Exhibit 10.4
SUBLEASE
THIS SUBLEASE is made as of June 14, 1996 (the "Effective Date"), by and
between TIBCO Inc., a Delaware corporation with an address at 530 Lytton Avenue,
Palo Alto, California ("Sublessor") and Artemis Research, a California
corporation, with an address at 275 Alma Street, Palo Alto, California
("Sublessee").
WHEREAS, Sublessor is the subtenant under a certain Sublease from Digital
Equipment Corporation ("DEC") dated February 17, 1995 ("Prime Sublease"), a copy
of which is attached hereto as Exhibit A; and
WHEREAS, DEC is the tenant under a certain Original Lease from Richard R.
Kelley, Jr. ("Landlord") executed September 18, 1990, a copy of which is
attached hereto as Exhibit B, as amended by First Amendment to Lease dated
January 18, 1991 ("First Amendment"), a copy of which is attached hereto as
Exhibit C, and Second Amendment to Lease dated June 1, 1991 ("Second
Amendment"), a copy of which is attached hereto as Exhibit D (such Original
Lease, as amended by the First Amendment and the Second Amendment is referred to
hereafter as the "Prime Lease"); and
WHEREAS, the premises leased under the Prime Lease and subleased under the
Prime Sublease are the land, with the building and improvements thereon at 305
Lytton Avenue, Palo Alto, California, 94301, which premises are more
particularly described in Article I of the Prime Lease as the "Demised Premises"
and are shown on Exhibit E; and
WHEREAS, Sublessee wishes to sublease from Sublessor the entire Demised
Premises, consisting of a certain parcel of land more particularly described in
Exhibit C of the Prime Lease (the "Land"), the building (the "Building") on the
Land, containing approximately 11,102 square feet, and the parking spaces and
other improvements on the Land (collectively, the "Sublet Premises"), and
Sublessor is willing to sublet the Sublet Premises to Sublessee;
NOW, THEREFORE, the parties hereto agree as follows:
1. Demise. Sublessor hereby subleases the Sublet Premises to Sublessee and
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Sublessee hereby sublets the Sublet Premises from Sublessor subject to the terms
and conditions hereinafter stated.
2. Term. The term of this Sublease (the "Sublease Term") shall be
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approximately six (6) years, commencing on August 1, 1996 or when DEC consents
to this Sublease, whichever occurs last (the "Commencement Date"), and shall end
September 15, 2002 (the "Termination Date"), unless terminated earlier in
accordance with the provisions of this Sublease. In the event the Sublease Term
commences on a date later than August 1, 1996, Sublessor and Sublessee shall
execute a memorandum setting forth the actual Commencement Date. Sublessor
agrees to use best efforts to make a portion of the Sublet Premises available to
Sublessee prior to the Commencement Date. In the event any such portion becomes
available prior to the Commencement Date, upon approval by DEC and delivery of
such portion of the premises as are available to Sublessee, Sublessee shall pay
that portion of the rent attributable to such portion of
the Sublet Premises for such time until the Commencement Date and shall occupy
said portion under all other terms and conditions of this Sublease. The rent
payment for such early occupancy shall not become due and payable unless and
until Sublessor delivers the entire Sublet Premises and the Bryant Street
Premises (as defined below) to Sublessee.
3. Delivery of Sublet Premises.
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a. Sublessee expressly acknowledges that it has inspected the
Sublet Premises and is fully familiar with the physical conditions thereof,
and agrees to accept possession of the Sublet Premises in its "as is"
condition. Sublessee acknowledges that, except as expressly provided in this
Sublease, Sublessor has made no representations or warranties regarding the
Sublet Premises and that it has relied on no such representations or
warranties in accepting the Sublet Premises. Sublessee acknowledges that
Sublessor shall have no obligation to do any work in or to the Sublet
Premises or incur any expense in connection therewith, in order to make them
suitable and/or ready for occupancy and use by Sublessee. Sublessee shall
have the right to utilize the telecommunications equipment (the
"Telecommunications Equipment") described in Exhibit E to the Prime Sublease,
subject to the terms of this Sublease.
b. Concurrently herewith, Sublessor and Sublessee are entering
into a Sublease of premises located at 335 Bryant Street, Palo Alto,
California (the "Bryant Street Premises") on terms and conditions similar to
that of this Sublease. Sublessee's obligations under this Sublease are
conditioned upon Sublessor delivering both the Sublet Premises and the Bryant
Street Premises to Sublessee on or before August 1, 1996 (which date may be
extended only in Sublessee's discretion). If Sublessor fails to deliver
either the Sublet Premises or the Bryant Street Premises to Sublessee on or
before August 1, 1996, then Sublessee shall be entitled to terminate this
Sublease by written notice to Sublessor at any time after August 1, 1996 and
before both the Sublet Premises and the Bryant Street Premises are delivered
to Sublessee. Such termination shall effect the simultaneous termination of
the sublease of the Bryant Street Premises and shall serve to discharge and
release both parties from any further liability to each other.
4. Rent.
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a. Base Rent. Sublessee shall pay to Sublessor base rent ("Base
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Rent") without offset, deduction or demand in the following amounts,
commencing on the Commencement Date and continuing on the first day of every
month thereafter; provided, however, that the first month's rent shall be due
and payable upon execution of this Sublease:
Term Rent/Month
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Commencement Date - January 31, 1997 $29,087.24
February 1, 1997 - January 31, 1999 $30,197.44
February 1, 1999 - January 31, 2000 $32,195.80
February 1, 2000 - January 31, 2001 $32,750.90
February 1, 2001 - January 31, 2002 $33,306.00
February 1, 2002 - September 15, 2002 $34,416.20
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Base Rent shall be apportioned for any partial calendar month occurring at the
beginning or end of the Sublease Term.
All payments hereunder shall be made at the following address:
TIBCO Inc.
530 Lytton Avenue
Palo Alto, CA 94301
Attn: Accounting Department
or such other address as Sublessor may from time to time designate by
written notice to Sublessee. Sublessor agrees to use its best efforts to for
ward to Sublessee on a monthly basis evidence of its payment of all rents and
Operating Expenses due under the Prime Sublease.
b. Operating Expenses. Sublessee shall pay to Sublessor all
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Operating Expenses as defined and required to be paid by Sublessor under
paragraph 4.b of the Prime Sublease. Payment shall be made as and when
payable by Sublessor to DEC. Sublessor shall promptly forward to Sublessee a
copy of all statements showing Operating Expenses which Sublessor receives
from DEC, including, without limitation, statements for the year just ended
and statements of estimates for the current year. Sublessee shall have the
right, through Sublessor, to inspect, audit and examine the records
pertaining to Operating Expenses in accordance with the provisions of
Paragraph 3 of Article V of the Prime Lease.
All sums which Sublessee agrees to pay under this Sublease other than
Base Rent, or which Sublessor pays or incurs as a result of a default by
Sublessee which constitutes an Event of Default as defined in the Prime
Sublease, including without limitation interest at the Default Rate of
Interest as defined in Section 13 of the Prime Sublease and the early
termination penalty, if applicable, due under Section 10 below, shall be
included within the term "Additional Rent" whether or not expressly so
identified. As used in this Sublease, the term "Rent" shall mean collectively
Base Rent and Additional Rent.
5. Utilities. Sublessee shall make its own arrangements with the
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applicable utility companies for the provision of all utilities and services
as set forth in Section 5 of the Prime Sublease.
6. Security Deposit. Upon the later of the execution of this Sublease
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and the receipt of DEC's written consent to this Sublease, Sublessee shall
deposit with Sublessor a security deposit in the amount of $34,416.20 (the
"Security Deposit"). If Sublessee fails to pay Rent when due under this
Sublease, which failure continues beyond any applicable cure period,
Sublessor may apply all or any portion of the Security Deposit for the
payment of any such Rent then due hereunder and unpaid beyond any applicable
cure period. If Sublessor so uses any portion of the Security Deposit,
Sublessee shall, within ten (10) days after receipt of written demand by
Sublessor, restore the Security Deposit to the full amount originally
required, and Sublessee's failure to do so shall constitute a default under
this Sublease. In the event Sublessor assigns its interest in this Sublease,
Sublessor shall deliver to its assignee so much of the Security Deposit as is
then held by Sublessor. Within ten (10) days after the Term has expired, or
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Sublessee has vacated the Premises, whichever shall occur last, the Security
Deposit, or so much thereof as had not heretofore been applied by Sublessor in
accordance with Sublessor's rights hereunder, shall be returned to Sublessee or
to the last assignee, if any, of Sublessee's interest hereunder.
7. Use. Sublessee shall be entitled to use and occupy the Sublet
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Premises, to the extent permitted by law, for the purpose of general office
use and for no other use or purpose (the "Permitted Uses").
8. Assignment and Subletting. Sublessee shall not assign, transfer,
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mortgage or pledge this Sublease, or further sublet all or any part of the
Sublet Premises, or enter into any other license or occupancy arrangement,
whether voluntary or involuntary or by operation of law (collectively a
"Transfer") without the prior written consent of Sublessor, which consent
shall not be unreasonably withheld, conditioned or delayed, and the prior
written consent of DEC, subject to the requirements of the Master Lease.
No Transfer, nor any collection of rent by Sublessor from any person or
entity other than Sublessee, shall relieve Sublessee of its obligations to
fully observe and perform the terms, covenants, and conditions hereof. No
consent by Sublessor or DEC in a particular instance shall be deemed a waiver
of the obligation to obtain Sublessor's and/or DEC's consent in another
instance. Sublessee shall pay to Sublessor as received any excess of amounts
received pursuant to an assignment, subletting, license or other occupancy
arrangement in excess of the Rent due hereunder. For purposes of this
Sublease, the transfer of a majority ownership interest in Sublessee shall be
deemed a Transfer.
9. Prime Sublease.
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a. Incorporation of Prime Sublease. Except as otherwise provided
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herein, Sublessor grants to Sublessee, all of Sublessor's rights, benefits
and interests with respect to the Sublet Premises, and Sublessee agrees to
accept from Sublessor and hereby assumes all of Sublessor's obligations and
burdens under the Prime Sublease with respect to the Sublet Premises
(including but not limited to Sublessor's obligations and burdens with
respect to the Prime Lease), as if all such rights and obligations were set
forth herein in their entirety, provided that the terms and conditions hereof
shall be controlling whenever the terms and conditions of the Prime Sublease
are contradictory to or inconsistent with terms and conditions hereof, and
provided further that those provisions of the Prime Lease which are
protective and for the benefit of the Landlord shall in this Sublease be
deemed to be protective and for the benefit of Landlord, DEC and Sublessor
and those provisions of the Prime Lease which are protective and for the
benefit of DEC shall in this Sublease be deemed to be protective and for the
benefit of Sublessee. The deletion of certain sections of the Prime Lease
from inclusion in the Prime Sublease are set forth in paragraph 11.a. of the
Prime Sublease and incorporated herein by this reference. All applicable
terms and conditions of the Prime Sublease are incorporated into and made a
part of this Sublease as if Sublessor were the Sublandlord thereunder and
Sublessee the Subtenant thereunder, except paragraphs 4.a., 14, 15, 21, and
24 are deleted and shall not apply.
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Sublessee represents that it has read and is familiar with the
terms of the Prime Lease and the Prime Sublease.
b. Performance of Prime Sublease. Sublessee covenants and agrees
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faithfully to observe and perform all of the terms, covenants and conditions
of the Prime Sublease on the part of Sublessor to be performed with respect
to the Sublet Premises, other than the payment of Rent to DEC which shall be
Sublessor's responsibility, and neither to do nor cause to be done, any act
or thing which would and might cause the Prime Sublease to be canceled,
terminated, forfeited or surrendered, or which would or might make Sublessor
liable for any damages, claims or penalties.
c. Representation, Covenant, Indemnity.
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(i) Sublessor hereby represents and warrants to Sublessee that as
of the date hereof Sublessor is not in default under the Prime Sublease nor
has any event occurred that with the giving of notice or the passage of time
would constitute a default by Sublessor under the Prime Sublease, and to
Sublessor's knowledge DEC is not in default and no event has occurred that
with the giving of notice or the passage of time would constitute a default
by DEC under the Prime Sublease or under the Prime Lease.
(ii) Sublessor covenants and agrees to pay all Rent due under the
Prime Sublease as and when due and to perform all other obligations under the
Prime Sublease that are not Sublessee's obligations hereunder or are
otherwise not performable by Sublessee.
(iii) Sublessor shall indemnify, defend and hold Sublessee
harmless from and against any and all losses, costs, damages and expenses,
including reasonable attorneys fees and expenses, incurred by Sublessee as a
result of (x) any failure of Sublessor to perform any of its obligations
under the Prime Sublease as set forth in Section 9c(ii), or (y) any other
default by Sublessor under the Prime Sublease. Sublessor's maximum aggregate
liability under this Section 9c(iii) shall not exceed $350,000 and the
aforesaid indemnity shall not include special, indirect, incidental or
consequential damages (including loss of profits) even if Sublessor has been
advised of the possibility of the same.
d. Termination. If the Prime Sublease terminates, this Sublease
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shall terminate and the parties shall be relieved of any further liability or
obligation under this Sublease; provided, however, that if the Prime Sublease
terminates as a result of a default or breach by Sublessor or Sublessee under
this Sublease and/or the Prime Sublease, then the defaulting party shall be
liable to the nondefaulting party for the costs incurred as a result of such
termination. Notwithstanding the foregoing to the contrary, if the Prime
Sublease gives Sublessor any right to terminate the Prime Lease in the event
of a partial or total damage, destruction or condemnation of the Sublet
premises or the building or project of which the Sublet Premises are a part,
the exercise of such right by Sublessor shall not constitute a default or
breach under this Sublease.
e. Recognition Agreements. Sublessor shall use reasonably diligent
----------------------
efforts to obtain from DEC a consent, recognition and attornment agreement in
the form of
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attached Exhibit E or in such other form as is acceptable to Sublessee in its
reasonable discretion. In addition, Sublessor shall use reasonably diligent
efforts to obtain a recognition and attornment agreement in the form of attached
Exhibit F or such other form as is reasonably acceptable to Sublessee executed
by the Landlord.
10. Option to Terminate. Sublessee shall have the option to terminate
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this Sublease, subject to the following provisions: Sublessee shall exercise
the option to terminate this Sublease, if at all, by written notice to
Sublessor given not later than October 31, 1998. If Sublessee exercises the
option to terminate, then the Sublease shall terminate effective on July 31,
1999; provided that if, and only if, Sublessee has exercised its termination
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option, Sublessor shall have the right, upon not less than three months
prior written notice to Sublessee, to terminate the Sublease effective as of
the end of any month after January 31, 1999 and prior to July 31, 1999. In
the event that Sublessee exercises its option to terminate the Sublease,
Sublessee shall pay to Sublessor an early termination penalty equal to one
month's Base Rent (in the amount in effect as of the date of termination)
which penalty shall be due and payable on the date three months prior to the
effective date of the termination.
In addition, Sublessee will reimburse Sublessor for fifty percent (50%)
of any reasonable brokerage commissions (not in excess of standard
commissions for office buildings in Palo Alto) incurred by Sublessor in re-
subleasing the Sublet Premises and one hundred percent (100%) of reasonable
out-of-pocket expenses incurred by Sublessor for marketing and brochures in
connection with such subsequent re-subletting and 100% of reasonable
attorneys' fees in connection with such subsequent re-subletting, not to
exceed $5,000. Sublessee shall have the right to conduct a search for and
attempt to locate a subsequent subtenant provided that such subsequent
subtenant shall be subject to the reasonable approval of Sublessor, which
consent shall not be unreasonably withheld. Sublessor may, in its sole
discretion, direct the retention or retain the services of Bill Reid of
Spallino Reid as listing broker for any subsequent sublease.
11. Insurance. Sublessee shall maintain insurance in accordance with
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the terms of the Prime Sublease. The named insureds shall be Sublessee,
Sublessor, DEC, Landlord and Landlord's mortgagees.
12. Surrender. Upon the expiration or earlier termination of the
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Sublease Term, Sublessee shall surrender the Sublet Premises free and clear
of all tenants and occupants, and in good order and condition, reasonable
wear and tear and damage by casualty or taking only excepted. All
alterations, additions and improvements (other than Sublessee's equipment
and property) shall remain part of the Sublet Premises and shall not be
removed unless Sublessor has required that such alterations be removed as a
condition to Sublessor's consent to the making of such alteration. Sublessee
shall repair any damage to the Sublet Premises caused by the removal of its
property. Any property of Sublessee not removed at or prior to the
expiration or earlier termination of the Sublease Term may be removed and
stored or disposed of by Sublessor as it deems appropriate in its sole
discretion (provided that in the event of a termination prior to the
expiration of the Sublease Term, Sublessee shall have a reasonable period of
time to remove such property). Sublessee agrees to reimburse Sublessor for
all of Sublessor's costs resulting from
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such removal and storage or disposition, less any proceeds received by Sublessor
as a result of the disposition.
13. Notices. All notices relating to this Sublease or the Sublet Premises
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shall be in writing and addressed, if to Sublessee, at the Sublet Premises, or
at such other address as Sublessee shall designate in writing, and if to
Sublessor, to TIBCO Inc., 530 Lytton Avenue, Palo Alto, California, Attn: Chief
Financial Officer, or to such other address as Sublessor shall designate in
writing.
14. Broker. Upon execution of this Sublease and consent thereto by DEC,
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Sublessor shall be responsible for paying the brokerage commissions due to
Spallino Reid and CB Commercial Real Estate Group, Inc. (the "Brokers") in
connection with this Sublease. Sublessee and Sublessor each represent and
warrant to the other that it has not dealt with any broker or agent in
connection with Sublease other than the Brokers and it shall indemnify, defend
(with counsel reasonably satisfactory to the indemnified party) and hold the
other party hereto harmless from and against all claims, liability, leases,
damages, costs and expenses arising from a breach of such representation and
warranty. If Spallino Reid is retained by Sublessor as its broker and earns a
commission in connection with a subsequent sublease of the Sublet Premises,
Spallino Reid agrees to waive its portion of the brokerage commission less
reasonable out-of-pocket costs and to pay fifteen percent (15%) of the remaining
brokerage commission.
15. Consent by DEC. This Sublease shall be of no force or effect unless
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consented to by DEC.
IN WITNESS WHEREOF, the parties hereto have caused this Sublease to be
executed by their duly authorized offices as of the date first written above.
Sublessor:
TIBCO Inc.
Signed:-
Print Name:
Title:
Sublessee:
ARTEMIS RESEARCH
Signed:
Print Name:
Title:
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EXHIBIT A
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SUBLEASE
between
DIGITAL EQUIPMENT CORPORATION, Sublandlord
and
TEKNEKRON SOFTWARE SYSTEMS, INC., Subtenant
Dated as of February 17, 1995
305 Lytton Avenue
Palo Alto, California 94301
SUBLEASE
BY DIGITAL EQUIPMENT CORPORATION, Sublandlord
TO TEKNEKRON SOFTWARE SYSTEMS, INC., SUBTENANT
DATED: AS OF February 17, 1995
305 Lytton Avenue
Palo Alto, California 94301
TABLE OF CONTENTS
1. Demise 4
2. Term 4
3. Delivery of Sublet Premises 4
4. Rent 5
a. Base Rent 5
b. Additional Rent 5
5. Utilities 6
6. Use 7
7. Assignment and Subletting 8
8. Insurance 8
9. Indemnification 9
10. Maintenance and Services 9
11. Prime Lease 10
a. Incorporation of Prime Lease 10
b. Performance of Prime Lease 10
c. Consents 11
d. No Sublandlord Obligation 11
e. Termination 11
12. Alterations 11
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13. Defaults and Remedies 12
14. Surrender 14
15. Notices 14
16. Effect 15
17. Applicable Law 15
18. Modification, etc. 15
19. Severability 15
20. No Waiver 15
21. Broker 15
22. Mechanics Liens 15
23. Confidentiality 15
24. Abatement 15
25. Quiet Enjoyment 16
26. Compliance With Legal Requirements 16
Exhibits
Exhibit A: Original Lease
Exhibit B: First Amendment to Original Lease
Exhibit C: Second Amendment to Original Lease
Exhibit D: Plan of Sublet Premises
Exhibit E: Telecommunications Equipment Inventory
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SUBLEASE
THIS SUBLEASE is made as of the day of February, 1995, by and between
Digital Equipment Corporation, a Massachusetts corporation, with an address at
111 Powdermill Road, Maynard, MA, ("Sublandlord") and Teknekron Software
Systems, Inc., a Delaware Corporation with an address at 530 Lytton Avenue, Palo
Alto, California ("Subtenant").
WITNESSETH
WHEREAS, Sublandlord is the tenant under a certain Original Lease from
Richard R. Kelley, Jr. ("Landlord"), executed September 18, 1990, a copy of
which is attached hereto as Exhibit A as amended by First Amendment to Lease
dated January 18, 1991 ("First Amendment"), a copy of which is attached hereto
as Exhibit "B", and Second Amendment to Lease dated June 1, 1991 ("Second
Amendment"), a copy of which is attached hereto as Exhibit "C" (such Original
Lease, as amended by the First Amendment and the Second Amendment, is
hereinafter referred to as the "Prime Lease"). The premises leased to
Sublandlord under the Prime Lease are the land, with the building and
improvements thereon, at 305 Lytton Avenue, Palo Alto, CA 94301, which premises
are more particularly described in Article I of the Prime Lease as the "Demised
Premises" and are shown on Exhibit D; and
WHEREAS, Subtenant wishes to sublease from Sublandlord the leased premises
shown on the plan attached hereto as Exhibit D, consisting of a certain parcel
of land more particularly described in Exhibit C of the Prime Lease (the
"Land"), the building (the "Building") on the Land, containing approximately
11,102 square feet, and the parking spaces and other improvements on the Land
(collectively, the "Sublet Premises"), and Sublandlord issuing to sublet the
Sublet Premises to Subtenant;
NOW, THEREFORE, the parties hereto agree as follows:
1. Demise. Sublandlord hereby subleases the Sublet Premises to Subtenant
and Subtenant hereby sublets the Sublet Premises from Sublandlord subject to the
terms and conditions hereinafter stated.
2. Term. The term of this Sublease (the "Sublease Term") shall be
approximately seven (7) years and seven (7) months, commencing seven (7) days
after the mutual execution and delivery of this Sublease (the "Commencement
Date") and terminating on the 15th day of September, 2002.
3. Delivery of Sublet Premises. Subtenant expressly acknowledges that it
has inspected the Sublet Premises and is fully familiar with the physical
condition thereof, and agrees to accept possession of the Sublet Premises in its
"as is" condition. Subtenant acknowledges that Sublandlord has made no
representations or warranties regarding the Sublet Premises, and that it has
relied on no such representations or warranties in accepting the Sublet
Premises. Subtenant acknowledges that Sublandlord shall have no obligation to do
any work in or to the Sublet
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Premises, or to incur any expense in connection therewith, in order to make them
suitable and ready for occupancy and use by Subtenant. Subtenant shall have the
light to utilize the telecommunications equipment (the "Telecommunications
Equipment") described in Exhibit E, subject to the terms of this Sublease.
4. Rent.
a. Base Rent. Subtenant shall pay to Sublandlord base rent ("Base Rent")
without set-off or demand in the following amounts, commencing on the
Commencement Date and continuing on the first day of every month thereafter:
Mos. 1-24: $29,087.24 per month
Mos. 25-48: $30,197.44 per month.
Mos. 49-60: $32,195.80 per month.
Mos. 61-72: $32,750.90 per month.
Mos. 73-84: $33,306.00 per month.
Mos. 85-92: $34,416.20 per month.
Base Rent shall be apportioned for any partial calendar month occurring at
the beginning or end of the Sublease Term.
All payments hereunder shall be made at the following address:
Digital Equipment Corporation
305 Rockrimmon Boulevard, South
Mailstop CX03 -D 12
Colorado Springs, Colorado 80919-2398
Attention: Property Development Center, Real Estate Administrator
or such other address as Sublandlord may from time to time designate by written
notice to Subtenant.
b. Operating Expenses. Operating Expenses shall be defined as the sum
of (i) Operating Costs, as defined in Article V, Section 1 of the Prime Lease,
(ii) Real Estate Taxes, as defined in Article V, Section 4 of the Prime Lease,
and (iii) the costs of Sublandlord's Maintenance Obligations, as defined
in Section 10 hereof. If, with respect to any calendar year during the Sublease
Term after the Operating Expenses Base Year (which shall be defined as calendar
year 1995); the aggregate amount of Operating Expenses exceeds the Operating
Expenses for the Operating Expenses Base Year; Tenant shall pay to Landlord, as
Additional Rent, the entire amount of such excess. Tenant's obligation under
this Section 4(b) shall be prorated for partial calendar years at the beginning
or end of the Term.
After the end of each calendar year included in the Sublease Term, Sublandlord
shall send Subtenant a statement showing Operating Expenses (i) for the calendar
year just ended ("Actual
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Expenses"), which statement shall be based in part upon information supplied by
Sublandlord, and (ii) an estimate of Operating Expenses for the then-current
calendar year ("Estimated Expenses"). Subtenant shall pay Sublandlord on the
first day of each month, in advance, as Additional Rent, an amount equal to
1/12th of the amount, if any, by which the Estimated Expenses for the
then current calendar year exceed the Operating Expenses for the Operating
Expenses Base Year. Such payments shall not bear interest and may be commingled
by Sublandlord with any other funds of Sublandlord. If the total amount paid by
Subtenant in accordance with (ii) above on account of Operating Expenses for any
calendar year during the Sublease Term (i) exceeds the amount due therefor as
shown on Sublandlord's statement delivered after the end of such calendar year,
such excess shall be credited against the monthly installments of Additional
Rent next due (or refunded to Subtenant if the Sublease Term has expired), or
(ii) is less than the amount due therefor as shown on Sublandlord's statement
delivered after the end of such calendar year, then Subtenant shall pay the
difference to Sublandlord within 30 days after receipt of such statement from
Sublandlord. Subtenant's rights and obligations under this Section 4(b) with
respect to the last calendar year (or portion thereof) included in the Sublease
Term shall survive the expiration or termination of this Sublease.
All sums which Subtenant agrees to pay under this Sublease other than Base
Rent, or which Sublandlord pays or incurs as a result of a default by Subtenant,
including without limitation interest at the Default Rate of Interest as defined
in Section 13, shall be included within the term "Additional Rent" whether or
not expressly so identified. As used in this Sublease, the term "Rent" shall
mean collectively Base Rent and Additional Rent.
1.
5. Utilities. Subtenant shall make its own arrangements with the
applicable utility companies for the provision of all utilities and services,
including, without limitation, water, sewer, electricity, gas, heating fuels,
and telephone service, which are required for the use of the Sublet Premises for
the Permitted Uses, and shall pay when due all charges therefor directly to the
company which provides such service. If Sublandlord is notified that a lien will
be placed upon the Sublet Premises as a result of Subtenant's nonpayment of any
such utility charge, then Sublandlord may pay such charges and notify Subtenant
thereof, and Subtenant shall pay the same to Sublandlord as Additional Rent with
the next installment of Base Rent becoming due. In no event shall Sublandlord
be responsible for charges for any utilities or services consumed by Subtenant
at the Sublet Premises.
If, for any reason whatsoever other than a negligent act or omission or a
willful act or omission of Subtenant and its officers, directors, employees,
contractors, servants or agents, or a default by Subtenant hereunder, any
utilities or services which are required for Subtenant's use of the Sublet
Premises for the Permitted Uses are interrupted, Tenant shall promptly so notify
Sublandlord in writing.
If resumption of such utilities or services does not occur within sixty
(60) days after the commencement of such interruption, and the lack of such
utilities or services continues to materially impair Subtenant's then-current
use of the Sublet Premises or a material portion thereof, Subtenant shall have
the right to terminate this Sublease at any given time thereafter while
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such interruption continues by giving to Sublandlord a written notice of
termination stating the date on which this Sublease shall terminate.
If the unavailability of such utilities or services materially impairs
Subtenant's then-current use of the Premises or a material portion thereof for a
period of more than ten (10) consecutive days, Rent shall be abated
proportionately according to the extent to which the Subtenant's use and
occupancy of the Sublet Premises are so affected, for the period commencing on
the date such utilities or services became unavailable and ending on the date on
which such condition is cured or this Sublease terminates, as the case may be.
Subtenant shall not connect to the Building's electrical system any
equipment which operates in excess of the current capacity of such system
without Sublandlord's prior written consent.
6. Use. Subtenant shall continuously use and occupy the Sublet Premises,
to the extent permitted by law, for the purpose of general office use (the
"Permitted Uses") and for no other use or purpose. Sublandlord makes no
representation or warrant as to the necessity of obtaining any license, permit
or approval from any federal, state or municipal governmental authority for such
uses.
Subtenant shall not conduct any activity on the Sublet Premises which is
not permitted under the Prime Lease, or which causes any noise, odor or
vibration to be emitted from the Sublet Premises. Subtenant shall comply with
reasonable rules and regulations as the same may be promulgated and modified by
Landlord from time to time. Except as specifically provided in Section 26
hereof, Subtenant shall comply with all laws, statutes, ordinances, by-laws,
regulations, restrictions, and with the requirements of all governmental
approvals, licenses and permits, relating to the Building or the Sublet Premises
(collectively, "Legal Requirements"), and with the provisions of all insurance
policies from time to time in effect with respect to the Building or the Sublet
Premises. In addition, Subtenant shall obtain, keep in force, and comply with
all requirements of all governmental approvals, licenses and permits required
for Subtenant's specific use of the Sublet Premises.
Subtenant shall not use, generate, treat, store, or dispose of "Hazardous
Substances" (as hereinafter defined) on the Sublet Premises without giving prior
written notification to Sublandlord, including the identity and amounts of the
Hazardous Substances which Subtenant proposes to use, and receiving prior
written consent from Sublandlord, which may be withheld or conditioned in
Sublandlord's sole discretion. In all events, Subtenant's use of Hazardous
Substances must be in full and complete accordance with all Legal Requirements
applicable thereto. Subtenant shall indemnify, save harmless, and defend (with
counsel reasonably satisfactory to Sublandlord) Sublandlord, its officers,
directors, employees, contractors, servants and agents, from and against all
loss, costs, damages, claims proceedings, demands, liabilities, penalties, fines
and expenses, including without limitation reasonable attorneys' fees,
consultants' fees, litigation costs, and cleanup costs, asserted against or
incurred by Sublandlord, its officers, directors, employees, contractors,
servants and agents at any time and from time to time resulting from the
presence of any Hazardous Substances in or on the Sublet Premises during the
Sublease
-7-
ARTICLE V
---------
OPERATING COSTS, CAPITAL EXPENDITURES
-------------------------------------
AND REAL ESTATE TAXES
---------------------
1. Operating Costs. During the Term of this Lease, Tenant shall pay to
---------------
Landlord, as Additional Rent, certain costs and expenses incurred by Landlord in
connection with the operation, repair and maintenance of the Building
("Operating Costs").
(a) Items Included. The term "Operating Costs" shall include, but not
--------------
be limited to (i) the Annual Amortization (defined in paragraph 1 (c) (ii)
below) of certain capital expenditures, described in paragraph 1(c) (ii) below;
(ii) compensation (including normal and customary vacation time, health
benefits, reasonable sick leave and employment taxes) of all persons who perform
duties connected with the operation, maintenance and repair of the Building,
excluding any executive above the level of building manager; (iii) accounting
fees incurred in connection with the determination and allocation of Operating
Costs; (iv) a management and overhead fee equal to one and three-quarter (1.75%)
per year of Tenant's annual Base Rent hereunder, which shall include all fees
for Landlord's direct personnel and office expenses; (v) insurance premiums for
the insurance coverage required to be carried by Landlord pursuant to Article
XVI, paragraph 1; and (vi) any deductibles under the insurance coverage required
to be carried by Landlord pursuant to Article XVI, paragraph 1. The computation
of Operating Costs shall be made in accordance with Generally Accepted
Accounting Principles.
(b) Items Excluded. Operating Costs shall not include any costs
--------------
recoverable under insurance coverage operating Costs shall also exclude, by way
of illustration and not limitation, (i) repair and replacement resulting from
inferior or deficient workmanship, materials, or equipment in the Building or
from the negligent acts or omissions of Landlord; (ii) the cost of the Interior'
Improvements, the Shell Improvements or of any additions to the Building; (iii)
depreciation, amortization, and interest on and capital retirement of debt; (iv)
leasing commissions; (v) repairs or other work of a capital nature (or
reimbursed by insurance proceeds, exclusive of reasonable deductibles)
occasioned by fire, windstorm or other casualty; (vi) any expenses for repairs
or maintenance which are covered by warranties or service contracts (excluding
deductibles); (vii) attorney's fees, costs and disbursements and other expenses
incurred in connection with negotiations or disputes with tenants, other
occupants, or prospective tenants or other occupants of the Building; (viii)
costs incurred in renovating or otherwise improving or decorating or
redecorating space for tenants or other occupants of the Building; (ix)
Landlord's cost of services provided to tenants, which services are not standard
for the Building and the cost of which is payable directly by
6
such tenants to Landlord; (x) capital expenditures as described in paragraph (c)
below (except for Annual Amortization); (xi) structural repairs as described in
Article XI, paragraph 2 below; (xii) expenses in connection with services or
other benefits of a type which are not standard for the Building and which are
not available to Tenant without specific charge therefor, but which are provided
to another tenant or occupant of the Building, whether or not such other tenant
or occupant is specifically charged therefor by Landlord; (xiii) costs incurred
due to the violation by Landlord of any valid, applicable building code,
regulation or law or incurred due to the Building being in violation of any such
code, regulation or law; (xiv) amounts paid to affiliates of Landlord for
services to the Building, to the extent that such amounts exceed competitive
costs for such services rendered by persons or entities of similar skill,
competence and experience; (xv) costs of Landlord's general administration
(other than as Specifically set forth in this Article V, paragraph 1 (a) (xi);
(xvi) any compensation paid to clerks, attendants or other persons in commercial
concessions, if any, operated by Landlord; (xvii) rentals and other related
expenses, if any, incurred in leasing air conditioning systems, elevators or
other capital equipment, except equipment which is used in conjunction with an
energy management system and except for rentals and expenses incurred in
emergency leasing of such equipment; (xviii) all items and services for which
Tenant or other tenants specifically reimburse Landlord other than through
payment of Operating Costs; (xix) costs incurred in installing, operating and
maintaining any specialty improvement not normally installed, operated, and
maintained in buildings comparable to the Building and not necessary for
Landlord's operation, repair, maintenance, and providing of required services
for the Building; (xx) costs incurred in advertising and promotional activities
for marketing of the Building; and (xxi) when and if any service (such as
janitorial service) which is normally provided by Landlord to tenants of the
Building is not provided by Landlord pursuant to agreement with Tenant in the
Demised Premises under the specific terms of this Lease, then in determining
Operating Costs for Tenant, the cost of that service shall be excluded. Further,
if any facilities, services or utilities for the operation, repair and
maintenance of the Building are provided from another building or other
buildings owned or operated by Landlord, or for the operation, repair and
maintenance of another building or other buildings owned or operated by Landlord
are provided from the Building, the net costs, charges and expenses therefor
shall be allocated by Landlord among the Building and the other building or
buildings on a fair and equitable basis.
(c) Capital Expenditures.
--------------------
(i) For purposes of this Lease, "capital expenditure" shall mean the
acquisition of a prior nonexisting asset or the replacement of a pre-existing
asset not acquired in the ordinary course of business and not characterized as
an
7
operating cost or expense within generally accepted accounting principles,
provided that the acquired asset must enhance the value of the real estate over
its useful life, be permanently affixed to the real estate and excludes all
personalty and removable trade fixtures. "Capital expenditure" shall not mean
any costs incurred by Landlord in order to comply with any laws, ordinances,
regulations, insurance requirements or building codes applicable to the Land,
Building or Demised Premises.
(ii) If, during the term of this Lease, Landlord shall make a capital
expenditure (A) for an improvement made by Landlord which produces a cost
savings in operating the Land, Building, or Demised Premises and of which
Landlord has given information reasonably satisfactory to Tenant demonstrating a
cost savings equal to or greater than the Annual Amortization of such
improvement as stated in the following sentence; or (B) for capital item
replacement made by Landlord to the Building, except for any such capital
expenditure made as a result of an obligation of Landlord pursuant to Article
XI, paragraph 2 of this Lease, which shall be done at Landlord's sole expense
without any reimbursement from Tenant, then Tenant shall pay the Annual
Amortization of such capital expenditure. "Annual Amortization" shall be
determined by fully amortizing the original capital expenditure at the interest
rate then being charged for long-term mortgages by institutional lenders on like
properties within the locality in which the Demised Premises are located, over a
period equal to the number of years of the economic useful life of the capital
expenditure.
With respect to capital expenditures, Tenant shall commence payment as
Additional Rent of one-twelfth (1/12th) of Tenant's Percentage Share of the
annual amount shown in Landlord's notice given pursuant to the immediately
preceding sentence with the next and each succeeding installment of Rent
becoming due during the Term, provided that the item for which the expenditure
was made has been fully completed on the date of Tenant's first payment and
further provided that Tenant has received notice of such amount at least fifteen
(15) days prior to the month in which payment is first due or if not so
received, then Tenant's payment shall commence as of the following month. If
Tenant exercises its option to purchase the Property as set forth in Article
XXIX below, the purchase price shall include an amount equal to any portions of
the costs of capital expenditures which have not been amortized as of the close
of escrow for said purchase but, in the case of capital expenditures made during
the seventh, eighth, ninth or tenth years of the Primary Term, only if Landlord
has obtained the written consent of Tenant before making such capital
expenditures.
2. Payment of Operating Costs. Landlord shall reasonably estimate the
--------------------------
Operating Costs for each calendar year wholly or partially included within the
Term of this Lease and shall send notice of said estimate to Tenant within
thirty (30) days after the Term Commencement Date for the remaining portion of
the first
8
such calendar year and thereafter at least thirty (30) days prior to the
commencement of each subsequent calendar year. During each calendar year
thereafter included in the Term, Tenant shall pay, as Additional Rent, one
twelfth of the applicable estimate each month to Landlord together with the Base
Rent. If Landlord does not give Tenant an estimate within the time periods
stated above, then Tenant shall continue to make estimated payments based upon
the preceding year's estimate and within thirty (30) days after receipt of the
new estimate for the current calendar year, Tenant shall commence payment of the
new estimated monthly amount and shall pay in a lump sum any retroactive amounts
due from the beginning of the new calendar year.
It is agreed between the parties that Landlord in good faith may revise its
estimate of Operating Costs once a calendar year to reflect increased costs and
shall give notice to Tenant thereof no later than the tenth (10th) day of the
month preceding the month in which said increased operating Costs will be
applicable. All payments of estimated Operating Costs and all payments-pursuant
to any accounting made hereunder shall be paid to Landlord as stated in this
Lease.
3. Annual Statement. Within one hundred twenty (120) days after the
----------------
expiration of each calendar year included in the Term, Landlord shall make a
determination of the actual Operating Costs for such year. Landlord shall submit
to Tenant a written statement, certified by Landlord, in sufficient detail for
verification by Tenant and a summary showing operating Costs on a line item
basis by category, which statement shall include the amount of actual operating
Costs for such calendar year and any amounts owed by either Landlord or Tenant
to the other for such year. Within thirty (30) days after delivery of such
statement, including any statement delivered after the expiration or termination
of this Lease, Tenant shall pay to Landlord the difference, if any, between the
amount paid by Tenant as estimated operating Costs and the amount owed by Tenant
for the actual operating Costs for such calendar year. If Tenant's payment of
the estimated Operating Costs was greater than the amount owed by Tenant of the
actual Operating costs, then Landlord shall, at Tenant's election, either credit
such amount against the next due installments of Base Rent and/or Additional
Rent or pay the same to Tenant all within thirty (30) days after receipt of
Landlord's annual statement.
Notwithstanding the foregoing, Tenant may at any time give Landlord
written notice of its intent to inspect, examine and audit Landlord's records
pertaining to operating Costs for the calendar year covered by such statement
("Audit Notice"). Tenant shall have the right, upon delivery of an Audit Notice
to Landlord, to inspect, audit and/or copy at Tenant's expense Landlord's books,
records and accounts pertaining to Operating Costs for the calendar year
specified in the Audit Notice, and Landlord shall make such books, records and
accounts available to Tenant and its agents, and accountants for review during
regular
9
business hours at Landlord's principal place of business. Any overpayment or
underpayment of Operating Costs revealed by Tenant's audit shall be adjusted
within thirty (30) days after Tenant delivers written notice of such overpayment
or underpayment to Landlord but only if such underpayment or overpayment
pertains to a year for which Landlord's annual statement was delivered to Tenant
within two (2) years prior to Tenant's delivery of an Audit Notice for such
year. If Tenant's audit discloses that Tenant's Percentage Share of Operating
Costs has been overstated by two percent (2%) or more, Landlord shall pay the
cost of such audit. If Tenant delivers an Audit Notice to Landlord within thirty
(30) days after the date of Tenant's receipt of Landlord's annual statement, the
time period for payment of the difference between Tenant's Percentage Share of
actual operating Costs and the amount paid by Tenant as estimated Operating
Costs shall be tolled until Tenant gives Landlord written notice that its audit
is completed.
Landlord hereby waives any right to collect from Tenant any items of
Operating Costs of which Landlord fails to notify Tenant within two (2) years
following the expiration of the calendar year in which such items were incurred.
Tenant waives any right to collect from Landlord any overpayment of Operating
Costs for any year provided that Tenant has not delivered to Landlord an Audit
Notice respecting said year within two (2) years after Landlord's annual
statement respecting said year has been delivered to Tenant.
4. Real Estate Taxes. As used herein, "Real Estate Taxes" shall mean real
------------------
estate taxes and general and special assessments. Real Estate Taxes shall
exclude, without limitation, any income, franchise, gross receipts, corporation,
capital levy, excess profits, revenue, rent, inheritance, devolution, gift,
estate, payroll or stamp tax by whatsoever authority imposed or howsoever
designated or any tax upon the sale, transfer and/or assignment of Landlord's
title or estate which at any time may be assessed against or become a lien upon
all or any part of the Land or the Building. In addition, Real Estate Taxes
shall exclude any liens or taxes, penalties or interest which are levied or
assessed against the Land or the Building for a period of time prior to the
commencement of the Term.
S. Change in Laws. If at any time during the Term the laws concerning
--------------
the methods of real property taxation prevailing at the commencement of the Term
are changed so that a tax or excise on rents or any other such tax, however
described, is levied or assessed against Landlord as a direct substitute in
whole or in part for any Real Estate Taxes, Tenant shall pay as described in
paragraph 7 hereof (but only to the extent that it can be ascertained that there
has been a substitution and that as a result Tenant has been relieved from the
payment of Real Estate Taxes it would otherwise have been obligated to pay) the
substitute tax or excise on rents.
10
6. Separate Assessment. The Land and the Building are currently assessed
-------------------
as a single and separate tax parcel. Throughout the Term of this Lease,
Landlord shall cause the Land and the Building to remain separately assessed
and maintained within a single and separate tax parcel or lot by the applicable
governmental taxing authority, so that Real Estate Tax bills shall issue solely
with respect to the Real Estate Taxes applicable only to the Land and the
Building.
7. Payment of Real-Estate Taxes. The total assessed value of the Land and
----------------------------
Building for the 1989-1990 tax year, as shown on the secured property tax roll
for Santa Clara County, was One Million Three Hundred Sixty-Five Thousand Two
Hundred Fifty-Five Dollars ($1,365,255). The total amount of real property
taxes due for such year, including assessments collected with real property
taxes, was Seventeen Thousand Seven Hundred and Three Dollars and Thirty-Eight
Cents ($17,703.38), due in two equal installments. In addition, supplemental
taxes assessed pursuant to Chapter 3.5 of the California Revenue and Taxation
Code for the 1989-1990 tax year totalled Eighty-Seven Dollars and Twenty-Two
Cents ($87.22), due in two equal installments. Landlord shall use its best
efforts to cause the tax bills for the Land and Building to be sent directly to
Tenant from the county assessor or other applicable taxing authority. If tax
bills are sent directly to Tenant, Tenant shall provide copies of such bills to
Landlord within thirty (30) days after their receipt by Tenant. Tenant shall
pay directly to the applicable governmental taxing authority, as Additional
Rent without any abatement, setoff or other reduction pursuant to any other
provision of this Lease, all Real Estate Taxes assessed for each tax period or
portion thereof included within the Term of this Lease, and which are during
such Term levied, or imposed upon or become a lien or liens upon the Land and
the Building. Tenant shall pay all Real Estate Taxes within fifteen (15)
business days of its receipt of the appropriate tax bill(s) from Landlord or
from the taxing authority but not earlier than thirty (30) days prior to the
delinquency date of any such taxes. Tenant shall furnish Landlord with evidence
of payment of same within thirty (30) days thereafter. Landlord shall pay all
interest and penalties assessed with respect to such Real Estate Taxes, unless
such interest or penalties are assessed as a result of the failure of Tenant to
timely pay such Real Estate Taxes, in which event Tenant shall pay such
interest and penalties directly to the applicable governmental taxing authority
as Additional Rent.
The foregoing notwithstanding, Tenant shall not be responsible to pay any
portion of any increase in Real Estate Taxes attributable to an increase in
valuation resulting or arising by virtue of a change of ownership of the Land
and/or the Building occurring during the first five (5) Lease Years of the
Primary Term. Tenant shall pay any increase in Real Estate Taxes attributable
to an increase in valuation resulting or arising from a change in ownership of
the Land and/or the Building
11
occurring during the remainder of the Primary Term or Extended Term(s).
Real Estate Taxes for the tax year in which the Term of this Lease
commences and for the tax year in which such Term expires shall be apportioned
between Landlord and Tenant in accordance with the number of days thereof
falling within the Term of this Lease.
8. Contest. Tenant shall, at Tenant's sole expense, have the right to
-------
contest or review (in the name of Tenant, or of Landlord, or both, as Tenant
shall elect, but with the cooperation of Landlord if requested) by appropriate
proceedings (which may be instituted either during or after the Term of this
Lease) any valuation of the Land and/or the Building for Real Estate Tax
assessment purposes and/or any increase in the tax rate. In furtherance of the
foregoing, Landlord shall, without limitation furnish on a timely basis, such
data, documents, information and assistance and make such appearances as may be
reasonably required by Tenant. Landlord agrees to execute all necessary
instruments in connection with any such protest, appeal or other proceedings. If
any such proceeding may only be instituted and maintained by Landlord then
Landlord shall do so at the request and expense of Tenant. Landlord shall not
settle any such appeal or other proceeding without obtaining Tenant's prior
written approval in each such instance. Tenant shall not abandon any such appeal
without first offering to Landlord the right to prosecute such appeal at
Landlord's expense.
Tenant shall be entitled to any refund (net of Tenant's or Landlord's
expenses in obtaining same) obtained by reason of any such proceeding or
otherwise, whether obtained during or after the expiration of the Term and
whether obtained by Landlord or Tenant, except that if such refund shall relate
to the year in which the Term of this Lease commences or expires, such refund
(after deducting all costs of Landlord or Tenant in obtaining same) shall be
equitably apportioned between Landlord and Tenant.
Tenant shall not be responsible to pay any portion of any increase in Real
Estate Taxes attributable to an increase in valuation unless Landlord shall have
delivered to Tenant a copy of the applicable Real Estate Tax bill or
notification of valuation increase in sufficient time to enable Tenant to
contest such Real Estate Taxes if Tenant so desires.
9. Payment in Installments. If, by law, any Real Estate Taxes may be paid
-----------------------
in installments (whether or not interest shall accrue on the unpaid balance
thereof), such Real Estate Taxes, at Tenant's option, shall be paid in
installments in accordance with paragraph 10 hereof. Tenant shall pay to
Landlord any installments coming due during the Term prorated for any fraction
of an installment period included within the Term, including interest, becoming
due at the end of such period.
12
10. Amortization. Real Estate Taxes shall include betterment assessments
------------
for municipal improvements levied against the Land and the Building during the
Term of this Lease. Such assessments shall be amortized over the maximum period
provided under the law and shall be payable in the maximum number of
installments permitted under the law and as described in paragraph 7 and 9
hereof.
11. Landlord's Action. Except to the extent provided in paragraph 7 above,
-----------------
if Landlord, solely by its action, causes the Real Estate Taxes and/or
assessments levied against the Land and/or the Building to increase, Tenant
shall not be responsible for said increase unless Tenant has been notified in
writing of such action and has agreed to same.
12. Minimum Additional Rent. Notwithstanding any other provisions of this
-----------------------
Lease, the portion of Operating Costs consisting of insurance premiums for the
insurance coverage required to be carried by Landlord pursuant to Article XVI
and all Real Estate Taxes (collectively, the "Minimum Additional Rent") shall
not be subject to any abatement, set-off or other reduction pursuant to any
other provision of this Lease.
ARTICLE VI
----------
UTILITIES AND SERVICES
----------------------
1. Utilities and Services Provided by Landlord. Landlord will provide, at
-------------------------------------------
no cost to Tenant, at or prior to the commencement of the Primary Term, the
following utility lines to and within the Demised Premises: water, electricity,
gas, sewer, and telephone (provided that telephone lines shall be provided up to
the connection points of the Building with installation of telephones within the
Demised Premises being the responsibility of Tenant, and that any utility lines
incorporated within the Demised Premises shall be Tenant's responsibility) in
such capacity as to meet general office use building code requirements.
Telephone service, electricity, gas and water shall be separately metered. The
installation of any new utility meters required for separate metering, as well
as the maintenance of all existing and new utility meters, shall be at Tenant's
expense.
2. Security. Landlord shall not be responsible for providing any security
--------
protection for the Demised Premises, the Land or the Building, and Tenant shall
at its own expense provide or obtain any security system or services that it
desires, if any.
3. Separate Utilities. Tenant shall make arrangements with the public
------------------
utility companies or other service provider serving the Demised Premises for
telephone service, electricity, gas, water, sewer, trash collection and all
other services required for Tenant's use of the Demised Premises and shall pay
13
when due any and all charges for such services directly to the companies
providing same. Tenant shall provide janitorial service to the Demised
Premises.
Tenant's failure to pay such charges shall not constitute a default under
this Lease entitling Landlord to exercise any rights or remedies it may have in
the event of default except that if Landlord is notified that a lien will be
placed upon the Demised Premises as a result of Tenant's nonpayment of any such
utility charge, then to protect the real estate Landlord may pay such charges,
notify Tenant thereof and the same shall be paid by Tenant as Additional Rent
with the next installment of Base Rent becoming due. In no event shall Landlord
be responsible for charges for any telephone service used by Tenant at the
Demised Premises.
Tenant shall supply to Landlord upon request copies of the most recent
invoices for utilities services provided to the Building.
4. Interruption of Services.
------------------------
(a) If, for any reason whatsoever other than a negligent act or
omission or a willful act or omission of Tenant, its officers, directors,
employees, contractors, servants or agents, or a default by Tenant hereunder,
any utilities or services which are required for Tenant's use of the Premises
for the Permitted Uses are interrupted, Tenant shall promptly so notify
Landlord. Notwithstanding any other provision to the contrary contained in this
Lease, in the event that Tenant reasonably determines that the existing
situation constitutes an emergency which either threatens imminent injury to
persons or material damage to property or materially impairs Tenant's
then current use of the Premises or a material portion thereof, Tenant may give
such notice by any means including, without limitation, by telephone.
(b) If resumption of such utilities or services does not occur within
thirty (30) days after the commencement of such interruption, and the lack of
such utilities or services continues to materially impair Tenant's then-
current use of the Premises or a material portion thereof, Tenant shall have
the right to terminate this Lease at any time thereafter while such
interruption continues by giving to Landlord a written notice of termination
stating the date on which this Lease shall terminate.
(c) If the unavailability of such utilities or services materially
impairs Tenant's then-current use of the Premises or a material portion thereof
for a period of more than five (5) days, Rent shall be abated proportionately
according to the extent to which the Tenant's use and occupancy of the Premises
are so affected, for the period commencing on the date such utilities or
services became unavailable and ending on the
14
date on which such condition is cured or this Lease terminates, as the case may
be.
ARTICLE VII
-----------
USE OF DEMISED PREMISES
-----------------------
Tenant may use the Demised Premises for all uses reasonably compatible with
office uses including but not limited to general office; research and
development including prototype assembly; customer/employee training; sales and
services; computer rooms, a cafeteria, and all related and accessory uses
customarily incidental thereto.
2. Permits. Except as expressly provided below, Landlord shall procure all
-------
authorizations and permits which may be required for the Demised Premises
including but not limited to certificates of occupancy and variances (if
required) prior to the time Tenant occupies the Demised Premises. All
authorizations and permits required for the construction and occupancy of the
Interior Improvements and of any Alterations are the responsibility of Tenant.
Any special business permits or licenses which may be required of Tenant to
conduct its particular business in the state or locality where the Demised
Premises are located are the responsibility of Tenant.
3. Compliance with Laws. Nothing shall be done upon or about the Demised
--------------------
Premises by Tenant, Landlord, or their agents, servants, employees or invitees
which shall be contrary to any law, ordinance, regulation or requirement of any
public authority having jurisdiction. Tenant will keep the Demised Premises
reasonably clean. Tenant will not do, nor suffer to be done, nor keep or suffer
to be kept, anything in or upon the Demised Premises or the Building which may
prevent the obtaining of any insurance on the Demised Premises or the Building
or on any property therein, including, but Without limitation of the generality
of the foregoing, fire, extended coverage and public liability insurance, or
which may make void any such insurance, If such actions do create any extra
premiums for or increase the rate of any such insurance, then Tenant shall pay
the increased cost of the same to Landlord upon written demand therefor.
ARTICLE VIII
------------
PREPARATION OF DEMISED PREMISES
-------------------------------
1. Building Shell. Landlord has enclosed the balcony on the second floor of
--------------
the Building, and shall use its best efforts to enclose the covered walkway on
the first floor of the Building prior to October 23, 1990, both as described on
Exhibit 2 attached hereto (the "Shell Improvements"). Tenant shall not be
- -------
required to accept the first floor portion of the Shell Improvements if they are
not substantially completed on or before November 7, 1990, and if they are not
substantially completed on or before October 23, 1990, then Tenant shall not be
required to
15
pay Rent with respect to the such first floor portion of the Shell improvements
until Tenant has completed its Interior Improvements in such space. Landlord
shall provide Tenant with notice of the substantial completion of the first
floor of the Shell Improvements by a Substantial completion Notice in the form
of Exhibit E attached hereto. The Shell Improvements shall be constructed and
---------
installed by Landlord, at Landlord's sole cost and expense. Landlord and its
contractor and subcontractors shall employ union workers only for any work on
the Shell Improvements occurring on a weekday after the Date of Execution.
Landlord warrants and represents that the Shell Improvements will be constructed
in a good and workmanlike manner and in compliance with all Laws. Landlord has
the entire and sole responsibility to correct any portion of the Shell
Improvements which is not in compliance with Laws.
2. Interior Improvements.
----------------------
(a) Construction of Interior Improvements. From and after the Date of
-------------------------------------
Execution, Tenant shall construct and install its interior improvements
("Interior Improvements") in the Demised Premises. The Interior Improvements
will be constructed In accordance with plans and specifications prepared by
Tenant. Landlord shall have the right to approve the plans and specifications
for the interior Improvements, which approval shall not be unreasonably withhold
or delayed. Landlord's consent shall be deemed given if Landlord does not
respond to Tenant's request for such consent within ten (10) days after the date
of Landlord's receipt of plans and specifications for the Interior Improvements
together with Tenant's request for approval of such plans and specifications. If
Landlord disapproves the plans and specifications, Landlord shall give Tenant
written notice of such disapproval specifying the reasons and basis for its
disapproval within ten (10) days after the date of Landlord's receipt of the
plans and specifications. The parties shall thereafter confer and negotiate in
good faith to reach agreement on the plans and specifications for the Interior
Improvements. Tenant shall comply with Article X, Paragraphs 3 through 8,
inclusive, in constructing the Interior Improvements. Tenant shall have no
obligation to remove the Interior Improvements upon the expiration or earlier
termination of the Lease.
(b) Interior Improvement Allowance. Landlord shall pay to Tenant an
------------------------------
improvement allowance for use in construction of the Interior improvements equal
to Three Hundred Nineteen Thousand Twenty Dollars ($319,020), which shall be
increased to Three Hundred Twenty-One Thousand Twenty Dollars ($321,020) if
Landlord completes the enclosure of certain ground-floor covered walkway space
as provided in Article VIII, paragraph 1, ("Improvement Allowance"). Landlord
shall pay the Improvement Allowance to Tenant upon the closing of a refinancing
by Landlord of the existing monetary encumbrances on the Land and Building,
provided that no mechanics' liens or similar liens for labor or material
supplied to the Interior Improvements have been filed or asserted against the
Demised Premises. Landlord shall use its best efforts to obtain such refinancing
within three (3) months
16
after the Date of Execution. The unpaid balance of the Improvement Allowance
shall be increased by one percent (1%) for each month that payment of the
Improvement Allowance is delayed beyond three (3) months after the Date of
Execution, prorated for any partial month on the basis of a thirty (30) day
month. Notwithstanding the provisions of Article IV, Paragraph 4, if payment of
the Improvement Allowance is delayed beyond four (4) months after the Date of
Execution, Tenant may deduct the remaining balance of the Improvement Allowance
from the next payments of Rent coming due according to the following schedule:
(i) Tenant may deduct all but Ten Thousand Dollars ($10,000) from the first such
Base Rent payment and all but the Minimum Additional Rent from the first such
Additional Rent payment, (ii) Tenant may deduct all but Five Thousand Dollars
($5,000) from the next such Base Rent payment and all but the Minimum Additional
Rent from the next such Additional Rent payment, and (iii) Tenant may deduct all
of each remaining Base Rent payment and all but the Minimum Additional Rent from
each remaining Additional Rent payment, until Tenant has recovered the remaining
unpaid balance of the Improvement Allowance. Tenant shall be responsible for
payment of all Improvement Costs in excess of the Improvement Allowance.
3. Entry by Tenant. The date on which Tenant may enter the Demised Premises
---------------
for purposes of constructing the Interior Improvements shall be the Date of
Execution. From and after the Date of Execution, Tenant shall have access to the
Demised Premises for purposes of planning, constructing and installing the
Interior Improvements, provided that Tenant's activities shall not materially
interfere with Landlord's completion of the Shell improvements. Tenant's
occupancy of the Demised Premises for the construction of the Interior
Improvements shall be subject to all of the provisions of this Lease except that
Rent shall not be payable until the Term Commencement Date.
4. Insurance. During the period of construction of the Interior
---------
Improvements, Tenant or its general contractor shall procure and maintain in
affect the following insurance coverages with an insurance company or companies
authorized to do business in California and the following agreements shall
apply:
(a) Worker's Compensation - statutory limits for the state in which the work
is to be performed, together with "ALL STATES" and "VOLUNTARY COMPENSATION"
coverage endorsements;
(b) Employer's Liability Insurance with a limit of not less than One Hundred
Thousand Dollars ($100,000);
(c) Comprehensive Liability - at least Three Million Dollars ($3,000,000)
combined single limit, including personal injury, contractual and
products/completed operations liability. Coverage must include the following:
(i) Premises - operations; (ii) elevators and hoists; (iii) independent
contractor; (iv) contractual liability assumed under this contract;
17
(v) completed operations - products; and (vi) explosion, underground and
collapse (XUC) coverage;
(d) Automobile Liability - including owned, hired and non-owned
vehicles of at least Two Million Dollars ($2,000,000) combined single limit for
bodily injury or property damage. Coverage must include the following: (1) owned
vehicles; (2) leased vehicles; (3) hired vehicles; and (4) non-owned vehicles;
(e) Standard builder's risk insurance in an amount at least equal to
the Improvements Allowance;
(f) Tenant shall furnish Landlord with certificates of insurance
evidencing such coverage prior to the commencement of the Interior Improvements.
All insurance shall be carried in companies having a Best's Guide rating of A-
or better. The following statement shall appear in each certificate of insurance
provided Landlord by Tenant hereunder: "It is agreed that in the event of any
material change in, cancellation or non-renewal of this policy, thirty (30) days
prior notice will be given to:
Richard R. Kelley, Jr.
c/o Premier Properties
532 Emerson Street
Palo Alto, California 94301"
(g) The carrying of any of the insurance required hereunder shall not
be interpreted as relieving Tenant of any responsibility to Landlord.
ARTICLE IX
----------
COMPLIANCE WITH LAW
-------------------
1. Compliance by Landlord. Landlord at its sole expense shall comply with
----------------------
and shall from time to time conform the Building (other than the Interior
Improvements and any Alterations) to all Laws of which the Building (other than
the Interior Improvements and any Alterations) would otherwise be in violation
(other than the Interior Improvements and any Alterations) required by law,
except for compliance necessitated by reason of Tenant's special use of the
Demised Premises. Landlord shall pay all costs, expenses, liabilities, losses,
damages, fines, penalties, claims and demands that may in any manner arise out
of or be imposed because of the failure of Landlord to comply with the
provisions of this Paragraph 1.
2. Compliance By Tenant. Tenant shall comply, at Tenant's sole expense,
--------------------
with all Laws if such compliance is related to the Interior Improvements or
Alterations or necessitated by reason of Tenant's special use of the Demised
Premises. The foregoing notwithstanding, Tenant shall not be required to make
any
18
structural, exterior or roof alterations of any nature whatsoever necessitated
by reason of its special use of the Demised Premises, but in such event Landlord
shall so comply and Tenant shall reimburse Landlord for the actual Out-of-pocket
cost thereof within thirty (30) days after demand therefor, provided Tenant is
in receipt of an itemized invoice regarding same and the work has been
performed, regardless of whether or not the alteration is a capital expenditures
Tenant shall pay all costs, expenses, liabilities, losses, damages, fines,
penalties, claims and demands that may in any manner arise out of or be imposed
because of the failure of Tenant to comply with the provisions of this Paragraph
2.
3. Right to Contest. Landlord and Tenant shall each have the right upon
----------------
giving notice to the other to contest any obligations imposed upon either
pursuant to the provisions of this Article and to defer their respective
compliance during the pendency of such contest, provided the enforcement of such
requirement or law is stayed during such contest and such contest will not
subject the other party to civil or criminal penalty or materially interfere
with Tenant's use and occupancy of the Demised Premises or jeopardize the title
to or use and enjoyment of the Land and the Building. Each party shall cooperate
with the other in such contest and shall execute any documents reasonably
required in the furtherance of such purpose. If either party is contesting as
aforesaid, then such party shall not be in default hereunder until and unless it
is determined that such party must perform such obligation and fails to do so by
the date upon which all applicable appeal periods have expired or if such party
has duly appealed any such determination and enforcement is stayed pending
appeal, then until all such appeals have been finally decided against said party
and said party fails to comply therewith.
ARTICLE X
---------
ALTERATIONS, ADDITIONS AND IMPROVEMENTS
---------------------------------------
1. Non-Structural Alterations. Tenant may, from time to time, at its own
--------------------------
cost and expense and without the consent of Landlord make alterations, additions
or improvements (collectively herein called "Alterations") of a non-structural
nature to the interior of the Demised Premises whose cost in any one instance is
Twenty-Five Thousand Dollars ($25,000) or less, provided Tenant gives landlord
five (5) days written notice of any such Alterations. To the extent that Tenant
obtains plans and specifications for any such Alterations whose cost is Twenty-
five Thousand Dollars ($25,000) or less, Tenant shall provide Landlord with
copies of such plans and specifications for Landlord's information. If Tenant
desires to make any Alterations to the exterior of the Demised Premises, or any
nonstructural Alterations to the interior of the Demised Premises costing in
excess of Twenty-five Thousand Dollars ($25,000) in any one instance, Tenant
must first obtain the consent of
19
Landlord thereto, and which consent shall not be unreasonably withheld or
delayed and which is hereby deemed given if Landlord does not respond to
Tenant's request for such consent within ten (10) days from receipt of such
request. Any request by Tenant to make Alterations to the exterior of the
Demised Premises, or any non-structural Alterations to the interior of the
Demised Premises costing in excess of Twenty-Five Thousand Dollars ($25,000) in
any one instance shall include written plans and specifications for the
Alterations. At the end of the Term (including any extensions), Tenant may elect
to remove or to leave any such Alterations, provided that Tenant must give
Landlord written notice of its election as to each Alteration no less than nine
(9) months prior to the expiration of the Term (including any extensions). If
Tenant elects to remove any such Alterations, Tenant's only responsibility upon
removal is to repair any damage caused by the removal and not to restore the
Demised Premises. If Tenant (i) fails to give Landlord the notice provided
herein or (ii), fails to obtain Landlord's prior approval (whether actual or
deemed) when required hereunder, for any non-structural alterations to the
interior of the Demised Premises, such failure shall not constitute a default by
Tenant hereunder.
2. Structural Alterations. If Tenant desires to make any structural
----------------------
Alterations to the Demised Premises, Tenant must first obtain the prior written
consent of Landlord thereto which may be withheld in Landlord's sole discretion
and at such time Landlord shall advise Tenant if such Alterations must either
remain or be removed at the end of the Term. If Landlord does not respond within
ten (10) business days of receipt of Tenant's request for such consent or, if
Landlord responds by consenting to the request, but such response does not
address the issue of removal, such consent is hereby deemed given and Tenant may
either remove or leave such Alterations at the end of the Term (including any
extensions) as Tenant elects, provided that Tenant must give Landlord written
notice of its election as to each Alteration no less than nine (9) months prior
to the expiration of the Term (including any extensions). If removal of any
such Alteration is required by Landlord or elected by Tenant at the end of the
Term, Tenant must only repair any damage caused by removal and not restore the
Demised Premises.
3. Contractor. Alterations may be done by any contractor chosen by Tenant
----------
provided any such contractor is reputable, bondable by reputable bonding
companies, and carries the kinds of insurance and in the amounts set forth in
Article VIII, Paragraph 4 of this Lease.
4. Performance of Work. Tenant in making any Alterations shall cause all
--------------------
work to be done in a good and workmanlike manner using materials equal to or
better than those used in the construction of the Demised Premises and shall
comply with or cause compliance with all laws and with any direction given by
any public officer pursuant to law. Tenant shall obtain or cause
20
to be obtained and maintain in effect, as necessary, all building permits,
licenses, temporary and permanent certificates of occupancy and other
governmental approvals which may be required in connection with the making of
the Alternations. Landlord shall cooperate with Tenant in the-obtaining thereof
and shall execute any documents reasonably required in furtherance of such
purpose, provided any such cooperation shall be without expense and/or liability
to Landlord.
5. Removal. At any time during the Term of this Lease, Tenant may, at its
-------
option, remove any Alterations which are removable by Tenant upon termination of
the Lease. In the event of a removal of any Alterations by Tenant, Tenant shall,
at its sole cost, repair any damage to the Demised Premises caused by such
removal.
6. Insurance. During the period of construction of any Alterations costing
---------
in excess of One Hundred Thousand Dollars ($100,000), Tenant or its general
contractor shall procure and maintain in effect the insurance coverage set forth
in Article VIII, Paragraph 6 of this Lease, to the extent such insurance is
applicable to Tenant's Alterations.
7. Mechanic's Liens. Landlord shall pay promptly for all labor and
----------------
materials supplied to Landlord in connection with any construction or alteration
on the Land or Building and shall not cause or permit any liens for such labor
or materials to attach to the Land or Building. Tenant shall pay promptly for
all labor and materials supplied to Tenant in connection with any construction
or alteration on the Land or Building and shall not cause or permit any liens
for such labor or materials to attach to the Land or Building. In the event of
any such lien, the party to the contract for the work or materials giving rise
to such lien shall cause the same to be discharged, at its expense and within
ten (10) days following its receipt of notice thereof, by filing of a release
bond meeting the requirements of California Civil Code section 3143, by payment,
by satisfaction or otherwise. Any monetary amounts paid to Landlord by Tenant in
connection with any Alterations performed by Landlord or Landlord's contractor
on behalf of Tenant shall not be construed, as Rent.
8. Notices of Non-responsibility. Tenant shall give Landlord five (5) days
-----------------------------
written notice prior to the commencement of any Alterations in order to allow
Landlord to post notices of non-responsibility with respect to such Alterations.
ARTICLE Xi
----------
CONDITION, REPAIR AND MAINTENANCE OF THE BUILDING
-------------------------------------------------
1. Condition of Building. Landlord represents and warrants that on the
---------------------
Date of Execution, to Landlord's knowledge,
21
without any inspection or investigation having been undertaken by Landlord to
confirm such matters, the structural elements of the Building (including the
HVAC, electrical and mechanical systems) comply with applicable laws,
ordinances, rules and regulations, including, but not limited to building and
zoning laws, health and fire codes of the state, local and federal governments,
agencies, and boards, and with requirements and regulations of Boards of Fire
Underwriters having jurisdiction and of insurance carriers of all insurance on
the Demised Premises (collectively called "Laws"). Landlord, at its sole cost
and expense and without cost or charge to or contribution by Tenant, shall
throughout the Term be responsible for and make all repairs, replacements and
perform all maintenance which may be necessitated by defective design or
construction of the Building and/or the Shell Improvements, and all equipment
and systems associated therewith and/or incorporated therein, or which may be
necessitated by latent defects in any of the foregoing or by the negligence or
willful misconduct of Landlord.
2. Landlord's Responsibilities. Landlord at its sole cost and expense
---------------------------
shall make all repairs and replacements to all structural elements of or
associated with the Building as needed to keep same in good order, condition and
repair. Such structural elements include, but are not limited to, (i) all
footings, foundations, floor slabs, columns, girders, mullions, beams,
loadbearing and non-loadbearing exterior walls; (ii) all utility lines located
outside of the Building; (iii) roof and roofing system of the Building,
including, without limitation, support members, membrane assembly, roof deck,
flashing, roof insulation assembly, curbs, walkways, hatches, skylights,
sleeves, vents, brackets and drain fixtures; (iv) exterior lighting,
landscaping, walkways, drives and curbs, and any other improvements on the Land
outside of the Building; (v) sewer lines up to an including the connection for
the Building; and (vi) exterior facade of the Building. The foregoing
notwithstanding, routine maintenance with respect to nonstructural elements
concerning item (iv) shall be included as Operating Costs unless Tenant performs
such routine maintenance itself pursuant to Paragraph 4 of this Article XI.
3. Capital Expenditures; Building Systems. Subject to reimbursement of
---------------------------------------
Landlord as specified in Article V, Landlord shall make all capital expenditures
throughout the Term which may be required to keep the Building in good repair
and condition and in compliance with all Laws (except for compliance of the
Interior Improvements and Alterations with Laws, which shall be Tenant's
responsibility), and Landlord shall maintain and repair the mechanical,
electrical, conveying, plumbing and all other systems within the Building
(except for any portion of the HVAC system serving the Demised Premises which is
installed by or at the expense of Tenant). In addition, Landlord shall perform
any other repairs and maintenance not specifically allocated to Tenant
hereunder.
