Exhibit 10.15
OFFICE LEASE
BASIC LEASE INFORMATION
LEASE DATE: February 19, 2001
TENANT: POLYCOM, INC.,
a Delaware corporation
TENANT'S ADDRESS: 1565 Barber Lane
Milpitas, California 95035
Attention: Mr. Michael Korey, Chief Financial Officer
Frederick Gonzalez, Esq., General Counsel
LANDLORD: WJT, LLC,
a California limited liability company
LANDLORD'S ADDRESS: 6601 Owens Drive, Suite 100
Pleasanton, CA 94588
Payments to: Charter Properties
c/o James Tong
6601 Owens Drive, Suite 100
Pleasanton, CA 94588
PROPERTY: That certain real property commonly known as 4750
Willow Road, located in Pleasanton, California, and
as more particularly described in Exhibit A,
attached.
PREMISES: That certain building (the "Building") to be
constructed by Landlord on the Property.
PREMISES RENTABLE AREA: Approximately fifty thousand three hundred
seventy five (50,375) net rentable
square feet.
PERMITTED USE: General office, administration and sales.
TERM COMMENCEMENT DATE: The date on which the Premises are Substantially
Complete (as defined in the Work Letter attached
hereto), subject to the terms of Section 3.A. below.
LEASE TERM: Ten (10) years.
BASE RENT: Lease Year Monthly Base Rent
---------- -----------------
1 $151,125 per month.
2 $157,170 per month.
3 $163,457 per month.
4 $169,995 per month.
5 $176,795 per month.
6 $183,867 per mouth.
7 $191,221 per month
8 $198,870 per month.
9 $206,825 per month.
10 $215,098 per month.
SECURITY DEPOSIT: One Million Dollars ($ 1,000,000.00)
TENANT'S PROPORTIONATE
SHARE: One hundred percent (100%)
BROKER: Gabriel E. Arechaederra
Colliers International
5050 Hopyard Rd., Suite 180
Pleasanton, CA 94588
The foregoing Basic Lease Information is incorporated into and made a part of
this Lease. Each reference in this Lease to any of the Basic Lease Information
shall mean the respective inforrnation above and shall be construed to
incorporate all of the terms provided under the particular Lease paragraph
pertaining to such information. In the event of any conflict between the Basic
Lease Information and the Lease, the latter shall control.
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TABLE OF CONTENTS
1. PREMISES................................................................1
2. POSSESSION AND LEASE COMMENCEMENT.......................................1
3. TERM....................................................................1
4. USE.....................................................................3
5. RULES AND REGULATIONS...................................................6
6. RENT....................................................................6
7. BASIC OPERATING COST....................................................7
8. INSURANCE AND INDEMNIFICATION..........................................11
9. WAIVER OF SUBROGATION..................................................14
10. LANDLORD'S REPAIRS AND SERVICES.......................................14
11, TENANT'S REPAIRS......................................................14
12. ALTERATIONS...........................................................15
13. SIGNS.................................................................16
14. INSPECTION/ POSTING NOTICES...........................................16
15. SUBORDINATION.........................................................17
16. FINANCIAL STATEMENTS..................................................18
17. ESTOPPEL CERTIFICATE..................................................18
18. SECURITY DEPOSIT......................................................18
19. TENANT'S REMEDIES.....................................................19
20. ASSIGNMENT AND SUBLETTING.............................................19
21. AUTHORITY OF PARTIES..................................................21
22, CONDEMNATION..........................................................21
23. CASUALTY DAMAGE.......................................................21
24. HOLDING OVER..........................................................22
25. DEFAULT...............................................................23
26. LIENS.................................................................25
27. TRANSFERS BY LANDLORD.................................................25
28. RIGHT OF LANDLORD TO PERFORM AND TENANT'S COVENANTS...................26
29. WAIVER................................................................26
30. NOTICES...............................................................26
31. ATTORNEYS' FEES.......................................................27
32. SUCCESSORS AND ASSIGNS................................................27
33. FORCE MAJEURE.........................................................27
34. BROKERAGE COMMISSION..................................................27
35. MISCELLANEOUS.........................................................27
SIGNATURES................................................................31
LEASE RIDER...............................................................32
Exhibits:
Exhibit A - Legal Description
Exhibit B - Work Letter
Exhibit C - Memorandum of Term Commencement Date
Exhibit D - Rules and Regulations
Exhibit D-1 - Elevator Use
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LEASE
THIS LEASE is made as of the date set.forth in the Basic
Lease Information by and between WJT, LLC, a California
limited liability company (hereinafter called "Landlord"),
and POLYCOM, INC., a Delaware corporation (hereinafter
called "Tenant").
PREMISES 1 Landlord leases to Tenant and Tenant
leases from Landlord, upon the terms and
conditions hereinafter set forth,
those premises (the "Premises") outlined and
crosshatched on Exhibit A attached hereto
and made a part hereof and described in the
Basic Lease Information. The Premises are
also referred to herein as the building (the
"Building"), commonly known as 4750 Willow
Road in Pleasanton, California.
POSSESSION 2. CONSTRUCTION OF IMPROVEMENTS. The Premises
AND LEASE shall be constructed substantially in
COMMENCE- accordance with plans and specifications
MENT (the "Plans and Specifications") and the
Work Letter attached hereto as Exhibit B and
made a part hereof. Tenant shall prepare
said Plans and Specifications which shall be
approved by Landlord and Tenant prior to
commencement of construction in accordance
with the Work Letter. The term commencement
date ("Term Commencement Date") shall be the
later of (i) October 15, 2001 (the
"Estimated Commencement Date"), or (h)
Substantial Completion of the Tenant
Improvements, as such date may be adjusted
for either or both Landlord Delays or Tenant
Delays (as such terms are defined in the
Work Letter). If, for any reason, Landlord
cannot deliver possession of the Premises to
Tenant on the Estimated Commencement Date,
Landlord shall not be subject to any
liability therefor, nor shall Landlord be in
default hereunder. Notwithstanding the
foregoing, if the Premises are not
Substantially Complete by July 1, 2002, then
Tenant, as Tenant's sole and exclusive
remedy, may terminate this Lease upon
written notice thereof to Landlord received
prior to July 30, 2002 (or any earlier date
on which the Premises are Substantially
Complete). If Tenant shall have failed to
deliver such termination notice prior to
July 30, 2002, then Tenant shall be deemed
to have waived Tenant's right to terminate
this Lease pursuant to this Section 21. If
Tenant shall properly terminate this Lease
pursuant to this Section 2, then the Base
Rent and Security Deposit prepaid to
Landlord shall be promptly returned to
Tenant. Tenant further acknowledges that no
representations as to the condition or
repair of the Premises nor promises to
alter, remodel or improve the Premises have
been made by Landlord unless such are
expressly set forth in this Lease.
TERM 3. A. COMMENCEMENT DATE. The Term of this Lease
shall commence on the Term Commencement Date
and continue in full force and effect for
One Hundred Twenty (120) months thereafter
or until this Lease is terminated as
otherwise provided herein. Notwithstanding
the foregoing, if the date on which the
Premises are Substantially Complete (as such
date may be adjusted for Tenant Delays) is
between November 24, 2001 and December 31,
2001 (the "Rent Abatement Period"), and,
notwithstanding the fact that the Premises
are Substantially Complete, Tenant does not
occupy the Premises during such. Rent
Abatement Period, then the Base Rent and
Additional Rent due hereunder shall instead
commence to be due and owing as of January
1, 2002, which date shall be deemed the Term
Commencement Date for the purposes of this
Lease. If the Premises are Substantially
Completed during the Rent Abatement Period
and Tenant takes possession of any portion
thereof, then the date of such possession
shall be the Term
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Commencement Date, and Tenant's
obligations hereunder to pay Base Rent
and Additional Rent shall commence on
such date. In any event Tenant's
obligations hereunder other than the
obligation to pay Base Rent and
Additional Rent (including, but not
limited to the insurance, indemnification
and maintenance and repair obligations
described herein) shall commence on the
date that the Premises are Substantially
Complete, regardless of whether such date
is within the Rent Abatement Period or
not The Base Rent shall be subject to
yearly increases pursuant to Paragraph
6.C. hereof. If the Term Commencement
Date is a date other than the first day
of the calendar month, the Term shall be
the number of months of the Term in
addition to the remainder of the calendar
month following the Term Commencement
Date. A Memorandum of Term Commencement
Date in the form set forth in Exhibit C
hereto shall be executed by both parties
as soon as practicable after the Term
commences. Notwithstanding anything to
the contrary in this Lease, Landlord
warrants and represents that, as of the
Term Commencement Date, to the best of
Landlord's knowledge, the Building Shell
(as defined in the Work Letter) will
comply with all applicable provisions of
the law commonly known as Title III of
the Americans With Disabilities Act, as
promulgated as of the Term Commencement
Date. Landlord shall, promptly after
receipt of notice from Tenant, remedy any
non-compliance with such warranty at
Landlord's sole cost and expense.
B. RENEWAL OPTIONS. As long as there does
not exist an uncured event of default, as
defined in Paragraph 25 hereof, on the part
of Tenant at the time this renewal is
exercised or the time the Renewal Term
begins, Landlord hereby grants to Tenant a
renewal option for a. FIVE (5) YEAR term
("Renewal Term"). During the Renewal Term,
all covenants and conditions applicable to
the immediately preceding Term, as
applicable, shall apply, except that the
Base Rent shall be One Hundred Percent
(100%) of the Fair Market Rent of the
Premises, as determined pursuant to
Paragraph 3.C. hereof. Tenant shall deliver
to Landlord a written notice of Tenant's
exercise of the Renewal Option no later than
Two Hundred Seventy (270) days but no
greater than Three Hundred Sixty (360) days
prior to the expiration of the initial Lease
Term (the "Exercise Notice"). The Base Rent
during the Renewal Term shall be subject to
yearly increases pursuant to Paragraph 6.C.
hereof.
C. FAIR MARKET RENT. As used in this Lease,
"Fair Market Rent" shall be deemed to mean
the base amount of rental that would
typically be paid by a tenant under a net
lease (exclusive of all other sums payable
by tenant under a net lease such as taxes,
insurance premiums, common area maintenance
charges, utilities, repair and restoration
costs, and similar charges) for premises of
a similar type, design, and quality in the
same geographic area in which the Premises
are situated under market leasing conditions
existing at that time and taking into
account the presence, if any, of other
escalation provisions provided in this
Lease. If Landlord and Tenant cannot agree
on the Fair Market Rent within thirty (30)
days after Landlord's receipt of the
Exercise Notice, the Base Rent payable
during the Renewal Term shall be
conclusively determined as follows:
(i) Within ten (10) days after the
expiration of the thirty (30) day period,
each party, at its cost and by giving notice
to the other party, shall appoint a real
estate appraiser with at least five (5)
years full time commercial appraisal
experience in the geographic area in which
the Premises are located, to appraise and
determine the then Fair Market Rent as
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described herein.
(ii) If one party does not appoint an
appraiser within the time period set forth
in Paragraph 3.C(i), the appraiser appointed
by the other party shall be the sole
appraiser and shall determine the Fair
Market Rent.
(iii) If neither party appoints an
appraiser within the time period set forth
in, Paragraph 3.C.(i), the Base Rent during
the Renewal Term shall be increased four
percent (4%) over the Base Rent payable in
the last full month immediately preceding
Landlord's receipt of the Exercise Notice.
(iv) If the two (2) appraisers are so
appointed by the parties, they shall meet
promptly and attempt to appraise and
determine the Fair Market Rent. If they are
unable to agree within ten (10) days after
the second appraiser has been appointed,
they shall attempt to select a third
appraiser who meets the qualifications
stated in Paragraph 3.C.(i) within ten (10)
days after the last day the two appraisers
are given to determine the Fair Market Rent.
If they are unable to agree on a third
appraiser, either of the parties to this
Lease, by giving ten (10) days' notice to
the other party, can apply to the presiding
judge of the Superior Court for the county
in which the Premises are located for the
selection of a third appraiser who meets the
qualifications stated in Paragraph 3.C.(i).
Each of the parties shall bear one-half
(1/2) of the cost of appointing the third
appraiser and of the third appraiser's fees.
The third appraiser, however selected, shall
be a person who has not previously acted in
any capacity for either party.
(v) Within ten (10) days after the
selection of the third appraiser, a majority
of the appraisers shall appraise and
detemine the Fair Market Rent. If a
majority of the appraisers are unable to so
set the Fair Market Rent within the required
period of time, the appraisals of the three
Appraisers shall be added together and their
total divided by three, The resulting
quotient shall be the Fair Market Rent.
(vi) If, however, the low appraisal
or the high appraisal are more than ten
percent (10%) lower or higher than the
middle appraisal, the low appraisal or the
high appraisal shall be disregarded, If only
one appraisal is disregarded, the remaining
two appraisals shall be added together and
their total divided by two. The resulting
quotient shall be the Fair Market Rent. If
two appraisals are disregarded, the
remaining appraisal shall be the Fair Market
Rent.
USE 4. A. GENERAL. Tenant shall use the Premises
for the Permitted Use and for no other use
or purpose. Tenant and Tenant's employees,
agents, customers, visitors, invitees,
licensees, contracters, assignees and
subtenants (collectively, "Tenant's
Parties"). shall have the right to use the
common corridors and hallways, stairwells,
elevators, restrooms and other public or
common areas; provided, however, that the
manner in which the public and common areas
are maintained and operated shall be at the
sole discretion of Landlord and the use
thereof shall be subject to such reasonable
rules, regulations and restrictions as
Landlord may make from time to time.
Landlord reserves the right to make
alterations or additions to or to change the
location of elements of the Building and the
common areas thereof in Landlord's sole
discretion, provided Tenant's use and
enjoyment of the Premises are not materially
diminished.
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B. LIMITATIONS. Tenant shall not use the
Premises, or permit the Premises to be used,
in any manner which: (a) causes or is likely
to cause damage to the Building or Premises;
(b) violates a requirement or condition of
any fire and extended insurance policy
covering the Building and/or Premises, or
increases the cost of such policy; (c)
violates any Regulation (as defined in
Section 4.C. below); (d) constitutes or is
reasonably likely to constitute a nuisance,
annoyance or inconvenience to other tenants
or occupants of the Building or its
equipment, facilities or systems; (e)
interferes with, or is reasonably likely to
interfere with, the transmission or
reception of microwave, television, radio,
telephone or other communication signals by
antennae or other facilities located in the
Building; or (f) violates the Rules and
Regulations described in Exhibit D attached
hereto. Tenant shall not use the Premises
so as to create unreasonable noise,
vibration, or heat in or around the Building
or Premises, or otherwise disturb any other
tenants or occupants of the Building or
third parties ("Objectionable Conditions").
If Landlord determines that Tenant's use of
the Premises (including any electrical
generating equipment or condensers installed
on the roof of the Building) creates
unreasonable noise, vibration or heat in or
around the Building or otherwise disturbs
any tenant of the Building or any third
party, Tenant shall, within five (5) days of
receipt of written notice from Landlord,
take all action necessary to correct any
such objectionable condition, including,
without limitation, installation of
additional insulation and soundproofing
materials and construction of platforms,
vibration eliminators and other devices
sufficient to eliminate, heat, noise and/or
vibration. If such an Objectionable
Condition exists, Landlord may employ, at
Tenant's expense, a consulting engineer to
advise Landlord on the means of eliminating
the objectionable noise, vibration, heat or
other condition. If Tenant fails to
eliminate the objectionable condition within
the five (5) day period Tenant shall
immediately discontinue use of the equipment
or machinery creating the subject condition.
Tenant's failure to eliminate the
objectionable condition within the five (5)
day period or to discontinue operation of
the offending equipment or machinery at the
expiration of the five (5) day period if the
objectionable condition, is not eliminated
shall constitute an Event of Default
hereunder. The provisions of Section
25.A.(3) granting Tenant thirty (30) days
after receipt of notice of default to cure a
non-monetary default shall not be applicable
to a default under this section. Storage
outside the Premises of materials, vehicles
or any other items is prohibited. Tenant
shall not use or allow the Premises to be
used for any improper, immoral, unlawful or
objectionable purpose, nor shall Tenant
cause or maintain or permit any nuisance in,
on or about the Premises. Tenant shall not
commit or suffer the commission of any waste
in, on or about the Premises. Tenant shall
not allow any sale by auction upon the
Premises, or place any loads upon the
floors which exceed 20 pounds per square
foot of partition load or 80 pounds
per square foot of live load, or place any
loads upon walls or ceilings which endanger
the structure, or place any harmful liquids
in the drainage system of the Building. No
waste, materials or refuse shall be dumped
upon or permitted to remain outside the
Premises. Landlord shall not be responsible
to Tenant for the non-compliance by any
other tenant or occupant of the Building
with any of the above referenced rules or
any other terms or provisions of such
tenant's or occupant's lease or other
contract.
