Exhibit 10.1
NET PREMISES LEASE
3030 CORVIN DRIVE
SANTA CLARA, CALIFORNIA
BY AND BETWEEN
LANDLORD
RAINBOW PROPERTY MANAGEMENT, LLC,
A CALIFORNIA LIMITED LIABILITY COMPANY
AND
TENANT
COLOCONNECTION, INC.,
A FLORIDA CORPORATION
TABLE OF CONTENTS
ARTICLE 1 Term of Lease...................................................................................1
1.1 Fixed Term...........................................................................................1
1.2 Early Occupancy......................................................................................2
1.3 Holdover Rent........................................................................................2
1.4 Option to Extend Term of Lease.......................................................................2
ARTICLE 2 Rent and Taxes..................................................................................3
2.1 Rent.................................................................................................3
2.2 Minimum Monthly Rent.................................................................................3
2.3 Additional Rent......................................................................................4
2.4 Reimbursement of Certain Expenses....................................................................4
2.5 Tenant's Personal Property Taxes.....................................................................6
2.6 Security Deposit.....................................................................................7
2.7 Minimum Monthly Rent During Option Period............................................................8
ARTICLE 3 Use of Leased Premises, Parking, License and Public Transportation.............................10
3.1 Permitted Use: Compliance with Insurance, Law.......................................................10
3.2 Waste; Nuisance.....................................................................................10
3.3 Toxic Materials.....................................................................................11
3.4 Quiet Enjoyment.....................................................................................14
3.5 Parking.............................................................................................14
3.6 Access..............................................................................................15
ARTICLE 4 Maintenance and Repair.........................................................................15
4.1 Condition of Premises...............................................................................15
4.2 Tenant Maintenance and Repair Obligations...........................................................15
4.3 Landlord Maintenance and Repair Obligations.........................................................15
ARTICLE 5 Alterations, Fixtures and Signs................................................................16
5.1 Initial Tenant Improvements.........................................................................16
5.2 Subsequent Alterations to the Leased Premises by Tenant.............................................17
5.3 Alterations to the Leased Premises Requiring Landlord's Consent.....................................18
5.4 All Alterations to the Leased Premises..............................................................18
5.5 Mechanics' Liens....................................................................................19
5.6 Signs...............................................................................................20
ARTICLE 6 UTILITIES AND SERVICES.........................................................................20
6.1 Utilities and Services to Leased Premises...........................................................20
6.2 Interruption of Services............................................................................20
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ARTICLE 7 Indemnity and Exculpation Insurance............................................................20
7.1 Indemnification and Waiver..........................................................................20
7.2 Tenant's Insurance..................................................................................21
ARTICLE 8 Destruction....................................................................................23
8.1 Repair of Damage to Premises by Landlord............................................................23
8.2 Elections to Terminate..............................................................................23
8.3 Waiver of Statutory Provisions......................................................................24
ARTICLE 9 Eminent Domain.................................................................................25
9.1 Parties' Rights and Obligations To Be Governed by Lease.............................................25
ARTICLE 10 Assignment, Subletting and Encumbrance.........................................................25
10.1 Prohibitions in General.............................................................................25
10.2 Consent Not Unreasonably Withheld to Assignment or Subleasing.......................................26
10.3 Change in Ownership Interest........................................................................26
10.4 Assumption Agreement................................................................................27
10.5 Monthly Bonus Value.................................................................................27
10.6 Landlord's Right to Recapture Space.................................................................27
10.7 Permitted Transfers.................................................................................28
10.8 Merger/Consolidation/Reorganization.................................................................28
ARTICLE 11 Default........................................................................................29
11.1 Default Described...................................................................................29
11.2 Landlord's Remedies.................................................................................29
11.3 Tenant's Right to Possession Not Terminated.........................................................29
11.4 Termination of Tenant's Right to Possession.........................................................30
11.5 Landlord's Right to Cure Tenant's Default...........................................................30
11.6 Waiver of Redemption................................................................................30
11.7 All Sums Due and Payable as Rent....................................................................31
11.8 Landlord Default....................................................................................31
ARTICLE 12 Landlord's Entry on Premises...................................................................31
12.1 Right of Entry......................................................................................31
12.2 Exculpation.........................................................................................31
ARTICLE 13 Subordination; Estoppel........................................................................32
13.1 Subordination.......................................................................................32
13.2 Prior Lien..........................................................................................32
13.3 Documentation.......................................................................................32
13.4 Attornment..........................................................................................32
13.5 Estoppel Certificates...............................................................................32
13.6 Non-Disturbance From Landlord's Current Lender......................................................33
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ARTICLE 14 Notice.........................................................................................33
ARTICLE 15 Waiver.........................................................................................33
15.1 Delay or Omission...................................................................................33
ARTICLE 16 Enforcement....................................................................................34
16.1 Choice of Law and Venue.............................................................................34
16.2 Waiver of Trial by Jury.............................................................................34
16.3 Attorneys' Fees.....................................................................................34
ARTICLE 17 Surrender of Possession........................................................................34
17.1 Surrender of Possession.............................................................................34
17.2 Failure to Surrender Possession.....................................................................35
17.3 Free of Liens.......................................................................................35
ARTICLE 18 General Conditions.............................................................................35
18.1 Time of Essence.....................................................................................35
18.2 Corporate Authority.................................................................................35
18.3 Successors..........................................................................................35
18.4 Landlord Liability..................................................................................35
18.5 Landlord............................................................................................35
18.6 Force Majeure.......................................................................................36
18.7 Security Measures...................................................................................36
18.8 Miscellaneous.......................................................................................36
18.9 Effect of Delivery of this Lease....................................................................36
18.10 Brokers.............................................................................................36
18.11 Guarantee...........................................................................................37
18.12 Right of First Offer................................................................................37
18.13 Leasehold Mortgage..................................................................................37
18.14 Recordation of Memorandum of Lease..................................................................38
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NET PREMISES LEASE
3030 CORVIN DRIVE
SANTA CLARA, CALIFORNIA
By this Net Building Lease (the "Lease"). which is dated for reference
purposes only on September 13, 2000 (the "Reference Date"), Rainbow Property
Management, LLC, a California limited liability company, whose address is 18070
China Grade, Boulder Creek. California, 95006 ("Landlord") hereby leases to
Coloconnection, Inc., a Florida corporation, whose address is 3030 Corvin Drive,
Santa Clara, CA 95051 ("Tenant"), and Tenant hereby leases from Landlord, that
certain real property located in Santa Clara County, California, at 3030 Corvin
Drive, Santa Clara, California, 95051 (A.P.N. 216-33-025), and more particularly
described in Exhibit "A", which is attached hereto and incorporated herein by
reference (the "Land"), together with the appurtenances, buildings and
improvements erected or to be erected upon the Land in accordance with the terms
of this Lease, including a ore story industrial building containing
approximately forty thousand four hundred ninety-one (40,491) gross interior
square feet (the "Building"). (The Land and the Building are sometimes
collectively referred to herein as the "Leased Premises.") The Leased Premises
shall also include all right, title and interest of Landlord, if any, in and to
any land lying in the bed of any street, road or avenue, open or proposed, in
front of or adjoining the Land and in and to the easements, franchises, rights,
appendages and appurtenances belonging or appertaining to such real property.
Tenant shall lease the Leased Premises from Landlord on the terms and conditions
set forth herein including the Rules and Regulations, as they may be amended by
Landlord from time to time by Landlord, and subject to any superior liens or
encumbrances, and to all covenants, conditions, and restrictions of record with
respect thereto, and subject to all of the covenants, terms, and conditions of
this Lease. A current copy of said Rules and Regulations is attached hereto as
Exhibit "B" and incorporated herein by reference (the "Rules and Regulations").
Landlord shall not be liable in any way for failure of any party to comply with
and observe these titles and regulations. Landlord reserves the tight, at any
time, to renumber and/or redesignate the street address, suite number or unit
number of all or any portion of the Leased Premises if required by law or by the
decree of the U.S. postal service or other governmental or quasi-governmental
organization.
ARTICLE 1
TERM OF LEASE
1.1 FIXED TERM. The term of this Lease shall be for a period of
approximately two hundred forty (240) months commencing upon October 1, 2000
(the "Commencement Date") and expiring on September 30, 2020 (the "Expiration
Date"), unless sooner terminated or extended as herein provided. Notwithstanding
the foregoing, if there shall be any Contingent Free Rent Period (as defined in
Section 2.2.1 below), the term of this Lease shall be extended (and the
Expiration Date postponed) an equal number of days as shall have comprised such
Contingent Free Rent Period, whereupon all references in this Lease to the
Expiration Date shall mean and refer to the final date of the extended term.
Notwithstanding any other provision in this Lease, if Landlord does not deliver
possession of the Premises to Tenant by January 5, 2001 (the "Trigger Date"),
then within five (5) days of the Trigger Date, Tenant may give Landlord written
notice of Tenant's intent to terminate this Lease.
1.2 EARLY OCCUPANCY. If Landlord shall deliver possession of the Leased
Premises to Tenant at any time prior to the Commencement Date, Tenant shall
accept delivery thereof and shall hold possession of the Leased Premises until
the Commencement Date subject to all of the terms and conditions of this Lease,
except that Tenant's obligation to pay Minimum Monthly Rent shall not commence
until the Commencement Date.
1.3 HOLDOVER RENT. If Tenant should hold over and continue in
possession of the Leased Premises after termination of the term of this Lease or
any renewal or extension of the term of this Lease, Tenant's continued occupancy
of the Leased Premises shall be deemed merely a tenancy from month to month at a
Minimum Monthly Rent (as defined in Section 2.1 of this Lease below) equal to
one hundred fifty percent (150%) of the final rental amount due under this Lease
for the first two (2) calendar months that Tenant fails to vacate the Leased
Premises and two hundred percent (200%) of the final rental amount due under
this Lease for every calendar month thereafter that Tenant fails to vacate the
Leased Premises (the "Holdover Rent"), subject to all the terms and conditions
of this Lease, including provisions for payment of Additional Rent. If Tenant
shall holdover and fail to surrender the Leased Premises upon the termination of
this Lease without Landlord's consent, in addition to any other liabilities to
Landlord arising therefrom, Tenant shall and does hereby agree to indemnify,
defend, and hold Landlord harmless from loss or liability resulting from such
failure including, but not limited to, claims made by any succeeding tenant
founded on such failure.
1.4 OPTION TO EXTEND TERM OF LEASE. Provided that the original Tenant
executing this Lease (and not any assignee, sublessee or other transferee of
such original Tenant or of such original Tenant's interest in the Lease) has
occupied not less than fifty percent (50%) of the floor area of the Building at
all times during the term of this Lease, and, provided further that original
Tenant is not in default of the terms and obligations in this Lease and that
this Lease has not been terminated, Tenant shall have two (2) consecutive
options to extend the term of this Lease for additional periods of sixty (60)
months each by giving Landlord written notice of Tenant's exercise of such
options (the "Extension Option Notice(s)") at a time no earlier than twelve (12)
months prior to the initial Expiration Date of the Lease and no later than nine
(9) months prior to the initial Expiration Date hereof or no earlier than twelve
(12) months prior to the expiration date of the First Option Period (as defined
below) and no later than nine (9) months prior to the expiration date of the
First Option Period. It shall be an absolute condition precedent to the exercise
of the second option that the first option be timely and properly exercised.
Upon exercise of the first option, the term of this Lease shall be extended for
an additional period of sixty (60) months from the initial Expiration Date (the
"First Option Period"), and upon the exercise of the second option the term of
this Lease shall be extended for an additional period of sixty (60) months from
the expiration of the First Option Period (tie "Second Option Period") upon the
same terms and conditions as set forth in this Lease, except for the Minimum
Monthly Rent, which shall be determined, upon the exercise of each option,
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pursuant to terms of Section 2.7 below. Except as otherwise provided for in
Section 10.8 of this Lease, the option rights set forth in this section are
personal to the original Tenant executing the Lease and may be exercised only by
such original Tenant (and not by any assignee, sublessee or other transferee of
such original Tenant or of such original Tenant's interest in the Lease).
ARTICLE 2
RENT AND TAXES
2.1 RENT. Commencing on the Commencement Date (the "Initial Rental
Date"), each month during the term of this Lease, Tenant shall pay to Landlord
minimum monthly rent (the "Minimum Monthly Rent") and additional rent (the
"Additional Rent") for the use and occupancy of the Leased Premises, determined
and adjusted in accordance with the provisions of this Lease, payable monthly in
lawful money of the United Stales, without any abatement, deduction or offset
whatsoever, and without any prior demand therefor. Rent shall be paid to
Landlord at the address specified in introductory paragraph of this Lease, or at
such other place or places as Landlord may from time to time designate by
written notice to Tenant. Payment of Minimum Monthly Rent for the first month of
the term of this Lease shall be due and payable upon execution of this Lease,
thereafter rent shall be due and payable in advance on the first day of each and
every calendar month during the term of this Lease. if Tenant's obligation to
pay rent should commence upon a day other than the first day of a calendar month
or terminate on other than the last day of a calendar month, all rentals shall
be prorated on the basis of a thirty (30) day month. Tenant agrees that Landlord
will incur additional expenses, including bookkeeping charges and processing
fees in the event that any payments required under this Lease are not timely
made. Tenant agrees that the exact nature and amount of these expenses are
difficult or impossible to ascertain at this time. Therefore, Tenant agrees
that, as reasonable damages to Landlord, and not as a penalty, any payment
required under this Lease, which is not made within five (5) days following the
due date for such payment, shall be subject to a Late charge in the amount of
six percent (6%) per annum of the amount of such delinquent payment, which late
charge shall be assessed as "Additional Rent". All past due rent, including, any
unpaid Additional Rent, shall, unless otherwise prohibited by law, accrue
interest at an interest rate equal to the lesser of the twelve percent (12%) per
annum or the maximum rate permitted by law. Unless restricted by law, payments
shall be applied first to accrued late charges, then to interest, then to
past-due rent (including, but not limited to all assessed Additional Rent, fees
and costs), and lastly to prospective rent.
2.2 MINIMUM MONTHLY RENT. During the initial term of this Lease,
commencing on the Initial Rental Date, Tenant shall pay Minimum Monthly Rent to
Landlord as set forth in the Minimum Monthly Rent Schedule below:
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MINIMUM MONTHLY RENT SCHEDULE
MONTH OF LEASE TERM MINIMUM MONTHLY RENT
------------------- --------------------
Initial Rental Date through last day 2nd $55,675.13;
consecutive full calendar month
following Initial Rental Date:
Months 3 through 12 $111,350.25
Months 13 through 24: $114,690.76;
Months 25 through 36: $118,131.48;
Months 37 through 48: $121,675.42;
Months 49 through 60: $125,325.69;
Months 61 through 72: $129,085.46;
Months 73 through 84: $132,958.02;
Months 85 through 96: $136,946.76;
Months 91 through 108: $141,055.17;
Months 109 through 120: $145,286.82;
Months 121 through 132: $149,645.43
Months 133 through 144: $154,134.79;
Months 145 through 156: $158,758.83;
Months 157 through 168: $163,521.60;
Months 169 through 180: $168,427.24;
Months 181 through 192: $173,480.06;
Months 193 through 204: $178,684.46;
Months 205 through 216: $184,045.00;
Months 217 through 228: $189,566.35; and
Months 229 through Expiration Date: $195,253.34.
2.2.1 THE CONTINGENT FREE RENT PERIOD. Notwithstanding the
Minimum Monthly Rent set forth in Section 2.2 above, if, for any reason other
than Tenant's default, Landlord shall not have delivered possession of the
Leased Premises to Tenant on or before the Commencement Date, as Tenant's sole
and only remedy in connection therewith, Tenant shall not be obligated to pay
Minimum Monthly Rent during the period, if any, commencing on October 1, 2000
and continuing until the date that Landlord shall have delivered possession of
the Leased Premises to Tenant (the "Contingent Free Rent Period").
2.3 ADDITIONAL RENT. Commencing on the Commencement Date, Tenant shall
pay to Landlord Additional Rent as and when required by the terms of this Lease,
including, as appropriate, without limitation: (i) items of Reimbursable Expense
(as defined in Section 2.4 below); (ii) the Monthly Bonus Value (Section
l0.5)(if any); and (ii) any other sums due and payable under the terms of this
Lease. If Tenant shall fail to timely pay to Landlord any Additional Rent as
when due hereunder, Landlord shall have the same remedies with respect thereto
as would be available for non-payment of Minimum Monthly Rent.
2.4 REIMBURSEMENT OF CERTAIN EXPENSES. This Lease is a net lease and
the Minimum Monthly Rent shall be absolutely net to Landlord, so that this Lease
shall yield, net, to Landlord, the Minimum Monthly Rent during the Term, and,
except as otherwise provided for in this Lease, shall pay as Additional Rent to
Landlord all costs, expenses and obligations of every kind and nature,
4
whatsoever relating to the Leased Premises which may arise and be attributable
to the ownership. use or occupancy of the Leased Premises during the Term,
including, without limitation: (i) the cost of the premiums and other charges
incurred by Landlord with respect to fire, other casualty, rent, earthquake,
flood and liability insurance and any other insurance as is deemed necessary or
advisable in the reasonable judgment of Landlord, or any other insurance
required by Landlord's lender, if any, and reasonable deductibles under such
insurance in the event a claim is made thereunder; (ii) Tax Expenses (as defined
below) (collectively, "Reimbursable Expense"). Except for items of Tax Expense
(which shall be payable as provided in Section 2.4.2 below), Tenant shall pay to
Landlord as Additional Rent hereunder within thirty (30) days following Tenant's
receipt of Landlord's invoice therefor, all items of Reimbursable Expense
incurred by Landlord through the date of the invoice. Each such invoice shall
describe the nature and amount of the item of Reimbursable Expense for which
Landlord seeks payment. Upon written request by Tenant, Landlord shall provide
Tenant with copies of the bills, invoices or other back-up materials evidencing
the Reimbursable Expense described in the invoice.
2.4.1 As used herein, "Tax Expenses" shall mean all federal,
state, county, or local governmental or municipal taxes, fees, charges or other
impositions of every kind and nature, whether general, special, ordinary or
extraordinary, payable by Landlord (including, without limitation, real estate
taxes, general and special assessments, transit taxes, leasehold taxes or taxes
based upon the receipt of rent, including gross receipts or sales taxes
applicable to the receipt of rent, unless required to be paid directly by
Tenant, personal property taxes imposed upon the fixtures, machinery, equipment,
apparatus, systems and equipment, appurtenances, furniture and other personal
property located on the Premise), because of the ownership, leasing and
operation of the Premises, or any portion thereof, during the term of this Lease
and any extension thereof. Tax Expenses shall include, without limitation: (i)
Any tax on the rent, right to rent or other income from the Premises or any
portion thereof, or as against the business of leasing the Premises or any
portion thereof; (ii) Any assessment. tax, fee, levy or charge in addition to,
or in substitution, partially or totally, of any assessment, tax, fee, levy or
charge previously included within the definition of real property tax, it being
acknowledged by Tenant and Landlord that Proposition 13 was adopted by the
voters of the State of California in the June 1978 election ("Proposition 13")
and that assessments, taxes, fees, levies and charges may be imposed by
governmental agencies for such services as fire protection, libraries, transit
programs, street, sidewalk and road maintenance, refuse removal and for other
governmental services formerly provided without charge to property owners or
occupants, and, in further recognition of the decrease in the level and quality
of governmental services and amenities as a result of Proposition 13; (iii) any
governmental assessments of the Premises' contribution towards a governmental
cost-sharing agreement for the purpose of augmenting or improving the quality of
services and amenities normally provided by governmental agencies; (iv) Any
assessment, tax, fee, levy, or charge allocable to or measured by the area of
the Premises or rent payable hereunder, including, without limitation, any
business or gross income tax or excise tax with respect to the receipt of such
rent, or upon or with respect to the possession, leasing, operating. management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises or
any portion thereof; (v) Any assessment, tax, fee, levy or charge upon this
transaction or any document to which Tenant is a party creating or transferring
an interest or an estate in the Premises; and (vi) any real estate taxes and
5
assessments imposed upon or with respect to the on the land and improvements
comprising the Premises. Any costs and expenses (including, without limitation,
reasonable attorneys' and consultants' Fees) incurred in attempting to protest,
reduce or minimize Tax Expenses shall be included in Tax Expenses in the year
such expenses are incurred. If Tax Expenses for any period during the term of
this Lease or any extension thereof are increased after payment thereof for any
reason, including, without limitation. error or reassessment by applicable
governmental or municipal authorities. Tenant shall pay to Landlord within
thirty (30) days after written notice to Tenant (containing evidence of such
increase) of such an increase in Tax Expenses and such increase shall be
included by Landlord as a Tax Expenses pursuant to the terms of this Lease.
Notwithstanding anything to the contrary herein, there shall be excluded from
Tax Expenses (a) all Tax Expenses relating to any period not within the term
(and any exercised extension term) of this Lease, and (b) all excess profits
taxes, franchise taxes. gift taxes, capital stock taxes, inheritance taxes,
estate taxes, federal and state income taxes.
2.4.2 Landlord shall periodically (but not more often than
twice a fiscal real property tax year) invoice to Tenant (which shall include a
copy of the real property tax bill on which the invoice is based), and Tenant
shall pay to Landlord as Additional Rent within thirty (30) days following
receipt of such invoice, the Tax Expenses owed for the period of the term
identified in such invoice.
2.4.3 Tenant shall have the right to contest the amount or
validity of any Tax Expense paid by Tenant pursuant to the terms of this Lease
by appropriate proceedings. If Tenant determines not to so contest any such Tax
Expense, Landlord shall have the right so to do, If Tenant shall contest the
amount or validity of any such Tax Expense, Tenant shall nevertheless promptly
pay the Tax Expense in accordance with the terms and provisions of this Lease,
and nothing herein shall imply any right on the part of Tenant to postpone or
defer such payment for any such purpose. Upon the termination of such
proceedings, Tenant shall pay the amount of the Tax Expense, or part thereof, as
finally determined to be due in such proceedings, the payment of which may have
been deferred during the prosecution of such proceedings, together with any
costs, fees, interest, penalties or other liabilities in connection therewith.
Landlord shall not be required to join in any such proceedings, Landlord shall
not unreasonably withhold its consent to joining in any such proceedings, or
permitting the same to be brought in its name, and shall execute any and all
documents reasonably required in connection therewith, provided the same shall
be approved as to both form and substance by Landlord's counsel, which approval
Landlord agrees shall not be unreasonably withheld, or delayed. Landlord shall
not be subjected to any liability for the payment of any costs or expenses in
connection with any such proceeding, including, but not limited to, Landlord's
reasonable counsel fees, and Tenant shall indemnify and save harmless Landlord
from any such costs or expenses. Tenant shall be entitled to any refund of the
Tax Expense relating to Tax Expenses paid by Tenant pursuant to the terms of
this Lease and penalties or interest thereon which shall have been paid by
Tenant, or, if' paid by Landlord, for which Landlord shall have been fully
reimbursed b Tenant.
2.5 TENANT'S PERSONAL PROPERTY TAXES. Tenant shall pay before
delinquency all taxes, assessments, license fees, and other charges ("taxes')
that are levied and assessed against Tenant's personal property installed or
located in or on the Premises, and that become payable during the term. On
demand by Landlord, Tenant shall furnish Landlord with satisfactory evidence of
these payments. If any taxes on Tenant's personal property are levied against
6
Landlord or Landlord's property, or if the assessed value of the Premises is
increased by the inclusion of a value placed on Tenant's personal property, and
if Landlord pays the taxes on any of these items or on taxes based on the
increased assessment of these items, Tenant, within thirty (30) days after
written demand on Tenant (containing proof of such taxes), shall, as Additional
Rent, reimburse Landlord for such amounts. Landlord shall have the right to pay
these taxes regardless of the validity of the levy. Failure to make such
reimbursement shall, at the sole discretion of Landlord, constitute a event of
default.
2.6 SECURITY DEPOSIT. Upon the execution of this Lease by Tenant,
Tenant shall deposit with Landlord a security deposit in the aggregate amount of
nine hundred forty-five thousand two hundred fifty dollars and no cents
($945,250.00) to sect re the faithful performance by Tenant of each term,
covenant and condition to be performed or observed by Tenant under this Lease.
The Security Deposit shall be delivered to Landlord partially in the form of
cash in the amount of one hundred ninety-five thousand two hundred fifty dollars
and no cents ($195,250.00) (the "Cash Security Deposit") and partially in the
font of an irrevocable Letter of Credit in the face amount of seven hundred
fifty thousand dollars and no cents ($750,000.00) (the "LC Security Deposit"),
as more particularly described in Section 2.6.1 below. (The Cash Security
Deposit and the LC Security Deposit are sometimes collectively referred to
herein as the "Security Deposit".) If Tenant shall at any time fail to timely
make any payment due or fail to timely perform or observe any term, covenant and
condition on Us part to be performed or observed under this Lease, Landlord may,
without Waiving or releasing Tenant from any obligation under this Lease and
without waiving its right to treat such failure as a default hereof use, apply
or retain the whole or any part of the Security Deposit reasonably necessary to
remedy such failure of Tenant and to compensate Landlord for damage it suffers
thereby. In such event, Tenant shall, within five (5) days after written demand
by Landlord, remit to Landlord sufficient funds to restore the Security Deposit
to its original sum; Tenants failure to do so being a material breach of this
Lease. Landlord is not a trustee of the Security Deposit and may commingle it,
use it in ordinary business, transfer or assign it, or use it in any combination
of those ways. Tenant shall not be entitled to any interest on the Security
Deposit. Should Tenant comply with all of said terms, covenants and conditions,
and at the end of the term of this Lease leave the Leased Premises in the
condition required by the terms of this Lease, then said Security Deposit shall
be returned to Tenant within the statutorily prescribed period following the
expiration or termination of this Lease and surrender of the Leased Premises by
Tenant.
