transferee, or to perform any work in the subleased space or the Building, or in
any way to prepare the subleased space for occupancy, beyond Landlord's
obligations under this Lease. The provisions of this Section 13.3(b)(v) shall be
self-operative, and no further instrument shall be required to give effect to
this provision, provided that the Transferee shall execute and deliver to
Landlord any instruments Landlord may reasonably request to evidence and confirm
such subordination and attornment.
Section 13.4 Binding on Tenant; Indemnification of Landlord. Notwithstanding any
assignment or subletting or any acceptance of rent by Landlord from any
Transferee, Tenant shall remain fully liable for the payment of all Rent due and
for the performance of all the covenants, terms and conditions contained in this
Lease on Tenant's part to be observed and performed, and any default under any
term, covenant or condition of this Lease by any Transferee or anyone claiming
under or through any Transferee shall be deemed to be a default under this Lease
by Tenant. Except for claims for personal injury or property damage caused by
the gross negligence or willful misconduct of Landlord or its employees or
agents, Tenant shall indemnify, defend, protect and hold harmless Landlord from
and against any and all Losses resulting from any claims that may be made
against Landlord by the Transferee or anyone claiming under or through any
Transferee or by any brokers or other persons claiming a commission or similar
compensation in connection with the proposed assignment or sublease,
irrespective of whether Landlord shall give or decline to give its consent to
any proposed assignment or sublease, or if Landlord shall exercise any of its
options under this Article 13.
Section 13.5 Tenant's Failure to Complete. If Landlord consents to a proposed
assignment or sublease and Tenant fails to execute and deliver to Landlord such
assignment or sublease within 90 days after the giving of such consent, then
Tenant shall again comply with all of the provisions and conditions of Section
13.2 before assigning this Lease or subletting all or part of the Premises.
Section 13.6 Profits. If Tenant enters into any assignment or sublease permitted
hereunder or consented to by Landlord, Tenant shall, within 60 days of
Landlord's consent to such assignment or sublease, deliver to Landlord a list of
Tenant's reasonable third-party brokerage fees, legal fees and architectural
fees paid or to be paid in connection with such transaction and any actual costs
incurred by Tenant in separately demising and otherwise improving for the
transferee the subleased space (collectively, "Transaction Costs"), together
with a list of all of Tenant's Property to be transferred to such Transferee.
The Transaction Costs shall be amortized, on a straight-line basis, over the
term of any sublease. Tenant shall deliver to Landlord evidence of the payment
of such Transaction Costs promptly after the same are paid. In consideration of
such assignment or subletting, Tenant shall pay to Landlord:
(a) In the case of an assignment, on the effective date of the assignment, 50%
of all sums and other consideration paid to Tenant by the Transferee for or by
reason of such assignment (including sums paid for the sale or rental of
Tenant's Property, less, in the case of a sale thereof, the then fair market
value, or in the case of the rental thereof, the then fair rental value thereof,
as reasonably determined by Landlord) after first deducting the Transaction
Costs; or
(b) In the case of a sublease, 50% of any consideration payable under the
sublease to Tenant by the Transferee which exceeds on a per square foot basis
the Fixed Rent accruing during the term of the sublease in respect of the
subleased space (together with any sums paid for the sale or rental of Tenant's
Property, less, in the case of the sale thereof, the then fair market value, or
in the case of the rental thereof, the then fair rental value thereof, as
reasonably determined by Landlord) after first deducting the monthly amortized
amount of Transaction Costs. The sums payable under this clause shall be paid by
Tenant to Landlord monthly as and when paid by the subtenant to Tenant.
Section 13.7 Transfers.
(a) Related Entities. If Tenant is a corporation, the transfer (by one or more
transfers) of a majority of the stock of Tenant shall be deemed a voluntary
assignment of this Lease; provided, however, that the provisions of this Article
13 shall not apply to the transfer of shares of stock of Tenant if and so long
as Tenant is publicly traded on a nationally recognized stock exchange. For
purposes of this Section 13.7 the term "transfers" shall be deemed to include
the issuance of new stock which results in a majority of the stock of Tenant
being held by a person or entity which does not hold a majority of the stock of
Tenant on the Effective Date. If Tenant is a limited liability company,
partnership, trust, or any other legal entity, the transfer (by one or more
transfers) of a majority of the beneficial ownership interests in such entity,
however characterized, shall be deemed a voluntary assignment of this Lease. The
provisions of Sections 13.1 and 13.6 shall not apply to transactions with a
corporation into or with which Tenant is merged or consolidated or to which
substantially all of Tenant's assets are transferred (each, a "Permitted
Transferee") so long as (i) such transfer was made for a legitimate independent
business purpose and not for the purpose of transferring this Lease, (ii) the
successor to Tenant has a net worth computed in accordance with generally
accepted accounting principles at least equal to the net worth of Tenant
immediately prior to such merger, consolidation or transfer, and (iii) proof
satisfactory to Landlord of such net worth is delivered to Landlord no later
than 10 days after the effective date of any such transaction. Section 13.6 or
the termination right as provided in Section 13.2 shall not apply to any of the
foregoing transfers whether or not the foregoing net worth text is satisfied.
Tenant may also, upon prior notice to Landlord, permit any corporation or other
business entity which controls, is controlled by, or is under common control
with the original Tenant (a "Related Corporation") to sublet all or part of the
Premises for the Permitted Uses, provided the Related Corporation is in
Landlord's reasonable judgment of a character and engaged in a business which is
in keeping with the standards for the Building and for so long as such entity
remains a Related Corporation. Such sublease shall not be deemed to vest in any
such Related Corporation any right or interest in this Lease nor shall it
relieve, release, impair or discharge any of Tenant's obligations hereunder. For
the purposes hereof, "control" shall be deemed to mean ownership of not less
than 50% of all of the voting stock of such corporation or not less than 50% of
all of the legal and equitable interest in any other business entity if Tenant
is not a corporation. Notwithstanding the foregoing, Tenant shall have no right
to assign this Lease or sublease all or any portion of the Premises without
Landlord's consent pursuant to this Section 13.7 if Tenant is not the initial
Tenant herein named or a person or entity who acquired Tenant's interest in this
Lease in a transaction approved by Landlord.
(b) Applicability. The limitations set forth in this Section 13.7 shall apply to
Transferee(s) and guarantor(s) of this Lease, if any, and any transfer by any
such entity in violation of this Section 13.7 shall be a transfer in violation
of Section 13.1.
(c) Modifications, Takeover Agreements. Any modification, amendment or extension
of a sublease and/or any other agreement by which a landlord of a building other
than the Building agrees to assume the obligations of Tenant under this Lease
shall be deemed a sublease for the purposes of Section 13.1 hereof.
Section 13.8 Assumption of Obligations. No assignment or transfer shall be
effective unless and until the Transferee executes, acknowledges and delivers to
Landlord an agreement in form and substance reasonably satisfactory to Landlord
whereby the assignee (a) assumes Tenant's obligations under this Lease and (b)
agrees that, notwithstanding such assignment or transfer, the provisions of
Section 13.1 hereof shall be binding upon it in respect of all future
assignments and transfers.
Section 13.9 Tenant's Liability. The joint and several liability of Tenant and
any successors-in-interest of Tenant and the due performance of Tenant's
obligations under this Lease shall not be discharged, released or impaired by
any agreement or stipulation made by Landlord, or any grantee or assignee of
Landlord, extending the time, or modifying any of the terms and provisions of
this Lease, or by any waiver or failure of Landlord, or any grantee or assignee
of Landlord, to enforce any of the terms and provisions of this Lease.
Section 13.10 Listings in Building Directory. The listing of any name other than
that of Tenant on the doors of the Premises, the Building directory or elsewhere
shall not vest any right or interest in this Lease or in the Premises, nor be
deemed to constitute Landlord's consent to any assignment or transfer of this
Lease or to any sublease of the Premises or to the use or occupancy thereof by
others. Any such listing shall constitute a privilege revocable in Landlord's
reasonable discretion by notice to Tenant.
Section 13.11 Lease Disaffirmance or Rejection. If at any time after an
assignment by Tenant named herein, this Lease is not affirmed or is rejected in
any bankruptcy proceeding or any similar proceeding, or upon a termination of
this Lease due to any such proceeding, Tenant named herein, upon request of
Landlord given after such disaffirmance, rejection or termination (and actual
notice thereof to Landlord in the event of a disaffirmance or rejection or in
the event of termination other than by act of Landlord), shall (a) pay to
Landlord all Rent and other charges due and owing by the assignee to Landlord
under this Lease to and including the date of such disaffirmance, rejection or
termination, and (b) as "tenant," enter into a new lease of the Premises with
Landlord for a term commencing on the effective date of such disaffirmance,
rejection or termination and ending on the Expiration Date, at the same Rent and
upon the then executory terms, covenants and conditions contained in this Lease,
except that (i) the rights of Tenant named herein under the new lease shall be
subject to the possessory rights of the assignee under this Lease and the
possessory rights of any persons claiming through or under such assignee or by
virtue of any statute or of any order of any court, (ii) such new lease shall
require all defaults existing under this Lease to be cured by Tenant named
herein with due diligence, and (iii) such new lease shall require Tenant named
herein to pay all Rent which, had this Lease not been so disaffirmed, rejected
or terminated, would have become due under the provisions of this Lease after
the date of such disaffirmance, rejection or termination with respect to any
period prior thereto. If Tenant named herein defaults in its obligations to
enter into such new lease for a period of 10 days after Landlord's request,
then, in addition to all other rights and remedies by reason of default, either
at law or in equity, Landlord shall have the same rights and remedies against
Tenant named herein as if it had entered into such new lease and such new lease
had thereafter been terminated as of the commencement date thereof by reason of
Tenant's default thereunder.
ARTICLE 14
ACCESS TO PREMISES
Section 14.1 Landlord's Access.(a) Landlord, Landlord's agents and utility
service providers servicing the Building may erect, use and maintain concealed
ducts, pipes and conduits in and through the Premises provided such use does not
cause the usable area of the Premises to be reduced beyond a de minimis amount.
Landlord shall promptly repair any damage to the Premises caused by any work
performed pursuant to this Article 14.
(b) Landlord, any Lessor or Mortgagee and any other party designated
by Landlord and their respective agents shall have the right to enter the
Premises at all reasonable times, upon not less than 24 hours prior telephonic
notice except in the case of emergency, to examine the Premises, to show the
Premises to prospective purchasers, Mortgagees, Lessors or, during the last 15
months of the Term, tenants and their respective agents and representatives or
others, to perform Restorative Work to the Premises or the Building, and
Landlord shall be allowed to take all material into the Premises that may be
required for the performance of such Restorative Work without the same
constituting an actual or constructive eviction of Tenant in whole or in part
and without any abatement of Rent; provided, however, that all such work shall
be done as promptly as reasonably possible and so as to cause as little
interference to Tenant as reasonably possible and shall be subject to the
provisions of Section 14.4 below.
(c) All parts (except surfaces facing the interior of the Premises) of
all walls, windows and doors bounding the Premises, all balconies, terraces and
roofs adjacent to the Premises, all space in or adjacent to the Premises used
for shafts, stacks, stairways, mail chutes, conduits and other mechanical
facilities, Building Systems; Building facilities and Common Areas are not part
of the Premises, and Landlord shall have the use thereof and access thereto
through the Premises for the purposes of Building operation, maintenance,
alteration and repair.
Section 14.2 Alterations to Real Property. Landlord has the right at any time to
(a) change the name, number or designation by which the Building is commonly
known, and (b) alter the Building and Garage to change the arrangement or
location of entrances or passageways, doors and doorways, corridors, elevators,
stairs, toilets or other Common Areas without any such acts constituting an
actual or constructive eviction and without incurring any liability to Tenant,
so long as such changes do not deprive Tenant of access to the Premises.
Landlord shall not exercise any of its rights pursuant to this Section 14.2, to
the extent doing so would unreasonably interfere with Tenant's use of the
Premises or Garage.
Section 14.3 Light and Air. If at any time any windows of the Premises are
temporarily darkened or covered over by reason of any Restorative Work, any of
such windows are permanently darkened or covered over due to any Requirement or
there is otherwise a diminution of light, air or view by another structure which
may hereinafter be erected (whether or not by Landlord), Landlord shall not be
liable for any damages and Tenant shall not be entitled to any compensation or
abatement of any Rent, nor shall the same release Tenant from its obligations
hereunder or constitute an actual or constructive eviction. Section 14.4
Tenant's Security Requirements. Landlord acknowledges that Tenant has advised
Landlord that Tenant's business at the Premises involves sensitive information
and operations and that Tenant has security requirements to protect such
information and operations. Landlord and any person entering the Premises with,
at the direction of or under the authority of, Landlord shall, subject to
Tenant's compliance with its obligations pursuant to this Section 14.4, follow
Tenant's commercially reasonable security requirements, which include the
requirement that all persons entering the Premises be attended by a
representative of Tenant, Tenant shall make a representative available upon
24-hours prior telephone notice by Landlord. Tenant acknowledges that to the
extent Tenant does not facilitate Landlord's access to the Premises or certain
portions thereof, Landlord shall be absolved from the obligation to perform any
services within such portion of the Premises including cleaning services. In the
event of an emergency that could cause damage to health, safety or property
Landlord shall use good faith efforts to follow Tenant's security requirements
and in such event Landlord will be required to give only such notice that it in
good faith believes is feasible under the circumstances and need not wait to be
accompanied by Tenant or its employees or representatives (although these
parties may still accompany Landlord if they are available and wish to do so).
ARTICLE 15
DEFAULT
Section 15.1 Tenant's Defaults. Each of the following events shall be an "Event
of Default" hereunder:
(a) Tenant fails to pay when due any installment of Rent and such
default shall continue for 5 days after notice of such default is given to
Tenant, except that if Landlord shall have given 2 such notices during any
calendar year of the Term, Tenant shall not be entitled to any further notice of
its delinquency in the payment of any installment of rent until the expiration
of such calendar year without Tenant having defaulted in any such payment; or
(b) Tenant fails to observe or perform any other term, covenant or
condition of this Lease and such failure continues for more than 30 days (10
days with respect to a default under Article 3) after notice by Landlord to
Tenant of such default, or if such default (other than a default under Article
3) is of a nature that it cannot be completely remedied within 30 days, failure
by Tenant to commence to remedy such failure within said 30 days, and thereafter
diligently prosecute to completion all steps necessary to remedy such default,
provided in all events the same is completed within 90 days; or
(c) if Landlord applies or retains any part of the Security Deposit,
and Tenant fails to deposit with Landlord the amount so applied or retained by
Landlord, or to provide Landlord with a replacement Letter of Credit (as
hereinafter defined), if applicable, within 5 days after notice by Landlord to
Tenant stating the amount applied or retained.
Section 15.2 Landlord's Remedies. (a) Upon the occurrence of an Event of
Default, Landlord, at its option, and without limiting the exercise of any other
right or remedy Landlord may have on account of such Event of Default, and
without any further demand or notice, may give to Tenant 3 days' notice of
termination of this Lease, in which event this Lease and the Term shall come to
an end and expire (whether or not the Term shall have commenced) upon the
expiration of such 3 day period with the same force and effect as if the date
set forth in the notice was the Expiration Date stated herein; and Tenant shall
then quit and surrender the Premises to Landlord, but Tenant shall remain liable
for damages as provided in this Article 15, and/or, to the extent permitted by
law, Landlord may remove all persons and property from the Premises, which
property shall be stored by Landlord at a warehouse or elsewhere at the risk,
expense and for the account of Tenant.
(b) If Landlord elects to terminate this Lease, pursuant to Section
1951.2 of the California Civil Code, Landlord shall be entitled to recover from
Tenant the aggregate of:
(i) The worth at the time of award of the unpaid Rent
and charges equivalent to Rent earned as of the date of the termination hereof;
(ii) The worth at the time of award of the amount by which the
unpaid Rent and charges equivalent to Rent which would have been earned after
the date of termination hereof until the time of award exceeds the amount of
such rental loss that Tenant proves could have been reasonably avoided;
(iii) The worth at the time of award of the amount by which the
unpaid Rent and charges equivalent to Rent for the balance of the Term after the
time of award exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided;
(iv) Any other amount necessary to compensate Landlord for the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which, in the ordinary course of things, would be likely to
result therefrom; and
(v) Any other amount which Landlord may hereafter be permitted to
recover from Tenant to compensate Landlord for the detriment caused by Tenant's
default.