22
4. Tenant's Responsibility. Tenant shall repair and maintain (i) the
-----------------------
interior of the Demised Premises, (ii) the Interior Improvements and any
Alterations, and (iii) all portions of the HVAC-system serving the Demised
Premises which are installed by or at the expense of Tenant, in good order,
condition, and repair and in compliance with all Laws, ordinary wear and tear
and damage by casualty excepted, throughout the Term. Tenant shall perform at
its own expense all (i) landscaping, repairing, replacing, painting, lighting,
cleaning, and similar items with respect to the Building and its associated
grounds, including within such grounds the patio shared by the Building with the
adjacent building located at 325 Lytton Avenue (provided that: (A) prior to the
construction of new improvements at 325 Lytton Avenue, Tenant shall not be
required to bear more than fifty percent (50%) of the cost of maintaining such
patio; (B) after the construction of new improvements at 325 Lytton Avenue,
Tenant shall bear a share of the costs of maintaining such patio in proportion
to the relative rentable square feet contained in the Demised Premises and in
325 Lytton Avenue as so improved; and (C) Tenant shall not bear any costs of
altering or improving such patio which result from the construction of new
improvements at 325 Lytton Avenue); (ii) normal maintenance of mechanical and
electrical equipment, including heating, ventilating and air conditioning and
elevator equipment; (iii) operating, repairing and maintaining life safety
systems, including, without limitation, sprinkler systems; (iv) obtaining
materials and supplies for repair or maintenance of items which are Tenant's
responsibility; (vi) exterior window washing. Except, as otherwise provided in
Article IX, paragraph 2, and except to the extent the need for such maintenance
or repair is caused by the Tenant's negligence or willful misconduct, Tenant
shall be required to perform only nonstructural, noncapital items of repair and
maintenance, and shall not be responsible for any Building systems (other than
those portions of the HVAC System serving the Demised Premises installed by or
at the expense of Tenant for which Tenant shall be solely responsible).
5. Assignment of Warranties. Landlord shall assign to Tenant any
------------------------
assignable warranties and guarantees which Landlord has obtained with respect to
the portions of the Improvements as to which Tenant has maintenance and repair
responsibilities. Landlord shall cooperate with and assist Tenant in the
enforcement of any such warranties and guaranties as may be required during the
Term, provided that such cooperation and assistance shall be given at no cost to
Landlord therefor. Landlord shall do no act which would impair or nullify any
such warranty or guaranty.
6. Performance of Work. All work to be performed by either party under
-------------------
this Article shall:
(a) be made as soon as reasonably possible but in any event within twenty-
four (24) hours in any emergency (as defined
23
below) and within twenty (20) days for all other repairs. If the work cannot be
completed within twenty-four (24) hours or twenty (20) days, as the case may be,
it shall be commenced within said period and prosecuted continuously and
diligently thereafter until completion; and
(b) be done at the sole cost and expense of the party who has
responsibility for same hereunder subject to Landlord's reimbursement rights
with respect to Operating Costs, or any other rights of either Landlord or
Tenant to reimbursement or set-off as provided in this Lease.
For purposes of this paragraph, the word "emergency" shall mean a
situation which (1) threatens the physical well-being of persons within the
Demised Premises or (2) materially disrupts the Tenant's use and/or occupancy
of the Demised Premises, ingress or egress to the Demised Premises, or any
portion thereof.
Notwithstanding anything contained herein to the contrary, if any repairs
and/or replacements are necessitated as a result of the negligence of either
party, its agents, employees, or contractors, said partys shall be responsible
for any such repairs and replacements, at its sole expense.
ARTICLE XII
-----------
DAMAGE AND DESTRUCTION
----------------------
1. Damage or Destruction. In the event of damage or destruction to all or
---------------------
part of the Building or if Tenant's access to the Building ("Access") is
obstructed or hindered, Tenant shall notify Landlord thereof as soon as
possible after Tenant becomes aware thereof. It shall be Landlord's obligation,
at Landlord's cost and expense to repair such damage and destruction to the
Building including any Shell Improvements in the Building, and to restore such
Access to the condition that existed prior to such damage or destruction
(collectively "Repair and Restoration"), except as expressly provided otherwise
in this Article XII.
2. Estimate. Landlord shall within a period of twenty (20) calendar
--------
days from receipt of Tenant's notice described above deliver to Tenant a good
faith estimate of the time and cost required to complete such Repair and
Restoration ("Estimate"). If the damage results from a casualty for which
Landlord is required to insure under Article XVI and the Estimate is for a
period equal to or more'than one hundred twenty (120) days, the damage is
hereby deemed substantial ("Substantial"). If the damage results from a
casualty for which Landlord is required to insure under Article XVI and the
Estimate is for a period of less than one hundred twenty (120) days, the damage
is hereby deemed partial ("Partial").
3. Partial Damage. If the damage is Partial, Landlord shall forthwith
--------------
complete the Repair and Restoration. If Landlord does not complete the Repair
and Restoration within one hundred thirty-five (135) days ("Partial Damage
Restoration Date"), Tenant shall have the right to terminate this Lease on ten
(10) days written notice to Landlord which notice must be delivered by Tenant
to Landlord within ten (10) days after the Partial Damage Restoration Date. If
Landlord does not complete the Repair and Restoration within fifteen (15) days
after the date stated in the Estimate, Tenant may complete the Repair and
Restoration for Landlord's account. If Tenant completes the Repair and
Restoration, Tenant shall be entitled to receive any insurance proceeds
available for such purpose in excess of those required to reimburse Landlord
for the Repair and Restoration undertaken Landlord. If the amount expended by
Tenant to complete the Repair and Restoration (subject to the limit provided
above) exceeds the insurance proceeds available to Tenant, Tenant shall be
entitled to recover the remainder of such amount by reimbursement from Landlord
on demand or, if Landlord does not pay such reimbursement within thirty (30)
days after demand by Tenant, by set-off against the Base Rent payments next
due, subject to payment of Minimum Base Rent and Minimum Additional Rent.
4. Substantial Damage. If the damage is Substantial, Tenant may elect to
------------------
terminate the Lease within ten (10) days after receipt of Landlord's Estimate.
If Tenant does not elect to terminate the Lease, Landlord shall forthwith
complete the Repair and Restoration. If Landlord does not complete the Repair
and Restoration within sixty (60) days after the end of the period stated in
the Estimate ("Substantial Damage Restoration Date"), Tenant shall have the
right to either (a) terminate this Lease on ten (10) days written notice to
Landlord which notice must be delivered by Tenant to Landlord' within ten (10)
days after the Substantial Damage Restoration Date; or (b) complete the Repair
and Restoration for Landlord's account. If Tenant completes the Repair and
Restoration, Tenant shall be entitled to receive anv insurance proceeds
available for such purpose in excess of those required to reimburse Landlord
for the Repair and Restoration undertaken by Landlord. If the amount expended
by Tenant to complete the Repair and Restoration (subject to the limit provided
above) exceeds the insurance proceeds available to Tenant, Tenant shall be
entitled to recover the remainder of such amount by reimbursement from Landlord
on demand or, if Landlord does not pay such reimbursement within thirty (30)
days after demand by Tenant, by set-off against the Rent payments next due,
subject to payment of Minimum Base Rent and Minimum Additional Rent.
5. Uninsured Damage. If the estimated cost of the damage to the Demised
----------------
Premises or Tenant's Access is Two Hundred Fifty Thousand Dollars ($250,000) or
less and is caused by a casualty for which Landlord is not required to insure
under Article XVI and has not otherwise elected to obtain insurance coverage,
the
25
Term arising after Subtenant's taking possession of the Sublet Premises and
resulting from (a) the action or inaction of Subtenant, its officers, directors,
employees, contractors, servants and agents, or (b) Subtenant's generation,
storage, treatment, handling, transportation disposal or release of any
Hazardous Substances at or near the Sublet Premises, or (c) the violation of any
applicable law governing Hazardous Substances by Subtenant, its officers,
directors, employees, contractors, servants or agents. The indemnities and
duties to defend set forth in this Section shall survive the expiration or
earlier termination of this Sublease. As used in this Sublease, "Hazardous
Substances" shall mean any chemical, substance, waste, material, gas or emission
which is deemed hazardous, toxic, a pollutant, or a contaminant under any
federal, state or local statute, law, ordinance, rule or regulations, now or
hereafter in effect. "Hazardous Substances" include but are not limited to
petroleum and petroleum products, asbestos, chloroflourocarbons (CFCs), radon
gas and polychlorinated biphenyle (PCBs). Upon request by Sublandlord from time
to time, Subtenant shall certify in writing to Sublandlord that no portion of
the Sublet Premises has been or is then being used by Subtenant or by anyone
claiming under Subtenant for the use, generation, treatment, storage, or
disposal of Hazardous Substances and Premises except those set forth in such
certification.
7. Assignment and Subletting. Subtenant shall not assign, transfer,
mortgage or pledge this Sublease, nor sublet all or any part of the Sublet
Premises, or enter into any other license or occupancy arrangement, whether
voluntary or involuntary or by operation of law (collectively a "Transfer")
without Sublandlord's prior written consent, which consent shall not be
unreasonably withheld by Sublandlord.
No Transfer, nor any collection of rent by Sublandlord from any person or
entity other than Subtenant, shall relieve Subtenant of its obligations to fully
observe and perform the terms, covenants, and conditions hereof. No consent by
Sublandlord in a particular instance shall be deemed a waiver of the obligation
to obtain Sublandlord's consent in another instance. Subtenant shall pay to
Sublandlord as received any excess of amounts received pursuant to an
assignment, subletting, license or other occupancy arrangement in excess of the
Rent due hereunder. For the purposes of this Sublease, the transfer of a
majority ownership interest in Subtenant shall be deemed a Transfer.
8. Insurance. Subtenant shall maintain in full force and effect during the
Sublease Term a commercial general liability insurance policy with a combined
single limit not less than $2,000,000 for personal injury/bodily injury and
property damage, under which Subtenant, Sublandlord, Landlord and Landlord's
mortgagees are named as insured. Such policy shall be in a form which shall
specifically include contractual liability coverage insuring Subtenant's
obligations under this Sublease. Such policy shall be issued by a responsible
insurance company with an A-M. Best rating of B+ or better and which is
authorized to do business in the state in which the Sublet Premises are located
Subtenant shall deliver certificates of such insurance to Sublandlord before the
Commencement date and thereafter within ten (10) days after a request by
Sublandlord. Subtenant shall use reasonable efforts to obtain insurance policies
which shall not be canceled, non-renewed, or materially changed without thirty
(30) days' prior written notice to Sublandlord, Landlord and Landlord's
mortgagees. Sublandlord and Subtenant each waive all claims and rights against
the other and their respective officers, directors, employees, contractors,
servants and
-8-
agents, for any damage to or destruction of real or personal property of
Sublandlord or Subtenant, regardless of cause or origin and regardless of any
proceeds or recoveries from any insurance policies, and all insurance policies
carried by Subtenant shall include a waiver of its right of subrogation against
Sublandlord. All such insurance shall be obtained at Subtenant's sole cost and
expense. Sublandlord shall have no responsibility or liability for any loss or
damage to personal property or trade fixtures of Subtenant, damage to all such
property and fixtures being Subtenant's sole risk.
In the event that Sublandlord receives a notice of cancellation of such
insurance policy, Sublandlord may, in addition to and without thereby waiving
any other remedies therefor, either (i) pay the premiums necessary to prevent
such cancellation or (ii) obtain substitute insurance, and bill Subtenant
therefor. Subtenant shall reimburse Sublandlord therefor by paying such amount
to Sublandlord, as Additional Rent, within ten (10) days after demand by
Sublandlord.
9. Indemnification. To the maximum extent that this agreement may be made
effective according to law, but subject to the waiver of subrogation in Section
8 above, Subtenant agrees that it will defend and indemnify Sublandlord and save
Sublandlord harmless from and against all liabilities, obligations, claims,
damages, penalties, causes of action, costs and expenses (including, without
limitation, attorneys' fees and expenses) imposed upon or incurred by or
asserted against Sublandlord by reason of (a) any accident, injury to, or death
of persons, or damage to or loss of property other than that of Sublandlord
and Subtenant, in or about the Sublet Premises to the extent not caused by any
negligence or willful misconduct of Sublandlord, or (b) any failure on the part
of Subtenant to perform, fulfill or observe any of Subtenant's representations,
warranties or agreements set forth in this Sublease. This indemnification shall
survive expiration or earlier termination of this Sublease. To the extent that
any action, suit or proceeding is brought against Sublandlord by reason of any
such occurrence, Subtenant, upon Sublandlord's request, shall at Subtenant's
expense, cause such action, suit or proceeding to be resisted and defended by
counsel reasonably satisfactory to Sublandlord.
10. Maintenance and Services. Subtenant hereby agrees that, except as
otherwise provided in this Section IO, it is relying directly on Landlord's
obligations under the Prime Lease for (i) all repairs and replacements to all
structural elements of or associated with the Building (as provided in Article
XI, Section 2 of the Original Lease), (ii) all capital expenditures throughout
the Sublease Term which may be required to keep the Building in good repair and
maintenance and in compliance with all Laws (except for compliance of Interior
Improvements and Alterations) and the maintenance and repair of the mechanical,
electrical, conveying, plumbing and other systems within the Building, except
for any portion of the HVAC system serving the Sublet Premises which was
installed by or at the expense of Sublandlord (as provided in Article XI,
Section 3 of the Original Lease), and (iii) all water, gas, electricity, sewer
and telephone lines, up to the connection points of the Building (as provided in
Article VI, Section I of the Original Lease).
Sublandlord shall maintain in good order, condition and repair all portions
of the HVAC system serving the Sublet Premises which were installed by or at the
expense of Sublandlord, and the paved and landscaped portions of the Land, shall
provide five (5) day per week janitorial
service to the Sublet Premises and shall perform all necessary landscaping,
repairing & replacing, painting, lighting, and cleaning with respect to the Land
and the exterior of the Building (collectively "Sublandlord's Maintenance
Obligations"). No failure or delay by Sublandlord in supplying any service or
performing any maintenance required under the preceding sentence shall give
Subtenant any right to terminate this Lease or shall give rise to any claim for
set-off or any abatement of rent or additional rent or of any of Subtenant's
obligations under this Sublease when such failure or delay is caused by the act
or omission of Subtenant or by any cause beyond the control of Sublandlord.
Subtenant shall, at its expense, maintain the interior non-structural
portions of the Building and the Telecommunications Equipment in good order and
condition, except for reasonable wear and tear and damage caused by fire or
other casualty, Taldng, default by Sublandlord hereunder, or by any negligent
act or omission or willful act or omission by Sublandlord, its officers,
directors, employees, contractors, servants or agents.
11. Prime Lease.
a. Incorporation of Prime Lease. Except as otherwise expressly provided
herein, Sublandlord grants to Subtenant, to share in common with Sublandlord,
and of Sublandlord's rights, benefits, and interests with respect to the Sublet
Premises, and Subtenant agrees to accept from Sublandlord and hereby assumes all
of Sublandlord's obligations and burdens under the Prime Lease with respect to
the Sublet Premises, as if all of such rights and obligations were set forth
herein in their entirety, provided that the terms and conditions hereof shall be
controlling whenever the terms and conditions of the Prime Lease are
contradictory to or inconsistent with terms and conditions hereof, and provided
further that those provisions of the Original Lease which are protective and for
the benefit of the Landlord shall in this Sublease be deemed to be protective
and for the benefit of the Landlord and Sublandlord. Notwithstanding the
foregoing sentence, the terms, covenants and conditions of the following
Sections of the Second Amendment are expressly deleted from this Sublease:
Sections 2, 3, 4 and 5; the terms, covenants and conditions of Section I of the
First Amendment is expressly deleted from this Sublease; and the terms,
covenants and conditions of the following Articles, Sections and Exhibits of the
Original Lease are expressly deleted from this Sublease: Article I, Sections 1
(d), (e), (f) and (1), Article III, Sections 2 and 3, Article IV, Sections 3 and
4, Article V, Sections 7, 8, 9, Article VI, Section 4, Article VII, Section 2,
Article VIII, Article IX, Sections 2 and 3, Article X, Article XI, Sections 4
and 5, Article XIV, Article XV, Article XVI, Article XVII, Article XIX, Article
XX, Article XXI, Article XXII, Article XXIII, Article XXIV, Article XXV, Article
XXVI, Article XXVIII, Article XXIX, Article XXXI, Sections 1, 6, 9, 10, 12, 15
and 20, and Exhibits E, F, G, H and I.
Subtenant represents that it has read and is familiar with the terms of the
Prime Lease.
b. Performance of Prime Lease. Subtenant covenants and agrees faithfully
to observe and perform all of the terms, covenants and conditions of the Prime
Lease on the part of Sublandlord to be performed with respect to the Sublet
Premises, and neither to do nor cause to be done, nor suffer, nor permit any act
or thing to be done which would or might cause the Prime
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Lease to be canceled, terminated, forfeited or surrendered, or which would or
might make Sublandlord liable for any damages, claims or penalties.
c. Consents. Sublandlord shall not be required to give any consent
required or permitted under the terms of this Sublease with respect to any
matter on which the Prime Lease requires the consent of Landlord until it has
first obtained the written consent of the Landlord with respect to such matter.
Upon written request by Subtenant, Sublandlord agrees to use reasonable efforts
(not involving the payment of money, unless Subtenant pays such money) to
obtain such consent of the Landlord in a timely manner.
d. No Sublandlord Obligation. Except as otherwise specifically provided
herein, Sublandlord shall not have any obligation to construct, maintain,
alter, restore or repair the Sublet Premises, the Building, the
Telecommunications Equipment, or any parking area or other facility or
improvement appurtenant thereto or to provide Subteriant with any service of
any kind or description whatsoever, nor shall Sublandlord be responsible for
the performance of Landlord's obligations under the Prime Lease or be liable in
damages or otherwise for any negligence of Landlord or for any damage or injury
suffered by Subteriant as a result of any act or failure to act by Landlord or
any default by Landlord in fulfilling its obligations under the Prime Lease.
Upon written request by Subtenant, Sublandlord agrees to use reasonable efforts
(not involving the payment of money, unless Subtenant pays such money) to cause
Landlord to perform its obligations under the Prime Lease in a timely manner.
Subtenant hereby waives all claims for consequential damages against
Sublandlord arising out of any breach or failure by Sublandlord to perform or
observe the requirements and obligations created by this Sublease.
e. Termination. If the Prime Lease is terminated pursuant to any
provision of the Prime Lease or otherwise, (i) this Sublease shall terminate
simultaneously therewith, and (ii) any unearned rent paid in advance shall be
refunded to Subtenant unless such termination was the result of a breach by
Subteriant of any term, covenant, or condition of this Sublease.
Notwithstanding the preceding sentence, in the event that Sublandlord or an
affiliate thereof acquires title to the Building, this Sublease shall remain in
full force and effect.
12. Alterations. Subtenant may, from time to time, at its own cost and
expense and without the consent of Sublandlord, make alterations, additions or
improvements (collectively herein called "Alterations") of a non-structural
nature to the interior of the Sublet Premises whose cost in any one instance is
$25,000 or less, provided Subtenant gives Sublandlord fifteen (15) days prior
written notice of any such Alterations. To the extent that Subtenant obtains
plans and specifications for any such Alterations whose cost is $25,000 or
less, Subtenant shall provide Sublandlord with copies of such plans and
specifications for Sublandlord's information. If Subtenant desires to make any
non-structural Alterations to the interior of the Sublet Premises costing in
excess of $25,000 in any one instance, Subtenant must first obtain the consent
of Sublandlord thereto, which consent by Sublandlord shall not be unreasonably
withheld or delayed. Any request by Subtenant to make any non-structural
Alterations to the interior of the Sublet Premises costing in excess of $25,000
in any one instance shall include written plans and specifications for the
Alterations. At the end of the Sublease Term, Subtenant may elect to remove or
to leave any such Alterations, provided that Subtenant must give Sublandlord
written
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notice of its election as to each Alteration no less than ten (10) months prior
to the expiration of the Term. If Subtenant elects to remove any such
Alterations, Subtenant's only responsibility upon removal is to repair any
damage caused by the removal and not to restore the Sublet Premises.
All Alterations shall be done by Sublandlord's designated contractors and
engineers in accordance with the terms and conditions of the Prime Lease.
Without limiting the foregoing, Subtenant shall obtain all necessary licenses
and permits, shall perform all Alterations in accordance with all laws, by-laws,
rules, regulations, licenses and permits.
13. Defaults and Remedies. The occurrence of any of the following shall
constitute an "Event of Default" hereunder: (i) if Subtenant fails to pay any
Rent when due and such failure continues for 10 days after written notice of
such failure, provided, however, that Subtenant shall not be entitled to such
notice if Sublandlord has give notice to Subtenant of one or more previous such
failures within a 12-month period, in which event such failure shall constitute
a default hereunder upon the expiration of 10 days after such payment was due,
or (ii) if Subtenant fails to perform or observe any of the terms of this
Sublease other than those requiring the payment of Rent and such failure
continues for 15 days after Sublandlord gives written notice of said failure;
provided, however, that if the grace period for such default provided to
Sublandlord under the Prime Lease is shorter than 15 days, the length of
Subtenant's grace period shall be one-half of Sublandlord's grace period; or
(iii) if the subleasehold hereby created shall be taken on execution, or by
other process of law, or if any assignment shall be made of Subtenant's property
for the benefit of creditors, or if a receiver, guardian, conservator, trustee
in bankruptcy or similar officer shall be appointed to take charge of all or any
part of Subtenant's property by a court of competent jurisdiction, or if a
petition is filed by Subtenant under any bankruptcy or insolvency law, or if a
petition is filed against Subtenant under any bankruptcy law and the same shall
not be dismissed within 30 days from the date upon which it is filed.
If an Event of Default occurs, Sublandlord may at its option immediately or
at any time thereafter exercise any one or more of the remedies provided in the
Prime Lease with respect to a default thereunder by Sublandlord. Notwithstanding
the foregoing, and in addition thereto, Sublandlord may at its option
immediately or at any time thereafter exercise one or more of the following
remedies, consecutively or simultaneously, without notice or demand.
(a) Sublandlord may bring suit for damages or specific performance for the
collection of unpaid Rent or the performance of any of Subtenant's obligations,
all either with or without entering into possession or terminating this
Sublease.
(b) Sublandlord may, at its option, give Subtenant a notice terminating
this Sublease on a date not less than 3 business days after Sublandlord gives
such notice, and upon such date this Sublease shall terminate and all rights of
Subtenant shall cease without further notice or lapse of time, Subtenant hereby
waiving all statutory rights, including rights of redemption, if any. Upon
termination of this Sublease, Subtenant shall surrender the Sublet Premises to
Sublandlord in accordance with the terms of this Sublease. Subtenant's liability
hereunder shall survive such
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termination and Subtenant shall indemnify and hold Sublandlord harmless from all
claims, losses, costs, expenses, damages or liabilities arising out of or in
connection with such termination.
(c) If, after such termination, Sublandlord elects to relet all or any part
of the Sublet Premises, such reletting may be on such terms and conditions as
Sublandlord in its reasonable discretion may determine. Sublandlord may retain
for itself all rents from reletting, and Sublandlord shall not be liable for any
failure to relet a or any part of the Sublet Premises. The rent obtained from
such reletting shall be, for purposes of subsection 13(d)(2), prima facie
evidence of the fair rental value for the part of the Sublet Premises so relet
during the term of the reletting. The proceeds of reletting shall be applied
first to pay all Sublandlord's reletting expenses, including, without
limitation, all repossession costs, alteration costs, brokerage commissions,
advertising expenses and reasonable attorneys' fees ("Reletting Expenses"), then
to pay any cost to Sublandlord of curing Subtenant's defaults, then to pay Rent,
any balance then to be kept by Sublandlord.
(d) After such termination, Subtenant shall:
(1) pay Sublandlord monthly on the days on which Base Rent would have
been payable, as damages for Subtenant's default, the difference between: (i)
the amount of Rent which would be payable under this Sublease by Subtenant if
this Sublease were still in effect, less (ii) the net proceeds of any reletting,
after deducting Sublandlord's Reletting Expenses and Sublandlord's costs
incurred in curing Subtenant's defaults; or
(2) at Sublandlord's election, whether or not Sublandlord shall have
collected any payments under the preceding paragraph (1), pay Sublandlord, on
demand, an amount equal to: (i) the present value, discounted at the discount
rate at which one-year Treasury bills have then most recently sold, of the
difference between (a) all Rent which would have been payable from the date of
such termination until the last day of the term of this Sublease, and (b) the
fair rental value of the Sublet Premises for the same period; plus (ii)
Sublandlord's reasonable estimate of Reletting Expenses.
(e) If an Event of Default occurs, Sublandlord shall have the right, but
not the obligation, without the necessity of terminating this Sublease, to enter
the Sublet Premises and perform any of Subtenant's obligations notwithstanding
that no specific provision for such substituted performance by Sublandlord is
made in this Sublease. All sums so paid by Sublandlord, and all costs and
expenses incurred by Sublandlord in connection with the performance of
Subtenant's obligations, plus interest thereon at the rate of IS% per annum (or,
if less, the maximum rate of interest permitted at such time by law), shall be
deemed Additional Rent and shall be payable to Sublandlord immediately upon
demand.
The rights and remedies granted to Sublandlord herein are cumulative and in
addition to any others Sublandlord may be entitled to at law or in equity.
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Should Sublandlord prevail in the enforcement of any provision in this Sublease,
Subtenant shall pay on demand all of Sublandlord's costs and expenses incurred
in connection with said enforcement, including without limitation, reasonable
attorney's fees and court costs.
All sums not paid by Subtenant when due hereunder (regardless of whether
or not the applicable grace period has expired) shall bear interest at a rate
equal to the lesser of (i) 1-1/2% per month or (H) the highest rate permitted
by law (the "Default Rate of Interest"), which interest shall be payable to
Sublandlord as Additional Rent hereunder immediately upon demand.
The occurrence of the following shall constitute a "Sublandlord Event of
Default" hereunder; if Sublandlord fails to perform or observe any of the terms
of this Sublease and such failure continues for ten (10) business days after
Subtenant gives Sublandlord written notice of said failure, provided, however,
that in the event Sublandlord cannot reasonably cure the default within the ten
(10) business day time period but has commenced to cure and proceeded
diligently, the ten (10) business day time period shall be extended so long as
Sublandlord continues to cure the default. In the event of a Sublandlord Event
of Default, Subtenant shall have all rights available at law or in equity.
14. Surrender. Upon the expiration or earlier termination of the Sublease
Term, Subtenant shall surrender the Sublet Premises and the Teleco
communications Equipment free and clear of all tenants and occupants, and in
good order and condition, reasonable wear and tear and damage by casualty or
taking only excepted. Subtenant's Work shall be removed if required pursuant
to Section 3 hereof and all other alterations, additions and improvements shall
remain part of the Sublet Premises and shall not be removed unless Sublandlord
so requests such removal by notice to Subtenant at least thirty (30) days prior
to the expiration or earlier termination date. Subtenant shall repair any
damage to the Sublet Premises caused by the removal of its property. Any
property of Subtenant not removed at or prior to the expiration or earlier
termination of the Sublease Tenant may be removed and stored or disposed of by
Sublandlord as it deems appropriate in its sole discretion. Subtenant agrees
to reimburse Sublandlord for all of Sublandlord's costs resulting from such
removal and storage or disposition, less any proceeds received by Sublandlord
as a result of the disposition.
15. Notices. All notices relating to this Sublease or the Sublet Premises
shall be in writing addressed, if to Subtenant, to the Sublet Premises, or to
such other address as Subtenant shall designate in writing; and if to
Sublandlord:
Digital Equipment Corporation, 305 Rockrimmon Boulevard, South, Mailstop
CX03-D12, Colorado Springs, CO 80919-2398, Attention: Property Development
Center, Real Estate Administrator, and with a copy to: Digital Equipment
Corporation, 111 Powdermill Road, Mailstop 02-3/F13, Maynard, MA 01754-1514-,
Attention: Real Estate Law Group, or to such other address as Sublandlord shall
designate in writing.
No notice from Subtenant to Landlord shall be effective as to Sublandlord
unless Subtenant delivers a copy of such notice in the manner set forth in this
section to Sublandlord simultaneously with delivery of such notice to Landlord.
Any notice shall be deemed duly given
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when delivered by hand, if so delivered and a receipt obtained, or (ii) four (4)
days after being deposited with the U.S. Postal Service addressed to such
address, postage prepaid, registered or certified mail, return receipt
requested, or (iii) the next business day after being delivered to an overnight
courier with acceptance signature required.
16. Effect. This Sublease shall be binding upon the parties hereto and
their respective successors and assigns.
17. Applicable Law. This Sublease shall be governed by and construed in
accordance with the laws of the state in which the Sublet Premises are located.
18. Modification, etc. Neither this Sublease nor any provision hereof may
be waived, modified, amended, discharged or terminated, except by an instrument
in writing signed by both parties. This Sublease constitutes the entire
agreement of the parties hereto with respect to the Sublet Premises.
19. Severability. If any term or provision of this Sublease or the
application thereof to any person or circumstance shall to any extent be held
invalid or unenforceable, the remainder of this Sublease or the application of
such term or provision to other persons or circumstances shall not be affected
thereby, and each term and provision of this Sublease shall be valid and
enforceable to the fullest extent permitted by law.
20. No Waiver. No failure by Sublandlord or Subtenant to insist upon the
strict performance of any term hereof or to exercise any right, power or remedy
consequent upon a breach thereof, and no acceptance of full or partial Rent by
Sublandlord during the continuance of such breach, shall constitute a waiver of
any such breach or of any such term. Sublandlord's consent in one instance
hereunder shall not relieve Subtenant of the requirement of obtaining
Sublandlord's consent in any other instance.
21. Broker. Sublandlord shall be responsible for paying the brokerage
commissions due to Julien J. Studley, Inc. and CB Commercial Real Estate
Services (the "Brokers") in connection with this Sublease. Subtenant and
Sublandlord each represent and warrants to the other that it has not dealt with
any broker or agent in connection with this Sublease other than the Brokers and
it shall indemnify, defend (with counsel reasonably satisfactory to the
indemnified party) and hold the other party hereto harmless from and against all
claims, liabilities, leases, damages, costs and expenses arising from a breach
of such representation and warranty.
22. Mechanics Liens. Subtenant shall not cause or permit any liens for
labor or materials to attach to the Sublet Premises as a result of any work
performed by or on behalf of Subtenant, and shall immediately discharge any such
liens which may so attach.
23. Confidentiality. All terms and conditions of this Sublease shall be
kept confidential by all parties and shall not be disclosed without the consent
of the other parties, provided, however, that either party may disclose the
terms and conditions of this Sublease to their respective legal counsels,
accountants, lenders, real estate brokers, prospective purchasers, and
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prospective subtenants and assignees, provided that each such entity shall be
instructed to keep the terms and conditions of this Sublease confidential.
24. Abatement. Provided that Subtenant is not in default hereunder, Base
Rent shall be abated for the first two months of the Sublease Term. In addition,
provided that (i) Subtenant is not in default hereunder, (ii) Subtenant vacates
the entire Sublet Premises at any time between July 1, 1996 and January 31,
2001, and (iii) Subtenant gives Sublandlord ninety (90) days advance written
notice of such vacation, then in such event Subtenant shall be entitled to a
one-time abatement of Base Rent commencing upon such vacation, and continuing
for 11 months thereafter. After the commencement of this 11 month Base Rent
abatement period, Subtenant shall not reoccupy the Sublet Premises prior to the
end of said eleven (11) month abatement period.
25. Quiet Enjoyment. Subject to the terms and provisions contained in this
Sublease, Sublandlord covenants and agrees with Subtenant that upon Subtenant
paying the Rent and observing and performing all of the terms and conditions to
be observed and performed by Subtenant under this Sublease, Subtenant may
peacefully and quietly enjoy the Sublet Premises during the Sublease Term
without molestation or interference from Sublandlord or anyone claiming through
Sublandlord.
26. Compliance With Legal Requirements. Subtenant hereby agrees that,
except as otherwise provided in this Section 26, it is relying directly on
Landlord's obligations under the Prime Lease to conform the Building (other than
the interior improvements and any Alterations) to all Legal Requirements of
which the Building (other than the interior improvements and any Alterations)
would otherwise be in violation (as provided in Article IX, Section I of the
Original Lease).
Notwithstanding the foregoing, Sublandlord shall, at its sole expense,
comply with all Legal Requirements if such compliance is related to the interior
improvements in the Sublet Premises in their condition as of the Commencement
Date, provided however, that Subtenant, at its sole expense, shall be
responsible for compliance with all Legal Requirements necessitated by
Subtenant's Alterations or Subtenant's special use of the Sublet Premises.
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IN WITNESS WHEREOF, the parties hereto have caused this Sublease to be executed
under seal by their duly authorized officers as of date first above written.
Sublandlord:
Name: D. E. Sliwinski
Title: Manager, Property Development Center, West
Subtenant:
TEKNEKRON SOFTWARE SYSTEMS, INC.
By:
Name: DAVID W. RICE
Title: EXEC. VICE PRESIDENT/CFO
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EXHIBIT B
-------
Original Lease
LEASE
between
RICHARD R. KELLEY, JR.
"Landlord"
and
DIGITAL EQUIPMENT CORPORATION,
a Massachusetts corporation
"Tenant"
TABLE OF CONTENTS
-----------------
ARTICLE I BASIC LEASE TERMS 1
1. Summary of Lease Provisions 1
(a) Address of Demised Premises 1
(b) Building 1
(c) Demised Premises 1
(d) Date of Execution 1
(e) Extended Term 1
(f) Interior Improvements 1
(g) Primary Term 1
(h) Use 1
(i) Land 1
(j) Landlord 1
(k) Landlord's Address 1
(1) Base Rent 1
(m) Additional Rent 2
(n) Rent During Extended Term 2
(o) Tenant 2
(p) Tenant's Address 2
(q) Term 2
(r) Beginning Liability Insurance Coverage
Amount 2
2. Exhibits 2
(a) EXHIBIT A - Demised Premises 2
(b) EXHIBIT B - Interior Improvements 2
(c) EXHIBIT C - Legal Description of Land 2
(d) EXHIBIT D - Shell Improvements 2
(e) EXHIBIT E - Substantial Completion Notice 2
(f) EXHIBIT F - Subordination, Recognition and
Non -Disturbance Agreement 3
(g) EXHIBIT G - Permitted Encumbrances 3
(h) EXHIBIT H - Tenant's Personal Property 3
(i) EXHIBIT I - Roof Space 3
ARTICLE II - DESCRIPTION OF DEMISED PREMISES 3
ARTICLE III - TERM 3
1. Term 3
2. Option to Extend 3
3. Lease Commencement 3
ARTICLE IV - RENT 3
1. Base Rent 3
2. Payment 4
3. Base Rent During Extended Term(s) 4
4. Minimum Rent 6
ARTICLE V - OPERATING COSTS, CAPITAL EXPENDITURES AND REAL
ESTATE TAXES 6
1. Operating Costs 6
(a) Items Included 6
(b) Items Excluded 6
i
(c) Capital Expenditures 8
2. Payment Of operating Costs 9
3. Annual Statement 9
4. Real Estate Taxes 10
5. Change in Laws 11
6. Separate Assessment 11
7. Payment of Real Estate Taxes 11
8. Contest 12
9. Payment in Installments 13
10. Amortization 13
11. Landlord's Action 13
12. Minimum Additional Rent 13
ARTICLE VI - UTILITIES AND SERVICES 13
1. Utilities and Services Provided by Landlord 13
2. Security 14
3. Separate Utilities 14
4. Interruption of Services 14
ARTICLE VII - USE OF DEMISED PREMISES 15
1. Use 15
2. Permits 15
3. Compliance With Laws 15
ARTICLE VIII - PREPARATION OF DEMISED PREMISES 16
1. Building Shell 16
2. Interior Improvements 16
(a) Construction of Interior Improvements 16
(b) Interior Improvement Allowance 17
3. Entry by Tenant 17
4. Insurance 18
ARTICLE IX - COMPLIANCE WITH LAW 19
1. Compliance by Landlord 19
2. Compliance By Tenant 19
3. Right to Contest 19
ARTICLE X - ALTERATIONS, ADDITIONS AND IMPROVEMENTS 20
1. Non-Structural Alterations 20
2. Structural Alterations 20
3. Contractor 21
4. Performance of Work 21
5. Removal 21
6. Insurance 21
7. Mechanic's Liens 21
8. Notices of Non-responsibility 22
ARTICLE XI - CONDITION, REPAIR AND MAINTENANCE OF THE
BUILDING 22
1. Condition of Building 22
2. Landlord's Responsibilities 22
3. Capital Expenditures; Building Systems 23
4. Tenant's Responsibility 23
5. Assignment of Warranties 24
ii
6. Performance of Work 24
ARTICLE XII - DAMAGE AND DESTRUCTION 25
1. Damage or Destruction 25
2. Estimate 25
3. Partial Damage 25
4. Substantial Damage 26
5. Uninsured Damage 26
6. Partial Uninsured Damage 26
7. Substantial Uninsured Damage 27
8. Rent Abatement 28
9. Damage Near End of Term 28
10. Waiver 29
ARTICLE XIII - CONDEMNATION 29
1. Total Taking 29
2. Substantial Taking 29
3. Continuance of Lease 30
4. Refund of Rent; Allocation of Award 31
5. Cancellation and Termination Rights 31
ARTICLE XIV - SUBORDINATION, RECOGNITION, NON-DISTURBANCE AND
ATTORNMENT 31
1. Subordination 31
2. Priority of Mortgage 31
3. Existing Mortgage 32
ARTICLE XV-- LANDLORD'S WARRANTIES AND FINANCIAL
INFORMATION 32
1. Warranties 32
2. Financial Information 33
ARTICLE XVI - INSURANCE; WAIVER OF SUBROGATION 34
1. Landlord's Insurance 34
2. Tenant's Insurance 34
3. General Requirements 35
4. Waiver of Claims, Subrogation 35
5. Excess Insurance Proceeds 35
ARTICLE XVII - INDEMNIFICATION 35
1. Indemnity by Tenant 36
2. Indemnity by Landlord 36
3. Consequential Damacies 36
ARTICLE XVIII - ASSIGNMENT AND SUBLETTING 37
1. Assignment and Subletting 37
2. Deemed Consent 38
3. Permitted Transfers 38
ARTICLE XIX - TENANT'S PROPERTY 38
1. Tenant's Property 38
2. Removal 38
3. Waiver of Lien 38
iii
ARTICLE XX - TENANT'S DEFAULT 39
1. Events of Default 39
2. Landlord's Remedies 39
(a) Termination 39
(b) Continue Lease 40
(c) Right to Cure 41
(d) Remedies Not Exclusive 41
(e) Termination, Surrender and Abandonment 41
ARTICLE XXI - LANDLORD'S DEFAULT 41
1. Landlord's Default 41
2. Emergency 43
ARTICLE XXII - NOTICES 43
1. In Writing 43
2. Notice to Tenant 43
3. Notice to Landlord 43
ARTICLE XXIII - QUIET ENJOYMENT 43
ARTICLE XXIV - HOLDING OVER 44
ARTICLE XXV - MEMORANDUM OF LEASE AND OPTION 44
ARTICLE XXVI - SURRENDER OF DEMISED PREMISES 44
ARTICLE XXVII - ESTOPPEL CERTIFICATES 44
ARTICLE XXVIII - HAZARDOUS SUBSTANCES 45
1. Definitions 45
(a) "Demised Premises" 45
(b) "Environmental Laws" 45
(c) "Hazardous Substances" 45
(d) "Hazardous Substance on the Demised
Premises" 45
(e) "Underground Storage Tank" 46
2. Representations and Warranties 46
(a) Compliance with Law 46
(b) Hazardous Substances 46
(c) Indoor Environment 46
(d) Underground Storage Tanks 46
(e) PCBs 46
(f) Asbestos 46
3. Landlord's Indemnity 47
4. Tenant's Obligations and Indemnity 47
ARTICLE.XXIX - RIGHT OF FIRST REFUSAL; OPTION TO PURCHASE 48
1. Right of First-Refusal 48
2. Option To Purchase 49
(a) Purchase Price 49
(b) Closing 50
(c) Title 50
(d) Condition Premises 50
(e) Perfection of Title or Condition 51
iv
(f) Use of Purchase Money 52
(g) Inspections 52
(h) Landlord's Closing Obligations 53
(i) Merger 54
(j) Adjustments 54
(k) Broker 54
(l) Recording Notice of Exercise 55
(m) Failure to Purchase 55
(n) General 55
3. Exchange 55
ARTICLE XXX - SATELLITE DISH 56
1. Roof Space 56
2. Equipment and Cables 56
3. Installation 56
4. Indemnity 56
5. Insurance 57
6. Legal Requirements 57
7. Access 57
8. Taxes 57
9. No Interference 57
ARTICLE XXXI - ADDITIONAL PROVISIONS 57
1. Broker-Commission 57
2. Landlord's Access 57
3. Signage 58
4. Binding Effect 58
5. Validity 58
6. Entire Agreement 58
7. Exhibits 59
8. Acts at Own Cost 59
9. Governing Law 59
10. Waiver/Consent 59
11. Cumulative Rights and Remedies 59
12. Payment/Performance Under Protest 59
13. Words and Phrases 60
14. Definition of Terms 60
15. Effective Date of Lease 60
16. Authority 60
17. Commencement/Expiration Dates 60
18. Force Majeure 60
19. Attorney's Fees 61
20. Confidentiality 59
v
ARTICLE I
---------
BASIC LEASE TERMS
-----------------
1. Summary of Lease Provisions. Reference in this Lease to any of the
---------------------------
terms listed below shall be deemed to incorporate and be a reference to the data
set forth next to such term in this Article.
(a) Address of Demised Premises: 305 Lytton Avenue, Palo Alto,
----------------------------
California 94301.
(b) Building: That certain building located at 305 Lytton Avenue, Palo
---------
Alto, California 94301, comprised of ten thousand nine hundred and two (10,902)
rentable square feet which shall be increased to eleven thousand one hundred two
(11,102) square feet if Landlord completes the enclosure of certain ground-floor
covered walkway space as provided in Article VIII, paragraph 1.
(c) Demised Premises: The entire Building, plus seven (7) designated
-----------------
parking spaces, as indicated on Exhibit A attached hereto.
---------
(d) Date of Execution: 1990.
------------------
(e) Extended Term: See Article III.
--------------
(f) Interior Improvements: See Article VIII and Exhibit B.
---------------------- ---------
(g) Primary Term: Twelve (12) years, commencing October 1, 1990 and
-------------
terminating September 30, 2002.
(h) Use: See Article VII.
----
(i) Land: That certain real property, more particularly described in
-----
Exhibit C, on which the Building is located.
- ---------
(j) Landlord: Richard R. Kelley, Jr.
---------
(k) Landlord's Address: c/o Premier Properties
-------------------
532 Emerson Street
Palo Alto, CA 94301
(1) Base Rent:
----------
Monthly for Lease Year 1: $2.30 per
rentable square foot.
1
Monthly for Lease Years 2-12 As of the
commencement of
each lease
year, monthly
base rent
hereunder shall
be increased by
five (5)
percent of the
previous lease
year's base
rent.
(m) Additional Rent: See Article IV.
---------------------
(n) Rent During Extended Term: See Article III.
(o) Tenant: Digital Equipment Corporation, a Massachusetts
corporation.
(p) Tenant's Address: Digital-Equipment Corporation, 1110 Chapel Hills
-----------------
Drive, Colorado Springs, Colorado 80920-3995 Attention: Western-Property
Development Center Manager.
(q) Term: Primary Term and/or any Extended Term as the context may
-----
require.
(r) Beginning Liability Insurance Coverage Amount: $3,000,000.
----------------------------------------------
2. Exhibits. The Exhibits listed below are attached hereto and are
--------
incorporated in this Lease by reference herein.
(a) EXHIBIT A.- Demised Premises
-----------
(b) EXHIBIT B - Interior Improvements
---------
(c) EXHIBIT C - Legal Description of Land
--------
(d) EXHIBIT D - shell Improvements
---------
(e) EXHIBIT E - Substantial Completion Notice
---------
(f) EXHIBIT F - Subordination, Recognition and Non Disturbance
---------
Agreement
(g) EXHIBIT G - Permitted Encumbrances
-------
(h) EXHIBIT H - Tenant's Personal Property
---------
(i) EXHIBIT I - Roof Space
---------
2
ARTICLE II
- ----------
DESCRIPTION OF DEMISED PREMISES
-------------------------------
Landlord hereby leases to Tenant and Tenant hereby takes from Landlord the
entire Building, plus seven (7) designated parking spaces, as indicated on
Exhibit A attached hereto.
- ---------
ARTICLE III
-----------
TERM
----
1. Term. The term of this Lease shall be for the period set forth in
----
Article I hereof ("Primary Term"), except as hereinafter provided otherwise.
2. Option to Extend. Tenant has two (2) consecutive options to extend this
----------------
Lease for a term(s) of five (5) year(s) each (each an "Extended Term"), provided
Tenant shall give to Landlord written notice of the exercise of (i) the first
option to extend the term on or before September 30, 2001, and (ii) the second
option no later than one hundred twenty (120) days prior to the expiration of
the first Extended Term. Each such Extended Term shall be upon the same terms,
covenants and conditions hereof, except for Base Rent.
3. Lease Commencement. The Primary Term shall commence on October 1, 1990
------------------
("Term Commencement Date"). For purposes of this Lease, each "Lease Year" shall
commence on the same calendar date as the Term Commencement Date.
ARTICLE IV
----------
RENT
----
1. Base Rent. The Base Rent for the Demised Premises shall be paid in equal
---- -----
monthly installments as set forth in Article I of this Lease on the first day of
each month during the Primary Term commencing with the Term Commencement Date
(subject to abatement as described below).
Rental payments shall be made at the address set forth in Article I or at such
other address as the Landlord may from time to time designate in writing. Except
as otherwise specified in this Lease, all other payments required by this Lease
to be made by Tenant to Landlord during the Term hereof are Additional Rent and
shall be paid as elsewhere in this at the address set forth in as Landlord may
from time to as otherwise specified in this by this Lease set forth. Additional
Rent shall begin accruing and be payable commencing on the Term Commencement
Date. Base Rent and Additional Rent are collectively referred to herein as
"Rent" or "Rents."
3
2. Payment. All Rent payable by Tenant pursuant to this Lease shall be
-------
paid without set off, adjustment, deduction or abatement except as otherwise
in this Lease provided.
If on two consecutive occasions in any Lease Year Landlord has not
received any installment of Base Rent or any other sum due from Tenant
hereunder within ten (10) days after the due date thereof and Tenant has
received written notice of such delinquency, then if any subsequent installment
of Base Rent or any other sum due from Tenant hereunder in the same Lease Year
is not received by Landlord within (i) ten (10) days after the due date thereof
and (ii) five (5) days after the date of Tenant's receipt of written notice
from Landlord, Tenant shall pay to Landlord a late charge equal to five percent
(5%) of the amount overdue, to compensate Landlord for processing and
accounting charges and any other charges that may be incurred by Landlord.
3. Base Rent During Extended Term(s). Base Rent for any Extended Term(s)
---------------------------------
shall be as hereinafter provided. During the first Lease Year of each Extended
Term hereof, Base Rent for the Demised Premises shall be equal to ninety-five
percent (95%) of the then current fair market rent for similar properties in
downtown Palo Alto taking into account the Demised Premises as improved, and
Tenant's responsibility for operating Costs and Real Estate Taxes pursuant to
this Lease. If the parties fail to agree, after good faith negotiation, upon
the amount of the fair market rent used to determine the Base Rent for the
first Lease Year of either Extended Term on or before ninety (90) days prior to
commencement thereof, the fair market rent used to determine the Base Rent for
the first Lease Year of such Extended Term shall be determined by appraisal in
the manner hereafter set forth.
If it becomes necessary under this paragraph to determine the fair market
rent by appraisal, not less than ninety (90) days prior to commencement of the
Extended Term, Landlord and Tenant each shall appoint a real estate appraiser
who shall be a member of the American Institute of Real Estate Appraisers
("AIREA") and shall be experienced in the appraisal of rental value for
commercial properties in the Palo Alto area. Such appraisers shall each
determine the fair market rent for the Demised Premises taking into account the
value of the Demised Premises as improved and the amenities provided by the
Building, Tenant's obligation to pay operating Costs and Real Estate Taxes and
prevailing comparable rentals. Such appraisers shall, within twenty (20)
business days after their appointment, complete their appraisals and submit
their appraisal reports to Landlord and Tenant. If the fair market rent of the
Demised Premises established in the two (2) appraisals varies by five percent
(5%) or less of the higher rental, the average of the two shall be controlling.
If said fair market rent varies by more than five percent (5%) of the higher
rental, said appraisers, within ten (10) days after submission of the last
appraisal, shall appoint a third appraiser who shall be a member of AIREA and
who shall be
4
similarly qualified and experienced. Such third appraiser shall, within twenty
(20) business days after his appointment, determine by appraisal the fair market
rent of the Demised Premises, taking into account the same factors referred to
above, and submit his appraisal report to Landlord and Tenant. The fair market
rent determined by the third appraiser for the Demised Premises shall be
averaged with whichever of the other two appraised values is closest to that
determined by the third appraiser, and said average shall be the fair market
rent used to determine Base Rent pursuant to the receding paragraph. If either
Landlord or Tenant fails to appoint an appraiser, or if an appraiser appointed
by either of then fails, after his appointment, to submit his appraisal within
the required period in accordance with the foregoing, the appraisal submitted by
the appraiser properly appointed and timely submitting his appraisal shall be
controlling. if the two appraisers appointed by Landlord and Tenant are unable
to agree upon a third appraiser within the required period in accordance with
the foregoing, application shall be made within twenty (20) days thereafter by
either Landlord or Tenant to AIREA, which shall appoint a member of said
institute willing to serve as appraiser. Each party shall be responsible for the
cost of the appraiser appointed by such party hereunder and the cost of any
third appraiser appointed under this paragraph shall be borne equally be
Landlord and Tenant.
The Base Rent payable during the second Lease Year of each Extended Term
shall be an amount equal to one hundred five percent (105%) of the Base Rent
payable during the first Lease Year of such Extended Term.
The Base Rent payable during the third Lease Year of each Extended Term
shall be an amount equal to one hundred five percent (105%) of the Base Rent
payable during the second Lease Year of such Extended Term.
The Base Rent payable during the fourth Lease Year of each Extended Term
shall be an amount equal to one hundred five percent (105%) of the Base Rent
payable during the third Lease Year of such Extended Term.
The Base Rent payable during the fifth Lease Year of each Extended Term
shall be an amount equal to one hundred five percent (105%) of the Base Rent
payable during the fourth Least Year of such Extended Term.
4. Minimum Rent. Notwithstanding any other provisions of this Lease
------------
allowing for abatement, set-off or other reduction in Bass Rent, other than
pursuant to Article VIII, Paragraph 2(b), Article XII, Paragraph 8 or Article
XIII, Paragraph 4, Tenant shall be required to pay a minimum amount of Base
Rent.(the "Minimum Base Rent") equal to Nineteen Thousand Dollars ($19,000) per
month.
5
damage is hereby deemed "Partial Uninsured. If the estimated cost of the damage
is over Two Hundred Fifty Thousand Dollars ($250,000) and is caused by a
casualty for-which Landlord is not required to insure under Article XVI and
has not otherwise elected to obtain insurance coverage, the damage is hereby
deemed "Substantial Uninsured. Notwithstanding the other provisions of this
Article XII, if any damage caused by a casualty for which Landlord is not
required to insure under Article XVI and has not otherwise elected to obtain
insurance coverage, and is due to the negligence or wilful misconduct of Tenant
or its agents, officers, employees, subtenants, assignees, guests or invitees,
the repair and restoration of such casualty shall be at Tenant's expense.
6. Partial Uninsured Damage. If the damage is Partial Uninsured, Landlord
------------------------
shall deliver Tenant an Estimate and forthwith complete the Repair and
Restoration. If Landlord does not complete the Repair and Restoration within one
hundred thirty-five (135) days ("Partial Uninsured Damage Restoration Date"),
Tenant shall have the right to terminate-this Lease on ten (10) days written
notice to Landlord which notice must be delivered by Tenant to Landlord within
ten (10) days after the Partial Uninsured Damage Restoration Date. If Landlord
does not complete the Repair and Restoration within fifteen (15) days after the
date stated in the Estimate, Tenant may complete the Repair and Restoration for
Landlord's account. If Tenant completes the Repair and Restoration, Tenant shall
be entitled to receive any insurance proceeds available for such purpose in
excess of those required to reimburse Landlord for the Repair and Restoration
undertaken by Landlord. If the amount expended by Tenant to complete the Repair
and Restoration (subject to the limit provided above) exceeds the insurance
proceeds available to Tenant, Tenant shall be entitled to recover the remainder
of such amount by reimbursement from Landlord on demand or, if Landlord does not
pay such reimbursement within thirty (30) days after demand by Tenant, by set-
off against the Rent payments next due, subject to payment of Minimum Base Rent
and Minimum Additional Rent.
7. Substantial Uninsured Damage. If the damage is Substantial Uninsured,
----------------------------
Landlord may elect to terminate this Lease by delivering written notice of such
termination within twenty (20) calendar days after the date of the damage. If
Landlord elects to terminate the Lease, then Tenant's Purchase option pursuant
to Article XXIX, Paragraph 2 shall be accelerated on the following terms:
(a) Tenant must exercise the Purchase option, if at all, by notice to
Landlord within ninety (90) days after Landlord gives notice of termination;
(b) The Close of Escrow shall occur within one hundred eighty (180)
days after Tenant exercises the Purchase option but
26
in no event before sixty (60) days after a final damage estimate has been
determined pursuant to Paragraph (c), below;
(c) The Purchase Price shall be computed by substituting in Article
XXIX, Paragraph 2 (a) (i), the Base Rent for the Lease Year in which the
termination occurs and by deducting the cost of repairing the damage as
determined below. Landlord and Tenant shall attempt to agree on the cost of
repairing the damage. If they are unable to agree within sixty (60) days after
Tenant exercises the Purchase Option, each shall select a contractor or other
estimator (the "Estimator") to determine the cost of repairing the damage. The
Estimators shall be required to estimate such cost within thirty (30) days after
their appointment. If the two cost estimates so determined do not differ by more
than 10%, then the average of such two cost estimates shall be the cost of
repair. If the two cost estimates differ by more than 10%, then the two
Estimators shall select a third Estimator* who shall estimate the cost of repair
within thirty (30) days after his appointment. The two closest of the three
appraised cost estimates shall then be averaged to determine the cost of repair.
The fees of each of the first two Estimators shall be borne by the party who
appointed each, the fees of any third Estimator shall be borne 50% by Landlord
and 50% by Tenant; and through the National Association of Independent Insurance
Adjustors.
(d) Landlord shall assign to Tenant any insurance proceeds to which
Landlord is entitled with respect to the casualty giving rise to the
termination, and the Purchase Price shall be increased by the amount of such
proceeds, if any.
If Landlord does not elect to terminate the Lease, Landlord shall deliver to
Tenant an Estimate. If the Estimate is for a period of one hundred twenty (120)
days or more, Tenant shall have the right to terminate the Lease within ten (10)
days after the date of receipt of Landlord's Estimate. If Tenant does not elect
to terminate the Lease, Landlord shall forthwith complete the Repair and
Restoration. If Landlord does not complete the Repair and Restoration within
sixty (60) days after the end of the period stated in the Estimate
("Substantial uninsured Damage Restoration Date"), Tenant shall have the right
to either (a) terminate this Lease on ten (10) days' written notice to Landlord
which notice must be delivered by Tenant to Landlord within ten (10) days after
the Substantial Uninsured Damage Restoration Date; or (b) complete the Repair
and Restoration for Landlord's account. If Tenant completes the Repair and
Restoration, Tenant shall be entitled to receive any insurance proceeds
available for such purpose in excess of those required to reimburse Landlord for
the Repair and Restoration undertaken by Landlord. If the amount expended by
Tenant to complete the Repair and Restoration (subject to the limit provided
above) exceeds the insurance Proceeds available to Tenant, Tenant shall be
entitled to recover the remainder of such amount by reimbursement from Landlord
on demand or, if Landlord does not pay such reimbursement within thirty (30)
days after demand by Tenant, by set-off against the
27
Rent payments next due, subject to payment of minimum Base Rent and Minimum
Additional Rent.
8. Rent Abatement. From the date of such damage or destruction or
--------------
obstruction or hindrance of Access, a proportionate part of Base Rent and
Additional Rent according to the nature and extent of the Building rendered
unusable by Tenant thereby shall be abated until the completion of the Repair
and Restoration. In the event this Lease is terminated as hereunder provided,
Tenant shall pay the Base Rent and Additional Rent apportioned to the date of
such damage or destruction and thereafter Tenant shall be relieved of all
further liability for the payment thereof.
9. Damage Near End of Term. Notwithstanding anything to the contrary in
------------------------
this Lease, if the Estimate is for a period extending beyond the remainder of
the Term, either Landlord or Tenant may terminate this Lease upon thirty (30)
days written notice to the other delivered within sixty (60) days after the date
of Tenant's receipt of the Estimate, provided, however, except in the case of
Uninsured Substantial Damage, Landlord may not exercise this right if Tenant has
previously exercised or exercises within said sixty (60) day period its Purchase
option pursuant to Article XXIX, Paragraph 2, or an option to extend the Term
contained in this Lease, provided, further, however that Tenant's rights
contained in paragraphs 3, 4, 6, and 7 of this Article remain in effect.
10. Waiver. Tenant waives the provisions of California civil Code sections
------
1932(2), 1933(4), 1941 and 1942 and any similar or successor statues relating to
the termination of leases in the event of damage or destruction, Landlord's
obligations for tenant ability and Tenant's right to make repairs and deduct the
expenses of such repairs from rent, and agrees that the parties' rights and
obligations in such event shall instead be governed by this Lease.
ARTICLE XIII
------------
CONDEMNATION
------------
1. Total Taking. In the event of a taking by condemnation or by the
------------
exercise of the power of eminent domain by a public or quasi-public authority or
entity or conveyance in lieu thereof (all hereinafter referred to as "Taking")
of the entire Demised Premises, this Lease shall terminate as of the earlier of
(a) the date of the vesting of title in the Taking authority or entity or (b)
the date of the taking of possession by such authority or entity so as to
deprive Tenant of the use thereof without the necessity for any further act or
notice by either party hereto (said earlier date being herein the "Taking
Date").
28
2. Substantial Taking. In the event either of the following occurs:
------------------
(i) a Taking occurs of a portion of the Demised Premises or the Building such
that undue hardship or substantial interference is caused in the conduct of
Tenant's business operations in the Demised Premises or (ii) a Taking occurs of
a portion of the Demised Premises or Building such that Tenant's access to the
Demised Premises is denied or interfered with substantially, Tenant shall have
the right to terminate this Lease upon written notice to Landlord given within
thirty (30) days of the Taking Date, which notice shall specify the effective
date of such termination, but which date shall not be more than fifteen (15)
days after the date of such notice. In the event that a Taking occurs of a
substantial portion of the Building resulting in undue hardship or substantial
interference the conduct of business operations in the Building, Landlord shall
waive the right to terminate this Lease upon written notice to Tenant given
within thirty (30) days of the Taking Date, which notice shall specify the
effective date of such termination, but which date shall not be more than
fifteen (15) days after the date of such notice. If Landlord elects to
terminate the Lease, then Tenant's Purchase Option pursuant to Article XxIX,
Paragraph 2 shall be accelerated on the following terms:
(a) Tenant must exercise the Purchase option, if at all, by notice to
Landlord within ninety (90) days after Landlord gives notice of termination;
(b) The Close of Escrow shall occur within one hundred eighty (180)
days after Tenant exercises the Purchase option;
(c) The Purchase Price shall be computed by substituting in Article
XXIX, Paragraph 2 (a) (i), the scheduled Base Rent for the Lease Year in which
the termination occurs; and
(d) The Purchase Price shall be reduced as provided in Article XXIX,
Paragraph 2 (e) (iii) (B)
3. Continuance of Lease. In the event this Lease is not cancelled and
--------------------
terminated as a result of a Taking:. (i) Base Rent and Additional Rent payable
hereunder shall abate from the Taking Date; such abatement in Base Rent and
Additional Rent shall be in proportion to the amount of the Demised Premises
subject to a Taking (and shall be permanent in the case of divestiture of
title); (ii) Landlord shall commence the work of repairing and restoring the
Building to a complete architectural unit and the work of restoring the
remainder of the Demised Premises as nearly as possible to the condition
existing immediately prior to the Taking and to restore Tenant's access to the
Building and Demised Premises or provide alternative access thereto, all such
work including the planning to be commenced promptly following the Taking Date,
and shall complete such work within one hundred twenty (120) days after the
Taking Date. If Landlord fails to complete the work of repair and restoration
within one hundred thirty-five (135) days after the Taking Date ("Final Work
Date"),
29
Tenant shall have the right to either (a) terminate this Lease by written notice
given to Landlord within ten (10) days after the Final Work Date effective on
the date specified in the notice which date shall not be more than ten (10)
days from the date of the notice; or (b) complete the repair and restoration
for Landlord's account. If Tenant completes the repair and restoration, Tenant
shall be entitled to receive any condemnation award available for such purpose
in excess of those required to reimburse Landlord for the repair and restoration
undertaken by Landlord. If the amount expended by Tenant to complete the repair
and restoration (subject to the limit provided above) exceeds the condemnation
award available to Tenant, Tenant shall be entitled to recover the remainder of
such amount by reimbursement from Landlord on demand or, if Landlord does not
pay such reimbursement within thirty (30) days after demand by Tenant, by set-
off against the Rent payments next due, subject to payment of Minimum Base Rent
and Minimum Additional Rent. Landlord shall use its best efforts to obtain and
retain the maximum amount of condemnation award available for reconstruction of
the Premises in accordance with this paragraph 3.
4. Refund of Rent; Allocation of Award. In event of a Taking: (i) Tenant
-----------------------------------
shall, within ten (10) days after the effective date of the termination of this
Lease or after the effective date of abatement of Base Rent and Additional Rent,
as the case may be, receive a refund from Landlord of the appropriate Base Rent
and Additional Rent amount paid by Tenant for any period subsequent to the
effective date of termination or abatement, (ii) Landlord shall be entitled to
receive the entire condemnation award; provided, however, that Tenant may pursue
a separate claim against the condemning authority for Tenant's moving expenses,
the value of Tenant's leasehold estate, the value of Tenant's trade fixtures and
equipment and any interruption or damage to Tenant's business, and (iii)
Landlord shall pay to Tenant promptly after receipt thirty percent (30%) of any
amount by which (a) any condemnation award received by Landlord exceeds (b) the
cost of repairing and restoring the Demised Premises as required pursuant to
paragraph 3 of this Article XIII plus the Purchase Price that would apply
pursuant to Article XXIX, Paragraph 2(a) if computed using the scheduled Base
Rent for the Lease Year immediately following the Lease Year in which the Taking
occurs.
5. Cancellation and Termination Rights. Landlord and Tenant may exercise
------------------------------------
any rights of cancellation and termination herein granted even though their
respective right, title, or interest may have been taken or divested.
ARTICLE XIV
-----------
SUBORDINATION, RECOGNITION, NON-DISTURBANCE AND ATTORNMENT
- ----------------------------------------------------------
1. Subordination. This Lease (including Tenant's Purchase Option pursuant
-------------
to Article XXIX, Paragraph 2) shall be subject
30
and subordinate to the lien of any mortgage or deed of trust ("Mortgage") of
all or a portion of the fee interest of the Demised Promises to (i) any
institute or entity which in the ordinary course of its business extends
financing secured by real estate, including without limitation, lending,
thrift or banking institutions, pension funds or insurance companies, or (ii)
individuals who have at least five (5) years experience in the management or
development of real property and have a net worth of at least Five Million
Dollars ($5,000,000) ("Mortgagee"), to provide construction and/or permanent
financing and any renewals, modifications or extensions thereof, provided
that the total liens on the Property pursuant to all Mortgages shall not
exceed eighty percent (80%) of the Purchase Price which would apply pursuant
to Article XXIX, Paragraph 2(a), if computed using the Base Rent in effect at
the time any such additional Mortgage is granted, and that a Subordination,
Recognition and Non-Disturbance Agreement substantially in the form of Exhibit
-------
F attached hereto and with such additional provisions as are reasonably
--
required by the Mortgagee, is executed acknowledged and delivered by such
Mortgages to Tenant.
Tenant shall execute and send to Landlord any such Agreement within
fifteen (15) days of receipt of same if such Agreement contains substantially
the provisions set forth in Exhibit F and such additional provisions as are
---------
reasonably required by the Mortgagee, or within fifteen (15) days after
agreement of the parties to said Agreement of the contents of same.
2. Priority of Mortgage. If the holder of any Mortgage of the Land and/or
---------------------
Building requires that this Lease have priority over such Mortgage, Tenant
shall, upon request of such holder, execute, acknowledge and deliver to such
holder an agreement acknowledging such priority.
3. Existing Mortgage. In the event of the existence of any Mortgage at
-----------------
the time this Lease is executed and to which this Lease would be subordinate,
Landlord shall obtain the type of agreement mentioned in this Article in favor
of Tenant. If such agreements with respect to existing Mortgages are not
obtained within fifteen (15) days after the Execution Date, Tenant may
terminate this Lease by written notice to Landlord at any time within forty-
five (45) days after the Date of Execution.
ARTICLE XV
----------
LANDLORD'S-WARRANTIES AND INFORMATION
-------------------------------------
1. Warranties. To induce Tenant to execute this Lease, and in
----------
consideration thereof, Landlord warrants and represents and covenants and
agrees as follows;
(a) Landlord is the fee owner of the Land and the Building.
(b) On the Date of Execution of this Lease, there are no liens,
restrictions or encumbrances placed upon the Building
31
or Land other than those shown on Exhibit G ("Permitted Encumbrances").
---------
Landlord further represents to its best knowledge that none of the liens,
restrictions or encumbrances listed on Exhibit G does or shall materially
-------
adversely affect Tenant's use and occupancy of the Demised Premises. Landlord
agrees that it shall not consent or agree to the creation of, and shall not
itself create, any liens and encumbrances on the Building or Land except for the
Permitted Encumbrances and the Mortgages permitted pursuant to Article XIV,
Paragraph I and except for those to which Tenant consents in advance or which do
not materially adversely affect Tenant's use and occupancy of the Demised
Premises or the value of the Building or the Land.
(c) To Landlord's best knowledge, the Land and Building are in
compliance with zoning, setback and other landuse laws, ordinances, rules and
regulations, and there are no restrictions or other legal impediments either
imposed by law (including applicable zoning and building ordinances ) or by any
instrument, which would prevent Tenant from using the Building for the uses and
in the manner contemplated in Article VII of this Lease.
(d) This Lease, the Building and the Shell Improvements, when and as
constructed, shall not be in violation of the provisions of any instrument
executed by Landlord or any instrument which places any restrictions and burdens
on the Land and/or Building.
(e) Landlord holds all easements required to provide for access or
utilities to the Building as such access and utilities are currently used.
(f) On the Date of Execution of this Lease, (a) Landlord is not in
default under any lease of the Land or Building, or any other agreement
affecting the Land or the Building or any Mortgage which encumbers the Land or
the Building, (b) this Lease and the Permitted Uses hereunder do not and will
not constitute a violation of any such lease or Mortgage, and (c) all consents
or approvals required by the terms of any such lease or Mortgage for this Lease
have been duly obtained by Landlord.
If Landlord breaches any of the representations or warranties listed above
or in the event any such representation or warranty proves to be false in any
material respect, Tenant shall have the right, at its option, in addition to any
other right hereunder or at law or equity, to terminate this Lease without
liability therefor if Landlord does not cure such breach or falsity to Tenant's
reasonable satisfaction within the period prescribed in Article XXI, Section 1
and if such breach has a material adverse effect on Tenant's use and occupancy
of the Building or to cure such breach as provided in Article XXI.
32
2. Financial Information. Landlord will provide to Tenant within
---------------------
sixty (60) days after the close of each calendar year during the Term of this
Lease (including any extensions) a balance sheet for Landlord prepared by a
certified public accountant, which fairly and accurately represents Landlord's
assets and liabilities as of the end of such calendar year. Landlord shall also
give written notice to Tenant if at any time there is a material adverse change
in Landlord's financial position from that reported in the most recent annual
balance sheet provided to Tenant, and Landlord shall include in such notice a
description of the change. If, upon review of such balance sheet or such notice
of change, Tenant reasonably concludes that Landlord's financial status has
been materially impaired in a manner which would adversely affect the ability
of Tenant to enforce its Purchase Option pursuant to Article XXIX, Paragraph 2
of this Lease, then Tenant's Purchase Option pursuant to Article XXIX,
Paragraph 2 shall be accelerated on the following terms:
(a) Tenant must exercise the Purchase Option, if at all, by notice to
Landlord within sixty (60) days after receiving Landlord's balance sheet or
notice of change;
(b) Tenant's notice of exercise of the Purchase option shall contain
a statement of the basis for Tenant's conclusion that Landlord's financial
status has been materially impaired in a manner which would adversely affect
the ability of Tenant to enforce its Purchase option;
(c) The Close of Escrow shall occur within one hundred eighty (180)
days after Tenant exercises the Purchase Option;
(d) The Purchase Price shall be computed by substituting in Article
XXIX, Paragraph 2 (a) (i), the scheduled Base Rent for the Lease Year in which
Tenant exercises the Purchase Option.
ARTICLE XVI
-----------
INSURANCE, WAIVER OF SUBROGATION
--------------------------------
1. Landlord's Insurance. Landlord shall obtain and maintain throughout
--------------------
the Term the following insurance coverage, the cost of which shall be an
operating Cost:
(a) Fire and extended coverage insurance, including all risk of
physical loss and damage, upon the Building and the Common Area on a full
replacement basis as reasonably determined by Landlord and consented to by
Tenant, such consent not to be unreasonably withheld;
(b) Comprehensive liability coverage with respect to the Building and
the Common Area throughout the Term with
33
combined single limit coverage of Dollars ($3,000,000), and said policy shall
contain a contractual liability endorsement insuring Landlord's indemnity under
this Lease.
Landlord shall, on the Term Commencement: Date (and thereafter within
thirty (30) days after Tenant's request), deliver certificates of such policies
to Tenant evidencing the coverage required hereunder, which shall provide that
the insurance indicated therein shall not be materially changed, cancelled or
non-renewed without at least thirty (30) days prior written notice to Tenant.
2. Tenant's Insurance. The Tenant shall maintain comprehensive general
------------------
liability insurance, including contractual liability endorsement, with respect
to the Demised Premises throughout the Term with combined single limit coverage
of Three Million Dollars ($3,000,000). The Tenant shall deliver to the Landlord
within thirty (30) days of Landlord's request a certificate evidencing the
aforesaid coverage issued by insurance companies authorized to do business in
the state wherein the Demised Premises are located and providing that the
insurance indicated therein shall not be materially changed, cancelled or non-
renewed without at least thirty (30) days prior written notice to Landlord.