2.6.1 THE LC SECURITY DEPOSIT. The LC Security Deposit shall:
(i) be in a form reasonably acceptable to Landlord and similar in form to the
For Letter of Credit, attached hereto as Exhibit "G" and incorporated by
reference herein: (ii) provide that it shall not terminate or expire until
ninety (90) days after the last to occur of the following: (a) the expiration or
earlier termination of this Lease, or (b) surrender of possession of the Leased
Premises by Tenant in accordance with this Lease (the "Expiry Date"); (iii) be
confirmed by a bank authorized to do business in the State of California, which
(x) is a member of the Federal Reserve banking system, (y) has a teller window
for receiving cash deposits located within the County of Santa Clara,
California, and (z) is otherwise reasonably acceptable to Landlord; and (iv) be
freely assignable by Landlord without charge; and (v) permit partial draws. In
addition, the LC Security Deposit shall state on its face that is payable to
Landlord, or to Landlord's assignee, upon the presentation by Landlord and/or
Landlord's assignee to the confirming bank that Beneficiary is entitled to make
the requested draw pursuant to the terms of this Lease. From time to time
7
throughout the term of this Lease, Tenant may replace and/or renew the Letter of
Credit then acting as the LC Security Deposit pursuant to this section, with
Immediately Available Funds and/or a replacement Letter of Credit, provided
that: (I) such replacement LC Security Deposit or renewal shall he delivered to
Landlord on or before the thirtieth (30th) day prior to the expiration of the
Letter of Credit then held by Landlord as the LC Security Deposit under this
section; and (ii) such replacement LC Security Deposit or renewal shall
otherwise comply with all terms and conditions of this paragraph pertaining to
the original LC Security Deposit. Failure to deliver such a replacement LC
Security Deposit and/or renewal on or before thirty (30) days prior to the
expiration of the Letter of Credit then held as the LC Security Deposit (except
after the Expiry Date) shall allow Landlord to draw on the entire Letter of
Credit. If an event of default by Tenant occurs during the term of :his Lease or
any extension thereof, Landlord may (but shall not be required to) draw on and
use or apply all or such lesser part of the Letter of Credit as Landlord deems
necessary or such lesser part of the Letter of Credit as is necessary to remedy
such default and compensate Landlord for any loss, damage, costs, or expenses
which Landlord may have suffered by reason of such an event of default. Tenant
shall then, within five (5) days of written demand of Landlord, reinstate the
Letter of Credit or obtain a replacement Letter of Credit, in each case in the
full amount of the Letter of Credit as it existed before the draw, or Tenant
will be in default of this Lease. Within sixty (60) days after the expiration or
sooner termination of this Lease, Landlord shall return the Letter of Credit
then held by it to Tenant or so much of the proceeds thereof as have not been
applied by Landlord to remedy an event of default by Tenant or to compensate
Landlord for any loss or damage which Landlord may have suffered by reason of an
event of default by Tenant. The rights of Landlord with respect to the Letter of
Credit shall be in addition to any other rights or remedies which Landlord may
possess under this Lease.
2.7 MINIMUM MONTHLY RENT DURING OPTION PERIOD. In the event that Tenant
shall timely and properly exercise its option to extend the term of this Lease,
the Minimum Monthly Rent during the First Option Period and the Second Option
Period shall be determined as follows:
2.7.1 MINIMUM MONTHLY RENT DURING OPTION PERIOD. During the
initial twelve (12) months of the First Option Period and the initial twelve
(12) months of the Second Option Period, Tenant shall pay to Landlord Minimum
Monthly Rent in an amount equal to ninety-five percent (95%) of the fair market
rental value for premises of similar type, design and quality and in the
immediate `vicinity of the Leased Premises, but in no event less than one
hundred three percent (103%) of the Minimum Monthly Rent payable by Tenant
diving the period immediately prior to the First Option Period or Second Option
Period, as applicable (the "Initial Option Year Minimum Monthly Rent"). The
Initial Option Year Minimum Monthly Rent shall be determined by agreement of
Landlord and Tenant, or by appraisal, as set forth below. During the succeeding
forty-eight (48) months of the First Option Period and the succeeding
forty-eight (48) months of the Second Option Period, as applicable, Tenant shall
pay to Landlord Minimum Monthly Rent in an amount determined by adjusting the
Initial Option Year Minimum Monthly Rent for such option period in accordance
with the provisions of Section 2.7.5 of this Lease below.
2.7.2 DETERMINATION OF INITIAL OPTION YEAR MINIMUM MONTHLY
RENT BY AGREEMENT. The parties shall have thirty (30) days after Landlord
receives the Extension Option Notice for each option period in which to agree
8
upon the Initial Option Year Minimum Monthly Rent for such option period. If the
parties agree on the Initial Option Year Minimum Monthly Rent during said thirty
(30) day period, Landlord and Tenant shall immediately execute an amendment to
this Lease stating the agreed upon Minimum Monthly Rent for the initial twelve
(12) months of the First Option Period or the Second Option Period, as
applicable.
2.7.3 DETERMINATION OF INITIAL OPTION YEAR MINIMUM MONTHLY
RENT BY APPRAISAL. If Landlord and Tenant are unable to agree upon the Initial
Option Year Minimum Monthly Rent within the above referenced thirty (30) day
period, ten the Initial Option Year Minimum Monthly Rent shall be determined by
appraisal as set forth in this section. Within ten (10) days after the
expiration of the above referenced thirty (30) day period, Landlord and Tenant
shall each, at their own cost and expense, appoint one real estate appraiser
with at least five (5) years full time commercial real estate appraisal
experience in the county wherein the Leased Premises are located, to appraise
the Fair Market Rental Value of the Leased Premises for the initial twelve (12)
months of the First Option Period or the Second Option Period, as applicable,
and shall give notice of such selection to the other party. The appraisers
chosen by Landlord and Tenant, respectively, shall promptly meet and attempt to
determine the Fair Market Rental Value of the Leased Premises for the initial
twelve (12) months of the First Option Period or the Second Option Period, as
applicable. If', within thirty (30) days, the two appraisers are unable to agree
upon the Fair Market Rental Value of the Leased Premises for the initial twelve
(12) months of the First Option Period or the Second Option Period, as
applicable, but the higher of the two appraisals is not more than ten percent
(10%) greater than the lower of the two appraisals, then the average of the two
appraisals shall be conclusively established as the Fair Market Rental Value,
and the Initial Option Year Minimum Monthly Rent shall be established
accordingly. If the two appraisers are unable to agree on the Initial Option
Year Minimum Monthly Rent within said thirty (30) day period, the two appraisers
shall appoint a third appraiser who shall be a real estate appraiser with at
least ten (10) years full time commercial real estate appraisal experience in
the county wherein the Leased Premises are located. If the parties are unable to
agree on a third appraiser, then either party shall have the power to apply to
the Superior Court of California in and for the County of Santa Clara to have
said Court appoint a third appraiser who meets the qualifications stated in this
section. Each of the parties shall bear one-half (1/4) of the cost of appointing
the third appraiser and of paying the third appraiser's fee. Within thirty (30)
days after the selection of the third appraiser, such third appraiser shall
appraise the fair market rental value of the Leased Premises for the initial
twelve (12) months of the First Option Period or the Second Option Period, as
applicable, and the three appraisals shall be added together and their total
divided by three (3), the resulting quotient shall be the Initial Option Year
Minimum Monthly Rent, provided, however, that, except as set forth in the next
sentence, the Initial Option Year Minimum Monthly Rent shall not be: (i) lesser
than the lower of the two original appraisals; or (ii) greater than the higher
of the two original appraisals. Notwithstanding the foregoing, in no event shall
the Initial Option Year Minimum Monthly Rent be less than one hundred three
percent (103%) of the Minimum Monthly Rent payable by Tenant under the Lease for
the period immediately prior to the initial twelve (12) months of the First
Option Period or the Second Option Period: as applicable. In determining the
fair market rental value, each appraiser shall consider the highest and best use
for the Leased Premises, subject to the restrictions on use as set forth in
Section 3.1 of the Lease.
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2.7.4 INTERIM MINIMUM MONTHLY RENT PAYABLE PENDING
DETERMINATION OF INITIAL OPTION YEAR MINIMUM MONTHLY RENT. If the Initial Option
Year Minimum Monthly Rent has not been determined prior to commencement of
either the First Option Period or the Second Option Period, as applicable, the
rent payable by Tenant until such determination shall be the applicable Holdover
Rent determined in accordance with Section 1.3 of this Lease above.
2.7.5 ADJUSTMENTS TO MINIMUM MONTHLY RENT DURING OPTION
PERIOD. The Minimum Monthly Rent payable during the First Option Period or the
Second Option Period, as applicable, shall be adjusted annually pursuant to this
section on each anniversary of the 1st day of the First Option Period or the
Second Option Period, as applicable (the "Adjustment Date(s)"). As of each
Adjustment Date, the Minimum Monthly Rent shall be increased to a sum equal to
one hundred three percent (103%) of the Minimum Monthly Rent or the Minimum
Monthly Rent, as adjusted, as the case may be, payable for the period
immediately prior to the applicable Adjustment Date. Landlord shall provide
Tenant with written notice of each such adjustment in the Minimum Monthly Rent
following Landlord's determination thereof; provided, however, that any failure
or delay on the part of Landlord in delivering such notice shall not relieve
Tenant from the obligation to pay Minimum Monthly Rent, during all periods
commencing on the relevant Adjustment Date. In the event that Landlord shall not
have delivered an adjustment notice on or before a given Adjustment Date, Tenant
shall continue to pay the Minimum Monthly Rent due for the period prior to the
relevant Adjustment Date, until Landlord shall deliver to Tenant the notice of
adjustment. Within ten (10) days following receipt of the relevant adjustment
notice, Tenant shall pay to Landlord any accrued unpaid rent for the period
commencing on the relevant Adjustment Date.
ARTICLE 3
USE OF LEASED PREMISES, PARKING, LICENSE
AND PUBLIC TRANSPORTATION
3.1 PERMITTED USE: COMPLIANCE WITH INSURANCE, LAW. Tenant shall: (i)
use the Leased Premises for a data center for collocation, general office,
research and development, marketing, sales, storage and other legal uses and for
no other purpose; (ii) not do, bring, keep or allow anything in or about the
Leased Premises that may cause a cancellation of any insurance covering the
Leased Premises; (iii) comply with any and all requirements of any insurer of
the Leased Premises; and (iv) comply at its sole cost with all laws insofar as
they relate to the condition, use, or occupancy of the Leased Premises, and any
certificate of occupancy, certificate of compliance, permit, easement,
condition, covenant or restriction covering or affecting the condition, use or
occupancy of the Leased Premises, including, without limitation, and subject to
Article S hereof, the obligation to take curative action, whether substantial or
insubstantial, to alter or maintain the Leased Premises in compliance and
conformity with all such laws.
3.2 WASTE; NUISANCE. Tenant shall not use or occupy the Leased Premises
in any manner that may constitute, nor shall Tenant suffer or permit the
existence, maintenance, or commission of any act, omission, or condition that
may constitute at the Leased Premises waste, nuisance, or unlawful acts. Tenant
shall not do anything on the Leased Premises that will cause damage to the
Leased Premises or threaten or impair the structural strength of the Building.
10
3.3 TOXIC MATERIALS. Tenant shall not create. generate, use, store,
bring, permit, emit, dispose of. or allow to be present, in, on, under, or
about, the Leased Premises any toxic or hazardous gaseous, liquid, or solid
material or waste ("Toxic Materials"), except upon Landlords specific prior
written consent, which consent may be withheld by Landlord with or without
cause, in its sole and absolute determination, and in compliance with all
applicable laws, as more particularly set forth in this Section 3.3.
3.3.1 For purposes of this section, "Toxic Materials",
include, without limitation, any material or substance: (i) having
characteristics of radioactivity, ignitability, corrosivity, reactivity, or
extraction procedure toxicity; (ii) which is listed on any of the Environmental
Protection Agency's lists of hazardous wastes or which are identified in
Sections 66680 through 66685 of Title 22 of the California Administrative Code
as the same may be amended from time to time; (iii) which has been determined by
any state, federal or local governmental or public authority or agency to be
capable of posing a risk of injury to health, safety or property; (iv) which are
designated as hazardous or toxic by the city and/or county in which the Leased
Premises are located, the United States Environmental Protection Agency, the
United States Consumer Product Safety Commission, the United States Food and
Drug Administration, the California Water Resources Control Board, the Regional
Water Quality Control Board, San Francisco Bay Region, the California Air
Resources Board, CAL/OSHA Standards Board, Division of Occupational Safety and
Health, the California Department of Food and Agriculture, the California
Department of Health Services, and any federal, state, county, and/or municipal
agencies that have overlapping jurisdiction with such federal, state, county,
and municipal agencies, or any other governmental agency now or hereafter
authorized to regulate materials and substances in the environment; and/or (v)
which require remediation under federal, state, county, or municipal statutes,
ordinances, regulations or policies.
3.3.2 Tenant shall indemnify, defend, and hold Landlord
harmless from any and all claims, liabilities, costs or expenses incurred or
suffered by Landlord arising from the creation, generation, use, storage,
bringing, permitting, emission, disposal of or allowance to be present, of Toxic
Materials in, on, tinder, or about the Leased Premises, and whether or not
consent to the same has been granted by Landlord, unless caused by Landlord's
gross negligence or willful misconduct. Tenant's indemnification, defense, and
hold harmless obligations include, without limitation: (5) any and all claims,
liabilities, costs and/or expenses resulting from or based upon administrative,
judicial (civil or criminal) or other action, whether legal or equitable,
brought by any private or public person or entity under common law or any
federal, state, county, municipal law, statute, ordinance, or regulation,
including, without limitation, any subsequent tenant or owner of the Leased
Premises or adjacent property; (ii) any and all claims, liabilities, costs or
expenses pertaining to the cleanup or containment of Toxic Materials in, on,
under, or about the Leased Premises, the identification of the pollutants in the
Toxic Materials, the identification of the scope of any such environmental
contamination, the removal of pollutants from soils, riverbeds or aquifers, the
provision of an alternative public drinking water source, or the long term
11
monitoring of ground water and surface waters; (iii) any and all costs and fees
incurred, including, without limitation, attorneys' fees and costs, in defending
such claims; and (iv) any and all costs or losses suffered by Landlord as the
result of any delay or inability to sell or lease the Leased Premises after the
expiration of the Lease, including, without limitation, compensation for any
diminution in the market value of the Leased Premises resulting from the
presence of Toxic Materials thereon. Tenant shall comply at its sole cost and
expense with all laws pertaining to such Toxic Materials. Tenant's hold
harmless, defense, and indemnity obligations hereunder shall survive the
expiration or termination of this Lease. Landlord shall indemnify, defend, and
hold Tenant harmless from any injury, loss or damage, including reasonable
attorneys' fees and costs of suit arising out of a release of Toxic Materials
which Tenant proves occurred prior to the Commencement Date, unless such
contamination results solely from the gross negligence or intentional acts of
Tenant.
3.3.3 Tenant shall immediately notify Landlord of any inquiry,
test, investigation or enforcement proceeding initiated by any applicable
governmental authority or other person or entity against Tenant, Landlord, or
the Leased Premises concerning the presence (or suspected presence) of any Toxic
Materials in , on, under, or about the Leased Premises. Tenant acknowledges that
Landlord, as the owner of the Leased Premises, must approve in writing any
settlement agreement negotiated by Tenant in connection with any such
investigation, proceeding, or enforcement action. Landlord shall not
unreasonably withhold any such approval.
3.3.4 Notwithstanding any other right of entry granted to
Landlord under this Lease, Landlord shall have the right to enter the Leased
Premises or to have consultants enter the Leased Premises throughout the term of
this Lease for the purpose of determining: (i) whether or not the Leased
Premises are in conformity with federal, state; county, and municipal statutes,
regulations, ordinances, and policies including those pertaining to the
environmental condition of the Leased Premises; (ii) whether or not Tenant is in
compliance with the provisions of this Section 3.3; and/or (iii) any or all
corrective measures required of Tenant in order to ensure the safe use, storage,
and disposal of Toxic Materials, and/or the removal thereof (except to the
extent used, stored, or disposed of by Tenant or its agents, employees,
contractors, or invitees in compliance with applicable law). Provided Landlord
has reasonable cause to believe that Toxic Materials are present in, on, or
tinder the Leased Premises, such inspections may include, but are not limited
to, entering the Leased Premises or adjacent property with drill rigs or other
machinery for the purpose of obtaining laboratory samples. Landlord shall not
undertake such inspections more than once a calendar year unless Landlord has
reasonable cause to believe that Toxic Materials are present in, on or under the
Leased Premises in violation of applicable laws or the terms of this Lease. To
the extent such inspections discover the presence, handling, storage, release,
or disposal of any Toxic Material contrary to provisions of this Lease by Tenant
or its agents, employees, contractors, or invitees, Tenant shall reimburse
Landlord for the cost of such inspections within ten (10) days after receipt of
a written statement thereof. Landlord shall use reasonable good faith efforts to
conduct such inspections in a manner that minimizes any interference with
Tenant's use of the Leased Premises. If such consultants determine that the
Leased Premises or any portion thereof (including, without limitation, sewers
and storm drains) are contaminated with Toxic Materials used, stored, disposed,
or released by Tenant or any of its agents, employees contractors, or invitees.
Tenant shall, in a timely manner, at Tenant's sole cost and expense, remove such
Toxic Materials or otherwise comply with the recommendations of such consultants
12
to the reasonable satisfaction of Landlord and any applicable governmental
authorities. The rights granted to Landlord herein to inspect the Leased
Premises shall not create a duty on Landlord's part to inspect the Leased
Premises, or liability of Landlord for Tenant's use, storage, or disposal of
Toxic Materials, it being understood that Tenant shall be solely' responsible
for all liability in connection therewith.
3.3.5 Tenant shall surrender the Premises to Landlord upon the
expiration or earlier termination of this Lease free from any Toxic Materials,
debris, and waste that Tenant is responsible for pursuant to the terms of this
Section 13, including without limitation, any Toxic Materials that may have been
created, generated, used, stored, disposed of brought upon, or introduced on the
Premises by Tenant or its agents, employees, contractors, or invitees during
Tenants prior occupancy of the Premises pursuant to this Lease. n no event shall
detectable levels of such Toxic Materials (if any) which would operate as a
threshold for actions prescribed by law or regulation or would diminish the fair
market value of the Leased Premises were it not for the presence of such Toxic
Materials be acceptable. Tenant's obligations tinder this section shall survive
the expiration or earlier termination of this Lease.
3.3.6 Prior to introducing any Toxic Materials in, or, under,
or about the Leased Premises, Tenant shall provide Landlord with copies of any
and all permits and applications submitted by Tenant and/or issued by any
governmental agency concerning Tenant's use or generation of such Toxic
Materials, in, on, under, or about the Leased Premises. At Tenant's sole cost
and expense, Tenant shall implement any conditions imposed by such governmental
agency(ies) in connection with such permits and applications, as well as any
governmentally required compliance programs, and any reasonable compliance
program requested by Landlord, and Tenant shall regularly provide Landlord and
Landlord's agents with all information they may request pertaining to any such
Toxic Materials or compliance program, and Landlord shall be free to make such
inspections of the Leased Premises as it deems necessary or desirable in order
to evaluate such conditions.
3.3.7 If Landlord grants Tenant permission in writing in
advance to so bring, allow, use, store, permit, generate, or create, emit or
dispose of Toxic Materials in, on ,under, or about the Leased Premises, Tenant
shall provide to Landlord on an annual basis a report from a person who, to
Landlord's satisfaction, is appropriately qualified or licensed as an expert in
the field of toxic materials compliance laws, which certifies that Tenant is
complying with all applicable governmental statutes and regulations concerning
Toxic Materials, and that there have been no spills or contaminations by Tenant
at the Leased Premises that have not been fully corrected and cleaned up.
3.3.8 In the event of contamination by Toxic Materials at,
from, of or around the Leased Premises, the cleanup of which is the
responsibility of Tenant, Landlord may require within fifteen (15) days after
written notification from Landlord, that Tenant post a bond or other adequate
security to the benefit of Landlord, in an amount equal to Landlord's estimate
of costs for cleaning up the contamination. The posting of the bond does not
relieve Tenant from fulfilling its responsibility to clean up the contamination.
After the contamination has been cleaned up and certified, as set forth above,
the bond or other adequate security shall be returned to Tenant.
3.3.9 Within ten (10) days after the expiration of the term of
this Lease, at Landlord's election, Landlord and Tenant shall reasonably agree
upon and engage a third party to test for Toxic Materials contamination in, on,
13
tinder, and about the Leased Premises, at a cost to be borne by Tenant. If the
parties cannot agree upon a third party to conduct such tests, Landlord shall
name a qualified environmental testing firm with at least five (5) years
experience to conduct such investigation. The results of such tests shall be
conclusively presumed to establish the presence or absence of any such Toxic
Materials contamination.
3.3.10 Tenant acknowledges that Tenant has been informed that
the property adjacent to the Leased Property, located at 2790-3000 Corvin Drive,
Santa Clara, CA, has recently been the subject of an environmental clean-up and
that one or more test wells are located on the Premises in connection with such
clean-up.
3.3.11 Landlord represents that as of the Commencement Date,
Landlord has not received notice that any Toxic Materials are present at or in
the Leased Premises the nature, concentration or condition of which violates any
applicable federal, state, or local, rule, regulation, ordinance, or statute. To
the best of Landlord's knowledge without inquiry, as of the date of execution of
this Lease: (i) no Toxic Materials from such adjacent property as described
above in Section 3.3.10 have migrated in, on, or tinder the Leased Premises; and
(ii) the Leased Premises, the Building and the Land are free front all Toxic
Materials.
3.3.12 Notwithstanding any other provision in this Lease,
nothing in this Lease shall obligate Tenant to remove, remediate or otherwise
respond to, or to indemnify, defend or hold harmless Landlord (or any other
person) as a result of or in connection with, or to pay to Landlord (or any
other person) as Additional Rent any costs or expenses arising out of, any Toxic
Materials that were present on or under the Premises at any time prior to the
Commencement Date.
3.3.13 The parties acknowledge that, per Tenant's request, and
pursuant to the terms of that letter agreement dated August 23, 2000, a copy of
which is attached hereto as Exhibit "F" and incorporated by reference herein,
Lowney Associates have been contracted to evaluate the Leased Premises' existing
subsurface conditions to establish a "base line" environmental condition of the
Leased Premises. The costs of such work shall be shared equally by Tenant and
Landlord; provided, however, that Landlord shall not be obligated to pay in
excess of five thousand dollars and no cents ($5,000.00) towards the cost of
such work and alt costs in excess of such amount shall be the sole obligation of
Tenant. Upon the completion of the work, Tenant shall provide Landlord with a
copy of any report arising from such work, if any.
3.4 QUIET ENJOYMENT. Provided Tenant timely complies with and performs
each and every covenant, agreement, term, provision, and condition contained in
this Lease on the part of Tenant to be complied with or performed, Tenant shall
have the quiet use and enjoyment of the Leased Premises without disturbance by
Landlord, its successors and assigns, or anyone claiming by, through, or under
Landlord, subject to the covenants, agreements, terms, provisions, and
conditions of this Lease. This covenant of Landlord is in lieu of any covenant
of quiet enjoyment implied by law.
3.5 PARKING. Subject to all applicable laws, throughout the term of
this Lease, Tenant shall have the use and enjoyment of all parking areas located
14
upon the Land for the purpose of parking passenger automobiles used by the
employees, customers, contractors, and guests of Tenant (the "Parking License").
3.6 ACCESS. During the term of the Lease, Tenant shall have twenty-four
(24) hour access to the Leased Premises, seven days a week.
ARTICLE 4
MAINTENANCE AND REPAIR
4.1 CONDITION OF PREMISES. Tenant: (i) has examined the Leased
Premises, is aware of their condition and acknowledges that, except as expressly
provided herein, Landlord has made no warranty or representation with respect to
same, (ii) accepts the Leased Premises and improvements thereon as-Is in their
present condition, including, without limitation, with respect to any
non-compliance of all or any portion of the Leased Premises with local
ordinances or building codes, or with the Americans With Disabilities Act, (iii)
agrees that the Leased Premises and improvements, and facilities appurtenant
thereto are. in good, clean, safe and tenantable condition as of the date of
this Lease and that this provision shall be conclusively binding on the parties
hereto, and (iv) acknowledges that Landlord is relying on such acceptance and
agreement as consideration for entering into this Lease. Notwithstanding the
foregoing, en the Commencement Date, Landlord shall deliver possession of the:
Leased Premises with all existing plumbing, air-conditioning, heating, and other
existing operating systems in good working condition.