For the purposes of this Section 15.2(b), the "time of award" shall mean the
date upon which the judgment in any action brought by Landlord against Tenant by
reason of such Event of Default is entered or such earlier date as the court may
determine; the "worth at the time of award" of the amounts referred to in
Sections 15.2(b)(i) and 15.2(b)(ii) shall be computed by allowing interest on
such amounts at the Interest Rate; and the "worth at the time of award" of the
amount referred to in Section 15.2(b)(iii) 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% per annum. Tenant agrees that such charges shall be
recoverable by Landlord under California Code of Civil Procedure Section 1174(b)
or any similar, successor or related provision of law.
Section 15.3 Recovering Rent as It Comes Due. Upon any Event of Default, in
addition to any other remedies available to Landlord at law or in equity or
under this Lease, Landlord shall have the remedy described in California Civil
Code Section 1951.4. Accordingly, if Landlord does not elect to terminate this
Lease, Landlord may, from time to time, enforce all of its rights and remedies
under this Lease, including the right to recover all Rent as it becomes due.
Such remedy may be exercised by Landlord without prejudice to its right
thereafter to terminate this Lease in accordance with the other provisions
contained in this Article 15. Landlord's reentry to perform acts of maintenance
or preservation of, or in connection with efforts to relet, the Premises, or any
portion thereof, or the appointment of a receiver upon Landlord's initiative to
protect Landlord's interest under this Lease shall not terminate Tenant's right
to possession of the Premises or any portion thereof and, until Landlord elects
to terminate this Lease, this Lease shall continue in full force and Landlord
may pursue all its remedies hereunder. Nothing in this Article 15 shall be
deemed to affect Landlord's right to indemnification, under the indemnification
clauses contained in this Lease, for Losses arising from events occurring prior
to the termination of this Lease.
Section 15.4 General. (a) All rights, powers and remedies of Landlord hereunder
and under any other agreement now or hereafter in force between Landlord and
Tenant shall be cumulative and not alternative and shall be in addition to all
rights, powers and remedies given to Landlord at law or in equity. The exercise
of any one or more of such rights or remedies shall not impair Landlord's right
to exercise any other right or remedy including any and all rights and remedies
of Landlord under California Civil Code Section 1951.8, California Code of Civil
Procedure Section 1161 et seq., or any similar, successor or related
Requirements.
(b) If, after Tenant's abandonment of the Premises, Tenant leaves
behind any of Tenant's Property, then Landlord shall store such Tenant's
Property at a warehouse or any other location at the risk, expense and for the
account of Tenant, and such property shall be released only upon Tenant's
payment of such charges, together with moving and other costs relating thereto
and all other sums due and owing under this Lease. If Tenant does not reclaim
such Tenant's Property within the period permitted by law, Landlord may sell
such Tenant's Property in accordance with law and apply the proceeds of such
sale to any sums due and owing hereunder, or retain said Property, granting
Tenant credit against sums due and owing hereunder for the reasonable value of
such Property.
(c) To the extent permitted by law, Tenant hereby waives all
provisions of, and protections under, any Requirement to the extent same are
inconsistent and in conflict with specific terms and provisions hereof.
Section 15.5 Interest. If any payment of Rent is not paid when due, interest
shall accrue on such payment, from the date such payment became due until paid
at the Interest Rate. Tenant acknowledges that late payment by Tenant of Rent
will cause Landlord to incur costs not contemplated by this Lease, the exact
amount of such costs being extremely difficult and impracticable to fix. Such
costs include, without limitation, processing and accounting charges, and late
charges that maybe imposed on Landlord by the terms of any note secured by a
Mortgage covering the Premises, Therefore, in addition to interest, if any
amount is not paid when due, a late charge equal to 5% of such amount shall be
assessed; provided, however, that on 2 occasions during any calendar year of the
Term, Landlord shall give Tenant notice of such late payment and Tenant shall
have a period of 5 days thereafter in which to make such payment before any late
charge is assessed. Such interest and late charges are separate and cumulative
and are in addition to and shall not diminish or represent a substitute for any
of Landlord's rights or remedies under any other provision of this Lease.
Section 15.6 Other Rights of Landlord. If Tenant fails to pay any Additional
Rent when due, Landlord, in addition to any other right or remedy, shall have
the same rights and remedies as in the case of a default by Tenant in the
payment of Fixed Rent. If Tenant is in arrears in the payment of Rent, Tenant
waives Tenant's right, if any, to designate the items against which any payments
made by Tenant are to be credited, and Landlord may apply any payments made by
Tenant to any items Landlord sees fit, regardless of any request by Tenant.
Landlord reserves the right, without liability to Tenant and without
constituting any claim of constructive eviction, to suspend furnishing or
rendering to Tenant any supplemental or overtime property, material, labor,
utility or other service, which Landlord is not obligated to furnish or render
in accordance with Article 10, in the event that (but only for so long as)
Tenant is in arrears in paying Landlord for such items for more than 30 days
after notice from Landlord to Tenant demanding the payment of such arrears.
Section 15.7 Landlord's Default. Landlord shall not be in default hereunder
unless Landlord fails to perform any obligation required of Landlord under the
terms of this Lease within a reasonable time, but in no event later than 30 days
after written notice by Tenant to Landlord, specifying the nature of Landlord's
failure to perform. If, however, the nature of Landlord's obligation is such
that more than 30 days are reasonably required for performance, than Landlord
shall not be in default hereunder if Landlord commences performance within such
30 day period and thereafter diligently prosecutes such cure to completion. If
Landlord at the expiration of such notice and cure periods has failed to cure
such default, then, subject to the exculpatory provisions of Section 26.3
hereof, Tenant may pursue any of its legal or equitable remedies, but Tenant
shall have no right to otherwise terminate this Lease.
ARTICLE 16
LANDLORD'S RIGHT TO CURE; FEES AND EXPENSES
If Tenant defaults in the performance of its obligations under
this Lease, Landlord, without waiving such default, may perform such obligations
at Tenant's expense: (a) immediately, and without notice, in the case of
emergency or if the default (i) materially interferes with the use by any other
tenant of the Building, (ii) materially interferes with the efficient operation
of the Building, (iii) results in a violation of any Requirement, or (iv)
results or will result in a cancellation of any insurance policy maintained by
Landlord, and (b) in any other case if such default continues after 10 days from
the date Landlord gives notice of Landlord's intention to perform the defaulted
obligation. All costs and expenses incurred by Landlord in connection with any
such performance by it and all costs and expenses, including reasonable counsel
fees and disbursements, incurred by Landlord in any action or proceeding
(including any unlawful detainer proceeding) brought by Landlord to enforce any
obligation of Tenant under this Lease and/or right of Landlord in or to the
Premises, shall be paid by Tenant to Landlord on demand, with interest thereon
at the Interest Rate from the date incurred by Landlord. Except as expressly
provided to the contrary in this Lease, all costs and expenses which, pursuant
to this Lease are incurred by Landlord and payable to Landlord by Tenant, and
all charges, amounts and sums payable to Landlord by Tenant for any property,
material, labor, utility or other services which, pursuant to this Lease or at
the request and for the account of Tenant, are provided, furnished or rendered
by Landlord, shall become due and payable by Tenant to Landlord in accordance
with the terms of the bills rendered by Landlord to Tenant.
ARTICLE 17
NO REPRESENTATIONS BY LANDLORD; LANDLORD'S APPROVAL
Section 17.1 No Representations. Except as expressly set forth herein, Landlord
and Landlord's agents have made no warranties, representations, statements or
promises with respect to the Building, the Real Property or the Premises and no
rights, easements or licenses are acquired by Tenant by implication or
otherwise. Tenant is entering into this Lease after full investigation and is
not relying upon any statement or representation made by Landlord not embodied
in this Lease.
Section 17.2 No Money Damages. Wherever in this Lease Landlord's consent or
approval is required, Landlord hereby acknowledges its duty to act in each such
case consistent with a covenant of good faith and fair dealing (but Landlord
shall not otherwise be subject to a "reasonableness" standard where Landlord has
not expressly agreed herein to not unreasonably withhold its consent or
approval). If Landlord refuses to grant such consent or approval, whether or not
Landlord expressly agreed that such consent or approval would not be
unreasonably withheld, Tenant shall not make, and Tenant hereby waives, any
claim for money damages (including any claim by way of set-off, counterclaim or
defense) based upon Tenant's claim or assertion that Landlord unreasonably
withheld or delayed its consent or approval. Tenant's sole remedy shall be an
action or proceeding to enforce such provision, by specific performance,
injunction or declaratory judgment. In no event shall Landlord be liable for,
and Tenant, on behalf of itself and all other Tenant Parties, hereby waives any
claim for, any indirect, consequential or punitive damages, including loss or
profits or business opportunity, arising under or in connection with this Lease.
Notwithstanding the foregoing, Tenant's waiver set forth in the second sentence
of this Section 17.2 shall not apply to any final non-appealable judgment (or a
judgment that is in fact not appealed) that Tenant obtains from a court of
competent jurisdiction that Landlord acted in bad faith in making its
determination to withhold its consent or approval.
Section 17.3 Reasonable Efforts. For purposes of this Lease, "reasonable
efforts" by Landlord shall not include an obligation to employ contractors or
labor at overtime or other premium pay rates or to incur any other overtime
costs or additional expenses whatsoever.
ARTICLE 18
END OF TERM
Section 18.1 Expiration. Upon the expiration or other termination of this Lease,
Tenant shall quit and surrender the Premises to Landlord vacant, broom clean and
in good order and condition, ordinary wear and tear and damage for which Tenant
is not responsible under the terms of this Lease excepted, and Tenant shall
remove all of Tenant's Property and Tenant's Alterations as may be required
pursuant to Article 5.
Section 18.2 Holdover Rent. Landlord and Tenant recognize that Landlord's
damages resulting from Tenant's failure to timely surrender possession of the
Premises may be substantial, may exceed the amount of the Rent payable
hereunder, and will be impossible to accurately measure. Accordingly, if
possession of the Premises is not surrendered to Landlord on the Expiration Date
or sooner termination of this Lease, in addition to any other rights or remedies
Landlord may have hereunder or at law, Tenant shall (a) pay to Landlord for each
month (or any portion thereof) during which Tenant holds over in the Premises
after the Expiration Date or sooner termination of this Lease, in addition to
all Additional Rent, (i) for the first month, a sum equal to 150% of the Fixed
Rent payable under this Lease for the last full calendar month of the Term
("Final Fixed Rent" and thereafter 200% of such Final Fixed Rent, (b) be liable
to Landlord for (i) any payment or rent concession which Landlord may be
required to make to any tenant obtained by Landlord for all or any part of the
Premises (a "New Tenant") in order to induce such New Tenant not to terminate
its lease by reason of the holding-over by Tenant, and (ii) the loss of the
benefit of the bargain if any New Tenant shall terminate its lease by reason of
the holding-over by Tenant, and (c) if any such nonconsensual holding-over
continues for more than 30 days, indemnify Landlord against all claims for
actual damages (but in no event any consequential damages) by any New Tenant. No
holding-over by Tenant, nor the payment to Landlord of the amounts specified
above, shall operate to extend the Term hereof. Nothing herein contained shall
be deemed to permit Tenant to retain possession of the Premises after the
Expiration Date or sooner termination of this Lease, and no acceptance by
Landlord of payments from Tenant after the Expiration Date or sooner termination
of this Lease shall be deemed to be other than on account of the amount to be
paid by Tenant in accordance with the provisions of this Section 18.2.
ARTICLE 19
QUIET ENJOYMENT
Provided this Lease is in full force and effect and no Event
of Default then exists, Tenant may peaceably and quietly enjoy the Premises
without hindrance by Landlord or any person lawfully claiming through or under
Landlord, subject to the terms and conditions of this Lease and to all Superior
Leases and Mortgages.
ARTICLE 20
NO SURRENDER; NO WAIVER
Section 20.1 No Surrender or Release. No act or thing done by Landlord or
Landlord's agents or employees during the Term shall be deemed an acceptance of
a surrender of the Premises, and no provision of this Lease shall be deemed to
have been waived by Landlord, unless such waiver is in writing and is signed by
Landlord.
Section 20.2 No Waiver. The failure of either party to seek redress for
violation of, or to insist upon the strict performance of, any covenant or
condition of this Lease, or any of the Rules and Regulations, shall not be
construed as a waiver or relinquishment for the future performance of such
obligations of this Lease or the Rules and Regulations, or of the right to
exercise such election but the same shall continue and remain in full force and
effect with respect to any subsequent breach, act or omission. The receipt by
Landlord of any Rent payable pursuant to this Lease or any other sums with
knowledge of the breach of any covenant of this Lease shall not be deemed a
waiver of such breach. No payment by Tenant or receipt by Landlord of a lesser
amount than the monthly Rent herein stipulated shall be deemed to be other than
a payment on account of the earliest stipulated Rent, or as Landlord may elect
to apply such payment, nor shall any endorsement or statement on any check or
any letter accompanying any check or payment as Rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such Rent or pursue any other remedy
provided in this Lease.
ARTICLE 21
WAIVER OF TRIAL BY JURY; COUNTERCLAIM
Section 21.1 Jury Trial Waiver. THE PARTIES HEREBY AGREE THAT THIS LEASE
CONSTITUTES A WRITTEN CONSENT TO WAIVER OF TRIAL BY JURY PURSUANT TO THE
PROVISIONS OF CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 631 AND EACH PARTY DOES
HEREBY CONSTITUTE AND APPOINT THE OTHER PARTY ITS TRUE AND LAWFUL
ATTORNEY-IN-FACT, WHICH APPOINTMENT IS COUPLED WITH AN INTEREST, AND EACH PARTY
DOES HEREBY AUTHORIZE AND EMPOWER THE OTHER PARTY, IN THE NAME, PLACE AND STEAD
OF SUCH PARTY, TO FILE THIS LEASE WITH THE CLERK OR JUDGE OF ANY COURT OF
COMPETENT JURISDICTION AS A STATUTORY WRITTEN CONSENT TO WAIVER OF TRIAL BY
JURY.
LANDLORD'S INITIALS: _____ TENANT'S INITIALS: _____
Section 21.2 Waiver of Counterclaim. If Landlord commences any summary
proceeding against Tenant, Tenant will not interpose any counterclaim of any
nature or description in any such proceeding (unless failure to impose such
counterclaim would preclude Tenant from asserting in a separate action the claim
which is the subject of such counterclaim), and will not seek to consolidate
such proceeding with any other action which may have been or will be brought in
any other court by Tenant.
ARTICLE 22
NOTICES
Except as otherwise expressly provided in this Lease, all
consents, notices, demands, requests, approvals or other communications given
under this Lease shall be in writing and shall be deemed sufficiently given or
rendered if delivered by hand (provided a signed receipt is obtained) or if sent
by registered or certified mail (return receipt requested) or by a nationally
recognized overnight delivery service making receipted deliveries, addressed to
Landlord and Tenant as set forth in Article 1, and to any Mortgagee or Lessee
who shall require copies of notices and whose address is provided to Tenant, or
to such other address(es) as Landlord, Tenant or any Mortgagee or Lessor may
designate as its new address(es) for such purpose by notice given to the other
in accordance with the provisions of this Article 22. Any such approval,
consent, notice, demand, request or other communication shall be deemed to have
been given on the date of receipted delivery, refusal to accept delivery or when
delivery is first attempted but cannot be made due to a change of address for
which no notice is given or 3 Business Days after it shall have been mailed as
provided in this Article 22, whichever is earlier.