3. General Requirements. Each party shall give prompt notice to the other
--------------------
party of all losses, damages, or injuries to any person or to property of
Tenant, Landlord or third persons which may be in any way related to the Lease
and for which a claim might be made against the other party. Each party shall
promptly report to the other party all such claims of which the first party has
notice, whether related to matters insured or uninsured. No settlement or
payment for any claim for loss, injury or damage or other matter as to which
either party may be charged with an obligation to make any payment or
reimbursement, shall be made by either party without the written approval of the
other party. Both parties shall assist and cooperate with any insurance company
in the adjustment or litigation of all claims arising under the terms of this
Lease. In the event of any damage or destruction caused by a casualty for which
Landlord is required to maintain insurance under this Article XVI, Landlord
shall use its best efforts to obtain and retain the maximum amount of insurance
proceeds available for application to the cost of Repair and Restoration.
4. Waiver of Claims, Subrogation. Landlord and Tenant hereby waive all
-----------------------------
causes and rights of recovery against each other, their agents, officers and
employees for any loss occurring to the real or personal property of Landlord or
Tenant, regardless of cause or origin, to the extent of any recovery from any
policy(s) of insurance. Landlord and Tenant agree that any policies presently
existing or obtained on or after the date hereof (including renewals of present
policies) shall include a
34
clause or endorsement to the effect that any such release shall not adversely
affect or impair said policies or prejudice the right of the insured to recover
thereunder.
5. Excess-Insurance Proceeds. Landlord shall pay to Tenant promptly after
-------------------------
completing repair and restoration of any insured casualty thirty percent (30%)
of any amount by which any proceeds received by Landlord with respect to the
Land and/or Building from casualty insurance required to be carried by Landlord
pursuant to paragraph I of this Article XVI exceed the cost of repair and
restoration of such casualty.
ARTICLE XVII
------------
INDEMNIFICATION
---------------
1. Indemnity by Tenant. Tenant shall defend, indemnify and hold Landlord
harmless from and against any and all suits claims, and demands arising out of
injury or damage occurring at the Demised Premises because of the negligence or
willful acts of Tenant, its agents, servants, employees, or Invitees, because
of Tenant's breach of any obligation under this Lease, or because of any other
occurrence for which Tenant is required to maintain insurance coverage under
this Lease.
If Landlord is notified of a claim, action or proceeding, or becomes aware
of an occurrence, which may result in indemnification by Tenant of Landlord as
provided above, Landlord shall give prompt written notice thereof to Tenant.
Landlord shall immediately forward to Tenant every demand, notice, summons or
other process received by Landlord or its representatives.
Tenant has the exclusive right and obligation to defend any claim, action,
or proceeding wherein Landlord is entitled to indemnification under the
provisions of this Article, but Tenant may settle any such claim, action, or
proceeding only with Landlord's prior written consent or approval, which shall
not be unreasonably withheld. Landlord will fully cooperate with Tenant in the
defense or settlement of any claim, action or proceeding.
2. Indemnity by Landlord. Landlord shall defend, indemnify and hold Tenant
---------------------
harmless from and against any and all suits, claims, and demands arising out of
injury or damage occurring at the Demised Premises or the Building because of
the negligence or willful acts of Landlord, its agents, servants, employees, or
invitees or because of Landlord's breach of any obligation under this Lease.
In the event Tenant is notified of a claim, action or proceeding, or becomes
aware of an occurrence, which may result in indemnification by Landlord of
Tenant as provided above, Tenant shall give prompt written notice thereof to
Landlord. Tenant shall immediately forward to Landlord every demand,
35
notice, summons or other process received by Tenant or its representatives.
Landlord has the exclusive right and obligation to defend any claim,
action, or proceeding wherein Tenant is entitled to indemnification under the
provisions of this Article, but Landlord may settle any such claim, action or
proceeding only with Tenant's prior written consent or approval, which shall not
be unreasonably withheld. Tenant will fully cooperate with Landlord in the
defense or settlement of any claim, action, or proceeding.
3. Consequential Damages. Each party hereby waives any and all claims it
---------------------
may have against the other party for consequential damages arising out of the
act or omission or breach or alleged breach of this Lease by such other party.
ARTICLE XVIII
-------------
ASSIGNMENT AND SUBLETTING
-------------------------
I. Assignment and Subletting. Landlord hereby grants to Tenant the right
-------------------------
to sublet any portion of the Demised Premises throughout the Term, including
extensions thereof, and without first obtaining Landlord's consent, provided
that (a) the use made of the Demised Premises by any sublessee is permitted
under Article VII of this Lease, and (b) Tenant remains primarily liable for and
retain management and control over the performance of any and all maintenance,
repair or restoration which Tenant is required or permitted to perform pursuant
to the terms of this Lease. Landlord hereby grants to Tenant the right to assign
this Lease throughout the Term, including extensions thereof, provided Tenant
first obtains Landlord's consent to such assignment in writing. Landlord's
consent shall not be unreasonably withheld or delayed. Notwithstanding the
foregoing, it shall be reasonable for Landlord to deny consent to a proposed
assignment (a) if the use to be made of the Demised Premises by the proposed
assignee would be prohibited by this Lease, or (b) if the financial condition of
the proposed assignee is not reasonably satisfactory to Landlord. Landlord's
consent or refusal of consent shall be in writing and, if Landlord refuses
consent, the reasons for such refusal are to be stated with particularity.
Landlord's consent to an assignment shall be accompanied by a statement
addressed to Tenant and the assignee, upon which statement Tenant and the
assignee may conclusively rely, stating that Tenant-is not in default under the
Lease (or setting forth in what respects Tenant is in default), that this Lease
has not been amended or modified (or setting forth such amendments or
modifications), the expiration date of this Lease, and the date to which Rent
has been paid to Landlord hereunder. Any permitted assignment shall not be
effective unless and until the assignee delivers to Landlord an express
assumption by the assignee of all of Tenant's liabilities and obligations
pursuant to this Lease.
36
Tenant shall be relieved of liability for its obligations pursuant to this Lease
only if (a) the permitted assignee is a corporation with a net worth (as
reflected in its audited financial statements issued as of a date no more than
ninety (90) days prior to the effective date of the assignment) of at least
Twenty Million Dollars ($20,000,000) and (b) the holder of the mortgage having
first priority on the Land and Building consents to such release, such consent
not to be unreasonably withheld. In the case of any other assignment or
subletting, regardless of whether Landlord consents to such assignment or
subletting, Tenant shall remain fully liable for all of its obligations pursuant
to this Lease.
2. Deemed Consent. If Landlord does not respond to the written request for
--------------
such consent within fifteen (15) days after the date of such request from
Tenant, Landlord consent is hereby deemed given.
3. Permitted Transfers. Notwithstanding anything to the contrary herein
-------------------
contained Tenant may assign or sublet all or any portion(s) of the Demised
Premises at any time to a subsidiary of Tenant, to the entity with which or into
which Tenant may merge, whether or not Tenant is the survivor of such merger,
or to any affiliate of Tenant without the need for Landlord's consent to such
assignment or subletting. For purposes of this Lease, the term "affiliate"
means any corporation which directly or indirectly controls, is controlled by,
or is under common control with Tenant. In the event of any such assignment or
subletting, Tenant shall remain fully liable for all of its obligations pursuant
to this Lease.
ARTICLE XIX
-----------
TENANT'S PROPERTY
-----------------
1. Tenant's Property. Tenant's trade fixtures and personal property
-----------------
described on Exhibit H attached hereto (collectively, "Tenant's Property")
---------
however installed or located on the Demised Premises shall be and remain the
property of Tenant and may be removed at any time and from time to time during
the Term, except that Tenant may not remove any portions of Tenant's Property
which are incorporated in the HVAC system or electrical, plumbing or mechanical
systems of the Building and installed by or at the expense of the Tenant prior
to the completion of the Interior Improvements. Tenant shall be entitled to all
depreciation and other tax benefits incidental to the ownership of Tenant's
Property. Tenant shall repair any damage caused by such removal or installation.
2. Removal. Upon the expiration or termination of this Lease, Tenant will
-------
remove Tenant's Property from the Demised Premises. If within ten (10) days
after such expiration or termination, Tenant shall not have removed same, it
shall be
37
deemed abandoned, whereupon Landlord shall remove and store the same in
accordance with applicable law* including Tenant's right to redeem the same.
Tenant shall pay to Landlord upon demand the reasonable costs and expenses
incurred, by Landlord in removing and storing Tenant's Property and shall pay
the reasonable cost of repairing any damage caused to the Demised Premises by
the removal of same.
3. Waiver of Lien. In no event (including a default under this Lease)
---------------
shall Landlord have any lien or other security interest in any of Tenant's
Property located in the Demised Premises or elsewhere and Landlord hereby
expressly waives and releases any such lien or other security interest however
created or arising.
ARTICLE XX
----------
TENANT'S DEFAULT
----------------
1. Events of Default. Tenant shall be deemed in default of this Lease if
-----------------
any of the following occur:
(a) If Tenant shall default in the payment of Rent and shall fail to
cure said default within ten (10) days after receipt of written notice of said
default from the Landlord; or
(b) if Tenant shall default in the performance or observance of any
other agreement or condition of this Lease to be performed or observed by
Tenant, and if Tenant shall fail to cure said default within ninety (90) days
after receipt of written notice of said default from Landlord (or if said
default cannot reasonably be cured within ninety (90) days, if Tenant fails to
commence to cure said default within ninety (90) days after receipt of written
notice thereof and thereafter diligently prosecute the cure to completion); or
(c) if Tenant shall file a voluntary petition in bankruptcy or shall
be adjudicated a bankrupt or insolvent, or shall file any petition or answer
seeking any arrangement, composition, liquidation or dissolution under any
present or future Federal, State, or other statute, law or regulation relating
to bankruptcy, insolvency or other relief for debtors, or shall seek or consent
to or acquiesce in the appointment of any trustee, receiver or liquidator of
Tenant or of all or any substantial part of its properties, or of the Demised
Premises, or shall make any general assignment for the benefit of creditors, or
shall admit in waiting its inability to pay its debts generally as they become
due; or
(d) if a court shall enter an order, judgment or decree approving a
petition filed against the Tenant seeking any arrangement, composition,
liquidation, dissolution or similar relief under the present or future federal,
state or other
38
statute, law or regulation relating to bankruptcy, insolvency or other relief
for debtors, and such order, judgment or decree shall remain unvacated or
unstayed for sixty (60) days.
2. Landlord's Remedies. In the event of any such default by Tenant,
-------------------
Landlord shall have, in addition to any other remedies available to Landlord at
law or in equity, the right to do the following:
(a) Termination. In the event of any default by Tenant, then after
-----------
complying with Code of civil Procedure section 1161, Landlord may immediately
terminate this Lease and Tenant's right to possession of the Demised Premises by
giving Tenant written notice that this Lease is terminated, in which event this
Lease shall terminate and Landlord may recover from Tenant:
(i) the worth at the time of award of any unpaid Rent which had been
earned at the time of such termination; plus
(ii) the worth at the time of award of the amount by which the unpaid
Rent which would have been earned after termination until the time of award
exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(iii) the worth at the time of award of the amount by which the
unpaid Rent for the balance of the Term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided; plus
(iv) any reasonable expenses incurred by Landlord in connection with
obtaining possession of the Demised Premises, with removing from the Demised
Premises property of Tenant and persons claiming under it (including warehouse
charges), with putting the Demised Premises into the condition required under
Article XXVI of the Lease, and with any reletting, including but without
limitation, reasonable attorney's fees and broker's fees, but excluding the cost
of any additional interior improvements or tenant rent concessions. All monies
collected from any reletting shall be applied first to the foregoing expenses
and then to the payment of Rent and all other payments due from Tenant to the
Landlord under this Lease. In no event shall Tenant be liable for consequential
damages to Landlord and Landlord shall have no right to recover damages under
Civil Code section 1951.2 (a) (4) Landlord shall use its best efforts to relet
the Demised Premises by actively offering the same for rent in order to mitigate
damages which may be incurred because of Tenant's default; or
(b) Continue Lease. Have this Lease continue in effect for so long as
--------------
Landlord does not terminate this Lease and Tenant's right to possession of the
Demised Premises, in which event Landlord shall have the right to enforce all of
Landlord's rights and remedies under this Lease, including the right to
39
recover all rentals payable by Tenant under this Lease as they become due.
As used in subparagraphs 2 (a) (i) and (ii) above, the "worth at the
time of award" is computed by allowing interest at the maximum rate permitted by
law per annum. As used in subparagraph 2 (a) (iii) above, the "worth at the time
of award" is computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).
(c) Right to Cure. If Tenant shall at any time fail, after written
-------------
notice and the expiration of any applicable grace period, to perform any
obligation required of Tenant hereunder, then Landlord may, at its option, and
upon giving written notice to Tenant, perform such obligation to the extent
Landlord deems reasonably necessary, and may pay any and all reasonable expenses
incidental thereto. No such action by Landlord shall be deemed a waiver by
Landlord of any of Landlord's rights or remedies, or a release of Tenant from
performance of such obligation. All sums so paid by Landlord shall be due and
payable by Tenant to Landlord within Twenty (20) days after the date of
Landlord's invoice therefor. Landlord shall have the same rights and remedies
for the nonpayment of any such sums as for default by Tenant in the payment of
Rent.
(d) Remedies Not Exclusive. No remedy or election hereunder shall be
----------------------
deemed exclusive but shall wherever possible be cumulative with all other
remedies available; provided, however, nothing contained herein shall permit
Landlord to recover consequential damages as a result of Tenant's default
hereunder.
(e) Termination, Surrender and Abandonment. No acts or conduct of
--------------------------------------
Landlord, including, without limitation, efforts to relet the Demised Premises,
an action in unlawful detainer or service of notice upon Tenant or surrender of
possession by Tenant pursuant to such notice or action, shall extinguish the
liability of Tenant to pay rent or other sums due hereunder or terminate this
Lease, unless Landlord notifies Tenant in writing of Landlord's election to
terminate this Lease. No act or conduct of Landlord, including the acceptance of
the keys to the Demised Premises, other than a written acknowledgement of
acceptance of surrender signed by Landlord, shall be deemed to be or constitute
an acceptance of the surrender of the Demised Premises by Tenant prior to the
expiration of the Lease term. The surrender of this Lease by Tenant, voluntarily
or otherwise, shall, at Landlord's option, operate as an assignment to Landlord
of any and all existing assignments and subleases, or, except for any
assignments which are permitted or which Landlord has given consent in
accordance with Article XVIII, Landlord may elect to terminate any or all of
such assignments and subleases by notifying the assignees and sublessees of its
election within fifteen (15) days after such surrender.
40
ARTICLE XXI
-----------
LANDLORD'S DEFAULT
------------------
1. If Landlord Shall default in the performance or observance of any
agreement, obligation, or condition in this Lease requiring the payment of
money and shall not cure such default within ten (10) days after receipt of
written notice thereof from Tenant or if Landlord shall default in the
performance or observance of any agreement, obligation or condition in this
Lease other than one requiring the payment of money and shall not cure such
default within thirty (30) days after receipt of written notice thereof from
Tenant (or if such cure cannot reasonably be effected within thirty (30) days,
shall not within said period commence to cure and thereafter prosecute the
curing of such default to completion with due diligence), Tenant may, at its
option, without waiving any claim for damages for breach of agreement, at any
time thereafter cure such default for the account of Landlord. In effecting
such cure, Tenant may, without limitation, hire repairman, pay bills, and
generally perform any other act which Landlord is required to perform
hereunder. All costs incurred by Tenant in curing such default shall be paid to
the applicable party by Landlord. If, however, Tenant pays any costs or
expenses on account of such cure, Landlord shall immediately reimburse Tenant
on demand for such payments. If Landlord has not made such reimbursement to
Tenant by the date Base Rent or Additional Rent is next due, Tenant may deduct
such amounts from Base Rent or Additional Rent until Tenant has been fully
reimbursed, provided that Tenant shall continue to pay in any event the Minimum
Base Rent required under Article IV, Paragraph 4 and the Minimum Additional
Rent required under Article V, Paragraph 12.
If Tenant has cured a default of Landlord and is entitled to a set-off
against Rent (whether pursuant to this Article XXI, Paragraph I or any other
provision of this Lease), and the amount to be recovered by set-off exceeds One
Hundred Thousand Dollars ($100,000), Tenant may require Landlord to execute,
acknowledge and deliver to Tenant an interest-free promissory note in the total
principal amount of the reimbursement due Tenant, payable in installments
corresponding to the portions of Rent payments which Tenant is entitled to set-
off but subject to acceleration and full reimbursement upon the Close of Escrow
for Tenant's purchase of the Land and Building pursuant to its Purchase Option
if exercised, as well as a deed of trust on the Land and Building securing such
note.
If Tenant has cured a default of Landlord and is entitled to a set-off
against Rent (whether pursuant to this Article XXI, Paragraph 1 or any other
provision of this Lease), and the amount to be recovered by set-off is such
that Tenant would not recover the full amount within the remaining original
Term of this Lease,
41
then Tenant may accelerate its Purchase Option pursuant to Article, XXIX,
Paragraph 2 on the following terms:
(a) Tenant must exercise the Purchase option, if at all, by notice to
Landlord within sixty (60) days after set-off of Rent commences;
(b) The Close of Escrow shall occur within one hundred eighty (180)
days after Tenant exercises the Purchase Option;
(c) The Purchase Price shall be computed by substituting in Article
XXIX, Paragraph 2 (a) (i), the scheduled Base Rent for the Lease Year in which
Tenant exercises the Purchase option.
2. Emergency. In the event of an emergency which threatens imminent
---------
injury to persons or material damage to property, Tenant may use any means
including, without limitation, telephone to notify Landlord of such emergency.
Tenant shall have no other obligation to act with respect to such emergency,
but Tenant shall have the right to commence cure pursuant to Paragraph 1 of
this Article XXI immediately without waiting for Landlord to commence cure.
ARTICLE XXII
------------
NOTICES
-------
1. In Writing. All notices, demands, requests and other instruments which
----------
may or are required to be given by either party to the other under this Lease
shall be given in writing.
2. Notice to Tenant. All notices, demands, requests and other instruments
----------------
from Landlord to Tenant shall be deemed to have been given upon receipt if sent
by United States Registered or Certified Mail, postage prepaid, return receipt
requested, or by overnight courier service, addressed to the Tenant at Tenant's
Address with a copy to Tenant at 111 Powdermill Road, Maynard, Massachusetts,
01754, Attention; General Counsel.
3. Notice to Landlord. All notices, demands, requests and other
------------------
instruments from Tenant to Landlord shall be deemed to have been properly given
upon receipt if sent by United States Registered or Certified Mail, postage
prepaid, return receipt requested, or by overnight courier service, addressed
as follows:
Richard R. Kelley, Jr.
314 Raymundo Way
Woodside, California 94025
42
with a copy to:
Premier Properties
532 Florence Street
Palo Alto, California 94301
ARTICLE XXIII
-------------
QUIET ENJOYMENT
---------------
Landlord covenants and agrees with Tenant that upon Tenant paying the Rent
and observing the terms, covenants and conditions on Tenant's part to be
observed and performed, Tenant may peaceably and quietly enjoy the premises
demised hereby.
ARTICLE XXIV
------------
HOLDING OVER
------------
If Tenant or anyone claiming under Tenant shall remain in possession of the
Demised Premises or any part thereof after expiration of the Term of this Lease
without any agreement in writing between Landlord and Tenant with respect
thereto, such possession shall be deemed a month to month tenancy under all the
terms, covenants and conditions of this Lease except that such tenancy may be
terminated upon thirty (30) days written notice from one party to the other. It
is hereby agreed by and between Landlord and Tenant that if Tenant or anyone
claiming under Tenant leaves any property in the Demised Premises at the
expiration of the Term or any renewal or extension thereof, such shall not
constitute a holding over by Tenant.
ARTICLE XXV
-----------
MEMORANDUM OF LEASE AND OPTION
------------------------------
At the time of the execution of this Lease, Landlord and Tenant shall
execute an instrument in recordable form containing those provisions including
but not limited to the Term, the commencement and expiration date, and such
other information as necessary to satisfy notice of lease statute of the state
where the Demised Premises are located. Tenant may record the same.
ARTICLE XXVI
------------
SURRENDER OF DEMISED PREMISES
-----------------------------
Tenant shall, at the expiration of the Term of this Lease, peaceably yield
up to Landlord the demised Premises in good repair in all respects, damage by
fire or other casualty (unless
43
Tenant is responsible for such damage pursuant to the terms of this Lease),
reasonable wear and tear, or other conditions for which Tenant is not
responsible under this Lease excepted.
ARTICLE XXVII
-------------
ESTOPPEL CERTIFICATES
----------------------
Upon the request of either party, at any time and from time to time,
Landlord and Tenant agree to execute and deliver to the other within fifteen
(15) business days after receipt of such request, a written instrument, duly
executed and (i) certifying that this Lease has not been modified and is in full
force and effect or, if there has been a modification of this Lease, that this
Lease is in full force and effect as modified, stating such modifications; (ii)
specifying the date to which the Rent has been paid; (iii) stating whether or
not to the best knowledge, information and belief of the party executing such
instrument, the other party hereto is in default and, if such party is in
default, stating the nature of such default; (iv) stating the Term Commencement
Date; and (v) stating which options to extend the Term have been exercised, if
any.
ARTICLE XXVIII
--------------
HAZARDOUS SUBSTANCES
--------------------
1. Definitions.
-----------
(a) "Demised Premises" includes, for purposes of this Article only,
-----------------
the Building, other improvements and the Land on which they are located.
(b) "Environmental Laws" shall mean all federal, state and local
--------------------
statutes, laws, ordinances, rules and regulations and judicial and
administrative orders, rulings and decisions relating to pollution or protection
of human health or the environment, including, without limitation, laws and
regulations relating to emissions, discharges, releases or threatened releases
of Hazardous Substances, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Substances.
(c) "Hazardous Substances" means any chemical, substance, waste,
----------------------
material, gas or emission which is deemed hazardous, toxic, a pollutant or
contaminant, under any federal, state or local statute, law, ordinance, rule,
regulation, or judicial or administrative order or decisions, now or hereafter
in effect, or which have been shown to have significant adverse effects on human
health or the environment. "Hazardous Substances" include, but are not limited
to, petroleum and
44
petroleum products, asbestos, po-lychlorinated biphenyls (PCBs) and radon gas.
(d) "Hazardous Substance on the Demised Premises" means any Hazardous
---------------------------------------------
Substance present in or on the Demised Premises including, without limitation,
in or on the surface or beneath the Demised Premises, the surface water or
groundwater, and in or on any improvement or part thereof at or beneath the
surface of the Demised Premises.
(e) "Underground Storage Tank" means any one or combination of tanks
---------------------------
(including underground pipes connected thereto), the total volume of which
(including the volume of the underground pipes connected thereto) is ten percent
10% or more beneath the surface of the ground.)
2. Representations and Warranties. To induce Tenant to execute this Lease,
------------------------------
and in consideration thereof, Landlord warrants and represents that, to
Landlord's knowledge on the Date of Execution, without any inspection or
investigation having been undertaken by Landlord to confirm such matters:
(a) Compliance with Law. Except as otherwise disclosed in writing to
-------------------
Tenant, all activities on the Demised Premises undertaken by Landlord or its
employees and agents have been undertaken in full compliance with all
Environmental Laws. Landlord has disclosed to Tenant all threatened or pending
litigation or administrative actions relating to the use or disposal of
Hazardous Substances on the Demised Premises.
(b) Hazardous Substances. Except as otherwise disclosed in writing to
--------------------
Tenant, no Hazardous Substances are in or on the Demised Premises, no Hazardous
Substances are being released into the environment by Landlord from, in, or on,
the Demised Premises, Landlord has not arranged for the off-site disposal of any
Hazardous Substances generated on the Demised Premises, nor have wastes from
Hazardous Substances been generated, treated or disposed of on the Demised
Premises during Landlord's ownership of the Demised Premises.
(c) Indoor Environment. The air and water supplies of the Demised
------------------
Premises do not release, circulate or introduce any substances that pose a
hazard to human health or an impediment to working conditions. Landlord has not
taken, or caused to be taken, any action with respect to the air and water
supplies of the Demised Premises that would release, circulate, or introduce any
substances that pose a hazard to human health or an impediment to working
conditions.
(d) Underground Storage Tanks. There are no Underground Storage Tanks
-------------------------
on the Demised Premises.
45
(e) PCBs. There are no transformers, capacitors, switches, or other
-----
equipment on the Demised Premises which contain PCBs.
(f) Asbestos. Except as otherwise disclosed in writing by Landlord to
--------
Tenant, there is no asbestos currently located on or about the Demised Premises.
Notwithstanding anything to the contrary stated herein, all representations
contained in this paragraph 2 shall continue to be valid for the entire Term of
the Lease. In the event (i) Landlord breaches any of the representations or
warranties listed above, or (ii) any such representation or warranty proves to
be false, then in each of the foregoing instances, (x) Landlord shall remedy
such breach at Landlord's expense, (y) on the fifth (5th) day after Tenant gives
Landlord written notice of the breach or falsity, Rent shall abate in full until
the breach is remedied, and on the thirtieth (30th) day after Tenant gives
Landlord written notice of the breach or falsity, Tenant shall have the
additional right, at its option and in addition to any other right hereunder or
at law or in equity, to terminate this Lease without liability therefor.
Notwithstanding the foregoing, Tenant shall not be entitled to abate rent or to
terminate this Lease as a result of the presence upon or about the Demised
Premises of any Hazardous Substance which presence is disclosed to Tenant in
writing by Landlord prior to the execution hereof.
3. Landlord's Indemnity. Landlord, its employees, agents, contractors,
--------------------
guests, invitees or licensees, shall not generate, store, dispose of, release or
otherwise handle any Hazardous Substance on the Demised Premises in any fashion
contrary to Environmental Laws. Landlord shall remove, cleanup and remedy any
Hazardous Substance on or under the Demised Premises to the extent required by
Environmental Law unless such Hazardous Substance resulted from the generation,
storage, treatment, handling, transportation, disposal, or release by Tenant,
its employees, agents, contractors, guests, invitees or licensees. Landlord
agrees to defend, indemnify and hold harmless Tenant, its officers, directors,
employees and agents, from and against any and all liability, loss, suits,
claims, actions, causes of action, proceedings, demands, costs, penalties, fines
and expenses, including without limitation attorneys' fees, consultants' fees,
litigation costs, and cleanup costs, asserted against or incurred by Tenant at
any time and from time to time by reason of or arising out of the presence of
any Hazardous Substance on the Demised Premises unless such Hazardous Substance
resulted from the generation, storage, treatment, handling, transportation,
disposal, or release by Tenant, its employees, agents, contractors, guests,
invitees or licensees. The foregoing obligation of Landlord shall survive the
expiration or sooner termination of this Lease.
4. Tenant's Obligations and Indemnity. Tenant, its employees, agents,
----------------------------------
contractors, subtenants, assignees, guests,
46
invitees or licensees, shall not generate, store, dispose of, release or
otherwise handle any Hazardous Substance on the Demised Premises in any fashion
contrary to Environmental Laws. Tenant shall remove, cleanup and remedy any
Hazardous Substance on or under the Demised Premises to the extent required by
Environmental Law provided that such Hazardous Substance resulted from the
generation, storage, treatment, handling, transportation, disposal, or release
by Tenant, its employees, agents, contractors, subtenants, assignees, guests,
invitees or licensees.
Tenant shall indemnify, defend and hold harmless Landlord from and against
any and all liability, loss, suits, claims, actions, causes of action,
proceedings, demands, costs, penalties, fines and expenses, including without
limitation attorneys' fees, consultants' fees, litigation costs and cleanup
costs asserted against or incurred by Landlord at any time and from time to time
arising out of the generation, storage, treatment, handling, transportation,
disposal or release of any Hazardous Materials on or under the Demised Premises
by Tenant, its agents, employees, contractors, subtenants, assignees, guests,
invitees or licensees. The foregoing obligation of Tenant shall survive the
expiration or sooner termination of this Lease.
ARTICLE XXIX
------------
RIGHT OF FIRST REFUSAL OPTION TO PURCHASE
------------------------------------------
1. Right of First Refusal. If during the Term of this Lease Landlord
----------------------
desires to sell or exchange its ownership interest in the Land and/or Building
(the "Property"), or receives a bona fide offer to purchase or exchange the
Property to anyone (the "Other Buyer") and Landlord desires to accept such offer
(the "Outside Offer") Landlord shall first offer in writing to sell or exchange
the Property to Tenant on the same terms and conditions and at the same price as
set forth in the Outside Offer or, if no Outside Offer has been received, on the
terms and conditions and at the price at which Landlord desires to sell or
exchange its ownership interest in the Property (such terms, conditions and
price, whether set forth in the Outside Offer or as determined by Landlord
without any outside Offer, are referred to herein as the "Offer"). Tenant shall
have twenty (20) business days from the delivery of written notice of the offer
to elect in writing to exchange for or purchase the Property upon the terms and
conditions of the Offer. Should Tenant elect not to exchange for or purchase the
Property on such terms and conditions or should Tenant fail to respond in
writing within said twenty (20) business days, Landlord may sell or exchange the
Property to the Other Buyer or any other party on substantially the terms and
conditions and at not less than ninety-five percent (95%) of the price set forth
in the Offer, provided that the closing occurs within one hundred eighty (180)
days after the date of the offer. If there are changes in the price or the terms
of the offer
47
exceeding those allowed in the preceding sentence or if the transaction is not
closed within said one hundred eighty (180) day period, Landlord shall not sell
or exchange the Property without first offering to sell or exchange the Property
to Tenant pursuant to this Article XXIX.
2. Option To Purchase. In consideration of the execution by Tenant of this
------------------
Lease* Landlord hereby grants to Tenant the option to purchase the Property (the
"Purchase Option"), at the price and upon the terms set forth in this Article
XXIX, paragraph 2, by giving written notice (the "Notice of Exercise") to
Landlord on or before September 30, 1999, Provided that this Lease is still in
full force and effect. The date on which such notice is given is hereinafter
referred to as the "Exercise Date."
Notwithstanding any provision of this Article XXIX, paragraph 2 to the
contrary, if at the time Tenant gives the Notice of Exercise Tenant is in
default of this Lease pursuant to paragraph 1(a), 1(c) or 1(d) of Article XX
(but as to paragraph 1(a), only if the payments as to which Tenant is in default
exceed One Hundred Thousand Dollars ($100,000) and are not paid by Tenant,
including payment under protest, within thirty (30) days after Tenant gives the
Notice of Exercise) then the Notice of Exercise shall be totally ineffective
to-the-rights of Tenant under this Article XXIX, paragraph 2 shall terminate and
Landlord and Tenant shall thereupon be relieved of all further obligation or
liability in connection with the Purchase Option, but rights and obligations of
Landlord and Tenant under all provisions of this Lease other than the provisions
Of this Article XXIX, paragraph 2 shall continue.
(a) Purchase Price. The purchase price for the Property (the "Purchase
--------------
Price") shall be the total of:
(i) a sum computed by multiplying the total of the scheduled base
rent (including the scheduled Base Rent under this Lease) under all leases of
the Property (including leases of space within the Building) payable for the
period October 1, 2000 through September 30, 2001 by one hundred two and one-
half percent (102.5%); and dividing the product resulting from the previous
calculation by a factor of eight hundredths (.08); and multiplying the result of
such division by ninety-seven percent (97%);
plus (ii) that portion of all capital expenditures incurred by Landlord
----
which have not been reimbursed to Landlord by the tenants of the Property
through direct payment or amortization of such capital expenditures,
plus (iii) the sum of Forty-Five Thousand Dollars ($45,000).
----
The Purchase Price shall be paid on the Closing Date (as hereinafter
defined) in cash or by Federal Reserve Bank wire
48
transfer, with appropriate Closing adjustments as provided in paragraph (j)
below.
(b) Closing. If Tenant gives the Notice of Exercise, the delivery of
-------
the deed to the Property, the payment of the Purchase Price and the closing of
the purchase of the Property by Tenant pursuant to this Article XXIX, paragraph
2 (the "Closing") shall occur at 10:00 a.m. at the offices of Aufmuth, Fox &
Baigent, on or about September 30, 2000 (such date, as the same may be extended
as hereinafter expressly provided, is hereinafter referred to as the "Closing
Date"). It is agreed that time is of the essence of this Article XXIX, paragraph
2.
(c) Title. At the Closing, Landlord shall convey the Property by a
-----
grant deed running to Tenant, or to such grantee as Tenant may designate by
notice given to Landlord at least three (3) business days before the Closing
Date, and the deed shall convey title to the Property free from encumbrances
except:
(i) Taxes as are not delinquent on the Closing Date or for which
Tenant has assumed the obligation to pay pursuant to Article V, paragraph 7;
(ii) Assessments for municipal or other betterments as are not
delinquent on the Closing Date or for which Tenant has assumed the obligation to
pay pursuant to Article V, paragraph 7;
(iii) Those Permitted Encumbrances as shown on Exhibit G which are
---------
non-monetary encumbrances;
(iv) Such other non-monetary encumbrances as are permitted pursuant
to Article XV, Paragraph 2; and
(v) Such other matters as Tenant may approve in writing at or prior to
the Closing Date (collectively, the "Permitted Exceptions").
The grant deed shall be in a form sufficient to convey marketable and
insurable title to Tenant. The words "insurable title" shall mean title which
may be insured under a standard ALTA owner's policy of title insurance subject
to the Permitted Exceptions.
(d) Condition of Premises. On the Closing Date Landlord shall deliver
---------------------
to Tenant possession of the Property subject to the rights of any tenants of the
Property which are subtenants or assignees of Tenant, and the Building to be in
compliance with all laws and in the same condition as it now exists on the Term
Commencement Date, reasonable use and wear thereof excepted, all Shell
Improvements excepted, and all Interior Improvements and Alterations made by
Tenant excepted.
49
(e) Perfection of Title or Condition.
--------------------------------
(i) Landlord shall be obligated to remove defects in title on the
following terms:
(A) Landlord shall at its sole expense remove from title at or
prior to the Close of Escrow, all monetary encumbrances which existed at the
Date of Execution or which were voluntarily granted by Landlord after the Date
of Execution.
(B) Landlord shall at its sole expense either (I) remove from
title at or prior to the close of Escrow or (II) secure prior to Close of Escrow
a commitment from the issuer of title insurance, to issue title insurance and/or
endorsements insuring Tenant against loss due to all monetary encumbrances
arising after the Date of Execution which are not among the Permitted
exceptions granted by Landlord.
(C) If Landlord does not remove or obtain insurance against all
title defect at or before Close of Escrow as provided in paragraph (A) and (B),
above then Tenant may remove such encumbrances itself at the Close of Escrow
and deduct from the Purchase Price the reasonable costs incurred by Tenant in
removing such encumbrances. If such costs incurred by Tenant exceed the Purchase
Price landlord shall pay the excess to Tenant at the Close of Escrow.
(ii) if on the Closing Date, Landlord shall have failed to make the
Prehises conform, as required in this Article XXIX, paragraph 2, then Tenant may
elect, by written notice given to Landlord on or before the extended Closing
Date:
(A) to accept the Property in its then existing condition and
to pay therefor the Purchase Price with appropriate deduction (except in the
event of a casualty or Taking as provided in Article XXIX, paragraph 2 (e) (iii)
(A) or (B) hereinbelow); or
(B) to rescind Tenant's Notice of Exercise and Landlord and
Tenant shall thereupon be relieved of all further obligation or liability in
connection with the option to Purchase, but such rescission shall not affect the
continued rights and obligations of Landlord and Tenant under all provisions of
this Lease other than those of this Article XXIX, paragraph 2.
(iii) If, on the Closing Date, the Building shall have been damaged
by fire or casualty insured against and shall not have been repaired or restored
to its former condition, and Tenant agrees to accept such title and possession
as Landlord can deliver and to accept the Property in its then condition
pursuant to Article XXIX , paragraph 2 (a) (ii) (A) of this Lease, then:
50
(A) Landlord shall either (1) pay over or assign to Tenant, at
the closing, all amounts recovered or recoverable on account of such insurance,
or (2) if a holder of a Mortgage on the Land shall not permit the insurance
proceeds or a part thereof to be used to restore the Building to its former
condition or to be so paid or assigned to Tenant, give to Tenant a credit
against the Purchase Price equal to the amount of the insurance proceeds
retained by the Mortgagee, less in either case, any amounts expended or incurred
by Landlord in the repair or restoration of the Building; and
(B) if any portion Of the Land and/or Building shall have been
the subject of a Taking, the Purchase Price shall be reduced by an amount agreed
upon by Landlord and Tenant to reflect the value of the portion of the Land
and/or Building so taken. Landlord shall be entitled to retain the proceeds of
such Taking, subject to the provisions of Article XIII, paragraph 4 of this
Lease.
(f) Use of Purchase Money. To enable Landlord to convey the Property
---------------------
as required in this Article XXIX, paragraph 2, Landlord may, on the Closing
Date, use the Purchase Price or any portion thereof to clear title of any or all
encumbrances or interests, provided that all instruments so procured are
recorded simultaneously with the grant deed, except for Mortgage discharges from
institutional lenders which nay be recorded when received provided that
satisfactory arrangements are agreed upon by Landlord and Tenant at the Closing
for the payment of all indebtedness secured by such Mortgages.
(g) Inspections. Tenant, its employees, contractors, consultants,
-----------
servants and agents shall have the right, at all reasonable times and at
Tenant's sole cost and expense, prior to and after the Exercise Date, to conduct
such surveys, tests, and inspections, including, without limitation, soil
borings, water sampling, environmental studies and assessments, as Tenant
determines necessary to evaluate the Property. In the exercise of such rights,
Tenant shall not disturb the occupancy of any other tenant of the Building or
interfere with any business conducted on the Property. Following the completion
of each such survey, test and inspection, Tenant shall promptly restore the
Property and every part thereof to its condition existing immediately prior to
the conduct of such survey, test or inspection. Tenant shall indemnify, defend
and hold harmless Landlord, and its partners, employees, contractors, servants
and agents, from and against all loss, costs, fines and expenses, including
without limitation, reasonable attorneys, fees and litigation costs, arising
from the conducting of such surveys, tests, or inspections including, but not
limited to, injury or death of any person or damage to property; provided,
however, that this indemnity shall not apply to any loss, costs, damages,
claims, proceedings, demands, liabilities, penalties, fines or expenses arising
from the discovery of Hazardous Substances on the Land or in the Building which
are not the responsibility of
51
Tenant Pursuant to Article XXVIII, paragraph 4 of this Lease. Tenant, its
employees, contractors, consultants, servants and agents, upon prior written
notice to Landlord, shall have the right to inquire at any and all governmental
authorities regarding the Property.
Prior to the Exercise Date, Tenant shall have the right, at its sole
cost and expense, to perform or have performed an environmental site assessment
("Site Assessment") of the Land and the Building.
Within thirty (30) days after written request by Tenant, Landlord shall
supply Tenant with copies of all Mortgages, agreements and other instruments or
documents, which Tenant would take subject to upon acquisition of the Land and
Building or which affect the provision of services to or operation of the Land
and Building.
(h) Landlord's Closing Obligations. At the Closing, Landlord
------------------------------
shall deliver to Tenant:
(i) The grant deed conveying title to the Property in
accordance with the provisions of Article XXIX, paragraph 2(c) of this Lease;
(ii) A bill of sale with warranty of title, in form and
content reasonably satisfactory to Tenant, conveying and transferring title to
Landlord's personal property used solely in connection with the ownership,
maintenance and operation of the Property;
(iii) An assignment, in form and content reasonably
satisfactory to Tenant, of all of Landlord's right, title and interest in and to
all service, maintenance and management contracts (to the extent that Tenant, at
its option, has elected to assume the same by written notice given to Landlord
not later than thirty (30) days prior to the Closing Date) affecting or relating
to the Property, together with the original of each such contract;
(iv) An assignment, in form and content reasonably
satisfactory to Tenant, of all permits, authorizations and approvals which have
been issued for or with respect to the Property by governmental authorities
having jurisdiction thereof, together with the originals or photocopies of such
permits, authorizations and approvals;
(v) A set of "as-built" plans and specifications for the
Building to the extent that Landlord has possession thereof;
(vi) An assignment, in form and content reasonably
satisfactory to Tenant, of all of Landlord's right, title and interest in and to
all guaranties and warranties
52
relating to the Building, together with the original of each such guaranty and
warranty;
(vii) A certificate of non-foreign status for Landlord;
(viii) All keys to the Building, appropriately tagged for
identification; and
(ix) All maintenance records and operating manuals pertaining
to the Building and copies of the books and records of Landlord with respect of
the Building.
(i) Merger. The recording of the grant deed in the records of the
------
County Recorder of Santa Clara County, California, shall be deemed to be a full
performance and discharge of every agreement and obligation contained or
expressed in this Article XXIX, paragraph 2, except as to those which by their
terms are to be performed after the delivery of the grant deed.
(j) Adjustments. Adjustments of Base Rent, operating Costs, Real
-----------
Estate Taxes, costs of operating and maintaining the Premises, utility charges
and all other items of cost payable under this Lease shall be prorated as of
the Closing Date and the net amount thereof shall be added to or deducted from
the Purchase Price. Landlord and Tenant shall each pay at the Closing one-half
(1/2) of all costs, fees, taxes and charges imposed as the result of the
purchase of the Property by Tenant including, but not limited to, title policy
and endorsement premiums (except as specifically provided in paragraph
2(c)(i)(B) of this Article XXIX), survey costs, transfer taxes, monument
fees, escrow fees, document preparation fees and recording costs.
(k) Broker. Neither Landlord nor Tenant shall have any obligation to
------
pay a broker's fee or commission to any party as a result of the exercise of
the Purchase Option or the purchase of the Property, except for any broker's
fee or commission which is the result of an agreement between such party and
the claiming broker. Landlord shall indemnify, defend and hold harmless Tenant,
its officers, directors, employees, contractors, servants or agents, from and
against all loss, costs, damages, claims, proceedings, demands, liabilities or
expenses, including without limitation reasonable attorneys' fees and
litigation costs, incurred by them resulting from a claim by any person for a
commission or fee relating to Tenant's exercise of the Purchase Option or
purchase of the Property and arising out of the actions of Landlord. Tenant
shall indemnify, defend and hold harmless Landlord, its officers, directors,
employees, contractors, servants or agents, from and against all loss, costs,
damages, claims, proceedings, demands, liabilities or expenses, including
without limitation reasonable attorneys' fees and litigation costs, incurred by
them resulting from a claim by any person for a commission or fee relating to
Tenant's exercise
53
of the Purchase Option or purchase of the Property other than claims by the
Brokers described in Article XXXI, paragraph 2.
(l) Recording Notice of Exercise. At the request of either party,
----------------------------
the parties shall execute, acknowledge and deliver a notice of Tenant's
exercise of the Purchase Option, in recordable form, which notice shall state
the Closing Date. (including the circumstances under which it may be extended).
Either party may record the notice.
(m) Failure to Purchase. If Tenant shall give the Notice of Exercise
-------------------
to Landlord and thereafter shall fail to purchase the Property in accordance
with the terms of this Article XXIX, paragraph 2, this Lease shall remain in
full force and effect. If such failure by Tenant occurs despite the fulfillment
of all conditions to closing for Tenant's benefit contained in this Article
XXIX, Paragraph 3, Tenant shall be liable to Landlord for all damage incurred
by Landlord as the result of Tenant's failure to so purchase the Property; and
Tenant shall deliver to Landlord at no charge copies of all surveys, tests,
investigations, studies, reports and analyses performed by Tenant or its
employees, contractors, consultants, servants and agents in connection with
Tenant's investigation of the Property. If Landlord fails to sell the Property
to Tenant despite the fulfillment of all conditions to closing for Landlord's
benefit contained in this Article XXIX, paragraph 3, Landlord shall be liable
to Tenant for all damage incurred by Tenant as the result of Landlord's failure
to so sell the Property, or Tenant may pursue specific performance of its
Purchase Option.
(n) General. All notices given under this Article XXIX, paragraph 2
-------
shall be given in the manner and shall be effective as provided in Article
XXII of this Lease. Tenant may assign this Purchase Option only in connection
with an Assignment of all of Tenant's other rights under this Lease either
before or after giving the Notice of Exercise. The Purchase option set forth in
this Article XXIX, paragraph 2 shall terminate at midnight on September 30,
1999 unless Tenant shall have given a Notice of Exercise on or before that
date.
3. Exchange. Landlord may elect to fulfill its obligations to dispose of
--------
the Property pursuant to this Article XXIX through an exchange intended to
qualify under Internal Revenue Code section 1031. Tenant agrees to cooperate
with such an exchange and execute all documents reasonably required by
Landlord's attorney or tax advisor, provided that: (a) any such documents are
delivered to Tenant for review at least thirty (30) days prior to the Close of
Escrow; (b) any such documents are reasonably acceptable to Tenant's counsel;
and (c) the exchange shall be at no cost or liability to Tenant. Landlord
agrees to indemnify and hold Tenant harmless from any liability, damages or
costs, including reasonable attorney's fees, that may arise from Tenant's
participation in the exchange.
54
ARTICLE XXX
-----------
SATELLITE DISH
--------------
1. Roof Space. Tenant shall have the right to use for the purposes of this
----------
Article certain roof space on the Building in the location shown on Exhibit I
-------
(the "Roof Space") for the Term of this Lease. Tenant's right to use the Roof
Space shall be appurtenant to the Premises and no Additional Rent shall be
payable with respect to such use.
2. Equipment and cables. Tenant may install, use and maintain, on the
--------------------
Roof Space certain equipment, including a satellite dish(s) and related
equipment (the "Equipment") and may run cables and related equipment (the
"Cables") between the Roof Space and the Premises. The Equipment and the Cables
are described in Exhibit I. The Equipment and Cables shall be deemed Tenant's
---------
Personal Property for the purposes of this Lease and shall be subject to the
terms of this Lease with respect thereto.
3. Installation. Tenant shall have the right to select the contractor to
------------
install and maintain the Equipment and Cable, subject to Landlord's delayed.
Tenant and/or its contractor shall install, use, and maintain the Equipment and
Cables in a manner that does not interfere with Landlord's operation of the
Building and that does not interfere with the quiet enjoyment of the tenants of
the Building. Tenant shall bear all expenses in connection with the
installation, use and maintenance of the Equipment and the Cables and the
removal thereof. Tenant shall ensure that no mechanics' or materialmen's liens
are placed on the Roof Space or the Building and will promptly remove any such
liens so placed within ten (10) days after receiving notice of such liens.
Tenant shall maintain (including the necessary power) the Equipment and the
Cables at all times in a state of good repair and good and safe condition.
4. Indemnity. Tenant shall indemnify and save harmless Landlord, its
---------
officers, directors, employees, contractors, servants, guests, business
invitees and agents, from and against all loss, costs, damages, claims,
proceedings, demands, liabilities, penalties, fines and expenses, including
without limitation reasonable attorneys' fees and litigation costs, arising
from injury or death of any person or damage to property from Tenant's
installation, use and maintenance of the Equipment and/or the Cables and the
removal thereof or from any use made by Tenant of the Roof Space resulting from
the failure of Tenant to perform and discharge its covenants under this
Agreement. Landlord shall not be liable for any loss or damage due to imperfect
or unsatisfactory communications experienced by Tenant for any reason
whatsoever.
55
5 Insurance. Tenant shall include the Equipment and Cables in the
---------
insurance required from Tenant pursuant to Article X, Paragraph 6 and shall
furnish Landlord with a certificate of insurance showing such coverage prior
to Tenant's exercise of its rights hereunder, including, without implied
limitation, the commencement of any work by Tenant.
6. Legal Requirements. Tenant and its contractors shall comply with all
------------------
Legal Requirements and obtain all Authorizations in connection with the
installation, use and maintenance of the Equipment and Cables.
7. Access. Landlord agrees to permit Tenant reasonable access during
------
Building Hours to the Roof Space and such other areas of the Building
necessary to facilitate the installation, use and maintenance of the Equipment
and the Cables and the removal thereof.
8. Taxes. In the event that any Taxes are assessed with respect to the
-----
Building by any Governmental Authority (whether assessed against Landlord,
Tenant, the Roof Space or the Equipment), Tenant shall pay the same in a
timely manner before any lien or penalty is assessed thereon.
9. No Interference. Tenant warrants that the installation and operation
---------------
of the Equipment and the Cables will not cause television transmitting or
receiving interference, radio interference, or noise or annoyance to tenants
of the Building, and that Tenant will correct such interference at once if it
should occur.
ARTICLE XXXI
------------
ADDITIONAL PROVISIONS
---------------------
1. Broker Commission. Landlord warrants to Tenant that the only broker
-----------------
retained by Landlord in connection with the negotiation and consummation of
this Lease is Hare, Brewer & Kelley, Inc., and Tenant warrants to Landlord
that the only broker retained by Tenant in connection herewith is Cooper/Brady
Commercial Real Estate (collectively, the aforementioned brokers shall be
referenced as the "Broker(s)"). Landlord covenants that it shall pay any and
all commissions, fees and amounts owing to the Broker(s) arising from the
negotiation and/or consummation of this Lease.
2. Landlord's Access. Upon not less than twenty-four (24) hours prior
-----------------
notice to Tenant and at times mutually convenient to Landlord and Tenant,
Landlord and its agents shall have the right to enter the Demised Premises for
purposes of inspecting the same, showing the Demised Premises to prospective
purchasers, posting notices of nonresponsibility, or making repairs,
alterations or additions to any portion of the Building. At any time within
four (4) months prior to the expiration of the Term,
56
Landlord shall have the right upon twenty-four (24) hours prior notice, at times
mutually convenient to Landlord and Tenant and not more than three (3) times per
week, to enter the Demised Premises, to show the Demised Premises to prospective
tenants in entering the Demised Premises for any purpose, Landlord shall comply
with any security measures required by Tenant.
3. Signage. Tenant shall not erect or place on any part of the exterior
-------
of the Building or on any Common Area any sign, radio or television antenna, or
other structure, without first obtaining the written consent of Landlord, which
consent shall not be unreasonably withheld or delayed. Landlord acknowledges
that Tenant intends to place antennae and a microwave dish on the roof of the
Building. Installation of said items, including appropriate screening therefor,
shall be subject to approval by the City of Palo Alto, and shall be performed
by Landlord's roofing contractor at Tenant's expense. Upon the expiration of
the Term of this Lease, Tenant shall remove any antennae, microwave or other
dishes and all screening materials and shall repair any damages or roof
penetrations caused thereby. Any signs installed by Tenant shall conform with
all applicable Laws, and shall be fabricated and installed at Tenant's expense.
4. Binding Effect. The covenants and agreements herein contained shall,
--------------
subject to the provisions hereof, bind and inure to the benefit of Landlord,
its successors and assigns, and Tenant, and its successors and assigns.
5. Validity. It is agreed that if any provisions of this Lease shall be
--------
determined to be void by any court of competent jurisdiction in the state where
the Demised Premises are located, that such determination shall not affect any
other provision of this Lease, all of which other provisions shall remain in
full force and effect; and it is the intention of the parties hereto that if
any provision of this Lease is capable of two constructions, one of which would
render the provision void, and the other of which would render the provision
valid, then the provision shall have the meaning which renders it valid.
6. Entire Agreement. This instrument contains the entire and only
----------------
agreement between the parties as to the Demised Premises, and no oral
statements or representations or prior written matter (including but not
limited to unsigned drafts of this Lease) not contained in this instrument
shall have any force or effect. This Lease shall not be modified in any way
except by writing subscribed by both parties. This Lease shall not be effective
unless fully executed by both parties.
7. Exhibits. All Exhibits attached to this Lease shall be deemed
--------
incorporated herein by the individual. Reference to each such Exhibit, and all
such Exhibits shall be deemed a part of this Lease as though set forth in full.
In the event of any conflict between the terms of this Lease and the terms of
any Exhibit, the terms of this Lease shall control.
57
8 Acts at Own Cost. Whenever in this Lease provision is made for the doing
----------------
of any act by any person, it is understood and agreed that said act shall be
done by such person at his own-cost and expense unless a contrary intent is
expressed.
9. Governing Law. This Lease shall be governed by and construed and
-------------
enforced in accordance with the laws of the state where the Demised Premises are
located.
10. Waiver/Consent. Failure of either party to complain of any act or
--------------
omission on the part of the other party, no matter how long the same may
continue, shall not be deemed to be a waiver of any rights hereunder. No waiver
by either party at any time, express or implied, or any breach of any
provisions of this Lease shall be deemed a waiver of a breach of any other
provision of this Lease or a consent to any subsequent breach of the same or any
other provision. If any action of any party shall require the consent or
approval of the other party, the consent to or approval of such action on any
one occasion shall not be deemed a consent to or approval of said action on
any subsequent occasion or a consent to or approval of any other action on the
same or any subsequent occasion, and such consent or approval shall not be
unreasonably withheld or delayed.
11. Cumulative Rights and Remedies. Any and all rights and remedies which
------------------------------
either party may have under this Lease or by operation of law, either at law or
in equity, upon any breach, shall be distinct, separate and cumulative and shall
not be deemed inconsistent with each other; no one of them whether exercised by
the other party or not, shall be deemed to be exclusive of any other, and any
two or more of all of such rights and remedies may be exercised at the same
time; provided, however, nothing contained herein shall entitle a party to
recover consequential damages from the other party arising out of any act or
omission or breach of this Lease by such other party, except to the extent
expressly permitted by this Lease.
12. Payment/Performance Under Protest. It is agreed that if at any time a
---------------------------------
dispute shall arise as to any amount or sum of money to be paid by one party to
the other under the provisions of this Lease, the party against whom the
obligation to pay the money is asserted shall have the right to make payment
"under protest" and such payment shall not be regarded as a voluntary payment
and there shall survive the right on the part of said party to institute suit
for the recovery of such sum, and if it shall be adjudged that there was no
legal obligation on the part of said party to pay such sum or any part thereof,
said party shall be entitled to recover such sum or so much thereof as it was
not legally required to pay under the provisions of this Lease; and if at any
time a dispute shall arise between the parties hereto as to any work to be
performed by either of them under the provisions hereof, the party against whom
the work is asserted may perform such work and pay the cost thereof "under
58
protest" and the performance of such work shall in no event be regarded as a
voluntary performance and there shall survive the right on the part of said
party to institute suit for the recovery of the costs of such work, and it if
shall be adjudged that there was no legal obligation on the part of said party
to perform the same or any part thereof, said party shall be entitled to recover
the cost of such work or the cost of so much thereof as said party was not
legally required to perform under the provisions of this Lease.
13. Words and Phrases. Words and phrases used in the singular shall be
-----------------
deemed to include the plural and vice versa, and nouns and pronouns used in any
particular gender shall be deemed to include any other gender.
14. Definition of Terms. The various terms which are defined in Articles
-------------------
of this Lease or are defined in Exhibits annexed hereto shall have the meanings
specified in such Articles and such Exhibits for all purposes of this Lease and
all agreements supplemental thereto, unless the context clearly indicates the
contrary.
15. Effective Date of Lease. This Lease shall not be effective or binding
-----------------------
on the parties to it until it has been signed by both Landlord and Tenant.
Furthermore, if Landlord has not returned a fully executed copy of this Lease
to Tenant within 15 days of execution by Tenant, this Lease is null and void
and of no force and effect.
16. Authority. Each party represents to the other that the person signing
---------
this Lease on its behalf is properly authorized to do so.
17. Commencement/Expiration Dates. Landlord and Tenant shall execute
------------------------------
within thirty (30) days of Term Commencement Date a certificate setting forth
the Term Commencement Date and the expiration dates of the Primary Term and of
any extended terms.
18. Force Majeure. Performance by Landlord or Tenant of their obligations
-------------
hereunder shall be extended by the period of delay caused by force majeure.
Force majeure is hereby deemed to include war, natural catastrophe, strikes,
walkouts or other labor industrial disturbance, order of any government, court
or regulatory body having jurisdiction, shortages, blockade, embargo, riot,
civil disorder, or any such similar cause beyond the reasonable control of the
party who is obligated to render performance.
19. Attorneys' Fees. If any party to this Lease shall institute an action
---------------
to enforce the terms hereof, the prevailing party shall be entitled to
reasonable attorneys' fees. Reasonable attorneys' fees shall be as fixed by the
court. The "prevailing party" shall be the party which by law is entitled to
recover its costs of suit, whether or not the action proceeds to
59
final judgment. If the party which shall have instituted suit shall dismiss it
as against the other party without the concurrence of the other party, the other
party shall be deemed the prevailing party.
20. Confidentiality. All of the terms and conditions of this Lease shall
---------------
be kept confidential and shall not be disclosed to third parties by either party
without the consent of the other party, except as otherwise provided in this
Paragraph 20. Either Landlord or Tenant may disclose such terms and conditions
to their attorneys, accountants-and other professional advisors. Tenant may
disclose such terms and conditions to prospective assignees and subtenants of
Tenant. Landlord may disclose such terms and conditions to prospective lenders
and purchasers of the Property. When any permitted disclosure is made pursuant
to this paragraph 20, the party making the disclosure shall do so only on the
condition that the third party receiving the disclosure agrees to keep such
terms and conditions confidential.
IN WITNESS WHEREOF, the parties have duly executed this Lease as of this 18 day
of September, 1990.
LANDLORD:
Richard R. Kelly, Jr.
TENANT:
DIGITAL EQUIPMENT CORPORATION, a
Massachusetts corporation,
By:
Carl Stegerwald
Development Manager
U.S. Property Development
60
EXHIBIT A
DEMISED PREMISES
EXHIBIT B Pg. 1
DIGITAL EQUIPMENT CORPORATION
305 Lytton Avenue Renovation
Palo Alto, CA
11 JULY 1990
539 Bryant St. San Francisco 94107 127
Phone 415 896 0800
Fax 415 495 523
EXHIBIT B Pg.2
MECHANICAL
----------
305 LYTTON
MECHANICAL
From our observations of the existing building and User's requirements, the
system best suited for this building is a VAV reheat system. This system meets
the flexibility and zoning requirements and at the same time fits into the
amount of ceiling space available, while minimizing the amount of shaft area
required through the floors. Medium velocity primary distribution ducting with
low velocity downstream of the terminal units. With the existing rooftop units
being single zone, they will be removed since they can't achieve the design
criteria for this building.
Air Handling
- ------------
Air handling will consist of two packaged single zone air conditioning units,
each capable of handling 50% of the total building load. The units will
consist.of an economizer section with exhaust fans, 85% bag filters, a preheat
hot water coil to assist in morning warm up, a DX cooling coil, a supply fan
with inlet vanes, condensing/compressor section, and a discharge plenum. The
units will be front discharging . in order to route the ductwork on the roof to
the architectural shafts.
Cooling
- -------
Cooling is programmed utilizing air cooled direct expansion (D/X). All
components for the cooling will be integral with the air handling units. Each
coil will have a modulating valve for control of the discharge air temperature.
Heating
- -------
The heating system will be a hot water reheat system with coils located in the
ductwork downstream of the terminal units at each zone in the building. An
exterior boiler will be installed on the roof. Insulated hot water distribution
piping will be routed to the two air handlers (for morning warm-up) and then
continue to each reheat coil. Each coil,will have a modulating valve for control
of the discharge air temperature.
Air Distribution
- ----------------
The supply air system will be via a medium velocity system, using wrapped
rectangular, round or oval duct to keep radiated noise levels to a minimum. In
-----
or near each zone will be a fan powered terminal unit with reheat coils. The
terminal unit will be controlled by a temperature sensor mounted in the zone
served by that particular terminal unit. The terminal unit modulates the
cooling air supply volume while circulating a fixed amount of air to the space
as required to satisfy the space conditions in response to the heat loads
generated in the spaces. Where the internal, heat gains cannot overcome the
heat losses through the building envelope, the hot water reheat coils will
provide the necessary amount of heat to maintain the set point of the
temperature sensor. Low velocity duct distribution will be utilized downstream
of the terminal unit.
The return system will be a ceiling return plenum.
EXHIBIT B Pg.3
Return air will be through return registers in the ceiling in areas with no
finished ceilings. Return air will be collected at a central location near each
shaft and hard ducted back to the air handling unit. Careful consideration for
the placement of return grilles must be exercised to reduce the possibility of
crosstalk between grilles serving different rooms or areas, and will be
incorporated into the design. Sensitive areas such as conference rooms and any
other locations, as determined by the Owner based on the occupant of a
particular room, will have sound attenuation boots mounted to the return
grille.
Noise levels of both the supply and return systems will be controlled as
required to maintain the necessary N.C. levels (NC 35 in offices and conference
rooms; NC 40 in all other areas) using sound attenuators above the roof. Any
additional attenuation will be installed in locations where the potential of
noise generation is possible.
The existing air distribution system will be removed in order to accommodate
the new medium velocity system.
Control
-------
Control of the systems will be commercial grade direct digital control (DDC)
which are hard wired rather than utilizing the tubing of a pneumatic system.
Controllers will be capable of being programmed individually using a hand held
programming touch pad or with a centrally operated computer setting the
parameters of each controller. All wiring of a DDC system will be plenum rated
so it may be routed throughout the return air plenum without conduit. This
system is also utilized in order to tie the Palo Alto campus to a single point
of control within the campus.
Design Conditions
-----------------
The design conditions are in accordance with ASHRAE climate data for the City
of Palo Alto. The summer outdoor conditions utilized are 90 degrees FDB/67
degrees FWB. The winter outdoor condition utilized is 31 degrees FOB. The
system components will be sized for a constant 70 degrees indoor temperature,
while the actual temperature settings will vary in accordance with Title 24 of
the California Energy Commission. Indoor heat gains in offices are based on 15
watts per square foot total for equipment, an ultimate of 60 watts per square
foot in computer machine rooms (if any are provided in this building) 1 1/2
watts per square foot for lighting, and one person per 200 square feet of gross
floor space. Loads will be refined upon confirmation of actual finalized
conditions.
Machine rooms (if any are provided in this building) with a high concentration
of computers will be handled using 'in room,' self contained computer room
units to handle the temperature and humidity loads of these atypical spaces.
The necessary ventilation air (outside air) will be introduced into the space
through the primary air handlers on the roof. The computer room units will be
overhead discharge/low level return, utilizing an above ceiling plenum or
ducted supply. Water cooled D/X appears to be the best solution for this
---------------------------------------------------------
application. LIEBERT REFRIGERANT GAS UNIT
------------
EXHIBIT B PgA
PLUMBING/FIRE PROTECTION
------------------------
installed on the roof. The air fluid cooler would reject waste heat from the
computer room (Machine Room) cooling system.
Preorder Equipment
------------------
Depending on the construction schedule, items which may require pre-ordering
would be the air handlers, boiler, computer room units, and the air fluid
cooler.
PLUMBING
There are no special requirements for the plumbing systems. At the present time
we will proceed with the assumption that all services (domestic water, sanitary
sewer, storm drainage and natural gas) presently serving the building are of
adequate capacity to meet the requirements for the new tenants. This assumption
---------------
also carries over to the domestic hot water system.
--------------------------------------------------
Industrial cold water make-up with backflow prevention will be provided for any
new hydronic mechanical systems.
It appears (based on the Building Survey Form) that no upgrades to the present
Toilet Room will be required to suit the handicapped.
FIRE PROTECTION
Fire protection consists of reconfiguring piping and providing new sprinkler
heads where required
based on the interior layout in accordance with
NFPA Chapter 13.
existing system shall be reused as possible, but the exact quantity
cannot be determined until further review of the existing system and the new
Architectural layout is determined. All components
shall be Factory Mutual approved where applicable.
EXHIBIT B Pg.5
ELECTRICAL TELECOMMUNICATIONS SECURITY/FIRE ALARM SYSTEM
- --------------------------------------------------------
305 LYTTON
----------
Electrical Service
------------------
Existing electrical service is supplied from City of Palo Alto underground
vault at 120/208V 3-phase rated 600 amperes. The main switchgear is in a
closet under a stair. A new service-will be required to increase the capacity
to 1200 amperes. A new location will have to be found for the new main
switchgear.
Power Distribution
------------------
The new switchgear will be used to serve any new equipment and HV and AC
loads and to back feed the existing main switchboard. Existing lighting
panels and miscellaneous power will remain connected to existing switchboard.
Computer Room
-------------
None Programmed.
Emergency Power
---------------
Emergency power is required. There will be battery powered emergency
lighting fixtures at --ress and stairs.
Emergency power for security system needs to be reviewed.
Interior Lighting
-----------------
DEC standard lighting for offices is by using 2' x 4' Parabolic fluorescent
fixtures with flicker-free electronic ballasts. Unless special treatment is
required DEC standard will be followed.
Workstation Power Level
-----------------------
25% of the offices/cubicles will have 1
workstation.+ DISK :APVN
25% of the offices/cubicles will have 2
workstations.+ DISKS:APVM
25% of the offices/cubicles will have 3
workstations.+ DISK:APVH
Convenience Outlet System
-------------------------
1 circuit will be provided for low density offices. Two circuits will be
provided for medium density offices and three circuits will be provided for
heavy density offices.
Convenience outlets will be provided throughout the
area. Convenience outlets will not be connected to circuits serving offices.
Telephone System
----------------
Telephone system will be extensions from main PBX located in 335 BRYANT
Voice and Data Distribution
---------------------------
Each office and work-station shall have ONE :APVM double gang 8 port
communication outlet and ONE: APVH double gang blank plate for future fiber
use. These outlets will be used for voice and data distribution. Method of
providing these outlets in office area and open work station need to be
addressed. Use of wiremold raceway system, power
EXHIBIT B Pg.6
poles or empty conduit system in the wall need to be Reviewed.
SER Rooms and Cable Tray
------------------------
ONE PER FLOOR, 100 TO 120 SQ FT PER :APVM
P.A. System
-----------
A.single zone paging P.A. system will all call feature will be provided.
Paging system microphone will be located at the security console and
amplifiers will be located in security system equipment room. Location of
security console to be determined.
Security System
---------------
Security system cameras will be located at each egress door with monitors
located at security console, location of which needs to be determined.
Fire Alarm System
-----------------
No fire alarm system is planned at this time.
EXHIBIT C
---------
LEGAL DESCRlPTION OF LAND
-------------------------
PARCEL 1:
PARCEL 1, AS SHOWN ON THAT CERTAIN PARCEL MAP RECORDED JUNE 9, 1976 IN BOOK 375
OF MAPS AT PAGE 2.
PARCEL 2:
A NON-EXCLUSIVE EASEMENT FOR INGRESS, EGRESS, PARKING AND ACCESS, TO, OVER AND
UPON THE NORTHWESTERLY 80 FEET OF PARCEL 2, AS SAID PARCEL 2 IS SHOWN ON THE
PARCEL MAP RECORDED JUNE 9, 1976 IN BOOK 375) OF MAPS AT PAGE 2, AS GRANTED IN
THAT CERTAIN EASEMENT AGREEMENT RECORDED SEPTEMBER 7, 1977 IN BOX D122 PAGE 355
OF OFFICIAL RECORDS. REFERENCE IS MADE TO SAID INSTRUMENT FOR FULL PARTICULARS.
PARCEL 3:
AN EASEMENT FOR PATIO PURPOSES, AS MORE PARTICULARLY SET FORTH IN THAT CERTAIN
EASEMENT AGREEMENT RECORDED SEPTEMBER 7, 1977 IN BOOK D122 PAGE 335 OF OFFICIAL
RECORDS, REFERENCE IS MADE TO SAID INSTRUMENT FOR FULL PARTICULARS, DESCRIBED AS
FOLLOWS:
PORTION OF LOT 2, BLOCK 19 OF THE CITY OF PALO ALTO, AS SHOWN ON A MAP RECORDED
IN BOOK "D", PAGE 69 OF MAPS, RECORDS OF SANTA CLARA COUNTY CALIFORNIA AND MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT A 3/4O IRON PIPE SET IN THE NORTHWESTERLY LINE OF LYTTON AVENUE
ADJACENT THEREON, NORTHEASTERLY 100 FEET FROM THE INTERSECTION OF SAID LINE OF
LYTTON AVENUE WITH THE NORTHEASTERLY LINE OF BRYANT STREET; THENCE AT RIGHT
ANGLES NORTHWESTERLY AND PARALLEL WITH SAID LINE OF BRYANT STREET FOR A DISTANCE
OF 48 FEET; THENCE TO A POINT ON THE NORTHWESTERLY FROM POINT OF BEGINNING;
THENCE ALONG SAID NORTHWESTERLY LINE OF LYTTON AVENUE FOR A DISTANCE OF 418 FEET
TO POINT OF BEGINNING.
APN: 120-14-101
ARB: 120-14
SHELL IMPROVEMENTS
Page 1 - Second Floor
EXHIBIT
SHELL IMPROVEMENTS
page 2 - First Floor.
LANDLORD'S NOTICE OF SUBSTANTIAL COMPLETION DATE
- ------------------------------------------------
Reference is made to a lease (the "Lease") dated September 18, 1990, by and
-------------------
between Richard R. Kelly, Jr., as landlord ("Landlord") and Digital Equipment
Corporation, a Massachusetts corporation, as tenant ("Tenant"). Capitalized
terms used in this Notice shall have the same meaning as assigned in the Lease.
Pursuant to Article VIII, Paragraph 1 of the Lease, Landlord hereby gives notice
to Tenant that the substantial completion date of the Shell Improvements under
the Lease shall be Dec. 15, 1990.
--------------
Executed on this 5th day of June, 1991.
---- ------ ---
LANDLORD:
Richard R. Kelley, Jr.
1
EXHIBIT E
- ---------
LANDLORD'S NOTICE OF SUBSTANTIAL COMPLETION DATE
- ------------------------------------------------
Reference is made to a lease (the "Lease") dated ___________________, by and
between Richard R. Kelly, Jr., as landlord ("Landlord") and Digital Equipment
Corporation, a Massachusetts corporation, as tenant ("Tenant"). Capitalized
terms used in this Notice shall have the same meaning as assigned in the Lease.
Pursuant to Article VIII, Paragraph 1 of the Lease, Landlord hereby gives notice
to Tenant that the substantial completion date of the Shell Improvements under
the Lease shall be __________________.
Executed on this _________ day of ____________, 19__________.
LANDLORD:
Richard R. Kelley, Jr.