4.2 TENANT MAINTENANCE AND REPAIR OBLIGATIONS. Tenant, at its sole cost
and expense, shall, at all times during the term of this Lease, keep and
maintain all the Leased Premises, and all portions thereof including, without
limitation, all Property, appurtenances, equipment, and systems, in, on, under,
and about, the Leased Premises, in good order, condition and repair (which shall
include replacement), including, without limitation, al improvements,
alterations, fixtures, and all wall, window, and floor coverings located
therein, as well as all telephonic, electrical, and computer systems and
cabling. The necessity for ant. adequacy of repairs to and maintenance of such
maintenance and repair shall be measured by the standard which is appropriate
for industrial/office buildings of similar type design, size, and quality in
Santa Clara or Alameda County. Except as otherwise provided in Article 8 of this
Lease (Destruction of the Leased Premises), Tenant, at Tenant's sole cost and
expense shall repair and/or replace any portion of the Leased Premises, or the
Building, which is damaged or injured as the result of any negligent or
intentional act or failure to act on the part of Tenant, or Tenant's agents,
servants, employees, contractors, visitors, invitees, or licensees, or as the
result of any breach of Tenant's obligations tinder this Lease.
4.3 LANDLORD MAINTENANCE AND REPAIR OBLIGATIONS. Landlord shall have no
obligation to repair or maintain all or any portion of the Leased Premises.
Tenant hereby waives all rights under the provisions of Sections 1932, 1933,
1941 and 1942 of the Civil Code of the State of California and all rights under
any law in existence during the term of this lease authorizing a tenant to make
repairs at the expense of a landlord or to terminate a ease upon the complete or
15
partial destruction of the Leased Premises, or any portion thereof. In no event
shall Landlord be responsible for any consequential damages arising or alleged
to have arisen from any of the foregoing matters.
ARTICLE 5
ALTERATIONS, FIXTURES AND SIGNS
5.1 INITIAL TENANT IMPROVEMENTS. Subject to the requirements of this
Section 5.1, immediately following receipt of possession of the Leased Premises,
Tenant shall proceed with all due diligence, at Tenant's sole expense, to
install and configure the Leased Premises in accordance with the tenant
improvement plans and/or descriptions set forth in the Tenant Work Letter
attached hereto as Exhibit "C" and incorporated herein by reference, to install
its trade fixtures, and to perform such additional work as it may deem necessary
for the conduct of its business within the Leased Premises (collectively
referred to as "Tenant's Work"). Tenant shall construct the Tenant's Work in
four phases, each phase is more particularly described in the Work Letter as
"Phase One", "Phase Two", "Phase Three" and "Phase Pour" respectively.
Construction of Tenant's Work during each phase shall comply with all the terms
of the Tenant Work Letter and the Lease, as applicable.
5.1.1 TENANT IMPROVEMENT ALLOWANCE. In connection with Phase
One, Landlord shall give to Tenant a Tenant Improvement Allowance (the
"Allowance") in an amount not to exceed seven hundred fifty thousand dollars and
no cents ($750,000.00), subject to the following terms and conditions:
5.1.1.1 The proceeds of the Allowance shall be used
solely to pay the costs of Tenant's construction of Tenant's Work in Phase One
("Tenant's Initial Work");
5.1.1.2 Landlord shall disburse funds from the
Allowance to Tenant, or for Tenant's account, in the mariner described below,
provided. that all of the following conditions have been satisfied:
5.1.1.2.1 Landlord receives a copy of
Tenant's budget for construction of the Tenant's Initial Work within thirty (30)
days after execution of this Lease for the proposed construction of Tenant's
Initial Work, and Landlord approves of said budget (Landlord's approval shall
not be unreasonably withheld);
5.1.1.2.2 Tenant delivers to Landlord copies
of each of the following:
(a) a use permit (if required);
(b) alt required building
permits;
(c) all other permits, licenses,
and other approvals required by law to complete Tenant's construction of
Tenant's Initial Work on the Leased Premises; and
16
(d) a complete list of the names,
addresses, telephone numbers and contract amounts for all contractor(s),
subcontractors, vendors and/or suppliers providing materials and/or labor for
the construction of Tenant's Initial Work; and
5.1.1.2.3 Within thirty (30) days after each
of the foregoing conditions specified have been satisfied by Tenant. Tenant
shall deliver to Landlord a written request for disbursement from the Allowance,
together with: (I) conies of all invoices from Tenant's contractor(s),
subcontractors, vendors and/or suppliers providing materials and/or labor for
the construction of Tenant's Initial Work; (ii) a conditional mechanic's lien
release or other lien release, in a form reasonably acceptable to Landlord, for
all work for which Tenant seeks a disbursement request; and (iii) an
unconditional mechanics' lien release or other lien release for all of the
Initial Tenant Work that has been performed thus far, if any, in a form
reasonably acceptable to Landlord. Within thirty (30) days after Landlord's
receipt of such written request for distribution, Landlord shall disburse to
Tenant the amount of such invoices, unless, within said thirty (30) day period,
Landlord shall notify Tenant of Landlord's reasonable objection(s) thereto.
Notwithstanding the foregoing, Landlord, in Landlord's sole determination, shall
have the right to deposit all or some portion of the Allowance into Tenant's
Escrow Account or into a separate construction escrow account established by
Landlord in order to facilitate payment of the construction costs upon
submission of Tenant invoices. In connection with the foregoing, prior to
commencing any Tenant's Work in any of the phases, Tenant shall purchase and
deliver to Landlord a payment and a performance bond issued by a surety
authorized to do business within the State of California in a principal amount
sufficient to ensure completion of such Tenant's Work. Tenant shall bear all
costs of construction of Tenant's Work in excess of the Allowance.
5.1.2 Tenant shall not have access to any of the Allowance
until after the Commencement Date of the Lease. During the first thirty days
after the Commencement Date, Landlord shall make available to Tenant a maximum
of two hundred thousand dollars and no cents (S200,000.00) of the Allowance,
subject to the terms in this Section 5.1. After the initial thirty-day period,
the balance of the Allowance shall be made available to Tenant, payable to
Tenant pursuant to the terms in this Section 5.1.
5.2 SUBSEQUENT ALTERATIONS TO THE LEASED PREMISES BY TENANT. Except as
provided in this section, Tenant shall not make any further alterations,
improvements, or modifications to the Leased Premises, or to the Building,
without Landlord's express prior written consent, which consent shall not he
unreasonably withheld or delayed. Tenant, at its cost, shall have the right to
make, without Landlord's consent, such nonstructural alterations to the interior
of the Leased Premises, as Tenant requires in order to conduct its business
within the Leased Premises, provided such non-structural alterations
collectively do not exceed a total cost to Tenant in excess of the amount of
fifty thousand dollars and no cents ($50,000.00) in any three calendar year
period; and provided, however, that Tenant shall not begin any such alterations,
modifications, or improvements, until five (5) business days after Tenant has
notified Landlord of the date the alterations will commence. so that Landlord
can post appropriate notices of non-responsibility.
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5.3 ALTERATIONS TO THE LEASED PREMISES REQUIRING LANDLORD'S CONSENT.
When making any alterations, improvements, or modifications to the Leased
Premises or the building thereon, which require Landlord's prior written
consent, not less than thirty (30) days prior to the date upon which Tenant
intends to commence construction of such alterations, improvements, or
modifications, Tenant shall submit to Landlord for approval reasonably detailed
final plans and working drawings of the proposed alterations, improvements, or
modifications. Landlord may impose as a condition of its consent to such
alterations, improvements, or modifications, such requirements as Landlord may
deem reasonable and desirable, including but not limited to, the requirement
that Tenant, and/or Tenant's contractor(s), post a payment and/or a completion
bond, or deposit sufficient funds to complete the project into a construction
escrow account reasonably acceptable to Landlord ("Tenant's Escrow Account"), in
order to guarantee the performance of Tenant's construction obligations
hereunder. Landlord also reserves the right to disapprove of any proposed
alterations, improvements, or modifications, which, in Landlord's sole
determination, would not maintain a consistency of design within the Building.
Landlord agrees to consent to said proposed alterations, improvements, or
modifications, or to advise Tenant in reasonable detail of its reasonable
objections thereto, within twenty-one (21) days after receipt of the proposed
final drawings and plans, in order to permit Tenant time to make any appropriate
revisions to its plans. If Landlord fails to affirmatively approve or disapprove
of the proposed alterations, improvements, or modifications within said time
period, the proposed alterations, improvements, or modifications shall be deemed
disapproved. Once said plans are approved by Landlord in writing, Tenant shall
configure and construct the Leased Premises in strict accordance with such plans
and shall make no changes without Landlord's consent.
5.4 ALL ALTERATIONS TO THE LEASED PREMISES. In making any alterations,
improvements, or modifications to the Leased Premises, or to the Building,
including, without limitation, the construction of Tenant's Work during any of
the phases, and whether or not Landlord's prior consent is required pursuant to
this Lease, Tenant shall comply with each of the following terms and conditions,
unless specifically stated otherwise in the Lease or the Work Letter:
5.4.1 Tenant shall utilize only such contractor(s), materials,
mechanics and materialmen in connection with the alteration, improvement, or
modification of the Leased Premises, as shall have been approved by Landlord in
Landlord's reasonable determination.
5.4.2 Tenant shall pay all costs and expenses relating to the
alteration, improvement, or modification to the Leased Premises undertaken by
Tenant.
5.4.3 Tenant shall provide working drawings of any proposed
alterations, improvements, and/or modifications to Landlord prior to commencing
such alterations or modifications.
5.4.4 All alterations, improvements, and/or modifications
shall be approved by all appropriate government agencies, and all applicable
permits and authorizations shall be obtained prior to commencement of
construction of the alterations.
5.4.5 All alterations, improvements, and/or modifications
shall be completed by Tenant with due diligence in strict compliance with all
laws ad regulations relating to the project, including, but not limited to, the
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Americans With Disabilities Act of 1990, Pub. Law 101-336, 104 Stat. 1327, as
amended, and all related Federal, State and Local statutes and regulations
(collectively referred to as "ADA"), and in strict accordance with the plans and
specifications and working drawings.
5.4.6 Prior to commencing construction, Tenant will obtain,
and/or cause its architects and contractors to obtain, and verify to Landlord
that Tenant, and/or its architects and contractor(s), have obtained, such
additional insurance as shall he reasonably required by Landlord, including, but
not limited to errors and omissions coverage for all design work, workers
compensation insurance as required by law, all physical loss builders risk
insurance, including operations completed coverage, and standard endorsement CC
2010, comprehensive automobile liability insurance, and comprehensive general
liability insurance. All liability policies, except for workers compensation
insurance, shall have policy limits of not less than two million dollars and no
cents ($2,000,000.00), or such additional amount as Landlord may reasonably
require, and shall name Landlord and Landlord's employees, agents, architects,
and contractors as additional insureds. All casualty policies shall have policy
limits of not less than full replacement value, with deductibles not greater
than one thousand dollars and no cents ($1,000.00) per occurrence. The policy of
workers compensation insurance shall be in such coverage amount as is required
by law, and shall contain an endorsement waiving all rights of subrogation
against Landlord, and Landlord's employees, agents, architects, and contractors.
5.4.7 All alterations, improvements, modifications, and
fixtures shall utilize building standard materials.
5.4.8 All work shall be performed in a manner that will not
materially interfere with the quiet enjoyment of occupants of adjacent
properties.
5.4.9 All improvements, modifications, alterations, and/or
fixtures installed as part of the construction, shall at Landlord's election,
become the property of Landlord upon the expiration or other earlier termination
of this Lease; provided, however, that Landlord shall have the right to require
Tenant to remove the fixtures at Tenant's cost on termination of this Lease. If
Tenant is required by Landlord to remove the fixtures on termination of this
Lease, Tenant shall repair and restore any damages to the Leased Premises caused
by such removal.
5.5 MECHANICS' LIENS. Tenant shall pay for all construction by it or
caused to be done by it on the Leased Premises as permitted by this Lease.
Tenant shall keep the Leased Premises, and the building thereon, and any other
improvements owned by Landlord, free and clear of all mechanics' and
materialmen's liens resulting from construction done by or for Tenant. Tenant
shall have the right to contest the correctness or the validity of any such lien
it immediately upon demand by Landlord, Tenant procures and records a lien
release bond issued by a corporation authorized to issue surety bonds in the
State of California in an amount equal to one and one-half (1/2) times the
amount of the claim of lien. The bond shall provide for the payment of any sum
that the claimant may recover on the claim (together with costs of suit if it
recovers in the action). Failure to obtain such a lien release bond within ten
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(10) days after notice thereof shall, in the sole discretion of Landlord,
constitute an event of default under this Lease. If Tenant fails to obtain such
a lien release bond within said ten (10) day period, Landlord may take whatever
actions Landlord deems necessary in order to obtain the release, and Tenant
shall indemnify Landlord for all costs incurred by Landlord in obtaining such
release, including, but not limited to, any attorneys' fees and costs incurred
by Landlord and/or the lien claimant.
5.6 SIGNS. Tenant, at Tenant's sole cost, may install any signage upon
the Leased Premises that is permitted by applicable law, including without
limitation, any federal, state, local, or quasi-governmental rule, regulation.
ordinance, statute, or case law, and is not inconsistent with any Covenants,
Conditions, and Restrictions (or similar type agreement) in effect concerning
the Property. Landlord makes no representation with respect to Tenant's ability
to obtain such approval and/or to install such signage. Tenant shall remove such
signage at the Expiration Date or sooner termination of this Lease and repair
any damage to the Leased Premises caused by such removal.
ARTICLE 6
UTILITIES AND SERVICES
6.1 UTILITIES AND SERVICES TO LEASED PREMISES. Tenant shall contract
with and pay directly the providers of all utilities and services furnished to
the Leased Premises, including, without limitation, the following: gas,
electrical, H.V.A.C., telephone, waste removal, janitorial, sewage, and other
utilities, telecommunications and cleaning services provided to the Leased
Premises.
6.2 INTERRUPTION OF SERVICES. Landlord shall not be liable to Tenant
for any interruption or failure of any utilities or services to the Leased
Premises, or any portion thereof, nor shall such constitute a constructive
eviction or give rise to a right of rent offset or abatement or effect the
obligations of Tenant under this Lease in any other way whatsoever where the
failure or interruption is caused by accident, breakage, repairs, strikes,
lockouts or labor disputes of any nature, Acts of God or Nature, the utility
supplier or by any other cause, similar or dissimilar, beyond the reasonable
control of Landlord or where Landlord diligently and in good faith acts to
remedy same, unless such interruption or failure was caused by Landlord's gross
negligence or willful misconduct, but Tenant shall be subrogated to any rights
Landlord may have against any supplier of services or utilities in such event.
ARTICLE 7
INDEMNITY AND EXCULPATION INSURANCE
7.1 INDEMNIFICATION AND WAIVER. Except when due to the gross negligence
or willful misconduct of the Landlord Parties (as defined below) and as
otherwise provided for in this Lease, Tenant hereby assumes all risk of damage
to property or injury to persons in, upon or about the Leased Premises from any
cause whatsoever (including, but not limited to, any personal injuries resulting
from a slip and fall in, upon or about the Leased Premises) and agrees that
Landlord, its partners, subpartners and their respective officers, agents,
servants, employees, and independent contractors (collectively, "Landlord
Parties") shall not be liable for, and are hereby released from any
responsibility for, any damage either to person or property or resulting from
the loss of use thereof, which damage is sustained by Tenant or by other persons
claiming through Tenant. Tenant shall indemnify, defend, protect, and hold
harmless the Landlord Parties from any and all loss, cost, damage, expense and
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liability (including without limitation court costs and reasonable attorneys'
fees) incurred in connection with or arising from any cause in, on or about the
Leased Premises (including, but not limited to, a slip and fall), any acts,
omissions or negligence of Tenant or of any person claiming by, through or under
Tenant, or of the contractors. agents, servants, employees, invitees. guests or
licensees of Tenant or any such person, in. on or about the Leased Premises, or
any portion thereof, or any breach of the terms of this Lease, either prior to,
during, or after the expiration of the term of this Lease, provided that the
terms of the foregoing indemnity shall not apply to the gross negligence or
willful misconduct of the Landlord Parties. Should Landlord be named as a
defendant in any suit brought against Tenant in connection with or arising out
of Tenant'; occupancy of the Leased Premises, Tenant shall pay to Landlord its
costs and expenses incurred in such suit, including without limitation, its
actual professional fees such as reasonable appraisers', accountants' and
attorneys' fees; provided, however, that if Tenant's and/or Landlord's insurance
carrier has acknowledged coverage for the claim, and the available insurance
proceeds are reasonably adequate to cover all of Landlord's losses, Tenant shall
not be obligated to pay any amounts in excess of the available coverage. The
provisions of this section shall survive the expiration or sooner termination of
this Lease with respect to any claims or liability arising in connection with
any event occurring prior to such expiration or termination.
7.2 TENANT'S INSURANCE. Tenant shall maintain the following coverages
in the following amounts.
7.2.1 COMMERCIAL GENERAL LIABILITY INSURANCE. Covering the
insured against claims of bodily injury, personal injury and property damage
(including loss of use thereof arising out of Tenant's operations, and
contractual liabilities (covering the performance by Tenant of its indemnity
agreements) including a Broad Form endorsement covering the insuring provisions
of this Lease and the performance by Tenant of the indemnity agreements set
forth in Section 7.1 above, for limits of liability not less than:
Bodily Injury and
Property Damage $3,000,000 each occurrence
Liability $3,000,000 annual aggregate
Personal Injury Liability $3,000,000 each occurrence
$3,000,000 annual aggregate
0% insured's participation
7.2.2 PHYSICAL DAMAGE INSURANCE. Covering the Leased Premises,
and all portions thereof, including without limitation, (i) all office
furniture, business and trade fixtures, office equipment, free-standing cabinet
work, movable partitions, merchandise and all other items of Tenant's property
within the Leased Premises. (ii) the Building structure and improvements; (iii)
Tenant's Work; (iv) any other improvements which exist in the Leased Premises,
and (v) all other improvements, alterations and additions to the Leased
Premises. Such insurance shall be written on an "all risks" of physical loss or
damage basis, for the full replacement cost value (subject to reasonable
deductible amounts) mew without deduction for depreciation of the covered items
and in amounts that meet any cc-insurance clauses of the policies of insurance
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and shall include coverage for damage or other loss caused by fire or other
peril including, but not limited to, vandalism and malicious mischief, theft,
water damage of any type, including sprinkler leakage, bursting or stoppage of
pipes, and explosion, and providing business interruption coverage for a period
of one year.
7.2.3 WORKER'S COMPENSATION AND EMPLOYER'S LIABILITY. Tenant
at Tenant's sole cost shall maintain Worker's Compensation insurance in the
amounts and as required by the State of California and Employer's Liability
insurance, or other similar insurance reasonably satisfactory to Landlord, in
amounts reasonably satisfactory to Landlord, or as otherwise required by
applicable state and local statutes and regulations.
7.2.4 FORM OF POLICIES. The minimum limits of policies of
insurance required of Tenant under this Lease shall in no event limit the
liability of Tenant under this Lease. Each policy of insurance required to be
carried by Tenant under this Lease (including, without limitation, all insurance
required pursuant to Section 5.4.6 above) shall (i) name Landlord, and any other
party the Landlord so specifies, as an additional insured, including Landlord's
managing agent, if any; (ii) be issued by an insurance company having a rating
of not less than A-X in Best's Insurance Guide or which is otherwise acceptable
to Landlord and licensed to do business in the State of California; (iii) be
primary insurance as to all claims thereunder and provide that any insurance
carried by Landlord is excess and is non-contributing with any insurance
requirement of Tenant; (iv) be in form and content reasonably acceptable to
Landlord; and (v) provide that said insurance shall not be canceled or coverage
changed unless thirty (30) days' prior written notice shall have been given to
Landlord and any mortgagee of Landlord. Tenant shall deliver said policy or
policies or certificates thereof to Landlord on or before the Commencement Date
and at least thirty (30) days before the expiration dates thereof. In the event
Tenant shall fail to procure such insurance, or to deliver such policies or
certificate, Landlord may, at its option, procure such policies for the account
of Tenant, and the cost thereof shall be paid to Landlord within five (5) days
after delivery to Tenant of bills therefor.
7.2.5 SUBROGATION. Landlord and Tenant intend that their
respective property loss risks shall be borne by reasonable insurance carriers
to the extent above provided, and Landlord and Tenant hereby agree to look
solely to, and seek recovery only from, their respective insurance carriers in
the event of a property loss to the extent that such coverage is agreed to be
provided hereunder. The parties each hereby waive all rights and claims against
each other for such losses, and waive all rights of subrogation of their
respective insurers, provided such waiver of subrogation shall not affect the
right to the insured to recover thereunder. The parties agree that their
respective insurance policies are now, or shall be, endorsed such that the
waiver of subrogation shall not affect the right of the insured to recover
thereunder, so long as no material additional premium is charged therefor.
7.2.6 ADDITIONAL INSURANCE OBLIGATIONS. Tenant shall carry and
maintain during the entire Lease Term, at Tenant's sole cost and expense,
increased amounts of the insurance required to be carried by Tenant pursuant to
this section and such other reasonable types of insurance coverage and in such
reasonable amounts covering the Leased Premises and Tenant's operations therein,
as may be reasonably requested by Landlord.
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ARTICLE 8
DESTRUCTION
8.1 REPAIR OF DAMAGE TO PREMISES BY LANDLORD. Except as otherwise set
forth in Section 8.2 below, in the event that all or any portion of the Leased
Premises shall be damaged by fire or other casualty, this Lease shall not
terminate, and Tenant shall reconstruct the Leased Premises on the terms and
conditions set forth herein. If any such casualty shall occur, Tenant shall
promptly notify Landlord of such damage, subject to the provisions of Article 5
of this Lease, Tenant shall promptly and diligently, subject to reasonable
delays for insurance adjustment or other matters beyond Tenant's reasonable
control, and subject to all other terms of this article, restore the Leased
Premises to substantially the condition prior to the casualty, except for
modifications required by zoning and building codes and other laws or by the
holder of a mortgage on the Building and/or the Leased Premises or any other
modifications requested by Landlord, which are consistent with the character of
the Building; provided, however that Landlord shall contribute to the costs of
such reconstruction ("Landlord's Insurance Contribution") out of any insurance
proceeds actually received by Landlord as the result of such damage to the
Leased Premises (other than insurance proceeds, or any portion thereof, received
by Landlord as compensation for loss or damage to personal property or fixtures
belonging to Landlord) in an amount equal to the difference between Tenant's
total costs of reconstruction and the greater of the following ("Tenant's
Insurance Proceeds"): (a) the total amount of insurance required to be carried
by Tenant under this Lease with respect to such event of damage or destruction;
or (b) the total amount of insurance proceeds actually received by Tenant as the
result of such damage or destruction. In no event shall Landlord's Insurance
Contribution exceed the amount of insurance proceeds actually received by
Landlord as the result of such damage to the Leased Premises (other than
insurance proceeds received by Landlord as compensation for loss or damage to
personal property or fixtures belonging to Landlord). Prior to the commencement
of construction, Tenant shall submit to Landlord, for Landlord's review and
approval, all plans, specifications and working drawings relating thereto, and
Landlord shall select the contractors to perform such improvement work. Landlord
shall not be liable for any inconvenience or annoyance to Tenant or its
visitors, or injury to Tenant's business resulting in any way from such damage
or the repair thereof; provided however, that if such fire or other casualty
shall have damaged portions of the Building necessary to Tenant's occupancy
thereof and the Building is not occupied by Tenant as a result of such casualty,
then during the time and to the extent the Building is unfit for occupancy, the
Minimum Monthly Rent shall be abated, to the extent compensated by the proceeds
of rental interruption insurance payments received by Landlord, in proportion to
the ratio that the amount of rentable square feet of the Building which are
unfit for occupancy for the purposes permitted under this Lease bears to the
total rentable square feet of the Building; provided, however, that Tenant's
right to a rent abatement pursuant to the preceding sentence shall terminate as
of the date which is reasonably determined by Landlord to be the date Tenant
should have completed repairs to the Leased Premises assuming Tenant used
reasonable due diligence in connection therewith.