C. COMPLIANCE WITH REGULATIONS. Except as
otherwise warranted by Landlord in Section
3A of this Lease, by entering the Premises,
Tenant accepts the Premises in the condition
existing as of the date of such entry,
subject to all existing or future applicable
municipal, state and federal and
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other governmental statutes, regulations,
laws and ordinances, including zoning
ordinances and regulations governing and
relating to the. use, occupancy and
possession of the Premises and the use,
storage, generation and disposal of
Hazardous materials (hereinafter defined)
in, on and under the Premises (collectively
"Regulations"); provided, however, that
Landlord shall repair all latent defects in
workmanship and materials of the Premises,
excluding any latent defects arising from
or in any way related to the improvements
constructed by Tenant hereunder, provided
Tenant shall give Landlord written notice of
any such latent defects within twelve (12)
months after the Term Commencement Date.
For purposes of this paragraph, the term
"latent defects" shall mean defects which
were not readily apparent on the Term
Commencement Date. Tenant shall, at Tenant's
sole expense, strictly comply with all
Regulations now in force or which may
hereafter be in force relating to its
particular use of the Premises and the use
of the Premises by Tenant and/or the use,
storage, generation Hazardous Materials in,
on and under the Premises by Tenant. Tenant
shall at its sole cost and expense obtain
any and all licenses or permits necessary
for Tenant's particular use of the Premises.
Tenant shall indemnify, defend, protect and
hold Landlord harmless from and against any
loss, cost, expense, damage, reasonable
attorneys' fees or liability arising out of
the failure of Tenant to comply with any
applicable Regulation or comply with the
requirements as set forth herein. The
judgment of any court of competent
jurisdiction or the admission of Tenant in
any judicial action, regardless of whether
Landlord is a party thereto, that Tenant has
violated any of the Regulations shall be
conclusive of that fact as between Landlord
and Tenant. Notwithstanding anything to the
contrary in this Lease, Tenant shall not be
required to perform any alteration,
modification or improvement to the Premises
which is required by any Regulations, except
to the extent that the compliance is
necessitated due to (a) Tenant's particular
use of the Premises, or (b) alterations,
modifications or improvements to the
Premises voluntarily made by Tenant. Any
other alteration, modification or
improvement to the Premises which is
required by any Regulations shall be
performed by Landlord, and shall be
reimbursed Landlord by Tenant as a Basic
Operating Building Cost, subject to the
terms of Section 7.A.(2) of this Lease.
D. HAZARDOUS WASTES. Tenant shall not
cause, or allow any of tenant's Parties
to cause, any Hazardous Materials to be
used, generated, stored or disposed of on
or about the Premises or the Building.
Notwithstanding the foregoing, normal
quantities of those Hazardous Materials
customarily used in the conduct of
general administrative and executive
office activities (e.g., copier fluids
and cleaning supplies) may be used and
stored at the Premises without Landlord's
prior written consent, but only in
compliance. with all applicable
Regulations. Notwithstanding the
obligation of Tenant to indemnify
Landlord pursuant to this Lease, Tenant
shall, at its sole cost and expense,
promptly take all actions required by any
federal, state or local governmental
agency or political subdivision, or
necessary for Landlord to make full
economic use of the Premises or any
portion of the Building which
requirements or necessity arises from
Tenant's release or emission of Hazardous
Materials upon, about, above or beneath
the Premises or any portion of the
Building. Such actions shall include, but
shall not be limited to, the
investigation of the environmental
condition of the Premises or any portion
of the Building; the preparation of any
feasibility studies or reports and the
performance of any cleanup, remedial,
removal or restoration work. Tenant shall
take all actions necessary to restore the
Premises or any portion of the Building
to the condition existing prior to the
introduction of Tenant's Hazardous
Materials, notwithstanding any less
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stringent standards or remediation allowable
under applicable Regulations, Tenant shall
nevertheless obtain Landlord's written
approval prior to undertaking any actions
required by this Section, which approval
shall not be unreasonably withheld so long
as such actions would not potentially have a
material adverse long term or short-term
effect on the Premises or any portion of the
Building. As used in this Lease, "Hazardous
Materials" shall include, but not be limited
to, hazardous, toxic and radioactive
materials and those substances defined as
"hazardous substances," "hazardous
materials," "hazardous. wastes," "toxic
substances," or other similar designations
'in any federal, state, or local law,
regulation, or ordinance. Landlord shall
have the right at all reasonable times to
inspect the Premises and to conduct tests
and investigations to determine whether
Tenant is in compliance with the foregoing
provisions, and if Tenant is not in
compliance with the foregoing provisions,
the costs of all such inspections, tests and
investigations to be borne by Tenant. Tenant
shall indemnify, defend, protect and hold
Landlord harmless from and against all
liabilities, losses, costs and expenses,
demands, causes of action, claims or
judgments directly or indirectly arising out
of the use, generation, storage or disposal
of Hazardous Materials by Tenant or any of
Tenant's Parties, which indemnity shall
include, without limitation, the cost of any
required or necessary repair, cleanup or
detoxification, and the preparation of any
closure or other required plans, whether
such action is required or necessary prior
to or following the termination of this
Lease. Neither the written consent by
Landlord to the use, generation, storage or
disposal of Hazardous Materials nor the
strict compliance by Tenant with all laws
pertaining to Hazardous Materials shall
excuse Tenant from Tenant's obligation or
indemnification pursuant to this Paragraph
4.D. Tenant's obligations pursuant to the
foregoing indemnity shall survive the
termination of this Lease.
RULES AND 5. Tenant shall faithfully observe and
comply with the rules and regulations set
REGULATIONS forth in exhibits D and D-1, as modified by
Landlord in Landlord's reasonable discretion
from time to time in writing, for the
purpose of maintaining the proper care,
cleanliness, safety, traffic flow and
general order of the Premises or Building.
Tenant shall cause Tenant's Parties to
comply with such rules and regulations.
Landlord shall not be responsible to Tenant
for the noncompliance by any other tenant or
occupant of the Building with any of the
rules and regulations or any other terms or
provisions of such tenant's or occupant's
lease or other contract
RENT 6. A. BASE RENT. Beginning with the Term
Commencement Date (subject to the terms of
Section 3.A. above), Tenant shall pay to
Landlord, without demand throughout the
Term, Base Rent as specified in the Basic
Lease Information, payable in monthly
installments in advance on or before the
first day of each calendar month, in lawful
money of the United States, without
deduction, abatement or setoff whatsoever
(except as provided by the terms of this
Lease), at the address specified in the
Basic Lease information or to such other
place as Landlord may from time to time
designate in writing. Base Rent for the
first full month of the Term shall be paid
by Tenant upon Tenant's execution of this
Lease. If the obligation for payment of Base
Rent commences on other than the first day
of a month, then Base Rent shall be prorated
and the prorated installment shall be paid
on the first day of the calendar month next
succeeding the Term Commencement Date.
B. ADDITIONAL RENT. All monies other than
Base Rent required to be paid by Tenant
hereunder, including, but not limited to,
the interest and late
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charge described in Paragraph 25.D., any
monies spent by Landlord pursuant to,
Paragraph 28, and Tenant's Basic Operating
Building Cost as specified in Paragraph 7 of
this Lease, shall be considered additional
rent ("Additional Rent"). "Rent" shall mean
Base Rent and Additional Rent.
C. ANNUAL INCREASES. On each anniversary of
the Term Commencement Date, the Base Rent
shall be increased, by an amount equal to
four percent (4%) of the Base Rent in effect
immediately prior to the most recent
anniversary of the Term Commencement Date
(without regard to any temporary abatement
of rental then or previously in effect
pursuant to the provisions of this Lease),
as more particularly shown to the Basic
Lease Information.
BASIC 7. BASIC OPERATING COST. In addition to the
OPERATING Base Rent required to be paid hereunder,
COST Tenant shall pay, as Additional Rent
Tenant's Proportionate, Share of the Basic
Operating Building Costs during any Expense
Year, in the manner set forth below (such
amount hereinafter referred to as "Tenant's
Proportionate Share of Basic Operating
Building Cost").
A. BASIC OPERATING BUILDING COST. Basic
Operating Building Cost shall mean,
except as otherwise provided for herein,
all expenses and costs which Landlord
shall pay or become obligated to pay,
because of or in connection with the
management, maintenance, preservation and
operation of the Building and its
supporting facilities (determined in
accordance with generally accepted
accounting principles, consistently
applied) including, but not limited to,
the following:
(1) TAXES. All property taxes, possessory
interest taxes, service payments in lieu of
such taxes or fees, annual or periodic
Property-specific license or use fees,
excises, transit charges, housing fund
assessments, sewer rents, open space
charges, assessments, levies, fees or
charges, general and special, ordinary and
extraordinary, unforeseen as well as
foreseen, of any kind (including fees
"in-lieu" of any such tax or assessment)
which are assessed, levied, charged,
confirmed, or imposed by any public
authority upon the Building, its operations
or the Rent (or any portion or component
thereof) (all of the foregoing being
hereinafter collectively referred to as real
property taxes"), or any tax imposed in
substitution, partially or totally, of any
tax previously included within the
definition of real property taxes, or any
additional tax the nature of which was
previously included within the definition of
real property taxes, except (a) inheritance
or estate taxes imposed upon or assessed
against the Building, or any part thereof or
interest therein, and (b) taxes computed
upon the basis of net income of Landlord or
the owner of any interest therein, except as
otherwise provided in the following
sentence. Basic Operating Building Cost
shall also include any taxes, assessments,
or any other fees imposed by any public
authority upon or measured by the monthly
rental or other charges payable hereunder,
including, without limitation, any gross
income or receipt tax or excise tax levied
by the local governmental authority in which
the Building is located, the federal
government; or any other governmental, body
with respect to receipt of such rental, or
upon, with respect to, or by reason of the
development, possession, leasing operation,
management; maintenance, alteration, repair,
use or occupancy by Tenant of the Premises
or any portion thereof, or upon this
transaction or any document to which Tenant
is a party creating or transferring an
interest or an estate in the Premises. Real
property taxes shall include all reasonable
fees and costs, including reasonable
attorneys' fees, appraisals and consultants'
fees, incurred by
7
Landlord in seeking to obtain a reduction
of, or a limit on the increase in, any real
property taxes, regardless of whether any
reduction or limitation is obtained. In
the event that it shall not be lawful for
Tenant to reimburse Landlord for all or any
part of any increase in any items specified
in this Paragraph 7.A.(I), the monthly
rental payable to Landlord under this Lease
shall be revised to net to Landlord the same
net rental after imposition of any such
increased taxes as would have been payable
to Landlord prior to the payment of any such
taxes. Notwithstanding the foregoing to the
contrary, if any general, special or other
assessment is levied or assessed against the
Building which may be paid either in a lump
sum or in installments, then, if Landlord
elects to' pay the same in a lump sum, real
property taxes chargeable to Tenant under
this Lease shall be calculated based upon
the amount which would have been payable had
Landlord elected to pay the same in
installments.
(2) INSURANCE. All insurance premiums and
costs, including but not limited to, any
deductible costs, premiums and cost of
insurance, incurred by Landlord, as more
fully set forth in Paragraph 8.A. herein.
(3) OTHER OPERATING EXPENSES. Any and all
actual costs and expenses (except as
otherwise provided herein) paid or incurred
by Landlord in connection with the
operation, maintenance, management and
repair of the Building. By way of
illustration but not limitation, such
expenses shall include (without duplication)
the following: (i) the cost of heating,
ventilation and air conditioning,
mechanical, sanitary and storm drainage, the
cost of any generally applicable
environmental surcharges imposed by any
governmental entity (as opposed to
Property-specific environmental surcharges,
which shall not be a Basic Operating
Building Cost), escalator and elevator
systems, all other utilities and the cost of
supplies and equipment and maintenance and
service contracts in connection therewith;
(ii) the cost of repairs, general
maintenance and replacing components of
equipment or machinery (subject to Section
vii below), including, without limitation,
heating, refrigeration, ventilation,
electrical, plumbing, janitorial, window
cleaning, garbage and refuse removal,
mechanical, elevator, escalator, sprinklers,
fire/life safety and energy management
systems, including service contracts,
maintenance contracts, supplies and parts;
(iii) wages, salaries and other labor costs,
including uniforms, taxes, insurance,
retirement, medical and other employee
benefits; (iv) fees, charges and other costs
including management fees, consulting fees,
legal fees and accounting fees paid in
connection with the Building and the costs
of supplying, replacing and cleaning
employee uniforms; (v) the cost of licenses,
permits and inspections and the cost of
contesting the validity or applicability of
any governmental enactments which may affect
any expenses set forth herein; (vi) the
cost of any capital improvements made to
the Building after completion of its
construction intended as a labor saving
device or to effect other economies in the
operation or maintenance of the Building, or
made to the Building after the date of this
Lease that are required under any
governmental law or regulation that was not
applicable to the Building at the time that
permits for the construction thereof were
obtained, such costs to be amortized over
such reasonable period as Landlord shall
determine, together with interest on the
unamortized balance at the "prime rite"
charged at the time such improvements or
capital assets are constructed or acquired
by Wells Fargo Bank N.A. (San Francisco)
plus two (2) percentage points but in no
event more than the maximum rate permitted
by law; (vii) the costs of policing,
security and supervision of the Building;
(viii) the cost of the rental of any
machinery or equipment and the cost of
supplies used exclusively in
8
the maintenance and operation of the
Building; (ix) audit fees and the cost of
accounting services incurred in the
preparation of statements referred to in
this Lease and financial statements used in
the computation of the rents and charges
payable by tenants of the Building; (x)
legal fees and expenses, including, but not
limited to, such expenses that relate to
seeking or obtaining reductions in or
refunds of real property taxes, or
components thereof; (xi) a fee for the
management and administration of the
Building appropriate to the first class
nature of the Building not to exceed two and
one half percent (2.50%) of Base Rent. For
purposes of this Lease, such expenses shall
not include interest expense (except as
provided in clause (vi) above), leasing
commissions, depreciation on the
improvements contained in the Building or
the cost of capital expenditures not
included within clause (vi) above; (xii)
cost of maintaining, replacing and servicing
exterior landscaping. Notwithstanding the
foregoing to the contrary, such expenses
shall not include the cost of any initial
Tenant Improvements prior to the Term
Commencement Date, any costs or expenses
(including, without limitation, legal fees
and expenses) incurred in connection with
enforcing the terms of any other tenant
leases, or costs or expenses incurred in the
form of tenant improvement allowances made
in connection with the leasing of the
Building. The computation of such expenses
shall be made in accordance with generally
accepted accounting principles.
Notwithstanding anything to the contrary in
this Lease, "Basic Operating Building Cost"
shall not include and Tenant shall in no
event have any obligation to perform or to
pay directly, or to reimburse Landlord for,
all or any portion of the following repairs,
improvements, replacements, premiums,
claims, losses, fees and expenses
(collectively, "Costs"):
B. EXCLUSIONS FROM BASIC OPERATING BUILDING
COSTS. Notwithstanding anything to the
contrary in this Lease, "Basic Operating
Building Costs" shall not include and Tenant
shall in no event have any obligation to
perform or to pay directly, or to reimburse
Landlord for, all or any portion of the
following repairs, improvements,
replacements, premiums, claims, losses, fees
and expenses (collectively, "Costs"): (a)
Costs of repairing damage to the Premises
caused by casualty, provided that nothing
herein shall be deemed to restrict
Landlord's ability to recover expenses
directly from Tenant pursuant to the terms
of Paragraph 23 hereof; or (b) Costs to
correct any construction defect in the
Premises 'or the Property.
C. GENERAL. In the event that the Building
is not fully occupied during any fiscal year
of the Term as determined by Landlord, an
adjustment shall be made in computing the
Basic Operating Building Cost for such year
so that Tenant pays an equitable portion of
all variable items of Basic Operating
Building Cost, as reasonably determined by
Landlord, so that the total Basic Operating
Cost equals the total amount which would
have been paid or incurred by Landlord had
the Building been one hundred percent (100%)
occupied for the entire calendar year;
provided, however, that in no event shall
Landlord be entitled to collect in excess of
one hundred percent (100%) of the total
Basic Operating Cost from all of the tenants
in the Building including Tenant.
Basic Operating Cost shall not include
specific costs incurred for the account of,
separately billed to or Paid by specific
tenants, Notwithstanding anything herein to
the contrary, in any instance wherein
Landlord, in Landlord's reasonable
discretion, deems Tenant to be responsible
for any amounts greater than Tenant's
Building Cost, Landlord shall have the right
to allocate
9
costs in a manner Landlord deems reasonably
appropriate.
D. PAYMENT OF ESTIMATED BASIC OPERATING
COSTS. "Estimated Basic Operating Building
Cost" for any particular Expense Year shall
mean Landlord's estimate of the amount of
the Basic Operating Building Cost for such
Expense Year, made prior to commencement of
such Expense Year as hereinafter provided.