ARTICLE 23
RULES AND REGULATIONS
All Tenant Parties shall observe and comply with the Rules and
Regulations, as supplemented or amended from time to time. Landlord reserves the
right, from time to time, to adopt additional Rules and Regulations and to amend
the Rules and Regulations then in effect. Nothing contained in this Lease shall
impose upon Landlord any obligation to enforce the Rules and Regulations or
terms, covenants or conditions in any other lease against any other Building
tenant, and Landlord shall not be liable to Tenant for violation of the same by
any other tenant, its employees, agents, visitors or licensees, provided that
Landlord shall enforce the Rules or Regulations against Tenant and all other
tenants of the Building in a non-discriminatory fashion.
ARTICLE 24
BROKER
Landlord has retained Landlord's Agent as leasing agent in
connection with this Lease and Landlord will be solely responsible for any fee
that may be payable to Landlord's Agent. Landlord agrees to pay a commission to
Tenant's Broker pursuant to a separate agreement. Each of Landlord and Tenant
represents and warrants to the other that it has not dealt with any broker in
connection with this Lease other than Landlord's Agent, Landlord's Broker and
Tenant's Broker and that no other broker, finder or like entity procured or
negotiated this Lease or is entitled to any fee or commission in connection
herewith. Each of Landlord and Tenant shall indemnify, defend, protect and hold
the other party harmless from and against any and all Losses which the
indemnified party may incur by reason of any claim of or liability to any
broker, finder or like agent (other than Landlord's Agent, Landlord's Broker and
Tenant's Broker) arising out of any dealings claimed to have occurred between
the indemnifying party and the claimant in connection with this Lease, and/or
the above representation being false.
ARTICLE 25
INDEMNITY
Section 25.1 Tenant's Indemnity. Tenant shall not do or permit to be done any
act or thing upon the Premises or the Real Property which may subject Landlord
to any liability or responsibility for injury, damages to persons or property or
to any liability by reason of any violation of any Requirement, and shall
exercise such control over the Premises as to fully protect Landlord against any
such liability. Except to the extent of the gross negligence or willful
misconduct of Landlord or its agents or contractors, Tenant shall indemnify,
defend, protect and hold harmless each of the Indemnitees from and against any
and all Losses, resulting from any claims (i) against the Indemnitees arising
from any act, omission or negligence of (A) all Tenant Parties or (B) both
Landlord and Tenant, provided, however, that Tenant's liability hereunder with
respect to matters judicially determined to have arisen out of the negligence of
Landlord, which determination shall not be subject to appeal, shall be limited
to the amount of insurance coverage carried by Tenant pursuant to Article 11,
(ii) against the Indemnitees arising from any accident, injury or damage
whatsoever caused to any person or to the property of any person and occurring
in or about the Premises, and (iii) against the Indemnitees resulting from any
breach, violation or nonperformance of any covenant, condition or agreement of
this Lease on the part of Tenant to be fulfilled, kept, observed or performed.
Section 25.2 Landlord's Indemnity. Landlord shall indemnify, defend and hold
harmless Tenant from and against all Losses incurred by Tenant arising from any
accident, injury or damage whatsoever caused to any person or the property of
any person in or about the Common Areas and with respect to claims for personal
injury, the Premises, to the extent attributable to the gross negligence or
willful misconduct of Landlord or its employees, agents or contractors.
Section 25.3 Defense and Settlement. If any claim, action or proceeding is made
or brought against any Indemnitee, then upon demand by an Indemnitee, Tenant, at
its sole cost and expense, shall resist or defend such claim, action or
proceeding in the Indemnitee's name (if necessary), by attorneys approved by the
Indemnitee, which approval shall not be unreasonably withheld (attorneys for
Tenant's insurer shall be deemed approved for purposes of this Section 25.3).
Notwithstanding the foregoing, an Indemnitee may retain its own attorneys to
participate or assist in defending any claim, action or proceeding involving
potential liability in excess of the amount available under Tenant's liability
insurance carried under Section 11.1 for such claim and Tenant shall pay the
reasonable fees and disbursements of such attorneys. If Tenant fails to
diligently defend or if there is a legal conflict or other conflict of interest,
then Landlord may retain separate counsel at Tenant's expense. Notwithstanding
anything herein contained to the contrary, Tenant may direct the Indemnitee to
settle any claim, suit or other proceeding provided that (a) such settlement
shall involve no obligation on the part of the Indemnitee other than the payment
of money, (b) any payments to be made pursuant to such settlement shall be paid
in full exclusively by Tenant at the time such settlement is reached, (c) such
settlement shall not require the Indemnitee to admit any liability, and (d) the
Indemnitee shall have received an unconditional release from the other parties
to such claim, suit or other proceeding.
ARTICLE 26
MISCELLANEOUS
Section 26.1 Delivery. This Lease shall not be binding upon Landlord or Tenant
unless and until Landlord shall have executed and delivered a fully executed
copy of this Lease to Tenant.
Section 26.2 Transfer of Real Property. In the event of the sale, conveyance,
assignment or transfer (collectively, a "Transfer") by such Landlord (or upon
any subsequent landlord after the Transfer by such subsequent landlord) of its
interest in the Building or the Real Property, as the case may be, such Landlord
shall be entirely freed and relieved of all covenants and obligations of
Landlord hereunder accruing from and after the date of Transfer, provided the
transferee of Landlord's interest (or that of such subsequent Landlord) in the
Building or the Real Property, as the case may be, has assumed in writing all
obligations under this Lease arising from and after the date of Transfer.
Section 26.3 Limitation on Liability. The liability of Landlord for Landlord's
obligations under this Lease shall be limited to Landlord's interest in the Real
Property and Landlord's interest in the net proceeds from the sale thereof and
Tenant shall not look to any other property or assets of Landlord or the
property or assets of any direct or indirect partner, member, manager,
shareholder, director, officer, principal, employee or agent of Landlord
(collectively, the "Parties") in seeking either to enforce Landlord's
obligations under this Lease or to satisfy a judgment for Landlord's failure to
perform such obligations; and none of the Parties shall be personally liable for
the performance of Landlord's obligations under this Lease.
Section 26.4 Rent. All amounts payable by Tenant to or on behalf of Landlord
under this Lease, whether or not expressly denominated Fixed Rent, Tenant's Tax
Payment, Tenant's Operating Payment, Additional Rent or Rent, shall constitute
rent for the purposes of Section 502(b)(6) of the United States Bankruptcy Code.
Section 26.5 Entire Document. This Lease (including any Schedules and Exhibits
referred to herein and all supplementary agreements provided for herein)
contains the entire agreement between the parties and all prior negotiations and
agreements are merged into this Lease. All of the Schedules and Exhibits
attached hereto are incorporated in and made a part of this Lease, provided that
in the event of any inconsistency between the terms and provisions of this Lease
and the terms and provisions of the Schedules and Exhibits hereto, the terms and
provisions of this Lease shall control.
Section 26.6 Governing Law. This Lease shall be governed in all respects by the
laws of the State of California.
Section 26.7 Unenforceability. If any provision of this Lease, or its
application to any Person or circumstance, shall ever be held to be invalid or
unenforceable, then in each such event the remainder of this Lease or the
application of such provision to any other Person or any other circumstance
(other than those as to which it shall be invalid or unenforceable) shall not be
thereby affected, and each provision hereof shall remain valid and enforceable
to the fullest extent permitted by law.
Section 26.8 Lease Disputes. (a) Tenant agrees that all disputes arising,
directly or indirectly, out of or relating to this Lease, and all actions to
enforce this Lease, shall be dealt with and adjudicated in the state courts of
the State of California or the United States District Court for the Northern
District of California and for that purpose hereby expressly and irrevocably
submits itself to the jurisdiction of such courts. Tenant agrees that so far as
is permitted under applicable law, this consent to personal jurisdiction shall
be self-operative and no further instrument or action, other than service of
process in one of the manners specified in this Lease, or as otherwise permitted
by law, shall be necessary in order to confer jurisdiction upon it in any such
court.
(b) To the extent that Tenant has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property,
Tenant irrevocably waives such immunity in respect of its obligations under this
Lease.
Section 26.9 Landlord's Agent. Unless Landlord delivers written notice to Tenant
to the contrary, Landlord's Agent is authorized to act as Landlord's agent in
connection with the performance of this Lease, and Tenant shall direct all
correspondence and requests to, and shall be entitled to rely upon
correspondence received from Landlord's Agent. Tenant acknowledges that
Landlord's Agent is acting solely as agent for Landlord in connection with the
foregoing; and neither Landlord's Agent nor any of its direct or indirect
partners, members, managers, officers, shareholders, directors, employees,
principals, agents or representatives shall have any liability to Tenant in
connection with the performance of this Lease, and Tenant waives any and all
claims against any and all of such parties (other than Landlord) arising out of,
or in any way connected with, this Lease, the Building or the Real Property.
Section 26.10 Estoppel. Within 10 Business Days following request from Landlord,
any Mortgagee or any Lessor, Tenant shall deliver to Landlord a statement
executed and acknowledged by Tenant, in form reasonably satisfactory to
Landlord, (a) stating the Commencement Date, the Rent Commencement Date and the
Expiration Date, and that this Lease is then in full force and effect and has
not been modified (or if modified, setting forth all modifications), (b) setting
forth the date to which the Fixed Rent and any Additional Rent have been paid,
together with the amount of monthly Fixed Rent and Additional, Rent then
payable, (c) stating whether or not, to Tenant's current actual knowledge,
Landlord is in default under this Lease, and, if Landlord is in default, setting
forth the specific nature of all such defaults, (d) stating the amount of the
Security Deposit, if any, under this Lease, (e) stating whether there are any
subleases or assignments affecting the Premises, (f) stating the address of
Tenant to which all notices and communications under the Lease shall be sent,
and (g) responding to any other matters reasonably requested by Landlord, such
Mortgagee or such Lessor. Tenant acknowledges that any statement delivered
pursuant to this Section 26.10 may be relied upon by any purchaser or owner of
the Real Property or the Building, or all or any portion of Landlord's interest
in the Real Property or the Building or any Superior Lease, or by any Mortgagee,
or assignee thereof or by any Lessor, or assignee thereof.
Section 26.11 Certain Interpretational Rules. For purposes of this Lease,
whenever the words "include", "includes", or "including" are used, they shall be
deemed to be followed by the words "without limitation" and, whenever the
circumstances or the context requires, the singular shall be construed as the
plural, the masculine shall be construed as the feminine and/or the neuter and
vice versa. This Lease shall be interpreted and enforced without the aid of any
canon, custom or rule of law requiring or suggesting construction against the
party drafting or causing the drafting of the provision in question. The
captions in this Lease are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope of this Lease or the
intent of any provision hereof.
Section 26.12 Parties Bound. The terms, covenants, conditions and agreements
contained in this Lease shall bind and inure to the benefit of Landlord and
Tenant and, except as otherwise provided in this Lease, to their respective
legal representatives, successors, and assigns.
Section 26.13 Memorandum of Lease. This Lease shall not be recorded; however, at
either party's request, Landlord and Tenant shall promptly execute, acknowledge
and deliver a memorandum with respect to this Lease sufficient for recording and
either party may record the Memorandum provided that if Tenant so request that
such memorandum be recorded, prior to such recordation Tenant shall execute,
acknowledge and deliver to Landlord a quitclaim deed for the Building and the
underlying real property together with Tenant's irrevocable instructions that
such quitclaim deed may be recorded upon the expiration or earlier termination
of this Lease. Section 26.14 Counterparts. This Lease may be executed in 2 or
more counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument.
Section 26.15 Survival. All obligations and liabilities of Landlord or Tenant to
the other which accrued before the expiration or other termination of this
Lease, and all such obligations and liabilities which by their nature or under
the circumstances can only be, or by the provisions of this Lease may be,
performed after such expiration or other termination, shall survive the
expiration or other termination of this Lease. Without limiting the generality
of the foregoing, the rights and obligations of the parties with respect to any
indemnity under this Lease, and with respect to any Rent and any other amounts
payable under this Lease, shall survive the expiration or other termination of
this Lease.
Section 26.16 Code Waivers. Tenant hereby waives any and all rights under and
benefits of Subsection 1 of Section 1931, 1932(2), Subdivision 2, 1933,
Subdivision 4, 1941 and 1942 of the California Civil Code, Section 1265.130 of
the California Code of Civil Procedure (allowing either party to petition a
court to terminate a lease in the event of a partial taking), and Section
1174(c) of the California Code of Civil Procedure and Section 1951.7 of the
California Civil Code (providing for Tenant's right to satisfy a judgment in
order to prevent a forfeiture of this Lease or requiring Landlord to deliver
written notice to Tenant of any reletting of the Premises), and any similar law,
statute or ordinance now or hereinafter in effect.
Section 26.17 Inability to Perform. This Lease and the obligation of Tenant to
pay Rent and to perform all of the other covenants and agreements of Tenant
hereunder shall not be affected, impaired or excused by any Unavoidable Delays.
Landlord shall use reasonable efforts to promptly notify Tenant of any
Unavoidable Delay which prevents Landlord from fulfilling any of its obligations
under this Lease.
Section 26.18 Transportation Demand Management Program. If, during the Term, the
City of Santa Clara so requires, then Tenant shall institute and maintain for
its employees working at the Building a Transportation Demand Management Program
("TDMP") which shall involve, as so required, measures such as shuttle services,
carpool matching, guaranteed ride home program and employee subsidies for travel
costs. Upon request of Landlord, Tenant shall report to Landlord and the City of
Santa Clara on the status of Tenant's TDMP.
Section 26.19 Reasonable Expenditures. Notwithstanding anything to the contrary
set forth herein, any expenditure by a party permitted or required under this
Lease, for which such party is entitled to and does demand reimbursement from
the other party, shall be entitled to the fair market value of the good and
services involved, shall be reasonably incurred, and shall be reasonably
substantiated by reasonable supporting documentary evidence available for
inspection and review by the other party upon reasonable prior written request
and during normal business hours.
ARTICLE 27
SECURITY DEPOSIT
Section 27.1 Security Deposit. Tenant shall deposit the Security Deposit with
Landlord upon the execution of this Lease in cash or check as security for the
faithful performance and observance by Tenant of the terms, covenants and
conditions of this Lease.
Section 27.2 Letter of Credit. In lieu of a cash or check Security Deposit,
Tenant may deliver the Security Deposit to Landlord in the form of a clean,
irrevocable, non-documentary and unconditional letter of credit (the "Letter of
Credit") issued by and drawable upon any commercial bank which is a member of
the New York Clearing House Association or other bank reasonably satisfactory to
Landlord, trust company, national banking association or savings and loan
association with offices for banking purposes in the City of San Francisco (the
"Issuing Bank"), which has outstanding unsecured, uninsured and unguaranteed
indebtedness, or shall have issued a letter of credit or other credit facility
that constitutes the primary security for any outstanding indebtedness (which is
otherwise uninsured and unguaranteed), that is then rated, without regard to
qualification of such rating by symbols such as "+" or "-" or numerical
notation, "Aa" or better by Moody's Investors Service and "AA" or better by
Standard & Poor's Rating Service, and has combined capital, surplus and
undivided profits of not less than $500,000,000. Landlord hereby approves of
Canadian Imperial Bank of Commerce as an Issuing Bank and the form of Letter of
Credit attached hereto as Exhibit I. Such Letter of Credit shall (a) name
Landlord as beneficiary, (b) be in the amount of the Security Deposit, (c) have
a term of not less than one year, (d) permit multiple drawings, (e) be fully
transferable by Landlord without the payment of any fees or charges by Landlord,
and (f) otherwise be in form and content reasonably satisfactory to Landlord. If
upon any transfer of the Letter of Credit, any fees or charges shall be so
imposed, then such fees or charges shall be payable solely by Tenant and the
Letter of Credit shall so specify. The Letter of Credit shall provide that it
shall be deemed automatically renewed, without amendment, for consecutive
periods of one year each thereafter during the Term (and in no event shall the
Letter of Credit expire prior to the 45th day following the Expiration Date)
unless the Issuing Bank sends a notice (the "Non-Renewal Notice") to Landlord by
certified mail, return receipt requested, not less than 45 days next preceding
the then expiration date of the Letter of Credit stating that the Issuing Bank
has elected not to renew the Letter of Credit. Landlord shall have the right,
upon receipt of the Non-Renewal Notice, to draw the full amount of the Letter of
Credit, by sight draft on the Issuing Bank, and shall thereafter hold or apply
the cash proceeds of the Letter of Credit pursuant to the terms of this Article
27, until Tenant delivers to Landlord a substitute Letter of Credit which meets
the requirements of this Section 27.2. The Issuing Bank shall agree with all
drawers, endorsers and bona fide holders that drafts drawn under and in
compliance with the terms of the Letter of Credit and accompanied by a
certificate signed by an authorized officer of Landlord (not in their individual
capacity, but solely as an officer of Landlord) under penalty of perjury, that
to such person's knowledge, information and belief, a default of Tenant beyond
all applicable notice and cure periods has occurred and is continuing and that
Landlord is entitled under the Lease to draw the amount being drawn, will be
duly honored upon presentation to the Issuing Bank at an office location in San
Francisco, California. The Letter of Credit shall be subject in all respects to
the Uniform Customs and Practice for Documentary Credits (1993 revision),
International Chamber of Commerce Publication No. 500.