8.2 ELECTIONS TO TERMINATE. In the event of damage or destruction to
the Leased Premises and/or the Building, Landlord or Tenant may terminate this
Lease only on the terms and conditions set forth in this section:
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8.2.1 LANDLORD'S ELECTION TO TERMINATE, Notwithstanding any
other provision of this Lease, Landlord may elect not to require Tenant to
rebuild and/or restore the Leased Premises, and to instead terminate this Lease,
by notifying Tenant in writing of such termination within sixty (60) days after
the date of discovery of the damage such notice to include a termination date
giving Tenant ninety (90) days to vacate the Leased Premises, but Landlord may
so elect only if the Building shall be damaged by fire or other casualty or
cause, whether or not the Leased Premises are affected, and one or more of the
following conditions is present: (i) in Landlord's reasonable judgment. repairs
cannot reasonably be completed within two hundred seventy (270) days after the
date of discovery of the damage (when such repairs are made promptly and
diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord's reasonable control, and subject to all other terms of
this article, without the payment of overtime or other premiums); (ii) the
holder of any mortgage on the Building or the Entire Property or ground lessor
with respect to the Building or the Entire Property shall require that the
insurance proceeds or any portion thereof he used to retire the mortgage debt,
or shall terminate the ground lease, as the case may be; (iii) the damage is not
fully covered by Landlord's insurance policies; (iv) the damage occurs during
the last twelve (12) months of the Lease Term.
8.2.2 TENANT'S ELECTION TO TERMINATE. Tenant may terminate
this Lease by providing written notice thereof to Landlord within sixty (60)
days after the date of discovery of the damage, such notice to include a
termination date giving Tenant not more than sixty (60) days following such
notice in which to vacate the Leased Premises, only if all of the following are
true: (i) the damage was not caused by the negligence or intentional act of
Tenant or any related persons or entities, and their respective officers,
agents. servants, employees, and independent contractors; (ii) Tenant is not
then in default under this Lease beyond applicable cure periods; (iii) as a
result of the damage, Tenant cannot reasonably conduct business from the Leased
Premises; and (iv) in Landlord's reasonable judgment, repairs cannot reasonably
be completed within three hundred sixty-five (365) consecutive calendar days
after the date of discovery of the damage (when such repairs are made promptly
and diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord's reasonable control, and subject to all other terms of
this article, without the payment of overtime or other premiums).
8.3 WAIVER OF STATUTORY PROVISIONS. The provisions of this Lease,
including this article, constitute an express agreement between Landlord and
Tenant with respect to any and all damage to, or destruction of, all or any
portion of the Leased Premises, the Building, and/or the Entire Property, and
any statute or regulation of the State of California, including, without
limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with
respect to any rights or obligations concerning damage or destruction in the
absence of an express agreement between the parties, and any other statute or
regulation, now or hereafter in effect, shall have no application to this Lease
or any damage or destruction to all or any part of the Leased Premises, the
Building, and/or the Entire Property.
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ARTICLE 9
EMINENT DOMAIN
9.1 PARTIES' RIGHTS AND OBLIGATIONS TO BE GOVERNED BY LEASE. In case
all of the Leased Premises, or such part thereof as shall substantially
interfere with Tenant's use and occupancy thereof, shall be taken for any public
or quasi-public purpose by any lawful power or authority by exercise of the
right of appropriation, condemnation or eminent domain, or sold to prevent such
taking, either party shall have the right to terminate this Lease effective as
of the date possession is required to be surrendered to said authority. Tenant
shall not assert any claim against Landlord or the taking authority for any
compensation because of such taking, and Landlord shall be entitled to receive
the entire amount of any award without deduction for any estate or interest of
Tenant. In the event the portion of the Leased Premises or the type of estate
taken shall not substantially interfere with the conduct of Tenant's business,
Landlord shall be entitled to the entire amount of the award without deduction
for any estate or interest of Tenant, Landlord shall accomplish all necessary
repair occasioned thereby, and a proportionate allowance shall be made to Tenant
for the rent corresponding to the time during which, and to the part of the
Leased Premises of which, Tenant shall be so deprived on account of such taking
and repair. Nothing contained in this section shall be construed to give
Landlord an interest in any award made to Tenant for the taking of personal
property and trade fixtures belonging to Tenant, and during the initial term of
this Lease only, Tenant shall retain a claim against an award in eminent domain
for an amount equal to Tenant's unamortized cost of the Tenant's Work over the
remaining initial Lease term on a straight line basis without interest. Each
party waives any statutory right in conflict with the provisions hereof
including, without limitation, rights under California Code of Civil Procedure
Section 1265.130. For purposes of this section, leasehold improvements paid for
by Tenant shall be amortized on a straight line basis, without interest. over
the entire term of this Lease. Notwithstanding anything to the contrary
contained in this section, in the event of a temporary taking of all or any
portion of the Leased Premises for a period of one hundred and eighty (180) days
or less, then this Lease shall not terminate but the Minimum Monthly Rent and
the Additional Rent shall be abated for the period of such taking in proportion
to the ratio that the amount of rentable square feet of the Building taken bears
to the total rentable square feet of the Building.
ARTICLE 10
ASSIGNMENT, SUBLETTING AND ENCUMBRANCE
10.1 PROHIBITIONS IN GENERAL. Tenant shall not (whether voluntarily,
involuntarily, or U' by operation of law) (i) assign, transfer, hypothecate,
pledge or encumber Tenant's interest in this Lease or in the Leased Premises,
(ii) allow all or any part of the Leased Premises to be sublet, occupied, or
used by any person other than Tenant, (iii) transfer any right appurtenant to
this Lease or the Leased Premises, (iv) mortgage or encumber the Lease (or
otherwise use the Lease as a security device) in any manner, or (v) permit any
person to assume or succeed to any interest whatsoever in this Lease without
Landlord's prior written consent in each instance, which consent may not be
unreasonably withheld. Landlord's consent to any such assignment, sublease,
hypothecation, encumbrance, or transfer (collectively "Transfer") shall be
evidenced by Landlord's signature on the Assumption Agreement provided for
below. Unless otherwise permitted under this Article 10, any Transfer without
25
Landlord's consent shall, at the election of Landlord, constitute an event of
default by Tenant under this Lease and shall be voidable at Landlord's option.
Landlord's consent to any one such Transfer shall not constitute a waiver of the
provisions of this section with respect to any subsequent Transfer or a consent
to any subsequent Transfer. Landlord's consent to any one Transfer shall not
release Tenant from Tenant's obligations under this Lease. The provisions of
this section expressly apply to all heirs, successors, subtenants. assigns and
transferees of Tenant. All Transfers and proposed Transfers are subject to the
provisions of this section.
10.2 CONSENT NOT UNREASONABLY WITHHELD TO ASSIGNMENT OR SUBLEASING.
Notwithstanding the foregoing, it shall be reasonable for Landlord to withhold
its consent to any proposed assignment or sublease of this Lease, any right or
interest in this Lease, or any right or interest in the Leased Premises or any
improvements that may now or hereafter be constructed or installed in the Leased
Premises, on any of the following grounds:
10.2.1 The inability of the Tenant's proposed assignee,
subtenant, encumbrancer, hypothecator, or transferee (collectively referred to
as the "Transferee") to fulfill the terms of the Lease;
10.2.2 The financial unsuitability of the Transferee. A
Transferee may be presumed to be financially unsuitable if, either: (a) at the
time of the proposed transfer, either (i) the net worth of the Transferee shall
be less than fifty million dollars ($50,000,000.00); and/or (ii) the difference
between the current assets and current liabilities of the Transferee shall be
less than five million dollars and no cents ($5,000,000.00); or (b) in the sole
determination of Landlord, the Transferee is less financially stable than
Tenant;
10.2.3 The non-suitability of the Leased Premises for the
intended use by the Transferee;
10.2.4 Any intended unlawful or undesirable use of :he Leased
Premises;
10.2.5 The need for alteration of the Leased Premises; and
10.2.6 The need to modify this Lease.
10.3 CHANGE IN OWNERSHIP INTEREST. If Tenant is a corporation, limited
liability company, partnership (whether general or limited), unincorporated
association, or other form of legal entity, whose ownership interests (whether
as shareholder, member, partner, or other) are not publicly traded on a
nationally recognized securities exchange, my sale, transfer, assignment,
hypothecation, gift, or other change, which, whether directly or indirectly,
results in a different person or entity: (i) possessing in excess of twenty-five
percent (25%) of the legal or beneficial ownership of Tenant; (ii) gaining
voting and/or management control of Tenant; and/or (iii) owning, possessing,
and/or claiming a security interest in, all or substantially all of the assets
of Tenant; as well as any merger, consolidation, or reorganization involving Ten
ant (collectively "Change in Ownership Interest"), shall be deemed an assignment
26
within the meaning of this section. As a condition to Landlord granting its
consent to any proposed Change of Ownership Interest relating to Tenant,
Landlord shall have the right, but not the obligation, in Landlord's sole and
absolute determination, by providing written notice thereof to Tenant, to adjust
the Minimum Monthly Rent payable under this Lease to the then applicable fair
market rent for the Leased Premises. In determining fair market rent. Landlord
shall consider the highest and best use for the Leased Premises, without regard
to any limitation upon the use of the Leased Premises specified in this Lease.
10.4 ASSUMPTION AGREEMENT. As a condition to Landlord's consent to any
Transfer of Tenant's interest in this Lease or the Leased Premises, Tenant and
the Transferee, shall each execute a written Assumption Agreement, in a form
approved by Landlord, which Assumption Agreement shall include a provision under
which the Transferee expressly assumes all of the obligations of Tenant under
this Lease, and that the Transferee shall be, and remain, jointly and severally
liable with Tenant for the performance of all conditions, covenants, and
obligations under, this Lease commencing on the effective date of the Transfer
of Tenant's interest in this Lease. Landlord shall be entitled to recover its
reasonable costs, including, without limitation, attorneys' fees in processing
any such request for consent to transfer. Upon the occurrence of an event of
default under this Lease, Landlord shall have the right, but not the obligation,
to collect and enjoy all rents and other sums of money payable under any
sublease of any of the Leased Premises, and Tenant hereby irrevocably and
unconditionally assigns such rents and money to Landlord, which assignment may
be exercised upon and after (but not before) the occurrence of an event of
default.
10.5 MONTHLY BONUS VALUE. It is the intention of the parties hereto
that this Lease shall confer upon Tenant only the right to use and occupy the
Leased Premises, and to exercise such other rights as are conferred upon Tenant
by this Lease, The parties agree that this Lease is not intended to have a
"Bonus Value", as defined below, nor is this Lease intended to serve as a
vehicle whereby Tenant may profit by a future Transfer of this Lease, or from
the right to use or occupy the Leased Premises as a result of any favorable
terms contained herein or any future changes in the market for leased space in
the geographical region `wherein the Leased Premises are located. Each month
following any such Transfer, Tenant shall pay to Landlord, as Additional Rent,
an amount equal to fifty percent (50%) of any Bonus Value that may attach to
this Lease during such month (the "Monthly Bonus Value"). For purposes of this
Lease, "Bonus Value" shall mean and refer to any and all amounts and/or other
consideration received by Tenant, however denominated, in excess of the rental
paid or payable by Tenant hereunder for the use and occupancy of the Leased
Premises, or any portion thereof, after amortizing the costs of subleasing on a
straight line basis, without interest, over the then remaining term of this
Lease. As used herein, "costs of subleasing" shall mean the actual amount paid
by Tenant in connection with any assignment or subletting for the following: (1)
brokerage and marketing fees; (2) legal fees; and (3) cost of sublease
improvements paid for by Tenant The amount of any Bonus Value shall be
determined on a dollars per square foot basis, by aggregating all subrents
received by Tenant and dividing such amount by the total number of square feet
of subleased space and subtracting from such amount the rent per square foot
payable by Tenant for such space.
10.6 LANDLORD'S RIGHT TO RECAPTURE SPACE. Notwithstanding anything to
the contrary set forth in this Lease, Landlord shall have the option, by giving
written notice thereof to Tenant within sixty (60) days after Landlord's receipt
of written notice from Tenant of Tenant's intention to assign or sublease all or
any portion of Tenant's interest in the Leased Premises and/or this Lease, to
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recapture all or any portion of the Leased Premises subject to such proposed
assignment or sublease. Such recapture shall cancel and terminate this Lease
with respect to the portion of the Leased Premises so recaptured until the last
day of the term of the proposed assignment or sublease. If this Lease shall be
canceled with respect to less than the entire Premises as the result of a
recapture of such space on the part of Landlord in accordance with this section.
during the period of such recapture, the Minimum Monthly Rent payable under this
Lease shall be proportionally reduced by an amount which shall be determined by
multiplying the then applicable Minimum Monthly Rent otherwise payable under
this Lease for the use and occupancy of the Premises by a ratio, the numerator
of which is the number of rentable square feet recaptured by Landlord in
accordance with this section and the denominator of which is the number of
rentable square feet comprising the Premises prior to such recapture. Except for
the rent reduction set forth in the previous sentence, this Lease shall
thereafter continue in full force and effect with respect to the reduced area of
the Premises, and upon request of either party, the parties shall execute an
amendment to this Lease providing written confirmation of the same.
10.7 PERMITTED TRANSFERS. Notwithstanding the foregoing, the consent of
Landlord shall not be required and Landlord shall have no right to recapture or
retake possession of the Premises in connection with any proposed assignment or
sublease, in which either of the following is true (the "Permitted Transfers"):
(i) after giving effect to such transfer, the original Tenant herein, in the
aggregate, shall be in occupancy of not less than fifty percent (50%) of the
floor area within the Building; or (ii) the proposed transfer is a true
collocation agreement, pursuant to which Tenant provides facilities and
telecommunications equipment to internet service providers and telecommunication
providers for the provision of telecommunication services to end users, provided
such internet service providers and telecommunication providers do not regularly
have personnel within the Leased Premises that is inconsistent with that which
is commercially reasonable within the collocation industry ("Colocation
Agreement"): provided that each of the following is also true: (a) Tenant is not
in default under this Lease beyond applicable cure periods; (b) the transferee
operates its business in the Leased Premises for the uses described in this
Lease and no other purpose; and (c) in no event shall any such transfer release
or relieve Tenant from any of its obligations under this Lease. Except for a
Colocation Agreements as defined above, Tenant shall provide Landlord with
written notice of any Permitted Transfer. Notwithstanding any other provision in
this section, Landlord shall not be entitled to any Bonus Value or other
consideration received by Tenant arising out of any Colocation Agreement.
10.8 MERGER/CONSOLIDATION/REORGANIZATION. Notwithstanding anything to
the contrary contained in this Lease: (i) Tenant shall not be obligated to pay
to Landlord any Bonus Value or other consideration received by Tenant; (ii)
Landlord shall have no right to recapture or retake possession of the Leased
Premises; (iii) no "option" (including the option to extend the term of this
Lease as set forth in Section 1.4 above) or other right of original Tenant
hereunder shall terminate or otherwise be affected, and (iv) the consent of
Landlord shall not be required, with respect to any proposed assignment or
sublease of all or any portion of the Leased Premises or this Lease to any
successor of Tenant by merger, consolidation or reorganization; provided: (a)
Tenant is not in default under this Lease beyond applicable cure periods; (b)
the continuing or surviving entity shall own all or substantially all of the
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assets of Tenant and shall have a net worth which is at least equal to the
Tenant's net worth at the date of the Transfer; (c) such proposed transferee
operates the business in the Leased Premises for the use described in this Lease
and no other purpose; and (d) in no event shall any Transfer release or relieve
Tenant from any of its obligations under this Lease. Tenant shall give Landlord
written notice of any such transfer. For the purpose of this Lease, sale of
Tenant's capital stock through any public exchange or issuances for purposes of
raising financing shall not be deemed an assignment, subletting, or any other
transfer of the Lease or the Leased Premises.
ARTICLE 11
DEFAULT
11.1 DEFAULT DESCRIBED. The occurrence of any of the following shall
constitute a material breach of this Lease and a default by Tenant: (i) Tenant
fails to pay Minimum Monthly Rent, `Additional Rent or any other sums as and
when due hereunder, where such failure continues for three (3) days after
written notice thereof by Landlord to Tenant; provided, however, that any such
notice shall be in lieu of, and not in addition to, any notice required under
Section 1161, et. seq. of the California Code of Civil Procedure or any
successor statute thereto or similar statute hereinafter enacted; (ii)
abandonment of the Leased Premises; (iii) assignment, encumbrance or subletting
in violation of the provisions hereof, or waste or nuisance or an act, omission
or condition prohibited hereunder at the Leased Premises or use of the Leased
Premises for an unlawful purpose or failure to perform any provision of this
Lease which cannot, after such failure, be performed; (iv) Tenant's failure to
vacate and deliver possession of the Leased Premises upon the expiration or
termination of this Lease as provided for herein; (v) any change in the use of
the Leased Premises by Tenant; (vi) failure to purchase and maintain policies of
insurance required to be carried by Tenant; or (vii) Tenant's failure to perform
timely any other provision of this Lease, which performance shall be deemed
timely, where no time period has been specified elsewhere in this Lease, if
completed within thirty (30) days, provided that if such default cannot
reasonably be cured within thirty (30) days, Tenant shall be excused from its
default of this Lease if Tenant commences to cure the default immediately upon
receipt of written notice from Landlord to do so and continuously, diligently,
and in good faith accomplishes such cure within a reasonable time thereafter.
11.2 LANDLORD'S REMEDIES. Landlord shall have the remedies set forth in
this Lease upon any event of default by Tenant hereunder. These remedies are not
exclusive; they are cumulative in addition to any remedies now or later allowed
by law including but not limited to the unlawful detainer proceedings authorized
by Code of Civil Procedure Sections 1161, et seq., equity or agreement of the
parties.
11.3 TENANT'S RIGHT TO POSSESSION NOT TERMINATED. Landlord has the
remedy described in California Civil Code Section 1951.4 (lessor may continue
lease in effect after lessee's breach and abandonment and recover rent as it
becomes due, if lessee has right to sublet or assign, subject only to reasonable
limitations). In connection with the foregoing. Landlord may elect to continue
this Lease in full force and effect, in which case Landlord shall have the right
to collect rent and other sums when due. During the period Tenant is in default,
Landlord may enter the Leased Premises and relet them, or any part of them, to
third parties for Tenant's account and alter or install locks and other security
devices at the Leased Premises, Tenant shall be liable immediately to Landlord
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for all reasonable costs Landlord incurs in reletting the Leased Premises.
Reletting may be for a period equal to, shorter or longer than the remaining
term of this Lease and rent received by Landlord shall he applied to (1) first,
any indebtedness from Tenant to Landlord other than rent due from Tenant; (ii)
second, all reasonable costs incurred by Landlord in reletting; (iii) third,
rent due and unpaid under this Lease. After deducting the payments referred to
in this section, any sum remaining from the rent Landlord receives from
reletting shall be held by Landlord and applied in payment of future rent and
other amounts as rent and such amounts become due tinder this Lease. In no event
shall Tenant be entitled to any excess rent received by Landlord.
11.4 TERMINATION OF TENANT'S RIGHT TO POSSESSION. Landlord can
terminate Tenant's right to possession of the Leased Premises or this Lease or
both at any time after a default by Tenant by giving notice to Tenant of
Landlord's election to do so and such termination shall be effective on the date
set forth in such notice. Acts of maintenance, efforts to relet the Leased
Premises, or the appointment of a receiver on Landlord's initiative to protect
Landlord's interest under this Lease shall not constitute a termination of
Tenant's right to possession. No act by Landlord other than giving notice to
Tenant shall terminate this Lease. On termination of this Lease, Landlord has
the right to recover from Tenant: (i) the worth, at the time of the award, of
the unpaid rent that had been earned at the time of termination of this Lease;
(ii) the worth, at the time of the award, of the amount by which the unpaid rent
that would have been earned after the date of termination of this Lease until
the time of award exceeds the amount of the loss of rent that Tenant proves
could have been reasonably avoided; (iii) the worth, at the time of the award,
of the amount by which the unpaid rent for the balance of the term after the
time of award exceeds the amount of the loss of rent that Tenant proves could
have been reasonably avoided; (iv) any other amount, and court costs, reasonably
necessary to compensate Landlord for all detriment proximately caused by
Tenant's default, or which in the ordinary course of things would be likely to
result therefrom, including, without limitation, the unamortized portion of
brokers' fees or commissions and reasonable attorneys' fees incurred by Landlord
in connection with the negotiation and execution of the Lease with Tenant; and
(vi "the worth, at the time of the award," as used in (i) and (ii) above, is to
be computed by allowing interest at the Default Interest Rate. "The worth, at
the time of the award," as referred to in (iii) , is to be computed by
discounting the amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of the award, plus one percent (1%).
11.5 LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT. If Tenant fails to
immediately commence and diligently and continuously prosecute to completion
performance of any of its obligations hereunder after notice by Landlord or any
governmental authority that it do so, and after expiration of the applicable
cure period, then Landlord, in addition to all other remedies available
hereunder or by law and equity, and without waiving any alternative remedies,
including the right to declare Tenant in breach and default of this Lease, may
perform the same, and in that event, Tenant shall reimburse Landlord, upon
demand, as Additional Rent, for all reasonable costs Landlord incurs in taking
steps to perform such obligations regardless of which party actually completes
the same, together with interest from the date Landlord incurs the cost until
paid at the Default Interest Rate.
11.6 WAIVER OF REDEMPTION. Tenant hereby expressly waives any and all
rights to recover or regain possession of the Leased Premises or to reinstate or
redeem this Lease to which it may be entitled by or under any present or future
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law or decisions including without limitation, Sections 1174 and 1179 of the
California Code of Civil Procedure.
11.7 ALL SUMS DUE AND PAYABLE AS RENT. Tenant shall also pay as
Additional Rent all sums, impositions, costs, expenses, and other payments which
Tenant in any of the provisions of this Lease assumes or agrees to pay, and, in
case of any nonpayment thereof Landlord shall have, in addition to all other
rights and remedies, all the rights and remedies provided for in this Lease or
by law in the case of nonpayment of Minimum Monthly Rent.
11.8 LANDLORD DEFAULT. For purposes of this Lease, Landlord shall not
be deemed in default hereunder unless and until Tenant shall first deliver to
Landlord thirty (30) days' prior written notice, and Landlord shall fail to cure
said default within said thirty (30) day period, or in the event Landlord shall
reasonably requite in excess of thirty (30) days to cure said default, shall
fail to commence said cure with said thirty (30) day period, and thereafter
diligently to prosecute the same to completion. In the event that Landlord fails
to perform any of its obligations within the period described in the preceding
sentence, Tenant, upon written notice to Landlord, may perform any such
obligation of Landlord's, and Landlord shall be obligated to reimburse Tenant
for its reasonable cost of so doing, promptly upon demand from Tenant for same.
ARTICLE 12
LANDLORD'S ENTRY ON PREMISES
12.1 RIGHT OF ENTRY. Landlord and its authorized representatives, (to
the extent Tenant reasonably requests, Landlord and its authorized
representatives shall not enter the Leased Premises unless accompanied by an
employee or representative of Tenant) shall have the right and Tenant shall
permit them to enter the Leased Premises at all reasonable times and (with
respect to (ii) , (iii) , and (iv) below only) upon reasonable notice of at
least twenty-four (24) hours (i) to determine whether the Leased Premises are in
good condition and whether Tenant is complying with its obligations under this
Lease, (ii) to perform any services (including, if applicable, janitorial
services), do any necessary or appropriate maintenance, or make any restoration
to the Leased Premises and/or the Building that Landlord has under the Lease the
right or obligation to perform, (iii) to serve, post, or keep posted any notices
required or allowed under the provisions of this Lease, (iv) to show the Leased
Premises to prospective brokers, agents, buyers, tenants, or persons interested
in an exchange, at any time during the term, provided that, notwithstanding the
foregoing, Landlord may enter the Leased Premises at any time, unaccompanied, in
an emergency to take action to preserve be Leased Premises or the occupants of
same.
12.2 EXCULPATION. Except to the extent of the gross negligence or
willful misconduct of Landlord or Landlord's authorized representatives,
Landlord shall not be liable in any manner for any inconvenience, disturbance,
loss of business, nuisance, or other damage arising out of Landlord's entry on
the Leased Premises as provided in this article, nor shall any such entry
constitute a constructive eviction or in any way affect Tenant's obligations
under this Lease or entitle Tenant to an abatement or reduction of rent.
Landlord shall use reasonable efforts in the exercise of its right of entry
pursuant to this article in such a manner as to minimize interference with the
conduct of Tenant's business.
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ARTICLE 13
SUBORDINATION; ESTOPPEL
13.1 SUBORDINATION. This Lease, at Landlord's option, shall be
subordinate to any ground lease, mortgage, deed of trust, or any other
hypothecation for security hereafter placed upon the Leased Premises and to any
and all advances made upon the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof
Notwithstanding such subordination, Tenant's right to quiet possession of the
Leased Premises shall not be disturbed so long as Tenant is not in default
hereunder.
13.2 PRIOR LIEN. If any mortgagee, trustee or ground lessor shall elect
to have this Lease prior to the lien of its mortgage, deed of trust or ground
lease, and shall give written notice thereof to Tenant, this Lease shall be
deemed prior to such mortgage, deed of trust or ground lease, whether this Lease
is dated prior or subsequent to the date of said mortgage, deed of trust or
ground lease on the date of recording thereof.
13.3 DOCUMENTATION. Tenant agrees to execute any documents required to
effectuate any such subordination or make this Lease prior to the lien of any
such mortgage, deed of trust or ground lease, as the case may be, and failing to
do so within 10 days after written demand, does hereby make, constitute and
irrevocably appoint Landlord as Tenant's attorney in fact and in Tenant's name,
place and stead to do so.