1
EXHIBIT F
SUBORDINATION, RECOGNITION, AND NON-DISTURBANCE AGREEMENT
---------------------------------------------------------
(Mortgagee)
Date:
Lender:
Lender's Address:
Landlord:
Landlord's Address:
Tenant: Digital Equipment Corporation, a Massachusetts
corporation
Tenant's Address: Digital Equipment Corporation
-------------------------------------------------------
-------------------------------------------------------
Attention: [Name of U.S. Area Attorney with Real Estate
Responsibility]
Property: [Street Address of property subject to the Mortgage)
Mortgage: A deed of trust from Landlord to
________________ ("Trustee") for the benefit
of Lender encumbering the Property dated
19 _____, and recorded with
_____________ in Book ___________,
Page __________, together with any extensions,
replacements, amendments or consolidations thereof
Premises: [Description of the leased premises making reference
to the Property]
Lease: A lease of the Premises from Landlord to
Tenant dated ______________, 19 _____,
together with any extensions, renewals,
replacements or amendments thereof
In consideration of the mutual covenants and agreements made
herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Lender and Tenant agree:
1. Subordination. The Lease, including all rights to purchase the Property
-------------
which are contained therein, is subject and subordinate to the Mortgage and to
all advances now or hereafter made thereunder, with the same force and effect as
if the Mortgage had been executed, delivered, recorded, and all advances had
been made thereunder, prior to execution and delivery of the Lease.
2. Non-disturbance. Provided Tenant is not then in default under the Lease
---------------
beyond all applicable periods of grace or cure thereunder (so as to entitle
Landlord to exercise its rights and remedies under the Lease):
(a) the Lease shall not be terminated and shall continue in full
force and effect and Tenant's possession of the Premises shall not be
disturbed;
(b) in the event Lender forecloses the Mortgage, exercises its rights
to sell the Property at a trustee's sale', accepts a deed in lieu thereof,
or enters into possession or collects rent from-the tenants of the
Property, Lender will not name Tenant as a party in any action or
proceeding with respect to the Mortgage, whether to foreclose the Mortgage
or to exercise any of its other rights under the Mortgage, under the note,
bond, or any other document secured thereby, or under law; and
(c) Tenant's rights under the Lease, including all rights to purchase
the Property which are contained the-rein, will not be impaired by any
sale of the property pursuant to foreclosure, trustee's sale or otherwise.
3. Attornment and Recognition. If Lender succeeds to the rights of
--------------------------
Landlord under the Lease, whether because Lender acquires the Property at a
foreclosure or trustee's sale or accepts a deed in lieu thereof, Tenant will
attorn to and recognize and be bound to Lender as landlord under the Lease, and
Lender will accept such attornment and recognition, for the unexpired term of
the Lease, subject to all of the terms of the Lease, including without
limitation, all rights and options to extend the Term and to purchase the
Property, and the Lease shall continue in full force and effect, without the
necessity of executing any new document, as a direct lease between Tenant and
Lender.
4. Consent. Lender hereby confirms its approval of and consent to the
-------
Lease.
2
5. Restoration. All condemnation awards and insurance proceeds paid or
-----------
payable with respect to the Premises and the Property and received by Lender
shall be applied to the repair and restoration of the Premises and the Property,
whether by Landlord or Tenant, unless the Lease is terminated pursuant to the
terms thereof.
6. Tenant's Personal Property. Lender hereby agrees that Tenant's Personal
--------------------------
Property, as such term is defined in the Lease, however installed in or affixed
to the Premises, shall at all times remain the property of Tenant and may be
removed by Tenant at any time and from time to time. In not event, including
without limitation, default under the Lease or Mortgage, shall Lender have any
lien, right or claim in Tenant's Personal Property. Lender expressly waives all
rights of levy, distraint, or execution with respect to Tenant's Personal
Property.
7. Notice of Default. Notwithstanding any provision of the Lease to the
-----------------
contrary, no notice by Tenant to Landlord of any default by Landlord, if the
default is of such a nature as to give Tenant a right to terminate the Lease,
shall be effective against Lender unless and until Tenant gives Lender written
notice of such default.
8. Successors and Assigns. The term "Lender", as used herein, unless the
----------------------
context requires otherwise, shall include the successors and assigns of Lender
and any persons or entity which shall become the owner of the Property by reason
of a foreclosure or trustee's sale under the Mortgage or an acceptance of a deed
or an assignment in lieu of foreclosure or otherwise. The term "Tenant" as used
herein shall include its successors and assigns.
9. Notices. All notices given 'hereunder shall be in writing and shall be
-------
delivered in hand, by recognized overnight courier, or by depositing with the
United States Postal Service, postage prepaid, certified or registered mail,
return receipt requested. All such communications shall be addressed to Tenant
and Lender at their addresses appearing on the first. page hereof, or to such
other address or addresses as the parties may from time to time specify by
notice so given. Notices shall be deemed received:
(a) if delivered by hand, when actually received, as evidenced by a
signed receipt;
(b) if sent by recognized overnight courier, the next Business Day; and
(c) if sent by the United States Postal Service, on the earlier of (i) the
third business day following the mailing thereof, or (ii) the business day
it is received.
3
10. Governing Law. This Agreement shall be governed by and interpreted in
-------------
accordance with the laws of the state of California.
11. Changes in Writing. This Agreement may not be changed, waived, or
------------------
terminated except in a writing signed by the party against whom enforcement of
the change, waiver, or termination is sought.
12. Partial Invalidity. If any provision of this Agreement shall be
------------------
determined to be invalid or unenforceable, the remainder of this Agreement shall
not be affected thereby, and each covenant and provision of this Agreement shall
be valid and enforceable to the fullest extent permitted by law.
Executed as of the date first above written.
LENDER:
By:
Name:
Title:
TENANT: DIGITAL EQUIPMENT CORPORATION
By:
Name:
Title:
[ADD ACKNOWLEDGEMENTS IN LOCAL FORM FOR ALL PARTIES]
4
ENCUMBRANCES
6. A DEED OF TRUST TO SECURE AN INDEBTEDNESS IN THE AMOUNT SHOWN BELOW, AND ANY
OTHER OBLIGATIONS SECURED THEREBY:
AMOUNT $971,655.00
DATED: AUGUST 17, 1987
TRUSTOR: RICHARD R. KELLY, JR., AN UNMARRIED PERSON
TRUSTEE: FIRST BANCORP, A CALIFORNIA CORPORATION
BENEFICIARY: SANWA BANK CALIFORNIA, A CALIFORNIA CORPORATION
RECORDED: AUGUST 28, 1987, BOOK K276, OFFICIAL RECORDS
PAGE 676
SERIES NO.: 9413324
LOAN NO.: NONE SHOWN
TYPE LOAN: NONE SHOWN
ADDRESS: NONE SHOWN
AND RE-RECORDED OCTOBER 27, 1987, BOOK X337, OFFICIAL RECORDS, PAGE-1238, AS
SERIES NO. 9480429.
7. NOTICE OF ASSESSMENT 250 UNIVERSITY AVENUE PARKING PROJECT ASSESSMENT
DISTRICT, RECORDED JANUARY 2, 1990, BOOK L216 OFFICIAL RECORDS, PAGE 157, AS
SERIES NO. 10376964.
3
EXHIBIT G
---------
PERMITTED ENCUMBRANCES
----------------------
A. PROPERTY TAXES, INCLUDING ANY ASSESSMENTS COLLECTED WITH TAXES, TO SE
LEVIED FOR THE FISCAL YEAR 1990 - 1991 WHICH ARE A LIEN NOT YET PAYABLE.
D. THE LIEN OF SUPPLEMENTAL TAXES, IF ANY, ASSESSED PURSUANT TO THE PROVISIONS
OF CHAPTER 3.5 (COMMENCING WITH SECTION 75) OF THE REVENUE AND TAXATION CODE OF
THE STATE OF CALIFORNIA.
1. COVENANTS, CONDITIONS AND RESTRICTIONS (DELETING THEREFROM ANY RESTRICTIONS
BASED ON RACE, COLOR OR CREED) AS SET FORTH IN THE DOCUMENT
RECORDED: DECEMBER 22, 1888, VOLUME 110 OF DEEDS
PAGE 345
SAID DOCUMENT CONTAINS PROVISION FOR A REVERSION OF TITLE.
AFFECTS: A PORTION OF THE LAND DESCRIBED HEREIN.
1
EXHIBIT H
---------
TENANT'S PERSONAL PROPERTY
--------------------------
All of Tenant's furniture, furnishings, equipment, fixtures trade
fixtures, and personal property of every kind from time to time in or upon the
Demised Premises, however or whether or not affixed or installed thereto,
including, without limitation:
Free-standing HVAC units, including condensers
All cafeteria equipment, including dishwashers, sinks, walk-in
freezers, refrigerators, ovens, grills, etc.
Plug-in type lights
Telephone equipment
Paging equipment
Buss duct
Cable tray
Motor generator system
Security equipment (cardreaders, cameras, monitors, etc.)
Vending machines
Halen systems
Computer room raised flooring
De-mountable partitions and ethernet components
Humidifier systems
White marker boards
Lobby receptionist desk
Copy/coffee center millwork
1
PERMITTED ENCUMBRANCES
----------------------
2. UNRECORDED LEASE WITH CERTAIN TERMS, COVENANTS, CONDITIONS AND PROVISIONS
SET FORTH THEREIN
LESSOR RICHARD R. KELLEY, JR.
LESSEE HARE, BREWER & KELLEY, INC.
DISCLOSED BY: ASSIGNMENT OF LEASE
RECORDED: DECEMBER 22, 1976, BOOK C490, OFFICIAL RECORDS
PAGE 221
SERIES NO.: 5504537
THE PRESENT OWNERSHIP OF THE LEASEHOLD CREATED BY SAID LEASE AND OTHER MATTERS
AFFECTING THE INTEREST OF THE LESSEE ARE NOT SHOWN HEREIN.
3. NOTICE OF ASSESSMENT, UNIVERSITY AVENUE AREA OFFSTREET PARKING ASSESSMENT
DISTRICT PROJECT No. 75-63
RECORDED: MARCH 1, 1977, BOOK C635, OFFICIAL RECORDS PAGE
71
SERIES NO.: 55677002
REFERENCE IS MADE TO SAID DOCUMENT FOR FULL PARTICULARS.
4. AN AGREEMENT ON THE TERMS AND CONDITIONS CONTAINED THEREIN,
FOR: EASEMENTS
DATED: JULY 15, 1977
EXECUTED BY: RICHARD R. KELLEY, JR. AND LINDEN DEVELOPMENT
CORPORATION, A CALIFORNIA CORPORATION
RECORDED: SEPTEMBER 7, 1977, BOOK D122, OFFICIAL RECORDS.
PAGE 335
SERIES NO.: 5775006
REFERENCE IS MADE TO SAID DOCUMENT FOR FULL PARTICULARS.
5. NOTICE OF ASSESSEMENT, UNIVERSITY AVENUE LOT J PARKING GARAGE
ASSESSMENT DISTRICT
RECORDED: AUGUST 9, 1984, BOOK 1780, OFFICIAL RECORDS. PAGE
100
SERIES NO.: 8152937
2
EXHIBIT C
---------
FIRST AMENDMENT TO LEASE
This First Amendment to Lease is entered into by and between Richard R.
Kelley, Jr. ("Landlord") and Digital Equipment Corporation, a Massachusetts
corporation ("Tenant") effective as of January 18, 1991.
RECITALS
--------
A. This First Amendment to Lease (this "First Amendment") modifies that
certain lease (the "Lease") by and between Landlord and Tenant dated September
19, 1990 for the property located at 305 Lytton Avenue, Palo Alto, California.
All terms used in this First Amendment shall have the same meaning ascribed to
them in the Lease unless expressly defined herein.
B. In consideration of efforts by Landlord to secure a refinancing of the
property subject to the Lease, Landlord and Tenant desire to amend the Lease to
extend the date on which Tenant may abate rent for certain unpaid Interior
Improvement Allowances.
AGREEMENT
---------
NOW, THEREFORE, Landlord and Tenant hereby agree that die Lease shall be
and hereby is amended as follows:
1. Amendment of Article VIII, Paragraph 2(b). The introductory clause of
-----------------------------------------
the Fifth sentence of Paragraph 2(b) of Article VM is amended to read as
follows:
Notwithstanding the provisions of Article IV, Paragraph 4, if payment of
the Improvement Allowance is delayed beyond five (5) months after the Date
of Execution, Tenant may deduct the remaining balance of the Improvement
Allowance from the next payments of Rent coming due according to the
following schedule:
2. No Further Modifications. Except as expressly modified by this First
-------------------------
Amendment, the Lease shall remain unchanged and in full, force and effect.
IN WITNESS WHEREOF, Landlord and Tenant have executed this First Amendment
effective as of the date first above written.
"Landlord"
Date:
Richard R. Kelley, Jr.
"Tenant"
Digital Equipment Corporation,
a Massachusetts corporation
Date: By:
Its:
EXHIBIT D
---------
SECOND AMENDMENT TO LEASE
This Second Amendment to Lease is entered into by and between Richard R.
Kelley, Jr. ("Landlord") and Digital Equipment Corporation, a Massachusetts
corporation ("Tenant") effective as of June 1, 1991.
RECITALS
--------
A. This Second Amendment to Lease (this "Second Amendment") modifies that
certain lease (the "Lease") by and between Landlord and Tenant dated September
18, 1990 and amended by a First Amendment thereto dated effective January 18,
1991 (collectively, the "Lease"), for the property located at 305 Lytton
Avenue, Palo Alto, California. All terms used in this Second Amendment shall
have the same meaning ascribed to them in the Lease unless expressly defined
herein.
B. In further consideration of efforts by Landlord to secure a refinancing
of the property subject to the Lease, and in consideration of the payment of an
increased Interior Improvement Allowance by Landlord, Landlord and Tenant have
agreed to make certain modifications to the Lease.
C. All capitalized terms not defined in this Second Amendment shall have
the meanings assigned to them in the Lease.
AGREEMENT
---------
NOW, THEREFORE, Landlord and Tenant hereby agree that the Lease shall be
and hereby is amended as follows:
1. Correction of First Amendment. The First Amendment refers to the Lease
------------------------------
as dated September 19, 1990. The Parties acknowledge and agree that the Lease
was dated as of September 18, 1990, and that the First Amendment amends such
Lease.
2. Amendment of Article VIII, Paragraph 2(b). Paragraph 2(b) of Article
------------------------------------------
VIII of the Lease shall be deleted in its entirety and there shall be inserted
in its place the following:
(b) Interior Improvement Allowance. Landlord shall pay to Tenant an
-------------------------------
improvement allowance for use in Construction of the Interior Improvements
equal to Three Hundred Twenty-One Thousand Twenty Dollars ($321,020)
("Improvement Allowance"). Landlord shall also pay to Tenant Eighteen
Thousand Dollars ($18,000) as the "Supplemental Improvement Allowance."
Landlord shall pay the Improvement Allowance and the Supplemental
Improvement Allowance to Tenant upon the closing of a refinancing by
Landlord of the existing monetary encumbrances on the Land and Building,
provided that
1
no mechanics' liens or similar lien for labor or material supplied to the
Interior Improvements have been filed or asserted against the Demised Premises.
Landlord shall use its best efforts to obtain such refinancing within the three
(3) months after the Date of Execution. The unpaid balance of the Improvement
Allowance (but not the Supplemental Improvement Allowance) shall be increased by
one percent (1%) for each month the payment of the Improvement Allowance is
delayed beyond three (3) months after the Date of Execution, prorated for any
partial month on the basis of a thirty (30) day month. Notwithstanding the
provisions of Article IV, Paragraph 4, if payment of the Improvement Allowance
is delayed beyond five (5) months after the Date, of Execution, Tenant may
deduct the remaining balance of the Improvement Allowance (but not the
Supplemental Improvement Allowance) from the next payments of Rent coming due
according to the following schedule: (i) Tenant may deduct all but Ten Thousand
Dollars ($10,000) from the first such Base Rent payments and all but the Minimum
Additional Rent from the full such Additional Rent payment, (ii) Tenant may
deduct all but Five Thousand Dollars ($5,000) from the next such Base Rent
payment and all but the Minimum Additional Rent from the next such Additional
Rent payment, and (iii) Tenant may deduct all of each remaining Base Rent
payment and all but the Minimum Additional Rent from each remaining Additional
Rent payment, until Tenant has recovered the Remaining unpaid balance of the
Improvement Allowance. Tenant shall be responsible for payment of all
Improvement Costs in excess of the Improvement Allowance and Supplemental
Improvement Allowance.
3. Amendment of Article XXI. A new subparagraph 3 is added to Article XXI
-------------------------
to read as follow:
3. Landlord Default Under Allstate Loan. Landlord proposes to enter into a
-------------------------------------
Mortgage of the Property with Allstate Life Insurance Company of New York
("Allstate"). If Allstate gives any notice of default pursuant to the
Allstate Mortgage to Landlord, Landlord shall provide a copy of such notice
to Tenant: and shall also apprise Tenant of Landlord's plans (if any) for
curing such default and with evidence of any payments made by Landlord to
Allstate or other actions taken by Landlord to cure such default. If a
default by Landlord pursuant to the Allstate Mortgage is not cured by
Landlord within the allowable cure periods contained therein, a material
adverse change in Landlord's financial position shall be deemed to have
occurred which shall entitle Tenant to accelerate its Purchase Option on
the terms set forth in Paragraph 2 of Article XV. Tenant may at its option
cure any monetary default by Landlord pursuant to the Allstate Mortgage,
during the period that Landlord is entitled to cure such default under the
Allstate Mortgage. If Landlord does not reimburse Tenant for the cost of
any such cure by Tenant of a monetary default pursuant to the Allstate
Mortgage which does not also constitute a default by Tenant pursuant to
this Lease, on or before the
2
monthly Base Rent is next due under this Lease, then Tenant may deduct
such amounts from Base Rents, until Tenant has become fully reimbursed,
provided that Tenant shall continue to pay in any event monthly Base Rent
at least equal to 100% of the monthly debt service payments then due
pursuant to the Allstate Mortgage. In no event shall Tenant have any
obligation to cure any default of Landlord under the Allstate Mortgage, or
to repeatedly cure any such default that Tenant has once cured.
4. Amendment of Article XXIX, Paragraph 2. The first sentence of Paragraph
---------------------------------------
2 of Article of XXX is amended to read as follows:
In consideration of the execution by Tenant of this Lease, Landlord
hereby grants to Tenant the one-time option to purchase the Property
(the "Purchase Option"), at the price and upon the terms set forth
in this Article XXIX, Paragraph 2, by giving written notice (the
"Notice of Exercise") to Landlord no earlier than October 1, 1998 and
no later than September 30, 1999, provided that this Lease is still in
full force and effect.
5. Amendment of Article XXIX, Paragraph 2(m). Paragraph 2(m) of Article of
------------------------------------------
XXIX is amended to read as follows:
(m) Failure to Purchase. If Tenant shall give the Notice of Exercise to
Landlord and thereafter shall fail to purchase the Property in
accordance with the terms of this Article XXIX, Paragraph 2, this Lease
shall remain in full force and effect. If such failure by Tenant occurs
despite the fulfillment of all conditions to closing for Tenant's
benefit contained in this Article XXIX, Paragraph 2, Tenant shall have
no further right pursuant to this Lease to purchase the Property from
Landlord, and Tenant shall be liable to Landlord for in damage incurred
by Landlord as the result of Tenant's failure to so purchase the
Property; and Tenant deliver to Landlord at no charge copies of all
surveys, tests, investigations, studies, reports and analyses performed
by Tenant or its employees, contractors, consultants, servants and
agents in connection with Tenant's investigation of the Property. If
Landlord fails to sell the Property to Tenant despite the fulfillment
of all conditions to closing for Landlord's benefit contained in this
Article XXIX, Paragraph 2, Landlord shall be liable to Tenant for all
damage incurred by Tenant as the result of Landlord's failure to so
sell the Property, or Tenant may pursue specific performance of its
Purchase Option.
6. No Conflict. Except as amended by this Second Amendment, the terms and
------------
conditions of the Lease shall remain in full force and effect and are hereby
ratified, affirmed and approved. In the event of any conflict between the terms
of the Lease and this Second Amendment, this Second Amendment shall govern and
control. This Amendment shall be interpreted and construed in accordance with
the laws of the State of California, and shall be
3
EXHIBIT D
Plan of Sublet Premises
Page 1 of 2
Page 2 of 2
binding upon and inure to the benefit of the parties hereto and to their
respective permitted successors and assigns under the Lease.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Second Amendment
effective as of the date fall above written.
"Landlord"
Date: Richard R. Kelley, Jr.
"Tenant"
Digital Equipment Corporation, a Massachusetts
corporation
Date: By:
Its:
4
EXHIBIT E
Telecommunications Equipment Inventory
Northern Telecom Handsets: Model Quantity
----- --------
2008 41
2250 (console) 1
2616 (without display) 1
Unity 1
500 1
-18-
EXHIBIT E
CONSENT TO SUBLEASE AND
RECOGNITION AND ATTORNMENT AGREEMENT
THIS RECOGNITION AND ATTORNMENT AGREEMENT (this "Agreement") is made as of
_______________ 1996, by and between by and between Digital Equipment
Corporation ("DEC"), TIBCO Inc., a Delaware corporation ("Sublessor") and
Artemis Research, a California corporation ("Sublessee").
A. DEC is the tenant under a certain Original Lease from Richard R.
Kelley, Jr. ("Landlord") executed September 18, 1990, as amended by First
Amendment to Lease dated January 18, 1991 and Second Amendment to Lease dated
June 1, 1991 (which Original Lease, as amended is referred to herein as the
"Prime Lease"), and DEC is the sublandlord and Sublessor is the subtenant under
a certain Sublease dated February 17, 1995 (the "Prime Sublease"). The premises
leased under the Prime Lease and subleased under the Prime Sublease are the
land, with the building and improvements thereon, at 305 Lytton Avenue, Palo
Alto, California, 94301 (as more particularly described in the Prime Lease, the
"Premises").
B. Sublessor has entered into or is entering into a sublease of the
Premises (the "Sublease") with Sublessee.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, DEC, Sublessor and Sublessee
hereby agree as follows:
I . Subject to the following provisions of this Agreement, DEC hereby
consents to Sublessor's sublease of the Premises to Sublessee pursuant to the
Sublease. Without limitation of the foregoing, DEC consents to the use of the
Premises for general office use, network operations, research and development
and any other use permitted under the Prime Lease.
2. The Sublease is subject and subordinate to the Prime Sublease.
3. DEC agrees to give Sublessee written notice of the occurrence of any
default by Sublessor under the Prime Sublease and to accept as a cure of such
default, any cure by Sublessee of such default within the applicable cure period
provided for in the Prime Sublease, which cure period, for purposes hereof,
shall commence on the date of delivery to Sublessee of the notice of default.
4. If the Prime Sublease is surrendered to DEC or if the Prime Sublease is
terminated as a result of a default by the Sublessor that by its nature is
personal to Sublessor and not curable by Sublessee, then DEC agrees that so long
as Sublessee is not in default under the Sublease, which default has not been
cured or is not in the process of being cured within any applicable grace period
provided under the Sublease, the following shall apply:
(i) Sublessee, shall not be evicted, nor shall Sublessee, be
joined in any eviction or unlawful detainer action or proceeding instituted or
taken by DEC; and
(ii) DEC shall succeed to the interest of Sublessor in the Sublease
and Sublessee shall be bound to DEC under all of the terms, covenants and
conditions of the Sublease, for the remaining term thereof, with the same force
and effect as if DEC were the Sublessor under the Sublease, and Sublessee does
hereby agree to attom to DEC, such attornment to be effective and self operative
without the execution of any further instruments on the part of any of the
parties to this Agreement, immediately upon DEC succeeding to the interest of
Sublessor under the Sublease.
5. The covenants and agreements contained herein shall be binding upon and
inure to the benefit of the respective heirs, administrators, executors, legal
representatives, successors, and assigns of the parties hereto.
6. In the event that any party fails to perform any of its obligations
under this Agreement or in the event a dispute arises concerning the meaning or
interpretation of any provision of this Agreement, the defaulting party or the
party not prevailing in such dispute, whichever the case may be, shall pay any
and all costs and expenses incurred by the other parties in enforcing or
establishing their rights hereunder, including court costs and reasonable
attorneys' fees.
7. This Agreement shall not be modified or amended except by a written
instrument executed by all of the parties hereto.
8. This agreement shall not be nor be deemed to be a consent or waiver or
amendment of the Prime Sublease with respect to any other or future transaction,
whether similar or dissimilar, and any other or future transaction shall require
DEC's written consent, which consent, except as otherwise expressly provided in
the Prime Sublease, may be given or withheld in DEC's sole discretion.
2
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
DIGITAL EQUIPMENT CORPORATION
By
Print Name
Its
TIBCO INC.
By
Print Name
Its
TENANT
ARTEMIS RESEARCH
By
Print Name
Its
3
EXHIBIT F
RECOGNITION AND ATTORNMENT AGREEMENT
THIS RECOGNITION AND ATTORNMENT AGREEMENT (this "Agreement") is made as of
__________ 1996, by and between Richard R. Kelley, Jr. ("Landlord") and TIBCO
Inc., a Delaware corporation (Sublessor), and Artemis Research, a California
corporation ("Sublessee").
A. Digital Equipment Corporation ("DEC") is the tenant under a certain
Original Lease from Landlord executed September 18, 1990, as amended by First
Amendment to Lease dated January 18, 1991 and Second Amendment to Lease dated
June 1, 1991 (which Original Lease, as amended is referred to herein as the
"Prime Lease"), and DEC is the sublandlord and Sublessor is the subtenant under
a certain Sublease dated February 17, 1995 (the "Prime Sublease"). The premises
leased under the Prime Lease and subleased under the Prime Sublease are the
land, with the building and improvements thereon, at 305 Lytton Avenue, Palo
Alto, California, 94301 (as more particularly described in the Prime Lease, the
"Premises").
B. Sublessor has entered into or is entering into a sublease of the
Premises (the "Sublease") with Sublessee.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord, Sublessor and Sublessee
hereby agree as follows:
1. The Sublease is subject and subordinate to the Prime Lease.
2. Landlord agrees to give Sublessee written notice of the occurrence of
any default by DEC under the Prime Lease and to accept as a cure of such
default, any cure by Sublessee of such default within the applicable cure period
provided for in the Prime Lease, which cure period, for purposes hereof, shall
commence on the date of delivery to Sublessee of the notice of default.
3. If the Prime lease is surrendered to Landlord or if the Prime Lease is
terminated as a result of a default by DEC that by its nature is personal to DEC
and not surable by Sublessee, then Landlord agrees that so long as Sublessee is
not in default under the Sublease, which default has not been cured or is not in
the process of being cured within any applicable grace period provided under the
Sublease, the following shall apply:
(i) Sublessee shall not be evicted, nor shall Sublessee be joined in any
eviction or unlawful detainer action or proceeding instituted or taken by
Landlord; and
(ii) Landlord shall succeed to the interest of Sublessor in the Sublease
and Sublessee shall be bound to Landlord under all of the terms, covenants and
conditions of the Sublease, for the remaining term thereof, with the same force
and effect as if Landlord were the Sublessor under the Sublease, and Sublessee
does hereby agree to attorn to Landlord, such attornment to be effective and
self operative without the execution of any further instruments on
the part of any of the parties to this Agreement, immediately upon Landlord
succeeding to the interest of Sublessor under the Sublease.
4. The covenants and agreements contained herein shall be binding upon and
inure to the benefits of the respective heirs, administrators, executors, legal
representatives, successors, and assigns of the parties hereto.
5. In the event that any party fails to perform any of its obligations
under this Agreement or in the event a dispute arises concerning the meaning or
interpretation of any provision of this Agreement, the defaulting party or the
party not prevailing in such dispute, whichever the case may be, shall pay any
and all costs and expenses incurred by the other parties in enforcing or
establishing their rights hereunder, including court costs and reasonable
attorney's fees.
6. This Agreement shall not be modified or amended except by a written
instrument executed by all of the parties hereto.
7. This agreement shall not be nor be deemed to be a consent or waiver or
amendment of the Prime Lease with respect to any other or future transaction,
whether similar or dissimilar, and any other or future transaction shall require
Landlord's written consent, which consent, except as otherwise expressly
provided in the Prime Lease, may be given or withheld in Landlord's sole
discretion.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
Richard R. Kelly, Jr.
TIBCO INC.
By
Print Name
Its
TENANT
ARTEMIS RESEARCH
By
Print Name
Its
2
SUBLEASE
THIS SUBLEASE is made as of June 14, 1996 (the "Effective Date"), by
and between TIBCO Inc., a Delaware corporation with an address at 530 Lytton
Avenue, Palo Alto, California ("Sublessor") and Artemis Research, a California
corporation, with an address at 275 Alma Street, Palo Alto, California
("Sublessee").
WHEREAS, Sublessor is the subtenant under a certain Sublease from
Digital Equipment Corporation ("DEC") dated February 17, 1995 ("Prime
Sublease"), a copy of which is attached hereto as Exhibit A; and
WHEREAS, DEC is the tenant under a certain Amended and Restated Lease
("Original Lease") from Richard R. Kelley, Jr., Charles E. Hangar and Faye E.
Hangar, and Harry L. Fox (as successor-in-interest to Hare, Brewer and Kelly,
Inc.) ("Landlord") executed November 26, 1990, a copy of which is attached
hereto as Exhibit B, which Original Lease, was amended by First Amendment to
Amended and Restated Lease ("First Amendment"), a copy of which is attached
hereto as Exhibit C (such Original Lease, as amended by the First Amendment is
referred to hereafter as the "Prime Lease"); and
WHEREAS, the premises leased under the Prime Lease and subleased
under the Prime Sublease are the land, with the building and improvements
thereon at 335 Bryant Street, Palo Alto, California, 94301, which premises are
more particularly described in Article I of the Original Lease as the "Demised
Premises"; and
WHEREAS, Sublessee wishes to sublease from Sublessor the entire
Demised Premises consisting of a certain parcel of land more particularly
described in Exhibit C of the Prime Lease (the "Land"), the building (the
"Building") on the Land, containing approximately 9,284 square feet, and the
parking spaces (if any) and other improvements on the Land (collectively, the
"Sublet Premises"), and Sublessor is willing to sublet the Sublet Premises to
Sublessee;
NOW, THEREFORE, the parties hereto agree as follows:
1. Demise. Sublessor hereby subleases the Sublet Premises to
-------
Sublessee and Sublessee hereby sublets the Sublet Premises from Sublessor
subject to the terms and conditions hereinafter stated.
2. Term. The term of this Sublease (the "Sublease Term") shall be
-----
approximately six (6) years, commencing on August 1, 1996 or when DEC consents
to this Sublease, whichever occurs last (the "Commencement Date"), and shall end
November 15, 2002 (the "Termination Date"), unless terminated earlier in
accordance with the provisions of this Sublease. In the event the Sublease Term
commences on a date later than August 1, 1996, Sublessor and Sublessee shall
execute a memorandum setting forth the actual Commencement Date. Sublessor
agrees to use best efforts to make a portion of the Sublet Premises available to
Sublessee prior to the Commencement Date. In the event any such portion becomes
available prior to the Commencement Date, upon approval by DEC and delivery of
such portion of the premises as are available to Sublessee, Sublessee shall pay
that portion of the rent attributable to such portion of
the Sublet Premises for such time until the Commencement Date and shall occupy
said portion under all other terms and conditions of this Sublease. The rent
payment for such early occupancy shall not become due and payable unless and
until Sublessor delivers the entire Sublet Premises and the Lytton Avenue
Premises (as defined below) to Sublessee.
3. Delivery of Sublet Premises.
----------------------------
a. Sublessee expressly acknowledges that it has inspected the
Sublet Premises and is ftdly familiar with the physical conditions thereof, and
agrees to accept possession of the Sublet Premises in its "as is" condition.
Sublessee acknowledges that, except as expressly provided in this Sublease,
Sublessor has made no representations or warranties regarding the Sublet
Premises and that it has relied on no such representations or warranties in
accepting the Sublet Premises. Sublessee acknowledges that Sublessor shall have
no obligation to do any work in or to the Sublet Premises or incur any expense
in connection therewith, in order to make them suitable and/or ready for
occupancy and use by Sublessee. Sublessee shall have the right to utilize the
telecommunications equipment (the "Telecommunications Equipment") described in
Exhibit D to the Prime Sublease, subject to the terms of this Sublease.
b. Concurrently herewith, Sublessor and Sublessee are entering
into a Sublease of premises located at 305 Lytton Avenue, Palo Alto, California
(the "Lytton Avenue Premises") on terms and conditions similar to that of this
Sublease. Sublessee's obligations under this Sublease are conditioned upon
Sublessor delivering both the Sublet Premises and the Lytton Avenue Premises to
Sublessee on or before August 1, 1996 (which date may be extended only in
Sublessee's discretion). If Sublessor fails to deliver either the Sublet
Premises or the Lytton Avenue Premises to Sublessee on or before August 1, 1996,
then Sublessee shall be entitled to terminate this Sublease by written notice to
Sublessor at any time after August 1, 1996 and before both the Sublet Premises
and the Lytton Avenue Premises are delivered to Sublessee. Such termination
shall effect the simultaneous termination of the sublease of the Lytton Avenue
Premises and shall serve to discharge and release both parties from any further
liability to each other.
4. Rent.
-----
a. Base Rent. Sublessee shall pay to Sublessor base rent ("Base
----------
Rent") without offset, deduction or demand in the following amounts, commencing
on the Commencement Date and continuing on the first day of every month
thereafter; provided, however, that the first month's rent shall be due and
payable upon execution of this Sublease:
Term Rent/Month
---- ----------
Commencement Date - January 31, 1997 $24,324.08
February 1, 1997 - January 31, 1999 $25,252.48
February 1, 1999 - January 31, 2000 $26,923.60
February 1, 2000 - January 31, 2001 $27,387.80
February 1, 2001 - January 31, 2002 $27,852.00
February 1, 2002 - November 15, 2002 $28,780.40
2
Base Rent shall be apportioned for any partial calendar month
occurring at the beginning or end of the Sublease Term.
All payments hereunder shall be made at the following address:
TIBCO Inc.
530 Lytton Avenue
Palo Alto, CA 94301
Attn: Accounting Department
or such other address as Sublessor may from time to time designate by
written notice to Sublessee. Sublessor agrees to use its best efforts to forward
to Sublessee on a monthly basis evidence of its payment of all rents and
Operating Expenses due under the Prime Sublease.
b. Operating Expenses. Sublessee shall pay to Sublessor all
-------------------
Operating Expenses as defined and required to be paid by Sublessor under
paragraph 4.b of the Prime Sublease. Payment shall be made as and when payable
by Sublessor to DEC. Sublessor shall promptly forward to Sublessee a copy of all
statements showing Operating Expenses which Sublessor receives from DEC,
including, without limitation, statements for the year just ended and statements
of estimates for the current year. Sublessee shall have the right, through
Sublessor, to inspect, audit and examine the records pertaining to Operating
Expenses in accordance with the provisions of Paragraph 3 of Article V of the
Prime Lease.
All sums which Sublessee agrees to pay under this Sublease other than
Base Rent, or which Sublessor pays or incurs as a result of a default by
Sublessee which constitutes an Event of Default as defined in the Prime
Sublease, including without limitation interest at the Default Rate of Interest
as defined in Section 13 of the Prime Sublease and the early termination
penalty, if applicable, due under Section 10 below, shall be included within the
term "Additional Rent" whether or not expressly so identified. As used in this
Sublease, the term "Rent" shall mean collectively Base Rent and Additional Rent.
5. Utilities. Sublessee shall make its own arrangements with the
----------
applicable utility companies for the provision of all utilities and services as
set forth in Section 5 of the Prime Sublease.
6. Security Deposit. Upon the later of the execution of this
-----------------
Sublease and the receipt of DEC's written consent to this Sublease, Sublessee
shall deposit with Sublessor a security deposit in the amount of $28,780.40 (the
"Security Deposit"). If Sublessee fails to pay Rent when due under this
Sublease, which failure continues beyond any applicable cure period, Sublessor
may apply all or any portion of the Security Deposit for the payment of any such
Rent then due hereunder and unpaid beyond any applicable cure period. If
Sublessor so uses any portion of the Security Deposit, Sublessee shall, within
ten (10) days after receipt of written demand by Sublessor, restore the Security
Deposit to the full amount originally required, and Sublessee's failure to do so
shall constitute a default under this Sublease. In the event Sublessor assigns
its interest in this Sublease, Sublessor shall deliver to its assignee so much
of the Security Deposit as is then held by Sublessor. Within ten (10) days after
the Term has expired, or
3
FA961550.029
Sublessee has vacated the Premises, whichever shall occur last, the Security
Deposit, or so much thereof as had not heretofore been applied by Sublessor in
accordance with Sublessor's rights hereunder, shall be returned to Sublessee or
to the last assignee, if any, of Sublessee's interest hereunder.
7. Use. Sublessee shall be entitled to use and occupy the Sublet
----
Premises, to the extent permitted by law, for the purpose of general office use
and for no other use or purpose (the "Permitted Uses").
8. Assignment and Subletting. Sublessee shall not assign, transfer,
--------------------------
mortgage or pledge this Sublease, or further sublet all or any part of the
Sublet Premises, or enter into any other license or occupancy arrangement,
whether voluntary or involuntary or by operation of law (collectively a
"Transfer") without the prior written consent of Sublessor, which consent shall
not be unreasonably withheld, conditioned or delayed, and the prior written
consent of DEC, subject to the requirements of the Master Lease.
No Transfer, nor any collection of rent by Sublessor from any person
or entity other than Sublessee, shall relieve Sublessee of its obligations to
fully observe and perform the terms, covenants, and conditions hereof. No
consent by Sublessor or DEC in a particular instance shall be deemed a waiver of
the obligation to obtain Sublessor's and/or DEC's consent in another instance.
Sublessee shall pay to Sublessor as received any excess of amounts received
pursuant to an assignment, subletting, license or other occupancy arrangement in
excess of the Rent due hereunder. For purposes of this Sublease, the transfer of
a majority ownership interest in Sublessee shall be deemed a Transfer.
9. Prime Sublease.
---------------
a. Incorporation of Prime Sublease. Except as otherwise provided
-------------------------------
herein, Sublessor grants to Sublessee, all of Sublessor's rights, benefits and
interests with respect to the Sublet Premises, and Sublessee agrees to accept
from Sublessor and hereby assumes all of Sublessor's obligations and burdens
under the Prime Sublease with respect to the Sublet Premises (including but not
limited to Sublessor's obligations and burdens with respect to the Prime Lease),
as if all such rights and obligations were set forth herein in their entirety,
provided that the terms and conditions hereof shall be controlling whenever the
terms and conditions of the Prime Sublease are contradictory to or inconsistent
with terms and conditions hereof, and provided further that those provisions of
the Prime Lease which are protective and for the benefit of the Landlord shall
in this Sublease be deemed to be protective and for the benefit of Landlord, DEC
and Sublessor and those provisions of the Prime Lease which are protective and
for the benefit of DEC shall in this Sublease be deemed to be protective and for
the benefit of Sublessee. The deletion of certain sections of the Prime Lease
from inclusion in the Prime Sublease are set forth in paragraph I La. of the
Prime Sublease and incorporated herein by this reference. All applicable terms
and conditions of the Prime Sublease are incorporated into and made a part of
this Sublease as if Sublessor were the Sublandlord thereunder and Sublessee the
Subtenant thereunder, except paragraphs 4.a., 14, 15, 21, and 24 are deleted and
shall not apply.
4
Sublessee represents that it has read and is familiar with the terms
of the Prime Lease and the Prime Sublease.
b. Performance of Prime Sublease. Sublessee covenants and agrees
------------------------------
faithfully to observe and perform all of the terms, covenants and conditions of
the Prime Sublease on the part of Sublessor to be performed with respect to the
Sublet Premises, other than the payment of Rent to DEC which shall be
Sublessor's responsibility, and neither to do nor cause to be done, any act or
thing which would and might cause the Prime Sublease to be canceled, terminated,
forfeited or surrendered, or which would or might make Sublessor liable for any
damages, claims or penalties.
C. Representation-Covenant, Indemnity.
------------------------------------
(i) Sublessor hereby represents and warrants to Sublessee that as
of the date hereof Sublessor is not in default under the Prime Sublease nor has
any event occurred that with the giving of notice or the passage of time would
constitute a default by Sublessor under the Prime Sublease, and to Sublessor's
knowledge DEC is not in default and no event has occurred that with the giving
of notice or the passage of time would constitute a default by DEC under the
Prime Sublease or under the Prime Lease.
(ii) Sublessor covenants and agrees to pay all Rent due under the
Prime Sublease as and when due and to perform all other obligations under the
Prime Sublease that are not Sublessee's obligations hereunder or are otherwise
not performable by Sublessee.
(iii) Sublessor shall indemnify, defend and hold Sublessee
harmless from and against any and all losses, costs, damages and expenses,
including reasonable attorneys fees and expenses, incurred by Sublessee as a
result of (x) any failure of Sublessor to perform any of its obligations under
the Prime Sublease as set forth in Section 9c(ii), or (y) any other default by
Sublessor under the Prime Sublease. Sublessor's maximum aggregate liability
under this Section 9c(iii) shall not exceed $350,000 and the aforesaid indemnity
shall not include special, indirect, incidental or consequential damages
(including loss of profits) even if Sublessor has been advised of the
possibility of the same.
d. Termination. If the Prime Sublease terminates, this Sublease shall
------------
terminate and the parties shall be relieved of any further liability or
obligation under this Sublease; provided, however, that if the Prime Sublease
terminates as a result of a default or breach by Sublessor or Sublessee under
this Sublease and/or the Prime Sublease, then the defaulting party shall be
liable to the nondefaulting party for the costs incurred as a result of such
termination. Notwithstanding the foregoing to the contrary, if the Prime
Sublease gives Sublessor any right to terminate the Prime Lease in the event of
a partial or total damage, destruction or condemnation of the Sublet premises or
the building or project of which the Sublet Premises are a part, the exercise of
such right by Sublessor shall not constitute a default or breach under this
Sublease.
e. Recognition Agreements. Sublessor shall use reasonably diligent
-----------------------
efforts to obtain from DEC a consent, recognition and attornment agreement in
the form of
5
attached Exhibit F or in such other form as is acceptable to Sublessee in its
reasonable discretion. In addition, Sublessor shall use reasonably diligent
efforts to obtain a recognition and attornment agreement in the form of attached
Exhibit G or such other form as is reasonably acceptable to Sublessee executed
by the Landlord.
10. Option to Terminate. Sublessee shall have the option to terminate
--------------------
this Sublease, subject to the following provisions: Sublessee shall exercise the
option to terminate this Sublease, if at all, by written notice to Sublessor
given not later than October 31, 1998. If Sublessee exercises the option to
terminate, then the Sublease shall terminate effective on July 31, 1999;
provided that if, and only if, Sublessee has exercised its termination option,
- --------
Sublessor shall have the right, upon not less than three months prior written
notice to Sublessee, to terminate the Sublease effective as of the end of any
month after January 31, 1999 and prior to July 31, 1999. In the event that
Sublessee exercises its option to terminate the Sublease, Sublessee shall pay to
Sublessor an early termination penalty equal to one month's Base Rent (in the
amount in effect as of the date of termination) which penalty shall be due and
payable on the date three months prior to the effective date of the termination.
In addition, Sublessee will reimburse Sublessor for fifty percent
(50%) of any reasonable brokerage commissions (not in excess of standard
commissions for office buildings in Palo Alto) incurred by Sublessor in re-
subleasing the Sublet Premises and one hundred percent (100%) of reasonable
out-of-pocket expenses incurred by Sublessor for marketing and brochures in
connection with such subsequent re-subletting and 100% of reasonable attorneys'
fees in connection with such subsequent re-subletting, not to exceed $5,000.
Sublessee shall have the right to conduct a search for and attempt to locate a
subsequent subtenant provided that such subsequent subtenant shall be subject to
the reasonable approval of Sublessor, which consent shall not be unreasonably
withheld. Sublessor may, in its sole discretion, direct the retention or retain
the services of Bill Reid of Spallino Reid as listing broker for any subsequent
sublease.
11. Insurance. Sublessee shall maintain insurance in accordance with
----------
the terms of the Prime Sublease. The named insureds shall be Sublessee,
Sublessor, DEC, Landlord and Landlord's mortgagees.
12. Surrender. Upon the expiration or earlier termination of the
----------
Sublease Tenn, Sublessee shall surrender the Sublet Premises free and clear of
all tenants and occupants, and in good order and condition, reasonable wear and
tear and damage by casualty or taking only excepted. All alterations, additions
and improvements (other than Sublessee's equipment and property) shall remain
part of the Sublet Premises and shall not be removed unless Sublessor has
required that such alterations be removed as a condition to Sublessor's consent
to the making of such alteration. Sublessee shall repair any damage to the
Sublet Premises caused by the removal of its property. Any property of Sublessee
not removed at or prior to the expiration or earlier termination of the Sublease
Term may be removed and stored or disposed of by Sublessor as it deems
appropriate in its sole discretion (provided that in the event of a termination
prior to the expiration of the Sublease Term, Sublessee shall have a reasonable
period of time to remove such property). Sublessee agrees to reimburse Sublessor
for all of Sublessor's costs resulting from
6
such removal and storage or disposition, less any proceeds received by Sublessor
as a result of the disposition.
13. Notices. All notices relating to this Sublease or the Sublet
-------
Premises shall be in writing and addressed, if to Sublessee, at the Sublet
Premises, or at such other address as Sublessee shall designate in writing, and
if to Sublessor, to TIBCO Inc., 530 Lytton Avenue, Palo Alto, California, Attn:
Chief Financial Officer, or to such other address as Sublessor shall designate
in writing.
14. Broker. Upon execution of this Sublease and consent thereto by
------
DEC, Sublessor shall be responsible for paying the brokerage commissions due to
Spallino Reid and CB Commercial Real Estate Group, Inc. (the "Brokers") in
connection with this Sublease. Sublessee and Sublessor each represent and
warrant to the other that it has not dealt with any broker or agent in
connection with Sublease other than the Brokers and it shall indemnify, defend
(with counsel reasonably satisfactory to the indemnified party) and hold the
other party hereto harmless from and against all claims, liability, leases,
damages, costs and expenses arising from a breach of such representation and
warranty. If Spallino Reid is retained by Sublessor as its broker and earns a
commission in connection with a subsequent sublease of the Sublet Premises,
Spallino Reid agrees to waive its portion of the brokerage commission less
reasonable out-of-pocket costs and to pay fifteen percent (15%) of the remaining
brokerage commission.
15. Consent by DEC. This Sublease shall be of no force or effect
--------------
unless consented to by DEC.
IN WITNESS WHEREOF, the parties hereto have caused this Sublease to
be executed by their duly authorized offices as of the date first written above.
Sublessor:
TIBCO Inc.
Signed:
Print Name:
Title:
Sublessee:
ARTEMI RESEARCH
Signed:
Print Name:
Title:
7
EXHIBIT A.
----------
SUBLEASE
between
DIGITAL EQUIPMENT CORPORATION, Sublandlord
and
TEKNEKRON SOFTWARE SYSTEMS, INC., Subtenant
Dated as of February 17, 1995
3 3 5 Bryant Street
Palo Alto, California 94301
SUBLEASE
BY DIGITAL EQUIPMENT CORPORATION, Sublandlord
TO TEKNEKRON SOFTWARE SYSTEMS, INC., SUBTENANT
DATED: AS OF February 17, 1995
335 Bryant Street
Palo Alto, California 94301
TABLE OF CONTENTS
1. Demise 3
2. Term 3
3. Delivery of Sublet Premises 3
4. Rent 5
a. Base Rent 5
b. Additional Rent 5
5. Utilities 6
6. Use 7
7. Assignment and Subletting 8
8. Insurance 8
9. Indemnification 9
10. Maintenance and Services 9
11. Prime Lease 10
a. Incorporation of Prime Lease 10
b. Performance of Prime Lease 10
c. Consents - 11
d. No Sublandlord Obligation 11
e. Termination
12. Alterations
-2-
13. Defaults and Remedies 12
14. Surrender 14
15. Notices 14
16. Effect 14
17. Applicable Law 15
18. Modification, etc. 15
19. Severability 15
20. No Waiver 15
21. Broker 15
22. Mechanics Liens 15
23. Confidentiality 15
24. Abatement 15
25. Quiet Enjoyment 16
26. Compliance With Legal Requirements 16
27. Early Occupancy 16
Exhibits
Exhibit A: Original Lease
Exhibit B: First Amendment to Original Lease
Exhibit C: Plan of Sublet Premises
Exhibit D: Telecommunications Equipment Inventory
-3-
SUBLEASE
THIS SUBLEASE is made as of the day of February, 1995, by and between
Digital Equipment Corporation, a Massachusetts corporation, with an address at
111 Powdermill Road, Maynard, MA, ("Sublandlord") and Teknekron Software
Systems, Inc., a Delaware Corporation with an address at 530 Lytton Avenue, Palo
Alto, California ("Subtenant").
WITNESSETH
WHEREAS, Sublandlord is the tenant under a certain Amended and
Restated Lease ("Original Lease") from Richard R. Kelley, Jr., Charles E. Hanger
and Faye E. Hanger, and Harry L. Fox (as successor-in-interest to Hare, Brewer
and Kelley, Inc.) ("Landlord"), executed November 26, 1990, a copy of which is
attached hereto as Exhibit A, as amended by First Amendment to Amended and
Restated Lease ("First Amendment"), a copy of which is attached hereto as
Exhibit B (such Original Lease, as amended by the First Amendment, is
hereinafter referred to as the "Prime Lease"). The premises leased to
Sublandlord under the Prime Lease are the land, with the building and
improvements thereon at 335 Bryant Street, Palo Alto, CA 94301, which premises
are more particularly described in Article I of the Original Lease as the
"Demised Premises" and are shown on Exhibit C; and
WHEREAS, Subtenant wishes to sublease from Sublandlord the leased
premises shown on the plan attached hereto as Exhibit C, consisting of a certain
parcel of land more particularly described in Exhibit C of the Prime Lease (the
"Land"), the building (the "Building") on the Land, containing approximately
9,284 square feet, and the parking spaces and other improvements on the Land
(collectively, the "Sublet Premises'), and Sublandlord is willing to Sublet the
Sublet Premises to Subtenant;
NOW, THEREFORE, the parties hereto agree as follows:
1. Demise. Sublandlord hereby subleases the Sublet Premises to
Subtenant and Subtenant hereby sublets the Sublet Premises from Sublandlord
subject to the terms and conditions hereinafter stated.
2. Term. The term of this Sublease (the "Sublease Term") shall be
approximately six (6) years and ten and one half (10 1/2) months, beginning with
the first day of January, 1996, (the "Commencement Date") and ending with the
15th day of November, 2002.
In order to move the commencement date forward, Sublandlord must
receive one hundred fifty (150) days written notice from Subtenant. Upon
commencement the rent schedule in Section 4 shall apply and the sublease term
extended to reflect the earlier commencement date. In such an event, a
subsequent amendment outlining the rent schedule and sublease term will be
executed by the parties.
3. Delivery of Sublet Premises. Subtenant expressly acknowledges
that it has inspected the Sublet Premises and is fully familiar with the
physical condition thereof, and agrees to accept possession of the Sublet
Premises in its "as is" condition. Subtenant acknowledges that Sublandlord has
made no representations or warranties regarding the Sublet Premises, and that it
has relied on no such representations or warranties in accepting the Sublet
Premises. Subtenant acknowledges that Sublandlord shall have no obligation to do
any work in or to the Sublet Premises, or to incur any expense in connection
therewith, in order to make them suitable and
-4-
ready for occupancy and use by Subtenant. Subtenant shall have the right to
utilize the telecommunications equipment (the "Telecommunications Equipment")
described in Exhibit D, subject to the terms of this Sublease.
4. Rent.
a. Base Rent. Subtenant shall pay to Sublandlord base rent ("Base
Rent") without offset, deduction or demand in the following amounts, commencing
on the Commencement Date and continuing on the first day of every month
thereafter:
Mos. 1-13: $24,324.08 per month.
Mos. 14-37: $25,252.48 per month.
Mos. 38-49: $26,923.60 per month.
Mos. 50-61: $27,387.80 per month.
Mos. 62-73: $27,852.00 per month.
Mos. 74-83: $28,780.40 per month.
Base Rent shall be apportioned for any partial calendar month
occurring at the beginning or end of the Sublease Term.
All payments hereunder shall be made at the following address:
Digital Equipment Corporation
305 Rockrimmon Boulevard, South
Mailstop CX03-D12Colorado Springs, Colorado 80919-2398
Attention: Property Development Center, Real Estate
Administrator
or such other address as Sublandlord may from time to time designate by written
notice to Subtenant.
b. Operating Expenses. Operating Expenses shall be defined as the
sum of (i) Operating Costs, as defined in Article V, Section 1 of the Prime
Lease, (ii) Real Estate Taxes, as defined in Article V, Section 4 of the Prime
Lease, and (ii) the costs of Sublandlord's Maintenance Obligations, as defined
in Section 10 hereof. If, with respect to any calendar year during the Sublease
Term after the Operating Expenses Base Year (Which shall be defined as calendar
year 1996), the aggregate amount of Operating Expenses exceeds the Operating
Expenses for the Operating Expenses Base Year; Tenant shall pay to Landlord, as
Additional Rent, the entire amount of such excess. Tenant's obligation under
this Section 4(b) shall be prorated for partial calendar years at the beginning
or end of the Term.
After the end of each calendar year included in the Sublease Term, Sublandlord
shall send Subtenant a statement showing Operating Expenses (i) for the calendar
year just ended ("Actual Expenses"), which statement shall be based in part upon
information supplied by Sublandlord, and
-5-
an estimate of Operating Expenses for the then-current calendar year ("Estimated
Expenses"). Subtenant shall pay Sublandlord on the first day of each month, in
advance, as Additional Rent, an amount equal to 1/12th of the amount, if any, by
which the Estimated Expenses for the then current calendar year exceed the
Operating Expenses for the Operating Expenses Base Year. Such payments shall not
bear interest and may be commingled by Sublandlord with any other funds of
Sublandlord. If the total amount paid by Subtenant in accordance with (ii) above
on account of Operating Expenses for any calendar year during the Sublease Term
(i) exceeds the amount due therefor as shown on Sublandlord's statement
delivered after the end of such calendar year, such excess shall be credited
against the monthly installments of Additional Rent next due (or refunded to
Subtenant if the Sublease Term has expired, or (ii) is less than the amount due
therefor as shown on Sublandlord's statement delivered after the end of such
calendar year, then Subtenant shall pay the difference to Sublandlord within 30
days after receipt of such statement from Sublandlord. Subtenant's rights and
obligations under this Section 4(b) with respect to the last calendar year (or
portion thereof) included in the Sublease Term shall survive the expiration or
termination of this Sublease.
All sums which Subtenant agrees to pay under this Sublease other than
Base Rent, or which Sublandlord pays or incurs as a result of a default by
Subtenant, including without limitation interest at the Default Rate of Interest
as defined in Section 13, shall be included within the term "Additional Rent"
whether or not expressly so identified. As used in this Sublease, the term
"Rent" shall mean collectively Base Rent and Additional Rent.
5. Utilities. Subtenant shall make its own arrangements with the
applicable utility companies for the provision of all utilities and services,
including, without limitation, water, sewer, electricity, gas, heating fuels,
and telephone service, which are required for the use of the Sublet Premises for
the Permitted Uses, and shall pay when due all charges therefor directly to the
company which provides such service. If Sublandlord is notified that a lien will
be placed upon the Sublet Premises as a result of Subtenant's non-payment of any
such utility charge, then Sublandlord may pay such charges and notify Subtenant
thereof, and Subtenant shall pay the same to Sublandlord as Additional Rent with
the next installment of Base Rent becoming due. In no event shall Sublandlord be
responsible for charges for any utilities or services consumed by Subtenant at
the Sublet Premises.
If, for any reason whatsoever other than a negligent act or omission
or a WMI act or omission of Subtenant, its officers, directors, employees,
contractors, servants or agents, or a default by Subtenant hereunder, any
utilities or services which are required for Subtenant's use of the Sublet
Premises for the Permitted Uses are interrupted, Tenant shall promptly so notify
Sublandlord in writing.
If resumption of such utilities or services does not occur within
sixty (60) days after the commencement of such interruption, and the lack of
such utilities or services continues to materially impair Subtenant's
then-current use of the Sublet Premises or a material portion thereof, Subtenant
shall have the right to terminate this Sublease at any time thereafter while
such interruption continues by giving to Sublandlord a written notice of
termination stating the date on which this Sublease shall terminate.
-6-
If the unavailability of such utilities or services materially impairs
Subtenant's then-current use of the Premises or a material portion thereof for a
period of more than ten (10) consecutive days, Rent shall be abated
proportionately according to the extent to which the Subtenant's use and
occupancy of the Sublet Premises are so affected, for the period commencing on
the date such utilities or services became unavailable and ending on the date on
which such -condition is cured or this Sublease terminates, as the case may be.
Subtenant shall not connect to the Building's electrical system any
equipment which operates in excess of the current capacity of such system
without Sublandlord's prior written consent.
6. Use. Subtenant shall continuously use and occupy the Sublet
Premises, to the extent permitted by law, for the purpose of general office use
(the "Permitted Uses") and for no other use or purpose. Sublandlord makes no
representation or warrant as to the necessity of obtaining any license, permit
or approval from any federal, state or municipal governmental authority for such
uses.
Subtenant shall not conduct any activity on the Sublet Premises,
which is not permitted under the Prime Lease, or which causes any noise, odor or
vibration to be emitted from the Sublet Premises. Subtenant shall comply with
reasonable rules and regulations as the same may be promulgated and modified by
Landlord from time to time. Except as specifically provided in Section 26
hereof, Subtenant shall comply with all laws, statutes, ordinances, by-laws,
regulations, restrictions, and with the requirements of all governmental
approvals, licenses and permits, relating to the Building or the Sublet Premises
(collectively, "Legal Requirements"), and with the provisions of all insurance
policies from time to time in effect with respect to the Building or the Sublet
Premises. In addition, Subtenant shall obtain, keep in force, and comply with
all requirements of all governmental approvals, licenses and permits required
for Subtenant's specific use of the Sublet Premises.
Subtenant shall not use, generate, treat, store, or dispose of
"Hazardous Substances" (as hereinafter defined) on the Sublet Premises without
giving prior written notification to Sublandlord, including the identity and
amounts of the Hazardous Substances which Subtenant proposes to use, and
receiving prior written consent from Sublandlord, which may be withheld or
conditioned in Sublandlord's sole discretion. In all events, Subtenant's use of
Hazardous Substances must be in full and complete accordance with all Legal
Requirements applicable thereto. Subtenant shall indemnify, save harmless, and
defend (with counsel reasonably satisfactory to Sublandlord) Sublandlord, its
officers, directors, employees, contractors, servants and agents, from and
against all loss, costs, damages, claims proceedings, demands, liabilities,
penalties, fines and expenses, including without Urnitation reasonable
attorneys' fees, consultants' fees, litigation costs, and cleanup costs,
asserted against or incurred by Sublandlord, its officers, directors, employees,
contractors, servants and agents at any time and from time to time resulting
from the presence of any Hazardous Substances in or on the Sublet Premises
during the Sublease Term arising after Subtenant's taking possession of the
Sublet Premises and resulting from (a) the action or inaction of Subtenant, its
officers, directors, employees, contractors, servants and
-7-
agents, or (b) Subtenant's generation, storage, treatment, handling,
transportation disposal or release of any Hazardous Substances at or near the
Sublet Premises, or (c) the violation of any applicable law governing Hazardous
Substances by Subtenant, its officers, directors, employees, contractors,
servants or agents. The indemnities and duties to defend set forth in this
Section shall survive the expiration or earlier termination of this Sublease. As
used in this Sublease, "Hazardous Substances" shall mean any chemical,
substance, waste, material, gas or emission which is deemed hazardous, toxic, a
pollutant, or a contaminant under any federal, state or local statute, law,
ordinance, rule or regulations, now or hereafter in effect. "Hazardous
Substances" include but are not limited to petroleum and petroleum products,
asbestos, chloroflourocarbons (CFCs), radon gas and polychlorinated biphenyle
(PCBs). Upon request by Sublandlord from time to time, Subtenant shall certify
in writing to Sublandlord that no portion of the Sublet Premises has been or is
then being used by Subtenant or by anyone claiming under Subtenant for the use,
generation, treatment, storage, or disposal of Hazardous Substances and Premises
except those set forth in such certification.
7. Assignment and Subletting. Subtenant shall not assign, transfer,
mortgage or pledge this Sublease, nor sublet all or any part of the Sublet
Premises, or enter into any other license or occupancy arrangement, whether
voluntary or involuntary or by operation of law (collectively a "Transfer")
without Sublandlord's prior written consent, which consent shall not be
unreasonably withheld by Sublandlord.
No Transfer, nor any collection of rent by Sublandlord from any
person or entity other than Subtenant, shall relieve Subtenant of its
obligations to fully observe and perform the terms, covenants, and conditions
hereof. No consent by Sublandlord in a particular instance shall be deemed a
waiver of the obligation to obtain Sublandlord's consent in another instance.
Subtenant shall pay to Sublandlord as received any excess of amounts received
pursuant to an assignment, subletting, license or other occupancy arrangement in
excess of the Rent due hereunder. For the purposes of this Sublease, the
transfer of a majority ownership interest in Subtenant shall be deemed a
Transfer.
8. Insurance. Subtenant shall maintain in full force and effect
during the Sublease Term a commercial general liability insurance policy with a
combined single Emit not less than $2,000,000 for personal injury/bodily injury
and property damage, under which Subtenant, Sublandlord, Landlord and Landlord's
mortgagees are named as insured. Such policy shall be in a form which shall
specifically include contractual liability coverage insuring Subtenant's
obligations under this Sublease. Such policy shall be issued by a responsible
insurance company with an A.M. Best rating of B+ or better and which is
authorized to do business in the state in which the Sublet Premises are located.
Subtenant shall deliver certificates of such insurance to Sublandlord before the
Commencement Date and thereafter within ten (10) days after a request by
Sublandlord. Subtenant shall use reasonable efforts to obtain insurance policies
which shall not be canceled, non-renewed, or materially changed without thirty
(30) days' prior written notice to Sublandlord, Landlord and Landlord's
mortgagees. Sublandlord and Subtenant each waive all claims and rights against
the other and their respective officers, directors, employees, contractors,
servants and agents, for any damage to or destruction of real or personal
property of Sublandlord or Subtenant, regardless of cause or origin and
regardless of any proceeds or recoveries from any
insurance policies, and all insurance policies carried by Subtenant shall
include a waiver of its right of subrogation against Sublandlord. All such
insurance shall be obtained at Subtenant's sole cost and expense. Sublandlord
shall have no responsibility or liability for any loss or damage to personal
property or trade fixtures of Subtenant, damage to all such property and
fixtures being Subtenant's sole risk.
In the event that Sublandlord receives a notice of cancellation of
such insurance policy, Sublandlord may, in addition to and without thereby
waiving any other remedies therefor, either (i) pay the premiums necessary to
prevent such cancellation or (ii) obtain substitute insurance, and bill
Subtenant therefor. Subtenant shall reimburse Sublandlord therefor by paying
such amount to Sublandlord, as Additional Rent, within ten (10) days after
demand by Sublandlord.
9. Indemnification. To the maximum extent that this agreement may
be made effective according to law, but subject to the waiver of subrogation in
Section 8 above, Subtenant agrees that it will defend and indemnify Sublandlord
and save Sublandlord harmless from and against all liabilities, obligations,
claims, damages, penalties, causes of action, costs and expenses (including,
without limitation, attorneys' fees and expenses) imposed upon or incurred by or
asserted against Sublandlord by reason of (a) any accident, injury to, or death
of persons, or damage to or loss of property other than that of Sublandlord and
Subtenant, in or about the Sublet Premises to the extent not caused by any
negligence or willful misconduct of Sublandlord, or (b) any failure on the part
of Subtenant to perform, fulfill or observe any of Subtenant's representations,
warranties or agreements set forth in this Sublease. This indemnification shall
survive expiration or earlier termination of this Sublease. To the extent that
any action, suit or proceeding is brought against Sublandlord by reason of any
such occurrence, Subtenant, upon Sublandlord's request, shall at Subtenant's
expense, cause such action, suit or proceeding to be resisted and defended by
counsel reasonably satisfactory to Sublandlord.
10. Maintenance and Services. Subtenant hereby agrees that, except
as otherwise provided in this Section 10, it is relying directly on Landlord's
obligations under the Prime Lease for (i) all repairs and replacements to all
structural elements of or associated with the Building (as provided in Article
XI, Section 2 of the Original Lease), (ii) all capital expenditures throughout
the Sublease Term which may be required to keep the Building in good repair and
maintenance and in compliance with all Laws (except for compliance of Interior
Improvements and Alterations) and the maintenance and repair of the mechanical,
electrical, conveying, plumbing and other systems within the Building, except
for any portion of the HVAC system serving the Sublet Premises which was
installed by or at the expense of Sublandlord (as provided in Article XI,
Section 3 of the Original Lease), and (iii) all water, gas, electricity, sewer
and telephone lines up to the connection points of the Building (as provided in
Article VL Section 1 of the Original Lease).
Sublandlord shall maintain in good order, condition and repair all
portions of the HVAC system serving the Sublet Premises which were installed by
or at the expense of Sublandlord, and the paved and landscaped portions of the
Land shall provide five (5) day per week janitorial service to the Sublet
Premises, and shall perform all necessary landscaping, repairing, replacing,
painting, lighting, and cleaning with respect to the Land and the exterior of
the Building
(collectively "Sublandlord's Maintenance Obligations"). No failure or delay by
Sublandlord in supplying any service or performing any maintenance required
under the preceding sentence shall give Subtenant any right to terminate this
Lease or shall give rise to any claim for set-off or any abatement of rent or
additional rent or of any of Subtenant's obligations under this Sublease when
such failure or delay is caused by the act or omission of Subtenant or by any
cause beyond the control of Sublandlord.
Subtenant shall, at its expense, maintain the interior non-structural
portions of the Building and the Telecommunications Equipment in good order and
condition, except for reasonable wear and tear and damage caused by fire or
other casualty, Taldng, default by Sublandlord hereunder, or by any negligent
act or omission or willful act or omission by Sublandlord, its officers,
directors, employees, contractors, servants or agents.
11. Prime Lease.
a. Incorporation of Prime Lease. Except as otherwise expressly
provided herein, Sublandlord grants to Subtenant, to share in common with
Sublandlord, all of Sublandlord's rights, benefits, and interests with respect
to the Sublet Premises, and Subtenant agrees to accept from Sublandlord and
hereby assumes all of Sublandlord's obligations and burdens under the Prime
Lease with respect to the Sublet Premises, as if all of such rights and
obligations were set forth herein in their entirety, provided that the terms and
conditions hereof shall be controlling whenever the terms and conditions of the
Prime Lease are contradictory to or inconsistent with terms and conditions
hereof, and provided further that those provisions of the Prime Lease which are
protective and for the benefit of the Landlord shall in this Sublease be deemed
to be protective and for the benefit of the Landlord and Sublandlord.
Notwithstanding the foregoing sentence, the terms, covenants and conditions of
the full Sections of the First Amendment are expressly deleted from this
Sublease: Sections 3, 4, 5, 6, 7 and 8; and the following Articles, Sections and
Exhibits of the Original Lease are expressly deleted from this Sublease: Article
I, Sections 1, (d), (e), (f) and (l), Article II, Sections 1 and 2, Article III,
Sections 2 and 3, Article IV, Sections 3 and 4, Article V, Sections 7, 8, 9,
Article VI, Section 4, Article VII, Section 2, Article VIII, Article IX,
Sections 2 and 3, Article X, Article XI, Sections 4 and 5, Article XIV, Article
XV, Article XVI, Article XVII, Article XIX, Article XX, Article XXI, Article
XXII, Article XXIII, Article XXIV, Article XXV, Article XXVI, Article XXVIII,
Article XXIX, Article XXXI, Sections 1, 6, 9, 10, 12, 15 and 20, and Exhibits E,
F, G, H and I.
Subtenant represents that it has read and is familiar with the terms of the
Prime Lease.
b. Performance of Prime Lease. Subtenant covenants and agrees
faithfully to observe and perform all of the terms, covenants and conditions of
the Prime Lease on the part of Sublandlord to be performed with respect to the
Sublet Premises, and neither to do nor cause to be done, nor suffer, nor permit
any act or thing to be done which would or might cause the Prime Lease to be
canceled, terminated, forfeited or surrendered, or which would or might make
Sublandlord liable for any damages, claims or penalties.
c. Consents. Sublandlord shall not be required to give any consent
required or permitted under the terms of this Sublease with respect to any
matter on which the Prime Lease
-10-
requires the consent of Landlord until it has first obtained the written consent
of the Landlord with respect to such matter. Upon written request by Subtenant,
Sublandlord agrees to use reasonable efforts (not involving the payment of
money, unless Subtenant pays such money) to obtain such consent of the Landlord
in a timely manner.
d. No Sublandlord Obligation. Except as otherwise specifically
provided herein, Sublandlord shall not have any obligation to construct,
maintain, alter, restore or repair the Sublet Premises, the Building, the
Telecommunications Equipment, or any parking area or other facility or
improvement appurtenant thereto or to provide Subtenant with any service of any
kind or description whatsoever, nor shall Sublandlord be responsible for the
performance of Landlord's obligations under the Prime Lease or be liable in
damages or otherwise for any negligence of Landlord or for any damage or injury
suffered by Subtenant as a result of any act or failure to act by Landlord or
any default by Landlord in fulfilling its obligations under the Prime Lease.
Upon written request by Subtenant, Sublandlord agrees to use reasonable efforts
(not involving the payment of money, unless Subtenant pays such money) to cause
Landlord to perform its obligations under the Prime Lease in a timely manner.
Subtenant hereby waives all claims for consequential damages against Sublandlord
arising out of any breach or failure by Sublandlord to perform or observe the
requirements and obligations created by this Sublease.
e. Termination. If the Prime Lease is terminated pursuant to any
provision of the Prime Lease or otherwise, (i) this Sublease shall terminate
simultaneously therewith, and (ii) any unearned rent paid in advance shall be
refunded to Subtenant unless such termination was the result of a breach by
Subtenant of any term, covenant, or condition of this Sublease. Notwithstanding
the preceding sentence, in the event that Sublandlord or an affiliate thereof
acquires title to the Building, this Sublease shall remain in full force and
effect.
12. Alterations. Subtenant may, from time to time, at its own cost
and expense and without the consent of Sublandlord, make alterations, additions
or improvements (collectively herein called "Alterations") of a non-structural
nature to the interior of the Sublet Premises whose cost in any one instance is
$25,000 or less, provided Subtenant gives Sublandlord fifteen (15) days prior
written notice of any such Alterations. To the extent that Subtenant obtains
plans and specifications for any such Alterations whose cost is $25,000 or less,
Subtenant shall provide Sublandlord with copies of such plans and specifications
for Sublandlord's information. If Subtenant desires to make any non-structural
Alterations to the interior of the Sublet Premises costing in excess of $25,000
in any one instance, Subtenant must first obtain the consent of Sublandlord and
Landlord thereto, which consent by Sublandlord shall not be unreasonably
withheld or delayed. Any non-structural Alterations to the interior of the
Sublet Premises costing in excess of $25,000 in any one instance shall include
written plans and specifications for the Alterations. At the end of the Sublease
Term, Subtenant may elect to remove or to leave any such Alterations, provided
that Subtenant must give Sublandlord written notice of its election as to each
Alteration no less than ten (10) months prior to the expiration of the Term. If
Subtenant elects to remove any such Alterations, Subtenant's only responsibility
upon removal is to repair any damage caused by the removal and not to restore
the Sublet Premises.