Section 27.3 Application of Security. If an Event of Default by Tenant occurs in
the payment or performance of any of the terms, covenants or conditions of this
Lease, including the payment of Rent, Landlord may apply or retain the whole or
any part of the cash Security Deposit or may notify the Issuing Bank and
thereupon receive all or a portion of the Security Deposit represented by the
Letter of Credit and use, apply, or retain the whole or any part of such
proceeds, as the case may be, to the extent required for the payment of any
Fixed Rent or any other sum as to which Tenant is in default beyond applicable
notice and cure periods including (i) any sum which Landlord may expend or may
be required to expend by reason of Tenant's default beyond applicable notice and
cure periods, and/or (i) any damages to which Landlord is entitled pursuant to
this Lease, whether such damages accrue before or after summary proceedings or
other reentry by Landlord. If Landlord applies any part of the Security Deposit,
Tenant, upon demand, shall deposit with Landlord the amount so applied or
retained so that Landlord shall have the full Security Deposit on hand at all
times during the Term. Except for portions of the Security Deposit so applied by
Landlord and not re-posted by Tenant, the Security Deposit shall be returned to
Tenant after the Expiration Date and after delivery of possession of the
Premises to Landlord in the manner required by this Lease.
Section 27.4 Transfer. Upon a sale or other transfer of the Real Property or the
Building, or any financing of Landlord's interest therein, Landlord shall have
the right to transfer the Security Deposit to its transferee or lender. With
respect to the Letter of Credit, within 5 days after notice of such transfer or
financing, Tenant, at its sole cost, shall arrange for the transfer of the
Letter of Credit to the new landlord or the lender, as designated by Landlord in
the foregoing notice or have the Letter of Credit reissued in the name of the
new landlord or the lender. Upon such Transfer Tenant shall look solely to the
new landlord or lender for the return of such cash Security Deposit or Letter of
Credit and the provisions hereof shall apply to every transfer or assignment
made of the Security Deposit to a new landlord. Except in connection with an
assignment of this Lease to a Permitted Transferee, Tenant shall not assign or
encumber or attempt to assign or encumber the cash Security Deposit or Letter of
Credit and neither Landlord nor its successors or assigns shall be bound by any
such action or attempted assignment, or encumbrance.
Section 27.5 Reduction. If Tenant (a) has not, on more than 2 occasions during
the 12-month period preceding the applicable Reduction Date (as hereinafter
defined), failed to pay Fixed Rent within 5 days of receiving written notice of
nonpayment, and (b) no Event of Default then exists, then, provided that Tenant
complies with the provisions of this Section 27.5, (i) on the 3rd anniversary of
the Commencement Date and on each annual anniversary thereafter (in each case,
the "Reduction Date"), the Security Deposit shall be reduced by $480,000;
provided that in no event shall the amount of the Security Deposit ever be less
than $480,000 (the "Reduction Minimum"). The Security Deposit shall be reduced
as follows: (A) if the Security Deposit is in the form of cash, Landlord shall,
within 10 Business Days following notice by Tenant to Landlord that Tenant is
entitled to reduce the Security Deposit pursuant to this Section 27.5, deliver
to Tenant the amount by which the Security Deposit is reduced, or (B) if the
Security Deposit is in the form of a Letter of Credit, Tenant shall deliver to
Landlord an amendment to the Letter of Credit (which amendment must be
reasonably acceptable to Landlord in all respects), reducing the amount of the
Letter of Credit by the amount of the permitted reduction, and Landlord shall
execute the amendment and such other documents as are reasonably necessary to
reduce the amount of the Letter of Credit in accordance with the terms hereof.
If Tenant delivers to Landlord an amendment to the Letter of Credit in
accordance with the terms hereof, Landlord shall, within 10 Business Days after
delivery of such amendment, either (1) provide its reasonable objections to such
amendment or (2) execute such amendment of the Letter of Credit in accordance
with the terms hereof.
ARTICLE 28
PARKING
Concurrently with Landlord's construction of the Building,
Landlord shall construct an expansion of the Garage so as to serve the Building
and Building One. Except as otherwise provided below, the Garage is open 24
hours a day, 7 days a week to tenants and their Building employees holding valid
Building entry cards. The Garage allows monthly parking with unlimited 24 hours
access with the Building's entry cards. Visitor parking is available during
Ordinary Business Hours. During the Term of this Lease and subject to
Unavoidable Delays, Landlord shall make available or cause to be available to
Tenant through-out the Term 3.77 unreserved parking spaces per 1,000 rentable
square feet of the Premises at no additional cost to Tenant.
Tenant shall at all times comply with (and the provisions
hereof shall be expressly subject to) all applicable Requirements regarding the
use of the Garage. Landlord reserves the right to adopt, modify and enforce
reasonable rules (the "Garage Rules") governing the use of the Garage from time
to time, including any key card, sticker or other identification or entrance
system. Landlord may refuse to permit any person who violates any such Garage
Rules to park in the Garage, and any violation of the Rules shall subject the
car to removal, at such person's expense from the Garage. The use of all parking
spaces shall be solely for use by Tenant's employees (or the employees of a
permitted subtenant) working in the Building.
The unreserved parking spaces hereunder may be provided on an
unreserved valet parking basis. Tenant acknowledges that Landlord may arrange
for the Garage to be operated by an independent contractor. Accordingly, Tenant
acknowledges that if Landlord is not the operator of the Garage Landlord shall
have no liability for claims arising through acts or omissions of such
independent contractor except to the extent due to Landlord's, or its agents' or
contractors' gross negligence or willful misconduct. Except when caused by the
gross negligence or criminal acts of Landlord or Landlord's Agent or their
respective employees, agents or contractors, Landlord shall have no liability
whatsoever for any damage to property or any other items located in the Garage,
nor for any personal injuries or death arising out of any matter relating to the
Garage, and in all events, Tenant agrees to look first to its insurance carrier
for payment of any losses sustained in connection with any use of the Garage and
secondly to the operator of the Garage. Landlord reserves the right to assign
specific spaces, and to reserve spaces for visitors, small cars, handicapped
persons and for other tenants, guests of tenants or other parties, and Tenant
shall not park in any such assigned or reserved spaces. Landlord also reserves
the right to close all or any portion of the Garage in order to make repairs or
perform maintenance services, or to alter, modify, re-stripe or renovate the
Garage, or if required by casualty, condemnation or Unavoidable Delay. In such
event, Landlord shall use its reasonable efforts to complete such maintenance or
repair as soon as reasonably possible.
Tenant agrees to acquaint all persons to whom Tenant assigns
parking space of any Garage Rules promulgated by Landlord with respect to the
Garage and the parking privileges granted to Tenant herein.
ARTICLE 29
RENEWAL TERM
Section 29.1 Renewal Term. Tenant shall have the right to renew the Term for all
of the Premises for one renewal term of 5 years (the "Renewal Term") which shall
commence on the day following the expiration of the initial Term and end on the
5th anniversary of the Expiration Date, unless the Renewal Term shall sooner
terminate pursuant to any of the terms of this Lease or otherwise. The Renewal
Term shall commence only if (a) Tenant shall have notified Landlord in writing
of Tenant's exercise of such renewal right at least 15 months prior to the
Expiration Date, (b) at the time of the exercise of such right and immediately
prior to the Expiration Date, no event of Default shall have occurred and be
continuing hereunder, and (c) PMC-Sierra, Inc. and/or Related Entities shall be
in occupancy of at least 70% of the Premises at the time such notice is given.
Time is of the essence with respect to the giving of the notice of Tenant's
exercise of the renewal option. The Renewal Term shall be upon all of the
agreements, terms, covenants and conditions hereof binding upon Tenant, except
that the Fixed Rent (as defined in Section 1.1) shall be determined as provided
in Section 29.2 and Tenant shall have no further right to renew the Term. Upon
the commencement of the Renewal Term, (A) the Renewal Term shall be added to and
become part of the Term (but shall not be considered part of the initial Term),
(B) any reference to "this Lease", to the "Term", the "term of this Lease" or
any similar expression shall be deemed to include the Renewal Term, and (C) the
expiration of the Renewal Term shall become the Expiration Date.
Section 29.2 Renewal Term Rent. If the Term shall be renewed as provided in
Section 29.1, the annual Fixed Rent payable during the Renewal Term shall be
equal to the greater of (a) the annual fair market rental value of the Premises
(the "Fair Market Value") as of the day immediately following the expiration of
the initial Term (the "Calculation Date"), and (b) the amount of Fixed Rent
payable by Tenant during the last year of the initial Term. Any dispute between
the parties as to the annual fair market rental value shall be resolved by
arbitration as provided in Section 29.3 hereof. For purposes hereof, the "Fair
Market Value" shall mean the rent at which tenants, as of the commencement of
the Renewal Term, will be leasing non-sublease space on a "triple-net" basis
comparable in size, location and quality to the Premises, for a comparable term,
and considering all other factors relevant to the determination of Fair Market
Value, which comparable space is located in Comparable Buildings. Within 30 days
following Landlord's receipt of the Exercise Notice, Landlord shall advise
Tenant in writing of Landlord's determination of Fair Market Value (the "Rent
Notice"). Within 30 days of Tenant's receipt of Landlord's Rent Notice, Tenant
shall advise Landlord in writing whether Tenant accepts Landlord's determination
of Fair Market Value, elects to rescind Tenant's exercise of the renewal option
or elects to have the determination of Fair Market Value be resolved by
arbitration as provided in Section 29.3 hereof. Tenant's failure to so advise
Landlord of its election within such 30-day period shall constitute Tenant's
acceptance of Landlord's determination of Fair Market Value. If Tenant timely
elects to rescind its exercise of the renewal option, the Term of this Lease
shall end on the Expiration Date. If the Fixed Rent payable during the Renewal
Term has not been determined prior to the commencement thereof, Tenant shall pay
Fixed Rent in an amount equal to the fair market rental value for the Premises
as determined by Landlord (the "Interim Rent"). Upon final determination of the
Fixed Rent for the Renewal Term, Tenant shall commence paying such Fixed Rent as
so determined, and within 10 days after such determination Tenant shall pay any
deficiency in prior payments of Fixed Rent or, if the Fixed Rent as so
determined shall be less than the Interim Rent, Tenant shall be entitled to a
credit against the next succeeding installments of Fixed Rent in an amount equal
to the difference between each installment of Interim Rent and the Fixed Rent as
so determined which should have been paid for such installment until the total
amount of the over payment has been recouped.
Section 29.3 Arbitration. If Tenant shall dispute Landlord's determination of
Fair Market Value pursuant to Section 29.2, Tenant shall give notice to Landlord
of such dispute within 10 days of Tenant's receipt of Landlord's determination,
and such dispute shall be determined by a single arbitrator appointed in
accordance with the American Arbitration Association Real Estate Valuation
Arbitration Proceeding Rules. The arbitrator shall be impartial and shall have
not less than 10 years' experience in the County of Santa Clara in a calling
related to the leasing of commercial office space in office buildings comparable
to the Building, and the fees of the arbitrator shall be shared by Landlord and
Tenant. Within 15 days following the appointment of the arbitrator, Landlord and
Tenant shall attend a hearing before the arbitrator at which each party shall
submit a report setting forth its determination of the Fair Market Value of the
Premises for the Renewal Term, together with such information on comparable
rentals and such other evidence as such party shall deem relevant. The
arbitrator shall, within 30 days following such hearing and submission of
evidence, render his or her decision by selecting the determination of Fair
Market Value submitted by either Landlord or Tenant which, in the judgment of
the arbitrator, most nearly reflects the Fair Market Value of the Premises for
the Renewal Term, provided, however, that Tenant shall have the right, by
written notice to Landlord, to terminate the exercise of its renewal option,
within ten (10) days of receipt of the judgment of the arbitrator. If Tenant
elects to so terminate its option, then the (a) Expiration Date shall be the
later to occur of (a) the Expiration Date, and (b) the 450th day following the
date of Tenant's termination notice, (b) Tenant shall pay the fees of the
arbitrator, and (c) the Fixed Rent payable for any period of time beyond the
stated Expiration Date shall be 103% of the Fixed Rent payable for the final
month of the Initial Term. The arbitrator shall have no power or authority to
select any Fair Market Value other than a Fair Market Value submitted by
Landlord or Tenant, and the decision of the arbitrator shall be final and
binding upon Landlord and Tenant.
ARTICLE 30
ROOF SPACE AND SATELLITE ANTENNA
Tenant is hereby granted, subject to Article 5 hereof and the
provisions of this Article 30 and such other requirements as shall be imposed by
Landlord and at no additional cost to Tenant, the right to install, secure,
maintain, replace and operate on the roof (the "Roof") of the Building in an
area reasonably designated by Landlord and reasonably acceptable to Tenant of
not more than 100 square feet (the "Roof Space"), a communications transmitter,
receiver or other supplemental equipment (the "Antenna"). The dimensions of the
Antenna shall be subject to Landlord's approval. In addition, also subject to
Article 5 and the provisions of this Article 30, Tenant shall have the right to
install cables leading from the Antenna to the Premises at Tenant's sole cost
and expense and in a location, manner, material and size as shall be approved by
Landlord.
Section 30.2 Tenant shall diligently service, repair, paint and
maintain the Antenna, including, without limitation, all electrical wires, guide
wires and conduits related thereto.
Section 30.3 No signs, whether temporary or permanent, shall be affixed,
installed or attached to the Antenna or the Roof other than those required by
Requirements. All signs required, if any, and the location thereof, shall be
first approved in writing by Landlord.
Section 30.4 In the performance of any installation, alteration, repair,
maintenance, removal and/or any other work with respect to the Roof Space or the
Antenna, Tenant shall comply with all of the applicable provisions of this Lease
including, without limitation, those set forth in Articles 5, 6 (with respect to
any damage to the roof caused by Tenant), 8, 11 and 25, and the provisions of
this Article 30 shall be applicable to the Roof Space as if the Roof Space was
part of the Premises.
Section 30.5 Any and all taxes, filing fees, charges or license fees imposed
upon Landlord by virtue of the existence and/or use of the Antenna (including
those shown to be specifically related to any increase in the assessed valuation
of the Building attributable to the Antenna), whether imposed by any local,
state and/or federal government or any agency thereof, shall be exclusively
borne by Tenant. Landlord agrees to cooperate reasonably with Tenant in any
necessary applications for any necessary license or permits provided Landlord
incurs no expense or liability in so doing.
Section 30.6 During Ordinary Business Hours and upon reasonable advance notice
to Landlord, Monday through Friday (exclusive of Building holidays), Tenant may
have access to the Roof Space for the sole purpose of servicing and maintaining
the Antenna. Landlord shall have the right (in its sole discretion) to have its
representative(s) accompany Tenant whenever it services or maintains the
Antenna. At all other times, Landlord may keep the entrances to the Roof Space
locked. Tenant shall not have any tools and/or materials stored in the Roof
Space, and Tenant's employees and independent contractors shall close and lock
the entrance door to the Roof when leaving the same. If Tenant shall require
access any of the Roof Space, at times other than those specified in the first
sentence of this Section 30.6, then except in the case of an emergency, Tenant
shall give Landlord at least two full business days prior written notice of such
requirement and shall pay all reasonable costs incurred by Landlord in
connection therewith, including, without limitation, any compensation paid to
Building employees or any independent contractors of Landlord.