"Expense Year" shall be each twelve (12)
consecutive month period commencing January
Ist of each year during the Term, provided
that "Landlord, upon notice to Tenant may
change the Expense Year from time to time to
any other twelve (12) consecutive month
period, and, in the event of any such
change, Tenants Basic Operating Building
Cost shall be equitably adjusted for the
Expense Year involved in any such change.
During the last month of each Expense Year
during the Term, or as soon thereafter as
practicable, Landlord shall give Tenant
written notice of Estimated Basic Operating
Building Cost for the ensuing Expense Year.
Tenant shall pay Tenant's Estimated Basic
Operating Building Cost (computed in the
same manner as Tenant's Basic Operating
Building Cost) with installments of Base
Rent for the Expense Year to which the
Estimated Basic Operating Building Cost and
Estimated Basic Operating Office Cost
applies in equal monthly installments on the
first day of each calendar month during such
year, in advance. If any time during the
course of any Expense Year, Landlord
determines that Basic Operating Building
Cost is projected to vary from the then
Estimated Basic Operating Building Cost by
more than ten percent (10%), Landlord may,
by written notice to Tenant, revise the
Estimated Basic Operating Building Cost for
the balance of such fiscal year, and Tenants
monthly installments for the remainder of
such year shall be adjusted so that by the
end of such Expense Year Tenant has paid to
Landlord Tenant's the revised Estimated
Basic Operating Building Cost for such year.
E. COMPUTATION OF BASIC OPERATING BUILDING
COST. "Basic Operating Building Cost
Adjustment" shall mean the difference
between (i) Estimated Basic Operating
Building Cost and (ii) Basic Operating
Building Cost for any Expense Year,
determined as hereinafter provided. Within
one hundred twenty (120) days after the end
of each fiscal year, as determined by
Landlord, or as soon thereafter as
practicable, Landlord shall deliver to
Tenant a statement of Basic Operating
Building Cost for the Expense Year just
ended, accompanied by a computation of Basic
Operating Building Cost If such statement
shows that Tenant's payments based upon
Estimated Basic Operating Building Cost is
less than Ten ants Basic Operating Building
Cost then Tenant shall pay to Landlord the
difference within twenty (20) days after
receipt of such statement. If such statement
shows that Tenants payments of Estimated
Basic Operating Building Cost exceed
Tenant's Basic Operating Building Cost then
(provided that Tenant is not in default
under this Lease), such excess shall be
credited against the Rent next coming due
hereunder. If this Lease has been
terminated or the Term hereof has expired
prior to the date of such statement then the
Basic Operating Building Cost Adjustment
shall be paid by the appropriate party
within twenty (20) days after the date of
delivery of the statement. Should this Lease
commence or terminate at any time other than
the first day of the fiscal year, Tenants
the Basic Operating Building Cost Adjustment
shall be prorated by reference to the exact
number of calendar days during such Expense
Year that this Lease is in effect.
F. Tenant Audit. In the event that Tenant
shall dispute the amount set forth in any
statement provided by Landlord under
Paragraph 7.C. or 7.D
10
above and provided that Tenant is not in
default (as provided for in Paragraph 25.A.
below hereunder), Tenant shall have the
right not later than thirty (30) days
following the receipt of such statement and
upon the condition that Tenant shall first
deposit with Landlord the fall amount in
dispute, to cause Landlord's books and
records with respect to Basic Operating
Building Cost and/or Basic Operating Office
Cost for such fiscal year to be audited by
certified public accountants selected by
Tenant and subject to Landlord's reasonable
right of approval. The Basic Operating
Building Cost Adjustment and/or Basic
Operating Office Cost Adjustment shall be
appropriately adjusted on the basis of such
audit. If such audit discloses liability for
a refund in excess of five percent (5%) of
Tenant's Proportionate Share of Basic
Operating Building Cost previously reported;
the cost of such audit shall be borne by
Landlord; otherwise the cost of such audit
shall be paid by Tenant. If Tenant shall not
request an audit in accordance with the
provisions of this Paragraph 7.E. within
thirty (30) days after receipt of Landlord's
statement provided pursuant to Paragraph 7.C
or 7.D., such statement shall be final and
binding for all purposes hereof The right of
Tenant under this Paragraph 7.E. may only be
exercised once for any Landlord statement;
and if Tenant fails to meet any of the above
conditions as a prerequisite to the exercise
of such right, the right of Tenant under
this Paragraph 7.E. for a particular
Landlord's statement shall be deemed waived.
INSURANCE 8. LANDLORD'S INSURANCE. Landlord agrees to
AND INDEMNI- maintain. insurance insuring the Building
FICATION against fire, lightning, vandalism and
malicious mischief (including "All
Risk" form coverage, boiler, sprinkler,
earthquake, and, if required by law or any
lender with a lien on the Property flood
insurance), in so called "All Risk" form
coverage, in an amount not less than one
hundred percent (100%) of the replacement
cost thereof, with deductibles and the form
and endorsements of such coverage as
selected by Landlord, in its reasonable
discretion. Such insurance may also include,
at Landlord's option, insurance against loss
of Base Rent and Additional Rent, in an
amount equal to the amount of Base Rent and
Additional Rent payable by Tenant for a
period of at least twelve (12) months
commencing on the date of loss. Such
insurance shall be for the sole benefit of
Landlord and under Landlord's sole control.
Landlord shall not be obligated to insure
any furniture, equipment machinery, goods or
supplies which Tenant may keep or maintain
in the Premises, or any leasehold
improvements, additions or alterations
within the Premises made after the
Commencement Date. Landlord shall also carry
such other insurance as Landlord may
reasonably deem prudent or advisable,
including, without limitation, rent
abatement insurance in an amount equal to up
to twelve (12) months' rent due hereunder
and liability insurance in such amounts and
on such terms as Landlord shall reasonably
determine (based on the amounts of liability
insurance carried by other prudent landlords
of similar buildings in the vicinity of the
Building) or as shall be required by any
lender with a lien on the Property. Tenant
shall neither use the Premises nor permit
the Premises to be used or acts to be done
therein which will (a) increase the premium
of any insurance described above; (b)
directly cause a cancellation of or be in
conflict with any such insurance policies;
(c) directly result in a refusal by
insurance companies of good standing to
insure the Building in amounts reasonably
satisfactory to Landlord; (d) subject
Landlord to any liability unsatisfactory to
Landlord. Tenant shall, at Tenant's expense,
comply as to the Premises with all insurance
company requirements pertaining to the use
of the Premises. If Tenant's conduct or use
of the Premises causes any increase in the
premium for such insurance policies, and
such conduct is otherwise permitted by
Landlord, then Tenant shall reimburse
Landlord for any such increase. Tenant, at
11
Tenant's expense, shall comply with all
rules, orders, regulations or requirements
of the American Insurance Association
(formerly the National Board of Fire
Underwriters) and with any similar body.
A. Tenant's Insurance.
(1) PROPERTY INSURANCE. Tenant shall procure
at Tenant's sole cost and expense and keep
in effect from the date of this Lease and at
all times until the end of the Term,
insurance on all personal property,
furniture and fixtures of Tenant and all
improvements made by or for Tenant to, the
Premises after the Term Commencement Date,
insuring such property for the full
replacement value of such property. The
proceeds of such insurance shall be used for
the repair or replacement of the property so
insured, except that if not so applied or if
this Lease is terminated following a
casualty, the proceeds applicable to the
leasehold improvements shall be paid to
Landlord and the proceeds applicable to
Tenant's personal property shall be paid to
Tenant.
(2) LIABILITY INSURANCE. Tenant shall
procure at Tenant's sole cost and expense
and keep in effect from the date of this
Lease and at all times until the end of the
Term either Comprehensive General Liability
insurance or Commercial General Liability
insurance applying to the use and occupancy
of the Premises and the Building, and any
part of either, and any areas adjacent
thereto, and the business operated by
Tenant, or by any other' occupant on the
Premises. Such insurance shall include Broad
Form Contractual Liability insurance
coverage insuring all of Tenant's indemnity
obligations under this Lease. Such coverage
shall have a minimum combined single limit
of liability of at least Two Million Dollars
($2,000,000.00), and a general aggregate
limit of Three Million Dollars
($3,000,000.00) under an umbrella policy of
an aggregate limit of Ten Million Dollars ($
10,000,000.00). All such policies shall be
written to apply to all bodily injury,
property damage, personal injury and other
covered loss occurring during the policy
term, shall be endorsed to add Landlord and
its agents, beneficiaries, partners,
employees, and any deed of trust holder or
mortgagee of Landlord or any ground lessor
as an additional insured, and to provide
that such coverage shall be primary and that
any insurance maintained by Landlord shall
be excess insurance only. Such coverage
shall also contain endorsements: (i)
deleting any employee exclusion on personal
injury coverage; (ii) including employees as
additional insureds; and (iii) providing for
coverage of employer's automobile
non-ownership liability. All such insurance
shall provide for severability of interests;
shall provide that an act or omission of
one of the named insureds shall not reduce
or avoid coverage to the other named
insureds; and shall afford coverage for all
claims based on acts, omissions injury and
damage, which claims occurred or arose (or
the onset of which occurred or arose) in
whole or in part during the policy period
and shall be written as primary policies,
not excess or contributing with or secondary
to any other insurance as may be available
to the additional insureds. Said coverage
shall be written on an "occurrence" basis,
if available. If a "claims made" policy is
ever used, the policy must be endorsed so
that Landlord is given the right to purchase
"tail" coverage should Tenant for any reason
not do so or if the policy is to be canceled
for nonpayment of premium.
(3) GENERAL INSURANCE REQUIREMENTS. All
coverages described in this Paragraph 8.B.
shall be endorsed to provide Landlord with
thirty (30) days' notice of cancellation,
material change in terms or reduction,
except for
12
cancellation due to non-payment of premium
in which case only ten (10) days notice of
cancellation shall be required. If at any
time during the Term the amount or coverage
of insurance which Tenant is required to
carry under this Paragraph 8.B. is, in
Landlord's reasonable judgment, materially
less than the amount or type of insurance
coverage typically carried by owners or
tenants of properties located in the general
area in which the Premises are located which
are similar to and operated for similar
purposes as the Premises, Landlord shall
have the right to require Tenant to
reasonably increase the amount or change the
types of insurance coverage required under
the Paragraph 8.B. All insurance policies
required to be carried under this Lease
shall be written by companies or rated B+
VII or better in "Best's Insurance Guide"
and authorized to do business in California.
In any event deductible amounts shall not
exceed Two Thousand Dollars ($2,000.00).
Tenant shall deliver to Landlord prior to
the Term Commencement Date, a certificate of
Tenant's insurance policies or, upon
Landlord's written request therefor,
certified copies of Tenant insurance
policies, showing that all premiums have
been paid for the full policy period; and in
the event Tenant shall fail to procure such
insurance, or to deliver such policies or
certificates Landlord may, at Landlord's
option and in addition to Landlord's other
remedies in the event of a default by Tenant
hereunder, procure the same for the account
of Tenant, and the reasonable cost thereof
shall be paid to Landlord as Additional
Rent.
B. INDEMNIFICATION. Landlord shall not be
liable to Tenant for any loss or damage to
person or property caused by theft, fire,
acts of God, acts of a public enemy, riot,
strike, insurrection, war, court order,
requisition or order of governmental body or
authority or for any damage or inconvenience
which may arise through repair or alteration
of any part of the Building or failure to
make any such repair, except to the extent
arising from either: (i) the gross
negligence or willful misconduct of
Landlord, or (ii) the failure of Landlord to
perform its repair obligations pursuant to
Paragraph 10 of this Lease. Tenant shall
indemnify, defend by counsel reasonably
acceptable to Landlord and Tenant, protect
and hold Landlord harmless from and against
any and all liabilities, losses, costs,
damages, injuries or expenses, including
reasonable attorneys' fees and court costs,
arising out of or related to: (1) claims of
injury to or death of persons or damage to
property occurring or resulting directly or
indirectly from the use or occupancy of the
Premises, or from activities of Tenant,
Tenant's Parties in or about the Premises or
Building; (2) claims for work or labor
performed, or for materials or supplies
Furnished to or at the request of Tenant in
connection with performance of any work done
for the account of Tenant within the
Premises or Building; and (3) claims arising
from any breach or default on the part of
the Tenant in the performance of any
covenant contained in this Lease. The
foregoing indemnity shall not be applicable
to claims arising from the active negligence
or willful misconduct of Landlord. The
provisions of this paragraph shall survive
the expiration or termination of this Lease
with respect to any claims or liability
occurring prior to such expiration or
termination. Landlord shall indemnify,
defend by counsel reasonably acceptable to
Tenant and protect and hold Tenant harmless
from and against any and all claims,
liabilities, losses, posts, hens, damages,
injuries and expenses, including reasonable
attorneys' and consultants' fees and court
costs, demands, causes of action, and
judgments, directly or indirectly arising
out of or related to the gross negligence or
willful misconduct of Landlord or its
agents, employees, contractors or
representatives.
WAIVER OF 9. Notwithstanding anything to the contrary
herein, the parties hereto release
13
SUBROGATION each other and their respective agents,
employees, successors, assignees and
subtenants from all liability for injury to
any person or damage to any property that
is caused by or results from a risk which
is actually insured against, which is
required to be insured against under the
Lease, or which would normally be covered by
all risk property insurance, without regard
to the negligence or willful misconduct of
the entity so released. All of Landlord's
and Tenant's repair and indemnity
obligations under the Lease shall be subject
to the waiver contained in this paragraph.
LANDLORD'S 10. Subject to reimbursement pursuant to
REPAIRS AND Paragraph 7 of the Lease, except as
SERVICES otherwise specified herein, Landlord shall
repair and maintain: (i) the structural
portions of the Building, including, without
limitation, the exterior walls,
underflooring, and the roof, (ii) the
electrical, plumbing, HVAC and other
systems for the Building, (iii) the
structural portions of the roof and roof
membrane and (iv) outdoor common areas of
the Property, including but not limited to
the parking areas, Subject to Paragraph 9
hereof, if any maintenance or repair becomes
necessary in whole or in part due to the
act, neglect, fault or omission of any duty
by Tenant, its employees, agents, customers
or invitees, or due to damage caused by a
breaking and entering into the Premises,
Tenant shall pay to Landlord that portion of
the cost of such maintenance or repair which
is allocable, to such act, neglect, fault or
omission. Landlord shall not be liable for
and Tenant shall not be entitled to any
reduction of the Base Rent or Additional
Rent by reason of Landlord's failure to make
any repair or to perform any maintenance
required on the part of Landlord hereunder,
unless due to Landlord's gross negligence or
willful misconduct. Tenant shall immediately
give Landlord written notice of any defect
or need for repairs for which Landlord is
responsible under this Paragraph 10, after
which notice Landlord shall have a
reasonable opportunity to repair same.
Tenant hereby waives and releases its right
to make repairs at Landlord's expense under
Sections 1941 and 1942 of the California
Civil Code or under any similar law,
statute, or ordinance now or hereafter in
effect.
TENANT'S 11. Except for those items specifically provided
REPAIRS for by Landlord pursuant to Paragraph 10
above, Tenant is obligated to, at Tenant's
expense, maintain all parts of the Premises
in a good, clean and secure condition and
repair. Tenant shall promptly notify
Landlord of all necessary repairs and
replacements. Tenant agrees to surrender the
Premises upon the expiration or sooner
termination of this Lease in the same
condition as when received, reasonable wear
and tear and damage by fire, earthquake,
acts of God, and the elements excepted.
Notwithstanding anything herein to the
contrary, in no event shall. Tenant be
required to surrender to Landlord at the
expiration of earlier termination of the
Lease Term any "cabinets" of Tenant marked
as such on the Approved Final Plans (as
defined in the Work Letter, which cabinets
must be removed from the Premises at such
time.) Landlord has no obligation to alter,
add to, improve, repair, remodel or paint
the Premises except as specified herein.
Tenant shall pay or cause to be paid, prior
to delinquency, any and all taxes and
assessments levied upon all trade fixtures,
inventories and other personal property
placed in and upon the Premises by Tenant.
Notwithstanding anything to the contrary in
this Lease, Landlord shall perform and
construct, and Tenant shall have no
responsibility to perform or construct, any
repair, maintenance or improvements
necessitated by the negligent acts or
negligent omissions of Landlord or any other
occupant of the Project, or their
respective agents, employees, contractors or
representatives.