13.4 ATTORNMENT. Tenant shall attorn to any purchaser at any
foreclosure sale, or to any grantee or transferee designated in any deed given
in lieu of foreclosure. Tenant shall execute the written agreement and any other
documents reasonably required by such purchaser, grantee or transferee to
accomplish the purposes of this article,
13.5 ESTOPPEL CERTIFICATES. Tenant or Landlord, within five (5)
business days of each request by the other to do so, shall:
13.5.1 Execute and deliver to the other estoppel
certificate(s), (1) certifying that this Lease is unmodified and in full force
and effect or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and effect and the
date to which the rent and other charges are paid in advance, if any, (ii)
acknowledging that there are not, to its knowledge, any uncured defaults on the
part of the other party hereunder, or stating the nature of defaults if such
exist, and (iii) evidencing the status of the Lease, as may be required either
by a prospective or actual lender making a loan to Landlord or Tenant or a
purchaser of the Leased Premises from Landlord or successor Landlord with
respect to some other interest in the Leased Premises or Lease;
13.5.2 (Tenant only): Deliver to Landlord its most currently
available financial statements with an opinion of a certified public accountant,
including a balance sheet and a profit and loss statement for the most recent
prior year all prepared in accordance with generally accepted accounting
principles consistently applied.
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13.5.3 Either party's failure to perform timely each of its
obligations under this section shall constitute a material breach of this Lease,
entitling the other party to exercise all of its remedies for same.
13.6 NON-DISTURBANCE FROM LANDLORD'S CURRENT LENDER. Landlord shall use
its commercially reasonable efforts to obtain a non-disturbance agreement for
Tenant from the holder of any mortgage or deed of trust that existed prior the
Commencement Date. Tenant shall pay for all costs arising out of such
non-disturbance agreement within ten (10) days of written demand by Landlord.
Tenant acknowledges and accepts that Landlord has no control over any required
processing fees arising out of such a request or the mortgagee's or holder of
the deed of trust's failure to respond to such a request, and Tenant
acknowledges that such fees may be subject to change at any time without notice
to Landlord or Tenant. In connection with the foregoing, Landlord shall not be
liable to Tenant for any costs, damages or liability arising out of any
mortgagee's or holder of the deed of trust's refusal to grant a non-disturbance
agreement.
ARTICLE 14
NOTICE
Except as otherwise required by law, and as provided in the Work
Letter, any and all notices or other communications required or permitted by
this Lease r by law to be served on or given to either party hereto by the other
party hereto shall be in writing and shall be deemed duly served and given when
personally delivered to the party to whom it is directed or to any managing
employee or officer of such party, or, in lieu of such personal service, when
sent by Certified United States Mail, Return Receipt Requested, with all postage
charges thereon fully prepaid, addressed to Tenant at the Leased Premises, or to
Landlord at the address set forth in the introductory paragraph of this Lease.
Use of the mail shall extend the time in which action must be taken by five (5)
days. Either party, may change its address for purposes of this section by
giving written notice of such change to the other party in the manner provided
in this section.
ARTICLE 15
WAIVER
15.1 DELAY OR OMISSION. No delay or omission in the exercise of any
right or remedy of either party hereto on any default shall impair such a right
or remedy or be construed as a waiver of any such default or of any subsequent
default. The receipt and acceptance by Landlord of rent shall not constitute a
waiver of any default known or unknown to Landlord; no payment by Tenant or
receipt by Landlord of a lesser amount than the monthly rent or other sum due
hereunder, nor any endorsement or statement on any check or any letter
accompanying any check or payment as rent or other sum due hereunder shall be
deemed an accord and satisfaction and Landlord may accept such check or payment
without prejudice to Landlord's right to recover the balance of such rent or
other sum or pursue any other remedy provided for in this Lease or otherwise. No
act or conduct of Landlord, including, without limitation, the acceptance of the
keys to the Leased Premises, shall constitute an acceptance by Landlord of the
surrender of the Leased Premises by Tenant before the expiration of the Term.
Landlord's consent to or approval of any act by Tenant requiring Landlord's
consent or approval shall not be deemed to waive or render unnecessary
Landlord's consent to or approval of any subsequent act by Tenant.
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ARTICLE 16
ENFORCEMENT
16.1 CHOICE OF LAW AND VENUE. This Lease shall be construed and
interpreted in accordance with the laws of the State of California. Any dispute
or Litigation brought to enforce or interpret the provisions of this Lease shall
be commenced in a court or other appropriate forum for the resolution of such
disputes located within the County of Santa Clara of the State of California.
16.2 WAIVER OF TRIAL BY JURY. In the interest of saving time and
expense, Landlord and Tenant do each hereby consent to trial without a jury in
any action, proceeding or counterclaim brought by either of the parties hereto
against the other or their successors in respect of any matter arising out of or
in connection with this Lease, the relationship of Landlord and Tenant, Tenant's
use or occupancy of the Leased Premises, and/or any claim for injury or damage,
or any emergency or statutory remedy. If, as the result of a default on the part
of Tenant under this Lease, Landlord commences an action in unlawful detainer or
other summary proceeding or action to gain possession or restitution of the
Leased Premises, Tenant shall not interpose any counterclaim of any nature or
description (unless such counterclaim shall be mandatory) in any such proceeding
or action, but shall be relegated to an independent action at law.
16.3 ATTORNEYS' FEES. In the event any action or proceeding in law or
equity or any arbitration proceeding be instituted by either party hereto for
damages or possession of the Leased Premises or both, for an alleged breach of
any obligation under this Lease to recover rent, to terminate the tenancy of
Tenant at the Leased Premises, or to enforce, protect, or establish any right or
remedy, the prevailing party (by judgment, award or settlement) in such action
or proceeding shall be entitled to recover as part of such action or proceeding
such reasonable attorneys' fees, expert witness fees, and court and/or
arbitration costs as may be fixed by the court, jury or arbitrator(s).
ARTICLE 17
SURRENDER OF POSSESSION
17.1 SURRENDER OF POSSESSION. Immediately upon the Expiration Date or
earlier termination of this Lease, Tenant, except as set forth in the next
sentence, shall: (i) vacate, surrender, and deliver to Landlord possession of
the Leased Premises, broom clean, with all improvements, fixtures, and equipment
therein, in good working order and in the same condition as they were in on the
Commencement Date or when installed, if later (reasonable wear and tear and
casualty damage excepted), free from all of Tenant's personal property, and free
from any toxic, hazardous, or waste materials of any nature whatsoever; and (ii)
repair all damage caused by and perform all restoration made necessary by the
removal of any alterations or Tenant's personal property. Notwithstanding the
foregoing, Landlord shall have the right to require Tenant, at Tenant's sole
cost and expense, to restore the Leased Premises to their condition on the
Commencement Date, reasonable wear and tear excepted, by providing written
notice thereof to Tenant not later than thirty (30) days after the Expiration
Date or earlier termination of this Lease.
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17.2 FAILURE TO SURRENDER POSSESSION. If Tenant fails to surrender
possession of the Leased Premises to Landlord on expiration or earlier
termination of this Lease, Tenant shall indemnify, defend, and hold Landlord
harmless from all claims, liabilities and damages resulting from. Tenant's
failure to vacate and deliver possession of the Leased Premises, including,
without limitation, claims made by a succeeding tenant resulting from Tenant's
failure to vacate and deliver possession of the Leased Premises and rental loss
which Landlord suffers.
17.3 FREE OF LIENS. Tenant shall vacate and deliver possession of the
Leased Premises free and clear of all liens, charges, or encumbrances thereon
resulting from any act or omission on Tenant's part and free and clear of all
violations of applicable laws of any federal, state, municipal, or other agency
or authority, and shall indemnify, defend, and hold Landlord harmless against
any and all claims, loss, liability, expense, damage, costs, and attorney's fees
arising out of Tenant's failure to do so.
ARTICLE 18
GENERAL CONDITIONS
18.1 TIME OF ESSENCE. Time is of the essence of each provision of this
Lease.
18.2 CORPORATE AUTHORITY. On or prior to the date on which Tenant
executes this Lease, Tenant shall deliver to Landlord a corporate resolution
and/or an incumbency certificate in form and substance reasonably satisfactory
to Landlord authorizing Tenant to enter into this Lease and evidencing the
signatory's authority to execute this Lease on behalf of Tenant.
18.3 SUCCESSORS. This Lease shall be binding on and inure to the
benefit of the parties and their successors, except as specifically provided in
Article 10.
18.4 LANDLORD LIABILITY. Tenant agrees that if Landlord shall fail to
perform any covenant or obligation on its part to be performed, and as a
consequence thereof, or if on any other claim by Tenant concerning the Leased
Premises or this Lease, Tenant shall recover a money judgment against Landlord,
then such judgment shall be satisfied only out of Landlord's estate in the
Leased Premises, and Landlord shall have no personal or further liability
whatsoever with respect to any such default or judgment.
18.5 LANDLORD. The term "Landlord" as used in this Lease, so far as the
covenants or obligations on the part of Landlord are concerned, shall be limited
to mean and include only the owner of the fee title of the Leased Premises at
the time in question, and in the event of any transfer or transfers of the title
of such fee, the Landlord herein named (and in case of any subsequent transfers
or conveyances, the then grantor) shall after tae date of such transfer or
conveyance be automatically freed and relieved of all liability with respect to
performance of any covenants or obligations on the part of the Landlord
contained in this Lease thereafter to be performed, provided. (i) that the new
owner expressly assumes such obligations in writing, and (ii) that this section
shall not apply to covenants or obligations with respect to any funds in the
hands of Landlord or the then grantor at the time of such transfer, in which
Tenant has an interest, unless the same shall be turned over or credited to the
grantee.
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18.6 FORCE MAJEURE. Any prevention, delay, or stoppage due to strikes,
lockouts, labor disputes, acts of God or Nature, inability to obtain labor or
materials or reasonable substitutes therefor, governmental restrictions,
governmental regulations, governmental controls, judicial order, enemy or
hostile governmental action, civil commotion, fire or other casualty, and other
causes beyond the reasonable control of the party obligated to perform, shall
excuse the performance by such party for a period equal to any such prevention,
delay or stoppage, except the obligations imposed on Tenant with regard to the
obligation to pay Minimum Monthly Rent, Additional Rent, and any other charges,
and the restrictions upon use set forth in Article 3.
18.7 SECURITY MEASURES. Tenant hereby acknowledges that Landlord does
not provide security guards or other security measures, and that Landlord has no
obligation of any nature whatsoever to provide the same, and that,
notwithstanding any other provision of this Lease, Landlord shall have no
obligation of any nature whatsoever to install, repair and/or maintain an alarm
system within the Building and/or the Leased Premises, and Landlord shall have
no responsibility for the protection and safety of Tenant, and/or Tenant's
employees, agents, and invitees, from acts of third parties.
18.8 MISCELLANEOUS. This Lease contains all the agreements of the
parties and cannot be amended or modified except by written agreement signed b'!
the party against whom enforcement of the amendment or modification is sought.
All provisions, whether covenants or conditions, creating obligations on the
part of Tenant shall be deemed to be both covenants and conditions. The article
and section headings used in this Lease are for the purpose of convenience only;
they shall not be construed to limit or to extend the meaning of any part of
this Lease. This is a negotiated Lease. Should any provision of this Lease be
found to create an ambiguity, Tenant waives any tight it may have to construe
the ambiguity against Landlord on the basis that Landlord provided the Lease
form or the particular provision. When required by the context of this Lease,
the neuter shall include the masculine and feminine and the singular shall
include the plural. The unenforceability, invalidity, or illegality of any
provision except those requiring payment of rent or any other sum to Landlord
shall not render the other provisions unenforceable, invalid, or illegal. This
Lease may be executed in two or more identical counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
18.9 EFFECT OF DELIVERY OF THIS LEASE. Landlord has delivered a draft
of this Lease to Tenant for Tenant's review only. The delivery hereof is not
intended to, and shall not construed to, constitute an offer from Landlord to
Tenant or the granting of an option to Tenant to lease. This Lease shall only be
effective when: (i) a copy has been duly executed by both Landlord and Tenant;
(ii) a fully executed original has been delivered to and accepted by Landlord;
and (iii) the terms and conditions of this Lease have been approved by
Landlord's Lender(s), if such approval is required by the terms of any
agreements, deeds of trust, mortgages, or other liens in effect between Landlord
and its lender(s).
18.10 BROKERS. Landlord and Tenant each represents and warrants to the
other that, with the sole exceptions of Dave Evans and Steve Zamudio of Colliers
International, who represent both Landlord and Tenant in this transaction
("Broker"), neither party has dealt with any agent or broker in this
transaction. The parties acknowledge that Broker is not party to this Lease or a
36
third. party beneficiary hereof Landlord and Tenant each further represents and
warrants to the other that it has not promised a commission, finder's fee, or
advisory fee to any party, including, but not limited to Broker, arising out of
any extension or other modification of this Lease. Except with respect to
Broker, who shall be paid a commission by Landlord pursuant to a separate Lease
Commission Agreement, each party indemnifies, defends, and holds the other
harmless from any claim for commission, finder's fee, or advisory fee arising
out of the actions of such party in this transaction.
18.11 GUARANTEE. The duties and obligations of Tenant under the terms
of this Lease shall be guaranteed by Terremark Worldwide, Inc. a Delaware
corporation (the "Guarantor"). This Lease is contingent upon said Guarantor
executing the Net Premises Lease Guaranty in the form attached hereto as Exhibit
"D" and incorporated by reference herein
18.12 RIGHT OF FIRST OFFER. If Landlord decides to sell all of the
Leased Premises, then Landlord shall first offer to sell the Leased Premises to
Tenant, pursuant to the terms of this Section 18.12. Tenant will have the right
to purchase the Leased Premises at the price and terms listed in Landlord's
offer to sell the Leased Premises (the "Landlord's Offer"). Tenant shall have
ten (10) days from the receipt of Landlord's Offer to accept such offer. If
Tenant accepts Landlord's Offer, Tenant shall have sixty days from the receipt
of Landlord's Offer to complete the purchase of the Leased Premises. If Tenant
does not accept Landlord's Offer within the said ten (10) day period, or fails
to complete the purchase of the Leased Premises within the said sixty (60) day
period, Landlord's Offer or the right to purchase as described above shall
terminate and Landlord shall be free to sell the Leased Premises to anyone, on
terms no less favorable than those in Landlord's Offer, without any obligation
to provide Tenant with a further right of first offer to purchase the Leased
Premises, for a period of twelve (12) months. If the Landlord shall not have
sold the Leased Premises within such twelve (12) month period, then Landlord
shall not have the right to sell the Leased Premises after such date, unless
Landlord complies with the terms and obligations just described in this section.
The rights arid obligations just described apply only to the originally named
Tenant, unless Landlord, in its sole discretion, agrees otherwise in writing.
All rights of Tenant tinder the provisions of this section shall terminate and
be of no further force or effect if during the term of the Lease, Tenant
defaults under any of the provisions of the Lease, unless Landlord, in its sole
discretion agrees otherwise in writing. Notwithstanding the foregoing. Landlord
shall be able to transfer the Leased Premises to the following without having to
first offer to sell the Leased Premises to Tenant: (i) any member of Landlord's
immediate family (for purposes of this section, "Landlord s immediate family"
shall include all spouses and children (including, natural born, adopted, and
step children), the spouses of said children, and their respective lineal
descendants); (ii) any refinancing of the Leased Premises. Land or Building;
(iii) any transfer to a subsidiary. affiliate. division or corporation
controlling, controlled by or under common control with Landlord; or (iv) to a
successor corporation related to Landlord by merger, consolidation,
nonbankruptcy reorganization, or government action.
18.13 LEASEHOLD MORTGAGE.
18.13.1 TENANT'S RIGHT TO MORTGAGE LEASEHOLD. Landlord shall
not be obligated to subordinate Landlord's fee title to the Leased Premises to
any mortgage, deed of trust, or other security instrument. Tenant shall have the
right from time to time to subject the leasehold estate and any or all
37
improvements to a mortgage as security for a loan or other obligation of Tenant,
provided that: (a) the mortgage and all rights acquired under it shall be
subject to each and all of the covenants, conditions and restrictions stated in
this Lease and to all rights and interests of Landlord except as otherwise
provided in this Lease; (b) Tenant shall deliver to Landlord a true copy of the
note and mortgage and other loan documents; (c) Tenant shall not then be in
default under this Lease; and (d) there shall be no personal liability imposed
on Landlord for repayment of the loan secured by said mortgage nor shall
Landlord incur any other liability in connection with the note and mortgage or
other loan documents in connection with the loan.
18.13.2 LIMIT ON MORTGAGEE'S LIABILITY. The leasehold
mortgagee shall not be liable to perform Tenant's obligations under this Lease
until the mortgagee acquires Tenant's rights by foreclosure. After acquiring
Tenant's rights by foreclosure, mortgagee shall be liable to perform Tenant's
obligations only until mortgagee assigns or transfers the leasehold as permitted
by this Lease. Landlord does not, however, waive its right to exercise any right
or remedy available to Landlord under this Lease, including, without limitation,
the right to terminate this Lease upon Tenant's default.
18.14 RECORDATION OF MEMORANDUM OF LEASE. The parties shall execute a
memorandum of this Lease in form and substance mutually acceptable to the
parties and sufficient to give constructive notice of this Lease to subsequent
purchasers and mortgages in a form similar to Exhibit "E", which is attached
hereto and incorporated by reference herein, upon the condition that Tenant
shall provide Landlord with a quit claim deed to the Leased Premises with an
effective date of the earlier of the Expiration Date or the earlier termination
of this Lease.
Executed on the Reference Date first set forth above.
LANDLORD: TENANT:
Rainbow Property Management, LLC, Coloconnection, Inc.,
a California limited liability company a Florida corporation
/s/ DAN BURFEIND /s/ BRIAN K. GOODKIND
- ------------------------------------ ----------------------------------
Dan Burfeind, Manager By: BRIAN K. GOODKIND
-------------------------------
Its: EXECUTIVE VICE PRESIDENT
---------------------------
38
Schedule of Exhibits to be Attached:
Exhibit "A": Description of the Leased Premises
Exhibit "B": The Rules and Regulations
Exhibit "C": Tenant Work Letter
Exhibit "D": Guarantee
Exhibit "E": Memorandum of Lease
Exhibit "F": Environmental Consulting Agreement
Exhibit "G": Form Letter of Credit
39
EXHIBIT "A"
Description: The land referred to herein is situated in the State of California,
County of SANTA CLARA, CITY OF SANTA CLARA, and is described as follows:
PARCEL 1:
ALL OF PARCEL 2A, AS SHOWN UPON THAT CERTAIN PARCEL MAP ENTITLED, "BEING A
PORTION OF TRACT NO. 2791 (LOTS 2 & 3) AND A PORTION OF LOT 5 - MAP OF THE
ARQUES SUBDIVISION IN THE CITY OF SANTA CLARA, CALIFORNIA", WHICH MAP WAS FILED
FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF
CALIFORNIA, ON APRIL 10, 1970 IN BOOK 266 OF MAPS, PAGE 32.
PARCEL 2:
AN EASEMENT FOR LIGHT AND AIR OVER AND ACROSS THE PARCEL OF LAND HEREINAFTER
DESCRIBED TO BE USED IN COMMON WITH THE RECORD OWNER (AS SUCH OWNER SHALL EXIST
FROM TIME TO TIME) OF THE LAND ADJOINING TO THE SOUTH A STRIP OF LAND OF A
UNIFORM 30.00 FEET LYING NORTHERLY OF THE FOLLOWING DESCRIBED LINE: BEGINNING AT
A POINT IN THE WESTERLY LINE OF CORVIN DRIVE AT THE INTERSECTION THEREOF WITH
THE NORTHERLY LINE OF THE HEREINBEFORE DESCRIBED PARCEL 2A; RUNNING THENCE ALONG
SAID NORTHERLY LINE SOUTH 89(degree) 29' WEST 310 FEET. SAID EASEMENT AREA SHALL
AT ALL TIMES TO BE UNOBSTRUCTED FROM GROUND TO SKY BY THE CONSTRUCTION,
INSTALLATION, OR MAINTENANCE OF ANY BUILDING OP STRUCTURE.
SAID ABOVE EASEMENT IS CREATED BY EASEMENT AGREEMENT RECORDED MARCH 30, 1998,
INSTRUMENT 14115469, SANTA CLARA COUNTY RECORDS.
PARCEL 3:
AN EASEMENT FOR INSTALLATION AND MAINTENANCE OF STORM DRAINAGE FACILITIES OVER
AND ACROSS THE PARCEL OF LAND HEREINAFTER DESCRIBED, TO BE USED IN COMMON WITH
THE RECORD OWNER (AS SUCH OWNER SHALL EXIST FROM TIME TO TIME) OF THE LAND
ADJOINING TO THE SOUTH A STRIP OF LAND OF A UNIFORM WIDTH OF 10.00 FEET, THE
CENTER LINE OF WHICH IS DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE
NORTHERLY LINE OF THE HEREINBEFORE DESCRIBED PARCEL 2A: DISTANCE THEREIN SOUTH
890 29' WEST 52.50 FEET FROM THE NORTHEASTERLY CORNER THEREOF; RUNNING THENCE
FROM SAID LINE NORTH 450 EAST 14.14 FEET; THENCE NORTH 30.00 FEET AND NORTH
67(degree) 31' 24 EAST 46.41 FEET TO THE WESTERLY LINE OF CORVIN DRIVE.
SAID ABOVE EASEMENT IS CREATED BY EASEMENT AGREEMENT RECORDED MARCH 30. 1998,
INSTRUMENT 14115469, SANTA CLARA COUNTY RECORDS.
40
PARCEL 4:
AN EASEMENT FOR THE PERMANENT, MUTUAL INGRESS AND EGRESS OVER A COMMON DRIVEWAY
TO SERVE BOTH PARCELS AND AS A COMMON STORM DRAINAGE AREA TO SERVE BOTH PARCELS,
DESCRIBED AS A STRIP OF LAND 25 FEET IN WIDTH AND 310 FEET IN LENGTH, THE
CENTERLINE OF SAID STRIP BEING THE LINE COMMON TO PARCEL 4A OF THAT PARCEL MAP
FILED FOR RECORD JULY 9, 1970 IN BOOK 270 OF MAPS AT PAGE 21, SANTA CLARA COUNTY
RECORDS, AND PARCEL 2A OF THAT PARCEL MAP FILED FOR RECORD APRIL 10, 1970 IN
BOOK 266 OF MAPS AT PAGE 32, SAID COUNTY RECORDS.
EXCEPTING THEREON THAT PORTION LYING WITHIN PARCEL ONE ABOVE.
ASSESSOR'S PARCEL NO.: 21 6-33-025
41
EXHIBIT B
RULES AND REGULATIONS
The following Rules and Regulations apply to and govern Tenant's use of
the Leased Premises, the Building and the Entire Property. Capitalized terms
have the meanings given in the' Lease. of which these Rules and Regulations are
a part. Tenant is responsible for all claims arising from any violation of the
Rules and Regulations by Tenant.
1. No awning or other projection may be attached to the outside
walls of the Leased Premises or the Building, without the
prior written consent of Landlord, which may be withheld in
Landlord's sole determination. In connection with the
foregoing, all windows visible from the exterior of the
Building shall be covered by Building Standard mini-blinds
selected by Landlord. which shall, at all times, be in the
fully lowered position.
2. No sign, lettering, picture, notice or advertisement which is
visible from the exterior of the Leased Premises or the
Building may be installed on or in the Leased Premises without
Landlord's prior written consent, and then only in such
manner, character and style as Landlord may have approved in
writing.
3. Tenant will not obstruct sidewalks, entrances, passages,
corridors, vestibules, halls, or stairways in and about the
Building. Tenant will not place objects against glass
partitions or doors or windows, which would be unsightly from
the exterior of the Building and will promptly remove any such
objects upon notice from Landlord.
4. Tenant will not create or allow obnoxious or harmful fumes,
odors, smoke or other discharges which may be offensive to
occupants of neighboring properties, or otherwise create any
nuisance.
5. The Leased Premises shall not be used for cooking (as opposed
to heating of food), lodging, sleeping or for any immoral or
illegal purpose.
6. Tenant will not make excessive noises, cause disturbances or
vibrations or use or operate any electrical or mechanical
devices or other equipment that emit excessive sound or other
waves or disturbances or which may be offensive to occupants
of adjacent properties, or that may unreasonably interfere
with the operation of any device, equipment, computer, video,
radio, television broadcasting or reception from or within the
Building or elsewhere.
7. Machines and mechanical equipment belonging to Tenant, which
cause noise or vibration that may be transmitted to the
structure of the Building or to any space therein to such a
degree as to be objectionable, shall be placed and maintained
by Tenant, at Tenant's expense, on vibration eliminators or
other devices sufficient to eliminate noise or vibration.
42
8. No dog or other animal or bird is allowed in the Building,
except for animals assisting the disabled.
9. Tenant will not waste electricity, water or air conditioning
and will ensure the most effective operation of the Building's
heating. air conditioning, ventilation and utility systems.
Tenant will not use any additional method of heating or air
conditioning (including without limitation fans or space
heaters) other than those approved in writing.