Section 30.7 On or before the termination of this Lease, Tenant shall remove the
Antenna and any and all appurtenant cables, wires, and other equipment and
repair and restore the Roof and any other damage caused to the Building as a
result of such removal. Such repair and restoration work shall proceed with due
diligence and dispatch and shall be completed prior to the Expiration Date. Any
holes, damage or injury in or to the Roof and/or Building arising out of or
connected to the removal of the Antenna and any or all appurtenant cables,
wires, and other equipment shall be promptly and duly repaired and restored by
Tenant at Tenant's sole cost and expense.
Section 30.8 During the Term, Tenant shall inspect the Antenna at least once a
month. Tenant shall be solely responsible for preserving the water tight
integrity of the Roof as may be caused by, or relates to, the installation,
maintenance, operation and repair of the Antenna. Tenant shall be responsible
for all leaks in the Roof arising out of or connected to its installation.
Tenant's Antenna shall not exceed the applicable load-bearing capacity of the
Roof Space.
Section 30.9 (a) (a) If, at any time during the Term, Landlord, in its judgment,
shall determine that it is necessary to move the Antenna to another area of the
Roof Space, then Landlord may give notice thereof to Tenant (which notice shall
have annexed thereto a plan on which such other area of the Roof Space (the
"Substitute Space") shall be substantially identified by hatching or otherwise).
The Substitute Space with respect to the Antenna shall not be located in an area
of the Roof in which the Antenna's reception would differ in a materially
adverse way from the Antenna's reception in the initial Roof Space. Within 30
days of receipt of Landlord's notice (or, if a governmental permit is required
to be obtained for installation of the Antenna on the Substitute Space, then,
within 30 days of the obtaining of such permit (which Tenant shall make prompt
application for, with Landlord's reasonable cooperation), Landlord, at its sole
cost (but subject to recoupment pursuant to Article 8 above) shall move the
Antenna to the Substitute Space which shall then become the Roof Space hereunder
and the original Roof Space shall be deleted from the coverage of this Lease.
(b) Tenant's operation or use of the Antenna shall not unreasonably
prevent or unreasonably interfere with the operation or use of any equipment of
(i) any present or future tenant or occupant of the Building or Building Two, or
(ii) Landlord. If, at any time during the Term hereof, Landlord shall reasonably
determine that the Antenna causes such interference with equipment of any such
present or future tenant or occupant or of Landlord, then Landlord may so notify
Tenant, and Landlord may require Tenant to replace the Antenna with another
antenna which would not cause such interference (the "Replacement"). Tenant,
within 30 days of receipt of such notice or, if a government permit is required
to install the Replacement, then within 30 days of the obtaining of such permit
(which Tenant shall make prompt application for, with Landlord's cooperation but
at no cost to Landlord), shall replace the Antenna with the new non-interfering
Replacement which shall then be deemed to be the Antenna hereunder. Section
30.10 Tenant agrees that Landlord has made no warranties or representations as
to the condition or suitability of the Roof Space or the Building (or the
electricity available to the Roof Space) for the installation, use, maintenance
or operation of the Antenna, and Tenant agrees to accept same in its "as is"
condition and without any work or alterations to be made by Landlord.
ARTICLE 31
[Intentionally Deleted]
ARTICLE 32
SIGNAGE
Section 32.1 Eyebrow Sign. Subject to the provisions of this Article 31,
including, without limitation, the receipt of all approvals therefor from
Governmental Authorities, Tenant shall have the right, during the Term, to
install one sign (on the western elevation of the Building facing Great America
Parkway and Highway 101) (the "Eyebrow Sign"), in which case Tenant shall bear
all costs and expenses relating to the design, construction, permitting,
maintenance and repair of such Eyebrow Sign. The Eyebrow Sign shall be located
on the exterior wall of the Building at the top of the Building and a location
reasonably acceptable to the parties. Landlord agrees to exercise commercially
reasonable efforts in support of Tenant's efforts to obtain required approvals
from Governmental Authorities for such Eyebrow Sign, so long as such Landlord
efforts result in no cost or expense to Landlord. Tenant hereby acknowledges
that neither Landlord nor any agent of Landlord has made any representation or
warranty concerning the obtaining of approvals from Governmental Authorities
concerning any such Eyebrow Sign. The size and quantity of the Eyebrow Sign
shall be consistent with the tenant identity signage programs of first class
office buildings in Santa Clara, California comparable to the Building, shall be
in keeping with the overall character of the Building's architecture and
construction materials, and shall be otherwise subject to Landlord's prior
review and approval. Tenant shall be solely responsible for all costs and
expenses relating to the design, permitting (including receipt of all necessary
electrical, building and other permits and/or approvals), fabrication,
installation, operation, removal and all on-going maintenance and repair of any
and all signage installed by Tenant in accordance with the terms and provisions
of this Article 32, together with all electrical equipment related thereto. The
rights afforded by this Article 32 are personal to PMC - Sierra, Inc. and shall,
at Landlord's election, terminate at such time as PMC - Sierra, Inc. does not
physically occupy at least 75% of the rentable square footage of the Premises.
Section 32.2 Premises Identity. Landlord shall provide, at its cost, Building
standard Premises signage and lobby directory identification.
IN WITNESS WHEREOF, Landlord and Tenant have executed this
Lease as of the day and year first above written.
LANDLORD: TENANT:
WHTS FREEDOM CIRCLE PARTNERS II, L.L.C., PMC - SIERRA, INC.,
a Delaware limited liability company a Delaware corporation
By: Tishman Speyer/Travelers Real Estate Venture, L.P.,
a Delaware limited partnership By:___________________
By: Tishman Speyer/Travelers Associates, Its:__________________
a Delaware limited partnership
Its general partner By: __________________
By: TSCE Venture Corp., a Delaware corporation
Its general partner Its:__________________
By: ___________________________
Its:________________________
and
By: Whitehall Street Real Estate Limited Partnership IX, a
Delaware limited partnership, its managing member
By: Whitehall Advisors, L.L.C. IX, Inc., a Delaware
limited liability company, its general partner
By: Whitehall IX/X, Inc., a Delaware corporation,
its managing member
By: ___________________________
Its:___________________________
EXHIBIT A-1
Floor Plan of the First Floor
The floor plan which follows is intended solely to identify the general location
of the Premises, and should not be used for any other purpose. All areas,
dimensions and locations are approximate, and any physical conditions indicated
may not exist as shown.
EXHIBIT A-2
Floor Plan of the Second Floor
The floor plan which follows is intended solely to identify the general location
of the Premises, and should not be used for any other purpose. All areas,
dimensions and locations are approximate, and any physical conditions indicated
may not exist as shown.
EXHIBIT A-3
Floor Plan of the Third Floor
The floor plan which follows is intended solely to identify the general location
of the Premises, and should not be used for any other purpose. All areas,
dimensions and locations are approximate, and any physical conditions indicated
may not exist as shown.
EXHIBIT A-4
Floor Plan of the Fourth Floor
The floor plan which follows is intended solely to identify the general location
of the Premises, and should not be used for any other purpose. All areas,
dimensions and locations are approximate, and any physical conditions indicated
may not exist as shown.
EXHIBIT A-5
Floor Plan of the Fifth Floor
The floor plan which follows is intended solely to identify the general location
of the Premises, and should not be used for any other purpose. All areas,
dimensions and locations are approximate, and any physical conditions indicated
may not exist as shown.
EXHIBIT A-6
Floor Plan of the Sixth Floor
The floor plan which follows is intended solely to identify the general location
of the Premises, and should not be used for any other purpose. All areas,
dimensions and locations are approximate, and any physical conditions indicated
may not exist as shown.
EXHIBIT B
Definitions
Base Rate: The annual rate of interest publicly announced from
time to time by Citibank, N.A., or its successor, in New York, New York as its
"base rate" (or such other term as may be used by Citibank, N.A., from time to
time, for the rate presently referred to as its "base rate").
Building Systems: The mechanical, electrical, plumbing,
sanitary, sprinkler, heating, ventilation and air conditioning, security,
life-safety, elevator and other service systems or facilities of the Building
which is installed by Landlord as part of the Base Building Work.
Business Days: All days, excluding Saturdays, Sundays and all
days observed by either the State in which the Building is located, the Federal
Government or the labor unions servicing the Building as legal holidays.
Code: The Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder, as amended.
Common Areas: The lobby, plaza and sidewalk areas and other
similar areas of general access and the areas on individual multi-tenant floors
in the Building devoted to corridors, elevator lobbies, restrooms, and other
similar facilities serving the Premises.
Comparable Buildings: First-class office buildings of
comparable age and quality in Santa Clara, California.
CC&R's: That certain Agreement Containing Covenants Running
with the Land, dated January 7, 1997, by and between Richard T. Peery, Trustee,
or his successor trustee, under Trust Agreement, dated July 20, 1997 (Richard T.
Peery Separate Property Trust), as amended, and John Arrillaga, Trustee, or his
successor trustee, under Trust Agreement, dated July 20, 1997 (the Arrillaga
Family Trust), as amended, and BNP Leasing Corporation, recorded on January 7,
1997, as Document Number 13571632 in the Official Records of Santa Clara County,
California.
Excluded Expenses: (a) Taxes; (b) franchise or income taxes
imposed upon Landlord; (c) mortgage amortization and interest; (d) leasing
commissions; (e) the cost of tenant installations and decorations incurred in
connection with preparing space for any Building tenant, including workletters
and concessions; (f) rent under Superior Leases, if any; (g) management fees
exceeding the greater of (A) 3% of the gross rentals and other revenues
collected for the Real Property, and (B) fees charged by Landlord or related
entities for the management by any of them of other first class properties in
the area of the Building; (h) wages, salaries and benefits paid to any persons
above the grade of Building Manager and their immediate supervisor; (i) legal
and accounting fees relating to (A) disputes with tenants, prospective tenants
or other occupants of the Building, (B) disputes with purchasers, prospective
purchasers, mortgagees or prospective mortgagees of the Building or the Real
Property or any part of either, or (C) negotiations of leases, contracts of sale
or mortgages; (j) costs of services provided to other tenants of the Building on
a "rent-inclusion" basis which are not provided to Tenant on such basis; (k)
costs that are reimbursed out of insurance, warranty or condemnation proceeds,
or which are reimbursable by Tenant or other tenants other than pursuant to an
expense escalation clause; (l) costs in the nature of penalties or fines; (m)
costs for services, supplies or repairs paid to any related entity in excess of
costs that would be payable in an "arm's length" or unrelated situation for
comparable services, supplies or repairs; (n) allowances, concessions or other
costs and expenses of improving or decorating any demised or demisable space in
the Building; (o) appraisal, advertising and promotional expenses in connection
with leasing of the Building; (p) the costs of installing, operating and
maintaining a specialty improvement, including a cafeteria, lodging or private
dining facility, or an athletic, luncheon or recreational club unless Tenant is
permitted to make use of such facility without additional cost or on a
subsidized basis consistent with other users; (q) any costs or expenses
(including fines, interest, penalties and legal fees) arising out of Landlord's
failure to timely pay Operating Expenses or Taxes; (r) costs incurred in
connection with the removal, encapsulation or other treatment of asbestos or any
other Hazardous Materials; (s) the cost of capital improvements other than those
expressly included in Operating Expenses pursuant to Section 7.1; (t) costs
occasioned by the grossly negligent act or omission or violation of Requirements
by Landlord, any other occupant of the Building, or their respective agents,
employees or contractors; (u) costs of correcting defects in, or significant
design error relating to, the initial design or condition of the Building; (v)
costs incurred to comply with any Requirements applicable to the Premises, the
Building or the Project on the Commencement Date; (w) costs (i) arising from the
disproportionate use of any utility or service supplied by Landlord to any other
occupant of the Project or (ii) associated with utilities or services of a type
not provided to Tenant; (x) except for any amortization or depreciation charges
expressly provided for in this Lease as includable in Operating Expenses,
depreciation charges or contributions to capital replacement reserves; (y)
except for costs and expenses incurred for insuring, securing and maintenance
and repair of objects of art on or about the Real Property for which Landlord is
responsible, costs for the acquisition of objects of art; (z) costs specifically
allocated to Mission Towers II; (aa) insurance costs for coverage not
customarily carried by owners of Comparable Buildings (provided that in all
events Operating Expenses shall include the premium for earthquake insurance and
such other insurance which any Mortgagee requires to be carried); (ab) increases
in insurance costs caused by the activities of another occupant of the Project;
(ac) the amount of any deductible carried by Landlord's insurance policies
respecting the Building which exceed $150,000, or with respect to earthquake
insurance, 5% of the replacement value of the Building; and (ad) capital costs
for repair, maintenance and replacement of structural portions of the Building.
Governmental Authority: The United States of America, the City
of Santa Clara, County of Santa Clara, or State of California, or any political
subdivision, agency, department, commission, board, bureau or instrumentality of
any of the foregoing, now existing or hereafter created, having jurisdiction
over the Real Property.
Hazardous Materials: Any substances, materials or wastes
currently or in the future deemed or defined in any Requirement as "hazardous
substances," "toxic substances," "contaminants," "pollutants" or words of
similar import.
HVAC Systems: The Building System designed to provide heating,
ventilation and air conditioning.
Indemnitees: Landlord, Landlord's Agent, each Mortgagee and
Lessor, and each of their respective direct and indirect partners, officers,
shareholders, directors, members, managers, trustees, beneficiaries, employees,
principals, contractors, servants, agents, and representatives.
Lessor: A lessor under a Superior Lease.
Losses: Any and all losses, liabilities, damages, claims,
judgments, fines, suits, demands, costs, interest and expenses of any kind or
nature (including reasonable attorneys' fees and disbursements) incurred in
connection with any claim, proceeding or judgment and the defense thereof, and
including all costs of repairing any damage to the Premises, the Building or the
Garage or the appurtenances of any of the foregoing to which a particular
indemnity and hold harmless agreement applies.
Mortgage(s): Any mortgage, trust indenture or other financing
document which may now or hereafter affect the Premises, the Real Property, the
Building or any Superior Lease and the leasehold interest created thereby, and
all renewals, extensions, supplements, amendments, modifications, consolidations
and replacements thereof or thereto, substitutions therefor, and advances made
thereunder.
Mortgagee(s): Any mortgagee, trustee or other holder of a
Mortgage.
Ordinary Business Hours: 6:00 a.m. to 6:00 p.m. on Business
Days and from 9:00 a.m. to 12:00 p.m. on Saturdays which are not observed as
legal holidays by the Federal Government or the labor unions servicing the
Building.
Prohibited Use: Any use or occupancy of the Premises that in
Landlord's reasonable judgment would: (a) cause damage to the Building or any
equipment, facilities or other systems therein; (b) impair the appearance of the
Building; (c) interfere with the efficient and economical maintenance, operation
and repair of the Premises or the Building or the equipment, facilities or
systems thereof; (d) adversely affect any service provided to, and/or the use
and occupancy by, any Building tenant or occupants; (e) violate the certificate
of occupancy issued for the Premises or the Building; (f) materially and
adversely affect the first-class image of the Building or (g) result in protests
or civil disorder or commotions at, or other disruptions of the normal business
activities in, the Building. Prohibited Use also includes the use of any part of
the Premises for: (i) a restaurant or bar; (ii) the preparation, consumption,
storage, manufacture or sale of food or beverages (except in connection with
vending machines (provided that each machine, where necessary, shall have a
waterproof pan thereunder and be connected to a drain) and/or warming kitchens
installed for the use of Tenant's employees only), liquor, tobacco or drugs;
(iii) the business of photocopying, multilith or offset printing (except
photocopying in connection with Tenant's own business); (iv) a school or
classroom; (v) lodging or sleeping; (vi) the operation of retail facilities
(meaning a business whose primary patronage arises from the generalized
solicitation of the general public to visit Tenant's offices in person without a
prior appointment) of a savings and loan association or retail facilities of any
financial, lending, securities brokerage or investment activity; (vii) a payroll
office; (viii) a barber, beauty or manicure shop; (ix) an employment agency or
similar enterprise; (x) offices of any Governmental Authority, any foreign
government, the United Nations, or any agency or department of the foregoing;
(xi) the manufacture, retail sale, storage of merchandise or auction of
merchandise, goods or property of any kind to the general public which could
reasonably be expected to create a volume of pedestrian traffic substantially in
excess of that normally encountered in the Premises; (xii) the rendering of
medical, dental or other therapeutic or diagnostic services; or (xiii) any
illegal purposes or any activity constituting a nuisance. Landlord agrees and
acknowledges that Tenant will have an electronic verification lab within the
Premises and a small shipping and receiving area on the first floor adjacent to
the Building's loading dock, and neither of the same shall constitute a
Prohibited Use.