14
ALTERATIONS 12. Tenant shall not make, or allow to be made,
any alterations, improvements or physical
additions (collectively "Alterations") in
about or to the Premises without obtaining
the prior written consent of Landlord, which
consent shall not be unreasonably withheld
or delayed with respect to proposed
Alterations which: (a) do not affect the
Building's structure and comply with all
applicable laws, ordinances, rules and
regulations; (b) are in Landlord's
reasonable opinion compatible with the
Building and its mechanical, plumbing,
electrical, heating/ventilation/air
conditioning systems, and life safety
systems; and (e) will not interfere with the
use and occupancy of any other portion of
the Building by any other tenant or its
invitees; Specifically, but without limiting
the generality of the foregoing, Landlord
shall have the right of written consent for
all plans and specifications for the
proposed Alterations, construction means and
methods, all appropriate permits and
licenses, any contractor or subcontractor to
be employed on the work of Alterations, and
the time for performance of such work.
Tenant shall also supply to Landlord any
documents and information reasonably
requested by Landlord in connection with
Landlord's consideration of a request for
approval hereunder. Landlord's consent shall
be conditioned upon receipt of performance
bonds or other bonds from contractors or
subcontractors performing the Alterations,
if Landlord so requires. Tenant shall
reimburse Landlord for all costs which
Landlord may incur in connection with
granting approval to Tenant for any such
Alterations, including any costs or expenses
which Landlord may incur in electing to have
outside, architects and engineers review
said plans and specifications. All
Alterations shall be performed at Tenants
sole cost and expense (including reasonable
costs for Landlord's supervision, but not
including costs, if any, for Landlord's
supervision, if any, in connection with
Tenant's installation of additional
telephone and electrical circuits within the
demised Premises). All Alterations shall
remain the property of Tenant until
termination of this Lease, at which time
they shall be and become the property of
Landlord if Landlord so elects; provided,
however, that Landlord may, at Landlord's
option, require that Tenant at Tenant's
expense, remove any or all Alterations made
by Tenant and restore the Premises by the
termination of this Lease, whether by lapse
of time, or otherwise, to their condition
existing prior to the construction of any
such Alterations. All such removals and
restoration shall be accomplished in a good
and workmanlike manner so as not to cause
any damage to the Premises whatsoever. If
Tenant fails to so remove such Alterations
or Tenant's trade fixtures or furniture,
Landlord may keep and use them or remove any
of them and cause them to be stored or sold
in accordance with applicable law, at
Tenant's sole expense. In addition to and
wholly apart from Tenant's obligation to pay
Tenant's Proportionate Share of Basic
Operating Building Cost, Tenant shall be
responsible for and shall pay prior to
delinquency any taxes or governmental
service fees, possessory interest taxes,
fees or charges in lieu of any such taxes,
capital levies, or other charges imposed
upon, levied with respect to or assessed
against it & personal property, on the value
of the Alterations, and on Tenant's interest
pursuant to this Lease. To the extent that
any such taxes are not separately assessed
or billed to Tenant, Tenant shall pay the
amount thereof as invoiced to Tenant by
Landlord. Notwithstanding the foregoing, (a)
upon Tenant's written request therefor at
such time, Landlord shall advise Tenant in
writing at the time Landlord approves of any
Alteration whether such Alteration must be
removed upon the termination of the Lease,
(b) Tenant may construct nonstructural
Alterations in the Premises which do not
affect the Building roof, foundation or
structural elements and which are not
visible from outside the Building without
Landlord's prior approval; but subject to
the other terms and
15
conditions of the Lease, if the cost of any
such Alteration does not exceed Ten Thousand
Dollars ($10,000.00) individually and, when
taken with all other such alterations not
requiring Landlord's consent, does not cost
more than Fifty Thousand Dollars ($50,000),
and (c) all trade fixtures and personal
property installed in the premises at
Tenant's expense shall at all times remain
Tenant's property and may be removed by
Tenant at any time provided that, Tenant
repairs any damage to the Premises caused by
such removal.
SIGNS 13. All signs, notices and graphics of every
kind or character, visible in or from public
view or corridors, the common areas or the
exterior of the Premises, shall be subject
to Landlord's prior written approval. Tenant
shall not place or maintain any banners
whatsoever or any window decor in or on any
exterior window or window fronting upon any
common areas or service areas without
Landlord's prior written approval. If Tenant
leases an entire floor of the Building, such
signs may be installed in the elevator lobby
of the floor on which the Premises are
located, subject to Landlord's prior written
approval. Any signs, notices, logos,
pictures, names or advertisements which are
installed that have not been individually
approved by Landlord may be removed without
notice by Landlord at the sole expense of
Tenant. Any installation of signs or
graphics on or about the Premises shall be
subject to any applicable governmental laws,
ordinances, regulations and to any other
requirements imposed by Landlord. Tenant
shall remove all such signs and graphics
prior to the termination of this Lease. Such
installations and removals shall be made in
such manner as to avoid injury or defacement
of the Premises, or Building and any other
improvements contained therein, and Tenant
shall repair any injury or defacement,
including without limitation, discoloration
caused by such installation or removal.
INSPECTION/ 14. After reasonable notice, except in
POSTING emergencies where no such notice shall be
NOTICES required, Landlord, and Landlord's agents
and representatives, shall have the right to
enter the Premises to inspect the same, to
clean, to perform such work as may be
permitted or required hereunder, to make
repairs or alterations to the Premises or
Building or to other tenant spaces therein,
to deal with emergencies, to post such
notices as may be permitted or required by
law to prevent the perfection of liens
against Landlord's interest in the Building
or to exhibit the Premises to prospective
tenants, purchasers, encumbrances or others,
or for any other purpose as Landlord may
deem necessary. or desirable; provided,
however, that Landlord shall use reasonable
efforts not to interfere with Tenant's
business operations. Tenant shall not be
entitled to any abatement of Rent by reason
of the exercise of any such right of entry.
At any time within six (6) months prior to
the end of the Term, Landlord shall have the
right to erect on the Premises and/or
Building a suitable sign indicating that the
Premises are available for lease. Tenant
shall give written notice to Landlord at
least thirty (30) days prior to vacating
the Premises and shall meet with Landlord
for a joint inspection of the Premises at
the time of vacating. Except in cases of
emergency, Landlord's entry upon the
Premises shall at all times be subject to
Tenant's reasonable security and operating
requirements.
SUBORDINATION 15 A. SUBORDINATION. Without the necessity of
any additional document being executed by
Tenant for the purpose of effecting a
subordination, the Lease shall be subject
and subordinate at all times to: (a) all
ground leases or underlying leases which may
now exist or hereafter be executed affecting
the Premises and/or the land upon which the
Premises and Building are situated, or both;
and (b) any mortgage or deed of trust which
may now exist
16
or be placed, upon the Building, land,
ground leases or underlying leases, or
Landlord's interest or estate in any of said
items which is specified as security.
Notwithstanding the foregoing, Landlord
shall have the right to subordinate, or
cause to be subordinated any such ground
leases or underlying leases or any such
liens to this Lease. In the event that any
ground lease or underlying lease terminates
for any reason or any mortgage or deed of
trust is foreclosed or a conveyance in lieu
of foreclosure is made for any reason,
Tenant shall, notwithstanding any
subordination, attorn to and become the
Tenant of the successor in interest to
Landlord. Within ten (10) days after request
by Landlord, Tenant shall, execute and
deliver any additional documents evidencing
Tenants attornment or the subordination of
this Lease with respect to any such ground
leases or underlying leases or any such
mortgage or deed of trust in a form
reasonably acceptable to Tenant. Such
instruments may contain, among other things,
provisions to the effect that such lessor,
mortgagee or beneficiary (hereafter, for the
purposes of this Section 15.A, a "Successor
Landlord") shall (i) not be liable for any
act or omission of Landlord or its
predecessors, if any, prior to the date of
such Successor Landlord's succession to
Landlord's interest under this Lease except
for continuing maintenance; (ii) not be
subject to any offsets or defenses which
Tenant may have been able to assert against
Landlord or its predecessors, if any, prior
to the date of such Successor Landlord's
succession to Landlord's interest, under
this Lease; (iii) not be liable for the
return of any security deposit under the
Lease unless the same shall have actually
been deposited with such Successor Landlord;
and (iv) be entitled to receive notice of
any Landlord default under this Lease plus a
reasonable opportunity to cure such default
prior to Tenant having any right or ability
to terminate this Lease as a result of such
Landlord default. Notwithstanding the
foregoing, the subordination of Tenant's
rights and interests under this Lease to any
mortgage or deed of trust shall be
contingent upon Tenant's having received
from any such ground lessor, mortgagee or
beneficiary of any deed of trust a written
recognition agreement in form reasonably
satisfactory to Tenant providing that
Tenant's rights and interest shall not be
disturbed in the event of any foreclosure of
any such lease, mortgage or deed of trust
and confirming that Tenant shall receive
all of the rights and services provided for
under this Lease. Landlord's failure to
obtain such an agreement shall not be a
default by Landlord pursuant to the terms of
this Lease. Further, Tenant shall have no
obligation to attorn to any
successor in interest or ground lessor, nor
to execute any instruments evidencing
attornment, unless the successor in interest
or ground lessor assumes Landlord's
obligations under this Lease in writing.
B. ATTORNMENT AND NON-DISTURBANCE. Tenant
shall attorn to and recognize as Tenant's
landlord under this lease any superior
lessor, superior mortgagee or other
purchaser or person taking title to the
Building by reason of the termination of any
superior lease or the foreclosure of any
superior mortgage or deed of trust and
Tenant shall, upon demand, execute any
documents reasonably requested by any such
person to evidence the attornment described
in this Section 15.B. Notwithstanding
anything in this Section 15, Tenant's
occupancy of the Premises during the term of
this Lease shall not be disturbed so long as
there is no uncured event of default by
Tenant hereunder.
C. MORTGAGE PROTECTION. Tenant agrees to
give any holder of any mortgage and any
ground lessor, by registered or certified
mail, a copy of any notice of default served
upon the Landlord by Tenant provided that
17
prior to such notice Tenant has been
notified in writing of the address of such
mortgage holder or ground lessor (hereafter
the "Notified Party"). Tenant further agrees
that if Landlord shall have failed to cure
such default within twenty (20) days after
such notice to Landlord (or if such default
cannot be cured or corrected within that
time, then such additional time as may be
necessary if Landlord has commenced within
such twenty (20) days and is diligently
pursuing the remedies or steps necessary to
cure or correct such default), then the
Notified Party shall have an additional
thirty (30) days within which to cure or
correct such default (or if such default
cannot be cured or corrected within that
time, then such additional time as may be
necessary if the Notified Party has
commenced within such thirty (30) days and
is diligently pursuing the remedies or steps
necessary to cure or correct such default).
Until the time allowed, as aforesaid, for
the Notified Party to cure such default has
expired without cure, Tenant shall have no
right to, and shall not terminate this Lease
on account of Landlord's default.
FINANCIAL 16. At the request of Landlord, but not more
STATEMENTS than twice per annum, Tenant shall provide
to Landlord Tenant's current publicly
available financial statement or such other
publicly available information discussing
financial worth of Tenant as may be
reasonably requested by Landlord, which
Landlord shall use solely for purposes of
this Lease and in connection with the
ownership, management and disposition of the
Building and keep confidential, provided
that Landlord may disclose such statements
to Landlord's lenders, potential purchasers
of the Building and any professionals hired
or engaged by Landlord in connection
therewith.
ESTOPPEL 17. Tenant agrees from time to time, within ten
CERTIFICATE (10) business days after request of
Landlord, to deliver to Landlord, or
Landlord's designee, an estoppel certificate
stating that this Lease is in full force and
effect, the date to which Rent has been
paid, the unexpired portion of this Lease,
and such other matters pertaining to this
Lease as may be reasonably requested by
Landlord. Failure by Tenant to execute and
deliver such certificate shall constitute an
acceptance of the Premises and
acknowledgment by Tenant that the statements
included are true and correct without
exception. Landlord and Tenant intend that
any statement delivered pursuant to this
paragraph may be relied upon by any
mortgagee, beneficiary, purchaser or
prospective purchaser of the Building or any
interest therein.
SECURITY 18. Tenant agrees to deposit with Landlord upon
DEPOSIT execution of this Lease a Security Deposit
as stated in the Basic Lease Information,
which sum shall be held by Landlord,
without obligation for interest as
security for the performance of Tenant's
covenants and obligations under this
Lease. the Security Deposit is not an
advance rental deposit or a measure of
damages incurred by Landlord in case of
Tenant's default. Landlord may, from time
to time, without prejudice to any other
remedy provided herein or provided by
law, use such fund to the extent
necessary to make good any arrears of
Rent or other payments due to Landlord
hereunder, and any other damage, injury,
expense or liability caused by such event
of default, and Tenant shall pay' to
Landlord, on demand, the amount so
applied in order to restore the Security
Deposit to its original amount. Although
the Security Deposit shall be deemed the
property of Landlord, any remaining
balance of such deposit shall be returned
by Landlord to Tenant at such time after
termination of this Lease that all of
Tenant's obligations under this Lease
have been fulfilled. Landlord may use and
commingle the Security Deposit with other
funds of
18
Landlord.
TENANT'S 19. The liability of Landlord to Tenant for any
REMEDIES default by Landlord under the terms of this
Lease are not personal obligations of the
individual or other partners, directors,
officers and shareholders of Landlord, and
Tenant agrees to look solely to Landlord's
interest in the Building for the recovery of
any amount from Landlord, and shall not look
to other assets of Landlord nor seek
recourse against the assets of the
individual or other partners, directors,
officers and shareholders of Landlord.
ASSIGNMENT 20. A. General. Tenant shall not assign or
AND sublet the Premises or any part thereof
SUBLETTING without Landlord's prior written approval
except as provided herein. If Tenant desires
to assign this Lease or, sublet any or all
of the Premises, Tenant shall provide
Landlord written notice thirty (30) calendar
days prior to the anticipated effective date
of the assignment or sublease. Landlord
shall then have a period of ten (10)
business days following receipt of such
notice to either: (1) terminate this Lease
as to the space so affected as of the date
so requested by Tenant, subject to the
limitations of Section 20.C. below; or (2)
to permit Tenant to assign this Lease or
sublet such space, subject, however, to
Landlord's prior written approval of the
proposed assignee or subtenant and any
assignment or sublease documents. If
Landlord should fail to notify Tenant in
writing of such election within thirty (30)
days following receipt of such notice,
Landlord shall be deemed to have refused
Landlord's consent to the assignment or
subletting in question. If Landlord does not
exercise the option provided in subsection
(c) below, Landlord's consent to a proposed
assignment or sublet shall not be
unreasonably withheld or delayed. Without
limiting the other instances in which it may
be reasonable for Landlord to withhold
Landlord's consent to an assignment or
subletting, Landlord and Tenant acknowledge
that it shall be reasonable for Landlord to
withhold Landlord's consent in the following
instances: The use of the Premises by such
proposed assignee or subtenant would not be
a permitted use; the proposed assignee or
subtenant is not of sound financial
condition; the proposed assignee or
subtenant is a governmental agency; the
proposed assignee or subtenant does not have
a good reputation as a tenant of property;
the proposed assignee or subtenant is a
person with whom Landlord is negotiating to
lease space in the Building; the assignment
or subletting would entail any alterations
which would lessen the value of the
leasehold improvements in the Premises; or
if Tenant is in default of any obligation of
Tenant under this Lease, or Tenant has
defaulted under this Lease on two (2) or
more occasions during any twelve (12) months
preceding the date that Tenant shall request
consent. Tenant shall pay promptly upon
billing any and all reasonable attorneys'
fees and other costs reasonably incurred by
Landlord for the review or preparation of
any documents in connection with a proposed
assignment or sublease not to exceed Two
Thousand Dollars ($2,000.00). Failure by
Landlord to approve a proposed assignee or
subtenant shall not cause a termination of
this Lease. Upon termination under this
Paragraph 20.A. Landlord may lease the
Premises to any party including parties with
whom Tenant has negotiated an assignment or
sublease, without incurring any liability to
Tenant.
B. Bonus Rent. Any Rent or other
consideration realized by Tenant under
any such sublease or assignment in excess
of the Rent payable hereunder, or in the
event such sublease is for a portion of
the Premises: in excess of the Rent that
is fairly allocable to such portion, as
determined by Landlord, after deduction
of a reasonable brokerage commission
actually paid by Tenant and deduction of
reasonable tenant improvement allowance,
19
reasonable attorneys' and leasing
commissions incurred by Tenant, shall be
divided and paid, seventy-five percent (75%)
to Landlord, twenty-five percent (25%) to
Tenant after first subtracting fair market
brokerage commissions. In any subletting or
assignment undertaken by Tenant Tenant shall
diligently seek to obtain the maximum rental
amount available in the marketplace for such
subletting or assignment.
C. RECAPTURE. If Tenant proposes to assign
this Lease or sublet more than fifty percent
(50%) of the rentable square footage of the
Premises, Landlord shall have the right, in
its sole and absolute discretion, to
terminate this Lease (as to such space) on
written notice to Tenant within ten (10)
business days after receipt of Tenant's
notice. If Landlord elects to terminate the
Lease as set forth in Tenant's notice, and
Landlord shall have the right (but no
obligation) to enter into a direct lease
with the proposed assignee or subtenant.