-11-
All Alterations shall be done by Sublandlord's designated contractors
and engineers in accordance with the terms and conditions of the Prime Lease.
Without limiting the foregoing, Subtenant shall obtain all necessary licenses
and permits, shall perform all Alterations in accordance with all laws, by-laws,
rules, regulations, licenses and permits.
13. Defaults and Remedies. The occurrence of any of the following
shall constitute an "Event of Default" hereunder: (i) if Subtenant fails to pay
any Rent when due and such failure continues for 10 days after written notice of
such failure, provided, however, that Subtenant shall not be entitled to such
notice if Sublandlord has give notice to Subtenant of one or more previous such
failures within a 12-month period, in which event such failure shall constitute
a default hereunder upon the expiration of 10 days after such payment was due,
or (ii) if Subtenant fails to perform or observe any of the terms of this
Sublease other than those requiring the payment of Rent and such failure
continues for 15 days after Sublandlord gives written notice of said failure;
provided, however, that if the grace period for such default provided to
Sublandlord under the Prime Lease is shorter than 15 days, the length of
Subtenant's grace period shall be one-half of Sublandlord's grace period; or
(iii) if the subleasehold hereby created shall be taken on execution, or by
other process of law, or if any assignment shall be made of Subtenant's property
for the benefit of creditors, or if a receiver, guardian, conservator, trustee
in bankruptcy or similar officer shall be appointed to take charge of all or any
part of Subtenant's property by a court of competent jurisdiction, or if a
petition is filed by Subtenant under any bankruptcy or insolvency law, or if a
petition is filed against Subtenant under any bankruptcy law and the same shall
not be dismissed within 30 days from the date upon which it is filed.
If an Event of Default occurs, Sublandlord may at its option
immediately or at any time thereafter exercise any one or more of the remedies
provided in the Prime Lease with respect to a default thereunder by Sublandlord.
Notwithstanding the foregoing, and in addition thereto, Sublandlord may at its
option immediately or at any time thereafter exercise one or more of the
following remedies, consecutively or simultaneously, without notice or demand.
(a) Sublandlord may bring suit for damages or specific performance
for the collection of unpaid Rent or the performance of any of Subtenant's
obligations, all either with or without entering into possession or terminating
this Sublease.
(b) Sublandlord may, at its option, give Subtenant a notice
terminating this Sublease on a date not less than 3 business days after
Sublandlord gives such notice, and upon such date this Sublease shall terminate
and all rights of Subtenant shall cease without further notice or lapse of time,
Subtenant hereby waiving all statutory rights, including rights of redemption,
if any. Upon termination of this Sublease, Subtenant shall surrender the Sublet
Premises to Sublandlord in accordance with the terms of this Sublease,
Subtenant's liability hereunder shall survive such termination and Subtenant
shall indemnify and hold Sublandlord harmless from all claims, losses, costs,
expenses, damages or liabilities arising out of or in connection with such
termination.
(c) If, after such termination, Sublandlord elects to relet all or
any part of the Sublet Premises, such reletting may be on such terms and
conditions as Sublandlord in its reasonable
-12-
discretion may determine. Sublandlord may retain for itself all rents from
reletting, and Sublandlord shall not be liable for any failure to relet all or
any part of the Sublet Premises. The rent obtained from such reletting shall be,
for purposes of subsection 13(d)(2), prima facie evidence of the fair rental
value for the part of the Sublet Premises so relet during the term of the
reletting. The proceeds of reletting shall be applied first to pay all
Sublandlord's reletting expenses, including, without limitation, all
repossession costs, alteration costs, brokerage commissions, advertising
expenses and reasonable attorneys' fees ("Reletting Expenses"), then to pay any
cost to Sublandlord of curing Subtenant's defaults, then to pay Rent, any
balance then to be kept by Sublandlord.
(d) After such termination, Subtenant shall:
(1) pay Sublandlord monthly on the days on which Base Rent
would have been payable, as damages for Subtenant's default, the difference
between: (i) the amount of Rent which would be payable under this Sublease by
Subtenant if this Sublease were still in effect, less (ii) the net proceeds of
any reletting, after deducting Sublandlord's Reletting Expenses and
Sublandlord's costs incurred in curing Subtenant's defaults; or
(2) at Sublandlord's election, whether or not Sublandlord shall
have collected any payments under the preceding paragraph (1), pay Sublandlord,
on demand, an amount equal to: (i) the present value, discounted at the discount
rate at which one-year Treasury bills have then most recently sold, of the
difference between (a) all Rent which would have been payable from the date of
such termination until the last day of the term of this Sublease, and (b) the
fair rental value of the Sublet Premises for the same period; plus (c)
Sublandlord's reasonable estimate of Reletting Expenses.
(e) If an Event of Default occurs, Sublandlord shall have the right,
but not the obligation, without the necessity of terminating this Sublease, to
enter the Sublet Premises and perform any of Subtenant's obligations
notwithstanding that no specific provision for such substituted performance by
Sublandlord is made in this Sublease. All sums so paid by Sublandlord, and all
costs and expenses incurred by Sublandlord in connection with the performance of
Subtenant's obligations, plus interest thereon at the rate of 18% per annum
(or, if less, the maximum rate of interest permitted at such time by law), shall
be deemed Additional Rent and shall be payable to Sublandlord immediately upon
demand.
The rights and remedies granted to Sublandlord herein are cumulative
and in addition to any others Sublandlord may be entitled to at law or in
equity.
Should Sublandlord prevail in the enforcement of any provision in
this Sublease, Subtenant shall pay on demand all of Sublandlord's costs and
expenses incurred in connection with said enforcement, including without
limitation, reasonable attorneys' fees and court costs.
All sums not paid by Subtenant when due hereunder (regardless of
whether or not the applicable grace period has expired) shall bear interest at a
rate equal to the lesser of (i) 1-1/2%
-13-
per month or (ii) the highest rate permitted by law (the "Default Rate of
Interest"), which interest shall be payable to Sublandlord as Additional Rent
hereunder immediately upon demand.
The occurrence of the following shall constitute a "Sublandlord Event
of Default" hereunder; if Sublandlord fails to perform or observe any of the
terms of this Sublease and such failure continues for ten (10) business days
after Subtenant gives Sublandlord written notice of said failure, provided,
however, that in the event Sublandlord cannot reasonably cure the default within
the ten (10) business day time period but has commenced to cure and proceeded
diligently, the ten (10) business day time period shall be extended so long as
Sublandlord continues to cure the default. In the event of a Sublandlord Event
of Default, Subtenant shall have all rights available at law or in equity.
14. Surrender. Upon the expiration or earlier termination of the
Sublease Term, Subtenant shall surrender the Sublet Premises and the
Telecommunications Equipment free and clear of all tenants and occupants, and in
good order and condition, reasonable wear and tear and damage by casualty or
taking only excepted. Subtenant's Work shall be removed if required pursuant to
Section 3 hereof, and all other alterations, additions and improvements shall
remain part of the Sublet Premises and shall not be removed unless Sublandlord
so requests such removal by notice to Subtenant at least thirty (30) days prior
to the expiration or earlier termination date. Subtenant shall repair any damage
to the Sublet Premises caused by the removal of its property. Any property of
Subtenant not removed at or prior to the expiration or earlier termination of
the Sublease Term may be removed and stored or disposed of by Sublandlord as it
deems appropriate in its sole discretion. Subtenant agrees to reimburse
Sublandlord for all of Sublandlord's costs resulting from such removal and
storage or disposition, less any proceeds received by Sublandlord as a result of
the disposition.
15. Notices. All notices relating to this Sublease or the Sublet
Premises shall be in writing and addressed, if to Subtenant, to the Sublet
Premises, or to such other address as Subtenant shall designate in writing; and
if to Sublandlord:
Digital Equipment Corporation, 305 Rockrimmon Boulevard, South,
Mailstop CX03-D12, Colorado Springs, CO 80919-2398, Attention: Property
Development Center, Real Estate Administrator, and with a copy to: Digital
Equipment Corporation, 111 Powdermill Road, Mailstop 02-3/F13, Maynard, MA
01754-1514, Attention: Real Estate Law Group, or to such other address as
Sublandlord shall designate in writing.
No notice from Subtenant to Landlord shall be effective as to Sublandlord unless
Subtenant delivers a copy of such notice in the manner set forth in this section
to Sublandlord simultaneously with delivery of such notice to Landlord. Any
notice shall be deemed duly given (i) when delivered by hand, if so delivered
and a receipt obtained, or (ii) four (4) days after being deposited with the
U.S. Postal Service addressed to such address, postage prepaid, registered or
certified mail, return receipt requested, or (iii) the next business day after
being delivered to an overnight courier with acceptance signature required.
-14-
16. Effect. This Sublease shall be binding upon the parties hereto
and their respective successors and assigns.
17. Applicable Law. This Sublease shall be governed by and construed
in accordance with the laws of the state in which the Sublet Premises are
located.
18. Modification, etc. Neither this Sublease nor any provision
hereof may be waived, modified, amended, discharged or terminated, except by an
instrument in writing signed by both parties. This Sublease constitutes the
entire agreement of the parties hereto with respect to the Sublet Premises.
19. Severability. If any term or provision of this Sublease or the
application thereof to any person or circumstance shall to any extent be held
invalid or unenforceable, the remainder of this Sublease or the application of
such term or provision to other persons or circumstances shall not be affected
thereby, and each term and provision of this Sublease shall be valid and
enforceable to the fullest extent permitted by law.
20. No Waiver. No failure by Sublandlord or Subtenant to insist upon
the strict performance of any term hereof or to exercise any right, power or
remedy consequent upon a breach thereof, and no acceptance of full or partial
Rent by Sublandlord during the continuance of such breach, shall constitute a
waiver of any such breach or of any such term. Sublandlord's consent in one
instance hereunder shall not relieve Subtenant of the requirement of obtaining
Sublandlord's consent in any other instance.
21. Broker. Sublandlord shall be responsible for paying the
brokerage commissions due to Julien J. Studley, Inc. and CB Commercial Real
Estate Services (the "Brokers") in connection with this Sublease. Subtenant and
Sublandlord each represent and warrants to the other that it has not dealt with
any broker or agent in connection with this Sublease other than the Brokers and
it shall indemnify, defend (with counsel reasonably satisfactory to the
indemnified party) and hold the other party hereto harmless from and against all
claims, liabilities, leases, damages, costs and expenses arising from a breach
of such representation and warranty.
22. Mechanics Liens. Subtenant shall not cause or permit any liens
for labor or materials to attach to the Sublet Premises as a result of any work
performed by or on behalf of Subtenant, and shall immediately discharge any such
liens which may so attach.
23. Confidentiality. All terms and conditions of this Sublease shall
be kept confidential by all parties and shall not be disclosed without the
consent of the other parties, provided, however, that either party may disclose
the terms and conditions of this Sublease to their respective legal counsels,
accountants, lenders, real estate brokers, prospective purchasers, and
prospective subtenants and assignees, provided that each such entity shall be
instructed to keep the terms and conditions of this Sublease confidential.
24. Abatement. Provided that (i) Subtenant is not in default
hereunder, (ii) Subtenant vacates the entire Sublet Premises at any time between
July 1, 1996 and January 31, 2001, and
-15-
(iii) Subtenant gives Sublandlord ninety (90) days advance written notice of
such vacation, then in such event Subtenant shall be entitled to a one-time
abatement of Base Rent commencing upon such vacation, and continuing for 11
months thereafter. After the commencement of this 11 month Base Rent abatement
period, Subtenant shall not reoccupy the Sublet Premises prior to the end of
said eleven (11) month abatement period.
25. Quiet Enjoyment. Subject to the terms and provisions contained
in this Sublease, Sublandlord covenants and agrees with Subtenant that upon
Subtenant paying the Rent and observing and performing all of the terms and
conditions to be observed and performed by Subtenant under this Sublease,
Subtenant may peacefully and quietly enjoy the Sublet Premises during the
Sublease Term without molestation or interference from Sublandlord or anyone
claiming through Sublandlord.
26. Compliance With Legal Requirements. Subtenant hereby agrees
that, except as otherwise provided in this Section 26, it is relying directly on
Landlord's obligations under the Prime Lease to conform the Building (other
than the interior improvements and any Alterations) to all Legal Requirements of
which the Building (other than the interior improvements and any Alterations)
would otherwise be in violation (as provided in Article IX, Section 1 of the
Original Lease).
Notwithstanding the foregoing, Sublandlord shall, at its sole
expense, comply with all Legal Requirements if such compliance is related to the
interior improvements in the Sublet Premises in their condition as of the
Commencement Date, provided however, that Subtenant, at its sole expense, shall
be responsible for compliance with all Legal Requirements necessitated by
Subtenant's Alterations or Subtenant's special use of the Sublet Premises.
27. Early Occupancy. At any time after the mutual execution and
delivery of this Sublease, Subtenant shall have the option, exercisable by
providing seven (7) days advance written notice to Sublandlord, to occupy all or
any portion of the ground floor of the Building for the Permitted Uses. Such
occupancy shall be subject to all of the terms and conditions of this Sublease,
provided, however, that Subtenant shall have no obligation to pay Rent for any
period prior to the Commencement Date.
-16-
IN WITNESS WHEREOF, the parties hereto have caused this Sublease to be executed
under seal by their duly authorized officers as of date first above written.
Sublandlord:
DIGITAL EQUIPMENT CORPORATION
By:
Name: D.E. Sliwinski
Title: Manager, Property Development Center, West
Subtenant:
TEKNEKRON SOFTWARE SYSTEMS, INC.
By:
Name: DAVID W. RICE
Title: EXEC. VICE PRESIDENT / CFO
-17-
EXHIBIT B
---------
AMENDED AND RESTATED LEASE
between
RICHARD R. KELLEY, JR.,
CHARLES E. HANGER AND FAYE E. HANGER
AND
HARE, BREWER & KELLEY, INC.
"Landlord"
and
DIGITAL EQUIPMENT CORPORATION,
a Massachusetts corporation
"Tenant"
TABLE OF CONTENTS
-----------------
ARTICLE I
---------
BASIC LEASE TERMS ......................... 1
-----------------
1. Summary of Lease Provisions ........................................ 1
---------------------------
(a) Address of Demised Premises .................................... 1
---------------------------
(b) Building ....................................................... 1
--------
(c) Demised Premises ............................................... 1
----------------
(d) Date of Execution .............................................. 1
-----------------
(e) Extended Term .................................................. 1
-------------
(f) Interior Improvements .......................................... 1
---------------------
(g) Primary Term ................................................... 1
------------
(h) Use ............................................................ 1
---
(i) Land ........................................................... 1
----
(j) Landlord ....................................................... 1
--------
(k) Landlord's Address ............................................. 2
------------------
(l) Base Rent ...................................................... 2
---------
(m) Additional Rent ................................................ 2
---------------
(n) Rent During Extended Term....................................... 2
-------------------------
(o) Tenant ......................................................... 2
------
(p) Tenant's Address ............................................... 2
----------------
(q) Tenant's Share ................................................. 2
--------------
(r) Term ........................................................... 2
----
(s) Beginning Liability Insurance Coverage Amount .................. 2
---------------------------------------------
2. Exhibits ........................................................... 2
--------
(a) EXHIBIT A - Demised Premises ................................... 2
---------
(b) EXHIBIT B - Interior Improvements .............................. 2
---------
(c) EXHIBIT C - Legal Description of Land .......................... 2
---------
(d) EXHIBIT D - Existing Lease ..................................... 3
---------
(e) EXHIBIT E - Subordination, Recognition and Non-Disturbance
---------
Agreement ...................................................... 3
(f) EXHIBIT F - Permitted Encumbrances ............................. 3
---------
(g) EXHIBIT G - Tenant's Personal Property ......................... 3
---------
(h) EXHIBIT H - Memorandum of Lease and Option ..................... 3
---------
(i) EXHIBIT I - Roof Space ......................................... 3
---------
ARTICLE II
- ----------
AMENDMENT AND RESTATEMENT OF LEASE:
- ----------------------------------
CONDITIONS PRECEDENT:
- --------------------
DESCRIPTION OF DEMISED PREMISES .......................................... 3
- -------------------------------
1. Amendment and Restatement of Lease ................................. 3
----------------------------------
2. Conditions Precedent ............................................... 3
--------------------
3. Description of Demised Premises .................................... 4
-------------------------------
ARTICLE III
- -----------
TERM ..................................................................... 4
- ----
1. Term ............................................................... 4
----
2. Option to Extend ................................................... 5
----------------
3. Lease Commencement ................................................. 5
------------------
ARTICLE IV
- ----------
RENT ..................................................................... 5
- ----
1. Base Rent .......................................................... 5
---------
2. Payment ............................................................ 5
-------
3. Base Rent During Extended Term(s) .................................. 5
---------------------------------
4. Minimum Rent ....................................................... 7
------------
ARTICLE V
- ---------
OPERATING COSTS, CAPITAL EXPENDITURES
- -------------------------------------
AND REAL ESTATE TAXES .................................................... 7
- ---------------------
1. Operating Costs .................................................... 7
---------------
(a) Items Included ................................................. 7
--------------
(b) Items Excluded ................................................. 8
--------------
(c) Capital Expenditures ........................................... 9
--------------------
2. Payment of Operating Costs ......................................... 9
--------------------------
3. Annual Statement ................................................... 10
----------------
4. Real Estate Taxes .................................................. 11
-----------------
5. Change in Laws ..................................................... 11
--------------
6. Separate Assessment ................................................ 11
-------------------
7. Payment of Real Estate Taxes ....................................... 11
----------------------------
8. Contest ............................................................ 12
-------
9. Payment in Installments ............................................ 13
-----------------------
10. Amortization ....................................................... 13
------------
11. Landlord's Action .................................................. 13
-----------------
12. Minimum Additional Rent ............................................ 13
-----------------------
13. Operating Costs With Respect to Suite 100 .......................... 14
-----------------------------------------
ARTICLE VI
- ----------
UTILITIES AND SERVICES ................................................... 14
- ----------------------
1. Utilities and Services Provided by Landlord ........................ 14
-------------------------------------------
2. Security ........................................................... 14
--------
3. Separate Utilities ................................................. 14
------------------
4. Interruption of Services ........................................... 15
------------------------
ARTICLE VII
- -----------
USE OF DEMISED PREMISES .................................................. 15
- -----------------------
1. Use ................................................................ 15
---
ii
2. Permits ............................................................ 16
-------
3. Compliance With Laws ............................................... 16
--------------------
ARTICLE VIII
- ------------
PREPARATION OF DEMISED PREMISES .......................................... 16
- -------------------------------
1. Roof Repairs ....................................................... 16
------------
2. Interior Improvements .............................................. 17
---------------------
(a) Construction of Interior Improvements ....................... 17
-------------------------------------
(b) Interior Improvement Allowance .............................. 17
------------------------------
3. Entry by Tenant..................................................... 18
---------------
4. Insurance .......................................................... 18
---------
ARTICLE IX
- ----------
COMPLIANCE WITH LAW ...................................................... 19
- -------------------
1. Compliance by Landlord ............................................. 19
----------------------
2. Compliance By Tenant ............................................... 19
--------------------
3. Right to Contest ................................................... 20
----------------
ARTICLE X
- ---------
ALTERATIONS, ADDITIONS AND IMPROVEMENTS .................................. 20
- ---------------------------------------
1. Non-Structural Alterations ......................................... 20
--------------------------
2. Structural Alterations ............................................. 21
----------------------
3. Contractor ......................................................... 21
----------
4. Performance of Work ................................................ 21
-------------------
5. Removal ............................................................ 21
-------
6. Insurance .......................................................... 21
---------
7. Mechanic's Liens ................................................... 22
----------------
8. Notices of Non-responsibility ...................................... 22
-----------------------------
ARTICLE XI
- ----------
CONDITION, REPAIR AND MAINTENANCE OF THE BUILDING ........................ 22
- -------------------------------------------------
1. Condition of Building .............................................. 22
---------------------
2. Landlord's Responsibilities ........................................ 22
---------------------------
3. Capital Expenditures: Building Systems ............................. 23
--------------------------------------
4. Tenant's Responsibility ............................................ 23
-----------------------
5. Assignment of Warranties ........................................... 23
------------------------
6. Performance of Work ................................................ 23
-------------------
ARTICLE XII
- -----------
DAMAGE AND DESTRUCTION ................................................... 24
- ----------------------
1. Damage or Destruction .............................................. 24
---------------------
2. Estimate ........................................................... 24
--------
3. Partial Damage ..................................................... 24
--------------
4. Substantial Damage ................................................. 25
------------------
5. Uninsured Damage ................................................... 25
----------------
6. Partial Uninsured Damage ........................................... 26
------------------------
iii
7. Substantial Uninsured Damage.................................... 26
----------------------------
8. Rent Abatement.................................................. 27
--------------
9. Damage Near End of Term......................................... 27
-----------------------
10. Waiver.......................................................... 27
------
ARTICLE XIII
- ------------
CONDEMNATION........................................................... 28
- ------------
1. Total Taking.................................................... 28
------------
2. Substantial Taking.............................................. 28
------------------
3. Continuance of Lease............................................ 29
--------------------
4. Refund of Rent; Allocation of Award............................. 29
-----------------------------------
5. Cancellation and Termination Rights............................. 30
-----------------------------------
ARTICLE XIV
- -----------
SUBORDINATION, RECOGNITION, NON-DISTURBANCE AND ATTORNMENT............. 30
- ----------------------------------------------------------
1. Subordination................................................... 30
-------------
2. Priority of Mortgage............................................ 30
--------------------
3. Existing Mortgage............................................... 30
-----------------
ARTICLE XV
- ----------
LANDLORD'S WARRANTIES AND FINANCIAL INFORMATION........................ 31
- -----------------------------------------------
1. Warranties...................................................... 31
----------
2. Financial Information........................................... 32
---------------------
ARTICLE XVI
- ------------
INSURANCE; WAIVER OF SUBROGATION....................................... 32
- --------------------------------
1. Landlord's Insurance............................................ 32
--------------------
2. Tenant's Insurance.............................................. 33
------------------
3. General Requirements............................................ 33
--------------------
4. Waiver of Claims, Subrogation................................... 33
-----------------------------
5. Excess Insurance Proceeds....................................... 33
-------------------------
ARTICLE XVII
- ------------
INDEMNIFICATION........................................................ 34
- ---------------
1. Indemnity by Tenant............................................. 34
-------------------
2. Indemnity by Landlord........................................... 34
---------------------
3. Consequential Damages........................................... 35
---------------------
ARTICLE XVIII
- -------------
ASSIGNMENT AND SUBLETTING.............................................. 35
- -------------------------
1. Assignment and Subletting....................................... 35
-------------------------
2. Deemed Consent.................................................. 36
--------------
3. Permitted Transfers............................................. 36
-------------------
iv
ARTICLE XIX
- -----------
TENANT'S PROPERTY..................................................... 36
- -----------------
1. Tenant's Property.............................................. 36
-----------------
2. Removal........................................................ 36
-------
3. Waiver of Lien................................................. 36
--------------
ARTICLE XX
- ----------
TENANT'S DEFAULT...................................................... 37
- ----------------
1. Events of Default.............................................. 37
-----------------
2. Landlord's Remedies............................................ 37
-------------------
(a) Termination................................................ 37
-----------
(b) Continue Lease............................................. 38
--------------
(c) Right to Cure.............................................. 38
-------------
(d) Remedies Not Exclusive..................................... 39
----------------------
(e) Termination, Surrender and Abandonment..................... 39
--------------------------------------
ARTICLE XXI
- -----------
LANDLORD'S DEFAULT.................................................... 39
- ------------------
1. Landlord's Default............................................. 39
------------------
2. Emergency...................................................... 40
---------
3. Acquisition of HBK Interest.................................... 40
---------------------------
ARTICLE XXII
- ------------
NOTICES............................................................... 41
- -------
1. In Writing..................................................... 41
----------
2. Notice to Tenant............................................... 41
----------------
3. Notice to Landlord............................................. 41
------------------
ARTICLE XXIII
- -------------
QUIET ENJOYMENT....................................................... 41
- ---------------
ARTICLE XXIV
- ------------
HOLDING OVER.......................................................... 42
- ------------
ARTICLE XXV
- ------------
MEMORANDUM OF LEASE AND OPTION........................................ 42
- ------------------------------
ARTICLE XXVI
- ------------
SURRENDER OF DEMISED PREMISES......................................... 42
- -----------------------------
ARTICLE XXVII
- -------------
ESTOPPEL CERTIFICATES................................................. 42
- ---------------------
v
ARTICLE XXVIII
- --------------
HAZARDOUS SUBSTANCES ........................................................ 43
- --------------------
1. Definitions ...................................................... 43
-----------
(a) "Demised Premises" .......................................... 43
----------------
(b) "Environmental Laws" ........................................ 43
------------------
(c) "Hazardous Substances" ...................................... 43
--------------------
(d) "Hazardous Substance on the Demised Premises"................ 43
-------------------------------------------
(e) "Underground Storage Tank" .................................. 43
------------------------
2. Representations and Warranties ................................... 43
------------------------------
(a) Compliance with Law ......................................... 44
-------------------
(b) Hazardous Substances ........................................ 44
--------------------
(c) Indoor Environment .......................................... 44
------------------
(d) Underground Storage Tanks.................................... 44
-------------------------
(e) PCBs ........................................................ 44
----
(f) Asbestos .................................................... 44
--------
3. Landlord's Indemnity ............................................. 44
--------------------
4. Tenant's Obligations and Indemnity ............................... 45
----------------------------------
ARTICLE XXIX
- ------------
RIGHT OF FIRST REFUSAL; OPTION TO PURCHASE .................................. 45
- ------------------------------------------
1. Right of First Refusal ........................................... 45
----------------------
2. Option To Purchase ............................................... 46
------------------
(a) Purchase Price .............................................. 46
--------------
(b) Closing ..................................................... 47
-------
(c) Title ....................................................... 47
-----
(d) Condition of Premises ....................................... 47
---------------------
(e) Perfection of Title or Condition ............................ 48
--------------------------------
(f) Use of Purchase Money ....................................... 49
---------------------
(g) Inspections ................................................. 49
-----------
(h) Landlord's Closing Obligations .............................. 50
------------------------------
(i) Merger ...................................................... 50
------
(j) Adjustments ................................................. 51
-----------
(k) Broker ...................................................... 51
------
(l) Recording Notice of Exercise ................................ 51
----------------------------
(m) Failure to Purchase ......................................... 51
-------------------
(n) General ..................................................... 52
-------
3. Exchange ......................................................... 52
--------
ARTICLE XXX
- -----------
SATELLITE DISH .............................................................. 52
- --------------
1. Roof Space ......................................................... 52
----------
2. Equipment and Cables ............................................... 52
--------------------
3. Installation ....................................................... 52
------------
4. Indemnity .......................................................... 53
---------
5. Insurance .......................................................... 53
---------
6. Legal Requirements ................................................. 53
------------------
vi
7. Access ............................................................. 53
------
8. Taxes .............................................................. 53
-----
9 No Interference .................................................... 53
---------------
ARTICLE XXXI
- ------------
ADDITIONAL PROVISIONS ....................................................... 53
- ---------------------
1. Broker Commission ................................................. 53
-----------------
2. Landlord's Access ................................................. 54
-----------------
3. Signage ........................................................... 54
-------
4. Binding Effect .................................................... 54
--------------
5. Validity .......................................................... 54
--------
6. Entire Agreement .................................................. 54
----------------
7. Exhibits .......................................................... 55
--------
8. Acts at Own Cost .................................................. 55
----------------
9. Governing Law ..................................................... 55
-------------
10. Waiver/Consent .................................................... 55
--------------
11. Cumulative Rights and Remedies .................................... 55
------------------------------
12. Payment/Performance Under Protest ................................. 55
---------------------------------
13. Words and Phrases ................................................. 56
-----------------
14. Definition of Terms ............................................... 56
-------------------
15. Effective Date of Lease ........................................... 56
-----------------------
16. Authority ......................................................... 56
---------
17. Commencement/Expiration Dates ..................................... 56
-----------------------------
18. Force Majeure ..................................................... 56
-------------
19. Attorneys' Fees ................................................... 56
---------------
20. Confidentiality ................................................... 56
---------------
21. No Other Tenant a Third Party Beneficiary ......................... 57
-----------------------------------------
vii
ARTICLE I
---------
BASIC LEASE TERMS
-----------------
1. Summary of Lease Provisions. Reference in this Lease to any of the
---------------------------
terms listed below shall be deemed to incorporate and be a reference to the
data set forth next to such term in this Article.
(a) Address of Demised Premises: 335 Bryant Street, Palo Alto,
---------------------------
California 94301.
(b) Building: That certain building located at 335 Bryant Street,
--------
Palo Alto, California 94301, comprised of nine thousand two hundred eighty-
four (9,284) rentable square feet.
(c) Demised Premises:
----------------
(i) Commencing December 1, 1990, the entire Building, less
Suite 100 currently occupied by Dr. Allan Sidle containing four hundred
sixty-two (462) rentable square feet, as indicated on Exhibit A, for a total
---------
of eight thousand eight hundred twenty-two (8,822) rentable square feet.
(ii) In addition, Suite 100, commencing when Landlord
delivers possession of Suite 100 to Tenant and Tenant accepts possession of
Suite 100, on the terms provided in Article II, Paragraph 2(b) of this
Lease. Tenant shall be required to pay Rent with respect to Suite 100
commencing sixty (60) days after Landlord delivers possession of Suite 100
to Tenant.
(d) Date of Execution: __________, 1990.
-----------------
(e) Extended Term: See Article III.
-------------
(f) Interior Improvements: See Article VIII and Exhibit B.
--------------------- ---------
(g) Primary Term: Twelve (12) years, commencing December 1, 1990
------------
and terminating November 30, 2002.
(h) Use: See Article VII.
----
(i) Land: That certain real property, more particularly described
----
in Exhibit C, on which the Building is located.
---------
(j) Landlord: Richard R. Kelley, Jr., a married man as his
--------
separate property, Charles E. Hanger and Faye E. Hanger, husband and wife as
community property and Hare, Brewer & Kelley, Inc., a California
corporation. Such parties have entered into
1
an Agreement Between Co-owners dated the same date as this Lease governing their
relationship as co-owners of the Land and Building, and shall promptly record a
memorandum of such Agreement.
(k) Landlord's Address: c/o Premier Properties
------------------- 532 Emerson Street
Palo Alto, CA 94301
(l) Base Rent:
----------
Monthly for Lease Year 1: $2.10 per rentable square foot.
Monthly for Lease Years 2-12 As of the commencement of
each lease year, monthly
base rent hereunder shall
be increased by five (5)
percent of the previous
lease year's base rent.
(m) Additional Rent: See Article IV.
----------------
(n) Rent During Extended Term: See Article III.
--------------------------
(o) Tenant: Digital Equipment Corporation, a Massachusetts
-------
corporation.
(p) Tenant's Address: Digital Equipment Corporation, 1110 Chapel
-----------------
Hills Drive, Colorado Springs, Colorado 80920-3995 Attention: Western Property
Development Center Manager.
(q) Tenant's Share: If Tenant has not received possession of
---------------
Suite 100, then Tenant's Share shall equal 95%. If Tenant has received
possession of the entire Building including Suite 100, then Tenant's Share shall
equal 100%.
(r) Term: Primary Term and/or any Extended Term as the context may
-----
require.
(s) Beginning Liability Insurance Coverage Amount: $3,000,000.
----------------------------------------------
2. Exhibits. The Exhibits listed below are attached hereto and are
--------
incorporated in this Lease by reference herein.
(a) EXHIBIT A - Demised Premises
---------
(b) EXHIBIT B - Interior Improvements
------- -
(c) EXHIBIT C - Legal Description of Land
---------
2
(d) EXHIBIT D - Existing Lease
---------
(e) EXHIBIT E - Subordination, Recognition and Non-Disturbance
---------
Agreement
(f) EXHIBIT F - Permitted Encumbrances
---------
(g) EXHIBIT G - Tenant's Personal Property
---------
(h) EXHIBIT H - Memorandum of Lease and Option
---------
(i) EXHIBIT I - Roof Space
---------
ARTICLE II
----------
AMENDMENT AND RESTATEMENT OF LEASE:
-----------------------------------
CONDITIONS PRECEDENT:
--------------------
DESCRIPTION OF DEMISED PREMISES
-------------------------------
1. Amendment and Restatement of Lease. Landlord and Tenant previously
-----------------------------------
entered into an Office Space Lease dated April 6, 1990 and amended October 10,
1990 and November 14, 1990 (as amended, the "Existing Lease") a copy of which is
-----------
attached hereto as Exhibit D, by which Landlord leased to Tenant all of the
---------
Building other than Suite 100 currently occupied by Dr. Allan Sidle. Landlord
and Tenant hereby amend and restate the Existing Lease in its entirety to extend
its term, incorporate additional space and set forth other terms and conditions
agreed to by Landlord and Tenant. Tenant shall continue to occupy the premises
which are demised pursuant to the Existing Lease on the terms set forth in the
Existing Lease during the period from October 7, 1990 through November 30, 1990,
except that Tenant shall not be required to pay any rent for the period October
7, 1990 through October 31, 1990 other than its share of operating costs and
real estate taxes on the terms set forth in the Existing Lease.
2. Conditions Precedent. This Lease shall not take effect unless the
--------------------
following conditions have been satisfied, or waived by both Landlord and
Tenant, on or before December 1, 1990:
(a) Receipt by Landlord from the holder of the existing first deed
of trust encumbering the Land and Building of a written waiver of any rights
such holder may have, as a result of Landlord's entering into this Lease, to
accelerate the indebtedness secured by such deed of trust or otherwise declare a
default under such deed of trust; and
(b) Execution by Landlord and Tenant of an Agreement for
Acquisition of Co-Tenant's Interest in Real Property providing for the sale of
the interest in the Land and Building held by Hare, Brewer & Kelley, Inc.
3
3. Description of Demised Premises. Landlord hereby leases to Tenant
-------------------------------
and Tenant hereby takes from Landlord:
(a) Commencing December 1, 1990, the entire Building, less
Suite 100 currently occupied by Dr. Allan Sidle containing four hundred
sixty-two (462) rentable square feet, as indicated on Exhibit A, for a total
---------
of eight-thousand eight hundred twenty-two (8,822) rentable square feet. Until
Landlord has delivered possession of Suite 100 to Tenant, Tenant shall allow the
lessee of Suite 100 (along with his employees, guests and invitees) to use, in
common with Tenant, the Building entry lobby, the second-floor restrooms, and
stairway and hallway access routes from Suite 100 to and from the second-floor
restrooms.
(b) In addition, Suite 100, commencing when Landlord delivers
possession of Suite 100 to Tenant and Tenant accepts possession of Suite 100.
Landlord shall be required to offer to deliver possession of Suite 100 to Tenant
upon each and every expiration or termination of any lease of Suite 100 at any
time during the Term. Landlord agrees not extend or renew the lease of the
current tenant of Suite 100, Dr. Allan Sidle, beyond the term (with extensions)
provided for in the currently effective lease between Landlord and Dr. Sidle,
without first offering Suite 100 to Tenant. If Landlord offers to and delivers
possession of Suite 100 to Tenant on or before May 1, 1991, Tenant shall be
required to accept possession of Suite 100 on the terms otherwise set forth in
this Lease, except that Tenant shall not be required to pay Base Rent and
Additional Rent with respect to Suite 100 until sixty (60) days after Landlord
delivers possession of Suite 100 to Tenant. If Landlord offers to deliver
possession of Suite 100 to Tenant at any time after May 1, 1991, Landlord shall
notify Tenant in writing of the date on which Landlord is prepared to deliver
possession of Suite 100, at least twenty (20) days prior to such date. Tenant
shall then have the option to accept or reject Suite 100 by giving written
notice to Landlord of Tenant's acceptance or rejection, such notice to be given
within twenty (20) days after receipt by Tenant of Landlord's notice. If Tenant
does not give notice of acceptance or rejection within such period, Tenant shall
be deemed to have rejected Suite 100 at such time. If Tenant accepts such offer,
Tenant shall take possession of Suite 100 on the terms otherwise set forth in
this Lease, except that Tenant shall not be required to pay Base Rent and
Additional Rent with respect to Suite 100 until sixty (60) days after Landlord
delivers possession of Suite 100 to Tenant. If Tenant rejects such offer,
Landlord may then lease Suite 100 to any other party for such rent and on such
conditions as Landlord may choose, so long as (i) the tenant of Suite 100 is not
engaged in the design, manufacture or sale of computer hardware or software,
(ii) the use to be made of Suite 100 by the lessee thereof is a use which would
be permitted under this Lease, and (iii) any such lease entered into prior to
November 30, 1999 (or after such date if Tenant has exercised its Purchase
Option) shall have a term (including options to renew) which does not extend
beyond November 30, 2000.
ARTICLE III
-----------
TERM
----
1. Term. The term of this Lease shall be for the period set forth in
----
Article I hereof ("Primary Term"), except as hereinafter provided otherwise.
4
2. Option to Extend. Tenant has two (2) consecutive options to extend
----------------
this Lease for a term(s) of five (5) year(s) each (each an "Extended Term"),
provided Tenant shall give to Landlord written notice of the exercise of (i) the
first option to extend the term on or before November 30, 2001, and (ii) the
second option no later than one hundred twenty (120) days prior to the
expiration of the first Extended Term. Each such Extended Term shall be upon the
same terms, covenants and conditions hereof, except for Base Rent.
3. Lease Commencement. The Primary Term shall commence on December 1,
------------------
1990 ("Term Commencement Date"). For purposes of this Lease, each "Lease Year"
shall commence on the same calendar date as the Term Commencement Date.
ARTICLE IV
----------
RENT
----
1. Base Rent. The Base Rent for the Demised Premises shall be paid in
---------
equal monthly installments as set forth in Article I of this Lease on the first
day of each month during the Primary Term commencing with the Term Commencement
Date (subject to abatement as described below).
Rental payments shall be made at the address set forth in Article I or
at such other address as Landlord may from time to time designate in writing.
Except as otherwise specified in this Lease, all other payments required by this
Lease to be made by Tenant to Landlord during the Term hereof are Additional
Rent and shall be paid as elsewhere in this Lease set forth. Additional Rent
shall begin accruing and be payable commencing on the Term Commencement Date.
Base Rent and Additional Rent are collectively referred to herein as "Rent" or
"Rents."
2. Payment. All Rent payable by Tenant pursuant to this Lease shall be
-------
paid without set off, adjustment, deduction or abatement except as otherwise in
this Lease provided.
If on two consecutive occasions in any Lease Year Landlord has not
received any installment of Base Rent or any other sum due from Tenant
hereunder within ten (10) days after the due date thereof and Tenant has
received written notice of such delinquency, then if any subsequent installment
of Base Rent or any other sum due from Tenant hereunder in the same Lease Year
is not received by Landlord within (i) ten (10) days after the due date thereof
and (ii) five (5) days after the date of Tenant's receipt of written notice from
Landlord, Tenant shall pay to Landlord a late charge equal to five percent (5%)
of the amount overdue, to compensate Landlord for processing and accounting
charges and any other charges that may be incurred by Landlord.
3. Base Rent During Extended Term(s). Base Rent for any Extended
---------------------------------
Term(s) shall be as hereinafter provided. During the first Lease Year of each
Extended Term hereof, Base Rent for the Demised Premises shall be equal to
ninety-five percent (95%) of the then current fair market rent for similar
properties in downtown Palo Alto taking into account the
5
The Base Rent payable during the third Lease Year of each Extended Term
shall be an amount equal to one hundred five percent (105%) of the Base Rent
payable during the second Lease Year of such Extended Term.
The Base Rent payable during the fourth Lease Year of each Extended
Term shall be an amount equal to one hundred five percent (105%) of the Base
Rent payable during the third Lease Year of such Extended Term.
The Base Rent payable during the fifth Lease Year of each Extended Term
shall be an amount equal to one hundred five percent (105%) of the Base Rent
payable during the fourth Lease Year of such Extended Term.
4. Minimum Rent. Notwithstanding any other provisions of this Lease
------------
allowing for abatement, set-off or other reduction in Base Rent, other than
pursuant to Article VIII, Paragraph 2(b), Article XII, Paragraph 8 or Article
XIII, Paragraph 4, Tenant shall be required to pay a minimum amount of Base Rent
(the "Minimum Base Rent) equal to (a) if Tenant has not received possession of
Suite 100, Fifteen Thousand Two Hundred Dollars ($15,200) per month; (b) if
Tenant has received possession of the entire Building including Suite 100,
Sixteen Thousand Dollars ($16,000) per month.
ARTICLE V
---------
OPERATING COSTS, CAPITAL EXPENDITURES
-------------------------------------
AND REAL ESTATE TAXES
---------------------
1. Operating Costs. During the Term of this Lease, Tenant shall pay to
---------------
Landlord, as Additional Rent, certain costs and expenses incurred by Landlord in
connection with the operation, repair and maintenance of the Building
("Operating Costs").
(a) Items Included. The term "Operating Costs" shall include, but
--------------
not be limited to (i) the Annual Amortization (defined in paragraph 1(c)(ii)
below) of certain capital expenditures, described in paragraph l(c)(ii) below;
(ii) compensation (including normal and customary vacation time, health
benefits, reasonable sick leave and employment taxes) of all persons who perform
duties connected with the operation, maintenance and repair of the Building,
excluding any executive above the level of building manager; (iii) accounting
fees incurred in connection with the determination and allocation of Operating
Costs; (iv) a management and overhead fee equal to one and three-quarter (1.75%)
per year of Tenant's annual Base Rent hereunder, which shall include all fees
for Landlord's direct personnel and office expenses; (v) insurance premiums for
the insurance coverage required to be carried by Landlord pursuant to Article
XVI, paragraph 1; and (vi) any deductibles under the insurance coverage required
to be carried by Landlord pursuant to Article XVI, paragraph 1. The computation
of Operating Costs shall be made in accordance with Generally Accepted
Accounting Principles.
7
b. Items Excluded. Operating Costs shall not include any costs
--------------
recoverable under insurance coverage. Operating Costs shall also exclude, by way
of illustration and not limitation, (i) repair and replacement resulting from
inferior or deficient workmanship, materials, or equipment in the Building or
from the negligent acts or omissions of Landlord; (ii) the cost of the Interior
Improvements, or of any additions to the Building; (iii) depreciation,
amortization, and interest on and capital retirement of debt; (iv) leasing
commissions; (v) repairs or other work of a capital nature (or reimbursed by
insurance proceeds, exclusive of reasonable deductibles) occasioned by fire,
windstorm or other casualty; (vi) any expenses for repairs or maintenance which
are covered by warranties or service contracts (excluding deductibles); (vii)
attorney's fees, costs and disbursements and other expenses incurred in
connection with negotiations or disputes with tenants, other occupants, or
prospective tenants or other occupants of the Building; (viii) costs incurred in
renovating or otherwise improving or decorating or redecorating space for
tenants or other occupants of the Building; (ix) Landlord's cost of services
provided to tenants, which services are not standard for the Building and the
cost of which is payable directly by such tenants to Landlord; (x) capital
expenditures as described in paragraph (c) below (except for Annual
Amortization); (xi) structural repairs as described in Article XI, paragraph 2
below; (xii) expenses in connection with services or other benefits of a type
which are not standard for the Building and which are not available to Tenant
without specific charge therefor, but which are provided to another tenant or
occupant of the Building, whether or not such other tenant or occupant is
specifically charged therefor by Landlord; (xiii) costs incurred due to the
violation by Landlord of any valid, applicable building code, regulation or law
or incurred due to the Building being in violation of any such code, regulation
or law; (xiv) amounts paid to affiliates of Landlord for services to the
Building, to the extent that such amounts exceed competitive costs for such
services rendered by persons or entities of similar skill, competence and
experience; (xv) costs of Landlord's general administration (other than as
specifically set forth in this Article V, paragraph 1(a)(iv); (xvi) any
compensation paid to clerks, attendants or other persons in commercial
concessions, if any, operated by Landlord; (xvii) rentals and other related
expenses, if any, incurred in leasing air conditioning systems, elevators or
other capital equipment, except equipment which is used in conjunction with an
energy management system and except for rentals and expenses incurred in
emergency leasing of such equipment; (xviii) all items and services for which
Tenant or other tenants specifically reimburse Landlord other than through
payment of Operating Costs; (xix) costs incurred in installing, operating and
maintaining any specialty improvement not normally installed, operated, and
maintained in buildings comparable to the Building and not necessary for
Landlord's operation, repair, maintenance, and providing of required services
for the Building; (xx) costs incurred in advertising and promotional activities
for marketing of the Building; and (xxi) when and if any service (such as
janitorial service) which is normally provided by Landlord to tenants of the
Building is not provided by Landlord pursuant to agreement with Tenant in the
Demised Premises under the specific terms of this Lease, then in determining
Operating Costs for Tenant, the cost of that service shall be excluded. Further,
if any facilities, services or utilities for the operation, repair and
maintenance of the Building are provided from another building or other
buildings owned or operated by Landlord, or for the operation, repair and
maintenance of another building or other buildings owned or operated by Landlord
are provided from the Building, the net costs,
8
charges and expenses therefor shall be allocated by Landlord among the Building
and the other building or buildings on a fair and equitable basis.
(c) Capital Expenditures.
--------------------
(i) For purposes of this Lease, "capital expenditure" shall mean
the acquisition of a prior nonexistent asset or the replacement of a pre-
existing asset not acquired in the ordinary course of business and not
characterized as an operating cost or expense within generally accepted
accounting principles, provided that the acquired asset must enhance the value
of the real estate over its useful life, be permanently affixed to the real
estate and excludes all personalty and removable trade fixtures. "Capital
expenditure"" shall not mean any costs incurred by Landlord in order to comply
with any laws, ordinances, regulations, insurance requirements or building codes
applicable to the Land, Building or Demised Premises.
(ii) If, during the term of this Lease, Landlord shall make a
capital expenditure (A) for an improvement made by Landlord which produces a
cost savings in operating the Land, Building, or Demised Premises and of which
Landlord has given information reasonably satisfactory to Tenant demonstrating a
cost savings equal to or greater than the Annual Amortization of such
improvement as stated in the following sentence; or (B) for capital item
replacement made by Landlord to the Building, except for any such capital
expenditure made as a result of an obligation of Landlord pursuant to Article
XI, paragraph 2 of this Lease, which shall be done at Landlord's sole expense
without any reimbursement from Tenant, then Tenant shall pay the Annual
Amortization of such capital expenditure. "Annual Amortization" shall be
determined by fully amortizing the original capital expenditure at the
interest rate then being charged for long-term mortgages by institutional
lenders on like properties within the locality in which the Demised Premises are
located, over a period equal to the number of years of the economic useful life
of the capital expenditure.
With respect to capital expenditures, Tenant shall commence payment as
Additional Rent of one-twelfth (1/12th) of the annual amount shown in Landlord's
notice given pursuant to the immediately preceding sentence with the next and
each succeeding installment of Rent becoming due during the Term, provided that
the item for which the expenditure was made has been fully completed on the date
of Tenant's first payment and further provided that Tenant has received notice
of such amount at least fifteen (15) days prior to the month in which payment is
first due or if not so received, then Tenant's payment shall commence as of the
following month. If Tenant exercises its option to purchase the Property as set
forth in Article XXIX below, the purchase price shall include an amount equal to
any portions of the costs of capital expenditures which have not been amortized
as of the close of escrow for said purchase but, in the case of capital
expenditures made during the seventh, eighth, ninth or tenth years of the
Primary Term, only if Landlord has obtained the written consent of Tenant before
making such capital expenditures.
2. Payment of Operating Costs. Landlord shall reasonably estimate the
--------------------------
Operating Costs for each calendar year wholly or partially included within the
Term of this Lease and
9
shall send notice of said estimate to Tenant within thirty (30) days after the
Term Commencement Date for the remaining portion of the first such calendar year
and thereafter at least thirty (30) days prior to the commencement of each
subsequent calendar year. During each calendar year thereafter included in the
Term, Tenant shall pay, as Additional Rent, one twelfth of the applicable
estimate each month to Landlord together with the Base Rent. If Landlord does
not give Tenant an estimate within the time periods stated above, then Tenant
shall continue to make estimated payments based upon the preceding year's
estimate and within thirty (30) days after receipt of the new estimate for the
current calendar year, Tenant shall commence payment of the new estimated
monthly amount and shall pay in a lump sum any retroactive amounts due from the
beginning of the new calendar year.
It is agreed between the parties that Landlord in good faith may revise
its estimate of Operating Costs once a calendar year to reflect increased costs
and shall give notice to Tenant thereof no later than the tenth (10th) day of
the month preceding the month in which said increased Operating Costs will be
applicable. All payments of estimated Operating Costs and all payments pursuant
to any accounting made hereunder shall be paid to Landlord as stated in this
Lease.
3. Annual Statement. Within one hundred twenty (120) days after the
----------------
expiration of each calendar year included in the Term, Landlord shall make a
determination of the actual Operating Costs for such year. Landlord shall submit
to Tenant a written statement, certified by Landlord, in sufficient detail for
verification by Tenant and a summary showing Operating Costs on a line item
basis by category, which statement shall include the amount of actual Operating
Costs for such calendar year and any amounts owed by either Landlord or Tenant
to the other for such year. Within thirty (30) days after delivery of such
statement, including any statement delivered after the expiration or termination
of this Lease, Tenant shall pay to Landlord the difference, if any, between the
amount paid by Tenant as estimated Operating Costs and the amount owed by Tenant
for the actual Operating Costs for such calendar year. If Tenant's payment of
the estimated Operating Costs was greater than the amount owed by Tenant of the
actual Operating Costs, then Landlord shall, at Tenant's election, either credit
such amount against the next due installments of Base Rent and/or Additional
Rent or pay the same to Tenant all within thirty (30) days after receipt of
Landlord's annual statement.
Notwithstanding the foregoing, Tenant may at any time give Landlord
written notice of its intent to inspect, examine and audit Landlord's records
pertaining to Operating Costs for the calendar year covered by such statement
(Audit notice"). Tenant shall have the right, upon delivery of an Audit Notice
to Landlord, to inspect, audit and/or copy at Tenant's expense Landlord's books,
records and accounts pertaining to Operating Costs for the calendar year
specified in the Audit Notice, and Landlord shall make such books, records and
accounts available to Tenant and its agents, and accountants for review during
regular business hours at Landlord's principal place of business. Any
overpayment or underpayment of Operating Costs revealed by Tenant's audit shall
be adjusted within thirty (30) days after Tenant delivers written notice of such
overpayment or underpayment to Landlord but only if such underpayment or
overpayment pertains to a year for which Landlord's annual statement was
delivered to Tenant within two (2) years prior to Tenant's delivery of an Audit
Notice
10
for such year. If Tenant's audit discloses that Tenant's Percentage Share of
Operating Costs has been overstated by two percent (2%) or more, Landlord shall
pay the cost of such audit. If Tenant delivers an Audit Notice to Landlord
within thirty (30) days after the date of Tenant's receipt of Landlord's annual
statement, the time period for payment of the difference between the actual
Operating Costs and the amount paid by Tenant as estimated Operating Costs shall
be tolled until Tenant gives Landlord written notice that its audit is
completed.
Landlord hereby waives any right to collect from Tenant any items of
Operating Costs of which Landlord fails to notify Tenant within two (2) years
following the expiration of the calendar year in which such items were incurred.
Tenant waives any right to collect from Landlord any overpayment of Operating
Costs for any year provided that Tenant has not delivered to Landlord an Audit
Notice respecting said year within two (2) years after Landlord's annual
statement respecting said year has been delivered to Tenant.
4. Real Estate Taxes. As used herein, "Real Estate Taxes" shall mean real
-----------------
estate taxes and general and special assessments. Real Estate Taxes shall
exclude, without limitation, any income, franchise, gross receipts, corporation,
capital levy, excess profits, revenue, rent, inheritance, devolution, gift,
estate, payroll or stamp tax by whatsoever authority imposed or howsoever
designated or any tax upon the sale, transfer and/or assignment of Landlord's
title or estate which at any time may be assessed against or become a lien upon
all or any part of the Land or the Building. In addition, Real Estate Taxes
shall exclude any liens or taxes, penalties or interest which are levied or
assessed against the Land or the Building for a period of time prior to the
commencement of the Term unless Tenant was obligated to pay but has failed to
pay such Real Estate Taxes pursuant to the Existing Lease. Landlord shall pay on
or before December 1, 1991 all real property taxes which are in default on the
Date of Execution, along with all penalties and interest due thereon.
5. Change in Laws. If at any time during the Term the laws concerning the
--------------
methods of real property taxation prevailing at the commencement of the Term are
changed so that a tax or excise on rents or any other such tax, however
described, is levied or assessed against Landlord as a direct substitute in
whole or in part for any Real Estate Taxes, Tenant shall pay as described in
paragraph 7 hereof (but only to the extent that it can be ascertained that there
has been a substitution and that as a result Tenant has been relieved from the
payment of Real Estate Taxes it would otherwise have been obligated to pay) the
substitute tax or excise on rents.
6. Separate Assessment. The Land and the Building are currently assessed as
-------------------
a single and separate tax parcel. Throughout the Term of this Lease, Landlord
shall cause the Land and the Building to remain separately assessed and
maintained within a single and separate tax parcel or lot by the applicable
governmental taxing authority, so that Real Estate Tax bills shall issue solely
with respect to the Real Estate Taxes applicable only to the Land and the
Building.
7. Payment of Real Estate Taxes. The total assessed value of the Land and
----------------------------
Building for the 1989-1990 tax year, as shown on the secured property tax roll
for Santa
11
Clara County, was One Million Two Hundred Thirty-Seven Thousand One Hundred
Fifty-Nine Dollars ($1,237,159). The total amount of real property taxes due for
such year, including assessments collected with real property taxes, was Sixteen
Thousand Five Hundred Twenty-Three Dollars and Eighty-Four Cents ($16,523.84),
due in two equal installments. In addition, supplemental taxes assessed pursuant
to Chapter 3.5 of the California Revenue and Taxation Code for the 1989-1990 tax
year totaled Eighty-Seven Dollars and Twenty-Two Cents ($87.22), due in two
equal installments. Landlord shall use its best efforts to cause the tax bills
for the Land and Building to be sent directly to Tenant from the county assessor
or other applicable taxing authority. If tax bills are sent directly to Tenant,
Tenant shall provide copies of such bills to Landlord within thirty (30) days
after their receipt by Tenant. Tenant shall pay directly to the applicable
governmental taxing authority, as Additional Rent without any abatement, set-off
or other reduction pursuant to any other provision of this Lease, all Real
Estate Taxes assessed for each tax period or portion thereof included within the
Term of this Lease, and which are during such Term levied, or imposed upon or
become a lien or liens upon the Land and the Building. Tenant shall pay all Real
Estate Taxes within fifteen (15) business days of its receipt of the appropriate
tax bill(s) from Landlord or from the taxing authority but not earlier than
thirty (30) days prior to the delinquency date of any such taxes. Tenant shall
furnish Landlord with evidence of payment of same within thirty (30) days
thereafter. Landlord shall pay all interest and penalties assessed with respect
to such Real Estate Taxes, unless such interest or penalties are assessed as a
result of the failure of Tenant to timely pay such Real Estate Taxes, in which
event Tenant shall pay such interest and penalties directly to the applicable
governmental taxing authority as Additional Rent.
The foregoing notwithstanding, Tenant shall not be responsible to pay any
portion of any increase in Real Estate Taxes attributable to an increase in
valuation resulting or arising by virtue of a change of ownership of the Land
and/or the Building occurring during the first five (5) Lease Years of the
Primary Term. Tenant shall pay any increase in Tenant's Share of Real Estate
Taxes attributable to an increase in valuation resulting or arising from any
change in ownership of the Land and/or the Building occurring during the
remainder of the Primary Term or Extended Term(s).
Real Estate Taxes for the tax year in which the Term of this Lease commences
and for the tax year in which such Term expires shall be apportioned between
Landlord and Tenant in accordance with the number of days thereof falling within
the Term of this Lease.
8. Contest. Tenant shall, at Tenant's sole expense, have the right to
-------
contest or review (in the name of Tenant, or of Landlord, or both, as Tenant
shall elect, but with the cooperation of Landlord if requested) by appropriate
proceedings (which may be instituted either during or after the Term of this
Lease) any valuation of the Land and/or the Building for Real Estate Tax
assessment purposes and/or any increase in the tax rate. In furtherance of the
foregoing, Landlord shall without limitation furnish, on a timely basis, such
data, documents, information and assistance and make such appearances as may be
reasonably required by Tenant. Landlord agrees to execute all necessary
instruments in connection with any such protest, appeal or other proceedings. If
any such proceeding may only be instituted and maintained by Landlord then
Landlord shall do so at the request and expense of Tenant.
12
Landlord shall not settle any such appeal or other proceeding without obtaining
Tenant's prior written approval in each such instance. Tenant shall not abandon
any such appeal without first offering to Landlord the right to prosecute such
appeal at Landlord's expense.
Tenant shall be entitled to Tenant's Share of any refund (net of Tenant's or
Landlord's expenses in obtaining same) obtained by reason of any such proceeding
or otherwise, whether obtained during or after the expiration of the Term and
whether obtained by Landlord or Tenant, except that if such refund shall relate
to the year in which the Term of this Lease commences or expires, such refund
(after deducting all costs of Landlord or Tenant in obtaining same) shall be
equitably apportioned between Landlord and Tenant.
Tenant shall not be responsible to pay any portion of any increase in Real
Estate Taxes attributable to an increase in valuation unless Landlord shall have
delivered to Tenant a copy of the applicable Real Estate Tax bill or
notification of valuation increase in sufficient time to enable Tenant to
contest such Real Estate Taxes if Tenant so desires.
9. Payment in Installments. If, by law, any Real Estate Taxes may be paid
-----------------------
in installments (whether or not interest shall accrue on the unpaid balance
thereof), such Real Estate Taxes, at Tenant's option, shall be paid in
installments in accordance with paragraph 10 hereof. Tenant shall pay to
Landlord any installments coming due during the Term prorated for any fraction
of an installment period included within the Term, including interest, becoming
due at the end of such period.
10. Amortization. Real Estate Taxes shall include betterment assessments
------------
for municipal improvements levied against the Land and the Building during the
Term of this Lease. Such assessments shall be amortized over the maximum period
provided under the law and shall be payable in the maximum number of
installments permitted under the law and as described in paragraph 7 and 9
hereof.
11. Landlord's Action. Except to the extent provided in paragraph 7 above,
-----------------
if Landlord, solely by its action, causes the Real Estate Taxes and/or
assessments levied against the Land and/or the Building to increase, Tenant
shall not be responsible for said increase unless Tenant has been notified in
writing of such action and has agreed to same.
12. Minimum Additional Rent. Notwithstanding any other provisions of this
-----------------------
Lease, the portion of Operating Costs consisting of insurance premiums for the
insurance coverage required to be carried by Landlord pursuant to Article XVI
and all Real Estate Taxes (collectively, the "Minimum Additional Rent") shall
not be subject to any abatement, set-off or other reduction pursuant to any
other provision of this Lease.
13
13. Operating Costs With Respect to Suite 100. Unless and until Tenant
-----------------------------------------
takes possession of Suite 100, Tenant shall be entitled to a credit against the
Rent otherwise payable by Tenant to Landlord equal to five percent (5%) of the,
sum of (a) the Operating Costs and Real Estate Taxes to be paid by Tenant
pursuant to this Article V, (b) costs of water, electricity, gas, sewer and
trash collection service to the Building paid by Tenant pursuant to Article VI,
(c) costs of janitorial service to the Building provided by Tenant, and (d)
costs of maintenance of the Building and grounds provided by Tenant pursuant to
the second sentence of Paragraph 4 of Article XI. Such credit shall compensate
Tenant for the payment by Tenant of Operating Costs, Real Estate Taxes,
utilities charges, maintenance expenses and other costs arising out of the
occupancy and use of Suite 100. The amount of such credit shall be estimated by
Tenant for each calendar year in the same manner as Operating Costs are
estimated by Landlord pursuant to Paragraph 2 of this Article V. The initial
credit for the month of December, 1990, shall be Three Hundred Seven Dollars
($307) per month.
ARTICLE VI
----------
UTILITIES AND SERVICES
----------------------
1. Utilities and Services Provided by Landlord. Landlord will provide, at
-------------------------------------------
no cost to Tenant, at or prior to the commencement of the Primary Term, the
following utility lines to and within the Demised Premises: water, electricity,
gas, sewer, and telephone (provided that telephone lines shall be provided up
to the connection points of the Building with installation of telephones within
the Demised Premises being the responsibility of Tenant, and that any utility
lines incorporated within the Demised Premises shall be Tenant's
responsibility) in such capacity as to meet general office use building code
requirements. Telephone service for the Demised Premises and Suite 100 shall be
separately metered. Electricity, gas and water shall be metered to the Building
as a whole (including Suite 100). The installation of any new utility meters
required for separate metering, as well as the maintenance of all existing and
new utility meters, shall be at Tenant's expense.
2. Security. Landlord shall not be responsible for providing any security
--------
protection for the Demised Premises, the Land or the Building, and Tenant shall
at its own expense provide or obtain any security system or services that it
desires, if any.
3. Separate Utilities. Tenant shall make arrangements with the public
------------------
utility companies or other service provider serving the Building for telephone
service to the Demised Premises, electricity, gas, water, sewer, trash
collection and all other services required for occupancy and use of the
Building and shall pay when due any and all charges for such services directly
to the companies providing same. Tenant shall provide janitorial service to the
Building.
Tenant's failure to pay such charges shall not constitute a default under
this Lease entitling Landlord to exercise any rights or remedies it may have in
the event of default except that if Landlord is notified that service to Suite
100 will be terminated at any time before Tenant has received possession of
Suite 100, or that a lien will be placed upon the
14
Demised Premises as a result of Tenant's nonpayment of any such utility charge,
then to protect the real estate Landlord may pay such charges, notify Tenant
thereof and the same shall be paid by Tenant as Additional Rent with the next
installment of Base Rent becoming due. In no event shall Landlord be responsible
for charges for any telephone service used by Tenant at the Demised Premises.
Tenant shall supply to Landlord upon request copies of the most recent
invoices for utilities services provided to the Building.
4. Interruption of Services.
------------------------
(a) If, for any reason whatsoever other than a negligent act or
omission or a willful act or omission of Tenant, its officers, directors,
employees, contractors, servants or agents, or a default by Tenant hereunder,
any utilities or services which are required for Tenant's use of the Premises
for the Permitted Uses are interrupted, Tenant shall promptly so notify
Landlord. Notwithstanding any other provision to the contrary contained in this
Lease, in the event that Tenant reasonably determines that the existing
situation constitutes an emergency which either threatens imminent injury to
persons or material damage to property or materially impairs Tenant's then-
current use of the Premises or a material portion thereof, Tenant may give such
notice by any means including, without limitation, by telephone.
(b) If resumption of such utilities or services does not occur within
thirty (30) days after the commencement of such interruption, and the lack of
such utilities or services continues to materially impair Tenant's then-current
use of the Premises or a material portion thereof, Tenant shall have the right
to terminate this Lease at any time thereafter while such interruption continues
by giving to Landlord a written notice of termination stating the date on which
this Lease shall terminate.
(c) If the unavailability of such utilities or services materially
impairs Tenant's then-current use of the Premises or a material portion thereof
for a period of more than five (5) days, Rent shall be abated proportionately
according to the extent to which the Tenant's use and occupancy of the Premises
are so affected, for the period commencing on the date such utilities or
services became unavailable and ending on the date on which such condition is
cured or this Lease terminates, as the case may be.
ARTICLE VII
-----------
USE OF DEMISED PREMISES
-----------------------
1. Use. Tenant may use the Demised Premises for all uses reasonably
----
compatible with office uses including but not limited to general office;
research and development including prototype assembly; customer/employee
training; sales and services; computer rooms, a cafeteria, and all related and
accessory uses customarily incidental thereto.
15
2. Permits. Except as expressly provided below, Landlord shall procure all
-------
authorizations and permits which may be required for the Demised Premises
including but not limited to certificates of occupancy and variances (if
required) prior to the time Tenant occupies the Demised Premises. All
authorizations and permits required for the construction and occupancy of the
Interior Improvements and of any Alterations are the responsibility of Tenant.
Any special business permits or licenses which may be required of Tenant to
conduct its particular business in the state or locality where the Demised
Premises are located are the responsibility of Tenant.
3. Compliance With Laws. Nothing shall be done upon or about the Demised
-------------------
Premises by Tenant, Landlord, or their agents, servants, employees or invitees
which shall be contrary to any law, ordinance, regulation or requirement of any
public authority having jurisdiction. Tenant will keep the Demised Premises
reasonably clean. Tenant will not do, nor suffer to be done, nor keep or suffer
to be kept, anything in or upon the Demised Premises or the Building which may
prevent the obtaining of any insurance on the Demised Premises or the Building
or on any property therein, including, but without limitation of the generality
of the foregoing, fire, extended coverage and public liability insurance, or
which may make void any such insurance. If such actions do create any extra
premiums for or increase the rate of any such insurance, then Tenant shall pay
the increased cost of the same to Landlord upon written demand therefor.
ARTICLE VIII
------------
PREPARATION OF DEMISED PREMISES
-------------------------------
1. Roof Repairs
------------
(a) Tenant shall repair the roof of the Building and replace the roof
membrane (the "Roof Repairs"), unless Landlord elects to perform the Roof
Repairs and Tenant consents to Landlord's performance of the Roof Repairs. If
Landlord elects to perform the Roof Repairs, Landlord shall so notify Tenant and
provide to Tenant on or before January 1, 1991 information regarding Landlord's
proposed Roof Repair method which is reasonably sufficient for Tenant to
evaluate the suitability of such method. Tenant, shall, within two (2) business
days after receipt of such information, give Landlord notice whether Tenant
consents to Landlord's proposed Roof Repair method, which consent shall not be
unreasonably withheld. If Tenant does not give such notice within such two (2)
business day period, Tenant shall be deemed to have consented.
(b) If Tenant consents (or is deemed to consent) to Landlord's Roof
repair method, Landlord shall perform the Roof Repairs at Landlord's sole cost
and expense during the period from April 15, 1991 through May 1, 1991. Landlord
warrants and represents that the Roof Repairs, if performed by Landlord, will be
constructed in a good and workmanlike manner and in compliance with all Laws.
Landlord has the entire and sole responsibility to correct any portion of the
Roof Repairs performed by Landlord which is not in compliance with Laws.
16
(c) If Landlord does not elect to perform the Roof Repairs or Tenant
does not consent to Landlord's proposed Roof Repair method, then:
(i) Tenant shall perform the Roof Repairs, in a good and
workmanlike manner and in compliance with all Laws;
(ii) Landlord shall pay to Tenant Twenty Thousand Dollars
($20,000) on the later of December 1, 1990 or the completion of the Roof
Repairs, to pay for a portion of the Roof Repairs; and
(iii) Tenant shall be responsible for paying all costs of the Roof
Repairs in excess of such amount.
2. Interior Improvements.
---------------------
(a) Construction of Interior Improvements. From and after the Date of
-------------------------------------
Execution, Tenant shall construct and install its interior improvements
("Interior improvements") in the Demised Premises. The Interior Improvements
will be constructed in accordance with plans and specifications prepared by
Tenant. Landlord shall have the right to approve the plans and specifications
for the Interior Improvements, which approval shall not be unreasonably withheld
or delayed. Landlord's consent shall be deemed given if Landlord does not
respond to Tenant's request for such consent within ten (10) days after the date
of Landlord's receipt of plans and specifications for the Interior Improvements
together with Tenant's request for approval of such plans and specifications. If
Landlord disapproves the plans and specifications, Landlord shall give Tenant
written notice of such disapproval specifying the reasons and basis for its
disapproval within ten (10) days after the date of Landlord's receipt of the
plans and specifications. The parties shall thereafter confer and negotiate in
good faith to reach agreement on the plans and specifications for the Interior
Improvements. Tenant shall comply with Article X, Paragraphs 3 through 8,
inclusive, in constructing the Interior Improvements. Tenant shall have no
obligation to remove the Interior Improvements upon the expiration or earlier
termination of the Lease.
(b) Interior Improvement Allowance. Landlord shall pay to Tenant an
------------------------------
improvement allowance for use in construction of the Interior Improvements equal
to Two Hundred Seventy-Eight Thousand Two Hundred Twenty Dollars ($278,220)
("Improvement Allowance"). If and when Landlord delivers possession of Suite 100
to Tenant as provided in Article II, paragraph 2, then the Improvement Allowance
shall be increased by Four Thousand Six Hundred Twenty Dollars ($4,620).
Landlord shall pay the Improvement Allowance to Tenant upon the closing of a
refinancing by Landlord of the existing first deed of trust on the Land and
Building, provided that no mechanics' liens or similar liens for labor or
material supplied to the Interior Improvements have been filed or asserted
against the Demised Premises (unless releases of such liens are obtained upon
payment of the Improvement Allowance). Landlord shall use its best efforts to
obtain such refinancing within nine (9) months after the Date of Execution. The
unpaid balance of the Improvement Allowance shall be increased by one percent
(1%) for each month that payment of the Improvement Allowance is delayed beyond
nine (9) months after the Date of Execution,
17
prorated for any partial month on the basis of a thirty (30) day month.
Notwithstanding, the provisions of Article IV, Paragraph 4, if payment of the
Improvement Allowance is delayed beyond twelve (12) months after the Date of
Execution, Tenant may deduct the Improvement Allowance or any remaining balance
of the Improvement Allowance from the next payments of Rent coming due according
to the following schedule: (i) Tenant may deduct all but Ten Thousand Dollars
($10,000) from the first such Base Rent payment and all but the Minimum
Additional Rent from the first such Additional Rent payment, (ii) Tenant may
deduct all but Five Thousand Dollars ($5,000) from the next such Base Rent
payment and all but the Minimum Additional Rent from the next such Additional
Rent payment, and (iii) Tenant may deduct all of each remaining Base Rent
payment and all but the Minimum Additional Rent from each remaining Additional
Rent payment, until Tenant has recovered the remaining unpaid balance of the
Improvement Allowance. Tenant shall be responsible for payment of all
Improvement Costs in excess of the Improvement Allowance.
4. Entry by Tenant. The date on which Tenant may enter the Demised Premises
---------------
for purposes of constructing the Interior Improvements (and the Roof Repairs, if
performed by Tenant) shall be the Date of Execution. From and after the Date of
Execution, Tenant shall have access to the Demised Premises for purposes of
planning, constructing and installing the Interior Improvements. Tenant's
occupancy of the Demised Premises for the construction of the Interior
Improvements shall be subject to all of the provisions of this Lease except
that Rent shall not be payable until the Term Commencement Date.