Requirements: All present and future laws, rules, orders,
ordinances, regulations, statutes, requirements, codes and executive orders,
extraordinary and ordinary of (i) all Governmental Authorities, including the
Americans With Disabilities Act, 42 U.S.C. ss.12,101 (et seq.), and any law of
like import, and all rules, regulations and government orders with respect
thereto, and any of the foregoing relating to Hazardous Materials, environmental
matters, public health and safety matters, (ii) any applicable fire rating
bureau or other body exercising similar functions, affecting the Real Property
or the maintenance, use or occupation thereof, or any street, avenue or sidewalk
comprising a part of or in front thereof or any vault in or under the same,
(iii) all requirements of all insurance bodies affecting the Premises, and (iv)
utility service providers.
Rules and Regulations: The rules and regulations annexed to
and made a part of this Lease as Exhibit F, as they may be modified from time to
time by Landlord.
Specialty Alterations: Alterations which are not standard
office installations such as full-service kitchens, executive bathrooms, raised
computer floors, computer installations, safe deposit boxes, vaults, libraries
or file rooms requiring reinforcement of floors, internal staircases, conveyors,
dumbwaiters, and other Alterations of a similar character (excluding, however,
small kitchens not requiring venting or grease traps and file rooms not
requiring the reinforcement of floors).
Substantial Completion: As to any construction performed by
any party in the Premises, including the Initial Installations, any Alterations,
or Landlord's Work, "Substantial Completion" or "Substantially Completed" means
that such work has been completed, as reasonably determined by Landlord's
architect, in accordance with (a) the provisions of this Lease applicable
thereto, (b) the plans and specifications for such work, and (c) all applicable
Requirements, except for minor details of construction, decoration and
mechanical adjustments, if any, the noncompletion of which does not materially
interfere with Tenant's use of the Premises or which in accordance with good
construction practices should be completed after the completion of other work in
the Premises or Building.
Superior Lease(s): Any ground or underlying lease of the Real
Property or any part thereof heretofore or hereafter made by Landlord and all
renewals, extensions, supplements, amendments, modifications, consolidations,
and replacements thereof.
Tenant Party: Tenant and any subtenants or occupants of the
Premises and their respective agents, contractors, subcontractors, employees,
invitees or licensees.
Tenant's Property: Tenant's movable fixtures and movable
partitions, telephone and other equipment, computer systems, trade fixtures,
furniture, furnishings, and other items of personal property which are removable
without material damage to the Building.
Unavoidable Delays: Landlord's inability to fulfill or delay
in fulfilling any of its obligations under this Lease expressly or impliedly to
be performed by Landlord or Landlord's inability to make or delay in making any
repairs, additions, alterations, improvements or decorations or Landlord's
inability to supply or delay in supplying any equipment or fixtures, if
Landlord's inability or delay is due to or arises by reason of strikes, labor
troubles or by accident, or by any cause whatsoever beyond reasonable Landlord's
control, including governmental preemption in connection with a national
emergency, Requirements or shortages, or unavailability of labor, fuel, steam,
water, electricity or materials, or delays caused by Tenant or other tenants,
mechanical breakdown, acts of God, enemy action, civil commotion, fire or other
casualty.
EXHIBIT C
Work Letter
1. Proposed and Final Plans.
(a) Tenant shall cause to be prepared and delivered to Landlord, for Landlord's
approval, the following proposed drawings ("Proposed Plans") for all
improvements Tenant desires to complete or have completed in the Premises (the
"Initial Installations"):
(i) Architectural drawings (consisting of floor construction plan,
ceiling lighting and layout, power, and telephone plan).
(ii) Mechanical drawings (consisting of HVAC, sprinkler, electrical,
telephone, and plumbing).
(iii) Finish schedule (consisting of wall finishes and floor finishes
and miscellaneous details).
(b) All architectural drawings shall be prepared at Tenant's sole expense by a
licensed architect employed by Tenant and approved by Landlord, which approval
shall not be unreasonably withheld, delayed or conditioned. Tenant shall deliver
two sets of reproducible architectural drawings to Landlord. All mechanical
drawings shall be prepared at Tenant's sole expense by a licensed engineer
designated by Landlord, whom Tenant shall employ. Tenant shall reimburse
Landlord for all reasonable out-of-pocket costs incurred by Landlord in
reviewing the Proposed Plans except for drawings prepared by Landlord's
designated engineers, consultants or Essential Subs (as hereinafter defined).
(c) Within 15 days after Landlord's receipt of the architectural drawings,
Landlord shall approve or disapprove such drawings, and if disapproved, Landlord
shall advise Tenant of any changes or additional information required to obtain
Landlord's approval.
(d) Within 15 days after receipt of mechanical drawings, Landlord shall approve
or disapprove such drawings, and if disapproved, Landlord shall advise Tenant of
any changes required to obtain Landlord's approval.
(e) If Landlord disapproves of, or requests additional information regarding the
Proposed Plans, Tenant shall, within 10 days thereafter, revise the Proposed
Plans disapproved by Landlord and resubmit such plans to Landlord or otherwise
provide such additional information to Landlord. Landlord shall, within 15 days
after receipt of Tenant's revised plans, approve or disapprove such drawings,
and if disapproved, Landlord shall advise Tenant of any additional changes which
may be required to obtain Landlord's approval. If Landlord disapproves the
revised plans specifying the reason therefor, or requests further additional
information, Tenant shall, within 10 days of receipt of Landlord's required
changes, revise such plans and resubmit them to Landlord or deliver to Landlord
such further information as Landlord has requested. Landlord shall, again within
15 days after receipt of Tenant's revised plans, approve or disapprove such
drawings, and if disapproved, Landlord shall advise Tenant of further changes,
if any, required for Landlord's approval. This process shall continue until
Landlord has approved Tenant's revised Proposed Plans. "Final Plans" shall mean
the Proposed Plans, as revised, which have been approved by Landlord and Tenant
in writing. In connection with the exercise of its approval rights pursuant to
Section 1 hereof, Landlord agrees not to withhold its approval unreasonably
withheld or delayed so long as such Initial Installations (i) are non-structural
and do not affect any Building Systems, (ii) affect only the Premises and are
not visible from outside of the Premises, (iii) do not affect the certificate of
occupancy issued for the Building or the Premises, and (iv) do not violate any
Requirement. If Landlord's approval to any of the Proposed Plans or the Final
Plans is not approved or disapproved within 15 days following Tenant's request
for consent, and Landlord fails to so advise Tenant within 5 days following
receipt of a second notice labeled in bold letters "URGENT -- DELAY NOTICE",
Landlord's consent shall be deemed granted. In addition, so long as the Initial
Installations as proposed by Tenant are in reasonable conformance with customary
office space in Comparable Buildings, Landlord shall not withhold its consent on
aesthetic grounds.
(f) All Proposed Plans and Final Plans shall comply with all applicable
Requirements. Neither review nor approval by Landlord of the Proposed Plans and
resulting Final Plans shall constitute a representation or warranty by Landlord
that such plans either (i) are complete or suitable for their intended purpose,
or (ii) comply with applicable Requirements, it being expressly agreed by Tenant
that Landlord assumes no responsibility or liability whatsoever to Tenant or to
any other person or entity for such completeness, suitability or compliance.
Tenant shall not make any changes in the Final Plans without Landlord's prior
approval, which shall not be unreasonably withheld or delayed; provided that
Landlord may, in the exercise of its sole and absolute discretion, disapprove
any proposed changes adversely affecting the Building's structure, systems,
equipment or the appearance or value of the Building. Landlord and Tenant shall
confer and negotiate in good faith to reach agreement on modifications to the
Final Plans.
(g) Tenant acknowledges that certain portions of the Base Building Work may not
be Substantially Complete at the time Landlord tenders possession of the
Premises to Tenant. For purposes of completing the Initial Installations,
Landlord shall use its commercially reasonable efforts to cause the completion
of the Base Building Work in a manner which does not unreasonably interfere with
Tenant's performance of its Initial Installations. Landlord agrees to use
reasonable efforts to complete all such Base Building Work in the Premises on or
before the Commencement Date, subject to Unavoidable Delay. At the time of
Landlord's tender of possession of the Premises to Tenant those portions of the
Base Building Work which are necessary to be completed for the orderly and
efficient progress of the Initial Installation shall be Substantially Completed.
2. Performance of the Initial Installations.
(a) Filing of Final Plans, Permits. Tenant, at its sole cost and expense, shall
file the Final Plans with the Governmental Authorities having jurisdiction over
the Initial Installations. Tenant shall furnish Landlord with copies of all
documents submitted to all such Governmental Authorities and with the
authorizations to commence work and the permits for the Initial Installations
issued by such Governmental Authorities. Tenant shall not commence the Initial
Installations until the required governmental authorizations for such work are
obtained and delivered to Landlord.
(b) Landlord Approval of Contractors. Tenant shall enter into a contract for
construction of the Initial Installations with a general contractor reasonably
acceptable to Landlord (the "General Contractor"). Tenant's construction
contract with the General Contractor shall be subject to Landlord's prior
approval, which approval shall not be unreasonably withheld. The General
Contractor shall be responsible for all required construction, management and
supervision. In addition, Tenant shall only utilize for purposes of mechanical,
electrical, structural, sprinkler, fire and life safety and those contractors as
specifically designated by Landlord (collectively, the "Essential Subs"), which
list of Essential Subs shall include 3 names each for those Essential Subs
engaged in mechanical, electrical or structural contracting and 1 Essential Sub
for fire alarm and life safety. Tenant shall submit to Landlord not less than 10
days prior to commencement of construction the following information and items:
(i) The names and addresses of the other subcontractors, and
subsubcontractors (collectively, together with the General Contractor and
Essential Subs, the "Tenant's Contractors") Tenant intends to employ in the
construction of the Initial Installations. Landlord shall have the right to
approve or disapprove Tenant's Contractors, and Tenant shall employ, as Tenant's
Contractors, only those persons or entities approved by Landlord. Landlord shall
not unreasonably withhold its approval to any of Tenant's Contractors. All
contractors and subcontractors engaged by or on behalf of Tenant for the
Premises shall be licensed contractors, possessing good labor relations, capable
of performing quality workmanship and working in harmony with Landlord's
contractors and subcontractors and with other contractors and subcontractors on
the job site. All work shall be coordinated with any general construction work
in the Building.
(ii) The scheduled commencement date of construction, the estimated
date of completion of construction work, fixturing work, and date of occupancy
of the Premises by Tenant.
(iii) Itemized statement of estimated construction cost, including
permits and fees, architectural, engineering, and contracting fees.
(iv) Certified copies of insurance policies or certificates of
insurance as hereinafter described. Tenant shall not permit Tenant's Contractors
to commence work until the required insurance has been obtained and certified
copies of policies or certificates have been delivered to Landlord.
(c) Access to Premises. Tenant, its employees, designers, contractors and
workmen shall have access to the Premises prior to the Commencement Date to
construct the Initial Installations, provided that Tenant and its employees,
agents, contractors, and suppliers only access the Premises via the Building
freight elevator, work in reasonable harmony and do not unreasonably interfere
with the performance of other work in the Building by Landlord, Landlord's
contractors, other tenants or occupants of the Building (whether or not the
terms of their respective leases have commenced) or their contractors. If at any
time such entry shall cause, or in Landlord's reasonable judgment threaten to
cause, such disharmony or interference, Landlord may terminate such permission
upon 24 hours' notice to Tenant, and thereupon, Tenant or its employees, agents,
contractors, and suppliers causing such disharmony or interference shall
immediately withdraw from the Premises and the Building until Landlord
determines such disturbance no longer exists.
(d) Landlord's Right to Perform. Landlord shall have the right, but not the
obligation, to perform, on behalf of and for the account of Tenant, subject to
reimbursement by Tenant, any of the Initial Installations which (i) Landlord
reasonably deems necessary to be done on an emergency basis, (ii) pertains to
structural components or the general Building systems, or (iii) pertains to the
erection of temporary safety barricades or signs during construction. Except in
case of emergency, Landlord shall give prior reasonable written notice to Tenant
of its intention to perform such work.
(e) Warranties. On completion of the Initial Installations, Tenant shall provide
Landlord with copies of all warranties of at least one year duration on all the
Initial Installations. At Landlord's request, Tenant shall enforce, at Tenant's
expense, all guarantees and warranties made and/or furnished to Tenant with
respect to the Initial Installations.
(f) Protection of Building. All work performed by Tenant shall be performed with
a minimum of interference with other tenants and occupants of the Building and
shall conform to the Rules and Regulations and those rules and regulations
governing construction in the Building as Landlord or Landlord's Agent may
impose. Tenant will take all reasonable and customary precautionary steps to
protect its facilities and the facilities of others affected by the Initial
Installations and to properly police same and Landlord shall have no
responsibility for any loss by theft or otherwise. Construction equipment and
materials are to be located in confined areas and delivery and loading of
equipment and materials shall be done at such reasonable locations and at such
time as Landlord shall direct so as not to burden the operation of the Building.
Landlord shall advise Tenant in advance of any special delivery and loading dock
requirements. Tenant shall at all times keep the Premises and adjacent areas
free from accumulations of waste materials or rubbish caused by its suppliers,
contractors or workmen. Landlord may require daily clean-up if required for fire
prevention and life safety reasons or applicable laws and reserves the right to
do clean-up at the expense of Tenant if Tenant fails to comply with Landlord's
cleanup requirements. At the completion of the Initial Installations, Tenant's
Contractors shall forthwith remove all rubbish and all tools, equipment and
surplus materials from and about the Premises and Building. Any damage caused by
Tenant's Contractors to any portion of the Building or to any property of
Landlord or other tenants shall be repaired forthwith after written notice from
Landlord to its condition prior to such damage by Tenant at Tenant's expense.
(g) Compliance by all Tenant Contractors. Tenant shall impose and enforce all
terms hereof on Tenant's Contractors and its designers, architects and
engineers. Landlord shall have the right to order Tenant or any of Tenant's
Contractors, designers, architects or engineers who willfully violate the
provisions of this Workletter to cease work and remove himself or itself and his
or its equipment and employees from the Building.
(h) Accidents, Notice to Landlord. Tenant's Contractors shall assume
responsibility for the prevention of accidents to its agents and employees and
shall take all reasonable safety precautions with respect to the work to be
performed and shall comply with all reasonable safety measures initiated by the
Landlord and with all applicable Requirements for the safety of persons or
property. Tenant shall advise the Tenant's Contractors to report to Landlord any
injury to any of its agents or employees and shall furnish Landlord a copy of
the accident report filed with its insurance carrier within 3 days of its
occurrence.
(i) Required Insurance. Tenant shall cause Tenant's Contractors to secure, pay
for, and maintain during the performance of the construction of the Initial
Installations, insurance in the following minimum coverages and limits of
liability:
(i) Workmen's Compensation and Employer's Liability Insurance as
required by Requirements.