Tenant may withdraw its request for
Landlord's consent at any time prior to, but
not after, Landlord delivers a written
notice of termination.
D. CORPORATION. Notwithstanding anything to
the contrary in this Lease, Tenant may,
without Landlord's prior written consent and
without being subject to Paragraph 20A., B.
or C. of this Lease, sublet any of the
Premises or assign this Lease to (a) a
subsidiary, affiliate, division. or
corporation controlling, controlled by, or
under common control with Tenant, (b) a
successor corporation related to Tenant by
merger, consolidation, nonbankruptcy
reorganization, or government action, or (c)
a purchaser of substantially all of Tenant's
assets located in the Premises, provided
that any party described in (a), (b) or (c)
above has a net worth at least equal to the
greater of the net worth of Tenant as of the
date of this Lease or the date of such
transfer. In addition, no issuance, sale or
transfer of Tenant's capital stock which
does not result in a change in the voting
control of Tenant shall be deemed an
assignment subletting or any other transfer
of this Lease or the Premises.
E. PARTNERSHIP. If Tenant is a partnership,
joint venture or other incorporated business
form, a transfer of the interest of persons,
firms or entities responsible for managerial
control of Tenant by sale, assignment
bequest, inheritance, operation of law or
other disposition, so as to result in a
change in the present control of said entity
and/or a change in the identity of the
persons responsible for the general credit
obligations of said entity shall constitute
an assignment for all purposes of this
Lease.
F. Liability. No Assignment or subletting by
Tenant shall relieve Tenant of any
obligation under this Lease. Any assignment
or subletting which conflicts with the
provisions hereof shall be void.
AUTHORITY OF 21. Landlord represents and warrants that it has
PARTIES full right and authority to enter into this
Lease and to perform all of landlord's
obligations hereunder. Tenant represents and
warrants that it has full right and
authority to enter into this Lease and to
perform all of Tenant's obligations
hereunder.
CONDEMNA- 22. A. CONDEMNATION RESULTING IN TERMINATION. If
TION the whole or any substantial part of the
Building should be taken or condemned for
any public use under governmental law,
ordinance or regulation, or by right of
eminent domain, or by private purchase in
lieu thereof, and the taking would prevent
or materially interfere with the Permitted
Use of the Premises, this Lease
20
shall terminate and the Rent shall be abated
during the unexpired portion of this Lease,
effective when the physical taking of said
Premises shall have occurred.
B. CONDEMNATION NOT RESULTING IN
TERMINATION. If a portion of the Building
should be taken or condemned for any public
use under any governmental law, ordinance,
or regulation, or by right of eminent
domain, or by private purchase in lieu
thereof, and this Lease is not terminated as
provided in Paragraph 23 A. above, this
Lease shall not terminate, but the Rent
payable hereunder during the unexpired
portion of the Lease shall be reduced,
beginning on the date when the physical
taking shall have occurred, to such amount
as may be fair and reasonable under all of
the.circumstances.
C. AWARD. Landlord shall be entitled to any
and all payment, income, rent, award, or
any interest therein whatsoever which may be
paid or made in connection with such taking
or conveyance and Tenant shall have no
claim against Landlord or otherwise for the
value of any unexpired portion of this
Lease. Notwithstanding the foregoing, any
compensation specifically awarded Tenant for
loss of business, Tenant's personal
property, moving costs or loss of goodwill,
shall be and remain the property of Tenant.
CASUALTY 23. A. General. If the Premises or Building
DAMAGE should be damaged or destroyed by fire or
other casualty, Tenant shall give
immediate written notice thereof to
Landlord. Within fifteen (15) days after
Landlord's receipt of such notice, Landlord
shall notify Tenant whether such repairs can
reasonably be made within one hundred eighty
(180) days from the date of such notice.
Landlord's determination shall be binding on
Tenant.
B. LESS THAN 180 DAYS. If the Premises or
Building should be damaged by fire or other
casualty but only to such extent that
rebuilding or repairs can in Landlord's
estimation be reasonably completed within
one hundred eighty (180) days after the date
of such damage, this Lease shall not
terminate, and provided that insurance
proceeds are available to fully repair the
damage, Landlord shall proceed to rebuild
and repair the Premises and/or the Building
and the Tenant Improvements to its/their
condition existing immediately prior to the
damage (to the extent allowed by then
applicable law), except that Landlord shall
not be required to rebuild, repair or
replace any part of the partitions,
fixtures, Alterations, additions and
leasehold improvements which may have been
placed in, on or about the Premises by
Tenant. If the Premises are untenantable in
whole or in part following such damage, or
if such damage prevents or materially
interferes with the Permitted Use of the
Premises by Tenant, the Rent payable
hereunder during the period in which they
are untenantable or during which the
Permitted Use of the Premises by Tenant is
prevented or materially interfered with,
shall be abated proportionately, but only to
the extent of rental abatement insurance
proceeds received by Landlord during the
time and to the extent the Premises are
unfit for occupancy.
C. GREATER THAN 180 DAYS. If the Premises or
Building should be so damaged by fire or by
other casualty that rebuilding or repairs
cannot in Landlord's estimation be completed
within one hundred eighty (180) days after
such damage, this Lease shall terminate and
the Rent shall be abated during the
unexpired portion of this Lease, effective
upon the date of the occurrence of such
damage. Notwithstanding anything in this
Section 23, if the Premises or any material
part of the Building or the Project that
Tenant is entitled to use under this Lease
is damaged by any casualty, then Tenant
21
shall have the right to terminate this Lease
if the Premises or such parts of' the
Building or the Project cannot be fully
restored by Landlord to their prior
condition within two hundred seventy (270)
days after the date of such damage.
D. TENANT'S FAULT. If the Premises are
damaged by fire or other casualty resulting
from the fault negligence, or breach of this
Lease by Tenant or any of Tenant's Parties,
Base Rent and Additional Rent shall not be
DIMINISHED during the repair of such damage,
except to the extent of any rental
interruption insurance carried by Landlord,
and, subject to the terms of Paragraph 4
hereof, Tenant shall be liable to Landlord
for the cost and expense of the repair and
restoration of the Building caused thereby
to the extent such cost and expense is not
covered by insurance proceeds.
E. UNINSURED CASUALTY. Notwithstanding
anything herein to the contrary, in the
event that the Premises or Building are
damaged or destroyed and are not fully
covered by the insurance proceeds received
by Landlord or in the event that the holder
of any indebtedness secured by a mortgage or
deed of trust covering the Premises legally
requires that the insurance proceeds be,
applied to such indebtedness, then in either
case Landlord shall have the right to
terminate this Lease by delivering written
notice of termination (a "Termination
Notice") to Tenant within thirty (30) days
after the date of notice to Landlord that
said damage or destruction is not fully
covered by insurance or such requirement is
made by any such holder, as the case may be,
whereupon all rights and obligations
hereunder shall cease and terminate.
Notwithstanding the foregoing, Tenant may
defeat Landlord's termination right
hereunder by providing Landlord with written
notice thereof within ten (10) days of
receipt of such Termination Notice and
further providing Landlord with the funds
necessary to complete rebuilding of the
damage or destruction (after subtracting
the, available insurance proceeds) within
thirty (30) days after receipt of the
Termination Notice, which funds shall be
used to repair such damage in the same
manner and order described in paragraph 4.C.
(1) of the Work Letter.
F. Waiver. Except as otherwise provided in
this Paragraph 23, Tenant hereby waives the
provisions of Sections 1932, 1933(4), 1941
and 1.942 of the Civil Code of California.
HOLDING OVER 24. If Tenant shall retain the possession of the
Premises or any portion thereof without
Landlord's consent following the
expiration of the Lease or sooner
termination for any reason, then Tenant
shall pay to Landlord for each day of
such retention one hundred fifty percent
(150%) of the amount of the daily rental
as of the last month prior to the date of
expiration or termination Tenant shall
also indemnify, defend, protect and hold
Landlord harmless from any loss,
liability or cost including reasonable
attorneys' fees, resulting from delay by
Tenant, in surrendering the Premises,
including, without limitation, any claims
made by any succeeding tenant founded on
such delay. Acceptance of Rent by
Landlord following expiration or
termination shall not constitute a
renewal of this Lease, and nothing
contained in this Paragraph 24 shall
waive Landlord's right of reentry or any
other right Unless Landlord consents in
writing to Tenant's holding over, Tenant
shall be only a Tenant at sufferance,
whether or not Landlord accepts any Rent
from. Tenant while Tenant is holding over
without Landlord's written consent.
Additionally, in the event that upon
termination of the Lease, Tenant has not
fulfilled its obligation with respect to
repairs and cleanup of the Premises or
any other Tenant obligations as set forth
in this Lease, then
22
Landlord shall have the right to perform any
such obligations as it deems necessary at
Tenant's sole cost and expense, and any time
required by Landlord to complete such
obligations shall be considered a period of
holding over and the terms of this Paragraph
24 shall apply.
DEFAULT 25. A. EVENTS OF DEFAULT. The occurrence of any
of the following shall constitute an event
of default on the part of Tenant:
(1) Abandonment. Abandonment of the Premises
for a continuous period in excess of thirty
(30) days, Tenant waives any right to notice
Tenant may have under Section 1951.3 of the
Civil Code of the State of California, the
terms of this Paragraph 25A being deemed
such notice to Tenant as required by said
Section 1951.3.
(2) NONPAYMENT OF RENT. Failure to pay any
installment of Rent or any other amount due
and payable hereunder within five (5) days
after written notice that such payment is
due.
(3) OTHER OBLIGATIONS. Failure to perform
any obligation, agreement or covenant under
this Lease other than those matters
specified in subparagraphs (1) and (2) of
this Paragraph 26.A., such failure
continuing for thirty (30) days after
written notice of such failure. If the
nature of the default (other than those
matters specified in subparagraphs (1) and
(2) of this Paragraph 25.A) reasonably
requires more than 30 days to cure, Tenant
shall not be deemed to be in default if
Tenant commences to cure within the 30-day
period and thereafter diligently continues
that cure to completion.
(4) GENERAL ASSIGNMENT. A general assignment
by Tenant for the benefit of creditors.
(5) BANKRUPTCY. The filing of any voluntary
petition in bankruptcy by Tenant, or the
filing of an involuntary petition by
Tenant's creditors, which involuntary
petition remains undischarged for a period
of thirty (30) days (or, in the case of an
involuntary petition, sixty (60) days.) In
the event that under applicable law the
trustee in bankruptcy or Tenant has the
right to affirm this Lease and continue to
perform the obligations of Tenant hereunder,
such trustee or Tenant shall, in such time
period as may be permitted by the bankruptcy
court having jurisdiction, cure all defaults
of Tenant hereunder outstanding as of the
date of the affirmance of this Lease and
provide to Landlord such adequate assurances
as may be necessary to ensure Landlord of
the continued performance of Tenant's
obligation under this Lease.
(6) RECEIVERSHIP. The employment of a
receiver to take possession of substantially
all of Tenants assets or the Premises, if
such appointment remains undismissed or
undischarged for a period of sixty (60) days
after the order therefor.
(7) ATTACHMENT. The attachment execution or
other judicial seizure of all or
substantially all of Tenants assets or the
Premises, if such attachment or other
seizure remains undismissed or undischarged
for a period of sixty (60) days after the
levy thereof.
B. REMEDIES UPON DEFAULT.
23
(1) TERMINATION. In the event of the
occurrence of any event of default, Landlord
shall have the right to give a written
termination notice to Tenant, and on the
date specified in such notice, Tenant's
right to possession shall terminate, and
this Lease shall terminate unless on or
before such date all arrears of rental and
all other sums payable by Tenant under this
Lease and all costs and expenses incurred by
or on behalf of Landlord hereunder shall
have been paid by Tenant and all other
events of default of this Lease by Tenant at
the time existing shall have been fully
remedied to the satisfaction of Landlord. At
any time after such termination, Landlord
may recover possession of the Premises or
any part thereof and expel and remove
therefrom Tenant and any other person
occupying the same, by any lawful means, and
again repossess and enjoy the Premises
without prejudice to any of the remedies
that Landlord may have under this Lease, or
at law or equity by reason of Tenant's
default or of such termination
(2) CONTINUATION AFTER DEFAULT. Even though
an event of default may have occurred, this
Lease shall continue in effect for so long
as Landlord does not terminate Tenant's
right to possession under Paragraph 25.B.(I)
hereof, and Landlord may enforce all of
Landlord's rights and remedies under this
Lease, including without limitation, the
right to recover Rent as it becomes due,
and Landlord, without terminating this
Lease, may exercise an of the rights and
remedies of a landlord under Section 1951.4
of the Civil Code of the State of California
or any successor code section. Acts of
maintenance, preservation or efforts to
lease the Premises or the appointment of a
receiver upon application of Landlord to
protect Landlord's interest under this Lease
shall not constitute an election to
terminate Tenant's right to possession.
C. DAMAGES AFTER DEFAULT. Should Landlord
terminate this Lease pursuant to the
provisions of Paragraph 25.B.(I) hereof,
Landlord shall have the rights and remedies
of a Landlord provided by Section 1951.2 of
the Civil Code of the State of California or
successor code sections. Upon such
termination, in addition to any other rights
and remedies to which Landlord may be
entitled under applicable law, Landlord
shall be entitled to recover from Tenant:
(1) the worth at the time of award of the
unpaid Rent and other amounts which had been
earned at the time of termination, (2) the
worth at the time of award of the amount by
which the unpaid Rent which would have been
earned after termination until the time of
award exceeds the amount of such Rent loss
that Tenant proves could have been
reasonably avoided; (3) the worth at the
time of award of the amount by which the
unpaid Rent for the balance of the Tenant
after the time of award exceeds the amount
of such Rent loss that the Tenant proves
could be reasonably avoided; and (4) any
other amount necessary to compensate
Landlord for all the detriment proximately
caused by Tenant's failure to perform
Tenant's obligations under this Lease or
which, in the ordinary course of things,
would be likely to result therefrom. The
"worth at the time of award" of the amounts
referred to in (1) and (2) above, shall be
computed at the lesser of the "prime rate,"
as announced from time to time by Wells
Fargo Bank, N.A. (San Francisco), plus five
(5) percentage points, or the maximum
interest rate allowed by law ("Applicable
Interest Rate"). The "worth at the time of
award" of the amount referred to in (3)
above shall be computed by discounting such
amount at the Federal Discount Rate of the
Federal Reserve Bank of San Francisco at the
time of the award.
D. LATE CHARGE. If any installment of Rent
is not paid within five (5) days after
Landlord shall have given Tenant notice of
nonpayment (provided
24
that Landlord shall not be required to
provide such a notice for more than one (1)
default in any twelve (1-2) consecutive
month period), such amount shall bear
interest at the Applicable Interest Rate,
from the date on which said payment was
originally due until the date on which
Landlord shall receive said payment. In
addition, Tenant shall pay Landlord a late
charge equal to three percent (3%) of the
delinquency, to compensate Landlord for the
loss of the use of the amount not paid and
the administrative costs caused by the
delinquency, the parties agreeing that
Landlord's damage by virtue of such
delinquencies would be difficult to compute
and the amount stated herein represents a
reasonable estimate thereof. This provision
shall not relieve Tenant of Tenant's
obligation to pay Rent at the time and in
the manner herein specified.
E. REMEDIES CUMULATIVE. All rights,
privileges and elections or remedies of the
parties are cumulative and not alternative,
to the extent permitted by law and except as
otherwise provided herein.
LIENS 26. Tenant shall keep the Premises free from
liens arising out of or related to work
performed, materials or supplies diminished
or obligation incurred by Tenant or in
connection with work made, suffered or done
by or on behalf of Tenant in or on the
Premises or Building. In the event that
Tenant shall not, within twenty (20) days
following the imposition of any such lien,
cause the same to be released of record by
payment or posting of a proper bond,
Landlord shall have, in addition to all
other remedies provided herein and by law,
the right, but not the obligation, to cause
the same to be released by such means as
Landlord shall deem proper, including
payment of the claim giving rise to such
lien. All sums paid by Landlord on behalf of
Tenant and all expenses incurred by Landlord
in connection therefor shall be payable to
Landlord by Tenant on demand with interest
at the Applicable Interest Rate. Landlord
shall have the right at all times to post
and keep posted on the Premises any notices
permitted or required by law, or which
Landlord shall deem proper, for the
protection, of Landlord, the Premises, the
Building and any other party having an
interest therein, from mechanics' and
materialmen's liens, and Tenant shall give
Landlord not less than ten (10) business
days' prior written notice of the
commencement of any' work in the Premises or
Building which would lawfully give rise to a
claim for mechanics' or materialmen's liens.