10. Tenant assumes full responsibility for protecting its space
from theft, robbery and pilferage, which includes keeping
valuable items locked up and doors locked and other means of
entry to the Leased Premises closed and secured after Building
Hours and at other times the Leased Premises are not in use.
11. Tenant will provide Landlord with a duplicate key and/or lock
combination in order for Landlord to be able to gain access to
all areas within the Leased Premises and the Building except
for safes and confidential files. Tenant will surrender all
keys to the Leased Premises and to the parking facilities and
shall explain to Landlord all combination locks on safest
cabinets and vaults.
12. Tenant will not bring inflammables, such as gasoline,
kerosene, naphtha and benzene, or explosives or any other
article of intrinsically dangerous nature into the Leased
Premises, or any portion thereof.
13. Tenant shall not bring any bicycles or other vehicles of any
kind into the Building, except for appropriate vehicles
necessary for assisting the disabled; provided, however. that
Tenant shall be allowed to bring some bicycles in the Building
upon Landlord's approval and subject to any reasonable rules
promulgated by Landlord pursuant to such request by Tenant.
14. If any carpeting or other flooring is installed by Tenant
using an adhesive, such adhesive will be an odorless,
releasable adhesive.
15. The water and wash closets, drinking fountains and other
plumbing fixtures will not be used for any purpose other than
those for which they were constructed, and no sweepings,
rubbish, rags, coffee grounds or other substances shall be
thrown therein.
16. Tenant will not overload any utilities serving the Leased
Premises.
17. All loading, unloading, receiving or delivery of goods,
supplies, furniture or other items will be made only through
entryway's provided for such purposes.
18. Landlord will in all cases have the right to specify the
proper position of any safe, equipment or other heavy article,
which shall only be used by Tenant in a manner which will not
interfere with or cause damage to the Leased Premises or the
Building. Tenant will not overload the floors or structure of
the Building.
43
19. Canvassing, soliciting, and peddling in or about the Leased
Premises is prohibited at all times and Tenant will cooperate
to prevent the same.
20. In case of invasion. mob, riot, public excitement, or other
commotion, Landlord reserves the right to limit or prevent
access to the Building during the continuance of the same by
closing the doors or taking other appropriate steps. Landlord
will in no case be liable for damages for any error or other
action taken with regard to the admission to or exclusion from
the Building of any person at any time.
21. Smoking is not permitted within the Leased Premises, except in
the smoking areas located outside of the Building, if any, as
designated and redesignated in writing from time. to time by
Landlord, in its sole, absolute and arbitrary discretion.
Except as set forth in the previous sentence, Tenant shall not
permit smoking anywhere within the Leased Premises. Including,
without limitation, the Building, sidewalks. entrances.
passages, corridors, halls. elevators and stairways of the
Building, other than the smoking areas, if any, designated in
writing by Landlord. All smoking materials must be disposed of
in ashtrays or other appropriate receptacles provided for that
purpose.
22. Landlord reserves the right to exclude or expel from the
Building. or the Land, or any portion thereof, any person who,
in Landlord's judgment, appears to be intoxicated or under the
influence of liquor or drugs or who is in violation of any of
the Rules and Regulations or any applicable governmental rules
or regulations.
23. Tenant shall store all its trash and garbage in proper
receptacles within the Leased Premises or in other facilities
provided for such purpose by Landlord. Tenant shall not place
in any trash box or receptacle any material, which cannot be
disposed of in the ordinary and customary manner of trash and
garbage disposal. All garbage and refuse disposal shall be
made in accordance with directions issued from time to time by
Landlord. Tenant will cooperate with any recycling program in
place from time to time at the Building.
24. Tenant will not use in the Leased Premises any hand truck
except those equipped with rubber tires and side guards or
such other material-handling equipment as Landlord may
approve.
25. Tenant will not use the name of the Building in connection
with or in promoting or advertising the business of Tenant
except as Tenant's address.
26. Tenant will comply with all safety, fire protection and
evacuation procedures and regulations established by Landlord
or any governmental agency.
27. No overnight or extended term parking (over two (2) business
days) or storage of vehicles is permitted, unless otherwise
approved by Landlord.
28. Parking is prohibited (a) in areas not striped for parking;
(b) in aisles; (c) where "no parking" signs are posted; (d) on
ramps; (e) in cross-hatched areas; (f) in loading areas; and
(g) in such other areas as may be designated by Landlord.
44
29. All responsibility for damage, loss or theft to vehicles and
the contents thereof is assumed by the person parking their
vehicle.
30. Tenant and/or each user of the parking areas may be required
to sign a parking agreement, as a condition to parking.
31. Landlord reserves the right to refuse parking identification
devices and parking rights to Tenant or any other person who
fails to comply with the Rules and Regulations applicable to
the parking areas. Any violation of such rule shall subject
the vehicle to removal, at such person's expense.
32. Tenant shall be responsible for the observance of all of the
Rules and Regulations by Tenant (including, without
limitation, all employees, agents, clients, customers,
invitees and guests).
33. Landlord may, from time to time, waive any one or more of
these Rules and Regulations, but no such waiver by Landlord
shall be construed as a continuing waiver of such Rules and
Regulations, nor prevent Landlord from thereafter enforcing
any such Rules and Regulations.
34. These Rules and Regulations are in addition to, and shall not
be construed to in any way modify or amend, in whole or in
part, the other terms, covenants, agreements and conditions of
the Lease. In the event of any conflict between these Rules
and Regulations and any ,express term or provision of the
Lease otherwise set forth in the Lease, such other express
term or provision shall be controlling. Landlord may amend or
supplement these rules from time to time in the sole
determination of Landlord.
45
EXHIBIT C
TENANT WORK LETTER
(TO BE ATTACHED)
SCHEDULE 1
FLOOR PLANS SHOWING
1. Location and type of all partitions.
2. Location and type of all doors. Indicate hardware and provide keying
schedule.
3. Location and type of glass partitions, windows, and doors. Indicate
framing and reference full-height partitions.
4. Locations of telephone equipment room.
5. Critical dimensions necessary for construction, with indication of
required clearances.
6. Location and types of all electrical items: outlets, switches,
telephone outlets and lighting.
7. Location and type of equipment that will require special electrical
requirements. Provide manufacturers' specifications for use and operation,
including heat output.
8. Location, weight per square foot, and description of any heavy
equipment or filing system.
9. Requirements for special air-conditioning or ventilation.
10. Location and type of plumbing.
11. Location and type of kitchen equipment.
12. Location, type and color of floor covering, wall covering, paint
and finishes.
DETAILS SHOWING
1. All millwork with verified dimensions of all equipment to be built
in.
2. Corridor entrance.
3. Bracing or support of special walls, glass partitions, etc., if
desired. If not included with the plans, Tenant's engineer will design all
support or bracing required at Tenant's expense.
ADDITIONAL INFORMATION
1. Provide Landlord with Title 24 energy calculations.
EXHIBIT C
TENANT WORK LETTER
3030 CORVIN DRIVE
SANTA CLARA, CALIFORNIA
This Tenant Work Letter is entered into with respect to that certain
NET PREMISES LEASE. of equal date herewith (the "Lease"), executed by and
between Rainbow Property Management, LLC, a California limited liability company
("Landlord") and Coloconnection, Inc., a Florida corporation ("Tenant"), to
which this Tenant Work Letter is attached as Exhibit "C" and of which this
Tenant Work Letter forms a part. This Tenant Work Letter shall set forth the
terms and conditions relating to the construction of Tenant's Work (as defined
in Section 5.1 of the Lease). This Tenant Work Letter is essentially organized
chronologically and addresses the issues of the configuration and construction
of the Tenant's Work, in sequence, as such issues will arise during the actual
configuration and construction of the Leased Premises. All capitalized terms not
otherwise defined shall have the meanings given to them in the Lease.
1. CONDITION UPON DELIVERY BY LANDLORD. Upon the Commencement Date,
Landlord shall deliver the Leased Premises to Tenant, and Tenant shall
accept the Leased Premises from Landlord in its presently existing,
"as-is" condition.
2. TENANT WORK.
2.1 UPGRADE OF THE BUILDING. Subject to the terms of the Lease and this
Work Letter, Tenant, at Tenant's sole cost and expense, shall install and
configure the Building as a state of the art telecommunications data center and
co-location facility (the "Upgrade"). Tenant shall cause the Upgrade of the
Building to be completed in four phases, each phase more particularly set forth
in this section below. During each phase of construction, Tenant shall comply
with all of the terms of the Lease and this Work Letter, including, without
limitation, Sections 3, 4, 5 and 6 herein, as applicable to the particular phase
of construction.
2.2 PHASE ONE. Tenant shall commence the first phase, ("Phase One")
immediately upon receipt of possession of the Leased Premises, and diligently
prosecute all construction in Phase One to completion. During Phase One, Tenant
shall install and configure a state of the art telecommunications data center
and co-location facility, at a minimum, over approximately one fourth (1/4th) of
the interior of the Building, together the configuration and installation of
each of the following within the Building:
2.2.1 ARCHITECTURAL. An access floor to allow for managing the
service requirements of complex electronic environments, together with
underfloor cooling for network server racks and distribution of
electrical/network wiring.
2.2.2 ELECTRICAL INFRASTRUCTURE. A primary electrical
substation adequate to provide 5,000 amps of power for the facility
from a local utility provider. A distribution system, based on
redundant diverse distributed components consisting of demarcation
power, power distribution units, static transfer switches,
uninterrupted power supplies, and a utility service bus. And an
emergency power generation system sufficient to provide power to
operate the facility for a period of _________ continuous hours in the
event of any interruption of service from the local utility provider,
consisting of automatic transfer devices, emergency service bus, and
emergency power generation in the form of diesel generators and battery
back up for uninterrupted power supply.
2.2.3 PRECISION ENVIRONMENTAL CONTROL SYSTEMS. A closed loop
heat rejection system for environmental control sufficient to maintain
an average space temperature of 72 degrees at 50% relative humidity.
Air filtration is accomplished by the use of both pre-filters and high
efficiency air filters.
2.2.4 FIRE SUPPRESSION SYSTEM. A two-stage state-of-the-art
fire suppression system and a pre-action dry pipe fire sprinkler system
located above and below the raised floor.
2.2.5 COMPREHENSIVE SECURITY SYSTEM. A security system, which
incorporates distributed control with central monitoring located within
the security center, including a comprehensive state of the art
security system, trained security personnel, and closed circuit
television cameras, with access readers installed at all primary entry
and egress points.
2.2.6 NETWORK INFRASTRUCTURE. A network infrastructure
designed to meet the service and quality requirements of businesses
executing telecommunications and Internet based strategies, which is
designed for high availability, low latency, and resiliency, and
includes two separate points of connection into the Building by
multiple network fiber providers.
2.2.7 SITE IMPROVEMENTS. Removal of any above grade fuel
tanks; Equipment leveling concrete slabs; Ramps, Access for ADA
compliance; Underground Electrical HI-Voltage; 12 000 KVA Primary
sub-station; Generators and associated diesel fuel storage (appx. 2-3
1500 KW); Primary cooling systems, chillers; Cooling Tower; Perimeter
Architectural Fencing; Parking Stall/Installation and Striping.
2.2.8 ROOF. Structural upgrade for HVAC; Air Handlers; and 0
HVAC
2.2.9 BUILDING EXTERIOR. Seismic Bracing; upgrade Overhead
door; replacement/upgrade Exterior doors; and ADA Required Lobby/Entry.
2.2.10 BUILDING INTERIOR. Toilet Cores; Lobby; and
mechanical/electrical rooms.
2.2.11 TENANT WORK. Elevated Floor; Preaction Dry-Pipe Fire
Sprinkler System; Preaction Fire System; HVAC Distribution Liebert
Units; PDU; UPS; Electrical Distribution; Transformers; Security/Access
Control; Lighting; Fire Sprinkler O.H.; Partitions; Ceilings; and
Flooring.
2.2.12 CHATTEL ITEMS. Data Wiring; Telephone Switch; and Cable
Tray.
2
2.3 PHASE TWO. During the second phase ("Phase Two"), Tenant shall
install and configure a state of the art telecommunications data center and
co-location facility, at a minimum, over the lesser of: (i) approximately one
fourth (1/4th) of the interior of the Building; or (ii) the portion of the
Building remaining to be Upgraded after Phase One. Tenant shall complete Phase
Two prior to the second anniversary of the Commencement Date.
2.4 PHASE THREE. During the third phase ("Phase Three"), Tenant shall
install and configure a state of the art telecommunications data center and
co-location facility, at a minimum, over the lesser of: (i) approximately one
fourth (1/4th) of the interior of the Building; or (ii) the portion of the
Building remaining to be Upgraded after Phase Two. Tenant shall complete Phase
Three prior to the fourth anniversary of the Commencement Date.
2.5 PHASE FOUR. During the fourth phase ("Phase Four"), Tenant shall
install and configure a state of the art telecommunications data center and
co-location facility over the remaining portion of the Building that has not
been previously Upgraded. Tenant shall complete Phase Four prior to the sixth
anniversary of the Commencement Date.
3. CONSTRUCTION DRAWINGS.
3.1 SELECTION OF DRAWINGS. Tenant shall retain the architect/space
planner reasonably approved by Landlord (the "Architect") to prepare the
Construction Drawings. Tenant shall retain the engineering consultants
reasonably approved by Landlord (the "Engineers") to prepare all plans and
engineering working drawings relating to the structural, mechanical, electrical,
plumbing, HVAC, life-safety, and sprinkler work for the Leased Premises. The
plans and drawings to be prepared by Architect and the Engineers hereunder shall
be known collectively as the "Construction Drawings." All Construction Drawings
shall comply with the drawing format and specifications determined by Landlord,
and shall be subject to Landlord's reasonable approval, which Construction
Drawings shall contain the information listed on Schedule 1, attached hereto.
Tenant and Architect shall verify, in the field, the dimensions and conditions
as shown on the relevant portions of the base building plans, and Tenant and
Architect shall be solely responsible for the same, and Landlord shall have no
responsibility in connection therewith. Landlord's review of the Construction
Drawings as set forth in this Section 3, shall be for its sole purpose and shall
not imply Landlord's review of the same, or obligate Landlord to review the
same, for quality, design, Code compliance or other like matters. Accordingly,
notwithstanding that any Construction Drawings are reviewed by Landlord or its
space planner, architect, engineers and consultants, and notwithstanding any
advice or assistance which may be rendered to Tenant by Landlord or Landlord's
space planner, architect, engineers, and consultants, Landlord shall have no
liability whatsoever in connection therewith and shall not be responsible for
any omissions or errors contained in the Construction Drawings, and Tenant's
waiver and indemnity set forth in Section of this Lease shall specifically
apply' to the Construction Drawings.
3.2 FINAL SPACE PLAN. Tenant shall supply Landlord with four (4) copies
signed by Tenant of its final space plan for the Leased Premises before any
architectural working drawings or engineering drawings have been commenced. The
final space plan (the "Final Space Plan") shall include a layout and designation
of all offices, rooms and other partitioning, their intended use, and equipment
to be contained therein. Landlord may request clarification or more specific
drawings for special use items not included in the Final Space Plan. Landlord
3
shall advise Tenant within seven (7) days after Landlord's receipt of the Final
Space Plan for the Leased Premises if the same is unsatisfactory or incomplete
in any respect. If Tenant is so advised, Tenant shall promptly cause the Final
Space Plan to be revised to correct any deficiencies or other matters Landlord
may reasonably require. Landlord's failure to so advise Tenant within the said
seven (7) day period shall be deemed to constitute Landlord's acceptance of the
Final Space Plan, so long as the Final Space Plans are reasonably similar to the
Construction Drawings and proposed space plans previously submitted to Landlord
by Tenant, otherwise, Landlord's failure to respond within the seven (7) day
period shall not be deemed approval by Landlord of the Final Space Plan.
3.3 FINAL WORKING DRAWINGS. After the Final Space Plan has been
approved by Landlord, Tenant shall supply the Engineers with a complete listing
of standard and non-standard equipment and specifications, including, without
limitation, B.T.U. calculations, electrical requirements and special electrical
receptacle requirements for the Leased Premises, to enable the Engineers and the
Architect to complete the "Final Working Drawings" (as that term is defined
below) in the manner as set forth below. Upon the approval of the Final Space
Plan by Landlord and Tenant, Tenant shall promptly' cause the Architect and the
Engineers to complete the architectural and engineering drawings for the Leased
Premises, and Architect shall compile a fully coordinated set of architectural,
structural, mechanical, electrical and plumbing working drawings in a form which
is complete to allow subcontractors to bid on the work and to obtain all
applicable permits (collectively, the "Final Working Drawings") and shall submit
the same to Landlord for Landlord's approval. Tenant shall supply Landlord with
four (4) copies signed by Tenant of such Final Working Drawings. Landlord shall
advise Tenant within seven (7) days after Landlord's receipt of the Final
Working Drawings for the Leased Premises if the same is unsatisfactory or
incomplete in any respect. If Tenant is so advised, Tenant shall immediately
revise the Final Working Drawings in accordance with such review and any
disapproval of Landlord in connection therewith. Landlord's failure' to so
advise Tenant within the said seven (7) day period shall be deemed to constitute
Landlord's acceptance of the Final Working Drawings, so long as the Final Work
Drawings are reasonably similar to the Final Space Plan and the Construction
Drawings previously submitted to Landlord by Tenant, otherwise, Landlord's
failure to respond within the seven (7) day period shall not be deemed approval
by Landlord of the Final Working Drawings.
3.4 APPROVED WORKING DRAWINGS. The Final Working Drawings shall be
approved by Landlord (the "Approved Working Drawings") prior to the commencement
of construction of the Leased Premises by' Tenant. After approval by Landlord of
the Final Working Drawings, Tenant may submit the same to the City of Santa
Clara for all applicable building permits. Tenant hereby agrees that neither
Landlord nor Landlord's consultants shall be responsible for obtaining any
building permit or certificate of occupancy for the Leased Premises and that
obtaining the same shall be Tenant's responsibility'; provided, however, that
Landlord shall cooperate with Tenant in executing permit applications and
performing other ministerial acts reasonably necessary to enable Tenant to
obtain any such permit or certificate of occupancy. No changes, modifications or
alterations in the Approved Working Drawings may be made without the prior
written consent of Landlord, which consent may not be unreasonably withheld.
4
4. CONSTRUCTION OF THE TENANT WORK.
4.1 TENANT'S SELECTION OF CONTRACTORS.
4.1.1 THE CONTRACTOR. Tenant shall retain a general contractor
("Contractor") reasonably approved by Landlord to construct the Tenant
Work.
4.1.2 TENANT'S AGENTS. All subcontractors, laborers,
materialmen, and suppliers used by' Tenant (such subcontractors,
laborers, materialmen, and suppliers, and the Contractor to be known
collectively as "Tenant's Agents") must be approved in writing by
Landlord, which approval shall not be unreasonably withheld or delayed.
If Landlord does not approve any of Tenant's proposed subcontractors,
laborers, materialmen or suppliers, Tenant shall submit other proposed
subcontractors, laborers, materialmen or suppliers for Landlord's
written approval. Notwithstanding the foregoing, Tenant shall retain
subcontractors designated by Landlord in connection with any
structural, mechanical, electrical, plumbing or heating,
air-conditioning or ventilation work to be performed in the Leased
Premises
4.2 CONSTRUCTION OF TENANT WORK BY TENANT'S AGENTS.
4.2.1 CONSTRUCTION CONTRACT: Cost Budget. Prior to Tenant's
execution of the construction contract and general conditions with
Contractor (the "Contract"), Tenant shall submit the Contract to
Landlord for its approval, which approval shall not be unreasonably
withheld or delayed. Prior to the commencement of the construction of
the Tenant Work, and after Tenant has accepted all bids for the Tenant
Work, Tenant shall provide Landlord with a detailed breakdown, by
trade, of the final costs to be incurred or which have been incurred in
connection with the design and construction of the Tenant Work to be
performed by or at the direction of Tenant or the Contractor, which
costs form a basis for the amount of the Contract (the "Final Costs").
Prior to the commencement of construction of the Tenant Work, Landlord,
at Landlord's sole election, shall require Tenant: (1) to supply
Landlord with cash in an amount equal to the Final Costs, which amount
shall be deposited into a construction escrow account reasonably
acceptable to Tenant and Landlord (the "construction Deposit") and
shall be used to fund the costs of construction in accordance with
escrow instructions to be mutually executed by Landlord and Tenant; or
(ii) to purchase and deliver to Landlord a payment and/or completion
bond in amount equal to the Final Costs. If at any time, or from time
to time, Landlord should reasonably determine that the balance of the
Construction Deposit then remaining should be insufficient to fully
fund the remaining costs of construction of the Tenant Work, Landlord
shall provide written notice thereof to Tenant and Tenant shall deposit
additional funds sufficient to ensure the completion of the Tenant
Work.
4.2.2 Tenant's Agents.
4.2.2.1 LANDLORD'S GENERAL CONDITIONS FOR TENANT'S
AGENTS AND TENANT IMPROVEMENT WORK. Tenant's and Tenant's Agent's construction
of the Tenant Work shall comply with the following: (I) the Tenant Work shall be
constructed in strict accordance with the Approved Working Drawings; (ii)
Tenant's Agents shall submit schedules of all work relating to the Tenant's
Improvements to Contractor and Contractor shall, within five (5) business days
of receipt thereof, inform Tenant's Agents of any changes which are necessary
5
thereto, and Tenant's Agents shall adhere to such corrected schedule; and (iii)
Tenant shall abide by' all rules made by Landlord's Building manager with
respect to the use of freight, loading dock and service elevators, storage of
materials, coordination of work with other contractors, if any, and any other
matter in connection with this Tenant Work Letter, including, without
limitation, the construction of the Tenant Work.
4.2.2.2 INDEMNITY. Tenant's indemnity of Landlord as
set forth in Section 7.1 of the Lease shall also apply with respect to any and
all costs, losses, damages, injuries and liabilities related in any way to any
act or omission of Tenant or Tenant's Agents, or anyone directly or indirectly
employed by any of them, or in connection with Tenant's non-payment of any
amount arising out of the Tenant Work and/or Tenant's disapproval of all or any
portion of any request for payment. Such indemnity by Tenant, as set forth in
Section of this Lease, shall also apply with respect to any and all costs,
losses, damages, injuries and liabilities related in any way to Landlord's
performance of any ministerial acts reasonably necessary' (i) to permit Tenant
to complete the Tenant Work, and (ii) to enable Tenant to obtain any building
permit or certificate of occupancy for the Leased Premises.
4.2.2.3 REQUIREMENTS OF TENANT'S AGENTS. Each of
Tenant's Agents shall guarantee to Tenant and for the benefit of Landlord that
the portion of the Tenant Work for which it is responsible shall be free from
any defects in workmanship and materials for a period of not less than one (1)
year from the date of completion thereof. Each of Tenant's Agents shall be
responsible for the replacement or repair, without additional charge, of all
work done or furnished in accordance with its contract that shall become
defective within one (1) year after the later to occur of (i) completion of the
work performed by such contractor or subcontractors and (ii) the Lease
Commencement Date. The correction of such work shall include, without additional
charge, all additional expenses and damages incurred in connection with such
removal or replacement of all or any part of the Tenant Work, and/or the Leased
Premises, or any portion thereof, that may be damaged or disturbed thereby'. All
such warranties or guarantees as to materials or workmanship of or with respect
to the Tenant Work shall be contained in the Contract or subcontract and shall
be written such that such guarantees or warranties shall inure to the benefit of
both Landlord and Tenant, as their respective interests may appear, and can be
directly enforced by either. Tenant covenants to give to Landlord any assignment
or other assurances which may be necessary to effect such right of direct
enforcement.
4.3 GOVERNMENTAL COMPLIANCE. The Tenant Work shall comply in all
respects with the following: (i) the Code and other state, federal, city or
quasi-governmental laws, codes, ordinances and regulations, as each may apply
according to the rulings of the controlling public official, agent or other
person; (ii) applicable standards of the American Insurance Association
(formerly, the National Board of Fire Underwriters) and the National Electrical
Code; and (iii) building material manufacturer's specifications.
4.4 INSPECTION BY LANDLORD. Landlord shall have the right to inspect
the Tenant Work at all times, provided however, that Landlord's failure to
inspect the Tenant Work shall in no event constitute a waiver of any of
6
Landlord's rights hereunder nor shall Landlord's inspection of the Tenant Work
constitute Landlord's approval of the same. Should Landlord disapprove any
portion of the Tenant Work, Landlord shall notify Tenant in writing of such
disapproval and shall specify the items disapproved. Any defects or deviations
in, and/or disapproval by Landlord of, the Tenant Work shall be rectified by
Tenant at no expense to Landlord, provided however, that in the event Landlord
determines that a defect or deviation exists or disapproves of any matter in
connection with any portion of the Tenant Work and such defect, deviation or
matter might adversely affect the mechanical, electrical, plumbing, heating,
ventilating and air-conditioning or life-safety systems of the Building, the
structure or exterior appearance of the Building or any other portion of the
Leased Premises, Landlord may take such action as Landlord deems necessary, at
Tenant's expense and without incurring any liability on Landlord's part, to
correct any such defect, deviation and/or matter, including, without limitation,
causing the cessation of performance of the construction of the Tenant Work
until such time as the defect, deviation and/or matter is corrected to
Landlord's satisfaction.