(ii) Commercial General Liability Insurance (including Owner's and
Contractors' Protective Liability) in an amount not less than $2,000,000 per
occurrence, whether involving bodily injury liability (or death resulting
therefrom) or property damage liability or a combination thereof with a minimum
aggregate limit of $2,000,000, and with umbrella coverage with limits not less
than $10,000,000. Such insurance shall provide for explosion and collapse,
completed operations coverage with a two-year extension after completion of the
work, and broad form blanket contractual liability coverage and shall insure
Tenant's Contractors against any and all claims for bodily injury, including
death resulting therefrom and damage to the property of others and arising from
its operations under the contracts whether such operations are performed by
Tenant's Contractors, or by anyone directly or indirectly employed by any of
them.
(iii) Business Automobile Liability Insurance, including the
ownership, maintenance, and operation of any automotive equipment, owned, hired,
or non-owned in an amount not less than $500,000 for each person in one
accident, and $1,000,000 for injuries sustained by two or more persons in any
one accident and property damage liability in an amount not less than $1,000,000
for each accident. Such insurance shall insure Tenant's Contractors against any
and all claims for bodily injury, including death resulting therefrom, and
damage to the property of others arising from its operations under the
contracts, whether such operations are performed by Tenant's Contractors, or by
anyone directly or indirectly employed by any of them.
(iv) "All-risk" builder's risk insurance upon the entire Initial
Installations to the full insurance value thereof. Such insurance shall include
the interest of Landlord and Tenant (and their respective contractors and
subcontractors of any tier to the extent of any insurable interest therein) in
the Initial Installations and shall insure against the perils of fire and
extended coverage and shall include "all-risk" builder's risk insurance for
physical loss or damage including, without duplication of coverage, theft,
vandalism, and malicious mischief. If portions of the Initial Installations are
stored off the site of the Building or in transit to such site are not covered
under such "all-risk" builder's risk insurance, then Tenant shall effect and
maintain similar property insurance on such portions of the Initial
Installations. Any loss insured under such "all-risk" builder's risk insurance
is to be adjusted with Landlord and Tenant and made payable to Landlord as
trustee for the insureds, as their interest may appear, subject to the agreement
reached by such parties in interest, or in the absence of any such agreement,
then in accordance with a final, nonappealable order of a court of competent
jurisdiction. If after such loss no other special agreement is made, the
decision to replace or not replace any such damaged the Initial Installations
shall be made in accordance with the terms and provisions of the Lease
including, this Workletter. The waiver of subrogation provisions contained in
the Lease shall apply to the "all-risk" builder's risk insurance policy to be
obtained by Tenant pursuant to this paragraph (iv).
All policies (except the Workmen's Compensation policy) shall
be endorsed to include as additional named insureds Landlord and its officers,
employees, and agents, Landlord's contractors, Landlord's architect, Tishman
Speyer Properties, L.P., any Mortgages and Superior Lessors and such additional
persons as Landlord may designate. Such endorsements shall also provide that all
additional insured parties shall be given 30 days' prior written notice of any
reduction, cancellation, or nonrenewal of coverage by certified mail, return
receipt requested (except that 10 days' notice shall be sufficient in the case
of cancellation for nonpayment of premium) and shall provide that the insurance
coverage afforded to the additional insured parties thereunder shall be primary
to any insurance carried independently by such additional insured parties. At
Tenant's request, Landlord shall furnish a list of names and addresses of
parties to be named as additional insureds. The insurance policies required
hereunder shall be considered as the primary insurance and shall not call into
contribution any insurance then maintained by Landlord. Additionally, where
applicable, such policy shall contain a cross liability and severability of
interest clause.
To the fullest extent permitted by law, except to the extent
of the gross negligence or willful misconduct of Landlord or its employees,
agents or contractors, Tenant (and Tenant's Contractors) shall indemnify and
hold harmless the Indemnitees from and against all Losses necessitated by
activities of the indemnifying party's contractors, bodily injury to persons or
damage to property of the Indemnitees arising out of or resulting from the
performance of work by the indemnifying party or its contractors. The foregoing
indemnity shall be in addition to the insurance requirements set forth above and
shall not be in discharge or substitution of the same, and shall not be limited
in any way by any limitations on the amount or type of damages, compensation or
benefits payable by or for Tenant's Contractors under Workers' or Workmen's
Compensation Acts, Disability Benefit Acts or other Employee Benefit Acts.
(j) Quality of Work. The Initial Installations shall be constructed in
a first-class workmanlike manner using only good grades of material and in
compliance with the Final Plans, all insurance requirements, applicable laws and
ordinances and rules and regulations of governmental departments or agencies and
the rules and regulations adopted by Landlord for the Building.
(k) "As-Built" Plans. Upon completion of the Initial Installations,
Tenant shall furnish Landlord with "as built" plans for the Premises, final
waivers of lien for the Initial Installations, a detailed breakdown of the costs
of the Initial Installations (which may be in the form of an owner's affidavit)
and evidence of payment reasonably satisfactory to Landlord, and an occupancy
permit for the Premises. The "as-built" plans shall be prepared on an AutoCAD
Computer Assisted Drafting and Design System (or such other system or medium as
Landlord may accept), using naming conventions issued by the American Institute
of Architects in June, 1990 (or such other naming conventions as Landlord may
accept) and magnetic computer media of such record drawings and specifications
translated in DFX format or another format acceptable to Landlord.
(l) Mechanics' Liens. Tenant shall not permit any of the Tenant's
Contractors to place any lien upon the Building, and if any such lien is placed
upon the Building, Tenant shall within 10 days of notice thereof, cause such
lien to be discharged of record, by bonding or otherwise. If Tenant shall fail
to cause any such lien to be discharged, Landlord shall have the right to have
such lien discharged and Landlord's expense in so doing, including bond
premiums, reasonable legal fees and filing fees, shall be immediately due and
payable by Tenant.
3. Payment of Costs of the Initial Installations.
(a) Subject to Landlord's Contribution as provided in Paragraph 3(b)
below, the Initial Installations shall be installed by Tenant at Tenant's sole
cost and expense. The cost of the Initial Installations shall include, and
Tenant agrees to pay Landlord for, the following costs ("Landlord's Costs"): (i)
the cost of all work performed by Landlord on behalf of Tenant and for all
materials and labor furnished on Tenant's behalf, (ii) the cost of any services
provided to Tenant or Tenant's Contractors including but not limited to the cost
for rubbish removal, hoisting, and utilities to the extent not included in
general conditions charges by the general contractor, and (iii) a supervision
fee equal to 3% of Landlord's Contribution. Landlord may render bills to Tenant
monthly for Landlord's Costs (provided that the supervision fee shall be billed
based on the cost of the Initial Installations performed during the period in
question). All bills shall be due and payable no later than the 30th day after
delivery of such bills to Tenant. Landlord shall be responsible for, Tenant
shall have no responsibility for, and Landlord's Contribution shall not be used
for (a) costs incurred to remove Hazardous Materials from the Premises present
within the Premises at the time possession thereof is tendered to Tenant, and
(b) costs to bring the Base Building Work into compliance with applicable
Requirements applicable to the Base Building Work as of the Effective Date.
(b) Landlord shall pay to Tenant an amount not to exceed Landlord's
Contribution toward the cost of the Initial Installations, provided as of the
date on which Landlord is required to make payment thereof, (i) the Lease is in
full force and effect, and (ii) no Event of Default then exists. Tenant shall
pay all costs of the Initial Installations in excess of Landlord's Contribution.
Landlord's Contribution shall be payable solely on account of labor directly
related to the Initial Installations and materials delivered to the Premises in
connection with the Initial Installations, except that Tenant may apply up to
10% of Landlord's Contribution to pay "soft costs", consisting of architectural,
consulting, engineering and legal fees, and furniture and equipment (exclusive
of computer equipment) acquired for use in the Premises, incurred in connection
with the Initial Installations. Tenant shall not be entitled to receive any
portion of Landlord's Contribution not actually expended by Tenant in the
performance of the Initial Installations in accordance with this Workletter, nor
shall Tenant have any right to apply any unexpended portion of Landlord's
Contribution as a credit against Rent or any other obligation of Tenant under
the Lease. Upon the completion of the Initial Installations and satisfaction of
the conditions set forth below, or upon the occurrence of the date which is
twelve months after the Commencement Date (which date shall be extended by
reason of strikes, labor trouble or any other similar cause beyond Tenant's
control in performing the Initial Installations), whichever first occurs, any
amount of Landlord's Contribution which has not been previously disbursed shall
be retained by Landlord; provided, however, that notwithstanding anything
contained herein to the contrary, such retained amounts shall continue to be
held for the benefit of Tenant by Landlord if Tenant delivers a notice to
Landlord prior to satisfaction of the conditions set forth below that it is in
dispute with any contractors, subcontractors, vendors or other providers of
service and refuses to make payments at such time or if any contracts provide
for retainage which has not then been finally paid.
(c) Landlord shall make progress payments to Tenant on a monthly
basis, for the work performed during the previous month, less a retainage of 10%
of each progress payment ("Retainage"). Each of Landlord's progress payments
shall be limited to an amount equal to the aggregate amounts (reduced by the
Retainage) theretofore paid by Tenant (as certified by an officer of Tenant and
by Tenant's independent architect) to Tenant's contractors, subcontractors and
material suppliers which have not been subject to previous disbursements from
Landlord's Contribution that fraction of the total amount of such payment, the
numerator of which is the amount of Landlord's Contribution, and the denominator
of which is the total contract price (or, if there is no specified or fixed
contract price for the Initial Installations, then Landlord's reasonable
estimate thereof) for the performance of all of the Initial Installations shown
on all plans and specifications approved by Landlord. Provided that Tenant
delivers requisitions to Landlord on or prior to the 10th day of any month, such
progress payments shall be made within 30 days next following the delivery to
Landlord of requisitions therefor, signed by the chief financial officer of
Tenant, which requisitions shall set forth the names of each contractor and
subcontractor to whom payment is due, and the amount thereof, and shall be
accompanied by (i) with the exception of the first requisition, copies of
conditional waivers and releases of lien upon progress payment in the form
prescribed in the Requirements from all contractors, subcontractors, and
material suppliers covering all work and materials which were the subject of
previous progress payments by Landlord and Tenant, (ii) a written certification
from Tenant's architect that the work for which the requisition is being made
has been completed substantially in accordance with the Final Plans and (iii)
such other documents and information as Landlord may reasonably request,
including in connection with title drawdowns and endorsements. Any requisition
made following the 10th day of any month shall be paid no later than the last
day of the month following the month in which such requisitions are made.
Landlord shall disburse the Retainage (and any portion of the Landlord
Contribution expended by Tenant but unpaid by Landlord) upon submission by
Tenant to Landlord of Tenant's requisition therefor accompanied by all
documentation required under this Section 3(c), together with (A) proof of the
satisfactory completion of all required inspections and issuance of any required
approvals, permits and sign-offs for the Initial Installation by Governmental
Authorities having jurisdiction thereover, (B) final "as-built" plans and
specifications for the Initial Installations as required pursuant to Section
2(k) and (C) issuance of final, unconditional lien waivers and releases in the
form prescribed by the Requirements by all contractors, subcontractors and
material suppliers covering all of the Initial Installations. Notwithstanding
anything to the contrary set forth in this Section 3(c), if Tenant does not
timely (or otherwise bond-over any such lien in accordance with Section 2(l)
above) pay any contractor or supplier as required by this provision, then if
necessary to prevent the imposition of any mechanics lien Landlord shall have
the right, but not the obligation, to pay, following 5 Business Days notice to
Tenant, to such contractor or supplier all sums so due from Tenant, and Tenant
agrees the same shall be deemed Additional Rent and shall be paid by Tenant
within 10 days after Landlord delivers to Tenant an invoice therefor.
4. Miscellaneous.
(a) All defined terms as used herein shall have the meanings ascribed
to them in the Lease.
(b) Tenant agrees that, in connection with the Initial Installations
and its use of the Premises prior to the commencement of the Term of the Lease,
Tenant shall have those duties and obligations with respect thereto that it has
pursuant to the Lease during the Term, except the obligation for payment of
rent, and further agrees that Landlord shall not be liable in any way for
injury, loss, or damage which may occur to any of the Initial Installations or
installations made in the Premises, or to any personal property placed therein,
the same being at Tenant's sole risk.
(c) Except as expressly set forth herein or in the Lease, Landlord has
no other agreement with Tenant and Landlord has no other obligation to do any
other work or pay any amounts with respect to the Premises. Any other work in
the Premises which may be permitted by Landlord pursuant to the terms and
conditions of the Lease shall be done at Tenant's sole cost and expense and in
accordance with the terms and conditions of the Lease.
(d) This Workletter shall not be deemed applicable to any additional
space added to the original Premises at any time or from time to time, whether
by any options under the Lease or otherwise, or to any portion of the original
Premises or any additions thereto in the event of a renewal or extension of the
initial term of the Lease, whether by any options under the Lease or otherwise,
unless expressly so provided in the Lease or any amendment or supplement
thereto.
(e) The failure by Tenant to pay any monies due Landlord pursuant to
this Workletter within the time period herein stated shall be deemed a default
under the terms of the Lease for which Landlord shall be entitled to exercise
all remedies available to Landlord for nonpayment of Rent (subject, however, to
applicable notice and cure periods as set forth in the Lease). All late payments
shall bear interest pursuant to Section 15.6 of the Lease.
EXHIBIT D
Design Standards
(a) HVAC. The Building HVAC System serving the Premises shall maintain
average temperatures within the Premises during the hours of 6:00 a.m. to 6:00
p.m. on Business Days of (i) not less than 70(0) F. during the heating season
when the outdoor temperature is 34(0) F. or more and (ii) not more than 75(0) F.
and 50% humidity + 5% during the cooling season, when the outdoor temperatures
are at 86(0) F. dry bulb and 68(0) F. wet bulb, with, in the case of clauses (i)
and (ii), a population load per floor of not more than one person per 150 square
feet of useable area, other than in dining and other special use areas per floor
for all purposes, and shades fully drawn and closed, including lighting and
power, and to provide at least .15 CFM of outside ventilation per square foot of
rentable area. Use of the Premises, or any part thereof, in a manner exceeding
the foregoing design conditions or rearrangement of partitioning after the
initial preparation of the Premises which interferes with normal operation of
the air-conditioning service in the Premises may require changes in the
air-conditioning system serving the Premises at Tenant's expense.
(b) Electrical. The Building Electrical System serving the Premises
shall provide
(i) 1 1/2 watts per usable square foot of high voltage (480/277
volt) connected load/lighting to each floor
(ii) 4 watts per usable square foot of low voltage (120/280
volts) connected load/convenience power to each floor
(iii) 4 1/2 watts per usable square foot connected
load/mechanical to each floor
EXHIBIT E
Cleaning Specifications
GENERAL CLEANING
NIGHTLY
General Offices:
1. All hard surfaced flooring to be swept using approved dustdown preparation.
2. Carpet sweep all carpets, moving only light furniture (desks, file
cabinets, etc. not to be moved).
3. Hand dust and wipe clean all furniture, fixtures and window sills.
4. Empty all waste receptacles and remove wastepaper.
5. Wash clean all Building water fountains and coolers.
6. Sweep all private stairways.
Lavatories:
1. Sweep and wash all floors, using proper disinfectants.
2. Wash and polish all mirrors, shelves, bright work and enameled surfaces.
3. Wash and disinfect all basins, bowls and urinals.
4. Wash all toilet seats.
5. Hand dust and clean all partitions, tile walls, dispensers and receptacles
in lavatories and restrooms.
6. Empty paper receptacles, fill receptacles and remove wastepaper.
7. Fill toilet tissue holders.
8. Empty and clean sanitary disposal receptacles.
WEEKLY
1. Vacuum all carpeting and rugs.
2. Dust all door louvers and other ventilating louvers within a person's
normal reach.
3. Wipe clean all brass and other bright work.
4. Wax all hard surface flooring
QUARTERLY
High dust premises complete including the following:
1. Dust all pictures, frames, charts, graphs and similar wall hangings not
reached in nightly cleaning.
2. Dust all vertical surfaces, such as walls, partitions, doors, door frames
and other surfaces not reached in nightly cleaning.
3. Dust all venetian blinds.
4. Wash all windows.
EXHIBIT F
Rules and Regulations
1. Nothing shall be attached to the outside walls of the Building. No curtains,
blinds, shades, screens or other obstructions shall be attached to or hung in or
used in connection with any exterior window or entry door of the Premises,
without the prior consent of Landlord.