TRANSFERS BY 27. In the event of a sale or conveyance by
LANDLORD Landlord of the Building or a foreclosure by
any creditor of Landlord, the same shall
operate to release Landlord from any
liability upon any of the covenants or
conditions, express or implied, herein
contained in favor of Tenant, to the extent
required to be performed after the passing
of title to Landlord's
successor-in-interest. In such event Tenant
agrees to look solely to the responsibility
of the successor-in-interest of Landlord
under this Lease with respect to the
performance of the covenants and duties of
"Landlord" to be performed after the passing
of title to Landlord's
successor-in-interest. This Lease shall not
be affected by any such sale and Tenant
agrees to attorn to the purchaser or
assignee. Landlord's
successor(s)-in-interest shall not have
liability to Tenant with respect to the
failure to perform all of the obligations of
"Landlord," to the extent required to be
performed prior to the date such
successor(s)-in-interest became the owner of
the Building, except that any such
successor(s)-in-interest shall be required
to remedy any continuing Landlord default,
such as a continuing failure to maintain and
repair.
RIGHT OF 28. All covenants and agreements to be performed
by Tenant under any of the
25
LANDLORD TO terms of this Lease shall be performed by
PERFORM AND Tenant at Tenant's sole cost and expense and
TENANT'S without any abatement of Rent. If Tenant
COVENANTS shall fail to pay any sum of money, other
than Base Rent, Basic Operating Building
Cost and Basic Operating Office Cost
required to be paid by Tenant hereunder or
shall fail to perform any other act on
Tenant's part to be performed hereunder, and
such failure shall continue for five (5)
days after notice thereof by Landlord,
Landlord may, but shall not be obligated to
do so, and without waiving or releasing
Tenant from any obligations of Tenant, make
any such payment or perform any such act on
Tenant's part to be made or performed. All
sums so paid by Landlord and all necessary
incidental costs together with interest
thereon at the Applicable Interest Rate
from the date such payment by Landlord shall
be payable to Landlord on demand, and Tenant
covenants to pay such sums, and Landlord
shall have, in addition to any other right
or remedy of Landlord, the same right and
remedies in the event of the non payment
thereof by Tenant as in the case of default
by Tenant in the payment of Base Rent and
Basic Operating Building Cost.
WAIVER 29. If either Landlord or Tenant waives the
performance of any term, covenant or
condition contained in this Lease, such
waiver shall not be deemed a waiver of any
subsequent breach of the same or any other
term, covenant or condition contained
herein. The acceptance of Rent by Landlord
shall not constitute a waiver of any
preceding breach by Tenant of any term,
covenant or condition of this Lease,
regardless of Landlord's knowledge of such
preceding breach at the time Landlord
accepted such Rent. Failure by Landlord to
enforce any of the terms, covenants or
conditions of this Lease for any length of
time shall not be deemed to waive or to
decrease the right of Landlord to insist
thereafter upon strict performance by
Tenant. Waiver of any term, covenant or
condition contained in this, Lease may only
be made by a written document signed by
Landlord.
NOTICES 30. Each provision of this Lease or of any
applicable governmental laws, ordinances,
regulations and other requirements with
reference to sending, mailing, or delivery
of any notice or the making of any payment
by Landlord or Tenant to the other shall be
deemed to be complied with when and if the
following steps are taken.
A. RENT. All Rent and other payments
required to be made by Tenant to Landlord
hereunder shall be payable to Landlord at
the address set forth in the Basic Lease
Information, or at such other address as
Landlord may specify from time to time by
written notice delivered in accordance
herewith. Tenant's obligation to pay Rent
and any other amounts to Landlord under the
terms of this Lease shall not be deemed
satisfied until such Rent and other amounts
have been actually received by Landlord.
B. OTHER. All notices, demands consents and
approvals which may or are required to be
given by either party to the, other
hereunder shall be in writing and either
personally delivered, sent by commercial
overnight courier, or mailed, certified or
registered, postage prepaid, and addressed
to the party to be notified at the address
for such party as specified in the Basic
Lease Information or to such other place as
the party to be notified may from time to
time designate by at least fifteen (15) days
notice to the notifying party. Notices shall
be deemed served upon receipt or refusal to
accept delivery.
ATTORNEYS' 31. In the event that Landlord places the
FEES enforcement of this Lease, or any part
thereof, or the collection of any Rent due,
or to become due hereunder, or
26
recovery of possession of the Premises in
the hands of an attorney, Tenant shall pay
to Landlord, upon demand, Landlord's
reasonable attorneys' fees and court costs.
In any action which Landlord or Tenant
brings to enforce its respective rights
hereunder, the unsuccessful party shall pay
all costs incurred by the prevailing party
including reasonable attorneys' fees, to be
fixed by the court, and said costs and
attorneys' fees shall be a part of the
judgment in said action.
SUCCESSORS 32. This Lease shall be binding upon and inure
AND ASSIGNS to the benefit of Landlord, its successors
and assigns, and shall be binding upon and
inure to the benefit of Tenant, its
successors, and to the extent an assignment
is approved by Landlord hereunder, Tenant's
assigns.
FORCE 33. Whenever period of time is herein prescribed
MAJEURE for action to be taken by Landlord or Tenant
(except for the payment of Rent or any other
costs or expenses under this Lease) such
party shall not be liable or responsible
for, and there shall be excluded from the
computation for any such period of time, any
delays due to strikes, riots, acts of God,
shortages of labor or materials, war,
governmental laws, regulations or
restrictions or any other causes of any kind
whatsoever which are beyond the control of
Landlord. This Paragraph 33 shall not
extend, or delay any time at which Tenant
shall be entitled to terminate this Lease.
BROKERAGE 34. Landlord shall pay a brokerage commission to
COMMISSION Broker in accordance with a separate
agreement between Landlord and Broker.
Tenant warrants to Landlord that Tenant's
sole contact with Landlord or with the
Premises in connection with this transaction
has been directly with Landlord and Broker,
and that no other broker or finder can
properly claim a right to a commission or a
finder's fee based upon contacts between the
claimant and Tenant with respect to Landlord
or the Premises. Tenant shall indemnify,
defend by counsel acceptable to Landlord,
protect and hold Landlord harmless from and
against any loss, cost or expense,
including, but not limited to, attorneys'
fees and costs, resulting from any claim for
a fee or commission by any broker or finder
in connection with the Premises and this
Lease other than Broker.
MISCELLAN- 3.5. A. GENERAL. The term "Tenant" or any
EOUS pronoun used in place thereof shall indicate
and include the masculine or feminine, the
singular or plural number, individuals,
firms or corporations, and their respective
successors, executors, administrators and
permitted assigns, according to the context
hereof
B. TIME. Time is of the essence regarding
this Lease and all of its provisions.
C. CHOICE OF LAW., This Lease shall in all
respects be governed by the laws of the
State of California.
D. ENTIRE AGREEMENT. This Lease, together
with its Exhibits, contains all the
agreements of the parties hereto and
supersedes any previous negotiations. There
have been no representations made by the
Landlord or understandings made between the
parties other than those set forth in this
Lease and its exhibits.
27
E. MODIFICATION. This Lease may not be
modified except by a written instrument by
the parties hereto.
F. SEVERABILITY. If, for any reason
whatsoever, any of the provisions hereof
shall be unenforceable or ineffective, all
of the other provisions shall be and remain
in full force and effect.
G. Recordation. Tenant shall not record this
Lease or a short form memorandum hereof.
H. EXAMINATION OF LEASE. Submission of this
Lease to Tenant does not constitute an
option or offer to lease and this Lease is
not effective. otherwise until execution and
delivery by both Landlord and Tenant.
I. ACCORD AND SATISFACTION. No payment by
Tenant of a lesser amount than the Rent nor
any endorsement on any check or letter
accompanying any check or payment of Rent
shall be deemed an accord and satisfaction
of full payment of Rent, and Landlord may
accept such payment without prejudice to
Landlord's right to recover the balance of
such to Rent or to pursue other remedies,
J. EASEMENTS. Landlord may grant easements
on the Building and dedicate for public use
portions of the Building without Tenant's
consent; provided that no such grant or
dedication shall substantially interfere
with Tenant's use of the Premises, nor shall
nay such grant or dedication materially
interfere with Tenant's access to the
Premises or parking at the Property as set
forth in this Lease or materially increase
the costs or obligations or decrease the
rights of Tenant under this Lease. Upon
Landlord's demand, Tenant shall execute,
acknowledge and deliver to Landlord
documents, instruments, maps and plats
necessary to effectuate Tenant's covenants
hereunder.
K. DRAFTING AND DETERMINATION PRESUMPTION.
The parties acknowledge that this Lease has
been agreed to by both the parties, that
both Landlord and Tenant have consulted with
attorneys with respect to the terms of this
Lease and that no presumption shall be
created against Landlord because Landlord
drafted this Lease. Except as otherwise
specifically set forth in this Lease, with
respect to any consent, determination or
estimation of Landlord required in this
Lease or requested of Landlord Landlord's
consent, determination or estimation shall
be reasonably made.
L. EXHIBITS. Exhibits A, B, Bl, C and D
attached hereto are hereby incorporated
herein by this reference.
M. No Light, Air or View Easements Any
diminution or shutting off of light air or
view by any structure which may be erected
on lands adjacent to or in the vicinity of
the Building shall in no way affect this
Lease or impose any liability on Landlord.
N. No Third Party Benefit. This Lease is a
contract between Landlord and Tenant and
nothing herein is intended to create any
third party benefit.
0. Building. Landlord shall have the right
at any time to change the name of the
Building, to increase the size of t he real
property upon which the
28
Building is located by adding additional
real property thereto, to construct other
buildings or improvements on, any portion of
such real property, to change the location
and/or character of or to make alterations
or additions to such real property. Tenant
shall not use the Building's name for any
purpose other than as part of its business.
address. Any use of such name in the
designation of Tenant's business shall
constitute a default under this Lease.
P. SURVIVAL OF OBLIGATIONS., Any obligations
of the parties arising prior to the
expiration of the Lease shall survive the
termination of the Lease, and each party
shall promptly perform all such obligations
whether or not this Lease has expired.
Q. INDEPENDENT COVENANTS. Each covenant,
agreement, obligation or other provision of
this Lease to be. performed by Tenant are
separate and independent covenants of
Tenant, and not dependent on any other
provision of the Lease.
R. JOINT AND SEVERAL LIABILITY. If Tenant
comprises more than one entity. or person,
or if this Lease is guaranteed by any party,
all such persons shall be jointly and
severally liable for payment of rents and
for performance of Tenant's obligations
hereunder.
S. OFFER TO LEASE. The submission of this
Lease to Tenant or its broker or other agent
does not constitute an offer to Tenant to
lease the Premises. This Lease shall have no
force and effect until (a) it is executed
and delivered by Tenant to Landlord and (b)
it is fully reviewed and executed by
Landlord.
APPROVAL 36. Except as specifically stated to the
contrary in this Lease, whenever this Lease
requires an approval, consent designation,
determination, selection or judgment by
either Landlord or Tenant, such approval,
consent, designation, determination,
selection or judgment and any conditions
imposed thereby shall be reasonable and
shall not be unreasonably withheld or
delayed and, in exercising any right or
remedy hereunder, each party shall at all
times act reasonably and in good faith.
PARKING 37. Landlord grants to Tenant and Tenant's
customers, suppliers, employees and invitees
a nonexclusive license to use parking spaces
on the Property for the use of motor
vehicles during the Lease Term subject to
rights reserved to Landlord as specified in
this Paragraph 37. Landlord reserves the
right to promulgate rules and regulations
relating to the parking areas; to make
changes in the parking layout from time to
time; and to do and perform any other acts
in and to these areas and improvements as
Landlord reasonably determines to be
advisable. Tenant agrees not to overburden
the parking. facilities and to abide by and
conform with the rules and regulations and
to cause. its employees and agents to abide
by and conform to the rules and regulations.
Currently, parking available for Tenant's
use is allotted at (three (3)) spaces per
one thousand (1,000) rental square feet of
the Premises.
29
SIGNATURES IN WITNESS WHEREOF, the parties hereto have executed this lease
the day and year first above written.
"Landlord"
WJT, LLC,
a California limited liability company
By: /s/ James Tong
---------------------------------------
Name: James Tong
Its: Managing Partner
---------------------------------
By:
---------------------------------------
Name: Wendahl K.S. Ting
Its:
---------------------------------
Date:
-------------------------------------
"TENANT"
POLYCOM, INC.,
a Delaware corporation
By: /s/ Robert C. Hagerty
---------------------------------------
Name: ROBERT C. HAGERTY
----------------------------------
Title: CHAIRMAN
---------------------------------
Date: 2-19-01
-------------------------------------
APPROVED AS TO FORM
/s/ illegible
----------------------------
POLYCOM LEGAL
30
LEASE RIDER
This Lease Rider is attached to and forms a -part of that certain Lease dated as
of _____________, __2001 by and between WJT, LLC, a California limited liability
company, as Landlord, and POLYCOM, INC., a Delaware corporation, as Tenant, and
constitutes additional covenants and agreements thereto as set forth in the
Lease, with the covenants and agreements contained herein to prevail in the
event of any conflict. between the covenants and agreements contained herein
and those in the Lease.
EXHIBIT A TRANSPORTATION MANAGEMENT
Tenant agrees to comply with any lawful regulations or ordinances of the City of
Pleasanton regarding transportation management within the City.
31
EXHIBIT A
Property Description
All of that land situated in the State of California, County of Alameda, City of
Pleasanton, and more particularly described as follows:
LOT 35B PARCEL MAP 7215 FILED DECEMBER 10, 1997 IN BOOK 234 AT PAGES 3 AND 4,
ALAMEDA COUNTY RECORDS.
ASSESSOR'S PARCEL NO.: 941-2759-011 (PORTION)
8
EXHIBIT B
PLANS AND SPECIFICATIONS
EXHIBIT B
EXHIBIT B
TENANT WORK LETTER
This Tenant Work Letter shall set forth the terms. and conditions relating to
the construction of the Tenant Improvements in the Premises. This Tenant Work
Letter is essentially organized chronologically and addresses the issues of the
construction of the Premises, in sequence, as such issues will arise during the
actual construction. All references in this Tenant Work Letter to Articles or
Sections of "the Lease" shall mean the relevant portion of Office Lease to which
this Tenant Work Letter is attached as Exhibit BI and of which this Tenant Work
Letter forms a part.
1. LANDLORD'S INITIAL CONSTRUCTION IN THE PREMISES. Landlord has constructed,
or will construct, at its sole cost and expense, the Base Building. As used
herein, the term "Base Building" shall mean a concrete and steel two (2)
story building containing approximately 50,375 rentable square feet with
lobbies therein, a roof and undistributed HVAC, and undropped sprinkler
lines, elevators and four (4) bathrooms.
2. TENANT IMPROVEMENTS.
A. Tenant Improvement Allowance. Tenant shall be entitled to a one time
tenant (the "Tenant Improvement Allowance") in an amount equal to
Thirty-Eight Dollar ($38.00) per rentable square foot of space in the
Premises for the costs relating to the initial construction of Tenant
improvements which are permanently affixed to the Premises (the "Tenant
Improvements"). In no event shall Landlord be obligated to make
disbursements for Tenant Improvements pursuant to this Tenant Work Letter in
a total amount which exceeds the Tenant Improvement Allowance.
B. Disbursement of the Tenant Improvement Allowance.
(1) Tenant Improvement Allowance Items. Except as otherwise set forth in this
Tenant Work Letter, the Tenant Improvement Allowance shall be disbursed by
Landlord (each of which disbursements shall be made pursuant to Landlord's
disbursement process) which shall consist of monthly disbursements to the
Contractor and retainage of ten percent (10%) of the cost of the Tenant
Improvements until Substantial Completion) only for the following items and
costs (collectively the "Tenant Improvement Allowance Items"):
(i) The payment of plan check permit and license fees relating to
construction of the Tenant Improvements;
(ii) The cost of construction of the Tenant Improvements as set forth in
the Construction Drawings as that term is defined in Section 3.A below,
including, without limitation, testing and inspection costs, and contractors'
fees and general conditions;
(iii) The cost of any changes in the Base Building work when such changes
are required by the Construction Drawings (including if such changes are due to
the fact that such work is prepared on. an unoccupied basis), such cost to
include all direct architectural and/or engineering fees, and expenses incurred
in connection therewith;
(iv) The cost of any changes to the Construction Drawings or Tenant
Improvements required by law;
(v) A portion of the costs of the tenant demising walls and public
corridor walls and materials, if any, as designated by Landlord; and
EXHIBIT B1
1
C. Unused Allowance. In the event that the Tenant Improvement Allowance
exceeds the total cost of Tenant Improvement Allowance items, as that term is
defined in Section 2.B.1, such excess shall be disbursed by Landlord to Tenant.)
provided Tenant is not then in default under the terms of the Lease or this
Tenant Work Letter), within thirty (30) days following the later to occur of
(i) Tenant's occupancy of the entire Premises:
(ii) the commencement of payment of Rent hereunder: or
(iii) Final Completion of the Tenant Improvements.