5. Insurance. During the period of construction of the Interior
---------
Improvements (and the Roof Repairs, if performed by Tenant), Tenant or its
general contractor shall procure and maintain in effect the following insurance
coverages with an insurance company or companies authorized to do business in
California and the following agreements shall apply:
(a) Worker's Compensation - statutory limits for the state in which
the work is to be performed, together with "ALL STATES" and "VOLUNTARY
COMPENSATION" coverage endorsements;
(b) Employer's Liability Insurance with a limit of not less than One
Hundred Thousand Dollars ($100,000);
(c) Comprehensive Liability - at least Three Million Dollars
($3,000,000) combined single limit, including personal injury, contractual and
products/completed operations liability. Coverage must include the following:
(i) premises - operations; (ii) elevators and hoists; (iii) independent
contractor; (iv) contractual liability assumed under this contract; (v)
completed operations - products; and (vi) explosion, underground and collapse
(XUC) coverage;
(d) Automobile Liability - including owned, hired and non-owned
vehicles of at least Two Million Dollars ($2,000,000) combined single limit for
bodily injury or
18
property damage. Coverage must include the following: (1) owned vehicles; (2)
leased vehicles; (3) hired vehicles; and (4) non-owned vehicles;
(e) Standard builder's risk insurance in an amount at least equal to
the Improvements Allowance;
(f) Tenant shall furnish Landlord with certificates of insurance
evidencing such coverage prior to the commencement of the Interior Improvements.
All insurance shall be carried in companies having a Best's Guide rating of A-
or better. The following statement shall appear in each certificate of insurance
provided Landlord by Tenant hereunder: "It is agreed that in the event of any
material change in, cancellation or non-renewal of this policy, thirty (30) days
prior notice will be given to:
Richard R. Kelley, Jr.
c/o Premier Properties
532 Emerson Street
Palo Alto, California 94301
(g) The carrying of any of the insurance required hereunder shall not
be interpreted as relieving Tenant of any responsibility to Landlord.
ARTICLE IX
----------
COMPLIANCE WITH LAW
-------------------
1. Compliance by Landlord. Landlord at its sole expense shall comply with
----------------------
and shall from time to time conform the Building (other than the Interior
Improvements and any Alterations) to all Laws of which the Building (other than
the Interior Improvements and any Alterations) would otherwise be in violation
(other than the Interior Improvements and any Alterations) required by law,
except for compliance necessitated by reason of Tenant's special use of the
Demised Premises. Landlord shall pay all costs, expenses, liabilities, losses,
damages, fines, penalties, claims and demands that may in any manner arise out
of or be imposed because of the failure of Landlord to comply with the
provisions of this Paragraph 1.
2. Compliance By Tenant. Tenant shall comply, at Tenant's sole expense,
--------------------
with all Laws if such compliance is related to the Interior Improvements or
Alterations or necessitated by reason of Tenant's special use of the Demised
Premises. The foregoing notwithstanding, Tenant shall not be required to make
any structural, exterior or roof alterations of any nature whatsoever
necessitated by reason of its special use of the Demised Premises, but in such
event Landlord shall so comply and Tenant shall reimburse Landlord for the
actual out-of-pocket cost thereof within thirty (30) days after demand therefor,
provided Tenant is in receipt of an itemized invoice regarding same and the work
has been performed, regardless of whether or not the alteration is a capital
expenditure. Tenant shall pay all costs, expenses, liabilities, losses, damages,
fines, penalties, claims and demands that
19
may in any manner arise out of or be imposed because of the failure of Tenant to
comply with the provisions of this Paragraph 2.
3. Right to Contest. Landlord and Tenant shall each have the right upon
----------------
giving notice to the other to contest any obligations imposed upon either
pursuant to the provisions of this Article and to defer their respective
compliance during the pendency of such contest, provided the enforcement of such
requirement or law is stayed during such contest and such contest will not
subject the other party to civil or criminal penalty or materially interfere
with Tenant's use and occupancy of the Demised Premises or jeopardize the title
to or use and enjoyment of the Land and the Building. Each party shall cooperate
with the other in such contest and shall execute any documents reasonably
required in the furtherance of such purpose. If either party is contesting as
aforesaid, then such party shall not be in default hereunder until and unless it
is determined that such party must perform such obligation and fails to do so by
the date upon which all applicable appeal periods have expired or if such party
has duly appealed any such determination and enforcement is stayed pending
appeal, then until all such appeals have been finally decided against said party
and said party fails to comply therewith.
ARTICLE X
---------
ALTERATIONS, ADDITIONS AND IMPROVEMENTS
---------------------------------------
1. Non-Structural Alterations. Tenant may, from time to time, at its own
--------------------------
cost and expense and without the consent of Landlord make alterations, additions
or improvements (collectively herein called "Alterations") of a non-structural
nature to the interior of the Demised Premises whose cost in any one instance is
Twenty-Five Thousand Dollars ($25,000) or less, provided Tenant gives Landlord
five (5) days written notice of any such Alterations. To the extent that Tenant
obtains plans and specifications for any such Alterations the cost of which is
Twenty-Five Thousand Dollars ($25,000) or less, Tenant shall provide Landlord
with copies of such plans and specifications for Landlord's information. If
Tenant desires to make any Alterations to the exterior of the Demised Premises,
or any non-structural Alterations to the interior of the Demised Premises
costing in excess of Twenty-Five Thousand Dollars ($25,000) in any one instance,
Tenant must first obtain the consent of Landlord thereto, and which consent
shall not be unreasonably withheld or delayed and which is hereby deemed given
if Landlord does not respond to Tenant's request for such consent within ten
(10) days from receipt of such request. Any request by Tenant to make
Alterations to the exterior of the Demised Premises, or any non-structural
Alterations to the interior of the Demised Premises costing in excess of Twenty-
Five Thousand Dollars ($25,000) in any one instance shall include written plans
and specifications for the Alterations. At the end of the Term (including any
extensions), Tenant may elect to remove or to leave any such Alterations,
provided that Tenant must give Landlord written notice of its election as to
each Alteration no less than nine (9) months prior to the expiration of the Term
(including any extensions). If Tenant elects to remove any such Alterations,
Tenant's only responsibility upon removal is to repair any damage caused by the
removal and not to restore the Demised Premises. If Tenant (i) fails to give
Landlord the notice provided herein or (ii) fails to obtain Landlord's prior
approval (whether actual or deemed) when
20
required hereunder, for any non-structural alterations to the interior of the
Demised Premises, such failure shall not constitute a default by Tenant
hereunder.
2. Structural Alterations. If Tenant desires to make any structural
----------------------
Alterations to the Demised Premises, Tenant must first obtain the prior written
consent of Landlord thereto which shall not be unreasonably withheld and at
such time Landlord shall advise Tenant if such Alterations must either remain
or be removed at the end of the Term. It shall be reasonable for Landlord to
withhold such consent if such structural Alterations would, for example,
diminish the value of the Building or Land or increase the cost of maintaining
or repairing the Building. If Landlord does not respond within ten (10)
business days of receipt of Tenant's request for such consent or, if Landlord
responds by consenting to the request, but such response does not address the
issue of removal, such consent is hereby deemed given and Tenant may either
remove or leave such Alterations at the end of the Term (including any
extensions) as Tenant elects, provided that Tenant must give Landlord written
notice of its election as to each Alteration no less than nine (9) months prior
to the expiration of the Term (including any extensions). If removal of any
such Alteration is required by Landlord or elected by Tenant at the end of the
Term, Tenant must only repair any damage caused by removal and not restore the
Demised Premises.
3. Contractor. Alterations may be done by any contractor chosen by Tenant
----------
provided any such contractor is reputable, bondable by reputable bonding
companies, and carries the kinds of insurance and in the amounts set forth in
Article VIII, Paragraph 4 of this Lease.
4. Performance of Work. Tenant in making any Alterations shall cause all
-------------------
work to be done in a good and workmanlike manner using materials equal to or
better than those used in the construction of the Demised Premises and shall
comply with or cause compliance with all laws and with any direction given by
any public officer pursuant to law. Tenant shall obtain or cause to be obtained
and maintain in effect, as necessary, all building permits, licenses, temporary
and permanent certificates of occupancy and other governmental approvals which
may be required in connection with the making of the Alternations. Landlord
shall cooperate with Tenant in the obtaining thereof and shall execute any
documents reasonably required in furtherance of such purpose, provided any such
cooperation shall be without expense and/or liability to Landlord.
5. Removal. At any time during the Term of this Lease, Tenant may, at its
-------
option, remove any Alterations which are removable by Tenant upon termination
of the Lease. In the event of a removal of any Alterations by Tenant, Tenant
shall, at its sole cost, repair any damage to the Demised Premises caused by
such removal.
6. Insurance. During the period of construction of any Alterations
---------
costing in excess of One Hundred Thousand Dollars ($100,000), Tenant or its
general contractor shall procure and maintain in effect the insurance coverage
set forth in Article VIII, Paragraph 6 of this Lease, to the extent such
insurance is applicable to Tenant's Alterations.
21
7. Mechanic's Liens. Landlord shall pay promptly for all labor and
----------------
materials supplied to Landlord in connection with any construction or alteration
on the Land or Building and shall not cause or permit any liens for such labor
or materials to attach to the Land or Building. Tenant shall pay promptly for
all labor and materials supplied to Tenant in connection with any construction
or alteration on the Land or Building and shall not cause or permit any liens
for such labor or materials to attach to the Land or Building. In the event of
any such lien, the party to the contract for the work or materials giving rise
to such lien shall cause the same to be discharged, at its expense and within
ten (10) days following its receipt of notice thereof, by filing of a release
bond meeting the requirements of California Civil Code section 3143, by payment,
by satisfaction or otherwise. Any monetary amounts paid to Landlord by Tenant in
connection with any Alterations performed by Landlord or Landlord's contractor
on behalf of Tenant shall not be construed as Rent.
8. Notices of Non-responsibility. Tenant shall give Landlord five (5) days
-----------------------------
written notice prior to the commencement of any Alterations in order to allow
Landlord to post notices of non-responsibility with respect to such Alterations.
ARTICLE XI
----------
CONDITION, REPAIR AND MAINTENANCE OF THE BUILDING
-------------------------------------------------
1. Condition of Building. Landlord represents and warrants that on the
---------------------
Date of Execution, to Landlord's knowledge, without any inspection or
investigation having been undertaken by Landlord to confirm such matters, the
structural elements of the Building (including the HVAC, electrical and
mechanical systems) comply with applicable laws, ordinances, rules and
regulations, including, but not limited to building and zoning laws, health and
fire codes of the state, local and federal governments, agencies, and boards,
and with requirements and regulations of Boards of Fire Underwriters having
jurisdiction and of insurance carriers of all insurance on the Demised Premises
(collectively called "Laws"). Landlord, at its sole cost and expense and without
cost or charge to or contribution by Tenant, shall throughout the Term be
responsible for and make all repairs, replacements and perform all maintenance
which may be necessitated by defective design or construction of the Building,
and all equipment and systems associated therewith and/or incorporated therein,
or which may be necessitated by latent defects in any of the foregoing or by the
negligence or willful misconduct of Landlord.
2. Landlord's Responsibilities. Landlord at its sole cost and expense
---------------------------
shall make all repairs and replacements to all structural elements of or
associated with the Building as needed to keep same in good order, condition and
repair. Such structural elements include, but are not limited to, (i) all
footings, foundations, floor slabs, columns, girders, mullions, beams,
loadbearing and non-loadbearing exterior walls; (ii) all utility lines located
outside of the Building; (iii) roof and roofing system of the Building,
including, without limitation, support members, membrane assembly, roof deck,
flashing, roof insulation assembly, curbs, walkways, hatches, skylights,
sleeves, vents, brackets and drain fixtures; (iv) exterior lighting,
landscaping, walkways, drives and curbs, and any other improvements on the Land
22
outside of the Building; (v) sewer lines up to and including the connection for
the Building; and (vi) exterior facade of the Building. The foregoing
notwithstanding, routine maintenance with respect to nonstructural elements
concerning item (iv) shall be included as Operating Costs unless Tenant performs
such routine maintenance itself pursuant to Paragraph 4 of this Article XI.
3. Capital Expenditures: Building Systems. Subject to reimbursement of
--------------------------------------
Landlord as specified in Article V, Landlord shall make all capital expenditures
throughout the Term which may be required to keep the Building in good repair
and condition and in compliance with all Laws (except for compliance of the
Interior Improvements and Alterations with Laws, which shall be Tenant's
responsibility), and Landlord shall maintain and repair the mechanical,
electrical, conveying, plumbing and all other systems within the Building
(except for any portion of the HVAC System serving the Demised Premises which is
installed by or at the expense of Tenant). In addition, Landlord shall perform
any other repairs and maintenance not specifically allocated to Tenant
hereunder.
4. Tenant's Responsibility. Tenant shall repair and maintain (i) the
------------------------
interior of the Demised Premises, (ii) the Interior Improvements and any
Alterations, and (iii) all portions of the HVAC system serving the Demised
Premises which are installed by or at the expense of Tenant, in good order,
condition, and repair and in compliance with all Laws, ordinary wear and tear
and damage by casualty excepted, throughout the Term. Tenant shall perform at
its own expense all (i) landscaping, repairing, replacing, painting, lighting,
cleaning, and similar items with respect to the Building and its associated
grounds; (ii) normal maintenance of mechanical and electrical equipment in the
Building, including heating, ventilating and air conditioning and elevator
equipment; (iii) operating, repairing and maintaining life safety systems in the
Building, including, without limitation, sprinkler systems; (iv) obtaining
materials and supplies for repair or maintenance of items which are Tenant's
responsibility; (vi) exterior window washing. Except as otherwise provided in
Article IX, paragraph 2, and except to the extent the need for such maintenance
or repair is caused by the Tenant's negligence or willful misconduct, Tenant
shall be required to perform only nonstructural, noncapital items of repair and
maintenance, and shall not be responsible for any Building systems (other than
those portions of the HVAC System serving the Demised Premises installed by or
at the expense of Tenant for which Tenant shall be solely responsible).
5. Assignment of Warranties. Landlord shall assign to Tenant any assignable
------------------------
warranties and guarantees which Landlord has obtained with respect to the
portions of the Improvements as to which Tenant has maintenance and repair
responsibilities. Landlord shall cooperate with and assist Tenant in the
enforcement of any such warranties and guaranties as may be required during the
Term, provided that such cooperation and assistance shall be given at no cost to
Landlord therefor. Landlord shall do no act which would impair or nullify any
such warranty or guaranty.
6. Performance of Work. All work to be performed by either party under this
-------------------
Article shall:
23
(a) be made as soon as reasonably possible but in any event within
twenty-four (24) hours in any emergency (as defined below) and within twenty
(20) days for all other repairs. If the work cannot be completed within twenty-
four (24) hours or twenty (20) days, as the case may be, it shall be commenced
within said period and prosecuted continuously and diligently thereafter until
completion; and
(b) be done at the sole cost and expense of the party who has
responsibility for same hereunder subject to Landlord's reimbursement rights
with respect to Operating Costs, or any other rights of either Landlord or
Tenant to reimbursement or set-off as provided in this Lease.
For purposes of this paragraph, the word "emergency" shall mean a situation
which (1) threatens the physical well-being of persons within the Demised
Premises or (2) materially disrupts the Tenant's use and/or occupancy of the
Demised Premises, ingress or egress to the Demised Premises, or any portion
thereof.
Notwithstanding anything contained herein to the contrary, if any repairs
and/or replacements are necessitated as a result of the negligence of either
party, its agents, employees, or contractors, said party shall be responsible
for any such repairs and replacements, at its sole expense.
ARTICLE XII
-----------
DAMAGE AND DESTRUCTION
----------------------
1. Damage or Destruction. In the event of damage or destruction to all or
---------------------
part of the Demised Premises or if Tenant's access to the Building ("Access") is
obstructed or hindered, Tenant shall notify Landlord thereof as soon as possible
after Tenant becomes aware thereof. It shall be Landlord's obligation, at
Landlord's cost and expense to repair such damage and destruction to the Demised
Premises, and to restore such Access to the condition that existed prior to such
damage or destruction (collectively "Repair and Restoration"), except as
expressly provided otherwise in this Article XII.
2. Estimate. Landlord shall within a period of twenty (20) calendar days
--------
from receipt of Tenant's notice described above deliver to Tenant a good faith
estimate of the time and cost required to complete such Repair and Restoration
("Estimate"). If the damage results from a casualty for which Landlord is
required to insure under Article XVI and the Estimate is for a period equal to
or more than one hundred twenty (120) days, the damage is hereby deemed
substantial ("Substantial"). If the damage results from a casualty for which
Landlord is required to insure under Article XVI and the Estimate is for a
period of less than one hundred twenty (120) days, the damage is hereby deemed
partial ("Partial").
3. Partial Damage. If the damage is Partial, Landlord shall forthwith
--------------
complete the Repair and Restoration. If Landlord does not complete the Repair
and Restoration within one hundred thirty-five (135) days ("Partial Damage
Restoration Date"), Tenant shall have the right to terminate this Lease on ten
(10) days written notice to Landlord which notice
24
must be delivered by Tenant to Landlord within ten (10) days after the Partial
Damage Restoration Date. If Landlord does not complete the Repair and
Restoration within fifteen (15) days after the date stated in the Estimate,
Tenant may complete the Repair and Restoration for Landlord's account. If Tenant
completes the Repair and Restoration, Tenant shall be entitled to receive any
insurance proceeds available for such purpose in excess of those required to
reimburse Landlord for the Repair and Restoration undertaken by Landlord. If the
amount expended by Tenant to complete the Repair and Restoration (subject to the
limit provided above) exceeds the insurance proceeds available to Tenant, Tenant
shall be entitled to recover the remainder of such amount by reimbursement from
Landlord on demand or, if Landlord does not pay such reimbursement within thirty
(30) days after demand by Tenant, by set-off against the Base Rent payments next
due, subject to payment of Minimum Base Rent and Minimum Additional Rent.
4. Substantial Damage. If the damage is Substantial, Tenant may elect to
------------------
terminate the Lease within ten (10) days after receipt of Landlord's Estimate.
If Tenant does not elect to terminate the Lease, Landlord shall forthwith
complete the Repair and Restoration. If Landlord does not complete the Repair
and Restoration within sixty (60) days after the end of the period stated in
the Estimate ("Substantial Damage Restoration Date"), Tenant shall have the
right to either (a) terminate this Lease on ten (10) days written notice to
Landlord which notice must be delivered by Tenant to Landlord within ten (10)
days after the Substantial Damage Restoration Date; or (b) complete the Repair
and Restoration for Landlord's account. If Tenant completes the Repair and
Restoration, Tenant shall be entitled to receive any insurance proceeds
available for such purpose in excess of those required to reimburse Landlord
for the Repair and Restoration undertaken by Landlord. If the amount expended
by Tenant to complete the Repair and Restoration (subject to the limit provided
above) exceeds the insurance proceeds available to Tenant, Tenant shall be
entitled to recover the remainder of such amount by reimbursement from Landlord
on demand or, if Landlord does not pay such reimbursement within thirty (30)
days after demand by Tenant, by set-off against the Rent payments next due,
subject to payment of Minimum Base Rent and Minimum Additional Rent.
5. Uninsured Damage. If the estimated cost of the damage to the Demised
----------------
Premises or Tenant's Access is Two Hundred Fifty Thousand Dollars ($250,000) or
less and is caused by a casualty for which Landlord is not required to insure
under Article XVI and has not otherwise elected to obtain insurance coverage,
the damage is hereby deemed "Partial Uninsured" If the estimated cost of the
damage is over Two Hundred Fifty Thousand Dollars ($250,000) and is caused by a
casualty for which Landlord is not required to insure under Article XVI and has
not otherwise elected to obtain insurance coverage, the damage is hereby deemed
"Substantial Uninsured" Notwithstanding the other provisions of this Article
XII, if any damage caused by a casualty for which Landlord is not required to
insure under Article XVI and has not otherwise elected to obtain insurance
coverage, and is due to the negligence or wilful misconduct of Tenant or its
agents, officers, employees, subtenants, assignees, guests or invitees, the
repair and restoration of such casualty shall be at Tenant's expense.
25
6. Partial Uninsured Damage. If the damage is Partial Uninsured, Landlord
------------------------
shall deliver Tenant an Estimate and forthwith complete the Repair and
Restoration. If Landlord does not complete the Repair and Restoration within one
hundred thirty-five (135) days ("Partial Uninsured Damage Restoration Date"),
Tenant shall have the right to terminate this Lease on ten (10) days written
notice to Landlord which notice must be delivered by Tenant to Landlord within
ten (10) days after the Partial Uninsured Damage Restoration Date. If Landlord
does not complete the Repair and Restoration within fifteen (15) days after the
date stated in the Estimate, Tenant may complete the Repair and Restoration for
Landlord's account. If Tenant completes the Repair and Restoration, Tenant shall
be entitled to receive any insurance proceeds available for such purpose in
excess of those required to reimburse Landlord for the Repair and Restoration
undertaken by Landlord. If the amount expended by Tenant to complete the Repair
and Restoration (subject to the limit provided above) exceeds the insurance
proceeds available to Tenant, Tenant shall be entitled to recover the remainder
of such amount by reimbursement from Landlord on demand or, if Landlord does not
pay such reimbursement within thirty (30) days after demand by Tenant, by set-
off against the Rent payments next due, subject to payment of Minimum Base Rent
and Minimum Additional Rent.
7. Substantial Uninsured Damage. If the damage is Substantial Uninsured,
----------------------------
Landlord may elect to terminate this Lease by delivering written notice of such
termination within twenty (20) calendar days after the date of the damage. If
Landlord elects to terminate the Lease, then Tenant's Purchase Option pursuant
to Article XXIX, Paragraph 2 shall be accelerated on the following terms:
(a) Tenant must exercise the Purchase Option, if at all, by notice to
Landlord within ninety (90) days after Landlord gives notice of termination;
(b) The Close of Escrow shall occur within one hundred eighty (180)
days after Tenant elects to accelerate the Purchase Option but in no event
before sixty (60) days after a final damage estimate has been determined
pursuant to Paragraph (c), below;
(c) The Purchase Price shall be computed by substituting in Article
XXIX, Paragraph 2(a)(i), the Base Rent for the entire Building (including Suite
100) for the Lease Year in which the termination occurs and by deducting the
cost of repairing the damage as determined below. Landlord and Tenant shall
attempt to agree on the cost of repairing the damage. If they are unable to
agree within sixty (60) days after Tenant elects to accelerate the Purchase
Option, each shall select a contractor or other estimator (the "Estimator") to
determine the cost of repairing the damage. The Estimators shall be required to
estimate such cost within thirty (30) days after their appointment. If the two
cost estimates so determined do not differ by more than 10%, then the average of
such two cost estimates shall be the cost of repair. If the two cost estimates
differ by more than 10%, then the two Estimators shall select a third Estimator
who shall estimate the cost of repair within thirty (30) days after his
appointment. The two closest of the three appraised cost estimates shall then be
averaged to determine the cost of repair. The fees of each of the first two
Estimators shall be borne by the party who appointed each, the fees of any third
Estimator shall be borne 50% by Landlord and 50% by Tenant; and
26
(d) Landlord shall assign to Tenant any insurance proceeds to which
Landlord is entitled with respect to the casualty giving rise to the
termination, and the Purchase Price shall be increased by the amount of such
proceeds, if any.
If Landlord does not elect to terminate the Lease, Landlord shall deliver to
Tenant an Estimate. If the Estimate is for a period of one hundred twenty (120)
days or more, Tenant shall have the right to terminate the Lease within ten (10)
days after the date of receipt of Landlord's Estimate. If Tenant does not elect
to terminate the Lease, Landlord shall forthwith complete the Repair and
Restoration. If Landlord does not complete the Repair and Restoration within
sixty (60) days after the end of the period stated in the Estimate ("Substantial
Uninsured Damage Restoration Date"), Tenant shall have the right to either (a)
terminate this Lease on ten (10) days' written notice to Landlord which notice
must be delivered by Tenant to Landlord within ten (10) days after the
Substantial Uninsured Damage Restoration Date; or (b) complete the Repair and
Restoration for Landlord's account. If Tenant completes the Repair and
Restoration, Tenant shall be entitled to receive any insurance proceeds
available for such purpose in excess of those required to reimburse Landlord for
the Repair and Restoration undertaken by Landlord. If the amount expended by
Tenant to complete the Repair and Restoration (subject to the limit provided
above) exceeds the insurance proceeds available to Tenant, Tenant shall be
entitled to recover the remainder of such amount by reimbursement from Landlord
on demand or, if Landlord does not pay such reimbursement within thirty (30)
days after demand by Tenant, by set-off against the Rent payments next due,
subject to payment of Minimum Base Rent and Minimum Additional Rent.
8. Rent Abatement. From the date of such damage or destruction or
--------------
obstruction or hindrance of Access, a proportionate part of Base Rent and
Additional Rent according to the nature and extent of the Building rendered
unusable by Tenant thereby shall be abated until the completion of the Repair
and Restoration. In the event this Lease is terminated as hereunder provided,
Tenant shall pay the Base Rent and Additional Rent apportioned to the date of
such damage or destruction and thereafter Tenant shall be relieved of all
further liability for the payment thereof.
9. Damage Near End of Term. Notwithstanding anything to the contrary in
-----------------------
this Lease, if the Estimate is for a period extending beyond the remainder of
the Term, either Landlord or Tenant may terminate this Lease upon thirty (30)
days written notice to the other delivered within sixty (60) days after the date
of Tenant's receipt of the Estimate, provided, however, except in the case of
Uninsured Substantial Damage, Landlord may not exercise this right if Tenant has
previously exercised or exercises within said sixty (60) day period its Purchase
Option pursuant to Article XXIX, Paragraph 2, or an option to extend the Term
contained in this Lease, provided, further, however that Tenant's rights
contained in paragraphs 3, 4, 6, and 7 of this Article remain in effect.
10. Waiver. Tenant waives the provisions of California Civil Code sections
------
1932(2), 1933(4), 1941 and 1942 and any similar or successor statues relating to
the termination of leases in the event of damage or destruction, Landlord's
obligations for tenantability and Tenant's right to make repairs and deduct the
expenses of such repairs from
27
rent, and agrees that the parties' rights and obligations in such event shall
instead be governed by this Lease.
ARTICLE XIII
------------
CONDEMNATION
------------
1. Total Taking. In the event of a taking by condemnation or by the
------------
exercise of the power of eminent domain by a public or quasi-public authority or
entity or conveyance in lieu thereof (all hereinafter referred to as "Taking")
of the entire Demised Premises, this Lease shall terminate as of the earlier of
(a) the date of the vesting of title in the Taking authority or entity or (b)
the date of the taking of possession by such authority or entity so as to
deprive Tenant of the use thereof without the necessity for any further act or
notice by either party hereto (said earlier date being herein the "Taking
Date").
2. Substantial Taking. In the event either of the following occurs: (i) a
------------------
Taking occurs of a portion of the Demised Premises or the Building such that
undue hardship or substantial interference is caused in the conduct of Tenant's
business operations in the Demised Premises or (ii) a Taking occurs of a portion
of the Demised Premises or Building such that Tenant's access to the Demised
Premises is denied or interfered with substantially, Tenant shall have the right
to terminate this Lease upon written notice to Landlord given within thirty (30)
days of the Taking Date, which notice shall specify the effective date of such
termination, but which date shall not be more than fifteen (15) days after the
date of such notice. In the event that a Taking occurs of a substantial portion
of the Building resulting in undue hardship or substantial interference in the
conduct of business operations in the Building, Landlord shall have the right to
terminate this Lease upon written notice to Tenant given within thirty (30) days
of the Taking Date, which notice shall specify the effective date of such
termination, but which date shall not be more than fifteen (15) days after the
date of such notice. If Landlord elects to terminate the Lease, then Tenant's
Purchase Option pursuant to Article XXIX, Paragraph 2 shall be accelerated on
the following terms:
(a) Tenant must exercise the Purchase Option, if at all, by notice to
Landlord within ninety (90) days after Landlord gives notice of termination;
(b) The Close of Escrow shall occur within one hundred eighty (180)
days after Tenant elects to accelerate the Purchase Option;
(c) The Purchase Price shall be computed by substituting in Article
XXIX, Paragraph 2(a)(i), the scheduled Base Rent for the entire Building
(including Suite 100) for the Lease Year in which the termination occurs; and
(d) The Purchase Price shall be reduced as provided in Article XXIX,
Paragraph 2(e)(iii)(B).
28
3. Continuance of Lease. In the event this Lease is not canceled and
--------------------
terminated as a result of a Taking: (i) Base Rent and Additional Rent payable
hereunder shall abate from the Taking Date; such abatement in Base Rent and
Additional Rent shall be in proportion to the amount of the Demised Premises
subject to a Taking (and shall be permanent in the case of divestiture of
title); (ii) Landlord shall commence the work of repairing and restoring the
Building to a complete architectural unit and the work of restoring the
remainder of the Demised Premises as nearly as possible to the condition
existing immediately prior to the Taking and to restore Tenant's access to the
Building and Demised Premises or provide alternative access thereto, all such
work including the planning to be commenced promptly following the Taking Date,
and shall complete such work within one hundred twenty (120) days after the
Taking Date. If Landlord fails to complete the work of repair and restoration
within one hundred thirty-five (135) days after the Taking Date ("Final Work
Date"), Tenant shall have the right to either (a) terminate this Lease by
written notice given to Landlord within ten (10) days after the Final Work Date
effective on the date specified in the notice, which date shall not be more than
ten (10) days from the date of the notice; or (b) complete the repair and
restoration for Landlord's account. If Tenant completes the repair and
restoration, Tenant shall be entitled to receive any condemnation award
available for such purpose in excess of those required to reimburse Landlord for
the repair and restoration undertaken by Landlord. If the amount expended by
Tenant to complete the repair and restoration (subject to the limit provided
above) exceeds the condemnation award available to Tenant, Tenant shall be
entitled to recover the remainder of such amount by reimbursement from Landlord
on demand or, if Landlord does not pay such reimbursement within thirty (30)
days after demand by Tenant, by set-off against the Rent payments next due,
subject to payment of Minimum Base Rent and Minimum Additional Rent. Landlord
shall use its best efforts to obtain and retain the maximum amount of
condemnation award available for reconstruction of the Premises in accordance
with this paragraph 3.
4. Refund of Rent; Allocation of Award. In event of a Taking: (i) Tenant
-----------------------------------
shall, within ten (10) days after the effective date of the termination of this
Lease or after the effective date of abatement of Base Rent and Additional Rent,
as the case may be, receive a refund from Landlord of the appropriate Base Rent
and Additional Rent amount paid by Tenant for any period subsequent to the
effective date of termination or abatement, (ii) Landlord shall be entitled to
receive the entire condemnation award; provided, however, that Tenant may pursue
a separate claim against the condemning authority for Tenant's moving expenses,
the value of Tenant's leasehold estate, the value of Tenant's trade fixtures and
equipment and any interruption or damage to Tenant's business, and (iii)
Landlord shall pay to Tenant promptly after receipt thirty percent (30%) of any
amount by which (a) any condemnation award received by Landlord exceeds (b) the
cost of repairing and restoring the Demised Premises as required pursuant to
paragraph 3 of this Article XIII plus the Purchase Price that would apply
pursuant to Article XXIX, Paragraph 2(a) if computed using the scheduled Base
Rent for the Lease Year immediately following the Lease Year in which the Taking
occurs.
29
5. Cancellation and Termination Rights. Landlord and Tenant may exercise
-----------------------------------
any rights of cancellation and termination herein granted even though their
respective right, title, or interest may have been taken or divested.
ARTICLE XIV
-----------
SUBORDINATION, RECOGNITION, NON-DISTURBANCE AND ATTORNMENT
----------------------------------------------------------
1. Subordination. This Lease (including Tenant's Purchase Option pursuant
-------------
to Article XXIX, Paragraph 2) shall be subject and subordinate to the lien of
any mortgage or deed of trust ("Mortgage") of all or a portion of the fee
interest of the Demised Premises to (i) any institute or entity which in the
ordinary course of its business extends financing secured by real estate,
including without limitation, lending, thrift or banking institutions, pension
funds or insurance companies, or (ii) individuals who have at least five (5)
years experience in the management or development of real property and have a
net worth of at least Five Million Dollars ($5,000,000) ("Mortgagee"), to
provide construction and/or permanent financing and any renewals, modifications
or extensions thereof, provided that the total liens on the Property pursuant to
all Mortgages shall not exceed eighty percent (80%) of the Purchase Price which
would apply pursuant to Article XXIX, Paragraph 2(a), if computed using the Base
Rent in effect at the time any such additional Mortgage is granted, and that a
Subordination, Recognition and Non-Disturbance Agreement substantially in the
form of Exhibit F attached hereto and with such additional provisions as are
---------
reasonably required by the Mortgagee and reasonably acceptable to Tenant, is
executed, acknowledged and delivered by such Mortgagee to Tenant.
Tenant shall execute and send to Landlord any such Agreement within fifteen
(15) days of receipt of same if such Agreement contains substantially the
provisions set forth in Exhibit F and such additional provisions as are
---------
reasonably required by the Mortgagee and reasonably acceptable to Tenant, or
within fifteen (15) days after agreement of the parties to said Agreement of the
contents of same.
2. Priority of Mortgage. If the holder of any Mortgage of the Land and/or
--------------------
Building requires that this Lease have priority over such Mortgage, Tenant
shall, upon request of such holder, execute, acknowledge and deliver to such
holder an agreement acknowledging such priority.
3. Existing Mortgage. In the event of the existence of any Mortgage at
-----------------
the time this Lease is executed and to which this Lease would be subordinate,
Landlord shall obtain the type of agreement mentioned in this Article in favor
of Tenant. If such agreements with respect to existing Mortgages are not
obtained within fifteen (15) days after the Execution Date, Tenant may terminate
this Lease by written notice to Landlord at any time within forty-five (45) days
after the Date of Execution.
30
ARTICLE XV
----------
LANDLORD'S WARRANTIES AND FINANCIAL INFORMATION
-----------------------------------------------
1. Warranties. To induce Tenant to execute this Lease, and in
----------
consideration thereof, Landlord warrants and represents and covenants and
agrees as follows:
(a) Landlord is the fee owner of the Land and the Building.
(b) On the Date of Execution of this Lease, there are no liens,
restrictions or encumbrances placed upon the Building or Land other than those
shown on Exhibit F ("Permitted Encumbrances"). Landlord further represents to
---------
its best knowledge that none of the liens, restrictions or encumbrances listed
on Exhibit F does or shall materially adversely affect Tenant's use and
---------
occupancy of the Demised Premises. Landlord agrees that it shall not consent or
agree to the creation of, and shall not itself create, any liens and
encumbrances on the Building or Land except for the Permitted Encumbrances and
the Mortgages permitted pursuant to Article XIV, Paragraph 1 and except for
those to which Tenant consents in advance or which do not materially adversely
affect Tenant's use and occupancy of the Demised Premises or the value of the
Building or the Land.
(c) To Landlord's best knowledge, the Land and Building are in
compliance with zoning, setback and other land-use laws, ordinances, rules and
regulations, and there are no restrictions or other legal impediments either
imposed by law (including applicable zoning and building ordinances) or by any
instrument, which would prevent Tenant from using the Building for the uses and
in the manner contemplated in Article VII of this Lease.
(d) This Lease and the Building shall not be in violation of the
provisions of any instrument executed by Landlord or any instrument which
places any restrictions and burdens on the Land and/or Building.
(e) Landlord holds all easements required to provide for access or
utilities to the Building as such access and utilities are currently used.
(f) On the Date of Execution of this Lease, (a) Landlord is not in
default under any lease of the Land or Building, or any other agreement
affecting the Land or the Building or any Mortgage which encumbers the Land or
the Building, (b) this Lease and the Permitted Uses hereunder do not and will
not constitute a violation of any such agreement, lease or Mortgage, and (c)
all consents or approvals required by the terms of any such lease or Mortgage
for this Lease have been duly obtained by Landlord.
If Landlord breaches any of the representations or warranties listed above
or in the event any such representation or warranty proves to be false in any
material respect, Tenant shall have the right, at its option, in addition to
any other right hereunder or at law or equity, to terminate this Lease without
liability therefor if Landlord does not cure such breach or falsity to Tenant's
reasonable satisfaction within the period prescribed in Article
31
XXI, Section 1 and if such breach has a material adverse effect on Tenant's use
and occupancy of the Building or to cure such breach as provided in Article XXI.
2. Financial Information. Each Landlord (including, for purposes of this
---------------------
Paragraph 2, the successors and assigns of each Landlord) will provide to Tenant
within sixty (60) days after the close of each calendar year during the Term of
this Lease (including any extensions) a balance sheet for such Landlord prepared
by a certified public accountant, which fairly and accurately represents such
Landlord's assets and liabilities as of the end of such calendar year. Each
Landlord shall also give written notice to Tenant if at any time there is a
material adverse change in such Landlord's financial position from that reported
in the most recent annual balance sheet provided to Tenant, and such Landlord
shall include in such notice a description of the change. If, upon review of
such balance sheet or such notice of change, Tenant reasonably concludes that
the financial status of any Landlord other than Hare, Brewer & Kelley, Inc.
("HBK") has been materially impaired in a manner which would adversely affect
the ability of Tenant to enforce its Purchase Option pursuant to Article XXIX,
Paragraph 2 of this Lease, then Tenant's Purchase Option pursuant to Article
XXIX, Paragraph 2 shall be accelerated on the following terms:
(a) Tenant must exercise the Purchase Option, if at all, by notice
to Landlord within sixty (60) days after receiving Landlord's balance sheet or
notice of change;
(b) Tenant's notice of exercise of the Purchase Option shall contain
a statement of the basis for Tenant's conclusion that Landlord's financial
status has been materially impaired in a manner which would adversely affect
the ability of Tenant to enforce its Purchase Option;
(c) The Close of Escrow shall occur within one hundred eighty (180)
days after Tenant elects to accelerate the Purchase Option;
(d) The Purchase Price shall be computed by substituting in Article
XXIX, Paragraph 2(a)(i), the scheduled Base Rent for the entire Building
(including Suite 100) for the Lease Year in which Tenant elects to accelerate
the Purchase Option.
ARTICLE XVI
-----------
INSURANCE: WAIVER OF SUBROGATION
--------------------------------
1. Landlord's Insurance. Landlord shall obtain and maintain throughout
--------------------
the Term the following insurance coverage, the cost of which shall be an
Operating Cost:
(a) Fire and extended coverage insurance, including all risk of
physical loss and damage, upon the Building and the Common Area on a full
replacement basis as reasonably determined by Landlord and consented to by
Tenant, such consent not to be unreasonably withheld;
32
(b) Comprehensive liability coverage with respect to the Building
and the Common Area throughout the Term with combined single limit coverage of
Three Million Dollars ($3,000,000), and said policy shall contain a contractual
liability endorsement insuring Landlord's indemnity under this Lease.
Landlord shall, on the Term Commencement Date (and thereafter within thirty
(30) days after Tenant's request), deliver certificates of such policies to
Tenant evidencing the coverage required hereunder, which shall provide that the
insurance indicated therein shall not be materially changed, canceled or non-
renewed without at least thirty (30) days prior written notice to Tenant.
2. Tenant's Insurance. The Tenant shall maintain comprehensive general
------------------
liability insurance, including contractual liability endorsement, with respect
to the Demised Premises throughout the Term with combined single limit coverage
of Three Million Dollars ($3,000,000). The Tenant shall deliver to the Landlord
within thirty (30) days of Landlord's request a certificate evidencing the
aforesaid coverage issued by insurance companies authorized to do business in
the state wherein the Demised Premises are located and providing that the
insurance indicated therein shall not be materially changed, canceled or non-
renewed without at least thirty (30) days prior written notice to Landlord.
3. General Requirements. Each party shall give prompt notice to the other
--------------------
party of all losses, damages, or injuries to any person or to property of
Tenant, Landlord or third persons which may be in any way related to the Lease
and for which a claim might be made against the other party. Each party shall
promptly report to the other party all such claims of which the first party has
notice, whether related to matters insured or uninsured. No settlement or
payment for any claim for loss, injury or damage or other matter as to which
either party may be charged with an obligation to make any payment or
reimbursement, shall be made by either party without the written approval of the
other party. Both parties shall assist and cooperate with any insurance company
in the adjustment or litigation of all claims arising under the terms of this
Lease. In the event of any damage or destruction caused by a casualty for which
Landlord is required to maintain insurance under this Article XVI, Landlord
shall use its best efforts to obtain and retain the maximum amount of insurance
proceeds available for application to the cost of Repair and Restoration.
4. Waiver of Claims, Subrogation. Landlord and Tenant hereby waive all
-----------------------------
causes and rights of recovery against each other, their agents, officers and
employees for any loss occurring to the real or personal property of Landlord or
Tenant, regardless of cause or origin, to the extent of any recovery from any
policy(s) of insurance. Landlord and Tenant agree that any policies presently
existing or obtained on or after the date hereof (including renewals of present
policies) shall include a clause or endorsement to the effect that any such
release shall not adversely affect or impair said policies or prejudice the
right of the insured to recover thereunder.
5. Excess Insurance Proceeds. Landlord shall pay to Tenant promptly after
-------------------------
completing repair and restoration of any insured casualty thirty percent (30%)
of any amount by which any proceeds received by Landlord with respect to the
Land and/or Building from
33
casualty insurance required to be carried by Landlord pursuant to paragraph 1 of
this Article XVI exceed the cost of repair and restoration of such casualty.
ARTICLE XVII
------------
INDEMNIFICATION
---------------
1. Indemnity by Tenant. Tenant shall defend, indemnify and hold Landlord
-------------------
harmless from and against any and all suits, claims, and demands arising out of
injury or damage occurring at the Demised Premises because of the negligence or
willful acts of Tenant, its agents, servants, employees, or invitees, because of
Tenant's breach of any obligation under this Lease, or because of any other
occurrence for which Tenant is required to maintain insurance coverage under
this Lease.
If Landlord is notified of a claim, action or proceeding, or becomes aware
of an occurrence, which may result in indemnification by Tenant of Landlord as
provided above, Landlord shall give prompt written notice thereof to Tenant.
Landlord shall immediately forward to Tenant every demand, notice, summons or
other process received by Landlord or its representatives.
Tenant has the exclusive right and obligation to defend any claim, action,
or proceeding wherein Landlord is entitled to indemnification under the
provisions of this Article, but Tenant may settle any such claim, action, or
proceeding only with Landlord's prior written consent or approval, which shall
not be unreasonably withheld. Landlord will fully cooperate with Tenant in the
defense or settlement of any claim, action or proceeding.
2. Indemnity by Landlord. Landlord shall defend, indemnify and hold
---------------------
Tenant harmless from and against any and all suits, claims, and demands arising
out of injury or damage occurring at the Demised Premises or the Building
because of the negligence or willful acts of Landlord, its agents, servants,
employees, or invitees or because of Landlord's breach of any obligation under
this Lease. Landlord shall defend, indemnify and hold Tenant harmless from and
against any and all suits, claims and demands by any other tenant of the
Building arising out of the performance of Tenant's obligations pursuant to this
Lease to provide utilities, janitorial and maintenance services to the Building
and its associated grounds.
In the event Tenant is notified of a claim, action or proceeding, or
becomes aware of an occurrence, which may result in indemnification by Landlord
of Tenant as provided above, Tenant shall give prompt written notice thereof to
Landlord. Tenant shall immediately forward to Landlord every demand, notice,
summons or other process received by Tenant or its representatives.
Landlord has the exclusive right and obligation to defend any claim,
action, or proceeding wherein Tenant is entitled to indemnification under the
provisions of this Article, but Landlord may settle any such claim, action or
proceeding only with Tenant's prior
34
written consent or approval, which shall not be unreasonably withheld. Tenant
will fully cooperate with Landlord in the defense or settlement of any claim,
action, or proceeding.
3. Consequential Damages. Each party hereby waives any and all claims it
---------------------
may have against the other party for consequential damages arising out of the
act or omission or breach or alleged breach of this Lease by such other party.
ARTICLE XVIII
-------------
ASSIGNMENT AND SUBLETTING
-------------------------
1. Assignment and Subletting. Landlord hereby grants to Tenant the right
-------------------------
to sublet all or any portion of the Demised Premises throughout the Term,
including extensions thereof, and without first obtaining Landlord's consent,
provided that (a) the use made of the Demised Premises by any subleases is
permitted under Article VII of this Lease, and (b) Tenant remains primarily
liable for and retains management and control over the performance of any and
all maintenance, repair or restoration which Tenant is required or permitted to
perform pursuant to the terms of this Lease. Landlord hereby grants to Tenant
the right to assign this Lease throughout the Term, including extensions
thereof, provided Tenant first obtains Landlord's consent to such assignment in
writing. Landlord's consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, it shall be reasonable for Landlord to deny
consent to a proposed assignment (a) if the use to be made of the Demised
Premises by the proposed assignee would be prohibited by this Lease, or (b) if
the financial condition of the proposed assignee is not reasonably satisfactory
to Landlord. Landlord's consent or refusal of consent shall be in writing and,
if Landlord refuses consent, the reasons for such refusal are to be stated with
particularity. Landlord's consent to an assignment shall be accompanied by a
statement addressed to Tenant and the assignee, upon which statement Tenant and
the assignee may conclusively rely, stating that Tenant is not in default under
the Lease (or setting forth in what respects Tenant is in default), that this
Lease has not been amended or modified (or setting forth such amendments or
modifications), the expiration date of this Lease, and the date to which Rent
has been paid to Landlord hereunder. Any permitted assignment shall not be
effective unless and until the assignee delivers to Landlord an express
assumption by the assignee of all of Tenant's liabilities and obligations
pursuant to this Lease. Tenant shall be relieved of liability for its
obligations pursuant to this Lease only if (a) the permitted assignee is a
corporation with a net worth (as reflected in its audited financial statements
issued as of a date no more than ninety (90) days prior to the effective date of
the assignment) of at least Twenty Million Dollars ($20,000,000) and (b) the
holder of the mortgage having first priority on the Land and Building consents
to such release, such consent not to be unreasonably withheld. In the case of
any other assignment or subletting, regardless of whether Landlord consents to
such assignment or subletting, Tenant shall remain fully liable for all of its
obligations pursuant to this Lease.
35
2. Deemed Consent. If Landlord does not respond to the written request
--------------
for consent to assignment within fifteen (15) days after the date of such
request from Tenant, Landlord's consent is hereby deemed given.
3. Permitted Transfers. Notwithstanding anything to the contrary herein
-------------------
contained Tenant may assign or sublet all or any portion(s) of the Demised
Premises at any time to a subsidiary of Tenant, to the entity with which or into
which Tenant may merge, whether or not Tenant is the survivor of such merger, or
to any affiliate of Tenant without the need for Landlord's consent to such
assignment or subletting. For purposes of this Lease, the term "affiliate" means
any corporation which directly or indirectly controls, is controlled by, or is
under common control with Tenant. In the event of any such assignment or
subletting, Tenant shall remain fully liable for all of its obligations pursuant
to this Lease.
ARTICLE XIX
-----------
TENANT'S PROPERTY
-----------------
1. Tenant's Property. Tenant's trade fixtures and personal property
-----------------
described on Exhibit G attached hereto (collectively, "Tenant's Property")
---------
however installed or located on the Demised Premises shall be and remain the
property of Tenant and may be removed at any time and from time to time during
the Term, except that Tenant may not remove any portions of Tenant's Property
which are incorporated in the HVAC system or electrical, plumbing or mechanical
systems of the Building and installed by or at the expense of the Tenant prior
to the completion of the Interior Improvements. Tenant shall be entitled to all
depreciation and other tax benefits incidental to the ownership of Tenant's
Property. Tenant shall repair any damage caused by such removal or installation.
2. Removal. Upon the expiration or termination of this Lease, Tenant will
-------
remove Tenant's Property from the Demised Premises. If within ten (10) days
after such expiration or termination, Tenant shall not have removed same, it
shall be deemed abandoned, whereupon Landlord shall remove and store the same in
accordance with applicable law, including Tenant's right to redeem the same.
Tenant shall pay to Landlord upon demand the reasonable costs and expenses
incurred by Landlord in removing and storing Tenant's Property and shall pay the
reasonable cost of repairing any damage caused to the Demised Premises by the
removal of same.
3. Waiver of Lien. In no event (including a default under this Lease)
--------------
shall Landlord have any lien or other security interest in any of Tenant's
Property located in the Demised Premises or elsewhere and Landlord hereby
expressly waives and releases any such lien or other security interest however
created or arising.
36
ARTICLE XX
----------
TENANT'S DEFAULT
----------------
1. Events of Default. Tenant shall be deemed in default of this Lease if
-----------------
any of the following occur:
(a) If Tenant shall default in the payment of Rent and shall fail to
cure said default within ten (10) days after receipt of written notice of said
default from the Landlord; or
(b) if Tenant shall default in the performance or observance of any
other agreement or condition of this Lease to be performed or observed by
Tenant, and if Tenant shall fail to cure said default within ninety (90) days
after receipt of written notice of said default from Landlord (or if said
default cannot reasonably be cured within ninety (90) days, if Tenant fails to
commence to cure said default within ninety (90) days after receipt of written
notice thereof and thereafter diligently prosecute the cure to completion); or
(c) if Tenant shall file a voluntary petition in bankruptcy or shall
be adjudicated a bankrupt or insolvent, or shall file any petition or answer
seeking any arrangement, composition, liquidation or dissolution under any
present or future Federal, State, or other statute, law or regulation relating
to bankruptcy, insolvency or other relief for debtors, or shall seek or consent
to or acquiesce in the appointment of any trustee, receiver or liquidator of
Tenant or of all or any substantial part of its properties, or of the Demised
Premises, or shall make any general assignment for the benefit of creditors, or
shall admit in writing its inability to pay its debts generally as they become
due; or
(d) if a court shall enter an order, judgment or decree approving a
petition filed against the Tenant seeking any arrangement, composition,
liquidation, dissolution or similar relief under the present or future federal,
state or other statute, law or regulation relating to bankruptcy, insolvency or
other relief for debtors, and such order, judgment or decree shall remain
unvacated or unstayed for sixty (60) days.
2. Landlord's Remedies. In the event of any such default by Tenant,
-------------------
Landlord shall have, in addition to any other remedies available to Landlord at
law or in equity, the right to do the following:
(a) Termination. In the event of any default by Tenant, then after
-----------
complying with Code of Civil Procedure section 1161, Landlord may immediately
terminate this Lease and Tenant's right to possession of the Demised Premises by
giving Tenant written notice that this Lease is terminated, in which event this
Lease shall terminate and Landlord may recover from Tenant:
(i) the worth at the time of award of any unpaid Rent which
had been earned at the time of such termination; plus
37
(ii) the worth at the time of award of the amount by which the
unpaid Rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(iii) the worth at the time of award of the amount by which the
unpaid Rent for the balance of the Term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided; plus
(iv) any reasonable expenses incurred by Landlord in
connection with obtaining possession of the Demised Premises, with removing from
the Demised Premises property of Tenant and persons claiming under it (including
warehouse charges), with putting the Demised Premises into the condition
required under Article XXVI of the Lease, and with any reletting, including but
without limitation, reasonable attorney's fees and broker's fees, but excluding
the cost of any additional interior improvements or tenant rent concessions. All
monies collected from any reletting shall be applied first to the foregoing
expenses and then to the payment of Rent and all other payments due from Tenant
to the Landlord under this Lease. In no event shall Tenant be liable for
consequential damages to Landlord and Landlord shall have no right to recover
damages under Civil Code section 1951.2(a)(4). Landlord shall use its best
efforts to relet the Demised Premises by actively offering the same for rent in
order to mitigate damages which may be incurred because of Tenant's default; or
(b) Continue Lease. Have this Lease continue in effect for so long
--------------
as Landlord does not terminate this Lease and Tenant's right to possession of
the Demised Premises, in which event Landlord shall have the right to enforce
all of Landlord's rights and remedies under this Lease, including the right to
recover all rentals payable by Tenant under this Lease as they become due.
As used in subparagraphs 2(a)(i) and (ii) above, the "worth at the time of
award" is computed by allowing interest at the maximum rate permitted by law per
annum. As used in subparagraph 2(a)(iii) above, the "worth at the time of award"
is computed by discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one percent (1%).
(c) Right to Cure. If Tenant shall at any time fail, after written
-------------
notice and the expiration of any applicable grace period, to perform any
obligation required of Tenant hereunder, then Landlord may, at its option, and
upon giving written notice to Tenant, perform such obligation to the extent
Landlord deems reasonably necessary, and may pay any and all reasonable expenses
incidental thereto. No such action by Landlord shall be deemed a waiver by
Landlord of any of Landlord's rights or remedies, or a release of Tenant from
performance of such obligation. All sums so paid by Landlord shall be due and
payable by Tenant to Landlord within Twenty (20) days after the date of
Landlord's invoice therefor. Landlord shall have the same rights and remedies
for the nonpayment of any such sums as for default by Tenant in the payment of
Rent.
38
(d) Remedies Not Exclusive. No remedy or election hereunder shall be
-----------------------
deemed exclusive but shall wherever possible be cumulative with all other
remedies available; provided, however, nothing contained herein shall permit
Landlord to recover consequential damages as a result of Tenant's default
hereunder.
(e) Termination, Surrender and Abandonment. No acts or conduct of
--------------------------------------
Landlord, including, without limitation, efforts to relet the Demised Premises,
an action in unlawful detainer or service of notice upon Tenant or surrender of
possession by Tenant pursuant to such notice or action, shall extinguish the
liability of Tenant to pay rent or other sums due hereunder or terminate this
Lease, unless Landlord notifies Tenant in writing of Landlord's election to
terminate this Lease. No act or conduct of Landlord, including the acceptance of
the keys to the Demised Premises, other than a written acknowledgment of
acceptance of surrender signed by Landlord, shall be deemed to be or constitute
an acceptance of the surrender of the Demised Premises by Tenant prior to the
expiration of the Lease term. The surrender of this Lease by Tenant, voluntarily
or otherwise, shall, at Landlord's option, operate as an assignment to Landlord
of any and all existing assignments and subleases, or, except for any
assignments which are permitted or which Landlord has given consent in
accordance with Article XVIII, Landlord may elect to terminate any or all of
such assignments and subleases by notifying the assignees and sublessees of its
election within fifteen (15) days after such surrender.
ARTICLE XXI
-----------
LANDLORD'S DEFAULT
------------------
1. Landlord's Default. If Landlord shall default in the performance or
------------------
observance of any agreement, obligation, or condition in this Lease requiring
the payment of money and shall not cure such default within ten (10) days after
receipt of written notice thereof from Tenant or if Landlord shall default in
the performance or observance of any agreement, obligation or condition in this
Lease other than one requiring the payment of money and shall not cure such
default within thirty (30) days after receipt of written notice thereof from
Tenant (or if such cure cannot reasonably be effected within thirty (30) days,
shall not within said period commence to cure and thereafter prosecute the
curing of such default to completion with due diligence), Tenant may, at its
option, without waiving any claim for damages for breach of agreement, at any
time thereafter cure such default for the account of Landlord. In effecting such
cure, Tenant may, without limitation, hire repairmen, pay bills, and generally
perform any other act which Landlord is required to perform hereunder. All costs
incurred by Tenant in curing such default shall be paid to the applicable party
by Landlord. If, however, Tenant pays any costs or expenses on account of such
cure, Landlord shall immediately reimburse Tenant on demand for such payments.
If Landlord has not made such reimbursement to Tenant by the date Base Rent or
Additional Rent is next due, Tenant may deduct such amounts from Base Rent or
Additional Rent until Tenant has been fully reimbursed, provided that Tenant
shall continue to pay in any event the Minimum Base Rent required under Article
IV, Paragraph 4 and the Minimum Additional Rent required under Article V,
Paragraph 12.
39
EXHIBIT E
RECOGNITION AND ATTORNMENT AGREEMENT
THIS RECOGNITION AND ATTORNMENT AGREEMENT (this "Agreement") is made as of
1996, by and between Richard R. Kelley, Jr., Charles E. Hangar and
- -----------
Faye E. Hangar, and Harry L. Fox (as successor-in-interest to Hare, Brewer and
Kelly, Inc.) ("Landlord"), TIBCO, Inc., a Delaware Corporation ("Sublessor") and
Artemis Research, a California corporation ("Sublessee").
A. Digital Equipment Corporation ("DEC") is the tenant under a certain
Amended and Restated Lease ("Original Lease") from Landlord executed November
26, 1990, which Original Lease, was amended by First Amendment to Amended and
Restated Lease ("First Amendment") (such Original Lease, as amended by the First
Amendment is referred to hereafter as the "Prime Lease") and DEC is the
sublandlord and Sublessor is the subtenant under a certain Sublease dated
February 17, 1995 (the "Prime Sublease"). The premises leased under the Prime
Lease and subleased under the Prime Sublease are the land, with the building and
improvements thereon, at 335 Bryant Street, Palo Alto, California, 94301 (as
more particularly described in the Prime Lease, the "Premises").
B. Sublessor has entered into or is entering into a sublease of the
Premesis (the "Sublease") with Sublessee.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord, Sublessor and Sublessee
hereby agree as follows:
1. The Sublease is subject and subordinate to the Prime Lease.
2. Landlord agrees to give Sublessee written notice of the occurrence of
any default by DEC under the Prime Lease and to accept as a cure of such
default, any cure by Sublessee of such default within the applicable cure period
provided for in the Prime Lease, which cure period, for purposes hereof, shall
commence on the date of delivery to Sublessee of the notice of default.
3. If the Prime Lease is surrendered to Landlord or if the Prime Lease is
terminated as a result of a default by DEC that by its nature is personal to DEC
and not curable by Sublessee, then Landlord agrees that so long as Sublessee is
not in default under the Sublease, which default has not been cured or is not in
the process of being cured within any applicable grace period provided under the
Sublease, the following shall apply:
(i) Sublessee shall not be evicted, not shall Sublessee be joined in
any eviction or unlawful detainer action or proceeding instituted or taken by
Landlord; and
(ii) Landlord shall succeed to the interest of Sublessor in the
Sublease and Sublessee shall be bound to Landlord under all of the terms,
covenants and conditions of the Sublease, for the remaining term thereof, with
the same force and effect as if Landlord were the Sublessor under the Sublease,
and Sublessee does hereby agree to attorn to Landlord, such attornment to be
effective and self operative without the execution of any further instruments on
the part of any of the parties to this Agreement, immediately upon Landlord
succeeding to the interest of Sublessor under the Sublease.
4. The covenants and agreements contained herein shall be binding upon and
inure to the benefit of the respective heirs, administrators, executors, legal
representatives, successors, and assigns of the parties hereto.
5. In the event that any party fails to perform any of its obligations
under this Agreement or in the event a dispute arises concerning the meaning or
interpretation of any provision of this Agreement, the defaulting party or the
party not prevailing in such dispute, whichever the case may be, shall pay any
and all costs and expenses incurred by the other parties in enforcing or
establishing their rights hereunder, including court costs and reasonable
attorneys' fees.
6. This Agreement shall not be modified or amended except by a written
instrument executed by all of the parties hereto.
7. This agreement shall not be nor be deemed to be a consent or waiver or
amendment of the Prime Lease with respect to any other or future transaction,
whether similar or dissimilar, and any other or future transaction shall require
Landlord's written consent, which consent, except as otherwise expressly
provided in the Prime Lease, may be given or withheld in Landlord's sole
discretion.
2
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
LANDLORD
---------------------------
Richard R. Kelly, Jr.
---------------------------
Charles E. Hangar
---------------------------
Faye E. Hangar
---------------------------
Harry L. Fox
TIBCO INC.
By
-------------------------------
Print Name
-----------------------
Its
------------------------------
TENANT
ARTEMIS RESEARCH
By
-------------------------------
Print Name
-----------------------
Its
------------------------------
3
If Tenant has cured a default of Landlord and is entitled to a set-off
against Rent (whether pursuant to this Article XXI, Paragraph 1 or any other
provision of this Lease), and the amount to be recovered by set-off exceeds One
Hundred Thousand Dollars ($100,000), Tenant may require Landlord to execute,
acknowledge and deliver to Tenant an interest-free promissory note in the total
principal amount of the reimbursement due Tenant, payable in installments
corresponding to the portions of Rent payments which Tenant is entitled to
setoff but subject to acceleration and full reimbursement upon the Close of
Escrow for Tenant's purchase of the Land of Building pursuant to its Purchase
Option if exercised, as well as a deed of trust on the Land and Building
securing such note.
If Tenant has cured a default of Landlord and is entitled to a set-off
against Rent (whether pursuant to this Article XXI, Paragraph 1 or any other
provision of this Lease), and the amount to be recovered by set-off is such that
Tenant would not recover the full amount within the remaining Original Term of
this Lease, then Tenant may accelerate its Purchase Option pursuant to Article
XXIX, Paragraph 2 on the following terms:
(a) Tenant must exercise the Purchase Option, if at all, by notice
to Landlord within sixty (60) days after set-off Rent commences;
(b) The Close of Escrow shall occur within one hundred eighty (180)
days after Tenant elects to accelerate the Purchase Option;
(c) The Purchase Price shall be computed by substituting in Article
XXIX, Paragraph 2(a)(i), the schedule Base Rent for the entire Building
(including Suite 100) for the Lease year in which Tenant elects to accelerate
the Purchase Option.
2. Emergency. In the event of an emergency which threatens imminent
---------
injury to persons or material damage to property, Tenant may use any means
including, without limitation, telephone to notify Landlord of such emergency.
Tenant shall have no other obligation to act with respect to such emergency,
but Tenant shall have the right to commence cure pursuant to Paragraph 1 of this
Article XXI immediately, without waiting for Landlord to commence cure.
3. Acquisition of HBK Interest. If HBK's interest in Land and Building
---------------------------
has not been acquired on or before December 1, 1991 on the terms set forth in an
Agreement for Acquisition of Co-Tenant's Interest in Real Property entered into
between Landlord and Tenant (the "Acquisition Agreement") by a party to the
Acquisition Agreement or another buyer authorized pursuant to the Acquisition
Agreement, then Tenant shall have the option to terminate this Lease or
accelerate its Purchase Option pursuant to Article XXIX, Paragraph 2 upon thirty
(30) days written notice to Landlord, provided that such notice is given no
later then January 1, 1992. If Tenant elects to accelerate its Purchase Option,
the Purchase Option should be exercised on the following terms:
(a) The Close of Escrow shall occur within one hundred eighty (180)
days after Tenant elects to accelerate the Purchase Option;
40
(b) The Purchase Price shall be computed by substituting in Article
XXIX, Paragraph 2(a)(i), the schedule Base Rent for the entire Building
(including Suite 100) for the Lease Year in which Tenant elects to accelerate
the Purchase Option.
ARTICLE XXII
------------
NOTICES
-------
1. In Writing. All notices, demands, requests and other instruments
----------
which may or are required to be given by either party to the other under this
Lease shall be given in writing.
2. Notice to Tenant. All notices, demands, requests and other
----------------
instruments from Landlord to Tenant shall be deemed to have been given upon
receipt if sent by United States Registered or Certified Mail, postage prepaid,
return receipt requested, or by overnight courier service, addressed to the
Tenant at Tenant's Address with a copy to Tenant's counsel at 111 Powder Mill
Road, Maynard, Massachusetts, 01754, Attention: General Counsel.
3. Notice to Landlord. All notices, demands, requests and other
-----------------
instruments from Tenant to Landlord shall be deemed to have been properly given
upon receipt if sent by United States Registered or Certified Mail, postage
prepaid, return receipt requested, or by overnight courier service, addressed as
follows:
Richard R, Kelley, Jr.
314 Raymundo Way
Woodside, California 94025
with a copy to:
Premier Properties
532 Florence Street
Palo Alto, California 94301
ARTICLE XXIII
-------------
QUIET ENJOYMENT
---------------
Landlord covenants and agrees with Tenant that upon Tenant paying the Rent
and observing the terms, covenants and conditions on Tenant's part to be
observed and performed, Tenant may peaceably and quietly enjoy the premises
demised hereby.
41
ARTICLE XXIV
------------
HOLDING OVER
------------
If Tenant or anyone claiming under Tenant shall remain in possession of the
Demised Premises or any part thereof after expiration of the Term of this Lease
without any agreement in writing between Landlord and Tenant with respect
thereto, such possession shall be deemed a month to month tenancy under all the
terms, covenants and conditions of this Lease except that such tenancy may be
terminated upon thirty (30) days written notice from one party to the other.
It is hereby agreed by and between Landlord and Tenant that if Tenant or anyone
claiming under Tenant leaves any property in the Demised Premises at the
expiration of the Term or any renewal or extension thereof, such shall not
constitute a holding over by Tenant.
ARTICLE XXV
-----------
MEMORANDUM OF LEASE AND OPTION
------------------------------
At the time of the execution of this Lease, Landlord and Tenant shall
execute an instrument in the form of Exhibit H attached hereto. Tenant may
---------
record the same.
ARTICLE XXVI
------------
SURRENDER OF DEMISED PREMISES
-----------------------------
Tenant shall, at the expiration of the Term of this Lease, peaceably yield
up to Landlord the demised Premises in good repair in all respects, damage by
fire or other casualty (unless Tenant is responsible for such damage pursuant to
the terms of this Lease), reasonable wear and tear, or other conditions for
which Tenant is not responsible under this Lease excepted.
ARTICLE XXVII
-------------
ESTOPPEL CERTIFICATES
----------------------
Upon the request of either party, at any time and from time to time,
Landlord and Tenant agree to execute and deliver to the other within fifteen
(15) business days after receipt of such request, a written instrument, duly
executed and (i) certifying that this Lease has not been modified and is in full
force and effect or, if there has been a modification of this Lease, that this
Lease is in full force and effect or, if there has been a modification of this
Lease, that this lease is in full force and effect as modified, stating such
modifications; (ii) specifying the date to which the Rent has been paid; (iii)
stating whether or not to the best knowledge, information and belief of the
party executing such instrument, the other party hereto is in default and, if
such party is in default, stating the nature of such default;
42
(iv) stating the Term Commencement Date; and (v) stating which options to extend
the Term have been exercised, if any.
ARTICLE XXVIII
--------------
HAZARDOUS SUBSTANCES
--------------------
1. Definitions.
-----------
(a) "Demised Premises" includes, for purposes of this Article only,
----------------
the Building, other improvements and the Land on which they are located.
(b) "Environmental Laws" shall mean all federal, state and local
------------------
statutes, laws, ordinances, rules and regulations and judicial and
administrative orders, rulings and decisions relating to pollution or protection
of human health or the environment, including, without limitation, laws and
regulations relating to emissions, discharges, releases or threatened releases
of Hazardous Substances, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Substances.
(c) "Hazardous Substances" means any chemical, substance, waste,
--------------------
material, gas or emission which is deemed hazardous, toxic, a pollutant or
contaminant, under any federal, state or local statute, law, ordinance, rule,
regulation, or judicial or administrative order or decisions, now or hereafter
in effect, or which have been shown to have significant adverse effects on human
health or the environment. "Hazardous Substances" include, but are not limited
to, petroleum and petroleum products, asbestos, polychlorinated biphenyls (PCBs)
and radon gas.
(d) "Hazardous Substance on the Demised Premises" means any
-------------------------------------------
Hazardous Substance present in or on the Demised premises including, without
limitation, in or on the surface or beneath the Demised Premises, the surface
water or groundwater, and in or on any improvement or part thereof at or beneath
the surface of the Demised Premises.
(e) "Underground Storage Tank" means any one or combination of
------------------------
tanks (including underground pipes connected thereto), the total volume of which
(including the volume of the underground pipes connected thereto) is ten percent
(10% or more beneath the surface of the ground.
2. Representations and Warranties. To induce Tenant to execute this
------------------------------
Lease, and represents that, to Landlord's knowledge on the Date of Execution,
without any inspection or investigation having been undertaken by Landlord to
confirm such matters:
43
(a) Compliance with Law. Except as otherwise disclosed in writing
-------------------
to Tenant, all activities on the Demised Premises undertaken by Landlord or its
employees and agents have been undertaken in full compliance with all
Environmental Laws. Landlord has disclosed to Tenant all threatened or pending
litigation or administrative actions relating to the use or disposal of
Hazardous Substances on the Demised Premises.
(b) Hazardous Substances. Except as otherwise disclosed in writing
--------------------
to Tenant, no Hazardous Substances are in or on the Demised Premises, no
Hazardous Substances are being released into the environment by Landlord from,
in, or on, the Demised Premises, Landlord has not arranged for the off-site
disposal of any Hazardous Substances generated on the Demised Premises, nor have
wastes from Hazardous Substances been generated, treated or disposed of on the
Demised Premises during Landlord's ownership of the Demised Premises.
(c) Indoor Environment. The air and water supplies of the Demised
------------------
Premises do not release, circulate or introduce any substances that pose a
hazard to human health or an impediment to working conditions. Landlord has not
taken, or caused to be taken, any action with respect to the air and water
supplies of the Demised Premises that would release, circulate, or introduce any
substances that pose a hazard to human health or an impediment to working
conditions.
(d) Underground Storage Tanks. There are no Underground Storage
-------------------------
Tanks on the Demised Premises.
(e) PCBs. There are no transformers, capacitors, switches, or
----
other equipment on the Demised Premises which contain PCBs.
(f) Asbestos. Except as otherwise disclosed in writing by Landlord
--------
to Tenant, there is no asbestos currently located on or about the Demised
Premises.
Notwithstanding anything to the contrary stated herein, all representations
contained in this paragraph 2 shall continue to be valid for the entire Term of
the Lease. In the event (i) Landlord breaches any of the representations or
warranties listed above, or (ii) any such representation or warranty proves to
be false, then in each of the foregoing instances, (x) Landlord shall remedy
such breach at Landlord's expense, (y) on the fifth (5th) day after Tenant gives
Landlord written notice of the breach or falsity, Rent shall abate in full until
the breach is remedied, and on the thirtieth (30th) day after Tenant gives
Landlord written notice of the breach or falsity, Tenant shall have the
additional right, at its option and in addition to any other right hereunder or
at law or in equity, to terminate this Lease without liability therefor.
Notwithstanding the foregoing, Tenant shall not be entitled to abate rent or to
terminate this Lease as a result of the presence upon or about the Demised
Premises of any Hazardous Substance which presence is disclosed to Tenant in
writing by Landlord prior to the execution hereof.