4.5 MEETINGS. During the preparation of the Work Drawings, and the
Construction of Tenant's Work during each of the phases of construction as set
forth in Section 3 above, Tenant shall hold bi-monthly meetings at reasonable
times, with the Architect and the Contractor regarding the progress of the
preparation of Construction Drawings and the construction of the Tenant Work,
which meetings shall be held at a location designated by Landlord, and Landlord
and/or its agents shall receive prior notice of, and shall have the right to
attend, all such meetings, and, upon Landlord's request, certain of Tenant's
Agents shall attend such meetings. In addition, minutes shall be taken at all
such meetings, a copy of which minutes shall be promptly delivered to Landlord.
One such meeting each month shall include the review of Contractor's current
request for payment.
4.6 NOTICE OF COMPLETION COPY OF RECORD SET OF PLANS. Within ten (10)
days after completion of construction of the Tenant Work, Tenant shall cause a
Notice of Completion to be recorded in the office of the Recorder of the County
of Santa Clara in accordance with Section 3093 of the Civil Code of the State of
California or any successor statute, and shall furnish a copy' thereof to
Landlord upon such recordation. If Tenant fails to do so. Landlord may execute
and tile the same on behalf of Tenant as Tenants agent for such purpose, at
Tenant's sole cost and expense. At the conclusion of construction, (i) Tenant
shall cause the Architect and Contractor (A) to update the Approved Working
Drawings as necessary to reflect all changes made to the Approved Working
Drawings during the course of construction, (B) to certify to the best of their
knowledge that the "record-set" of mylar as-built drawings are true and correct,
which certification shall survive the expiration or termination of the Lease,
and (C) to deliver to Landlord two (2) sets of copies of such, record set of
drawings within ninety (90) day's following issuance of a certificate of
occupancy for the Building, and (ii) Tenant shall deliver to Landlord a copy of
all warranties, guaranties, and operating manuals and information relating to
the improvements, equipment, and systems in the Leased Premises.
5. MISCELLANEOUS
5.1 TENANT'S REPRESENTATIVE. Tenant has designated ____________________
as its sole representative with respect to the matters set forth in this Tenant
7
Work Letter, who shall have full authority and responsibility to act on behalf
of the Tenant as required in this Tenant Work Letter.
5.2 LANDLORD'S REPRESENTATIVE. Landlord has designated Dan Burfeind as
its sole representatives with respect to the matters set forth in this Tenant
Work Letter, who, until further notice to Tenant, shall have full authority' and
responsibility to act on behalf of the Landlord as required in this Tenant Work
Letter.
5.3 TIME OF THE ESSENCE IN THIS TENANT WORK LETTER. Unless otherwise
indicated, all references herein to a "number of days" shall mean and refer to
calendar days. if any item requiring approval is timely' disapproved by
Landlord, the procedure for preparation of-the document and approval thereof
shall be repeated until the document is approved by Landlord.
5.4 TENANT'S LEASE DEFAULT. Notwithstanding any provision to the
contrary contained in the Lease, if an event of default as described in either
the Lease or this Tenant Work Letter shall occur at any time prior to
Substantial Completion of the Tenant Work, then in addition to all other rights
and remedies granted to Landlord pursuant to the Lease, (i) Landlord may cause
Contractor to cease the construction of the Leased Premises (in which case,
Tenant shall be responsible for any delay in the substantial completion of the
Leased Premises caused by such work stoppage), and (ii) all other obligations of
Landlord under the terms of this Tenant Work Letter shall be forgiven until such
time as such default is cured pursuant to the terms of this Lease (in which
case, Tenant shall be responsible for any' delay in the substantial completion
of the Leased Premises caused by such inaction by Landlord).
5.5 HAZARDOUS MATERIALS. If the construction of the Tenant Work or
Tenant's move into the Leased Premises will involve the use of or disturb
hazardous materials or substances existing in the Leased Premises, Tenant shall
comply with Landlord's rules and regulations concerning such hazardous materials
or substances.
8
6. NOTICES. For the purposes of this Work Letter only, and except as
otherwise required by law, any and all notices or other communications
required or permitted by this Lease or by law to be served on or given
to either party' hereto by the other party hereto shall be in writing
and shall be deemed duly served and given when personally delivered and
received by the party to whom it is directed or to any managing
employee or officer of such party, or, in lieu of such personal
service, when sent by' Certified United States Mail, Return Receipt
Requested, with all postage charges thereof fully prepaid, addressed to
Tenant at the Leased Premises, or to Landlord at the address set forth
in the introductory paragraph of the Lease and when received by such
party. Either party, may change its address for purposes of this
section by giving written notice of such change to the other party in
the manner provided in this section.
Executed on the date first set forth above.
LANDLORD: TENANT:
Rainbow Property Management, LLC, Coloconnection, Inc., a Florida
a California limited corporation
liability company
- --------------------------------- -------------------------------------
Dan Burfeind, Manager By:
-----------------------------------
Its:
-----------------------------------
- --------------------------------- -------------------------------------
Dianne G. Burfeind, Manager By:
-----------------------------------
Its:
-----------------------------------
9
EXHIBIT "D"
NET PREMISES LEASE GUARANTY
By this Net Premises Lease Guaranty (the "Guaranty"), dated August_
2000 the undersigned Terremark Worldwide, Inc., a Delaware corporation, or its
successor(s) or assign(s), whose address is 3030 Corvin Drive, Santa Clara, CA
95051 does hereby endorse, guaranty, and promise to pay to Rainbow Property'
Management. LLC, a California limited liability company, whose address is 1 8Q70
China Grade, Boulder Creek. CA 95006 ("Landlord"), or its successor(s) or
assign(s), any and all sums which may become due and payable to Landlord by
Coloconnection, Inc., a Florida corporation, whose address is 3030 Corvin Drive,
Santa Clara, California, 95113 ("Tenant"), under the terms of that certain Net
Premises Lease dated September 13, 2000, by and between Tenant and Landlord,
including any renewals, extensions, or modifications thereof (the "Lease"),
relating to that certain real property located in the City and County of Santa
Clara, California, at 3030 Corvin Drive, and the improvements thereon consisting
of a one story industrial building containing approximately' forty. thousand
four hundred ninety-one (40,491) square feet, as more particularly described in
the Lease ,(the "Leased Premises"). A copy of the Lease is attached hereto as
Exhibit "A" and incorporated herein by reference. In addition, Guarantor hereby
endorses, guarantees, and promises to Landlord to fully and timely perform any
and all non-monetary obligations of Tenant under the Lease. This guaranty is
given as a material inducement to Landlord to enter into the Lease with Tenant.
Guarantor hereby irrevocably appoints Tenant as Guarantor's sole agent
for the purpose of amending or modifying the Lease in any manner. The aforesaid
agency agreement is coupled with an interest and is irrevocable. This Guaranty
is a continuing guaranty enforceable with respect to any such amendment or
modification of the Lease.
If any party fails to perform its obligations under this Guaranty or if
a dispute arises concerning the meaning or interpretation of any provision of
this Guaranty, the defaulting party, or the party not prevailing in such
dispute, as the case may be, shall pay any and all costs and expenses incurred
by' the other party in enforcing or establishing its rights hereunder,
including, without limitation, court costs and attorneys' fees. The obligations
of Guarantor hereunder are independent of the obligations of Tenant. One or more
separate action(s) may, at Landlord's option, be brought and prosecuted against
Guarantor, whether or not Landlord has utilized any security deposit or rental
deposit posted by Tenant under the Lease, whether or not any action has been
first or is subsequently brought against Tenant, whether or not Tenant is joined
in any such action, and whether or not Guarantor may have been joined in any
action or proceeding commenced by Landlord against Tenant arising out of, in
connection with, or based upon the Lease.
Guarantor hereby waives any right to assert or plead at any time any
surety or other defenses in the nature thereof, including, without limitation,
the provisions of California Civil Code Section 2845 or any' other similar,
related or successor provision of law. In addition, Guarantor hereby waives any
rights to (a) require Landlord to proceed against or exhaust any entity' or
pursue any other remedy in Landlord's power whatsoever; or (b) require Landlord
to proceed against or exhaust any security held from Tenant or Guarantor.
Guarantor further waives any defense arising by reason of any disability of
1
Tenant. Except as otherwise provided in the Lease, Guarantor waives all demands
and notices to Tenant and to Guarantor, including, without limitation, demands
for payment or performance, and notices of nonperformance or nonpayment. Any act
of Landlord, or its successors or assignors, consisting of a waiver of any of
the terms or conditions of the Lease, or the giving of any consent to any matter
or thing relating to the Lease, or the granting of any indulgences or extensions
of time to Tenant, may be done without notice to Guarantor, and without
releasing Guarantor from any obligations hereunder. The obligations of Guarantor
hereunder shall not be discharged, diminished or released by reason of any
amendment or modification to the Lease.
The liability of Guarantor hereunder shall in no way be affected by (a)
the release or discharge of Tenant in any creditors' receivership, bankruptcy or
other proceeding; (b) the impairment, limitation or modification of the
liability of Tenant or the estate of Tenant in bankruptcy, or of any remedy for
the enforcement of Tenant's liability' under the Lease resulting from the
operation of any present or future provision of the Bankruptcy' Code or any
successor statute; (c) Landlord's receipt, application or release of any
security given for Tenant's performance and observance of Tenant's obligations;
(d) the rejection or disaffirmance of the Lease in any such proceedings; (e) the
assignment or transfer of the Lease or subletting of the rental premises by'
Tenant; (f) the assignment or transfer of the Lease or this Guaranty by
Landlord; or (g) the exercise by Landlord of any of its rights or remedies
reserved under the Lease or by law. The obligations of Guarantor hereunder shall
be joint and several.
This Guaranty shall be deemed to be made under, and shall be governed
by, the laws of the State of California in all respects, including matters of
construction, validity, and performance, and its terms and provisions may not be
waived, altered, modified, or amended except in writing duly signed by Landlord
and Guarantor. Any dispute or litigation brought to enforce or interpret the
provisions of this Guaranty shall be commenced in a court or other appropriate
forum for the resolution of such disputes located within the County of Santa
Clara of the State of California.
Guarantor represents and warrant to Landlord that the execution of this
Guaranty is given freely and voluntarily, in consideration of Landlord entering
into the Lease with Tenant. This Guaranty may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
In the case of any obligation of Tenant arising under the Lease to
execute and deliver estoppel certificates and deliver financial statements, as
therein provided. Guarantor shall also do and provide the same.
This Guaranty shall expire the later of: (I) ninety (90) days after the
expiration of the Lease term, as extended by the Option; or (ii) ninety (90)
days after Tenant vacates the Leased Premises; provided however, this Guaranty
shall remain in full effect as to those provisions in the Lease that survive the
expiration or termination of the Lease.
2
Executed on the date first above written.
GUARANTOR
Terremark Worldwide, Inc.,
a Delaware corporation
By:
----------------------------------------
Its:
--------------------------------------
3
EXHIBIT E
Recording Requested By and
When Recorded Mail to:
- ------------------------
- ------------------------
- ------------------------
- -------------------------------------------------------------------------------
MEMORANDUM OF LEASE
This Memorandum of Lease ("Memorandum") is executed as of the day of
September, 2000, between Rainbow Property Management, LLC, a California limited
liability company ("Landlord") and Coloconnection, Inc., a Florida corporation
("Tenant"), and is as follows:
1. LEASE OF PREMISES. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord that certain real property in the City and County of
Santa Clara, State of California more particularly described in Exhibit A which
is attached hereto (the "Premises") on the terms and conditions set forth in a
certain Net Premises Lease dated for reference purposes only September 13, 2000
(the "Lease"), the provisions of which are hereby incorporated into this
Memorandum by this reference. The Premises includes, without limitation, rights
now or hereafter appurtenant to the Premises and any' and all improvements now
or hereafter located thereon.
2. LEASE TERM. The term of the Lease shall commence October 1, 2000,
and shall expire on September 30, 2020, except that Tenant has two (2) options
to extend the term of the Lease for additional terms of 60 months each, unless
sooner terminated by Landlord or Tenant pursuant to the terms of the Lease.
3. RIGHT OF FIRST OFFER TO PURCHASE. Landlord hereby grants to Tenant
the right of first offer to purchase the Premises, on all of the terms arid
conditions stated herein and in the Lease.
5. FURTHER INFORMATION. Any' party who wishes to obtain further
information concerning the Lease may contact:
__________________________________________
6. BINDING EFFECT. Provisions of the Lease to be performed by Landlord
or Tenant, whether to be performed on the Premises or in any other location, and
whether affirmative or negative in nature, are intended to and shall inure to
the benefit of and bind Landlord and Tenant, respectively, and their respective
heirs, administrators, executors, successors, and assigns at any time.
7. PURPOSE OF MEMORANDUM. This Memorandum is prepared for the purpose
of recordation. and it in no way modifies the provisions of the Lease referred
to above.
Executed as of the date first set forth above.
1
LANDLORD: TENANT:
Rainbow Property Management, LLC, Coloconnection, Inc., a Florida
a California limited corporation
liability company
- --------------------------------- ------------------------------------
Dan Burfeind, Manager By:
----------------------------------
Its:
----------------------------------
- --------------------------------- ------------------------------------
Dianne G. Burfeind, Manager By:
----------------------------------
Its:
----------------------------------
STATE OF CALIFORNIA )
) ss:
COUNTY OF SANTA CLARA )
On ___________ before me, ____________, Notary Public, personally
appeared ___________________ personally' known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s). or the entity' upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my' hand and official seal.
- -----------------------------------
Notary Public (Seal)
STATE OF FLORIDA )
) ss:
COUNTY OF MIAMI DADE )
On ______________ before me, ____________, Notary Public, personally
appeared _____________________ personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity' upon
behalf of which the person(s) acted, executed the instrument
WITNESS my' hand and official seal.
- -----------------------------------
Notary Public (Seal)
2
STATE OF CALIFORNIA )
) ss:
COUNTY OF SANTA CLARA )
On ___________ before me, ____________, Notary Public, personally
appeared ___________________ personally' known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s). or the entity' upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my' hand and official seal.
- -----------------------------------
Notary Public (Seal)
STATE OF CALIFORNIA )
) ss:
COUNTY OF SANTA CLARA )
On ___________ before me, ____________, Notary Public, personally
appeared ___________________ personally' known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s). or the entity' upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my' hand and official seal.
- -----------------------------------
Notary Public (Seal)
3
EXHIBIT A
DESCRIPTION OF PREMISES
Description: The land referred to herein is situated in the State of California,
County of SANTA CLARA, CITY OF SANTA CLARA, and is described as follows:
PARCEL 1:
ALL OF PARCEL 2A, AS SHOWN UPON THAT CERTAIN PARCEL MAP ENTITLED, "BEING A
PORTION OF TRACT NO. 2791 (LOTS 2 & 3) AND A PORTION OF LOT 5 - MAP OF THE
ARQUES SUBDIVISION IN THE CITY OF SANTA CLARA, CALIFORNIA", WHICH MAP WAS FILED
FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA `CLARA, STATE OF
CALIFORNIA, ON APRIL 10, 1970 IN BOOK 266 OF MAPS, PAGE 32.
PARCEL 2:
AN EASEMENT FOR LIGHT AND AIR OVER AND ACROSS THE PARCEL OF LAND HEREINAFTER
DESCRIBED TO BE USED IN COMMON WITH THE RECORD OWNER (AS SUCH OWNER SHALL EXIST
FROM TIME TO TIME) OF THE LAND ADJOINING TO THE SOUTH A STRIP OF LAND OF A
UNIFORM 30.00 FEET LYING NORTHERLY OF THE FOLLOWING DESCRIBED LINE: BEGINNING AT
A POINT IN THE WESTERLY LINE OF CORVIN DRIVE AT THE INTERSECTION THEREOF WITH
THE NORTHERLY LINE OF THE HEREINBEFORE DESCRIBED PARCEL 2A; RUNNING THENCE ALONG
SAID NORTHERLY LINE SOUTH 890 29' WEST 310 FEET. SAID EASEMENT AREA SHALL AT ALL
TIMES TO BE UNOBSTRUCTED FROM GROUND TO SKY BY THE CONSTRUCTION, INSTALLATION,
OR MAINTENANCE OF ANY BUILDING OR STRUCTURE. SAID ABOVE EASEMENT IS CREATED BY
EASEMENT AGREEMENT RECORDED MARCH 30, 1998, INSTRUMENT 14115469, SANTA CLARA
COUNTY RECORDS.
PARCEL 3:
AN EASEMENT FOR INSTALLATION AND MAINTENANCE OF STORM DRAINAGE FACILITIES OVER
AND ACROSS THE PARCEL OF LAND HEREINAFTER DESCRIBED, TO BE USED IN COMMON WITH
THE RECORD OWNER (AS SUCH OWNER SHALL EXIST FROM TIME TO TIME) OF THE LAND
ADJOINING TO THE SOUTH A STRIP OF LAND OF A UNIFORM WIDTH OF 10.00 FEET, THE
CENTER LINE OF WHICH IS DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE
NORTHERLY LINE OF THE HEREINBEFORE DESCRIBED PARCEL 2A: DISTANCE THEREIN SOUTH
89(degree) 29' WEST 52.50 FEET FROM THE NORTHEASTERLY CORNER THEREOF; RUNNING
THENCE FROM SAID LINE NORTH 450 EAST 14.14 FEET; THENCE NORTH 30.00 FEET AND
NORTH 670 31' 24" EAST 46.41 FEET TO THE WESTERLY LINE OF CORVIN DRIVE.
SAID ABOVE EASEMENT IS CREATED BY EASEMENT AGREEMENT RECORDED MARCH 30, 1998,
INSTRUMENT 141 15469, SANTA CLARA COUNTY RECORDS.
1
PARCEL 4:
AN EASEMENT FOR THE PERMANENT, MUTUAL INGRESS AND EGRESS OVER A COMMON DRIVEWAY
TO SERVE BOTH PARCELS AND AS A COMMON STORM DRAINAGE AREA TO SERVE BOTH PARCELS,
DESCRIBED AS A STRIP OF LAND 25 FEET IN WIDTH AND 310 FEET IN LENGTH, THE
CENTERLINE OF SAID STRIP BEING THE LINE COMMON TO PARCEL 4A OF THAT PARCEL MAP
FILED FOR RECORD JULY 9, 1970 IN BOOK 270 OF MAPS AT PAGE 21, SANTA CLARA COUNTY
RECORDS, AND PARCEL 2A OF THAT PARCEL MAP FILED FOR RECORD APRIL 10, 1970 IN
BOOK 266 OF MAPS AT PAGE 32, SAID COUNTY RECORDS.
EXCEPTING THEREON THAT PORTION LYING WITHIN PARCEL ONE ABOVE.
ASSESSOR'S PARCEL NO.: 21 6-33-025
2
EXHIBIT E
Recording Requested By and.
When Recorded Mail to:
- ----------------------------
- ----------------------------
- ----------------------------
- -------------------------------------------------------------------------------
MEMORANDUM OF LEASE
This Memorandum of Lease ("Memorandum") is executed as of the ____ day
of September, 2000, between Rainbow Property Management, LLC, a California
limited liability company ("Landlord") and Coloconnection, Inc., a Florida
corporation ("tenant"), and is as follows:
1. LEASE OF PREMISES. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord that certain real property in the City and County of
Santa Clara, State of California more particularly described in Exhibit A which
is attached hereto (the "Premises") on the terms and conditions set forth in a
certain Net Premises Lease dated for reference purposes only September 13, 2000
(the "Lease"), the provisions of which are hereby incorporated into this
Memorandum by this reference. The Premises includes, without limitation, rights
now or hereafter appurtenant to the Premises and any and all improvements now or
hereafter located thereon.
2. LEASE TERM. The term of the Lease shall commence October 1. 2000,
and shall expire on September 30, 2020, except that Tenant has two (2) options
to extend the term of the Lease for additional terms of 60 months each, unless
sooner terminated by Landlord or Tenant pursuant to the terms of the Lease.
3. RIGHT OF FIRST OFFER TO PURCHASE. Landlord hereby grants to Tenant
the right of first offer to purchase the Premises, on all of the terms arid
conditions stated herein and in the Lease.
4. FURTHER INFORMATION. Any party who wishes to obtain further
information concerning the Lease may contact: _____________________
5. BINDING EFFECT. Provisions of the Lease to be performed by Landlord
or Tenant, whether to be performed on the Premises or in any other location, and
whether affirmative or negative in nature, are intended to arid shall inure to
the benefit of and bind Landlord and Tenant, respectively, and their respective
heirs, administrators, executors, successors, and assigns at any time.
6. PURPOSE OF MEMORANDUM. This Memorandum is prepared for the purpose
of recordation and it in no way modifies the provisions of the Lease referred to
above.
1
Executed as of the date first set forth above.
LANDLORD: TENANT:
Rainbow Property Management, LLC, Coloconnection, Inc., a Florida
a California limited corporation
liability company
- ----------------------------- ----------------------------------
Dan Burfeind, Manager By:
-------------------------------
Its:
-------------------------------
- ----------------------------- ----------------------------------
Dianne G. Burfeind, Manager By:
-------------------------------
Its:
-------------------------------
2
STATE OF CALIFORNIA )
) ss:
COUNTY OF SANTA CLARA )
On ___________ before me, ____________, Notary Public, personally
appeared ___________________ personally' known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s). or the entity' upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my' hand and official seal.
- -----------------------------------
Notary Public (Seal)
STATE OF CALIFORNIA )
) ss:
COUNTY OF SANTA CLARA )
On ___________ before me, ____________, Notary Public, personally
appeared ___________________ personally' known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s). or the entity' upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my' hand and official seal.
- -----------------------------------
Notary Public (Seal)
3
STATE OF CALIFORNIA )
) ss:
COUNTY OF SANTA CLARA )
On ___________ before me, ____________, Notary Public, personally
appeared ___________________ personally' known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s). or the entity' upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my' hand and official seal.
- -----------------------------------
Notary Public (Seal)
STATE OF CALIFORNIA )
) ss:
COUNTY OF SANTA CLARA )
On ___________ before me, ____________, Notary Public, personally
appeared ___________________ personally' known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s). or the entity' upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my' hand and official seal.
- -----------------------------------
Notary Public (Seal)
4
EXHIBIT "F"
Mr. Alex Johnson
Don L. Beck Associates
10050 North Foothill Boulevard
Cupertino, California 95014
August 23, 2000 P10313
RE: Agreement for Environmental Consulting Services
3030 Corvin Drive
Santa Clara, California
Dear Mr. Johnson:
Thank you for requesting our agreement for investigative services at the 3030
Corvin Drive facility. This document will serve as our agreement to work
together.
THE PROJECT
It is our understanding that Your client plans to lease the 3030 Corvin Drive
facility and, that under conditions of the lease, they will be responsible only
for contaminants they generate at the site. This investigation is designed o
evaluate existing subsurface conditions at the facility so that your client has
a "baseline" prior to occupying the facility. The site is bordered by Kifer Road
to the south, Copper Road. to the west, Central Expressway to the north, and
Corvin Road to the east.
LOCAL EXPERIENCE
Since 1969, Lowney Associates has provided geotechnical and environmental
services for more than 5,000 projects. We have prepared this agreement based on
our previous work in the area, our site visit and discussions with you.
PROJECT TEAM
Our team consists of Stason I Foster, Principal in Charge, and Douglas T. Young,
Project Manager. We are prepared to begin the following scope of work.
--------------------
Recent Awards
1999 APWA
1998 C2ELSQG
1995 CELSOC
1994 CFLcOC
--------------------
SCOPE OF SERVICES
We propose the following scope of work to evaluate soil and ground water quality
near the facility by 1) reviewing available environmental records from sites
near the facility, 2) collecting a water sample from an existing on-site
monitoring well (MW-12), and 3) analyzing soil and ground water samples from a
boring drilled in the vicinity of the proposed aboveground fuel storage area.
DOCUMENT REVIEW
We will review case histories that are on record at the Santa Clara Valley Water
District (SCVWDI) for facilities that are adjacent to and either up- or
cross-gradient to the Site. Review of these facility records may assist in
refining the analytical resting program for the site.
2
------------------
SOIL SAMPLING HELPS DOCUMENT
BASELINE CONDITIONS AND POSSIBLE
SOURCES OF CONTAMINATION
------------------
FIELD INVESTIGATION
We plan to drill one soil boring in the proposed fuel storage area to obtain
baseline chemical data from soil and ground water samples.
Pre-Field Activities: Prior to beginning work, we will contact Underground
Service Alert (USA) to attempt to locate public underground utilities in the
area of our exploratory boring. Please note that USA will not mark private
utility locations. We will need you to mark any private utilities at the site or
provide us with utility plans prior to on-site drilling. We recommend using a
private utility locator to help reduce the risk of damaging underground
utilities during drilling, especially on sites where little information is
available regarding existing underground utilities. We are nor. responsible for
damage to underground structures.