3. CONSTRUCTION DRAWINGS.
A. Selection of Architect/Construction Drawings. Tenant shall retain on
behalf of Landlord, Hoover Associates; Inc. (the "Architect') to prepare the
Construction Drawings and engineering consultants designated by Landlord (the
"Engineers"), to prepare all plans and engineering working drawings relating to
the structural, mechanical, electrical, plumbing, HVAC, life safety, and
sprinkler work of the Tenant Improvements. The plans and drawings to be prepared
by Architect and the Engineers hereunder shall be known collectively as the,
"Construction Drawings". All Construction Drawings shall comply in all respects
with the provisions of the Specifications, shall be in the drawing format
determined by Landlord, and shall be subject to Landlord's reasonable approval.
Landlord's review of the Construction Drawings shall be for its sole purpose and
shall not obligate Landlord to review the same, for quality, design, code
compliance or other like matters. Accordingly, Landlord shall have no liability
whatsoever in connection therewith and shall not be responsible for any
omissions or errors contained in the Construction Drawings.
B. Final Space Plan. On or before the date set forth in Schedule 2 attached
hereto, Tenant shall prepare and forward to Landlord three copies, of the final
space plan for Tenant Improvements. in the Premises (the "Final Space Plan")
before any. architectural working drawings or engineering drawings have
commenced. The Final Space Plan shall include a layout and description of all
offices, rooms and other partitions, their intended use and the equipment to be
contained therein. Landlord may request clarification or more specific drawings
for special use items not included in the Final Space Plan. Landlord shall,
within five (5) business days after Landlord receives such Final Space Plan, (i)
approve the Final Space Plan as submitted, or (ii) approve the Final Space Plan
subject to specified conditions to be complied with when the Final Working
Drawings are submitted by Tenant to Landlord.
C. Final Working Drawings. Upon the approval of the Final Space Plan by
Landlord, but in no event later than the date which is sixty (60) days after the
date on which the Lease is executed, Tenant shall promptly cause the Architect
and the Engineers to complete the architectural and engineering drawings for the
Premises and Architect shall compile a fully coordinated set of architectural,
structural, mechanical, electrical and plumbing working drawings in a form which
is complete to allow subcontractors to bid on the work and to obtain all
applicable permits. (collectively, the, "Final Working Drawings") and shall
submit the same to Landlord for Landlord's approval. The Final Working Drawings
shall be sealed by the Architect or a certified registered engineer. Landlord
shall, within five (5) business days after Landlord receives the Final Working
Drawings, either (i) approve the Final Working Drawings, (ii) approve the Final
Working Drawings subject to specified conditions to be satisfied by Tenant prior
to submitting the Approved Working Drawings for permits as set forth in Section
3.D, below. Tenant shall cause the Architect to provide Landlord with a
sufficient number of sets of the Approved Working Drawings as that term is
defined in Section 3.D, as may be required for distribution to the Contractor
and subcontractors for construction of the Tenant Improvements.
D. Permits. The Final Working Drawings shall be approved by Landlord (the
"Approved Working Drawings") prior to commencement of construction of the Tenant
Improvements. Landlord shall immediately submit the Approved Working Drawings to
the* appropriate municipal authorities for all applicable building and other
permits (the "Permits") necessary to allow Contractor (as that term is defined
iii Section 4.A), below, to commence and fully complete the construction of the
Tenant Improvements, and shall endeavor to obtain the Permits as quickly as
possible. Landlord shall be responsible for obtaining any building permit or
certificate of occupancy for the Premises.
EXHIBIT B 1
2
E. Changes to Approved Working Drawings.: In the event Tenant desires to
change the Approved Working Drawings, Tenant shall deliver notice of the same to
Landlord, setting forth in detail the changes Tenant desires to make to the
Approved Working Drawings. Landlord shall, within five (5) business days of
receipt thereof, either (i) approve. the Tenant Change or (ii) disapprove the
Tenant Change and deliver a notice to Tenant specifying in detail the reasons
for. Landlord's disapproval. In the event that such changes would directly or
indirectly delay the "Substantial Completion", as that term is defined in
Section 5.A of this Tenant Work Letter, of Tenant's Improvements. Such delay
shall be deemed to be a Tenant Delay under Section 5.D. Tenant shall pay any
additional costs that arise as a direct result of such Tenant Change.
F. Construction Schedule; Time Deadlines. As promptly as is practical,
Landlord shall prepare and provide Tenant a copy of a construction schedule
showing in reasonable detail the schedule for construction of the Tenant
Improvements. Landlord and Tenant shall use their respective best good faith,
efforts and all due diligence to cooperate with (i) the Architect, the
Engineers, and each other to complete all phases of the Construction Drawings
and the permitting process and to receive the Permits, and (ii) the Contractor
for approval of the "Cost Proposal" as that term is defined in Section 4.B of
this Tenant Work Letter, as soon as possible after the execution of the Lease,
and, in that regard, shall advise each other on a scheduled basis to be
determined reasonably by Landlord, as to Landlord's and Tenant's progress in
connection with the same. The applicable dates for approval of items, plans and
drawings as described in this Section 3, Section 4 below, and in this Tenant
Work Letter are set forth and further elaborated upon in Schedule 2 (the "Time
Deadlines"), attached hereto. Landlord, and Tenant agree to comply with the Time
Deadlines.
4. CONSTRUCTION OF THE TENANT IMPROVEMENTS.
A. Bidding of Contractors; Cost Proposal, After the Approved Working Drawings
are signed by Landlord and Tenant Landlord shall cause the Contractor to solicit
bids from at least three (3) general contractors for the construction of the
Tenant Improvements and shall select one of the bidding contractors, based on
the best combination of price and quality of work as the contractor (the
"Contractor") to perform the Tenant Improvements. The Contractor may be an
affiliate of Landlord. Upon selection of the Contractor, Landlord shall provide
Tenant with a cost proposal which shall include, as nearly as possible, the cost
of all Tenant Improvement Allowance Items to be incurred by Tenant in connection
with the construction of the Tenant Improvements. Tenant shall approve or
disapprove the cost proposal ("Cost Proposal") and shall deliver the same to
Landlord within five (5) business days of the receipt of the thereof. Upon
receipt of the same by Landlord, Landlord shall be released by Tenant to
independently retain Contractor, on behalf of Tenant, to commence construction
of the Tenant Improvements in accordance with the Approved Working Drawings and
the Cost Proposal. The date by which Tenant must approve and deliver the Cost
Proposal to Landlord shall be known hereafter as the "Cost Proposal Delivery
Date".
B. Construction of Tenant Improvements by Contractor under the Supervision of
Landlord.
(1) Pro-Rata Amount. Landlord and Tenant acknowledge and agree that the cost
of the Tenant Improvements is to be made in monthly progress payments once
construction of the Tenant Improvements has commenced. In connection therewith,
Tenant shall deliver to Landlord on a monthly basis, within ten (10) days of
invoice therefor, Tenant's Pro Rata Amount of the Tenant Improvements costs. As
used herein, the term Tenant's Pro-Rata Amount for each such monthly invoice
shall mean an amount determined by multiplying each such invoice by a fraction,
the numerator of which is the amount of the Cast Approval, minus the amount of
the Tenant Improvement Allowance, and the denominator of which is the amount of
the Cost Approval. In the event that, after the Cost Proposal Delivery Date, any
revisions, changes, or substitutions shall be made to the Construction Drawings
or the Tenant Improvements which increase the cost of the Tenant Improvements,
or should the cost of the Tenant I Improvements increase for any other reason,
such additional costs shall be paid by Tenant to Landlord immediately upon
Landlord's request as an addition to Tenant's Pro-Rata Amount.
(2) Landlord's Retention of Contractor. Landlord shall independently retain
Contractor, on behalf of Tenant, to construct the Tenant Improvements in
accordance with the Approved Working Drawings and Landlord shall supervise the
construction by Contractor, and Landlord shall receive a construction management
fee equal to two percent (2%) of the cost of Tenant Improvements in connection
with the Landlord's supervision of the Contractor.
EXHIBIT B1
3
(3) As Built Drawings. At the conclusion of construction, Tenant shall have
the Architect update the Approved Working Drawings as necessary to reflect
changes made during the course of construction that deviate from the Approved
Working Drawings. Tenant shall deliver to Landlord within ninety (90) days
following issuance of a certificate of occupancy for the Premises, one
"record-set" of as-built drawings of the Premises made on a 4 mil
polyester based permanent mylar or approved equal and two (2) sets of copies of
such record drawings certified by the Architect shall to be true and correct (or
at Landlord's request, Auto CAD Disk File "As Builts").
(4) Inspection by Landlord. In the event that Landlord determines that an
error or omission exists in the Approved Construction Drawings such that the
Tenant Improvements if and/or as constructed pursuant thereto might adversely
affect the mechanical, electrical, plumbing, heating, ventilating and
air conditioning or lifesafety systems serving the Building, the curtain wall of
the Building, the structure or exterior appearance of the Building or any other
tenant's use of such other tenant's leased premises, Landlord shall advise
Tenant of such error or omission and Tenant shall take such action, at Tenant's
expense, as may be necessary to correct such defect.
5. Completion of Tenant Improvements
A. Substantial Completion. For purposes of the Lease, the Premises shall be
deemed to be "Substantially Complete" upon the date (the date of "Substantial
Completion') upon which: (i) the Base Building is substantially completed, and
(ii) the Tenant Improvements in the Premises have been completed by Contractor
pursuant to the Approved Working Drawings so that Tenant can use the Premise for
their intended purposes without material interference to Tenant conducting its
ordinary business activities, with the exception of any punch list items
consisting of incomplete, minor or insubstantial details of construction,
mechanical type adjustments or finishing touches like touch lip painting. If
there is a dispute between Landlord and Tenant as to whether Substantial
Completion has occurred the determination of the Architect shall be conclusive
and binding on the parties.
B . Notice of Substantial Completion. Landlord shall give Tenant at least ten
(10) business days advance notice of the estimated date of Substantial
Completion.
C. Correction of Punch. List Items. Within thirty (30) days following
Substantial Completion of the Tenant Improvements in the Premises, Tenant shall
notify Landlord and Contractor, in writing, of those punch list items which need
to be completed or corrected. Upon receipt of the punch list, Landlord shall
cause the Contractor to proceed diligently to remedy all such items.
D. Tenant Delay of Substantial Completion. If there shall be a delay in the
Substantial Completion of the Tenant Improvements as a direct, indirect partial,
or total result of the occurrence of any of the following events (individually
or collectively "Tenant Delay"):
(1) Tenant's failure to comply with the Time Deadlines;
(2) Tenant's failure to timely approve any matter requiring Tenant's
approval;
(3) A breach by Tenant of the terms of this Tenant Work Letter or the Lease;
(4) Changes in any of the Construction Drawings after approval of the same
by Landlord or because the same do not comply with Code or other applicable
laws;
(5) Tenant's request for changes in the Approved Working Drawings;
(6) Tenant's requirement for materials, components, finishes or improvements
which are not available in a commercially reasonable time given the anticipated
date of Substantial Completion of the Tenant Improvements as set forth in the
Lease;
(7) Changes to the Base Building required by the Approved Working Drawings;
or
EXHIBIT B 1
4
(8) Any other acts or omissions of Tenant, or its agents, or employees of
which Tenant is given written notice and does not cure within one day of receipt
of such notice then, notwithstanding anything to the contrary set forth in the
Lease or this Tenant Work Letter and regardless of the actual date of the
Substantial Completion of the Tenant Improvements, the Lease Commencement Pate
shall be deemed to be the date the Lease Commencement Date would have occurred
if no Tenant Delay had occurred.
E. Landlord Delays. Notwithstanding anything to the contrary herein,
the Term Commencement Date shall be delayed one (1) day for each day of Landlord
Delay. The term "Landlord Delay" as used herein, shall mean any (1) delay in the
giving of authorizations or approvals by Landlord required by Landlord pursuant
to the terms of the Lease; (2) delay attributable to the unreasonable
interference of Landlord, its agents or contractors with the design of the
tenant improvements or the failure or unreasonable refusal of any such party to
permit Tenant, its agents or contractors, access to and use of the Building or
any Building facilities or services, which access and use are reasonably
required for the orderly and continuous performance of the work necessary for
Tenant to complete its move into the Premises, No such act of delay shall be
deemed a Landlord Delay until Tenant has provided Landlord with written notice
thereof (not more than ten (10) days after the date on which such delay is
alleged to have occurred) and two (2) business days in which to cure such delay.
If such delay is not cured within such two (2) business day period, then a
Landlord Delay shall be deemed to have occurred, starting on the day after such
cure period has elapsed.
6. Miscellaneous.
A. Tenant's Representative. Tenant has designated the
person(s) named in Schedule 1 as Tenant's sole representative with respect to
the matters set forth in this Tenant Work Letter, who, until further notice to
Landlord, shall have full authority and responsibility to act on behalf of the
Tenant as required in this Tenant Work Letter.
B. Landlord's Representative. Landlord has designated the
person(s) named in Schedule 1 'as Landlord's sole representative with respect to
the matters set forth in this Tenant Work Letter, who, until further notice to
Tenant shall have full authority and responsibility to act on behalf of the
Landlord as required in this Tenant Work Letter.
C. Time of the Essence in This Tenant Work Letter. Unless
otherwise indicated, all references herein to a "number of days" shall mean. and
refer to calendar days.* In all instances where Tenant is required to approve or
deliver an item, if no written notice of approval is given or the item is not
delivered within the stated time period, at Landlord's option, at the end of
such period the item shall automatically be deemed approved or delivered by
Tenant and the next succeeding time period shall commence.
D. Tenant's Entry Into the Premises Prior to Substantial
Completion. Provided that Tenant and its agents do not significantly interfere
with Contractor's work in the Building and the Premises, Landlord and Contractor
shall allow Tenant access to the Premises prior to the Substantial Completion of
the Tenant Improvements for the purpose of Tenant installing equipment
furniture, work-stations, fixtures (including Tenant's data and telephone
equipment), or other improvements (not included in Tenant Improvements) in the
Premises. Prior to Tenant's entry into the Premises as permitted by the terms of
this Section 6.A, Tenant shall submit a schedule to Landlord and Contractor, for
their approval, which schedule shall detail the timing and purpose of Tenant's
entry. Tenant shall hold Landlord harmless from and indemnify, protect and
defend Landlord against any loss or damage to the Building or Premises and
against injury to any persons caused by Tenant's actions pursuant to this
Section 6.D. All such property or equipment brought into, kept in and stored
upon the Premises, or the Building, pursuant to this Section 6.D shall be at the
risk of Tenant only and Tenant shall hold harmless and indemnify, protect and
defend Landlord from any claims arising out of damage to, or loss of, same
including subrogation claims by Tenant's insurance carrier.
E. Tenant's Agents. All subcontractors, laborers,
materialmen, and suppliers retained directly by Tenant shall conduct their
activities around the Premises, Building and the Property in a harmonious
relationship with all subcontractors, laborers, materialmen and suppliers at the
Premises, Building and Real Property.
EXHIBIT B 1
5
F. Ownership of Tenant Improvements. All Tenant
Improvements (but excluding, signs, furniture, trade fixtures, office equipment
and items of a like nature) that may be installed or placed in or about the
Premises from time to time shall be and become the property of Landlord on
installation.
EXHIBIT B 1
6
EXHIBIT C
MEMORANDUM OF TERM COMMENCEMENT DATE.
LANDLORD: WJT, LLC
TENANT: POLYCOM, INC., a Delaware corporation
PREMISES:
---------------------------------------
---------------------------------------
Pursuant to Paragraph 3 of the above-referenced Lease, the Commencement
Date is hereby established as
------------------
Dated:
-------------------
"Landlord"
WJT, LLC
By.
-------------------------
Name: James Tong
Its:
----------------------
By:
-------------------------
Name: Wendahl K.S. Ting
Its:
------------------------
"Tenant"
POLYCOM, INC.,
a Delaware corporation
By:
-------------------------
Name:
--------------------
Title:
-------------------
Date:
-----------------------
EXHIBIT C
EXHIBIT D
RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the Rules and Regulations Set
forth in this Exhibit D, as reasonably modified by Landlord from time to time in
writing. Landlord shall not be responsible to Tenant for the nonperformance of
any of said Rules and. Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Building.
1. SIGNAGE
No sign, placard, picture, advertisement, name or notice, shall be
installed or displayed on any part of the outside or inside of the
building without the prior written consent of the Landlord, Landlord
shall have the right to remove, at Tenants expense and without written
notice, any sign installed or displayed in violation of this rule. All
approved signs or lettering on doors and walls shall be printed,
painted, affixed or inscribed at the expense of Tenant by a person
chosen by Landlord.