3. Landlord's Indemnity. Landlord, its employees, agents, contractors,
--------------------
guests, invitees or licensees, shall not generate, store, dispose of, release or
otherwise handle any
44
Hazardous Substance on the Demised Premises in any fashion contrary to
Environmental Laws. Landlord shall remove, cleanup and remedy any Hazardous
Substance on or under the Demised Premises to the extent required by
Environmental Law unless such Hazardous Substance resulted from the generation,
storage, treatment, handling, transportation, disposal, or release by Tenant,
its employees, agents, contractors, guests, invitees or licensees. Landlord
agrees to defend, indemnify and hold harmless Tenant, its officers, directors,
employees and agents, from and against any and all liability, loss, suits,
claims, actions, causes of action, proceedings, demands, costs, penalties, fines
and expenses, including without limitation attorneys' fees, consultants' fees,
litigation costs, and cleanup costs, asserted against or incurred by Tenant at
any time and from time to time by reason of or arising out of the presence of
any Hazardous Substance on the Demised Premises unless such Hazardous Substance
resulted from the generation, storage, treatment, handling, transportation,
disposal, or release by Tenant, its employees, agents, contractors, guests,
invitees or licensees. The foregoing obligation of Landlord shall survive the
expiration or sooner termination of this Lease.
4. Tenant's Obligations and Indemnity. Tenant, its employees, agents,
----------------------------------
contractors, subtenants, assignees, guests, invitees or licensees, shall not
generate, store, dispose of, release or otherwise handle any Hazardous Substance
on the Demised Premises in any fashion contrary to Environmental Laws. Tenant
shall remove, cleanup and remedy any Hazardous Substance on or under the Demised
Premises to the extent required by Environmental Law provided that such
Hazardous Substance resulted from the generation, storage, treatment, handling,
transportation, disposal, or release by Tenant, its employees, agents,
contractors, subtenants, assignees, guests, invitees or licensees.
Tenant shall indemnify, defend and hold harmless landlord from and against
any and all liability, loss, suits, claims, actions, causes of action,
proceedings, demands, costs, penalties, fines and expenses, including without
limitation attorneys' fees, consultants' fees, litigation costs and cleanup
costs asserted against or incurred by Landlord at any time and from time to time
arising out of the generation, storage, treatment, handling, transportation,
disposal or release of any Hazardous Materials on or under the Demised Premises
by Tenant, its agents, employees, contractors, subtenants, assignees, guests,
invitees or licensees. The foregoing obligation of Tenant shall survive the
expiration or sooner termination of this Lease.
ARTICLE XXIX
------------
RIGHT OF FIRST REFUSAL; OPTION TO PURCHASE
------------------------------------------
1. Right of First Refusal. If during the Term of this Lease Landlord
----------------------
desires to sell or exchange its ownership interest in the Land and/or Building
(the "Property"), or receives a bona fide offer to purchase or exchange the
Property to anyone (the "Other Buyer") and Landlord desires to accept such offer
(the "Outside Offer".) Landlord shall first offer in writing to sell or exchange
the Property to Tenant on the same terms and conditions and at the same price as
set forth in the Outside Offer or, if no Outside Offer has been received, on the
terms and conditions and at the price at which Landlord desires to sell or
45
exchange its ownership interest in the Property (such terms, conditions and
price, whether set forth in the Outside Offer or as determined by Landlord
without any Outside Offer, are referred to herein as the "Offer"). Tenant shall
have twenty (20) business days from the delivery of written notice of the Offer
to elect in writing to exchange for or purchase the Property upon the terms and
conditions of the Offer. Should Tenant elect not to exchange for or purchase the
Property on such terms and conditions or should Tenant fail to respond in
writing within said twenty (20) business days, Landlord may sell or exchange the
Property to the Other Buyer or any other party on substantially the terms and
conditions and at not less than ninety-five percent (95%) of the price set forth
in the Offer, provided that the closing occurs within one hundred eighty (180)
days after the date of the Offer. If there are changes in the price or the terms
of the Offer exceeding those allowed in the preceding sentence or if the
transaction is not closed within said one hundred eighty (180) day period,
Landlord shall not sell or exchange the Property without first offering to sell
or exchange the Property to Tenant pursuant to this Article XXIX.
2. Option to Purchase. In consideration of the execution by Tenant of
------------------
this Lease, Landlord hereby grants to Tenant the option to purchase the Property
(the "Purchase Option"), at the price and upon the terms set forth in this
Article XXIX, paragraph 2, by giving written notice (the "Notice of Exercise")
to Landlord on or before November 30, 1999, provided that this Lease is still in
full force and effect. The date on which such notice is given is hereinafter
referred to as the "Exercise Date."
Notwithstanding any provision of this Article XXIX, paragraph 2 to the
contrary, if at the time Tenant gives the Notice of Exercise Tenant is in
default of this Lease pursuant to paragraph 1(a), 1(c) or 1(d) of Article XX
(but as to paragraph 1(a), only if the payments as to which Tenant is in
default exceed One Hundred Thousand Dollars ($100,000) and are not paid by
Tenant, including payment under protest, within thirty (30) days after Tenant
gives the Notice of Exercise), then the Notice of Exercise shall be totally
ineffective, the rights of Tenant under this Article XXIX, paragraph 2 shall
terminate and Landlord and Tenant shall thereupon be relieved of all further
obligation or liability in connection with the Purchase Option, but rights and
obligations of Landlord and Tenant under all provisions of this Lease other than
the provisions of this Article XXIX, paragraph 2 shall continue.
(a) Purchase Price. The purchase price for the Property (the
--------------
"Purchase Price") shall be the total of:
(i) a sum computed by multiplying the total of the scheduled
Base Rent under this Lease for the entire Building (including Suite 100) payable
for the period December 1, 2000 through November 30, 2001 by one hundred two and
one-half percent (102.5%); and dividing the product resulting from the previous
calculation by a factor of eight hundredths (.08); and multiplying the result of
such division by ninety-seven percent (97%);
plus (ii) that portion of all capital expenditures incurred by
----
Landlord which have not been reimbursed to Landlord by the tenants of the
Property through direct payment or amortization of such capital expenditures,
46
The Purchase Price shall be paid on the Closing Date (as hereinafter
defined) in cash or by Federal Reserve Bank wire transfer, with appropriate
Closing adjustments as provided in paragraph (i) below.
(b) Closing. If Tenant gives the Notice of Exercise, the delivery of
-------
the deed to the Property, the payment of the Purchase Price and the closing of
the purchase of the Property by Tenant pursuant to this Article XXIX, paragraph
2 (the "Closing") shall occur at 10:00 a.m. at the offices of Aufmuth, Fox &
Baigent, on or about November 30, 2000 (such date, as the same may be extended
as hereinafter expressly provided, is hereinafter referred to as the "Closing
Date"). It is agreed that time is of the essence of this Article XXIX, paragraph
2.
(c) Title. At the Closing, Landlord shall convey the Property by a
-----
grant deed running to Tenant, or to such grantee as Tenant may designate by
notice given to Landlord at least three (3) business days before the Closing
Date, and the deed shall convey title to the Property free from encumbrances
except:
(i) Taxes as are not delinquent on the Closing Date or for which
Tenant has assumed the obligation to pay pursuant to Article V, paragraph 7;
(ii) Assessments for municipal or other betterments as are not
delinquent on the Closing Date or for which Tenant has assumed the obligation to
pay pursuant to Article V, paragraph 7;
(iii) Those Permitted Encumbrances as shown on Exhibit F which are
---------
non-monetary encumbrances;
(iv) Such other non-monetary encumbrances as are permitted pursuant
to Article XV, Paragraph 2; and
(v) Such other matters as Tenant may approve in writing at or prior
to the Closing Date.
Items (i) through (v) of this Paragraph 2(c) are referred to herein
collectively as the "Permitted Exceptions". The grant deed shall be in a form
sufficient to convey marketable and insurable title to Tenant. The words
"insurable title" shall mean title which may be insured under a standard ALTA
owner's policy of title insurance subject to the Permitted Exceptions.
(d) Condition of Premises. On the Closing Date Landlord shall deliver to
---------------------
Tenant possession of the Property subject to the rights of any tenants of the
Property which are subtenants or assignees of Tenant, and the Building to be in
compliance with all laws and in the same condition as it now exists on the Term
Commencement Date, reasonable use and wear thereof excepted, all Shell
Improvements excepted, and all Interior Improvements and Alterations made by
Tenant excepted.
47
(e) Perfection of Title or Condition.
--------------------------------
(i) Landlord shall be obligated to remove defects in title on
the following terms:
(A) Landlord shall at its sole expense remove from title
at or prior to the Close of Escrow, all monetary encumbrances which existed at
the Date of Execution or which were voluntarily granted by Landlord after the
Date of Execution.
(B) Landlord shall as its sole expense either (I) remove
from title at or prior to the Close of Escrow or (II) secure prior to Close
of Escrow a commitment from the issuer of title insurance, to issue title
insurance and/or endorsement insuring Tenant against loss due to all monetary
encumbrances arising after the Date of Execution which are not among the
Permitted Exceptions granted by Landlord.
(C) If Landlord does not remove or obtain insurance
against all title defect at or before Close of Escrow as provided in paragraph
(A) and (B), above, then Tenant may remove such encumbrances itself at the Close
of Escrow and deduct from the Purchase Price the reasonable costs incurred by
Tenant in removing such encumbrances. If such costs incurred by Tenant exceed
the Purchase Price, Landlord shall pay the excess to Tenant at the Close of
Escrow.
(ii) If on the Closing Date, Landlord shall have failed to make
the Premises conform, as required in this Article XXIX, paragraph 2, then
Tenant may elect, by written notice given to Landlord on or before the extended
Closing Date:
(A) to accept the Property in its then existing condition
and to pay therefor the Purchase Price with the appropriate deduction (except in
the event of a casualty if Taking as provided in Article XXIX, paragraph
2(e)(iii)(A) or (B) hereinbelow); or
(B) to rescind Tenant's Notice of Exercise and Landlord
and Tenant shall thereupon be relieved of all further obligation or liability in
connection with the Option to Purchase, but such rescission shall not affect the
continued rights and obligations of Landlord and Tenant under all provisions of
this Lease other than those of this Article XXIX, paragraph 2.
(iii) If, on the Closing Date, the Building shall have been
damaged by fire or casualty insured against and shall not have been repaired or
restored to its former condition, and Tenant agrees to accept such title and
possession as Landlord can deliver and to accept the Property in its then
condition pursuant to Article XXIX, paragraph 2(e)(ii)(A) if this Lease, then:
(A) Landlord shall either (1) pay over or assign to
Tenant, at the Closing, all amounts recovered or recoverable on account of such
insurance, or (2) if a holder of a Mortgage on the Land shall not permit the
insurance proceeds or a part thereof to
48
be used to restore the Building to its former condition or to be so paid or
assigned to Tenant, give to Tenant a credit against the Purchase Price equal to
the amount of the insurance proceeds retained by the Mortgagee, less in either
case, any amounts expended or incurred by Landlord in the repair or restoration
of the Building; and
(B) if any portion of the Land and/or Building
shall have been the subject of a Taking, the Purchase Price shall be reduced by
an amount agreed upon by Landlord and Tenant to reflect the value of the portion
of the Land and/or Building so taken. Landlord shall be entitled to retain the
proceeds of such Taking, subject to the provisions of Article XIII, paragraph 4
of this Lease.
(f) Use of Purchase Money. To enable Landlord to convey the
---------------------
Property as required in this Article XXIX, paragraph 2, Landlord may, on the
Closing Date, use the Purchase Price or any portion thereof to clear title of
any or all encumbrances or interests, provided that all instruments so procured
are recorded simultaneously with the grant deed, except for Mortgage discharges
from institutional lenders which may be recorded when received provided that
satisfactory arrangements are agreed upon by Landlord and Tenant at the Closing
for the payment of all indebtedness secured by such Mortgages.
(g) Inspections. Tenant, its employees, contractors,
-----------
consultants, servants and agents shall have the right, at all reasonable times
and at Tenant's sole cost and expense, prior to and after the Exercise Date, to
conduct such surveys, tests, and inspections, including, without limitation,
soil borings, water sampling, environmental studies and assessments, as Tenant
determines necessary to evaluate the Property. In the exercise of such rights,
Tenants shall not disturb the occupancy of any other tenant of the Building or
interfere with any business conducted on the Property. Following the completion
of each such survey, test and inspection, Tenant shall promptly restore the
Property and every part thereof to its condition existing immediately prior to
the conduct of such survey, test or inspection. Tenant shall indemnify, defend
and hold harmless Landlord, and its partners, employees, contractors, servants
and agents, from and against all loss, costs, fines and expenses, including
without limitation reasonable attorneys' fees and litigation costs, arising from
the conducting of such surveys, tests, or inspections including, but not limited
to, injury or death of any person or damage to property; provided, however, that
this indemnity shall not apply to any loss, costs, damages, claims, proceedings,
demands, liabilities, penalties, fines or expenses arising from the discovery of
Hazardous Substances on the Land or in the Building which are not the
responsibility of Tenant pursuant to Article XXVIII, paragraph 4 of this Lease.
Tenant, its employees, contractors, consultants, servants and agents, upon prior
written notice to Landlord, shall have the right to inquire at any and all
governmental authorities regarding the Property.
Prior to the Exercise Date, Tenant shall have the rights, at its sole cost
and expense, to perform or have performed an environmental site assessment
("Site Assessment") of the Land and the Building.
Within thirty (30) days after written request by Tenant, Landlord shall
supply Tenant with copies of all Mortgages, agreements and other instruments or
documents, which Tenant
49
would take subject to upon acquisition of the Land and Building or which affect
the provision of services to or operation of the Land and Building.
(h) Landlord's Closing Obligations. At the Closing, Landlord shall
------------------------------
deliver to Tenant:
(i) The grant deed conveying title to the Property in accordance
with the provisions of Article XXIX, paragraph 2(c) of this Lease;
(ii) A bill of sale with warranty of title, in form and content
reasonably satisfactory to Tenant, conveying and transferring title to
Landlord's presonal property used solely in connection with the ownership,
maintenance and operation of the Property;
(iii) An assignment, in form and content reasonably satisfactory
to Tenant, of all of Landlord's right, title and interest in and to all service,
maintenance and management contracts (to the extent that Tenant, at its option,
has elected to assume the same by written notice given to Landlord not later
than thirty (30) days prior to the Closing Date) affecting or relating to the
Property, together with the original of each such contract;
(iv) An assignment, in form and content reasonably satisfactory
to Tenant, of all permits, authorizations and approvals which have been issued
for or with respect to the Property by governmental authorities having
jurisdiction thereof, together with the originals or photocopies of such
permits, authorizations and approvals;
(v) A set of "as-built" plans and specifications for the
Building to the extent that the Landlord has possesion thereof;
(vi) An assignment, in form and content reasonably satisfactory
to Tenant, of all of Landlord's right, title and interest in and to all
guaranties and warranties relating to the Building, together with the original
of each such guaranty and warranty;
(vii) A certificate of non-foreign status for Landlord;
(viii) All keys to the Building, appropriately tagged for
identification; and
(ix) All maintenance records and operating manuals pertaining
to the Building and copies of the books of Landlord with respect of the
Building.
(i) Merger. The recording of the grant deed in the records of the
------
County Recorder of Santa Clara County, California, shall be deemed to be a
full performance and discharge of every agreement and obligation contained or
expressed in this Article XXIX, paragraph 2, except as to those which by their
terms are to be performed after the delivery of the grant deed.
50
(j) Adjustments. Adjustments of Base Rent, Operating Costs, Real Estate
-----------
Taxes, costs of operating and maintaining the Premises, utility charges and all
other items of cost payable under this Lease shall be prorated as of the Closing
Date and the net amount thereof shall be added to or deducted from the Purchase
Price. Landlord and Tenant shall each pay at the Closing one-half (1/2) of all
costs, fees, taxes and charges imposed as the result of the purchase of the
Property by Tenant including, but not limited to, title policy and endorsement
premiums (except as specifically provided in paragraph 2(e)(i)(B) of this
Article XXIX), survey costs, transfer taxes, monument fees, escrow fees,
document preparation fees and recording costs.
(k) Broker. Neither Landlord nor Tenant shall have any obligation to pay
------
a broker's fee or commission to any party as a result of the exercise of the
Purchase Option or the purchase of the Property, except for any broker's fee or
commission which is the result of an agreement between such party and the
claiming broker. Landlord shall indemnify, defend and hold harmless Tenant, its
officers, directors, employees, contractors, servants or agents, from and
against all loss, costs, damages, claims, proceedings, demands, liabilities or
expenses, including without limitation reasonable attorneys' fees and litigation
costs, incurred by them resulting from a claim by any person for a commission or
fee relating to Tenant's exercise of the Purchase Option or purchase of the
Property and arising out of the actions of Landlord. Tenant shall indemnify,
defend and hold harmless Landlord, its officers, directors, employees,
contractors, servants or agents, from and against all loss, costs, damages,
claims, proceedings, demands, liabilities or expenses, including without
limitation reasonable attorneys' fees and litigation costs, incurred by them
resulting from a claim by any person for a commission or fee relating to
Tenant's exercise of the Purchase Option or purchase of the Property other than
claims by the Brokers described in Article XXXI, paragraph 2.
(l) Recording Notice of Exercise. At the request of either party, the
----------------------------
parties shall execute, acknowledge and deliver a notice of Tenant's exercise of
the Purchase Option, in recordable form, which notice shall state the Closing
Date (including the circumstances under which it may be extended). Either party
may record the notice.
(m) Failure to Purchase. If Tenant shall give the Notice of Exercise to
-------------------
Landlord and thereafter shall fail to purchase the Property in accordance with
the terms of this Article XXIX, paragraph 2, this Lease shall remain in full
force and effect. If such failure by Tenant occurs despite the fulfillment of
all conditions to closing for Tenant's benefit contained in this Article XXIX,
Paragraph 3, Tenant shall be liable to Landlord for all damage incurred by
Landlord as the result of Tenant's failure to so purchase the Property; and
Tenant shall deliver to Landlord at no charge copies of all surveys, tests,
investigations, studies, reports and analyses performed by Tenant or its
employees, contractors, consultants, servants and agents in connection with
Tenant's investigation of the Property. If Landlord fails to sell the Property
to Tenant despite the fulfillment of all conditions to closing for Landlord's
benefit contained in this Article XXIX, paragraph 3, Landlord shall be liable to
Tenant for all damage incurred by Tenant as the result of Landlord's failure to
so sell the Property, or Tenant may pursue specific performance of its Purchase
Option.
51
(n) General. All notices given under this Article XXIX, paragraph
-------
2 shall be given in the manner and shall be effective as provided in Article
XXII of this Lease. Tenant may assign this Purchase Option only in connection
with an Assignment of all of Tenant's other rights under this Lease either
before or after giving the Notice of Exercise. The Purchase Option set forth in
this Article XXIX, paragraph 2 shall terminate at midnight on November 30, 1999
unless Tenant shall have given a Notice of Exercise on or before that date.
3. Exchange. Landlord may elect to fulfill its obligations to dispose
--------
of the Property pursuant to this Article XXIX through an exchange intended to
qualify under Internal Revenue Code section 1031. Tenant agrees to cooperate
with such an exchange and execute all documents reasonably required by
Landlord's attorney or tax advisor, provided that: (a) any such documents are
delivered to Tenant for review at least thirty (30) days prior to the Close of
Escrow; (b) any such documents are reasonably acceptable to Tenant's counsel;
and (c) the exchange shall be at no cost or liability to Tenant. Landlord agrees
to indemnify and hold Tenant harmless from any liability, damages or costs,
including reasonable attorney's fees (including for the review of exchange
documents), that may arise from Tenant's participation in the exchange.
ARTICLE XXX
-----------
SATELLITE DISH
--------------
1. Roof Space. Tenant shall have the right to use for the purposes of
----------
this Article certain roof space on the Building in the location shown on Exhibit
-------
I (the "Roof Space") for the Term of this Lease. Tenant's right to use the Roof
- -
Space shall be appurtenant to the Premises and not Additional Rent shall be
payable with respect to such use.
2. Equipment and Cables. Tenant may install, use and maintain, on the
--------------------
Roof Space certain equipment, including a satellite dish(s) and related
equipment (the "Equipment") and may run cables and related equipment (the
"Cables") between the Roof Space and the Premises. The Equipment and the Cables
are described in Exhibit I. The Equipment and Cables shall be deemed Tenant's
---------
Personal Property for the purposes of this Lease and shall be subject to the
terms of this Lease with respect thereto.
3. Installation. Tenant shall have the right to select the contractor
------------
to install and maintain the Equipment and Cable, subject to Landlord's delayed.
Tenant and/or its contractor shall install, use, and maintain the Equipment and
Cables in a manner that does not interfere with Landlord's operation of the
Building and that does not interfere with quiet enjoyment of the tenants of the
Building. Tenant shall bear all expenses in connection with the installation,
use and maintenance of the Equipment and the Cables and the removal thereof.
Tenant shall ensure that no mechanic's or materialmen's liens are placed on the
Roof Space or the Building and will promptly remove any such liens so placed
within ten (10) days after receiving notice of such liens. Tenant shall maintain
(including the necessary
52
power) the Equipment and the Cable at all times in a state of good repair and
good and safe condition.
4. Indemnity. Tenant shall indemnify and save harmless Landlord, its
---------
officers, directors, employees, contractors, servants, guests, business invitees
and agents, from and against all loss, costs, damages, claims, proceedings,
demands, liabilities, penalties, fines and expenses, including without
limitation reasonable attorney's fees and litigation costs, arising from injury
or death of any person or damage to property from Tenant's installation, use and
maintenance of the Equipment and/or the Cables and the removal thereof or from
any use made by Tenant of the Roof Space resulting from the failure of Tenant to
perform and discharge its covenants under this Agreement. Landlord shall not be
liable for any loss or damage due to imperfect or unsatisfactory communications
experienced by Tenant for any reason whatsoever.
5. Insurance. Tenant shall include the Equipment and Cables in the
---------
insurance required from Tenant pursuant to Article X, Paragraph 6 and shall
furnish Landlord with a certificate of insurance showing such coverage prior to
Tenant's exercise of its rights hereunder, including, without implied
limitation, the commencement of any work by Tenant.
6. Legal Requirements. Tenant and its contractors shall comply with all
------------------
Legal Requirements and obtain all Authorizations in connection with the
installation, use and maintenance of the Equipment and Cables.
7. Access. Landlord agrees to permit Tenant reasonable access during
------
Building Hours to the Roof Space and such other areas of the Building necessary
to facilitate the installation, use and maintenance of the Equipment and the
Cables and the removal thereof.
8. Taxes. In the event that any Taxes are assessed with respect to the
-----
Building by any Governmental Authority (whether assessed against Landlord,
Tenant, the Roof Space or the Equipment), Tenant shall pay the same in a timely
manner before any lien or penalty is assessed thereon.
9. No Interference. Tenant warrants that the installation and operation of
---------------
the Equipment and the Cables will not cause television transmitting or receiving
interference, radio interference, or noise or annoyance to tenants of the
Building, and that Tenant will correct such interference at once if it should
occur.
ARTICLE XXXI
------------
ADDITIONAL PROVISIONS
---------------------
1. Broker Commission. Landlord warrants to Tenant that the only broker
-----------------
retained by Landlord in connection with the negotiation and consummation of this
Lease is Hare, Brewer & Kelley, Inc., and Tenant warrants to Landlord that the
only broker retained by Tenant in connection herewith is Cooper/Brady Commercial
Real Estate (collectively, the aforementioned brokers shall be referenced as the
"Broker(s)"). Landlord covenants that it
53
shall pay any and all commissions, fees and amounts owing to the Broker(s)
arising from the negotiation and/or consummation of this Lease.
2. Landlord's Access. Upon not less than twenty-four (24) hours prior
-----------------
notice to Tenant and at times mutually convenient to Landlord and Tenant,
Landlord and its agents shall have the right to enter the Demised Premises for
purposes of inspecting the same, showing the Demised Premises to prospective
purchasers, posting notices of nonresponsibility, or making repairs, alterations
or additions to any portion of the Building. At any time within four (4) months
prior to the expiration of the Term, Landlord shall have the right upon
twenty-four (24) hours prior notice, at times mutually convenient to Landlord
and Tenant and not more than three (3) times per week, to enter the Demised
Premises, to show the Demised Premises to prospective tenants. In entering the
Demised Premises for any purpose, Landlord shall comply with any security
measures required by Tenant.
3. Signage. Tenant shall not erect or place on any part of the exterior
-------
of the Building or on any Common Area any sign, radio or television antenna, or
other structure, without first obtaining the written consent of Landlord, which
consent shall not unreasonably withheld or delayed. Landlord acknowledges that
Tenant intends to place antennae and a microwave dish on the roof of the
Building. Installation of said items, including appropriate screening therefor,
shall be subject to approval by the City of Palo Alto, and shall be performed by
Landlord's roofing contractor at Tenant's expense. Upon the expiration of the
Term of this Lease, Tenant shall remove any antennae, microwave or other dishes
and all screening materials and shall repair any damages or roof penetrations
caused thereby. Any signs installed by Tenant shall conform with all applicable
Laws, and shall be fabricated and installed at Tenant's expense.
4. Binding Effect. The covenants and agreements herein contained shall,
--------------
subject to the provisions hereof, bind and inure to the benefit of Landlord, its
successors and assigns, and Tenant, and its successors and assigns.
5. Validity. It is agreed that if any provisions of this Lease shall be
--------
determined to be void by any court of competent jurisdiction in the state where
the Demised Premises are located, that such determination shall not affect any
other provision of this Lease, all of which other provisions shall remain in
full force and effect; and it is the intention of the parties hereto that if any
provision of this Lease is capable of two constructions, one of which would
render the provision void, and the other of which would render the provision
valid, then the provision shall have the meaning which renders it valid.
6. Entire Agreement. This instrument contains the entire and only
----------------
agreement between the parties as to the Demised Premises, and no oral statements
or representations or prior written matter (including but not limited to
unsigned drafts of this Lease) not contained in this instrument shall have any
force or effect. This Lease shall not be modified in any way except by writing
subscribed by both parties. This Lease shall not be effective unless fully
executed by both parties.
54
7. Exhibits. All Exhibits attached to this Lease shall be deemed
--------
incorporated herein by the individual reference to each such Exhibit, and all
such Exhibits shall be deemed a part of this Lease as though set forth in full.
In the event of any conflict between the terms of this Lease and the terms of
any Exhibit, the terms of this Lease shall control.
8. Acts at Own Cost. Whenever in this Lease provision is made for the
----------------
doing of any act by any person, it is understood and agreed that said act shall
be done by such person at his own cost and expense unless a contrary intent is
expressed.
9. Governing Law. This Lease shall be governed by and construed and
-------------
enforced in accordance with the laws of the state where the Demised Premises are
located.
10. Waiver/Consent. Failure of either party to complain of any act or
--------------
omission on the part of the other party, no matter how long the same may
continue, shall not be deemed to be a waiver of any rights hereunder. No waiver
by either party at any time, express or implied, or any breach of any provisions
of this Lease shall be deemed a waiver of a breach of any other provision of
this Lease or a consent to any subsequent breach of the same or any other
provision. If any action of any party shall require the consent or approval of
the other party, the consent to or approval of such action on any one occasion
shall not be deemed a consent to or approval of said action on any subsequent
occasion or a consent to or approval of any other action on the same or any
subsequent occasion, and such consent or approval shall not be unreasonably
withheld or delayed.
11. Cumulative Rights and Remedies. Any and all rights and remedies
------------------------------
which either party may have under this Lease or by operation of law, either at
law or in equity, upon any breach, shall be distinct, separate and cumulative
and shall not be deemed inconsistent with each other; no one of them whether
exercised by the other party or not, shall be deemed to be exclusive of any
other, and any two or more of all of such rights and remedies may be exercised
at the same time; provided, however, nothing contained herein shall entitle a
party to recover consequential damages from the other party arising out of any
act or omission or breach of this Lease by such other party, except to the
extent expressly permitted by this Lease.
12. Payment/Performance Under Protest. It is agreed that if at any time
---------------------------------
a dispute shall arise as to any amount or sum of money to be paid by one party
to the other under the provisions of this Lease, the party against whom the
obligation to pay the money is asserted shall have the right to make payment
"under protest" and such payment shall not be regarded as a voluntary payment
and there shall survive the right on the part of said party to institute suit
for the recovery of such sum, and if it shall be adjudged that there was no
legal obligation on the part of said party to pay such sum or any part thereof,
said party shall be entitled to recover such sum or so much thereof as it was
not legally required to pay under the provisions of this Lease; and if at any
time a dispute shall arise between the parties hereto as to any work to be
performed by either of them under the provisions hereof, the party against whom
the work is asserted may perform such work and pay the cost thereof "under
protest" and the performance of such work shall in no event be regarded as a
voluntary performance and there shall survive the right on the part of said
party to institute
55
suit for the recovery of the costs of such work, and if it shall be adjudged
that there was no legal obligation on the part of said party to perform the same
or any part thereof, said party shall be entitled to recover the cost of such
work or the cost of so much thereof as said party was not legally required to
perform under the provisions of this Lease.
13. Words and Phrases. Words and phrases used in the singular shall be
-----------------
deemed to include the plural and vice versa, and nouns and pronouns used in any
particular gender shall be deemed to include any other gender.
14. Definition of Terms. The various terms which are defined in Articles
-------------------
of this Lease or are defined in Exhibits annexed hereto shall have the meanings
specified in such Articles and such Exhibits for all purposes of this Lease and
all agreements supplemental thereto, unless the contest clearly indicates the
contrary.
15. Effective Date of Lease. This Lease shall not be effective or
-----------------------
binding on the parties to it until it has been signed by both Landlord and
Tenant. Furthermore, if Landlord has not returned a fully executed copy of this
Lease to Tenant within 15 days of execution by Tenant, this Lease is null and
void and of no force and effect.
16. Authority. Each party represents to the other that the person
---------
signing this Lease on its behalf is properly authorized to do so.
17. Commencement/Expiration Dates. Landlord and Tenant shall execute
-----------------------------
within thirty (30) days of Term Commencement Date a certificate setting forth
the Term Commencement Date and the expiration dates of the Primary Term and of
any extended terms.
18. Force Majeure. Performance by Landlord or Tenant of their
-------------
obligations hereunder shall be extended by the period of delay caused by force
majeure. Force majeure is hereby deemed to include war, natural catastrophe,
strikes, walkouts or other labor industrial disturbance, order of any
government, court or regulatory body having jurisdiction, shortages, blockade,
embargo, riot, civil disorder, or any such similar cause beyond the reasonable
control of the party who is obligated to render performance.
19. Attorneys' Fees. If any party to this Lease shall institute an
---------------
action to enforce the terms hereof, the prevailing party shall be entitled to
reasonable attorneys' fees. Reasonable attorneys' fees shall be as fixed by the
court. The "prevailing party" shall be the party which by law is entitled to
recover its costs of suit, whether or not the action proceeds to final judgment.
If the party which shall have instituted suit shall dismiss it as against the
other party without the concurrence of the other party, the other party shall be
deemed the prevailing party.
20. Confidentiality. All of the terms and conditions of this Lease shall
---------------
be kept confidential and shall not be disclosed to third parties by either party
without the consent of the other party, except as otherwise provided in this
Paragraph 20. Either Landlord or Tenant may disclose such terms and conditions
to their attorneys, accountants and other
56
EXHIBIT A
AMENDED AND RESTATED LEASE
between
RICHARD R. KELLEY, JR.,
CHARLES E. HANGER AND FAYE E. HANGER
AND
HARE, BREWER & KELLEY, INC.
"Landlord"
and
DIGITAL EQUIPMENT CORPORATION,
a Massachusetts corporation
"Tenant"
TABLE OF CONTENTS
-----------------
ARTICLE I
---------
BASIC LEASE TERMS.............................. 1
-----------------
1. Summary of Lease Provisions....................................... 1
---------------------------
(a) Address of Demised Premises................................. 1
---------------------------
(b) Building.................................................... 1
--------
(c) Demised Premises............................................ 1
----------------
(d) Date of Execution........................................... 1
-----------------
(e) Extended Term............................................... 1
-------------
(f) Interior Improvements....................................... 1
---------------------
(g) Primary Term................................................ 1
------------
(h) Use......................................................... 1
---
(i) Land........................................................ 1
----
(j) Landlord.................................................... 1
--------
(k) Landlord's Address.......................................... 2
------------------
(l) Base Rent................................................... 2
---------
(m) Additional Rent............................................. 2
---------------
(n) Rent During Extended Term................................... 2
-------------------------
(o) Tenant...................................................... 2
------
(p) Tenant's Address............................................ 2
----------------
(q) Tenant's Share.............................................. 2
--------------
(r) Term........................................................ 2
----
(s) Beginning Liability Insurance Coverage Amount............... 2
---------------------------------------------
2. Exhibits.......................................................... 2
--------
(a) EXHIBIT A - Demised Premises................................ 2
---------
(b) EXHIBIT B - Interior Improvements........................... 2
---------
(c) EXHIBIT C - Legal Description of Land....................... 2
---------
(d) EXHIBIT D - Existing Lease.................................. 3
---------
(e) EXHIBIT E - Subordination, Recognition and Non-Disturbance
---------
Agreement................................................... 3
(f) EXHIBIT F - Permitted Encumbrances.......................... 3
---------
(g) EXHIBIT G - Tenant's Personal Property...................... 3
---------
(h) EXHIBIT H - Memorandum of Lease and Option.................. 3
---------
(i) EXHIBIT I - Roof Space...................................... 3
---------
ARTICLE II
- ----------
AMENDMENT AND RESTATEMENT OF LEASE:
- -----------------------------------
CONDITIONS PRECEDENT:
- ---------------------
DESCRIPTION OF DEMISED PREMISES............................................. 3
- -------------------------------
1. Amendment and Restatement of Lease................................ 3
----------------------------------
2. Conditions Precedent.............................................. 3
--------------------
3. Description of Demised Premises................................... 4
-------------------------------
ARTICLE III
- -----------
TERM......................................................................... 4
- ----
1. Term.............................................................. 4
----
2. Option to Extend.................................................. 5
----------------
3. Lease Commencement................................................ 5
------------------
ARTICLE IV
- ----------
RENT......................................................................... 5
- ----
1. Base Rent......................................................... 5
---------
2. Payment........................................................... 5
-------
3. Base Rent During Extended Term(s)................................. 5
---------------------------------
4. Minimum Rent...................................................... 7
------------
ARTICLE V
- ---------
OPERATING COSTS, CAPITAL EXPENDITURES
- -------------------------------------
AND REAL ESTATE TAXES........................................................ 7
- ---------------------
1. Operating Costs................................................... 7
---------------
(a) Items Included.............................................. 7
--------------
(b) Items Excluded.............................................. 8
--------------
(c) Capital Expenditures........................................ 9
--------------------
2. Payment of Operating Costs........................................ 9
--------------------------
3. Annual Statement..................................................10
----------------
4. Real Estate Taxes.................................................11
-----------------
5. Change in Laws....................................................11
--------------
6. Separate Assessment...............................................11
-------------------
7. Payment of Real Estate Taxes......................................11
----------------------------
8. Contest...........................................................12
-------
9. Payment in Installments...........................................13
-----------------------
10. Amortization......................................................13
------------
11. Landlord's Action.................................................13
-----------------
12. Minimum Additional Rent...........................................13
-----------------------
13. Operating Costs With Respect to Suite 100.........................14
-----------------------------------------
ARTICLE VI
- ----------
UTILITIES AND SERVICES.......................................................14
- ----------------------
1. Utilities and Services Provided by Landlord.......................14
-------------------------------------------
2. Security..........................................................14
--------
3. Separate Utilities................................................14
------------------
4. Interruption of Services..........................................15
------------------------
ARTICLE VII
- -----------
USE OF DEMISED PREMISES......................................................15
- -----------------------
1. Use...............................................................15
---
ii
2. Permits...........................................................16
-------
3. Compliance With Laws..............................................16
--------------------
ARTICLE VIII
- ------------
PREPARATION OF DEMISED PREMISES..............................................16
- -------------------------------
1. Roof Repairs......................................................16
------------
2. Interior Improvements.............................................17
---------------------
(a) Construction of Interior Improvements.......................17
-------------------------------------
(b) Interior Improvement Allowance..............................17
------------------------------
4. Entry by Tenant...................................................18
---------------
5. Insurance.........................................................18
---------
ARTICLE IX
- ----------
COMPLIANCE WITH LAW..........................................................19
- -------------------
1. Compliance by Landlord............................................19
----------------------
2. Compliance By Tenant..............................................19
--------------------
3. Right to Contest..................................................20
----------------
ARTICLE X
- ---------
ALTERATIONS, ADDITIONS AND IMPROVEMENTS......................................20
- ---------------------------------------
1. Non-Structural Alterations........................................20
--------------------------
2. Structural Alterations............................................21
----------------------
3. Contractor........................................................21
----------
4. Performance of Work...............................................21
-------------------
5. Removal...........................................................21
-------
6. Insurance.........................................................21
---------
7. Mechanic's Liens..................................................22
----------------
8. Notices of Non-responsibility.....................................22
-----------------------------
ARTICLE XI
- ----------
CONDITION, REPAIR AND MAINTENANCE OF THE BUILDING............................22
- -------------------------------------------------
1. Condition of Building.............................................22
---------------------
2. Landlord's Responsibilities.......................................22
---------------------------
3. Capital Expenditures; Building Systems............................23
--------------------------------------
4. Tenant's Responsibility...........................................23
-----------------------
5. Assignment of Warranties..........................................23
------------------------
6. Performance of Work...............................................23
-------------------
ARTICLE XII
- -----------
DAMAGE AND DESTRUCTION.......................................................24
- ----------------------
1. Damage or Destruction.............................................24
---------------------
2. Estimate..........................................................24
--------
3. Partial Damage....................................................24
--------------
4. Substantial Damage................................................25
------------------
5. Uninsured Damage..................................................25
----------------
6. Partial Uninsured Damage..........................................26
------------------------
iii
7. Substantial Uninsured Damage............................26
----------------------------
8. Rent Abatement..........................................27
--------------
9. Damage Near End of Term.................................27
-----------------------
10. Waiver..................................................27
------
ARTICLE XIII
- ------------
CONDEMNATION......................................................28
- ------------
1. Total Taking............................................28
------------
2. Substantial Taking......................................28
------------------
3. Continuance of Lease....................................29
--------------------
4. Refund of Rent: Allocation of Award.....................29
-----------------------------------
5. Cancellation and Termination Rights.....................30
-----------------------------------
ARTICLE XIV
- -----------
SUBORDINATION, RECOGNITION, NON-DISTURBANCE AND ATTORNMENT........30
- ----------------------------------------------------------
1. Subordination...........................................30
-------------
2. Priority of Mortgage....................................30
--------------------
3. Existing Mortgage.......................................30
-----------------
ARTICLE XV
- ----------
LANDLORD'S WARRANTIES AND FINANCIAL INFORMATION...................31
- -----------------------------------------------
1. Warranties..............................................31
----------
2. Financial Information...................................32
---------------------
ARTICLE XVI
- -----------
INSURANCE; WAIVER OF SUBROGATION..................................32
- --------------------------------
1. Landlord's Insurance....................................32
--------------------
2. Tenant's Insurance......................................33
------------------
3. General Requirements....................................33
--------------------
4. Waiver of Claims, Subrogation...........................33
-----------------------------
5. Excess Insurance Proceeds...............................33
-------------------------
ARTICLE XVII
- ------------
INDEMNIFICATION...................................................34
- ---------------
1. Indemnity by Tenant.....................................34
-------------------
2. Indemnity by Landlord...................................34
---------------------
3. Consequential Damages...................................35
---------------------
ARTICLE XVIII
- -------------
ASSIGNMENT AND SUBLETTING.........................................35
- -------------------------
1. Assignment and Subletting...............................35
-------------------------
2. Deemed Consent..........................................36
--------------
3. Permitted Transfers.....................................36
-------------------
iv
ARTICLE XIX
- -----------
TENANT'S PROPERTY.......................................................... 36
- -----------------
1. Tenant's Property................................................ 36
-----------------
2. Removal.......................................................... 36
-------
3. Waiver of Lien................................................... 36
--------------
ARTICLE XX
- ----------
TENANT'S DEFAULT........................................................... 37
- ----------------
1. Events of Default................................................ 37
-----------------
2. Landlord's Remedies.............................................. 37
-------------------
(a) Termination................................................. 37
-----------
(b) Continue Lease.............................................. 38
--------------
(c) Right to Cure............................................... 38
-------------
(d) Remedies Not Exclusive...................................... 39
----------------------
(e) Termination, Surrender and Abandonment...................... 39
--------------------------------------
ARTICLE XXI
- -----------
LANDLORD'S DEFAULT......................................................... 39
- ------------------
1. Landlord's Default............................................... 39
------------------
2. Emergency........................................................ 40
---------
3. Acquisition of HBK Interest...................................... 40
---------------------------
ARTICLE XXII
- ------------
NOTICES.................................................................... 41
- -------
1. In Writing....................................................... 41
----------
2. Notice to Tenant................................................. 41
----------------
3. Notice to Landlord............................................... 41
------------------
ARTICLE XXIII
- -------------
QUIET ENJOYMENT............................................................ 41
- ---------------
ARTICLE XXIV
- ------------
HOLDING OVER............................................................... 42
- ------------
ARTICLE XXV
- -----------
MEMORANDUM OF LEASE AND OPTION............................................. 42
- ------------------------------
ARTICLE XXVI
- ------------
SURRENDER OF DEMISED PREMISES.............................................. 42
- -----------------------------
ARTICLE XXVII
- -------------
ESTOPPEL CERTIFICATES...................................................... 42
- ---------------------
v
ARTICLE XXVIII
- --------------
HAZARDOUS SUBSTANCES........................................................ 43
- --------------------
1. Definitions...................................................... 43
-----------
(a) "Demised Premises"......................................... 43
----------------
(b) "Environmental Laws"....................................... 43
------------------
(c) "Hazardous Substances"..................................... 43
--------------------
(d) "Hazardous Substance on the Demised Premises".............. 43
-------------------------------------------
(e) "Underground Storage Tank"................................. 43
------------------------
2. Representations and Warranties................................... 43
------------------------------
(a) Compliance with Law........................................ 44
-------------------
(b) Hazardous Substances....................................... 44
--------------------
(c) Indoor Environment......................................... 44
------------------
(d) Underground Storage Tanks.................................. 44
-------------------------
(e) PCBs....................................................... 44
----
(f) Asbestos................................................... 44
--------
3. Landlord's Indemnity............................................. 44
--------------------
4. Tenant's Obligations and Indemnity............................... 45
----------------------------------
ARTICLE XXIX
- ------------
RIGHT OF FIRST REFUSAL: OPTION TO PURCHASE.................................. 45
- ------------------------------------------
1. Right of First Refusal........................................... 45
----------------------
2. Option To Purchase............................................... 46
------------------
(a) Purchase Price............................................. 46
--------------
(b) Closing.................................................... 47
-------
(c) Title...................................................... 47
-----
(d) Condition of Premises...................................... 47
---------------------
(e) Perfection of Title or Condition........................... 48
--------------------------------
(f) Use of Purchase Money...................................... 49
---------------------
(g) Inspections................................................ 49
-----------
(h) Landlord's Closing Obligations............................. 50
------------------------------
(i) Merger..................................................... 50
------
(j) Adjustments................................................ 51
-----------
(k) Broker..................................................... 51
------
(l) Recording Notice of Exercise............................... 51
----------------------------
(m) Failure to Purchase........................................ 51
-------------------
(n) General.................................................... 52
-------
3. Exchange......................................................... 52
--------
ARTICLE XXX
- -----------
SATELLITE DISH.............................................................. 52
- --------------
1. Roof Space.......................................................... 52
----------
2. Equipment and Cables................................................ 52
--------------------
3. Installation........................................................ 52
------------
4. Indemnity........................................................... 53
---------
5. Insurance........................................................... 53
---------
6. Legal Requirements.................................................. 53
------------------
vi
7. Access..........................................53
------
8. Taxes...........................................53
-----
9. No Interference.................................53
---------------
ARTICLE XXXI
- ------------
ADDITIONAL PROVISIONS.....................................53
- ---------------------
1. Broker Commission............................53
-----------------
2. Landlord's Access............................54
-----------------
3. Signage......................................54
-------
4. Binding Effect...............................54
--------------
5. Validity.....................................54
--------
6. Entire Agreement.............................54
----------------
7. Exhibits.....................................55
--------
8. Acts at Own Cost.............................55
----------------
9. Governing Law................................55
-------------
10. Waiver/Consent...............................55
--------------
11. Cumulative Rights and Remedies...............55
------------------------------
12. Payment/Performance Under Protest............55
---------------------------------
13. Words and Phrases............................56
-----------------
14. Definition of Terms..........................56
-------------------
15. Effective Date of Lease......................56
-----------------------
16. Authority....................................56
---------
17. Commencement/Expiration Dates................56
-----------------------------
18. Force Majeure................................56
-------------
19. Attorney's Fees..............................56
---------------
20. Confidentiality..............................56
---------------
21. No Other Tenant a Third Party Beneficiary....57
-----------------------------------------
vii
FIRST AMENDMENT TO AGREEMENT BETWEEN CO-OWNERS
The First Amendment to Agreement Between Co-Owners is entered into by and
between Richard R. Kelley, Jr., Charles E. Hanger, Faye E. Hanger and Harry L.
Fox ("Co-Owners"), are Hare, Brewer and Kelley, Inc., a California corporation
("HBK"), effective as of July 8, 1991.
RECITALS
--------
A. Richard R. Kelley, Jr., Charles E. Hanger, Faye E. Hanger and HBK
entered into an Agreement Between Co-Owners dated effective December 1, 1990
(the "Agreement"), concerning their common ownership of the property located at
335 Bryant Street, Palo Alto, California (the "Property"). All terms used in
this First Amendment shall have the same meaning ascribed to them in the
Agreement unless expressly defined herein.
B. Harry L. Fox has acquired all of HBK's undivided 8.34% interest in
the Property pursuant to a Trustee's Deed Upon Sale dated July 8, 1991 and
recorded July 16, 1991 in the official records of Santa Clara County,
Claifornia, as document No. 10972564. The parties desire to amend the Agreement
to reflect the substitution of Fox in place of HBK.
AGREEMENT
---------
NOW, THEREFORE, the Co-owners and HBK hereby agree that the Agreement shall
be and hereby is amended as follows:
1. Harry L. Fox is substituted in place of HBK for all purposes under
the Agreement. Harry L. Fox agrees to be bound by all provisions of the
Agreement as a Co-Owner as to his ownership share in the Property.
2. The Address of Fox for delivery of notices pursuant to the Agreement
shall be:
Harry L. Fox
314 Lytton Ave., Suite 200
Palo Alto, CA 94301
1
IN WITNESS WHEREOF, the Co-owners and HBK have executed this First
Amendment effective as of the date first above written.
"Co-Owners"
/s/ Richard R. Kelley, Jr.
-------------------------
Richard R. Kelley, Jr.
/s/ Charles E. Hanger
--------------------
Charles E. Hanger
/s/ Harry L. Fox
---------------
Harry L. Fox
"HBK"
Hare, Brewer & Kelley, Inc., a
California corporation
By:/s/ Richard Kelley
--------------------
Title: President
--------------------
2
FIRST AMENDMENT TO COMMERCIAL PROPERTY MANAGEMENT AGREEMENT
This First Amendment to Commercial Property Management Agreement is entered
into by and between Richard R. Kelley, Jr., Charles E. Hanger, Faye E. Hanger
and Harry L. Fox ("Owners"), Premier Properties Management, a California
corporation ("Agent"), and Hare, Brewer and Kelley, Inc., a California
corporation ("HBK"), effective as of July 8, 1991.
RECITALS
--------
A. Richard R. Kelley, Jr., Charles E. Hanger, Faye E. Hanger and HBK
entered into a Commercial Property Management Agreement with Agent dated
effective October 1, 1990 (the "Agreement"), for the property located at 335
Bryant Street, Palo Alto, California (the "Premises"). All terms used in this
First Amendment shall have the same meaning ascribed to them in the Agreement
unless expressly defined herein.
B. Harry L. Fox has acquired all of HBK's undivided 8.34% interest in
the premises pursuant to a Trustee's Deed Upon Sale dated July 8, 1991 and
recorded July 16, 1991 in the official records of Santa Clara County,
California, as document No. 10972564. The parties desire to amend the Agreement
to reflect the substitution of Fox in place of HBK.
AGREEMENT
---------
NOW, THEREFORE, Owners and Agent hereby agree that the Agreement shall be
and hereby is amended as follows:
1. Harry L. Fox is substituted in place of HBK for all purposes under
the Agreement. Harry L. Fox agrees to be bound by all provisions of the
Agreement as an Owner as to his ownership share in the Premises.
2. Monthly statements and disbursements under Section 2.5 of the
Agreement are to be delivered to Fox in accordance with the following percentage
at the following address:
Harry L. Fox (8.34%)
314 Lytton Ave., Suite 200
Palo Alto, CA 94301
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IN WITNESS WHEREOF, Owners and Agent have executed this First Amendment
effective as of the date first above written.
"Owners"
/s/ Richard R. Kelley, Jr.
--------------------------
Richard R. Kelley, Jr.
/s/ Charles E. Hanger
---------------------
Charles E. Hanger
/s/ Faye E. Hanger
------------------
Faye E. Hanger
/s/ Harry L. Fox
----------------
Harry L. Fox
"Agent"
Premier Properties Management, a
California corporation
By: /s/ James E. Baer, President
-----------------------------
James E. Baer, President
"HBK"
Hare, Brewer & Kelley, Inc., a
California corporation
By: /s/ Richard Kelley
-------------------
Title: President
--------------
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Author: Beverly Bellows
Date: 04-Oct-1990
Posted-date: 05-Oct-1990
FIRST LEASE AMENDMENT
THIS AMENDMENT is made this 10 day of October, 1990 by and between
RICHARD KELLEY, CHARLES HANGAR and HARE, BREWER, & KELLEY, INC., a
California Limited Partnership ("Landlord") and DIGITAL EQUIPMENT
CORPORATION, a Massachusetts Corporation ("Tenant").
WITNESSETH
Landlord and Tenant are parties to a OFFICE SPACE LEASE dated April
6, 1990 ("Lease") which leases property in the building commonly
known as 335 Bryant Street, Palo Alto, California ("Premises").
Landlord and Tenant hereby agree that the Lease shall be amended in
consideration of the mutual covenants set forth hereinafter and in
accordance with the terms and conditions set forth herein:
1. ARTICLE 1. TERM of the Lease is hereby amended to add the
following:
The term of this Lease shall be extended from October 6,
1990 and shall now expire on October 31, 1990.
2. ARTICLE 4. RENT is hereby amended to add the following:
The extended term from October 7, 1990 to October 31, 1990
shall be at no monthly rent as defined in this Article. If
Landlord and Tenant do not enter into a long-term lease of
the Premises on or before March 1, 199_, Tenant shall pay
rent for such period at the rate provided in the Lease.
All other terms and conditions of the Lease shall remain in full
force and effect.
In Witness hereof, the parties hereto have set their hands to this
Amendment as of the day and date first above written.
LANDLORD: TENANT:
RICHARD KELLEY, CHARLES HANGAR, DIGITAL EQUIPMENT CORPORATION,
HARE, BREWER & KELLEY, INC. a Massachusetts Corporation
Tenants-in-Common
By: /s/ Richard Kelley By: /s/ Don Sliwinski
-------------------------------- -----------------------------
Richard Kelley Property Development
Manager
By: /s/ Charles Hangar
--------------------------------
Charles Hangar
By: /s/ Hare, Brewer & Kelley, Inc.
--------------------------------
Hare, Brewer & Kelley, Inc.
OFFICE SPACE LEASE
335 BRYANT STREET
PALO ALTO, CA 94301
This Lease dated April 6, 1990, is entered into by and between Richard Kelley,
Charles Mangar and Hare, Brewer, & Kelley, Inc., a California Limited
Partnership as Landlord, and Digital Equipment Corporation as Tenant.
ARTICLE 1. TERM
The term ("Term") of this Lease shall be for six (6) months commencing April 7,
1990 and expiring October 6, 1990.
ARTICLE 2. PREMISES
(a) The Premises consists of 8,426 rentable square feet of space on floors
1, 2, and 3 as shown on Exhibit A attached hereto and made a part hereof
(Premises). It is understood that said Premises does not include approximately
462 rentable square feet occupied by Dr. Alan Bidle, Suite 100.
ARTICLE 3. USE
The Premises may be used for computer laboratories, conference rooms, offices,
repair and service of computers and associated equipment and the storage
thereof, and all other uses permitted by law. Tenant is also given the right to
use in common with others the lobbies, entrances, stairs, elevators, restrooms
and other public portions of the Building within the following exceptions:
(1) the garden area immediately adjacent to suite 100.
(2) The 1st floor lobby shall be used for ingress and egress only.
ARTICLE 4. RENT
The monthly rent payable to the Landlord for the Premises is Seventeen Thousand
Six Hundred Ninety-Four and 60/100 ($17,694.60) payable on the first day of each
month with the rent prorated for any portion of a month included within the
Term. Tenant recognizes that late payment of any Rent or other sum due hereunder
from Tenant to Landlord will result in administrative expenses to Landlord, the
extent of such additional expenses being extremely difficult and economically
impractical to ascertain. Tenant therefore agrees that if Rent or any other
payment due hereunder from Tenant to Landlord remains unpaid five (5) days after
said amount is due, the amount of such unpaid Rent or other payment shall be
increased by a late charge to be paid
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to Landlord by Tenant in the amount of the maximum annual interest rate per
annum permitted by law together with a daily administrative charge of
twenty-five dollars ($25.00). Tenant agrees that such amount is a reasonable
estimate of such loss and expense and may be charged by Landlord to defray such
loss and expense. The amount of the late charge to be paid Landlord by Tenant on
any unpaid Rent or other payment shall be reassessed and added to Tenant's
obligation for each successive monthly period accruing after the date on which
the late charge is initially imposed. The remedy provided in this article are in
addition to any other remedies available to landlord at law or in equity by
statute or otherwise.
ARTICLE 5. ADDITIONAL RENT
Tenant shall pay as additional rent hereunder, its prorata share of the agreed
upon operating costs of the building, common area and real estate taxes.
Tenant hereby agrees to pay Landlord's base Cost for Operating Costs for the
term of the Lease, which cost is $.72 per square foot of rentable space per
month. It is agreed that for this sum all utilities and HVAC costs shall be
paid. Said amount has been agreed to whether the cost as shall actually be
incurred by Landlord during the Lease term is actually greater or less than the
amount.
ARTICLE 6. SERVICES
Landlord covenants that Landlord shall supply or cause to be supplied to or for
the use of the Premises, hot and cold running water for lavatory and drinking
purposes, sewer services and electricity at current capacity and shall furnish
heat and air conditioning to the standard set forth below, during the hours
hereinafter set forth. Unless prevented by causes beyond Landlord's control, the
services to be rendered by Landlord set forth in this Article 6, shall be
provided twenty-four hours a day, seven days a week.
(a) The heating system of the Premises will be adequate to heat all areas
of the Premises to an inside temperature of seventy-five (75) degrees Fahrenheit
when outside temperature is zero (0) degrees Fahrenheit.
(b) The air conditioning system of the Premises will be adequate to cool
all areas of the Premises serviced thereby to seventy-five (75) degrees
Fahrenheit + or - two (2) degrees when relative humidity is fifty percent (50%)
+ or - five percent (5%) and the outside temperature is ninety-five (95) degrees
D3 seventy three (73) degrees WE. Unless prevented by causes beyond Landlord's
control, the services to be rendered by Landlord set forth in this Paragraph
shall be provided between the hours of 7 o'clock AM and 6 o'clock P.M. Monday
through Friday, and between 7 o'clock AM and 1 o'clock P.M. on Saturday, except
holidays.
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(c) Landlord, at its sole cost and expense, and without any condition by
Tenant, shall throughout the Term of the Lease perform all interior and exterior
maintenance and make all interior and exterior repairs and replacements within
and to the Premises, common areas, Building and all other improvements, Land and
to all systems and utilities within Landlord's control, and to any and all
portions thereof - electrical, mechanical, plumbing, heating, ventilating, and
air conditioning - as needed to keep them or it in good working order and
conditioning and operating to design capacity. Whether structural or
nonstructural in nature, and whether ordinary or extraordinary or foreseen or
unforeseen. This provision is not intended to release or relieve Tenant from
payment for any such repair or replacement to the extent necessitated by the
negligence or willful acts of Tenant, its agents, servants or employees.
ARTICLE 7. INSURANCE
Tenant shall maintain throughout the Term hereof Comprehensive General Liability
Insurance, including Contractual Liability coverage, with respect to the
Premises, in the amount of $1,000,000 combined single limit for bodily injury
and property damage. A Certificate of Insurance shall be provided by Tenant upon
request.
Tenant shall, upon timely receipt of written notice, defend and save the
Landlord harmless from and against any all suits, claims, and demands arising
out of injury or demand occurring in the Premises because of negligence or
willful acts of Tenant, its agents, servants, or employees. In the event the
Landlord is notified of a claim, action or proceeding, or becomes aware of an
occurrence, which may result in indemnification by Tenant as provided in this
Article 7, the Landlord shall give immediate written notice to Tenant and
provide complete particulars known by the Landlord. The Landlord shall
immediately forward to the Tenant every demand, notice, summons or other process
received by Landlord or his representatives.
Tenant has the exclusive right and obligation to defend any action or proceeding
wherein Landlord is entitled to indemnification hereunder and Tenant may settle
any such claim, aim action or proceeding without Landlord's consent or approval.
The Landlord will fully cooperate with the Tenant at no cost to Landlord in the
defense or settlement of any claim, action, or proceeding. Landlord's failure to
comply with its obligations under this Article releases Tenants from the
obligation to indemnify Landlord hereunder. The provisions hereof do not and
shall not relieve Landlord of the responsibility of liability for acts, neglect,
fault or omission of Landlord, its agents, servants, employees or contractors
which cause injury or death to persons or damage to property in, on, or about
the Premises, Building or Land.
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Landlord shall, throughout the Term, procure and carry at its sole cost and
expense, a comprehensive liability policy in the same amounts and affording the
same coverage that Tenant is required to provide hereunder and said policy shall
contain a contractual liability endorsement insuring Landlord's indemnity under
this Lease. Said insurance shall be carried with a responsible company
authorized to do business in the State of California. A certificate evidencing
such coverage shall be provided to Tenant at the commencement of this Lease.
Landlord agrees to maintain insurance coverage with a responsible insurance
company authorized to do business in the State of California on the entire
Building in which the Premises are located in an amount not less than the full
replacement value of the Building. Such coverage shall insure against All Risks
excluding flood and earthquake. Upon the request of Digital, Landlord will
furnish a certificate of insurance evidencing the casualty coverage stated in
this Article 7.
Landlord and Tenant hereby waive all causes of action and rights of recovery
against each other and their respective agents, officers and employees for any
loss occurring to the real or personal property of either of them regardless of
cause or origin, to the extent of any recovery by either of them from any
policy(s) of insurance. Landlord and Tenant agree that any property policies
presently existing or obtained on or after the date hereof (including renewals
of present policies) shall include a clause or endorsement to the effect that
any such release shall not adversely affect or impair said policies or prejudice
the right to recover thereunder.
Landlord shall, upon timely receipt of written notice, defend and save Tenant
harmless from and against any all suits, claims, and demands arising out of
injury or damage occurring on, in or about the Premises, Building or Land
because of the negligence or willful acts of Landlord, its agents, servants,
employees or contractors. In the event the Tenant is notified of a claim, action
or proceeding, or becomes aware of an occurrence which may result in
indemnification by Landlord as provided in this Article 7, the Tenant shall give
immediate written notice to Landlord and provide complete particulars known by
the Tenant. The Tenant shall immediately forward to the Landlord every demand,
notice, summons or other process received by Tenant or his representatives. The
Tenant will fully cooperate with the Landlord in the defense or settlement of
any claim, action or proceeding. The provisions hereof do not and shall not
relieve Tenant of the responsibility for the acts, neglect, fault or omission of
Tenant its agents, servants, employees or contractors which cause injury or
death to persons or damage to property in, or about the Premises, Building or
Land.
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ARTICLE 8. ENTRY BY LANDLORD
Landlord may enter the Premises at reasonable hours with minimum of one (1) hour
notice to (a) inspect the same, (b) exhibit the same to prospective purchasers,
lenders or tenants, (c) determine whether Tenant is complying with all of
Tenant's obligations hereunder, (d) supply janitor service and any other service
to be provided by landlord to Tenant hereunder, (e) post notices of non
responsibility and (f) make repairs required of Landlord under the terms hereof
or repairs to any adjoining space or utility service or make repairs,
alterations or improvements to any other portion of the Building, provided,
however, that all such work shall be done as promptly as possible and, so as to
cause as little interference to Tenant as reasonably possible. Tenant hereby
waives any claim for damages for any injury or inconvenience to or interference
with Tenant's business, any loss of occupancy or quiet enjoyment of the Premises
or any other loss occasioned by such entry. Landlord shall have the right to use
any and all means which Landlord may deem proper to open said doors in an
emergency in order to obtain entry to the Premises, and any entry to the
Premises obtained by Landlord by any of said means, or otherwise, shall not
under any circumstances be construed or deemed to be a forcible or unlawful
entry into or a detainer of the Premises or an eviction, actual or constructive,
of Tenant from the Premises, or any portion thereof. The Tenant is hereby
granted the right of twenty-four (24) hour access to the Premises.
Tenant is hereby granted the right to change or install lock(s) on the interior
door(s) of the Premises and at the end of the Term Tenant shall surrender the
keys to such locks to Landlord.
ARTICLE 9. DAMAGE OR DESTRUCTION
In the event of any damage to any portion of the Premises or of the Building
from fire or other casualty, insured or uninsured; or in the event of a taking
of any portion of the Premises or of the Building or the Land by the exercise of
the power of eminent domain or condemnation or the taking for a public or
quasi-public use of any portion of the Premises, the Building or Land, this
Lease shall terminate as of the date of the damage or the vesting of title or
the taking of possession, actual or constructive, without the necessity of
notice of termination from one party to the other. In such event, the rent
payable hereunder shall be apportioned to the date of such damage, vesting, or
taking and thereafter this Lease shall cease and determine and shall be of no
further force and effect.
ARTICLE 10. LIENS
The Landlord hereby waives any lien upon Tenant's property in the Premises
whether such lien is created by common law, by statute or otherwise and whether
such lien may presently exist or may be
5
created in the future. Tenant shall keep the premises and Building free of any
mechanics liens or other liens.
ARTICLE 11. DEFAULTS
In the event of a default by either party hereunder, the non-defaulting party
shall send written notice to the defaulting party specifying the nature of the
default. The defaulting party shall have twenty (20) days from the date of such
notice to cure the default or if such default is of such a nature that it cannot
be cured within said twenty (20) day period, then the defaulting party shall
promptly commence the curing thereof within said twenty (20) day period and
shall thereafter proceed with due diligence to cure the same. If the default
creates an emergency, the twenty (20) day period shall not be applicable thereto
and non-defaulting party may immediately take all reasonable measures to cure
the default and the defaulting party shall reimburse the non-defaulting party
therefor upon presentation of receipted bills. In the event Landlord does not
reimburse Tenant pursuant to the immediately preceding sentence, Tenant shall
have the right to deduct the cost thereof from the next and succeeding
installments of rent. In the event of a dispute between Landlord and Tenant as
to the correctness of Tenant's invocation of its right of self-help herein
contained, it is hereby agreed that Landlord shall not have the right to evict
Tenant from the Premises if it is determined by a court that Tenant has
incorrectly invoked its right to self-help, and Landlord agrees that its only
remedy is such instances is for Tenant to pay to Landlord the withheld rental
amounts within fifteen (15) days of any determination that Tenant was incorrect
in invoking its right to self-help.
ARTICLE 12. ALTERATIONS
(a) Tenant may make any non structural interior alterations desired during
the Term of the Lease if the costs of such alterations do not exceed $25,000.00
in any one instance. Any structural alterations or alterations costing in excess
of $25,000 in any one instance, shall require the consent of Landlord which
consent shall not be unreasonably withheld or denied and which shall be deemed
given if not denied within ten (10) days. At the request of Landlord at lease
termination Lessee shall restore the space to a standard office area.
(b) Any alteration, additions, or improvement shall be made promptly and
in a good workman like manner and in compliance with all applicable permits and
authorizations and building and zoning laws and with all other laws, ordinances,
orders, rules, regulations and requirements of all federal, state and municipal
governments, departments, commissions, boards and offices. The costs of any such
alteration, addition or improvement shall be paid by Tenant, so that the
Premises and any improvements at anytime located thereon shall at all times be
free of liens for services performed, labor and material supplied or claimed to
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have been [ ]. Before any alteration, additional improvement shall be
commenced, Tenant shall pay the amount of any increase in premiums on insurance
policies (provided for under this Lease) on account of endorsement to be made
thereon covering the risk during the course of such alteration, addition or
improvement.
ARTICLE 13. INTERRUPTION OF SERVICES
In the event that the utilities or services which Landlord is obligated
hereunder to provide to the Premises are interrupted such that they are provided
only intermittently or such utilities or services altogether cease to be
provided to the Premises for any reason whatsoever for a period of five (5)
consecutive days, Tenant at the end of such period ("Non-Service Period") has
the right to cancel and terminate this Agreement by giving written notice to the
Landlord within ten (10) days of the end of the Non-Service Period, and this
Agreement shall be canceled and terminated on the date set forth in such
notice, provided such date shall be no more than fifteen (15) days from the date
of the notice. If the Tenant or anyone claiming under the Tenant shall remain
in possession of the Premises or any part thereof after expiration of the term
of this Agreement, or any extension thereof, without any agreement in writing
between the Landlord and the Tenant with respect thereto, such possession shall
be deemed a month to month tenancy under all terms, covenants and conditions of
this Agreement except that such tenancy may be terminated upon thirty (30) days
written notice from one party to the other.
At any time and from time to time during the term of this Lease during normal
business hours and whether or not Tenant is in default hereunder, the Tenant may
remove any or all of the Tenant's property from the Premises. Upon the
expiration or earlier termination of this Lease, the Tenant will remove all of
its property from the Premises; if within ten (10) days after such expiration or
termination, Tenant shall not have removed its property it shall be deemed
abandoned by Tenant. During such ten (10) day period Tenant shall pay to
Landlord rent. Tenant shall pay the reasonable costs to repair any damage caused
to the Premises or to the Building by the removal of Tenant's property. Landlord
covenants and agrees with Tenant that upon Tenant paying the rent and observing
the terms, covenants and conditions on Tenant's part to be observed and
performed, Tenant paying the rent and observing the terms, covenants and
conditions on Tenant's part to be observed and performed, Tenant may peaceably
and quietly enjoy the Premises demised hereby.
The Tenant shall, at the expiration of the Term of this Lease, peaceably yield
up to the Landlord the Premises and all additions made upon the same by the
Landlord, in as good repair as at the commencement of the Term, damage by fire
or other casualty, reasonable wear and tear and any damage that is not the
responsibility of Tenant hereunder excepted.
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ARTICLE 14. NOTICE
All notices, demands, and requests, hereunder shall be sent in writing by
certified or registered mail, return receipt requested, postage prepaid as
follows:
Landlord to Tenant:
Jim Robbins, Manager
Northern California Administration
Digital Equipment Corporation
800 El Camino Real
Mountain View, California
with a copy to:
Manager, U.S. Property Development
2352 Main Street
Concord, Massachusetts 01742
Tenant to Landlord:
Hare, Brewer & Kelley, Inc.
Property Management Department
305 Lytton Avenue
Palo Alto, CA 94301
with a copy to:
Richard Kelley
C/O Hare, Brewer & Kelley, Inc.
ARTICLE 15. HAZARDOUS SUBSTANCES
(a) "HAZARDOUS SUBSTANCE" means any substance, waste or material which
---------- ----------
is deemed hazardous, toxic, a pollutant or contaminant, under any federal,
state or local statute, law, ordinance, rule regulation, or judicial or
administrative order or decision, now or hereunder in effect.
"HAZARDOUS SUBSTANCE ON THE PREMISES" means any hazardous substance present in
- ---------- --------- -- --- ---------
or on the Premises including, without imitation, in or on the surface or beneath
the Premises, the surface water or under ground water, and in or on any
improvement or part thereof at or beneath the surface of the Premises.
"APPLICABLE LAW" shall mean all federal, state and local statutes, laws,
- ----------- ----
ordinances, rules and regulations and judicial and administrative orders,
rulings and decisions that are applicable now or in the future to the Premises
or any portion thereof or to any activity which shall take place thereon.
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"PREMISES" for purposes of this Article 15, only, Premises includes the
- ----------
Building, other improvements and the Land on which they are located.
(b) Landlord has never generated, stored, disposed of or otherwise
handled any Hazardous Substance on the Premises in any fashion contrary to
Applicable Law and Landlord shall not generate, store, dispose of or otherwise
handle any Hazardous Substance on the Premises in any fashion contrary to
Applicable Law. Landlord is, to the best of its knowledge, not aware of the
generation, storage, disposal or other handling of any Hazardous Substance on
the Premises by anyone else in any fashion contrary to Applicable Law. Landlord
also is, to the best of its knowledge, not aware of the presence of any
Hazardous Substance on the Premises which may require remedial action under
Applicable Law or may pose a threat to human health or the environment.
Landlord hereby grants Tenant the right to perform environmental testing at the
Premises throughout the term of this Lease including but not limited to removal
and analysis of ground water, surface water and soil, which testing shall be
performed by a company mutually acceptable to both parties. Tenant shall
restore any areas on the Premises affected by such testing to the grade which
existing immediately prior to such testing.
(c) Landlord is not aware of any underground storage tanks on the
Premises and is not aware of any asbestos currently located at the Premises.
(d) There are no transformers or other equipment on the Premises which
contain PCBs, and Landlord shall not bring any such equipment onto the Premises
during the term of this Lease.
(e) Landlord shall defend, indemnify and hold harmless Tenant from and
against any and all liability, loss, suits, claims, actions, causes of action,
proceedings, demands, costs, penalties, fines and expenses, including, without
limitations, attorneys' fees, consultants' fees, and clean-up costs, resulting
from the presence of any Hazardous Substance on the Premises, or arising out of
the generation, storage, treatment, handling, transportation, disposal or
release, other than by Tenant, of any Hazardous Substance at or near the
Premises, or arising out of any violation(s) other than by Tenant, of any
Applicable Law regarding Hazardous Substances.
In the event Landlord breaches any of the representations or warranties listed
above or in the event any such representation or warranty proves to be false or
in the event there is the presence of any Hazardous Substance on the Premises
providing such presence is not the result of Tenant's breach of its covenants in
this Paragraph, then in each of the foregoing instances, Tenant shall have the
additional right, at its option and in addition to any other right hereunder or
at law or in equity, to terminate this Lease without liability therefor.
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EXHIBIT C
Plan of Sublet Premises
[GRAPHIC APPEARS HERE]
Business Enterprise Cluster
UCB - 335 BRYANT ST. - FIRST FLOOR
Page 1 of 3
[GRAPHIC APPEARS HERE]
Business Enterprise Cluster
UCB - 335 BRYANT ST. - SECOND FLOOR
Page 2 of 3
[GRAPHIC APPEARS HERE]
Business Enterprise Cluster
UCB - 335 BRYANT ST. - THIRD FLOOR
Page 3 of 3
(f) Tenant's Warranties/Reps: Tenant shall not generate, store, dispose
of or otherwise handle any Hazardous Substance on the Premises in any fashion
contrary to Applicable Law.