2. No sign, advertisement, notice or other lettering visible from the exterior
of the Premises shall be exhibited, inscribed, painted or affixed to any part of
the Premises without the prior written consent of Landlord. All lettering on
doors shall be inscribed, painted or affixed in a size, color and style
acceptable to Landlord.
3. The grills, louvers, skylights, windows and doors that reflect or admit light
and/or air into the Premises or Common Areas shall not be covered or obstructed
by Tenant, nor shall any articles be placed on the window sills, radiators or
convectors.
4. Landlord shall have the right to prohibit any advertising by any Tenant
which, in Landlord's opinion, tends to impair the reputation of the Building,
and upon written notice from Landlord, Tenant shall refrain from or discontinue
such advertising.
5. The sidewalks, entrances, passages, courts, elevators, vestibules, stairways,
corridors or halls shall not be obstructed or encumbered by any Tenant or used
for any purposes other than ingress of egress to and from the Premises and for
delivery of merchandise and equipment in a prompt and efficient manner, using
elevators and passageways designated for such delivery by Landlord.
6. Except in those areas designated by Tenant as "security areas," all locks or
bolts of any kind shall be operable by the Building's Master Key. No locks shall
be placed upon any of the doors or windows by Tenant, nor shall any changes be
made in locks or the mechanism thereof which shall make such locks inoperable by
the Building's Master Key. Tenant shall, upon the termination of its Lease,
deliver to Landlord all keys of stores, offices and lavatories, either furnished
to or otherwise procured by Tenant and in the event of the loss of any keys
furnished by Landlord, Tenant shall pay to Landlord the cost thereof.
7. Tenant shall keep the entrance door to the Premises closed at all times.
8. All movement in or out of any freight, furniture, boxes, crates or any other
large object or matter of any description must take place during such times and
in such elevators as Landlord may prescribe. Landlord reserves the right to
inspect all articles to be brought into the Building and to exclude from the
Building all articles which violate any of these Rules and Regulations or the
Lease of which these Rules and Regulations are a part. Landlord may require that
any person leaving the public areas of the Building with any article to submit a
pass, signed by an authorized person, listing each article being removed, but
the establishment and enforcement of such requirement shall not impose any
responsibility on Landlord for the protection of any Tenant against the removal
of property from the Premises.
9. All hand trucks shall be equipped with rubber tires, side guards and such
other safeguards as Landlord may require. 10. None of Tenant's employees,
visitors or contractors shall be permitted to have access to the Building's
roof, mechanical, electrical or telephone rooms without permission from
Landlord.
11. Tenant shall not lay floor tile, or other similar floor covering so that the
same shall come in direct contact with the concrete floor of the Premises and,
if such floor covering is desired to be used, an interlining of builder's
deadening felt shall be first affixed to the floor by a paste or other material,
soluble in water; the use of cement or other similar adhesive material being
expressly prohibited.
12. Tenant shall not permit or suffer the Premises to be occupied or used in a
manner offensive or objectionable to Landlord or other occupants of the Building
by reason of noise, odors, vibrations or interfere in any way with other tenants
or those having business therein.
13. Tenant shall not employ any person or persons other than the janitor of
Landlord for the purpose of cleaning the Premises, unless otherwise reasonably
agreed to by Landlord. Tenant shall not cause any unnecessary labor by reason of
such Tenant's carelessness or indifference in the preservation of good order and
cleanliness.
14. Tenant shall store all its trash and recyclables within its Premises. No
material shall be disposed of which may result in a violation of any
Requirement. All refuse disposal shall be made only though entry ways and
elevators provided for such purposes and at such times as Landlord shall
designate. Tenant shall use the Building's hauler.
15. Except in connection with Decorative Alterations, Tenant shall not mark,
paint, drill into or in any way deface any part of the Building, except with the
prior written consent of Landlord in the case of the Premises, which consent
shall not be unreasonably withheld. No boring, cutting or stringing of wires
shall be permitted, except with prior reasonable consent of Landlord, and as
Landlord may direct.
16. The water and wash closets, electrical closets, mechanical rooms, fire
stairs and other plumbing fixtures shall not be used for any purposes other than
those for which they were constructed and no sweepings, rubbish, rags, acids or
other substances shall be deposited therein. All damages resulting from any
misuse of the fixtures shall be borne by Tenant where a Tenant Party caused the
same.
17. Tenant, before closing and leaving the Premises at any time, shall see that
all lights, water faucets, etc. are turned off. All entrance doors in the
Premises shall be kept locked by Tenant when the Premises are not in use. 18. No
bicycles, in-line roller skates, vehicles or animals of any kind (except for
seeing eye dogs) shall be brought into or kept by any Tenant in or about the
Premises or the Building.
19. Canvassing or soliciting in the Building is prohibited.
20. Employees of Landlord or Landlord's Agent shall not perform any work or do
anything outside of the regular duties, unless under special instructions from
the office of Landlord or in response to any emergency condition.
21. Tenant is responsible for the delivery and pick up of all mail from the
United States Post Office.
22. Landlord reserves the right to exclude from the Building during other than
Ordinary Business Hours all persons who do not present a valid Building pass.
Tenant shall be responsible for all persons for whom a pass shall be issued at
the request of Tenant and shall be liable to Landlord for all acts of such
persons.
23. Landlord shall not be responsible to Tenant or to any other person for the
non-observance or violation of these Rules and Regulations by any other tenant
or other person. Tenant shall be deemed to have read Rules and Regulations and
to have agreed to abide by them as a condition to its occupancy of the Premises.
EXHIBIT G
Development Specifications
EXHIBIT H
Base Building Work
BASE BUILDING WORK BY LANDLORD
A. All site work, including landscaping, parking and site utilities.
B. Main building lobby including:
(i) All surfaces finished
(ii) Lighting
(iii) All doors, hardware and glazing installed.
C. Required building exit corridors on the first floor complete on the inside
including all finishes, doors and hardware, glazing and lighting.
D. Typical elevator vestibule, fire taped.
E. Elevator cabs complete, including all finishes, doors, hardware and
lighting.
F. Building stairs complete, including all finishes, doors and lighting.
G. Building mechanical equipment room, including doors, hardware and lighting.
H. Building electrical rooms, including doors, hardware and lighting.
I. Building telephone closets (less paint and backboard), including all
finishes, doors, hardware and lighting.
J. Restrooms complete, including all finishes, doors and hardware, lighting,
plumbing, fixtures, life safety devices, partitions and accessories
installed to meet code and ADA.
K. HVAC ducts and piping distributed to each floor stubbed out of the shafts.
L. Main power distribution brought to each floor.
M. Fire sprinklers and fire protection on each floor as required per code for
base building installed to an open plan.
N. Main telecommunications route to each floor.
O. Provision of one dedicated 4-inch conduit from the main electrical room on
the first level of the Building to each of the electrical closets within
the Premises.
P. Cable TV service and fiber optics brought to the Building.
Q. 120/208 Volt 3-Phase 4-wire power to electrical room on each floor. 2
panels with 84 circuits on each floor; additional circuits or 277/480 Volt
power available at Tenant's cost.
R. Centralized computer security system monitoring all doors, service areas,
elevators, and select building stairwells.
S. Demising walls fire taped and ready for tenant finish; exterior walls
insulated.
T. Exterior windows tinted and equiped with horizontal venetian blinds.
U. Install two (2) four-inch (4") conduits between Building One and the
Building originating, in each building, in a ground floor telephone closet
located therein.
Exhibit I
425 LEXINGTON AVENUE, NEW YORK, 10017
June __, 2000
ISSUE DATE: June ___, 2000
EXPIRY DATE: June ___, 2001
IRREVOCABLE STANDBY LETTER OF CREDIT NO. SYN-00-10006
Beneficiary: Applicant:
- ------------ ---------
WHTS Freedom Circle Partners II, L.L.C. PMC-Sierra, Inc.
c/o Tishman Speyer Properties, L.P.
520 Madison Avenue
New York, NY 10022
ATT: GENERAL COUNSEL
We hereby establish our Irrevocable Standby Letter of Credit No. SYN-00-10006 in
your favor for a principal amount of USD 2,000,000.00 (Two Million and 00/100
U.S. Dollars), available at Canadian Imperial Bank of Commerce, 425 Lexington
Avenue, New York, New York 10017, by payment against your drafts at sight (in
the form of Exhibit A attached hereto) to be accompanied by:
1. This Original Letter of Credit and all amendments, if any;
2. An affidavit, purportedly signed by an authorized officer of the
Beneficiary, under penalty of perjury stating:
"(1) A default of PMC-Sierra, Inc. beyond applicable notice and cure periods has
occurred and is continuing under that certain lease (the "Lease") dated February
1, 2000 between PMC-Sierra, Inc. as Tenant and the Beneficiary hereunder as
Landlord ("Landlord"), and (2) Landlord is entitled under the Lease to draw the
amount being drawn."
OR
"Notice of non renewal of Canadian Imperial Bank of Commerce
Irrevocable Letter of Credit SYN-00-10006 has been received by
the Beneficiary and a replacement letter of credit has not
been received by the Beneficiary within 15 business days of
the expiry date. Beneficiary hereby instructs Canadian
Imperial Bank of Commerce to pay the draft amount to
_________________ at _________."
This Letter of Credit may be transferred upon presentation to us of a signed
transfer form in the form of Annex 1 accompanied by this Letter of Credit, in
which the Beneficiary irrevocably transfers to such transferee all of its rights
hereunder, whereupon we agree to either issue a substitute letter of credit to
such successor (which designates the transferee as beneficiary, and with all
references to "you" referring to it and is otherwise in the same form as this
letter of credit and is also transferable) or endorse such transfer on the
reverse of this Letter of Credit.
Partial drawings are permitted.
It is a condition of this Irrevocable Standby Letter of Credit that it is
automatically extended without amendment for successive periods of one year from
the then relevant expiration date, but in no event later than
___________________,2011 unless we notify you by registered Mail or overnight
courier at least 30 days prior to the then relevant expiration date to the
effect that we elect not to extend this Irrevocable Standby Letter of Credit for
any further periods. In the event this credit is not extended for an additional
period as provided above, you may draw as provided for above.
Except as expressly stated herein, this undertaking is not
subject to any agreements, requirements or qualification. Our obligation under
this letter of credit is our individual obligation and is on no way contingent
upon reimbursement with respect thereto or upon our ability to perfect any lien,
security interest or any other reimbursement.
All correspondence shall be addressed to Canadian Imperial Bank of Commerce, 425
Lexington Avenue, New York, NY 10017, USA, Attention: Agency Services, and shall
mention this Letter of Credit number.
All drafts so drawn must be marked "Drawn under Irrevocable Letter of Credit No.
SYN-00-10006, dated June __31, 2000.
This Letter of Credit is subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision) International Chamber of Commerce
Publication No. 500, and shall be deemed to be a contract made under, and as to
matters not governed by the UCP, shall be governed and construed in accordance
with the laws of the State of New York and applicable U.S. law.
Sincerely,
Canadian Imperial Bank of Commerce
- ------------------------------------ -------------------------------
Authorized Signatory Countersigned
- ------------------------------------ -------------------------------
Beneficiary's Approval Applicant's Approval
ANNEX 1
Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, New York 10017
Reference is made to Canadian Imperial Bank of Commerce Letter of Credit
SYN-00-10006.
The undersigned, as beneficiary hereby irrevocably transfers to ___________,
(the "Transferee") all rights of the undersigned to draw under the Letter of
Credit.
Very truly yours,
--------------------------------
WHTS Freedom Circle Partners II, L.L.C.
Exhibit A
FOR VALUE RECEIVED
PAY AT SIGHT BY WIRE TRANSFER IN IMMEDIATELY AVAILABLE FUNDS TO
_____________________ THE SUM OF U.S. $______________ DRAWN UNDER IRREVOCABLE
LETTER OF CREDIT NO. _______________, DATED ___________, 2000___, ISSUED BY
_______________________________.
TO: [CIBC]
----------------------------
New York, New York
FIRST AMENDMENT TO AMENDED AND RESTATED LEASE
THIS FIRST AMENDMENT TO AMENDED AND RESTATED lease (the "First
Amendment") is made as of this 7 day of April, 2000, by and between WHTS freedom
circle partners, l.l.c., a Delaware limited liability company ("Landlord"), and
PMC--sIERRA, INC., a Delaware corporation ("Tenant").
RECITALS:
Landlord and Tenant are parties to that certain Amended and
Restated Lease, dated as of April 7, 2000 (the "Lease"), under the terms of
which Landlord leased to Tenant, and Tenant leased from Landlord, certain
premises located at 3975 Freedom Circle Drive, Santa Clara, California. Landlord
and Tenant now desire to amend the Lease in several respects.
NOW, THEREFORE, Landlord and Tenant hereby agree as follows:
1. All defined terms as used in this First Amendment shall have the same
meanings as set forth in the Lease, unless otherwise expressly set forth herein.
2. The Basic Lease Provisions as set forth in Article 1 are hereby amended in
accordance with the following:
PREMISES A portion of the first floor and the entire second, third,
fourth and fifth floors of the Building, as more
particularly shown on Exhibits A-1, A-2, A-3, A-4 and A-5.
COMMENCEMENT
DATE The later to occur of (a) the Scheduled Commencement Date,
and (b) the 90th calendar day following the date of
Landlord's tender of possession of the Premises with the
Base Building Work at a stage of completion so as to permit
Tenant's contractors to commence construction of the Initial
Installations without unreasonable delay or interference.
EXPIRATION DATE The date which is the last day of the month in which
the 11th anniversary of the Commencement Date occurs, or the
last day of any renewal or extended term, if the Term of
this Lease is extended in accordance with any express
provision hereof.
TENANT'S
PROPORTIONATE
SHARE 38.3723%
AREA OF PREMISES Floor 1: 11,861 rentable square feet (10,676
usable square feet).
Floor 2: 21,813 rentable square feet (19,634
usable square feet).
Floor 3: 24,856 rentable square feet (22,373
usable square feet).
Floor 4: 24,856 rentable square feet (22,373
usable square feet).
Floor 5: 24,856 rentable square feet (22,373
usable square feet)
Total: 108,242 rentable square feet (97,429
usable square feet).
FIXED RENT Period Per Annum Per Month
------ --------- ---------
Year 1 $3,746,298.92 $312,191.58
Year 2 $3,877,419.38 $323,118.28
Year 3 $4,013,129.06 $334,427.42
Year 4 $4,153,588.57 $346,132.38
Year 5 $4,298,964.17 $358,247.01
Year 6 $4,449,427.92 $370,785.66
Year 7 $4,605,157.90 $383,763.16
Year 8 $4,766,338.42 $397,194.87
Year 9 $4,933,160.27 $411,096.69
Year 10 $5,105,820.88 $425,485.07
Year 11 $5,284,524.61 $440,377.05
Landlord's contribution $3,247,260.00.
* * * * *
3. In all other respects, the Lease remains unchanged and in full force and
effect.
IN WITNESS WHEREOF, Landlord and Tenant have executed this
First Amendment to Amended and Restated Lease as of the dates set forth below,
and it shall be effective as of the latter of such dates.
LANDLORD: TENANT:
WHTS FREEDOM CIRCLE PARTNERS II, L.L.C., PMC - SIERRA, INC.,
a Delaware limited liability company a Delaware corporation
By: Tishman Speyer/Travelers Real Estate Venture, L.P.,
a Delaware limited partnership By:___________________
By: Tishman Speyer/Travelers Associates, Its:__________________
a Delaware limited partnership
Its general partner By: __________________
By: TSCE Venture Corp., a Delaware corporation
Its general partner Its:__________________
By: ___________________________
Its:________________________
and
By: Whitehall Street Real Estate Limited Partnership IX, a
Delaware limited partnership, its managing member
By: Whitehall Advisors, L.L.C. IX, Inc., a Delaware
limited liability company, its general partner
By: Whitehall IX/X, Inc., a Delaware corporation,
its managing member
By: ___________________________
Its:___________________________