2. WINDOW COVERINGS
If Landlord objects in writing to any curtains, blinds, shades or
screens attached to or hung in or used in connection with any window or
door of the Premise, Tenant shall immediately discontinue such use. No
awning shall be permitted on any part of the Premises. Tenant shall not
place anything against glass partitions or doors or windows which may
appear unsightly from outside the Premises.
3. FLOOR COVERINGS
Tenant shall not lay linoleum, tile, carpet or other similar floor in
any manner except by a past or other material, which may easily be
removed with water, the use of cement or other similar adhesive
materials being expressly. prohibited, The expense of repairing any
damage resulting from a violation of this rule shall be borne by
Tenant. Tenant shall provide and cause all Tenant's employees to use
protective floor mats under all desk chairs used in the Premises.
4. ACCESS
Tenant shall not loiter in or obstruct any sidewalks, balls, passages,
exits, entrances, elevators, escalators or stairways of the Building.
The halls, passages, exits, entrances, elevators, escalators and
stairways shall be used only as a means of ingress and egress for the,
leased Premises, and Landlord shall in all cases retain the right to
control and prevent access thereto to all persons whose presence in the
judgement of Landlord would be prejudicial to the safety, character,
reputation and interests of the Building and its tenants provided that
nothing herein contained shall be construed to prevent such access to
persons with whom any tenant normally deals in the ordinary course of
its business, unless such persons are engaged in illegal activities. No
tenant and no employee or invitee of any tenant shall go upon the roof
of the Building, the mechanical rooms, air conditioning rooms,
electrical closets, janitorial closets, or in other restricted access
areas within the Building. Landlord reserves the right to close and
keep' locked all entrance and exit doors of the Building during such
hours as are customary for comparable buildings in the City of San
Francisco. Tenant, its employees or agents must be Sure that the doors
to the Building are securely closed and locked ,when leaving the
Premises after the normal hours of business for the Building. Any
tenant, its employees or agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time
when. it is considered to be after normal business hours for the
Building, may be required to sign the Building Register when so doing.
Access to the Building may be refused Unless the person seeking access
has the proper identification or has previously arranged a pass for
access to the Building. Landlord and its agents shall in no case be
liable for damages for any error with. regard to the admission to or
exclusion from the Building of any person. In case of invasion, mob
riot, public excitement or other commotion, Landlord reserves the right
to prevent access to the Building during the continuance of same by any
means it deems appropriate for the safety and protection of life and
property. All re-keying of office doors or changes to the card access
system, after occupancy, will be at the expense of the Tenant. Tenant
shall not
EXHIBIT D
1
re-key any doors or change the card access system in any way without
making prior arrangements with Landlord.
5. JANITORIAL SERVICES
All cleaning and janitorial services for the Building and the Premises
shall be provided exclusively through Landlord,, and except with the
written consent of Landlord, no person or persons other than those
approved by Landlord shall be employed by Tenant or permitted to enter
the Building for the purpose of cleaning the same. Tenant shall not
cause any unnecessary labor by carelessness or indifference to the good
order and cleanliness of the Premises. Landlord shall not in any way be
responsible to any tenant for any loss of property on the Premises,
however occurring, or for any damage to any Tenants property by the
janitor or any other employee or any other person. Janitor services
shall include ordinary dusting and cleaning by the janitor assigned to
do such work and shall not include cleaning, of carpets or rugs, except
NORMAL vacuuming, or moving of furniture, interior window cleaning,
coffee or eating area cleaning, and other special services. Janitorial
services shall not exceed five (5) times per calendar week. Janitor
services will not be furnished on nights when rooms are occupied or to
rooms which are locked. Window cleaning shall be provided through
Landlord at Landlord's discretion.
6.
WIRING
Landlord reserves the right to approve both where and how telephonic
wires, security alarms and similar equipment are to be introduced to
the Premises. No boring or cutting for wires shall be allowed without
express written consent of Landlord. The location of telephone, call
boxes and other office equipment affixed to the Premises shall be
subject to the approval of Landlord. Landlord makes no representation
to Tenant regarding the condition, security, availability or
suitability of existing intrabuilding network cabling or any
telecommunication, services located within the Building for Tenant's
purposes. Tenant hereby waives any claim against Landlord for damages
if Tenant's telecommunication services are in any way interrupted,
damaged or otherwise interfered with, except to the extent caused by
the gross negligence or willful misconduct. of Landlord, its agents or
employees, provided that in no. event shall any such interruptions,
damages, or interference entitle Tenant to any consequential damages
(including damages for loss of business) or relieve tenant of any of
its obligations under the Lease.
Tenant shall maintain and repair all telecommunications cabling and
wiring within or exclusively, serving the Premises. At the Landlord's
written request, all voice and data telecommunication cabling
installed in connection with Tenant's business shall be removed at
Tenant's sole cost and expense at the termination or expiration of the
Lease.
7. ELEVATOR
The elevator shall be available for use by tenant(s) in the Building
subject to such reasonable scheduling as Landlord in its discretion
shall deem appropriate and no equipment, materials, furniture,
packages, supplies, merchandise or other property will be received in
the Building unless approved by Landlord or carried in the elevators
except between such hours and in such elevators as may be designated
and approved by Landlord.
8. LOADS
Tenant shall not place a load upon any floor of the Premises which
exceeds 2.0 pounds per square foot partition load or 80 pounds per
square foot live load. Landlord shall have the right to prescribe the
weight, size and position of all equipment materials, furniture or
other property brought into the Building. Heavy objects shall, if
considered necessary by Tenant, stand on such platforms as determined
by Landlord necessary to properly distribute the weight. Business
machines and mechanical equipment belonging to Tenant which cause noise
or vibration that may be transmitted to the structure of the Building
or to any space therein to such a degree as to be objectionable to
Landlord or to any tenants in the Building shall be placed and
maintained by Tenant at Tenant's expense, on vibration eliminators or
other devices sufficient
EXHIBIT D
2
to eliminate noise or vibration. The persons employed to move such
equipment in or out of the Building must be acceptable to Landlord.
Landlord will not be responsible for loss of, or damage to, any such
equipment or other property from any cause, and all damage done to the
Building by maintaining or moving such equipment or other property
shall be repaired at the expense of the Tenant.
9. TOXICS
Tenant shall not use or keep in the Premises any kerosene, gasoline or
flammable or combustible fluid or material other than limited
quantities necessary for the operation or maintenance of office
equipment. Tenant shall not use or permit to be used in the Premises
any foul or noxious gas or substance, or permit or allow 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
or vibrations. Tenant shall not bring into or keep within the Building
or the Premises any animals, fish or birds, bicycles or other vehicles.
10. HEATING/AIR CONDITIONING
Tenant shall not use any method of heating or air conditioning other
than that supplied by Landlord, unless Tenant has Landlord's written
approval for said alteration. Heating or air conditioning alterations
shall be governed by guidelines established in section 12 of the Lease.
Heating and air conditioning is available during the hours of 7:00 a.m.
to 6:00 p.m., Monday through Friday. In the event Tenant requires
heating and air conditioning during off hours, Saturdays, Sundays, or
holidays, Landlord on twenty-four (24) hours' prior written notice from
Tenant may provide such services at an hourly rate to be established by
Landlord, from time to time.
11. NATURAL RESOURCE USE
Tenant shall not waste electricity, water or air-conditioning and
agrees to cooperate fully with Landlord to assure the most effective
operation of the Building's heating and air-conditioning, and shall
refrain from attempting to adjust any controls other than room
thermostats installed for Tenant's use. Tenant shall keep corridor
doors closed.
12. BUILDING NAME/ADDRESS
Landlord reserves the right, exercisable without notice and without
liability to Tenant to change the name and street address of the
Building.
13. SECURE PREMISES
Tenant shall close and lock the doors of its Premises and entirely shut
off all water faucets or other water apparatus a and electricity, gas
or air outlets, and all electric machines (coffee pots) before Tenant
and its employees leave the Premises. Tenant shall be responsible for
any damage or injuries sustained by other tenants or occupants of the
Building or by Landlord for noncompliance with this rule.
14. VENDORS
Tenant shall not obtain for use on the Premises ice, food, beverage,
towel or other similar services or accept barbering or bootblacking
services upon the Premises, except at such hours and under such
regulations as may be fixed by Landlord. Tenant may obtain bottled
water service provided by an independent vendor. Tenant shall not
disturb, solicit, or canvass any occupant of the Building nor shall
Tenant permit or cause others to do so and Tenant shall cooperate to
prevent same by others.
15. RESTROOMS
The toilet rooms, toilets, urinals, wash bowls and other apparatus
shall not be used for any purpose other than that for which they were
constructed, no foreign substance of any kind whatsoever shall be
thrown
EXHIBIT D
3
therein, and the expense of any breakage, stoppage or damage resulting
from the violation of this rule shall be borne by the Tenant who, or
whose employees or invitees, shall have caused it.
16. RETAIL SALES
the sale at retail, of newspapers, magazines, periodicals, theater
tickets or Tenant shall not sell, or permit any other good or
merchandise to the general public in or on the Premises. Tenant shall
not make any room-to-room solicitation of business from other tenants
in the Building. Tenant shall not use the Premises for any business or
activity other than that specifically provided for 'in such Tenant's
lease. Canvassing, soliciting and distribution of handbills or any
other written material, and peddling in the Building are prohibited,
and each tenant shall cooperate to prevent same.
17. BUILDING EXTERIOR
Tenant shall not install any radio or television antenna, loudspeaker
or other device on the roof or exterior walls of the Building or
without Landlord's prior written approval. Tenant shall not interfere
with radio or television broadcasting or reception from or in the
Building or elsewhere.
18. MAINTENANCE OF WALLS/CARPET
Tenant shall not mark drive nails, screw or drill into the partitions,
woodwork or plaster or in any way deface the Premises or any part
thereof except for nails and screws used for normal decorating
purposes. Landlord reserves the right to direct electricians as to
where and how telephone and telegraph wires are to be introduced to the
Premises. Tenant shall not cut or bore holes for wires. Tenant shall
not affix any floor covering to the floor of the Premises in any manner
except as approved by Landlord. Tenant shall repair any damage
resulting from noncompliance with this rule. In all carpeted areas
where desks and chairs are utilized, Landlord shall require Tenant at
Tenants sole cost, to place mats under each and every chair in order to
protect said carpeting from unnecessary wear and tear.
19. VENDING, MACHINES
Tenant shall not install, maintain or operate upon the Premises any
vending machines without the written consent of Landlord.
20. TRASH STORAGE
Tenant shall store, all its trash and garbage within its Premises.
Tenant shall not place in any trash box or receptacle any material
which cannot be disposed of in. the ordinary and customary manner of
trash and garbage disposal. All garbage and refuse disposal shall be
made in accordance, with directions issued from time, to time by
Landlord.
21. COOKING
The Premises shall not be used for the storage of merchandise held for
sale to the general public, or for lodging or for manufacturing of any
kind without prior written approval of Landlord, nor shall Premises be
used for any improper, immoral or objectionable purpose. No cooking
shall be done or permitted by any Tenant on the Premises, except for
that use by the Tenant of Underwriters' Laboratory approved equipment
inclusive of a microwave oven for heating food and equipment for
brewing coffee, tea, hot chocolate and similar beverages shall be
permitted, provided that such equipment and use is in accordance with
all applicable federal, state. and city laws, codes, ordinances, rules
and regulations: Tenant may install a refrigerator in the Premises for
ordinary use by Tenant's employees.
EXHIBIT D
4
22. HAND TRUCKS
Tenant shall not use in any space or in the public halls of the
Building any hand trucks except those equipped with rubber tires and
side guards or such other material handling equipment as Landlord may
approve. Tenant shall not bring any other vehicles of any kind into the
Building. Tenant shall obey all Building rules and regulations covering
the timing, procedures and restrictions for moving objects in and out
of the Premises (i.e., masonite over file).
23. TENANT USE OF BUILDING, NAME
Without the written consent of Landlord, Tenant shall not use the name
of the Building in connection with or in promoting or advertising the
business of Tenant except as Tenant's address.
24. LIFE SAFETY
Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental
agency, including the attendance of required safety seminars and
demonstrations. Tenant, Tenants agents, employees, guests and invitees
shall observe all non-smoking areas as may be established either by law
or Landlord including, but not limited to, the ground floor interior
and exterior lobbies.
25. THEFT
Tenant assumes any and all responsibility for protecting its Premises
from the robbery and pilferage. All doors opening to public corridors
shall be kept closed at all times.
26. NOTIFICATION
The requirements of Tenant will be attended to only upon appropriate
application to the office of the Building by an authorized individual.
Employees of Landlord shall not perform any work or do anything outside
of their regular duties unless under special instructions from
Landlord, and no employee of Landlord will admit any person (Tenant or
otherwise) to any office without specific instructions from Landlord.
27. LANDLORD CONTROL
Landlord reserves the right to exclude or expel from the Building any
person who, in Landlord's judgement, is intoxicated or under the
influence of liquor or drugs or who is in violation of any rules and
regulations of the Building. Landlord shall have the right to control
and operate the public portions of the Building, the public facilities,
the heating and air conditioning, and any other facilities famished for
the common use of Tenants, in such manner as is customary for
comparable buildings in the City of San Francisco. Landlord reserves
the right to make such other and reasonable rules and regulations as in
its judgement may from time to time be needed for care and cleanliness
of the building and for the preservation of good order therein. Tenant
agrees to abide by all such rules and regulations hereinabove stated
and any additional rules and regulations which are adopted. 7) No
improper noises, vibrations or odors will be permitted in the Building,
nor shall any person be permitted to interfere in any way with tenants
or those having business with them, No person will be permitted to
bring or keep within the Building any animal, bird, or bicycle or any
toxic or flammable substances without Landlord's prior permission. No
person shall throw trash, refuse, cigarettes or other substances of any
kind any place within or out of the Building except in the. refuse
containers provided therefor.
EXHIBIT D
5
28. LEASE AGREEMENT
These Rules and Regulations are in addition to, and shall not be
construed to in any way modify or amend, in whole or in part, the
terms, covenants, agreements and conditions of any lease of premises in
the Building.
29. BUILDING
The word "Building" a's used herein means the Building of which the
Premises are a part.
30. ELEVATOR USE
See Exhibit D-1.
TENANT RESPONSIBILITY
Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant's employees, agents, clients, customers, invitees and
guests.
32. SERVICES
Tenant shall not obtain for use on the Premises ice, drinking water,
food, beverage, towel or other similar services or accept barbering or
bootblacking services upon the Premises, except at such hours and under
such regulations as may be fixed by Landlord.
33. OTHER INSTALLATION PROHIBITED
Tenant shall not install any radio or television antenna, loudspeaker
or other device on the roof or exterior walls of the Building. Tenant
shall not interfere with radio or television broadcasting or reception
from or in the Building elsewhere.
34. PARKING
Tenant shall not park its vehicles in any area designated by Landlord
as areas for parking by visitors to the Building. Tenant shall not
leave vehicles in the Building parking areas overnight nor park any
vehicle in the Building parking areas other than automobiles,
motorcycles, motor driven or non-motor driven bicycles or four-wheeled
trucks. Landlord may, in its sole discretion, designate separate areas
for bicycles and motorcycles.
35. OTHER
Tenant shall be deemed to have read these Rules and Regulations and to
have agreed to abide by them as a condition to his/her occupancy of the
Premises.
The normal business hours ("Business Hours") of the Building shall be
8:00 a.m. to 6:00 p.m., Monday through Friday, holidays excepted.
EXHIBIT D
5
EXHIBIT D-1
ELEVATOR USE
CONDITIONS
1. Masonite protection required on elevator floor (Contractors: also'
around interior walls) during moves. Contact Building Management for
details prior to each move.
2. Cardboard protection folded and MASKING taped around edges of elevator
entrance frames Cardboard to span height of no less than 6 feet.
ELEVATOR DIMENSIONS:
Interior Width
(left to right when facing rear wall of elevator): inches wide.
----------
Interior Depth Excluding Elevator Door Indentation
(front right or left comer of rear or left comer): inches deep.
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Width of Elevator Entrance/Doors: inches wide.
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Height of Elevator Interior: inches tall.
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HEIGHT OF ELEVATOR ENTRANCE (FROM OUTSIDE FACING ENTRANCE):
feet inches or inches tall.
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Prohibited:
1. Use of STOP Emergency alarm button in non-emergencies.,
2. Holding, jamming, propping, blocking, obstructing or impeding of
elevator entrances and doors.
3. Use/providing of keys for operation of elevator(s).
4. Tampering with elevator controls, locks, etc.
Initials:
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Initials:
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EXHIBIT D-1
1.