Landlord will not create or permit to be created or if created, to remain in
effect as a result of work done for or materials supplied to Landlord in or for
the Premises or for the Building or Land and/or other improvements, including
any work being performed by Landlord on behalf of Tenant, and Landlord will
discharge or will bond, any such lien, encumbrance, or charge arising therefrom
which may be a lien or encumbrance upon the Premises, Building or Land.
ARTICLE 16. MISCELLANEOUS
Landlord represents and warrants to Tenant that it is the owner of the Premises,
the Building and the Land and has full power and authority to enter into and
perform under this Lease. Landlord further represents and warrants that all
requisite approvals and consents have been obtained for the execution and
delivery of and performance by Landlord hereunder.
Tenant hereby agrees to pay Hare, Brewer & Kelley upon execution of this Lease
Agreement the lump sum payment of Ten Thousand Dollars and no cents ($10,000.00)
as consideration for costs associated with the existing tenant in these premises
vacating said premises by the commencement date of this Lease Agreement. Hare,
Brewer & Kelley, Inc. hereby agrees to analyze the costs of its move including
the costs of furniture movers, telephone charges and computer move and hook up
and to rebate any excess over cost and beneath the $10,000.00 to Digital.
DIGITAL EQUIPMENT CORPORATION
BY: /s/ Edward B. Reiss
-----------------------------
Edward B. Reiss, Manager
U.S. Property Manager
This Lease is agreed to and accepted this 6th day of April , 1990.
----- ---------
/s/ Richard R. Kelley, Jr.
- -----------------------------
Richard Kelley
/s/ Charles Hangar
- -----------------------------
Charles Hangar
/s/ William K. Kelley
- -----------------------------
Hare, Brewer & Kelley, Inc.
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EXHIBIT C
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FIRST AMENDMENT TO AMENDED AND RESTATED LEASE
This First Amendment to Amended and Restated Lease is entered into by and
between Richard R. Kelley, Jr., Charles E. Hanger, Faye E. Hanger and Harry L.
Fox ("Landlord") and Digital Equipment Corporation, a Massachusetts corporation
("Tenant") effective as of November 1, 1991.
RECITALS
--------
A. This First Amendment to Amended and Restated Lease (this "First
Amendment") modifies that certain Amended and Restated Lease by and between
Richard R. Kelley, Jr., Charles E. Hanger, Faye E. Hanger and Hare, Brewer and
Kelley, Inc. and Tenant effective December 1, 1990 (the "Lease"), for the
property located at 335 Bryant Street, Palo Alto, California. All terms used in
this First Amendment shall have the same meaning ascribed to them in the Lease
unless expressly defined herein.
B. In further consideration of efforts by Landlord to secure a
refinancing of the property subject to the Lease, Landlord and Tenant have
agreed to make certain modifications to the Lease.
C. All capitalized terms not defined in this First Amendment shall have
the meanings assigned to them in the Lease.
AGREEMENT
---------
NOW, THEREFORE, Landlord and Tenant hereby agree that the Lease shall be
and hereby is amended as follows:
1. Amendment of Article I. Paragraphs 1(c), 1(d), 1(j) and 1(q).
------------------------------------------------------------
Paragraphs 1(c), 1(j) and 1(q) of Article I of the Lease are deleted in their
entirety and there shall be inserted in their place the following:
(c) Demised Premises: The entire Building containing a total of
----------------
nine thousand two hundred eighty-four (9,284) rentable square feet.
(d) Date of Execution: As of December 1, 1990.
-----------------
(j) Landlord: Richard R. Kelly, Jr., a married man as his separate
--------
property, Charles E. Hanger and Faye E. Hanger, husband and wife as
community property and Harry L. Fox, a single man. Such parties are
bound by an Agreement Between Co-owners dated December 1, 1990 and
amended by the First Amendment thereto dated as of July 8, 1991
governing their relationship as co-owners of the Land and Building. A
memorandum of such Agreement was
1
recorded February 7, 1991, and a memorandum of such First Amendment to such
Agreement shall be recorded promptly.
(q) Tenant's Share: Tenant's Share shall equal 100%.
--------------
2. Amendment of Article II. Paragraphs (2) and (3). Paragraphs (2) and
-----------------------------------------------
(3) of Article II of the Lease are deleted in their entirety and there shall be
inserted in their place the following:
2. No Conditions Precedent. There are no unsatisfied conditions to
-----------------------
the effectiveness of the Lease.
3. Description of Demised Premises. Landlord hereby leases to Tenant
-------------------------------
and Tenant hereby takes from Landlord the entire Building containing a
total of nine thousand two hundred eighty-four (9,284) rentable square
feet.
3. Amendment of Article IV. Paragraph 4. Paragraph 4 of Article IV of the
------------------------------------
Lease is deleted in its entirety and there shall be inserted in its place the
following:
4. Minimum Rent. Notwithstanding any other provisions of this Lease
------------
allowing for abatement, set-off or other reduction in Base Rent, other than
pursuant to Article VIII, Paragraph 2(b), Article XII, Paragraph 8 or Article
XIII, Paragraph 4, Tenant shall be required to pay a minimum amount of Base Rent
(the "Minimum Base Rent") equal to Sixteen Thousand Dollars ($16,000) per month.
4. Amendment of Article VIII, Paragraph 2(b). of Article VIII of the
-----------------------------------------
Lease shall be deleted in its entirety and there shall be inserted in its place
the following:
(b) Interior Improvement Allowance. Landlord shall pay to Tenant an
------------------------------
improvement allowance for use in construction of the Interior Improvements equal
to Two Hundred Eighty-Two Thousand Eight Hundred Forty Dollars ($282,840)
("Improvement Allowance"). Landlord shall pay the Improvement Allowance to
Tenant upon the closing of a refinancing by Landlord of the existing monetary
encumbrances on the Land and Building, provided that no mechanics' liens or
similar liens for labor or material supplied to the Interior Improvements have
been filed or asserted against the Demised Premises. Landlord shall use its best
efforts to obtain such refinancing within nine (9) months after the Date of
Execution. The unpaid balance of the Improvement Allowance shall be increased by
one percent (1%) for each month that payment of the Improvement Allowance is
delayed beyond nine (9) months after Date of Execution, prorated for any partial
month on the basis of a thirty (30) day month. Notwithstanding the provisions of
Article IV, Paragraph 4, if payment of
2
the Improvement Allowance is delayed beyond twelve (12) months after the
Date of Execution, Tenant may deduct the remaining balance of the
Improvement Allowance from the net payments of Rent coming due according to
the following schedule: (i) Tenant may deduct all but Ten Thousand Dollars
($10,000) from the first such Base Rent payment all but the Minimum
Additional Rent from the first such Additional Rent payment, (ii)Tenant may
deduct all but Five Thousand Dollars ($5,000) from the next such Base Rent
payment and all but the Minimum Additional Rent from the next such
Additional Rent payment, and (iii) Tenant may deduct all of each remaining
Base Rent payment and all but the Minimum Additional Rent from each
remaining Additional Rent payment, until Tenant has recovered the remaining
unpaid balance of the Improvement Allowance. Tenant shall be responsible
for payment of all Improvement Costs in excess of the Improvement
Allowance.
5. Amendment of Article XV, Paragraph 2. The third sentence of Paragraph
------------------------------------
2 of Article XV of the Lease is amended to read as follows:
If, upon review of such balance sheet or such notice of change, Tenant
reasonably concludes that the financial status of any Landlord has been
materially impaired in a manner which would adversely affect the ability of
Tenant to enforce its Purchase Option pursuant to Article XXIX, Paragraph 2
of this Lease, then Tenant's Purchase Option pursuant to Article XXIX,
Paragraph 2 shall be accelerated on the following terms:
6. Amendment of Article XXI, Paragraph 3. Paragraph 3 of Article XXI of
-------------------------------------
the Lease is deleted in its entirety and there shall be inserted in its place
the following:
3. Landlord Default Under Allstate Loan. Landlord proposes to enter
------------------------------------
into a Mortgage of the Property with Allstate Life Insurance Company
("Allstate"). If Allstate gives any notice of default pursuant to the
Allstate Mortgage to Landlord, Landlord shall provide a copy of such notice
to Tenant and shall also appraise Tenant of Landlord's plans (if any) for
curing such default and with evidence of any payments made by Landlord to
Allstate or other actions taken by Landlord to cure such default. If a
default by Landlord pursuant to the Allstate Mortgage is not cured by
Landlord within the allowable cure periods contained therein, a material
adverse change in Landlord's financial position shall be deemed to have
occurred which shall entitle Tenant to accelerate its Purchase Option on
the terms set forth in Paragraph 2 of Article XV. Tenant may at its option
cure any monetary default by Landlord pursuant to the Allstate Mortgage,
during the period that Landlord is entitled to cure such default under the
Allstate Mortgage. If landlord does not reimburse Tenant for the cost of
any such cure by Tenant of a monetary default pursuant to the Allstate
Mortgage which does not also constitute a default by Tenant pursuant to
this Lease, on or before the date
3
monthly Base Rent is next due under this Lease, then Tenant may deduct such
amounts from Base Rents until Tenant has been fully reimbursed, provided
that Tenant shall continue to pay in any event monthly Base Rent at least
equal to 100% of the monthly debt service payments then due pursuant to the
Allstate Mortgage. In no event shall Tenant have any obligation to cure any
default of Landlord under the Allstate Mortgage, or to repeatedly cure any
such default that Tenant has once cured.
7. Amendment of Article XXIX, Paragraph 2. The first sentence of
--------------------------------------
Paragraph 2 of Article XXIX is amended to read as follows:
In consideration of the execution by Tenant of this Lease, Landlord hereby
grants to Tenant the one-time option to purchase the Property (the
"Purchase Option"), at the price and upon the terms set forth in this
Article XXIX, Paragaraph 2, by giving written notice (the "Notice of
Exercise") to Landlord no earlier than December 1, 1998 and no later than
November 30, 1999, provided that this Lease is still in full force and
effect.
8. Amendment of Article XXIX, Paragraph 2(m). Paragraph 2(m) of Article
----------------------------------------
of XXIX is amended to read as follows:
(m) Failure to Purchase: If Tenant shall give the Notice of Exercise
-------------------
to Landlord and thereafter shall fail to purchase the Property in
accordance with the terms of this Article XXIX, Paragraph 2, this
Lease shall remain in full force and effect. If such failure by Tenant
occurs despite the fulfillment of all conditions to closing for
Tenant's benefit contained in this Article XXIX, Paragraph 2, Tenant
shall have no further right pursuant to this Lease to purchase the
Property from Landlord, and Tenant shall be liable to Landlord for all
damage incurred by Landlord as the result of Tenant's failure to so
purchase the Property; and Tenant shall deliver to Landlord at no
charge copies of all surveys, tests, investigations, studies, reports
and analyses performed by Tenant or its employees, contractors,
consultants, servants and agents in connection with Tenant's
investigation of the Property. If Landlord fails to sell the Property
to Tenant despite the fulfillment of all conditions to closing for
Landlord's benefit contained in this Article XXIX, Paragraph 2,
Landlord shall be liable to Tenant for all damage incurred by Tenant
as the result of Landlord's failure to sell the Property, or Tenant
may pursue specific performance of its Purchase Option.
9. No Conflict. Except as amended by this First Amendment, the
-----------
terms and conditions of the Lease shall remain in full force and effect and are
hereby ratified, affirmed and approved. In the event of any conflict between
the terms of the Lease and this First Amendment, this First Amendment shall
govern and control. This First Amendment shall be interpreted and construed in
accordance with the laws of the State of California, and shall be
4
binding upon and inure to the benefit of the parties hereto and to their
respective permitted successors and assigns under the Lease.
IN WITNESS WHEREOF, Landlord and Tenant have executed this First Amendment
effective as of the date first above written.
"Landlord"
Date: 11/27/91 /s/ Richard R. Kelley, Jr.
------------------------- -----------------------------
Richard R. Kelley, Jr.
Date: 12/2/91 /s/ Charles E. Hanger
------------------------- -----------------------------
Charles E. Hanger
Date: 12/2/91 /s/ Faye E. Hanger
------------------------- -----------------------------
Faye E. Hanger
Date: 11/27/97 /s/ Harry L. Fox
------------------------- -----------------------------
Harry L. Fox
"Tenant"
Digital Equipment Corporation, a
Massachussets corporation
Date: By:
------------------------- ----------------------------
Its:
---------------------------
5
binding upon and inure to the benefit of the parties hereto and to their
respective permitted successors and assigns under the Lease.
IN WITNESS WHEREOF, Landlord and Tenant have executed this First Amendment
effective as of the date first above written.
"Landlord"
Date:
------------------------- ------------------------------
Richard R. Kelley, Jr.
Date:
------------------------- ------------------------------
Charles E. Hanger
Date:
------------------------- ------------------------------
Faye E. Hanger
Date:
------------------------- ------------------------------
Harry L. Fox
"Tenant"
Digital Equipment Corporation, a
Massachusetts corporation
Date: Nov 25, 1991 By: [SIGNATURE APPEARS HERE]
------------------------- ----------------------------
Its: US Development Manager
---------------------------
5
EXHIBIT D
Telecommunications Equipment Inventory
Telephone Switch: Northern Telecom Model M1 Option 21
Software: Ver/Rel-XII Gen 1011 Res. 17.71
Signaling Information: Type (TT or MF)
Start Dial signal to PBX-Wink
Start Dial signal from PBX-ground
Battery Back-up: 6 hours
Available Ports: Digital: 75
Analog: 7
Trunks: Outgoing: 12 (for 305 Lytton Avenue)
Incoming: 20 DID's
Northern Telecom Handsets: Model# Quantity
------ --------
2008 18
2616 (without display) 8
Unity 1
500 2
-18-
professional advisors. Tenant may disclose such terms and conditions to
prospective assignees and subtenants of Tenant. Landlord may disclose such terms
and conditions to prospective lenders and purchasers of the Property. When any
permitted disclosure is made pursuant to this paragraph 20, the party making the
disclosure shall do so only on the condition that the third party receiving the
disclosure agrees to keep such terms and conditions confidential.
21. No Other Tenant a Third Party Beneficiary. No tenant of the Building
-----------------------------------------
other than Tenant and its permitted subtenants and assignees may claim the
benefits of any provision of this Lease.
IN WITNESS WHEREOF, the parties have duly executed this Lease as of this
_______ day of _________, 1990.
LANDLORD:
/s/ Richard R. Kelley, Jr.
----------------------------------
Richard R. Kelley, Jr.
/s/ Charles E. Hanger
----------------------------------
Charles E. Hanger
/s/ Faye E. Hanger
----------------------------------
Faye E. Hanger
HARE, BREWER & KELLEY, INC.,
a California corporation
By: [SIGNATURE APPEARS HERE]
------------------------------
Its: President
------------------------------
TENANT:
DIGITAL EQUIPMENT
CORPORATION, a Massachusetts
corporation.
By:
------------------------------
Its:
------------------------------
57
professional advisors. Tenant may disclose such terms and conditions to
prospective assignees and subtenants of Tenant. Landlord may disclose such terms
and conditions to prospective lenders and purchasers of the Property . When any
permitted disclosure is made pursuant to this paragraph 20, the party making the
disclosure shall do so only on the condition that the third party receiving the
disclosure agrees to keep such terms and conditions conditional.
21. No Other Tenant a Third Party Beneficiary. No tenant of the Building
-----------------------------------------
other than Tenant and its permitted subtenants and assignees may claim the
benefits of any provision of this Lease.
IN WITNESS WHEREOF, the parties have duly executed this Lease as of this___
day of ________, 1990.
LANDLORD:
-----------------------------
Richard R. Kelley, Jr.
-----------------------------
Charles E. Hanger
-----------------------------
Faye E. Hanger
HARE, BREWER & KELLEY, INC.,
a California corporation
By: /s/ Richard R. Kelley, Jr.
--------------------------
Its. President
-------------------------
TENANT:
DIGITAL EQUIPMENT
CORPORATION, a Massachusetts
corporation,
By: [SIGNATURE APPEARS HERE]
--------------------------
Its: US Development Manager
-------------------------
57
EXHIBIT C
---------
Legal Description of Land
THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF
SANTA CLARA, CITY OF PALO ALTO AND IS DESCRIBED AS FOLLOWS:
PARCEL A AS SHOWN ON THAT CERTAIN PARCEL MAP RECORDED DECEMBER 28, 1979 IN
BOOK 456, PAGE 44 OF MAPS, RECORDS OF SANTA CLARA COUNTY, CALIFORNIA.
EXHIBIT D
---------
OFFICE SPACE LEASE
335 BRYANT STREET
PALO ALTO, CA 94301
This Lease dated April 6, 1990, is entered into by and between Richard Kelley,
Charles Hangar and Hare, Brewer, & Kelley, Inc., a California Limited
Partnership as Landlord, and Digital Equipment Corporation as Tenant.
ARTICLE 1. TERM
The term ("Term") of this Lease shall be for six (6) months commencing April 7,
1990 and expiring October 6, 1990.
ARTICLE 2. PREMISES
(a) The Premises consists of 8,426 rentable square feet of space on floors
1, 2, and 3 as shown on Exhibit A attached hereto and made a part hereof
(Premises). It is understood that said Premises does not include approximately
462 rentable square feet occupied by Dr. Alan Sidle, Suite 100.
ARTICLE 3. USE
The Premises may be used for computer laboratories, conference rooms, offices,
repair and service of computers and associated equipment and the storage
thereof, and all other uses permitted by law. Tenant is also given the right to
use in common with others the lobbies, entrances, stairs, elevators, restrooms
and other public portions of the Building within the following exceptions:
(1) the garden area immediately adjacent to suite 100.
(2) The 1st floor lobby shall be used for ingress and egress only.
ARTICLE 4. RENT
The monthly rent payable to the Landlord for the Premises is Seventeen Thousand
Six Hundred Ninety-Four and 60/100 ($17,694.60) payable on the first day of each
month with the rent prorated for any portion of a month included within the
Term. Tenant recognizes that late payment of any Rent or other sum due hereunder
from Tenant to Landlord will result in administrative expenses to Landlord, the
extent of such additional expenses being extremely difficult and economically
impractical to ascertain. Tenant therefore agrees that if Rent or any other
payment due hereunder from Tenant to Landlord remains unpaid five (5) days after
said amount is due, the amount of such unpaid Rent or other payment shall be
increased by a late charge to be paid
1
to Landlord by Tenant in the amount of the maximum annual interest rate per
annum permitted by law together with a daily administrative charge of
twenty-five dollars ($25.00). Tenant agrees that such amount is a reasonable
estimate of such loss and expense and may be charged by Landlord to defray such
loss and expense. The amount of the late charge to be paid Landlord by Tenant on
any unpaid Rent or other payment shall be reassessed and added to Tenant's
obligation for each successive monthly period accruing after the date on which
the late charge is initially imposed. The remedy provided in this article are in
addition to any other remedies available to landlord at law or in equity by
statute or otherwise.
ARTICLE 5. ADDITIONAL RENT
Tenant shall pay as additional rent hereunder, its prorata share of the agreed
upon operating costs of the building, common area and real estate taxes.
Tenant hereby agrees to pay Landlord's base Cost for Operating Costs for the
term of the Lease, which cost is $.72 per square foot of rentable space per
month. It is agreed that for this sum all utilities and HVAC costs shall be
paid. Said amount has been agreed to whether the cost as shall actually be
incurred by Landlord during the Lease term is actually greater or less than the
amount.
ARTICLE 6. SERVICES
Landlord covenants that Landlord shall supply or cause to be supplied to or for
the use of the Premises, hot and cold running water for lavatory and drinking
purposes, sewer services and electricity at current capacity and shall furnish
heat and air conditioning to the standard set forth below, during the hours
hereinafter set forth. Unless prevented by causes beyond Landlord's control, the
services to be rendered by Landlord set forth in this Article 6, shall be
provided twenty-four hours a day, seven days a week.
(a) The heating system of the Premises will be adequate to heat all areas
of the Premises to an inside temperature of seventy-five (75) degrees Fahrenheit
when outside temperature is zero (0) degrees Fahrenheit.
(b) The air conditioning system of the Premises will be adequate to cool
all areas of the Premises serviced thereby to seventy-five (75) degrees
Fahrenheit + or - two (2) degrees when relative humidity is fifty percent (50%)
+ or - five percent (5%) and the outside temperature is ninety-five (95) degrees
DB seventy three (73) degrees WB. Unless prevented by causes beyond Landlord's
control, the services to be rendered by Landlord set forth in this Paragraph
shall be provided between the hours of 7 o'clock AM and 6 o'clock P.M. Monday
through Friday, and between 7 o'clock AM and 1 o'clock P.M. on Saturday, except
holidays.
2
(c) Landlord, at its sole cost and expense, and without any condition by
Tenant, shall throughout the Term of the Lease perform all interior and exterior
maintenance and make all interior and exterior repairs and replacements within
and to the Premises, common areas, Building and all other improvements, Land and
to all systems and utilities within Landlord's control, and to any and all
portions thereof - electrical, mechanical, plumbing, heating, ventilating, and
air conditioning - as needed to keep them or it in good working order and
conditioning and operating to design capacity. Whether structural or
nonstructural in nature, and whether ordinary or extraordinary or foreseen or
unforeseen. This provision is not intended to release or relieve Tenant from
payment for any such repair or replacement to the extent necessitated by the
negligence or willful acts of Tenant, its agents, servants or employees.
ARTICLE 7. INSURANCE
Tenant shall maintain throughout the Term hereof Comprehensive General Liability
Insurance, including Contractual Liability coverage, with respect to the
Premises, in the amount of $1,000,000 combined single limit for bodily injury
and property damage. A Certificate of Insurance shall be provided by Tenant upon
request.
Tenant shall, upon timely receipt of written notice, defend and save the
Landlord harmless from and against any all suits, claims, and demands arising
out of injury or demand occurring in the Premises because of negligence or
willful acts of Tenant, its agents, servants, or employees. In the event the
Landlord is notified of a claim, action or proceeding, or becomes aware of an
occurrence, which may result in indemnification by Tenant as provided in this
Article 7, the Landlord shall give immediate written notice to Tenant and
provide complete particulars known by the Landlord. The Landlord shall
immediately forward to the Tenant every demand, notice, summons or other process
received by Landlord or his representatives.
Tenant has the exclusive right and obligation to defend any action or proceeding
wherein Landlord is entitled to indemnification hereunder and Tenant may settle
any such claim, aim action or proceeding without Landlord's consent or approval.
The Landlord will fully cooperate with the Tenant at no cost to Landlord in the
defense or settlement of any claim, action, or proceeding. Landlord's failure to
comply with its obligations under this Article releases Tenants from the
obligation to indemnify Landlord hereunder. The provisions hereof do not and
shall not relieve Landlord of the responsibility of liability for acts, neglect,
fault or omission of Landlord, its agents, servants, employees or contractors
which cause injury or death to persons or damage to property in, on, or about
the Premises, Building or Land.
3
Landlord shall throughout the Term, procure [ ] carry at its sole cost and
expense, a comprehensive liability policy in the same amounts and affording the
same coverage that Tenant is required to provide hereunder and said policy shall
contain a contractual liability endorsement insuring Landlord's indemnity under
this Lease. Said insurance shall be carried with a responsible company
authorized to do business in the State of California. A certificate evidencing
such coverage shall be provided to Tenant at the commencement of this Lease.
Landlord agrees to maintain insurance coverage with a responsible insurance
company authorized to do business in the State of California on the entire
Building in which the Premises are located in an amount not less than the full
replacement value of the Building. Such coverage shall insure against All Risks
excluding flood and earthquake. Upon the request of Digital, Landlord will
furnish a certificate of insurance evidencing the casualty coverage stated in
this Article 7.
Landlord and Tenant hereby waive all causes of action and rights of recovery
against each other and their respective agents, officers and employees for any
loss occurring to the real or personal property of either of them regardless of
cause or origin, to the extent of any recovery by either of them from any
policy(s) of insurance. Landlord and Tenant agree that any property policies
presently existing or obtained on or after the date hereof (including renewals
of present policies) shall include a clause or endorsement to the effect that
any such release shall not adversely affect or impair said policies or prejudice
the right to recover thereunder.
Landlord shall, upon timely receipt of written notice, defend and save Tenant
harmless from and against any all suits, claims, and demands arising out of
injury or damage occurring on, in or about the Premises, Building or Land
because of the negligence or willful acts of Landlord, its agents, servants,
employees or contractors. In the event the Tenant is notified of a claim, action
or proceeding, or becomes aware of an occurrence which may result in
indemnification by Landlord as provided in this Article 7, the Tenant shall give
immediate written notice to Landlord and provide complete particulars known by
the Tenant. The Tenant shall immediately forward to the Landlord every demand,
notice, summons or other process received by Tenant or his representatives. The
Tenant will fully cooperate with the Landlord in the defense or settlement of
any claim, action or proceeding. The provisions hereof do not and shall not
relieve Tenant of the responsibility of liability for the acts, neglect, fault
or omission of Tenant its agents, servants, employees or contractors which cause
injury or death to persons or damage to property in, or about the Premises,
Building or Land.
4
ARTICLE 8. ENTRY BY LANDLORD
Landlord may enter the Premises at reasonable hours with minimum of one (1) hour
notice to (a) inspect the same, (b) exhibit the same to prospective purchasers,
lenders or tenants, (c) determine whether Tenant is complying with all of
Tenant's obligations hereunder, (d) supply janitor service and any other service
to be provided by landlord to Tenant hereunder, (e) post notices of non
responsibility and (f) make repairs required of Landlord under the terms hereof
or repairs to any adjoining space or utility service or make repairs,
alterations, or improvements to any other portion of the Building, provided,
however, that all such work shall be done as promptly as possible and, so as to
cause as little interference to Tenant as reasonably possible. Tenant hereby
waives any claim for damages for any injury or inconvenience to or interference
with Tenant's business, any loss of occupancy or quiet enjoyment of the Premises
or any other loss occasioned by such entry. Landlord shall have the right to use
any and all means which Landlord may deem proper to open said doors in an
emergency in order to obtain entry to the Premises, and any entry to the
Premises obtained by Landlord by any of said means, or otherwise, shall not
under any circumstances be construed or deemed to be a forcible or unlawful
entry into or a detainer of the Premises or an eviction, actual or constructive,
of Tenant from the Premises, or any portion thereof. The Tenant is hereby
granted the right of twenty-four (24) hour access to the Premises.
Tenant is hereby granted the right to change or install lock (a) on the
interior door(s) of the Premises and at the end of the Term Tenant shall
surrender the keys to such locks to Landlord.
ARTICLE 9. DAMAGE OR DESTRUCTION
In the event of any damage to any portion of the Premises or of the Building
from fire or other casualty, insured or uninsured; or in the event of a taking
of any portion if the Premises or of the Building or the Land by the exercise of
the power of eminent domain or condemnation or the taking for a public or
quasi-public use of any portion of the Premises, the Building or Land, this
Lease shall terminate as of the date of the damage or the vesting of title or
the taking of possession, actual or constructive, without the necessity of
notice of termination from one party to the other. In such event, the rent
payable hereunder shall be apportioned to the date of such damage, vesting, or
taking and thereafter this Lease shall cease and determine and shall be of no
further force and effect.
ARTICLE 10. LIENS
The Landlord hereby waives any lien upon Tenant's property in the Premises
whether such lien is created by common law, by statute or otherwise and whether
such lien may presently exist or may be
5
created in the future. Tenant shall keep the premises and Building free of any
mechanics liens or other liens.
ARTICLE 11. DEFAULTS
In the event of a default by either party hereunder, the non-defaulting party
shall send written notice to the defaulting party specifying the nature of the
default. The defaulting party shall have twenty (20) days from the date of such
notice to cure the default or if such default is of such a nature that it cannot
be cured within said twenty (20) day period, then the defaulting party shall
promptly commence the curing thereof within said twenty (20) day period and
shall thereafter proceed with due diligence to cure the same. If the default
creates an emergency, the twenty (20) day period shall not be applicable thereto
and non-defaulting party may immediately take all reasonable measures to cure
the default and the defaulting party shall reimburse the non-defaulting party
therefor upon presentation of receipted bills. In the event Landlord does not
reimburse Tenant pursuant to the immediately preceding sentence, Tenant shall
have the right to deduct the cost thereof from the next and succeeding
installments of rent. In the event of a dispute between Landlord and Tenant as
to the correctness of Tenant's invocation of its right of self-help herein
contained, it is hereby agreed that Landlord shall not have the right to evict
Tenant from the Premises if it is determined by a court that Tenant has
incorrectly invoked its right to self-help, and Landlord agrees that its only
remedy in such instances is for Tenant to pay to Landlord the withheld rental
amounts within fifteen (15) days of any determination that Tenant was incorrect
in invoking its right to self-help.
ARTICLE 12. ALTERATIONS
(a) Tenant may make any non structural interior alterations desired during
the Term of the Lease if the costs of such alterations do not exceed $25,000.00
in any one instance. Any structural alterations or alterations costing in excess
of $25,000 in any one instance, shall require the consent of Landlord which
consent shall not be unreasonably withheld or denied and which shall be deemed
given if not denied within ten (10) days. At the request of Landlord at lease
termination Lessee shall restore the space to a standard office area.
(b) Any alteration, additions, or improvement shall be made promptly and
in a good workman like manner and in compliance with all applicable permits and
authorizations and building and zoning laws and with all other laws, ordinances,
orders, rules, regulations and requirements of all federal, state and municipal
governments, departments, commissions, boards and offices. The costs of any such
alteration, addition or improvement shall be paid by Tenant, so that the
Premises and any improvements at anytime located thereon shall at all times be
free of liens for services performed, labor and material supplied or claimed to
6
have been supplied. Before any alterations, additions or improvement shall be
commenced, Tenant shall pay the amount of any increase in premiums on insurance
policies (provided for under this Lease) on account of endorsement to be made
thereon covering the risk during the course of such alteration, addition or
improvement.
ARTICLE 13. INTERRUPTION OF SERVICES
In the event that the utilities or services which Landlord is obligated
hereunder to provide to the Premises are interrupted such that they are provided
only intermittently or such utilities or services altogether cease to be
provided to the Premises for any reason whatsoever for a period of five (5)
consecutive days, Tenant at the end of such period ("Non-Service Period") has
the right to cancel and terminate this Agreement by giving written notice to the
Landlord within ten (10) days of the end of the Non-Service Period, and this
Agreement shall be canceled and terminated on the date set forth in such notice,
provided such date shall be no more than fifteen (15) days from the date of the
notice. If the Tenant or anyone claiming under the Tenant shall remain in
possession of the Premises or any part thereof after expiration of the term of
this Agreement, or any extension thereof, without any agreement in writing
between the Landlord and the Tenant with respect thereto, such possession shall
be deemed a month to month tenancy under all terms, covenants and conditions of
this Agreement except that such tenancy may be terminated upon thirty (30) days
written notice from one party to the other.
At any time and from time to time during the term of this Lease during normal
business hours and whether or not Tenant is in default hereunder, the Tenant may
remove any or all of the Tenant's property from the Premises. Upon the
expiration or earlier termination of this Lease, the Tenant will remove all of
its property from the Premises; if within ten (10) days after such expiration or
termination, Tenant shall not have removed its property it shall be deemed
abandoned by Tenant. During such ten (10) day period Tenant shall pay to
Landlord rent. Tenant shall pay the reasonable costs to repair any damage caused
to the Premises or to the Building by the removal of Tenant's property. Landlord
covenants and agrees with Tenant that upon Tenant paying the rent and observing
the terms, covenants and conditions on Tenant's part to be observed and
performed, Tenant paying the rent and observing the terms, covenants and
conditions on Tenant's part to be observed and performed, Tenant may peaceably
and quietly enjoy the Premises demised hereby.
The Tenant shall, at the expiration of the Term of this Lease, peaceably yield
up to the Landlord the Premises and all additions made upon the same by the
Landlord, in as good repair as at the commencement of the Term, damage by fire
or other casualty, reasonable wear and tear and any damage that is not the
responsibility of Tenant hereunder excepted.
7
ARTICLE 14. NOTICES
All notices, demands, and requests, hereunder shall be sent in writing by
certified or registered mail, return receipt requested, postage prepaid as
follows:
Landlord to Tenant:
Jim Robbins, Manager
Northern California Administration
Digital Equipment Corporation
800 El Camino Real
Mountain View, California
with a copy to:
Manager, U.S. Property Development
2352 Main Street
Concord, Massachusetts 01742
Tenant to Landlord:
Hare, Brewer & Kelley, Inc.
Property Management Department
305 Lytton Avenue
Palo Alto, CA 94301
with a copy to:
Richard Kelley
C/O Hare, Brewer & Kelley, Inc.
ARTICLE 15. HAZARDOUS SUBSTANCES
(a) "HAZARDOUS SUBSTANCE" means any substance, waste or material which is
---------------------
deemed hazardous, toxic, a pollutant or contaminant, under any federal, state or
local statute, law, ordinance, rule regulation, or judicial or administrative
order or decision, now or hereafter in effect.
"HAZARDOUS SUBSTANCE ON THE PREMISES" means any hazardous substance present in
- -------------------------------------
or on the Premises including, without limitation, in or on the surface or
beneath the Premises, the surface water or under ground water, and in or on any
improvement or part thereof at or beneath the surface of the Premises.
"APPLICABLE LAW" shall mean all federal, state and local statutes, laws,
- ----------------
ordinances, rules and regulations and judicial and administrative orders,
rulings and decisions that are applicable now or in the future to the Premises
or any portion thereof or to any activity which shall take place thereon.
8
"PREMISES" for purposes of this Article 15 only, Premises includes the Building,
--------
other improvements and the Land on which they are located.
(b) Landlord has never generated, stored, disposed of or otherwise handled
any Hazardous Substance on the Premises in any fashion contrary to Applicable
Law and Landlord shall not generate, store, dispose of or otherwise handle any
Hazardous Substance on the Premises in any fashion contrary to Applicable Law.
Landlord is, to the best of its knowledge, not aware of the generation, storage,
disposal or other handling of any Hazardous Substance on the Premises by anyone
else in any fashion contrary to Applicable Law. Landlord also is, to the best of
its knowledge, not aware of the presence of any Hazardous Substance on the
Premises which may require remedial action under Applicable Law or may pose a
threat to human health or the environment. Landlord hereby grants Tenant the
right to perform environmental testing at the Premises throughout the term of
this Lease including but not limited to removal and analysis of ground water,
surface water and soil, which testing shall be performed by a company mutually
acceptable to both parties. Tenant shall restore any areas on the Premises
affected by such testing to the grade which existed immediately prior to such
testing.
(c) Landlord is not aware of any underground storage tanks on the Premises
and is not aware of any asbestos currently located at the Premises.
(d) There are no transformers or other equipment on the Premises which
contain PCBs, and Landlord shall not bring any such equipment onto the Premises
during the term of this Lease.
(e) Landlord shall defend, indemnify and hold harmless Tenant from and
against any and all liability, loss, suits, claims, actions, causes of action,
proceedings, demands, costs, penalties, fines and expenses, including, without
limitation, attorneys' fees, consultants' fees, and clean-up costs, resulting
from the presence of any Hazardous Substance on the Premises, or arising out of
the generation, storage, treatment, handling, transportation, disposal or
release, other than by Tenant, of any Hazardous Substance at or near the
Premises, or arising out of any violation(s) other than by Tenant, of any
Applicable Law regarding Hazardous Substances.
In the event Landlord breaches any of the representations or warranties listed
above or in the event any such representation or warranty proves to be false or
in the event there is the presence of any Hazardous Substance on the Premises
providing such presence is not the result of Tenant's breach of its covenants in
this Paragraph, then in each of the foregoing instances, Tenant shall have the
additional right, at its option and in addition to any other right hereunder or
at law or in equity, to terminate this Lease without liability therefor.
9
(f) Tenant's Guaranties/Reps: Tenant shall not generate, store, dispose of
or otherwise handle any Hazardous Substance on the Premises in any fashion
contrary to Applicable Law.
Landlord will not create or permit to be created or if created, to remain in
effect as a result of work done for or materials supplied to Landlord in or for
the Premises or for the Building or Land and/or other improvements, including
any work being performed by Landlord on behalf of Tenant, and Landlord will
discharge or will bond , any such lien, encumbrance, or charge arising therefrom
which may be a lien or encumbrance upon the Premises, Building or Land.
ARTICLE 16. MISCELLANEOUS
Landlord represents and warrants to Tenant that it is the owner of the
Premises, the Building and the Land and has full power and authority to enter
into and perform under this Lease. Landlord further represents and warrants that
all requisite approvals and consents have been obtained for the execution and
delivery of and performance by Landlord hereunder.
Tenant hereby agrees to pay Hare, Brewer, & Kelley upon execution of this Lease
Agreement the lump sum payment of Ten Thousand Dollars and no cents ($10,000.00)
as consideration for costs associated with the existing tenant in these premises
vacating said premises by the commencement date of this Lease Agreement. Hare,
Brewer & Kelley, Inc. hereby agrees to analyze the costs of its move including
the costs of furniture movers, telephone charges and computer move and hook up
and to rebate any excess over cost and beneath the $10,000.00 to Digital.
DIGITAL EQUIPMENT CORPORATION
BY: /s/ Edward B. Reiss
---------------------------
Edward B. Reiss, Manager
U.S. Property Manager
This Lease is agreed to and accepted this 6 day of April, 1990.
/s/ Richard R. Kelley, Jr.
- ----------------------------
Richard Kelley
/s/ Charles Hangar
- ----------------------------
Charles Hangar
[SIGNATURE APPEARS HERE]
- ----------------------------
Hare, Brewer, & Kelley, Inc.
10
FIRST LEASE AMENDMENT
THIS AMENDMENT is made this 10 day of October, 1990 by and between RICHARD
KELLEY, CHARLES HANGAR AND HARE, BREWER, & KELLEY, INC., a California Limited
Partnership ("Landlord") and DIGITAL EQUIPMENT CORPORATION, a Massachusetts
Corporation ("Tenant").
WITNESSETH
Landlord and Tenant are parties to a OFFICE SPACE LEASE dated April 6, 1990
("Lease") which leases property in the building commonly known as 335 Bryant
Street, Palo Alto, California ("Premises"). Landlord and Tenant hereby agree
that the Lease shall be amended in consideration of the mutual covenants set
forth hereinafter and in accordance with the terms and conditions set forth
herein:
1. ARTICLE 1. TERM of the Lease is hereby amended to add the following:
The term of this Lease shall be extended from October 6, 1990 and shall
now expire on October 31, 1990.
2. ARTICLE 4. RENT is hereby amended to add the following:
The extended term from October 7, 1990 to October 31, 1990 shall be at
no monthly rent as defined in this Article. If Landlord and Tenant do
not enter into a long-term lease of the Premises on or before March 1,
1994, Tenant shall pay rent for such period at the rate provided in the
Lease.
All other terms and conditions of the Lease shall remain in full force and
effect.
In Witness hereof, the parties hereto have set their hands to this Amendment as
of the day and date first above written.
LANDLORD: TENANT:
RICHARD KELLEY, CHARLES HANGAR DIGITAL EQUIPMENT CORPROATION,
HARE, BREWER & KELLEY, INC. a Massachusetts Corporation
Tenants-in-Common
By: /s/ Richard Kelley By: /s/ Don Sliwinski
------------------- ------------------
Richard Kelley Don Sliwinski
Property Development
By: /s/ Charles Hangar Manager
-------------------
Charles Hangar
By: [SIGNATURE APPEARS HERE]
-------------------------
Hare, Brewer & Kelley, Inc.
SECOND LEASE AMENDMENT
THIS AMENDMENT is made this 14 day of November, 1990 by and between
RICHARD KELLEY, CHARLES HANGAR AND HARE, BREWER, & KELLEY, INC., a
California Partnership ("Landlord") and DIGITAL EQUIPMENT
CORPORATION, a Massachusetts Corporation ("Tenant").
WITNESSETH
Landlord and Tenant are parties to a OFFICE SPACE LEASE dated
April 6, 1990 ("Lease"), and a FIRST LEASE AMENDMENT dated
October 10, 1990, which leases property in the building commonly
known as 335 Bryant Street, Palo Alto, California ("Premises").
Landlord and Tenant hereby agree that the Lease shall be amended in
consideration of the mutual covenants set forth hereinafter and in
accordance with the terms and conditions set forth herein:
1. ARTICLE 1. TERM of the Lease is hereby amended to add the
following:
The term of this Lease shall be extended from November 1,
1990 and shall now expire on November 30, 1990.
2. ARTICLE 4. RENT is hereby amended to add the following:
The extended term from November 1, 1990 to November 30,
1990 shall be at the monthly rent of Seventeen Thousand
Six Hundred Ninety-Four and 60/100 Dollars ($17,694.60) as
defined in this Article.
All other terms and conditions of the Lease shall remain in full
force and effect.
In Witness hereof, the parties hereto have set their hands to this
Amendment as of the day and date first above written.
LANDLORD: TENANT:
RICHARD KELLEY, CHARLES HANGAR, DIGITAL EQUIPMENT CORPORATION,
HARE, BREWER & KELLEY, INC. a Massachusetts Corporation
a California Limited Partnership
By: /s/ Richard R. Kelley, Jr. By: /s/ Don Sliwinski
------------------------------- -----------------------------
Richard Kelley Don Sliwinski
Property Development
Manager
By: /s/ Charles Hangar
-------------------------------
Charles Hangar
By: /s/ Hare Brewer & Kelley, Inc.
-------------------------------
Hare Brewer & Kelley, Inc.
EXHIBIT E
---------
SUBORDINATION, RECOGNITION, AND NON-DISTURBANCE AGREEMENT
---------------------------------------------------------
(Mortgagee)
Date:
Lender:
Lender's Address:
Landlord:
Landlord's Address:
Tenant: Digital Equipment Corporation, a
Massachusetts corporation
Tenant's Address: Digital Equipment Corporation
______________________________
______________________________
Attention: [Name of U.S. Area Attorney
with Real Estate Responsibility]
Property: [Street Address of property subject to the
Mortgage]
Mortgage: A deed of trust from Landlord to
_____________ ("Trustee") for the benefit
of Lender encumbering the Property dated
____________, 19__, and recorded with
_________________ in Book __________,
Page ______, together with any extensions,
replacements, amendments or consolidations
thereof
Premises: [Description of the leased premises making
reference to the Property]
Lease: A lease of the Premises from Landlord to
Tenant dated _____________, 19__,
together with any extensions, renewals,
replacements or amendments thereof
In consideration of the mutual covenants and agreements made herein, and
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Lender and Tenant agree:
1. Subordination. The Lease, including all rights to purchase the Property
-------------
which are contained therein, is subject and subordinate to the Mortgage and to
all advances now or hereafter made thereunder, with the same force and effect as
if the Mortgage had been executed, delivered, recorded, and all advances had
been made thereunder, prior to execution and delivery of the Lease.
2. Non-disturbance. Provided Tenant is not then in default under the Lease
---------------
beyond all applicable periods of grace or cure thereunder (so as to entitle
Landlord to exercise its rights and remedies under the Lease):
(a) the Lease shall not be terminated and shall continue in full force
and effect and Tenant's possession of the Premises shall not be disturbed;
(b) in the event Lender forecloses the Mortgage, exercises its rights
to sell the Property at a trustee's sale, accepts a deed in lieu thereof,
or enters into possession or collects rent from the tenants of the
Property, Lender will not name Tenant as a party in any action or
proceeding with respect to the Mortgage, whether to foreclose the Mortgage
or to exercise any of its other rights under the Mortgage, under the note,
bond, or any other document secured thereby, or under law; and
(c) Tenant's rights under the Lease, including all rights to purchase
the Property which are contained therein, will not be impaired by any sale
of the property pursuant to foreclosure, trustee's sale or otherwise.
3. Attornment and Recognition. If Lender succeeds to the rights of
--------------------------
Landlord under the Lease, whether because Lender acquires the Property at a
foreclosure or trustee's sale or accepts a deed in lieu thereof, Tenant will
attorn to and recognize and be bound to Lender as landlord under the Lease, and
Lender will accept such attornment and recognition, for the unexpired term of
the Lease, subject to all of the terms of the Lease, including without
limitation, all rights and options to extend the Term and to purchase the
Property, and the Lease shall continue in full force and effect, without the
necessity of executing any new document, as a direct lease between Tenant and
Lender.
4. Consent. Lender hereby confirms its approval of and consent to the
-------
Lease.
2
5. Restoration. All condemnation awards and insurance proceeds paid or
-----------
payable with respect to the Premises and the Property and received by Lender
shall be applied to the repair and restoration of the Premises and the Property,
whether by Landlord or Tenant, unless the Lease is terminated pursuant to the
terms thereof.
6. Tenant's Personal Property. Lender hereby agrees that Tenant's Personal
--------------------------
Property, as such term is defined in the Lease, however installed in or affixed
to the Premises, shall at all times remain the property of Tenant and may be
removed by Tenant at any time and from time to time. In no event, including
without limitation, default under the Lease or Mortgage, shall Lender have any
lien, right or claim in Tenant's Personal Property. Lender expressly waives all
rights of levy, distraint, or execution with respect to Tenant's Personal
Property.
7. Notice of Default. Notwithstanding any provision of the Lease to the
-----------------
contrary, no notice by Tenant to Landlord of any default by Landlord, if the
default is of such a nature as to give Tenant a right to terminated the Lease,
shall be effective against Lender unless and until Tenant gives Lender written
notice of such default.
8. Successors and Assigns. The term "Lender", as used herein, unless the
----------------------
context requires otherwise, shall include the successors and assigns of Lender
and any persons or entity which shall become the owner of the Property by reason
of a foreclosure or trustee's sale under the Mortgage or an acceptance of a deed
or an assignment in lieu of foreclosure or otherwise. The term "Tenant" as used
herein shall include its successors and assigns.
9. Notices. All notices given hereunder shall be in writing and shall be
-------
delivered in hand, by recognized overnight courier, or by depositing with the
United States Postal Service, postage prepaid, certified or registered mail,
return receipt requested. All such communications shall be addressed to Tenant
and Lender at their addresses appearing on the first page hereof, or to such
other address or addresses as the parties may from time to time specify by
notice so given. Notices shall be deemed received:
(a) if delivered by hand, when actually received, as evidenced by a
signed receipt;
(b) if sent by recognized overnight courier, the next Business Day; and
(c) if sent by the United States Postal Service, on the earlier of (i)
the third business day following the mailing thereof, or (ii) the business
day it is received.
3
10. Governing Law. This Agreement shall be governed by and interpreted in
-------------
accordance with the laws of the state of California.
11. Changes in Writing. This Agreement may not be changed, waived, or
------------------
terminated except in a writing signed by the party against whom enforcement of
the change, waiver, or termination is sought.
12. Partial Invalidity. If any provision of this Agreement shall be
------------------
determined to be invalid or unenforceable, the remainder of this Agreement shall
not be affected thereby, and each covenant and provision of this Agreement shall
be valid and enforceable to the fullest extent permitted by law.
Executed as of the date first above written.
LENDER:
By:
-------------------------------------
Name :
------------------------------
Title:
-------------------------------
TENANT:
By:
-------------------------------------
Name :
-------------------------------
Title:
-------------------------------
[ADD ACKNOWLEDGEMENTS IN LOCAL FORM FOR ALL PARTIES]
4
EXHIBIT F
---------
Permitted Encumbrances
1. PROPERTY TAXES, INCLUDING ANY ASSESSMENTS COLLECTED WITH TAXES, TO BE
LEVIED FOR THE FISCAL YEAR 1990 - 1991 WHICH ARE A LIEN NOT YET PAYABLE.
2. THE LIEN OF SUPPLEMENTAL TAXES, IF ANY, ASSESSED PURSUANT TO THE
PROVISIONS OF CHAPTER 3.5 (COMMENCING WITH SECTION 75) OF THE REVENUE
AND TAXATION CODE OF THE STATE OF CALIFORNIA.
3. AN AGREEMENT ON THE TERMS AND CONDITIONS CONTAINED THEREIN,
FOR: PARKING
DATED: NONE SHOWN
EXECUTED BY: CITY OF PALO ALTO, A MUNICIPAL CORPORATION AND
RICHARD KELLEY JR.
RECORDED: OCTOBER 3, 1979, BOOK E843, OFFICIAL RECORDS.
PAGE 168
SERIES NO.: NONE SHOWN
4. A DEED OF TRUST TO SECURE AN INDEBTEDNESS IN THE AMOUNT SHOWN BELOW, AND
ANY OTHER OBLIGATIONS SECURED THEREBY:
AMOUNT: $1,200,000.00
DATED: JULY 2, 1986
TRUSTOR: CHARLES E. HANGER AND FAYE E. HANGER AND RICHARD
R. KELLEY, JR., AND HARE, BREWER & KELLEY, INC.,
A CALIFORNIA CORPORATION
TRUSTEE: GATEWAY MORTGAGE CORPORATION, A CALIFORNIA
CORPORATION
BENEFICIARY: FIDELITY FEDERAL SAVINGS AND LOAN ASSOCIATION, A
CORPORATION
RECORDED: AUGUST 7, 1986, OFFICIAL RECORDS
SERIES NO.: 8892533
LOAN NO.: 21-02-2011298 JK
TYPE LOAN: NONE SHOWN
ADDRESS: 600 NORTH BRAND BLVD., GLENDALE, CA
AN ASSIGNMENT
ASSIGNED TO: FIDELITY FEDERAL SAVINGS AND LOAN ASSOCIATION, A
CORPORATION
RECORDED: AUGUST 7, 1986, BOOK J796, OFFICIAL RECORDS
PAGE 1010
SERIES NO.: 8892534
OF CERTAIN OF THE LESSOR'S INTEREST UNDER LEASES REFERRED TO THEREIN,
WHICH ASSIGNMENT RECITES, AMONG OTHER THINGS, THAT IT IS GIVEN AS
ADDITIONAL SECURITY FOR THE DEED OF TRUST.
1
5. A DEED OF TRUST TO SECURE AN INDEBTEDNESS IN THE AMOUNT SHOWN BELOW,
AND ANY OTHER OBLIGATIONS SECURED THEREBY:
AMOUNT: $50,000
DATED: APRIL 14, 1988
TRUSTOR: HARE, BREWER & KELLEY, INC.
TRUSTEE: FIRST AMERICAN TITLE INSURANCE COMPANY, A CALIFORNIA
CORPORATION
BENEFICIARY: NORA R. MIELKE
RECORDED: MAY 26, 1988, BOOK K549, OFFICIAL RECORDS
PAGE 292
SERIES NO.: 9705785
LOAN NO.: NONE SHOWN
TYPE LOAN: NONE SHOWN
ADDRESS: 305 LYTTON AVENUE, PALO ALTO, CA
6. AN ATTACHMENT ISSUED BY THE COURT AS SET OUT BELOW.
PLAINTIFF: EARL WATKINS
DEFENDANT: HARE, BREWER & KELLEY, A CALIFORNIA CORPORATION
COUNTY: SANTA CLARA
COURT: SUPERIOR COURT
CASE NO: 699084
RECORDED: JUNE 1, 1990, BOOK L374, OFFICIAL RECORDS
PAGE 2058
SERIES NO.: 10542961
ATTORNEY FOR PLAINTIFF: LINDA HENDRIX MCPHARLIN, MCPHARLIN & MAUL, 50
WEST SAN FERNANDO ST., SUITE 810, SAN JOSE, CA 95113. (408) 293-1900
7. AN ABSTRACT OF JUDGEMENT FOR THE AMOUNT SHOWN BELOW AND ANY OTHER
AMOUNTS DUE.
DEBTOR: HARE, BREWER & KELLEY, INC.
CREDITOR: EARL WATKINS
DATE ENTERED: JUNE 19, 1990
COUNTY: SANTA CLARA
COURT: SUPERIOR COURT OF SANTA CLARA COUNTY
CASE NO. 699084
AMOUNT: $160,699.84
RECORDED: JUNE 20, 1990, BOOK L393, OFFICIAL RECORDS
PAGE 1053
SERIES NO.: 10563618
ATTORNEY FOR JUDGEMENT CREDITOR: LINDA HENDRIX MCPHARLIN, MCPHARLIN &
MAHL, 50 W. SAN FERNANDO, STE. 810, SAN JOSE, CA 95113
AN ATTACHMENT ISSUED OUT OF SAID ACTION WAS
RECORDED: JUNE 1, 1990, BOOK L374, OFFICIAL RECORDS
PAGE 2058
SERIES NO.: 10542961
2
AN ABSTRACT OF JUDGEMENT FOR THE AMOUNT SHOWN BELOW AND ANY OTHER
AMOUNTS DUE.
DEBTOR: HARE, BREWER & KELLEY, INC.
CREDITOR: PENTAGON APARTMENTS
DATE ENTERED: MAY 30, 1990
COUNTY: SAN MATEO
COURT: SUPERIOR COURT OF CALIFORNIA, COUNTY OF SAN
MATEO
CASE NO. 348187
AMOUNT: $54,235.61
RECORDED: JUNE 18, 1990, BOOK L390, OFFICIAL RECORDS
PAGE 197
SERIES NO.: 10559712
ATTORNEY FOR JUDGEMENT CREDITOR: DOUGLAS W. HOLT, ESQ., 1450 CHAPIN
AVENUE, P.O. BOX 1695, BURLINGAME, CA 94011-1695
9. AN ABSTRACT OF JUDGEMENT FOR THE AMOUNT SHOWN BELOW AND ANY OTHER
AMOUNTS DUE.
DEBTOR: HARE, BREWER & KELLEY, INC.
CREDITOR: GERI MADORSKY
DATE ENTERED: MAY 8, 1990
COUNTY: SANTA CLARA
COURT: SANTA CLARA COUNTY MUNICIPAL COURT
CASE NO. FC 90 051191
AMOUNT: $19,172.81
RECORDED: JUNE 22, 1990, BOOK L396, OFFICIAL RECORDS
PAGE 774
SERIES NO.: 10566329
ATTORNEY FOR JUDGEMENT CREDITOR: GLENN H. WECHSLER, BELZER, JACKL,
KATZEN, HULCHIY, MURRAY & BALAMUTH, 2033 NORTH MAIN STREET, SUITE 700,
WALNUT CREEK, CA 94596
10. AN UNRECORDED LEASE WITH CERTAIN TERMS, COVENANTS, CONDITIONS AND
PROVISIONS SET FORTH THEREIN
LESSOR: RICHARD KELLEY
LESSEE: DIGITAL EQUIPMENT CORP.
DISCLOSED BY: NOTICE OF NON-RESPONSIBILITY
RECORDED: JUNE 26, 1990, BOOK L398, OFFICIAL RECORDS
PAGE 1961
SERIES NO.: 10568894
THE PRESENT OWNERSHIP OF THE LEASEHOLD CREATED BY SAID LEASE AND OTHER
MATTERS AFFECTING THE INTEREST OF THE LESSEE ARE NOT SHOWN HEREIN.
3
1. AN ABSTRACT OF JUDGEMENT FOR THE AMOUNT SHOWN BELOW AND ANY OTHER
AMOUNTS DUE.
DEBTOR: HARE, BREWER & KELLEY, INC.
CREDITOR: WEST COAST PLUMBING PROFIT SHARING PLAN
DATE ENTERED: MAY 30, 1990
COUNTY: SAN MATEO
COURT: SUPERIOR COURT OF CALIFORNIA, COUNTY OF SAN MATEO
CASE NO. 348194
AMOUNT: $96,245.39
RECORDED: JUNE 28, 1990, BOOK L402, OFFICIAL RECORDS
PAGE 224
SERIES NO.: 10572053
ATTORNEY FOR JUDGEMENT CREDITOR: DOUGLAS W. HOLT, ESQ., 1450 CHAPIN
AVENUE, P.O. BOX 1695, BURLINGAME, CA 94011-1695
2. AN ABSTRACT OF JUDGEMENT FOR THE AMOUNT SHOWN BELOW AND ANY OTHER
AMOUNTS DUE.
DEBTOR: HARE, BREWER & KELLEY, INC.
CREDITOR: PENINSULA AIR CONDITIONING, INC.
DATE ENTERED: JUNE 21, 1990
COUNTY: SAN MATEO
COURT: SUPERIOR COURT OF CALIFORNIA, COUNTY OF SAN MATEO
CASE NO. 348722
AMOUNT $39,697.78
RECORDED: JULY 17, 1990, BOOK L419, OFFICIAL RECORDS
PAGE 1383
SERIES NO.: 10590857
ATTORNEY FOR JUDGEMENT CREDITOR: DENNIS JOHN DURKIN, BURLIN, DURKIN &
WHITE, P.O. BOX 1177, REDWOOD CITY, CA 94064
3. AN ABSTRACT OF JUDGEMENT FOR THE AMOUNT SHOWN BELOW AND ANY OTHER
AMOUNTS DUE.
DEBTOR: HARE, BREWER & KELLEY, INC., RYLAND KELLEY AND
WILLIAM K. KELLEY
CREDITOR: S. DAVID NORMAN, AVA E. NORMAN AND RUSSELL NORMAN
DATE ENTERED: JULY 18, 1990
COUNTY: SANTA CLARA
COURT: MUNICIPAL COURT, SUNNYVALE FACILITY
CASE NO. EC 90 050542
AMOUNT: $18,495.53
RECORDED: JULY 26, 1990, BOOK L430, OFFICIAL RECORDS
PAGE 0702
SERIES NO.: 10603097
ATTORNEY FOR JUDGEMENT CREDITOR: STEVEN D. HOFFMAN, ESQ., 20370 TOWN
CENTER LANE, SUITE 100, CUPERTINO, CA 95014
4.
14. AN ABSTRACT OF JUDGEMENT FOR THE AMOUNT SHOWN BELOW AND ANY OTHER AMOUNTS
DUE.
DEBTOR: HARE, BREWER & KELLEY, INC.
CREDITOR: IRENE R. CHERNISS
DATE ENTERED: AUGUST 3, 1990
COUNTY: SAN FRANCISCO
COURT: SAN FRANCISCO MUNICIPAL COURT
CASE NO. 041 116
AMOUNT: $23,236.00
RECORDED: AUGUST 9, 1990, BOOK L444, OFFICIAL RECORDS
PAGE 0651
SERIES NO.: 10617963
ATTORNEY FOR JUDGEMENT CREDITOR; LAWRENCE M. PINES, ESQ., ONE POST
ST., SUITE 2100, SAN FRANCISCO, CA 94104-5200
15. AN ABSTRACT OF JUDGEMENT FOR THE AMOUNT SHOWN BELOW AND ANY OTHER AMOUNTS
DUE.
DEBTOR: HARE, BREWER & KELLEY, INC.
CREDITOR: PAUL S. HEATH
DATE ENTERED: JULY 3, 1990
COUNTY: SANTA CLARA
COURT: SUPERIOR COURT OF CALIFORNIA
CASE NO. 598613
AMOUNT: $87,882.40
RECORDED: AUGUST 22, 1990, BOOK L457, OFFICIAL RECORDS
PAGE 0203
SERIES NO.: 10632150
ATTORNEY FOR JUDGEMENT CREDITOR: LEONARD J. SIEGAL, ESQ, ATKINSON-FARASYN,
660 WEST DANA ST., P.O. BOX 279, MOUNTAIN VIEW, CA 94042.
(415) 967-69411
5
EXHIBIT G
---------
TENANT'S PERSONAL PROPERTY
--------------------------
All of Tenant's furniture, furnishings, equipment, fixtures trade fixtures,
and personal property of every kind from time to time in or upon the Demised
Premises, however or whether or not affixed or installed thereto, including,
without limitation:
Free-standing HVAC units, including condensers
All cafeteria equipment, including dishwashers, sinks, walk-in freezers,
refrigerators, ovens, grills, etc.
Plug-in type lights
Telephone equipment
Paging equipment
Buss duct
Cable tray
Motor generator system
Security equipment (cardreaders, cameras, monitors, etc.)
Vending machines
Halon systems
Computer room raised flooring
De-mountable partitions and ethernet components
Humidifier systems
White marker boards
Lobby receptionist desk
Copy/coffee center millwork
1
EXHIBIT H
---------
Recording requested by, )
and when recorded return to: )
)
Harry L. Fox )
Aufmuth, Fox & Baigent )
314 Lytton Ave, Suite 200 )
Palo Alto, CA 94301 )
)
)
- --------------------------------------------------------------------------------
MEMORANDUM OF LEASE WITH PURCHASE OPTION
This memorandum of Lease with Purchase Option is made ______________, 1990,
by Richard R. Kelley, Jr., Charles E. Hanger and Faye E. Hanger, and Hare,
Brewer & Kelley, Inc. (collectively, "Landlord"), who agrees as follows:
1. Term and Premises. Landlord leases to Digital Equipment Corporation,
-----------------
a Massachusetts corporation ("Tenant") the real property located in the City of
Palo Alto, Santa Clara County, California, described in Exhibit A attached to
this memorandum of lease (the "Property"), for a term of twelve (12) years,
commencing December 1, 1990, which term is subject to extension by Tenant, for
up to two (2) consecutive additional terms of five (5) years each, on the terms
and provisions of the Lease between the parties dated November _____, 1990 (the
"Lease"). The terms and provisions of the Lease are incorporated into this
Memorandum of Lease with Purchase Option by reference.
2. Tenant's Right of First Refusal. Reference is made to Article XXIX,
-------------------------------
paragraph 1 of the Lease, in which Landlord grants Tenant a right of first
refusal to acquire the Property. That paragraph provides, among other terms,
that if Landlord desire to sell the Property or has received an offer to
purchase the Property, Landlord must first offer to sell the Property to Tenant
on the same terms as have been offered to Landlord or on the terms under which
Landlord is prepared to sell the Property, and that Tenant shall have twenty
(20) business days to accept or reject Landlord's offer.
3. Tenant's Option to Purchase Property. Reference is made to Article
------------------------------------
XXIX, paragraph 2 of the Lease, in which Landlord grants to Tenant an option to
purchase the Property, provided the option is exercised on or before November
30, 1999. That paragraph provides, among other terms, that the conveyance of the
Property to Tenant upon exercise of the purchase option shall be free and clear
of all encumbrances unless expressly consented to by Tenant or otherwise
permitted pursuant to the Lease.
4. Purpose of Memorandum of Lease. This memorandum of lease is prepared
------------------------------
for the purpose of recordation, and it in no way modifies the provisions of the
Lease.
LANDLORD
-------------------------------
Richard R. Kelley, Jr.
-------------------------------
Charles E. Hanger
-------------------------------
Faye E. Hanger
Hare, Brewer & Kelley, Inc.
By:
----------------------------
Its:
------------------------
State of California )
) ss.
County of Santa Clara )
On _________________, 1990, before me, the undersigned, a Notary Public in and
for said State, personally appeared Richard R. Kelley, Jr., personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person who
executed the within instrument, and acknowledged to me that he executed the
same.
WITNESS my hand and official seal.
- ----------------------------------
State of California )
) SS.
County of Santa Clara )
On ____________, 1990, before me, the undersigned, a Notary Public in and for
said State, personally appeared Charles E. Hanger, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person who
executed the within instrument, and acknowledged to me that he executed the
same.
WITNESS my hand and official seal.
___________________________________
State of California )
) SS.
County of Santa Clara )
On ____________, 1990, before me, the undersigned, a Notary Public in and for
said State, personally appeared Faye E. Hanger, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person who
executed the within instrument, and acknowledged to me that he executed the
same.
WITNESS my hand and official seal.
___________________________________
STATE OF CALIFORNIA )
) ss.
COUNTY OF ___________ )
On this___ day of ____________, before me a Notary Public for the State of
California, personally appeared - ______________________, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person who
executed the within instrument as _____________________ on behalf of the
corporation therein named and acknowledged to me that the corporation executed
it.
________________________________
Notary Public
SECOND LEASE AMENDMENT
THIS AMENDMENT is made this 14 day of November, 1990 by and between RICHARD
KELLEY, CHARLES HANGAR and HARE, BREWER, & KELLEY, INC. a California Partnership
("Landlord") and DIGITAL EQUIPMENT CORPORATION, a Massachusetts Corporation
("Tenant").
WITNESSETH
Landlord and Tenant are parties to a OFFICE SPACE LEASE dated April 6, 1990
("Lease"), and a FIRST LEASE AMENDMENT dated October 10, 1990, which leases
property in the building commonly known as 335 Bryant Street, Palo Alto
California ("Premises"). Landlord and Tenant hereby agree that the Lease shall
be amended in consideration of the mutual covenants set forth hereinafter and in
accordance with the terms and conditions set forth herein:
1. ARTICLE 1. TERM of the Lease is hereby amended to add the following:
The term of this lease shall be extended from November 1, 1990 and
shall now expire on November 30, 1990.
2. ARTICLE 4. RENT is hereby amended to add the following:
The extended term from November 1, 1990 to November 30, 1990 shall be
at the monthly rent of Seventeen Thousand Six Hundred Ninety-Four and
60/100 Dollars ($17,694.60) as defined in this Article.
All other terms and conditions of the Lease shall remain in full force and
effect.
In Witness hereof, the parties hereto have set their hands to this Amendment as
of the day and date first above written.
LANDLORD: TENANT:
RICHARD KELLEY, CHARLES HANGAR, DIGITAL EQUIPMENT CORPORATION,
HARE, BREWER & KELLEY, INC. a Massachusetts Corporation
a California Limited Partnership
By: /s/ Richard R. Kelley, Jr. By: /s/ Don Sliwinski
-------------------------------- --------------------------
Richard Kelley Don Sliwinski
Property Development
Manager
By: /s/ Charles Hangar
--------------------------------
Charles Hangar
By: /s/ [SIGNATURE APPEARS HERE]
--------------------------------
Hare Brewer & Kelley, Inc.
AMENDMENT - 335 BRYANT, PALO ALTO
From: NAME: BEVERLY BELLOWS
FUNC: WESTERN AREA LAW GROUP
TEL: 521-3458
[BELLOWS. BEVERLY AT A1WR1FOR AT WR1FOR @WRO]
To: WILLIAMSAM @COMET @VMSMAIL
Amelia,
Attached is an Amendment to extend the 6 months lease for 335 Bryant in Palo
Alto until the end of October. I drafted this at the request of John Brady
and Molly Brennan. The time is needed to finalize the acquisition of the
building.
Consider this memo approval for Don to sign the Amendment. Then please FAX a
signed copy of the Amendment to John Brady at FAX number, 408.554.0704. John
will get the Landlords' signature.
Please note that the extension is at no monthly rent cost.
Regards,
EXHIBIT D
CONSENT TO SUBLEASE AND
RECOGNITION AND ATTORNMENT AGREEMENT
THIS RECOGNITION AND ATTORNMENT AGREEMENT (this "Agreement" is made
as of __________ 1996, by and between by and between Digital Equipment
Corporation ("DEC"), TIBCO Inc., a Delaware corporation ("Sublessor") and
Artemis Research, a California corporation ("Sublessee").
A. DEC is the tenant under a certain Amended and Restated Lease
("Original Lease" from Richard R. Kelley, Jr., Charles E. Hangar and Faye
E. Hangar, and Harry L. Fox (as successor-in-interest to Hare, Brewer and
Kelly, Inc.) ("Landlord") executed November 26, 1990, which Original Lease,
was amended by First Amendment to Amended and Restated Lease ("First Amendment")
(such Original Lease, as amended by the First Amendment is referred to
hereafter as the "Prime Lease") and DEC is the sublandlord and Sublessor is
the subtenant under a certain Sublease dated February 17, 1995 (the "Prime
Sublease"). The premises leased under the Prime Lease and subleased under
the Prime Sublease are the land, with the building and improvements thereon, at
335 Bryant Street, Palo Alto, California, 94301 (as more particularly described
in the Prime Lease, the "Premises").
B. Sublessor has entered into or is entering into a sublease of
the Premises (the "Sublease") with Sublessee.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, DEC, Sublessor and Sublessee
hereby agree as follows:
1. Subject to the following provisions of this Agreement, DEC hereby
consents to Sublessor's sublease of the Premises to Sublessee pursuant to
the Sublease. Without limitation of the foregoing, DEC consents to the use of
the Premises for general office use, network operations, research and
development and any other use permitted under the Prime Lease.
2. The Sublease is subject and subordinate to the Prime Sublease.
3. DEC agrees to give Sublessee written notice of the occurrence of
any default by Sublessor under the Prime Sublease and to accept as a cure of
such default, any cure by Sublessee of such default within the applicable
cure period provided for in the Prime Sublease, which cure period, for purposes
hereof, shall commence on the date of delivery to Sublessee of the notice of
default.
4. If the Prime Sublease is surrendered to DEC or if the Prime
Sublease is terminated as a result of a default by the Sublessor that
by its nature is personal to Sublessor and not curable
by Sublessee, then DEC agrees that so long as Sublessee is not in
default under the Sublease, which default has not been cured or is
not in the process of being cured within any applicable grace period
provided under the Sublease, the following shall apply:
(i) Sublessee shall not be evicted, nor shall Sublessee be joined
in any eviction or unlawful detainer action or proceeding instituted or
taken by DEC; and
(ii) DEC shall succeed to the interest of Sublessor in the Sublease
and Sublessee shall be bound to DEC under all of the terms, covenants and
conditions of the Sublease, for the remaining term thereof, with the same
force and effect as if DEC were the Sublessor under the Sublease, and
Sublessee does hereby agree to attorn to DEC, such attornment to be
effective and self operative without the execution of any further instruments
on the part of any of the parties to this Agreement, immediately upon DEC
succeeding to the interest of Sublessor under the Sublease.
5. The covenants and agreements contained herein shall be binding upon
and inure to the benefit of the respective heirs, administrators, executors,
legal representatives, successors, and assigns of the parties hereto.
6. In the event that any party fails to perform any of its obligations
under this Agreement or in the event a dispute arises concerning the
meaning or interpretation of any provision of this Agreement, the
defaulting party or the party not prevailing in such dispute, whichever the
case may be, shall pay any and all costs and expenses incurred by the other
parties in enforcing or establishing their rights hereunder, including court
costs and reasonable attorneys' fees.
7. This Agreement shall not be modifies or amended except by a written
instrument executed by all of the parties hereto.
8. This agreement shall not be nor be deemed to be a consent or waiver
or amendment of the Prime Sublease with respect to any other or future
transaction, whether similar or dissimilar, and any other or future transaction
shall require DEC's written consent, which consent, except as otherwise
expressly provided in the Prime Sublease, may be given or withheld in DEC's
sole discretion.
2
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
DIGITAL EQUIPMENT CORPORATION
By
----------------------------
Print Name
--------------------
Its
---------------------------
TIBCO INC.
By
----------------------------
Print Name
--------------------
Its
---------------------------
TENANT
ARTEMIS RESEARCH
By
----------------------------
Print Name
--------------------
Its
---------------------------
3