Subsurface Explorations Our field engineer or scientist will direct a subsurface
exploratory program, supervise, log, and sample one exploratory boring to a
depth of approximately 25 feet. Ground water is anticipated to be at a depth of
between 20 and 25 feet.
The subsurface investigation will be performed using a limited access rig
equipped with Direct Push Technology equipment. The boring will be advanced by
hydraulically driving a 2-inch diameter by 4-foot-long open sampler with an
interior clear acetate sample liner. After being driven to a depth of 4 feet,
the sampler will be retracted to the surface. The soils sampled at approximately
5-foot intervals will be Jogged using the Unified Soil Classification System
(ASTM D-2487). Soil vapors from each sample will be monitored with an organic
vapor meter (OVM). The soil will he placed in a Ziploc(TM) hag for several
minutes; the bag then will be pierced with the OVM probe in order to record the
organic vapor levels present.
Soil samples for laboratory analysis will be collected in acetate liners. The
ends of the liners will be covered in Teflon film, fitted with plastic end caps,
taped, and labeled with a unique identification number. The samples then will be
placed in an ice-chilled cooler and transported to a state-certified analytical
laboratory with chain of custody documentation.
3
------------------
GROUND WATER SAMPLING HELPS
IDENTIFY IF ON-SITE SOURCES OF
CONTAMINATION MAY EXIST
------------------
GROUND WATER SAMPLING
Ground water will be collected through the direct push drive rods using a small
diameter bailer and placed in appropriate sample bottles labeled with a unique
identification number. The samples then will be placed in an ice-chilled cooler
and transposed to a state-certified analytical laboratory with chain of custody
documentation.
Sampling of Monitoring Welt MW-12: Ground .Water from the monitoring well MW-12
will be sampled in general accordance with EPA guidelines. A Teflon bailer or
submersible pump will be used to purge a minimum of three well casing volumes of
water from the well. After purging, the volume, pH, temperature, and
conductivity measurements will be recorded. In general, these measurements
stabilize (consecutive readings within 10 percent) after three to four well
volumes. If, alter the third well volume, the pH and conductivity have not
stabilized, additional well volumes will be removed until these measurements do
stabilize. if the yield is low and the well pumped dry, the well will be allowed
to recharge to the 50 percent level before sampling.
4
Ground water samples will be collected using a Teflon hailer and placed in
appropriate sample bottles labeled with a unique identification number. The
samples then will be placed in an ice-chilled cooler and transported to a
state-certified analytical laboratory with chain of custody documentation.
SAMPLING EQUIPMENT DECONTAMINATION
All sampling equipment will be thoroughly cleaned with an aqueous solution of
tri-sodium phosphate and distilled water or steam cleaned
Soil Cuttings, Steam Cleaning rinsate, and purged Ground Water Soil cuttings,
steam cleaning rinsate, and purged ground water will be stored on-site in EPA
approved drums. Our costs do not include handling or disposal of this material.
After receipt of the analytical results, we could provide a cost estimate for
disposal of these materials. If this is desired by you, please notify us.
LABORATORY ANALYSES
Four soil samples and two ground water samples will be analyzed at a state
certified laboratory for total petroleum hydrocarbons in the diesel range
(TPHd)(EPA Test Method 8015/8020), and volatile organic compounds (VOCs) (EPA
Test Method 8240). All analyses will be performed on a standard one-week
laboratory response time.
----------------------
IF THE SITE IS "CLEAN," WE
DOCUMENT COMPLIANCE; IF PROBLEMS
EXIST, WE HELP YOU WEIGHT
BUSINESS DECISIONS AGAINST
ENVIRONMENTAL LIABILITIES
----------------------
REPORT
We will prepare a soil and ground water letter evaluation report presenting the
results of our investigation and summarizing our conclusions and
recommendations. Our conclusions and recommendations will be based on readily
available information, observations of existing conditions, and our
interpretation of the analytical data. The report will include a site plan
showing sampling locations and copies of permits and laboratory data sheets.
5
FEES AND TERMS
We will perform the above tasks for the fixed fees presented in Table 1, per the
attached terms and conditions. Percent complete invoices will be issued on a
monthly basis. Any requested contract changes will need to he approved in
writing before we can proceed. The project cost is based on reported conditions
at the site to date. Should any significant factor be encountered other than as
represented at the time of this proposal, such as difficulty in accessing the
Site with our drilling equipment or deeper than anticipated ground water levels,
we reserve the right to adjust our fees in a reasonable manner.
TABLE 1. FIXED FEES FOR ENVIRONMENTAL SERVICES
Document Review ................................................... $ 792
Pre-Field Activities .............................................. 396
Subsurface Exploration ............................................ 1,628
Monitoring Well MW-12 Sampling .................................... 560
Laboratory Costs .................................................. 1,395
Office Coordination, Data Intrepretation, and Report Preparation .. 806
TOTAL ........................................................ $5,577
Optional Task
Utility Locator ................................................... $ 650
ADDITIONAL SERVICES
Additional services requested by you that are not outlined in this agreement,
such as attendance at project meetings and preparation Of draft reports, will be
charged on a time and expense basis. Please let us know if you would like us to
provide an estimate for any additional services, such as a geotechnical
investigation.
6
SCHEDULE
We are prepared to begin work within one week of receiving your authorization to
proceed. Scheduling and performance of field work will take approximately two
weeks to complete. All laboratory analyses will be performed on a standard
one-week laboratory response time. After receipt of the laboratory results,
review of the data and completion of our report will take approximately two
addition-al weeks. We will strive to keep you informed of significant project
developments and to he available to answer your inquiries.
AUTHORIZATION
Please acknowledge your receipt of and agreement with the terms contained in
this agreement by signing below and returning one signed original to us. As soon
as we receive a signed agreement, we will begin work.
Thank you for choosing us to assist you with this project. If you have any
questions, please call and we will be glad to discuss them with you.
Very truly yours, Agreement accepted by:
LOWNEY ASSOCIATES DON L. BECK AND ASSOCIATES
Douglas T. Young, R.G. -----------------------------------------
Senior Environmental Geologist Signature Date
-----------------------------------------
Please Print Name and Title
7
TERMS AND CONDITIONS OF AGREEMENT
1. AGREEMENT
Lowney's services are defined by and limited to (1) those services (the
"Work") described in the attached proposal, which is incorporated by this
reference and these Terms and Conditions of Agreement ("Terms and Conditions").
Together, the proposal and Terms and Conditions form our Agreement. This
Agreement represents the parties' entire agreement and supersedes all prior
negotiations, representations, or agreements, either written or oral. The
Agreement can only be ended by a written instrument signed by both the Client
and Lowney. Failure to immediately enforce any provision in this Agreement shall
not constitute a waiver of right to enforce that provision or any other
provision.
2. MISCELLANEOUS CHARGES
Expenses and other similar project-related costs are billed at cost
plus eighteen and one-half (181/2%) percent. Telephone costs, computer usage
charges, and computerized control of project charges will be additionally billed
at five (5%) percent of the total project charge. Reproduction charges will be
billed at twenty-five cents ($.25) per page plus the technical assistant's time
billed at their hourly rate. Fax transmissions will be charged at fifty cents
($0.50) per sheet. Fixed fee services will be ______________ for the agreed
fixed fee sum.
3. TERMS OF PAYMENT
The Client's obligation to pay for the Work is in no way dependent upon
the Client's ability to obtain financing or dependent upon the Client's
successful completion of the project. Payment for Work and expenses shall be due
and payable upon receipt of Lowney's statement. To be recognized, any dispute
over charges must be claimed in writing within thirty (30) days of the billing
date. Disputes or questions about a statement shall not be cause for withholding
payment of remaining ___________ due. Amounts unpaid thirty (30) days after the
issue date of Lowney's statement shall be assessed a service charge of one (1%)
percent per month on balances outstanding to compensate Lowney for the cost and
burden of administering the account and collecting fees owed. Should any legal
proceeding be commenced between the parties to this Agreement seeking to enforce
any of its provisions, including, but not limited to, fee provisions, the
prevailing party in such a proceeding shall be entitled to, in addition to such
other relief as may be granted, a reasonable sum of attorneys' fees and other
costs. For purposes of this provision, "prevailing party" shall include a party
which dismisses an action for recovery hereunder in exchange for payment of the
sum allegedly due, performance of covenants allegedly breached, in consideration
substantially equal to the relief sought in the action or proceeding. Lowney may
at its option withhold delivery of reports and other data pending receipt of
payment for all Work rendered and shall have no liability to the Client for
delay or damage caused because of such withholding.
4. INSURANCE
Lowney, its officers, employees, and agents (hereinafter referred to as
"Lowney") are protected by Worker's Compensation Insurance (and/or Employer's
Liability Insurance), by Commercial General Liability Insurance for bodily
injury and property damage, and by Professional Liability Insurance (including
8
Contractor's Pollution Liability Insurance), and will furnish certificates
thereof upon request. Client specifically agrees that Lowney will not be
responsible for property damage from any cause, including fire and explosion,
beyond the amounts actually paid by Lowney's insurance carriers under Lowney's
available insurance.
5. LIMITATIONS
5.1 Client recognizes the inherent risks connected with construction
activities, geotechnical investigations, environmental investigations, and
assessments. Client also recognizes that actual conditions at the site may vary
from those observed by Lowney when performing the Work. Client specifically
acknowledges and agrees that the interpretations and recommendations of Lowney
are based on information actually reviewed and conditions actually observed by
Lowney. Lowney shall not be responsible for the validity or accuracy of data
collected by others or interpretations made by others.
5.2 The Client agrees to defend and indemnify Lowney from any and all
claims, damages, costs and losses (including attorneys' fees and costs) arising
out of or in any way related to the Work or the performance or non-performance
of obligations under this Agreement except when the Claim arises from the sole
negligence of Lowney where the claim arises from the willful, wanton, or
reckless conduct of Lowney.
5.3 In performing its professional services, Lowney will strive to use
that degree of care and skill ordinarily exercised, under similar circumstances,
by members of its profession practicing in the same or similar locality and
under the same standard of care. No warranty, expressed or implied, is made or
intended by Lowney by the proposal for consulting services, the contract between
Lowney and Client, or by furnishing oral or written reports of the findings made
to the Client or any other person.
5.4 This paragraph limits Lowney's liability -- READ IT CAREFULLY. The
Client understands and acknowledges that the Work poses certain risks to both
Lowney and the Client. Client further acknowledges and agrees that the amount of
risk that Lowney accepts by this Agreement is commensurate with the amount of
compensation received under this Agreement for the Work. Lowney's fee for the
Work is based on and reflects Client's agreement to limit Lowney's liability as
described below. Client specifically acknowledges and agrees that but for this
promise to limit Lowney's liability, Lowney's fee would be significantly higher
to accommodate Lowney for the risks ____________ by the Work and entering this
Agreement. Client acknowledges its right to discuss this provision with legal
counsel and negotiate with Lowney regarding this provision and the proposed fee.
In reliance on the foregoing and in consideration for the fee proposed, Client
specifically acknowledges and agrees that, to the fullest extent permitted by
law, Lowney's total liability for any and all injuries, claims, liabilities,
losses, costs, expenses, or damages whatsoever including, without limitation,
attorneys' fees and legal costs (hereinafter "Claims") to Client and any third
party arising out of or in any way related to the Work or this Agreement from
any cause or ____________ including, but not limited to, Lowney's negligence,
errors, omissions, or breach of contract or any duty, is limited to and shall
not exceed $50,000 or the amount of Lowney's fee, whichever is greater (Option
1) except when the Claim arises from the sole negligence of Lowney or where the
9
Claim arises from the willful, wanton, or reckless conduct of Lowney. In
consideration of an additional fee of four (4%) percent of Lowney's total Work
fee or $400, whichever is greater, Lowney will raise the limitation of liability
up to the amount actually paid by Lowney's insurance carriers for the Claims
under Lowney's available insurance coverage (Limitation Increase) if and only if
Client makes its written request for the Limitation Increase before the
commencement of the Work and Client and Lowney each initial and date this
paragraph 5.4 below (Option 2) except when the Claim arises from the sole
negligence of Lowney or where the Claim arises from the willful, wanton, or
reckless conduct of Lowney.
LIMITATION INCREASE: IT IS AGREED THAT LIMITATION OF LIABILITY INCREASED TO
ACTUAL AMOUNT OF PROCEEDS PAID BY LOWNEY'S INSURANCE CARRIERS IN EXCHANGE FOR
ADDITIONAL FEE OF FOUR (4%) PERCENT OF TOTAL CHARGE OR $400, WHICHEVER IS
GREATER.
- -------------- ---- -------------- ----
Client Initial Date Lowney Initial Date
5.5 Client agrees on its behalf and on behalf of Client's officers,
directors, partners, principals, agents, employees, successors, representatives
and assignees (collectively referred to as the "Client Group") that in no event
shall any action or proceeding be brought against Lowney by Client or Client
Group for any claim or cause of action arising from or in any way related to the
Work or this agreement unless such action or proceeding is commenced within
three (3) years from the Date of Completion of Work provided by Lowney under
this Agreement. Client and Client Group agree and acknowledge that the
limitations period set froth herein supersedes, replaces, and supplants any and
all limitation periods which would otherwise apply including, but not limited
to, those appearing in the California Code of Civil Procedure. The Date of
Completion shall be the date of the final invoice for the Work performed under
this Agreement.
5.6 If Client requests that Lowney's work product be relied upon by a
third party, including, but not limited to, a lender, Client specifically agrees
to provide the third party with a copy of these terms and conditions and Client
agrees to limit Lowney's total liability to Client and any third party as
described in paragraph 5.4 above, and Client agrees to defend and indemnify
Lowney from any and all third party claims, damages, costs, and losses arising
out of or in any way related to the Work or the performance or non-performance
of obligations under this Agreement except when the Claim arises from the sole
negligence of Lowney or where the Claim arises from the willful, wanton, or
reckless conduct of Lowney. Any third party which accepts Lowney's work product
does so under the strict understanding that the third party is bound by all
provisions in these Terms and Conditions including, but not limited to, the
provisions of paragraphs 5.4 and 5.5 above, and this paragraph 5.6. Every
report, recommendation, finding or conclusion issued by Lowney shall be subject
to the limitations stated therein.
6. SCOPE AND EXECUTION OF SERVICES
6.1 Lowney will serve the Client by providing professional counsel and
technical advise based on information furnished by the Client. The Client will
make available to Lowney all known information regarding existing and proposed
conditions of the site, including the location of all underground utilities and
installations, and will immediately transmit any new information that becomes
available or any change in plans. When hazardous materials are known, assumed or
suspected to exist at a site, Lowney may be required by law to take appropriate
precautions to protect the health and safety of its personnel. Client hereby
10
warrants that if it knows or has any reason to assume or suspect that hazardous
materials may exist at the project site, Client will immediately inform Lowney
and warrants that Client has done its best to inform Lowney of the known or
suspected hazardous materials' type, quantity, and location. Client and Lowney
agree that Lowney shall not be responsible for any claims, damages, costs or
losses arising from or in any way related to conditions not actually encountered
during the course of Lowney's work and Lowney shall not have any liability or
responsibility for losses resulting from inaccurate or incomplete information
supplied by Client, and Client agrees to defend and indemnify Lowney against
claims, damages, costs or losses arising from or in any way related to
conditions not actually encountered during the course of Lowney's work and
Lowney shall not have any liability or responsibility for losses resulting from
inaccurate or incomplete information supplied by Client, and Client agrees to
defend and indemnify Lowney against claims, damages, costs or losses arising
therefrom. Lowney shall not be liable for failing to discover any condition the
discovery of which would reasonably require the performance of services not
authorized by Client.
6.2 Lowney will diligently proceed with its services and will submit
its report in a timely manner, but it is expressly agreed and understood by
Client that Lowney shall not be held responsible for delays occasioned by
factors beyond its control, nor by factors which could not reasonably have been
foreseen at the time of the execution of the Agreement between the parties.
Lowney will not be responsible for any damages, consequential or otherwise,
caused by delays in the completion of the Work. Lowney makes no warranties
regarding time of completion of the Work. In the event that the Work is
interrupted or delayed due to causes beyond Lowney's control including, but not
limited to, acts of God, war, riot, insurrection, inclement weather, fire acts
of third parties or governmental bodies, or matters within the control of
Client), Lowney shall be paid compensation for labor, equipment, and other costs
Lowney incurs in order to perform the Work for the Client's benefit during the
interruption or delay.
6.3 The individual or individuals who contract with Lowney on behalf of
the Client warrant that they are duly authorized agents of the Client and are
empowered to so contract.
6.4 Unless otherwise agreed in writing, the Client shall be entitled to
two copies of each report prepared by Lowney.
6.5 In the event that Lowney submits a proposal including these Terms
and Conditions of Agreement, to provide professional services and the Client
authorizes the Work by means of a purchase order or other writing
("Confirmation"), it is expressly agreed that these Terms and Conditions shall
apply, and any terms, condition, or provisions appearing in the Confirmation are
void and inapplicable except to the extent the Confirmation authorizes the Work
and binds Client to this Agreement.
7. SITE SAFETY
7.1 Lowney shall not be responsible for construction means, methods,
techniques, sequences, or procedures, or for safety precautions and programs in
connection with the job or the work of any contractor, subcontractor, or their
11
agents or employees, or any other person performing work or services on the job
or at the site.
8. TERMINATION
8.1 Either party may terminate this Agreement by giving the other party
seven (7) days' written notice. Notice shall be effective as of the date of
deposit in the U.S. Mail of the written notice, properly addressed to the person
to be notified. In the event that the Client requests termination of the
services prior to completion of Work, Lowney reserves the right to complete such
analyses and records as may be necessary to place its files in order and, where
considered necessary to protect its professional reputation, to complete a
report on the services performed to date. A termination charge of 10 percent of
the total contract amount in addition to all costs incurred to the date of Work
stoppage may be made at the discretion of Lowney.
9. OWNERSHIP OF DOCUMENTS
9.1 All reports, boring logs, field data, field notes, laboratory test
data, calculations, estimates and other documents prepared by Lowney, as
instruments of Work, shall remain the property of Lowney. Client agrees that all
reports and other services furnished to the Client or its agents, that are not
paid for, will be immediately returned upon demand and will not be used by the
Client for any purpose whatsoever. Client warrants that Lowney, in order to
perform its Work under this Agreement, has the unrestricted license and right to
use any information provided to Lowney by the Client or others.
10. RIGHT OF ENTRY
10.1 The Client will provide for right of entry of Lowney personnel and
all necessary equipment, in order to complete the Work. While Lowney will take
all reasonable precautions to minimize any damage to the property including
underground utilities, it is acknowledged and agreed by Client that in the
normal course of the Work some damage may occur, the correction of which is not
part of this Agreement. Accordingly, Client shall waive any claim against Lowney
and agree to defend and indemnify Lowney from any claims arising from entering
or working on the site which is the subject of the Work.
11. MONITORING OF CONSTRUCTION
The Client hereby acknowledges and understands that unanticipated or
changed conditions may be encountered during construction. Further, there is a
substantial risk to both the Client and to Lowney if Lowney is not engaged to
provide complete services, including but not limited to, construction
observation services. Such risks include the increased likelihood of
misinterpretation of Lowney's findings and conclusions, and error in
implementing recommendations by Lowney. Therefore, if the Client fails to retain
Lowney to provide complete services, the Client agrees to defend and indemnify
Lowney against any and all claims, damages, costs and losses arising out of or
in any way related to the Work or arising out of implementing or interpreting
Lowney's work product except when the Claim arises from the sole negligence of
Lowney or where the Claim arises from the willful, wanton, or reckless conduct
of Lowney.
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12. DISCOVERY OF UNANTICIPATED HAZARDOUS MATERIALS
12.1 Hazardous materials or other toxic substances may exist at a site
where there is no reason known to Client to believe they could or should be
present. Lowney and Client agree that the discovery of unanticipated potentially
hazardous materials constitutes a changed condition mandating a renegotiation of
the scope of Work or termination of Work. Lowney and client also agree that the
discovery of unanticipated potentially hazardous materials may make it necessary
for Lowney to take immediate measures to protect public health, safety, and the
environment. Lowney agrees to notify Client as soon as practically possible
should unanticipated hazardous materials be encountered. Client encourages
Lowney to take any or all measures that in Lowney's professional opinion are
justified to preserve and protect the health and safety of Lowney's personnel,
the public, and the environment, and Client agrees to compensate Lowney for the
cost of such services. Further, the Client agrees to defend and indemnify Lowney
from any and all claims, damages, costs, and losses arising out of or in any way
related to subsurface sampling, including, but not limited to, claims, damages,
costs and losses arising from cross-contamination except when the Claim arises
from the sole negligence of Lowney or where the Claim arises from the willful,
wanton, or reckless conduct of Lowney.
13. CONTAMINATION OF A WATER-BEARING ZONE
13.1 Subsurface sampling may result in unavoidable contamination of
certain subsurface areas, as when a probe or boring is advanced or drilled
through a contaminated area, into a clean soil or a water-bearing zone. Because
of the risks posed by such Work, and because subsurface sampling is often a
necessary part of Lowney's Work, the Client hereby agrees to waive all claims
against Lowney that in any way arise out of subsurface sampling, including
claims relating to cross-contamination.
14. DISPOSAL OF SAMPLES AND DRILL CUTTINGS
14.1 Lowney shall hold samples collected during the performance of its
Work no longer than 45 calendar days after issuance of any document that
includes data obtained from them unless Client advises in writing otherwise:
drill cuttings will be left on site. In the event that soil, rock, water or
drill cuttings, and/or other samples or material are contaminated or are
suspected to contain hazardous materials or other toxic substances hazardous or
detrimental to public health, safety, or the environment as defined by federal,
state or local statutes, regulations or ordinances, Lowney will, after
completion of testing, notify the Client of same in order for the Client to
arrange for the disposal of samples and materials. The Client recognizes and
agrees that Lowney at no time assumes title to said samples and/or materials.
The Client, not Lowney, remains ultimately responsible for selecting the
disposal or treatment facility to which such samples and/or materials are to be
delivered. The Client agrees to pay all costs associated with any storage,
transport, and disposal of samples and materials, and to defend and indemnify
Lowney from any and all claims arising out of or in any way related to the
storage, transport, and disposal of asbestos, hazardous or toxic substances, or
pollutants, including but not limited to, any samples and/or materials.
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15. MISCELLANEOUS PROVISIONS
15.1 The term "indemnify" shall mean indemnify, defend, and hold
harmless from and against any and all claims, liabilities, suits, demands,
losses, costs and expenses including, but not limited to, reasonable attorneys'
fees and all legal expenses and fees incurred on appeal, and all interest
thereon ("claims"), accruing or resulting to any and all persons, firms, or any
other legal entities, on account of any damages or losses to property or
persons, including death, or economic losses, arising out of the item, manner,
action or inaction specified in the specific provision.
15.2 This Agreement shall be governed by California law. The venue for
any legal action brought pursuant to this Agreement shall be located within the
County of Santa Clara, State of California.
15.3 Nothing contained in this Agreement shall create a contractual
relationship with or cause of action in favor of a third party against either
the Client or Lowney.
15.4 The Client and Lowney, respectively, bind themselves, their
partners, successors, assigns and legal representatives to the other party to
this Agreement and to the partners, successors, assigns and legal
representatives of such other party with respect to all covenants of this
Agreement. Client shall not assign this Agreement or any right or cause of
action hereunder without the written consent of Lowney.
15.5 Unless specified otherwise by Lowney, this quotation shall not
remain in effect after thirty (30) days of the proposal date.
15.6 Lowney maintains a General Engineering A license (No. 682286) and
Hazardous Substances Removal and Remedial Actions Certification with the State
of California which are regulated by the Contractors State License Board. Any
questions concerning a contractor may be referred to the Registrar, Contractors
State License Board, P.O. Box 26000, Sacramento, California 95826.
15.7 Client agrees that Lowney may use and publish Client's name and a
general description of Lowney's services with respect to the project in
describing Lowney's experience and qualification to other clients or prospective
clients.
15.8 Client acknowledges and agrees that it has received and reviewed
these Terms and Conditions and that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not apply to the
interpretation of this Agreement.
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EXHIBIT "G"
FORM OF LETTER OF CREDIT
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Contact Phones:
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IRREVOCABLE LETTER OF CREDIT
__________, 2000 Our irrevocable Letter of Credit:
No.
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Beneficiary: Applicant:
- --------------------- -------------------------------------------
- ---------------------
- --------------------- Amount: Exactly USD $_____ (_______ Dollars)
Final Date of Expiration:
------------------
We (the "Bank") hereby issue our irrevocable Letter of Credit No.
_______________ in Beneficiary's favor for the account of the above-referenced
Applicant, in the aggregate amount of exactly USD $________________
This Letter of Credit is available with us at our above office by
presentation of your draft drawn on us at sight bearing the clause: "Drawn under
No. ______________ [INSERT NAME OF BANK] Letter of Credit No. _____________"and
accompanied by the following:
1. Beneficiary's signed certification purportedly signed by an
authorized officer or agent stating:
(A) "Such amount is due to the Beneficiary as landlord tinder
the terms and conditions of that certain lease agreement dated __________, 2000
for premises known as the
_____________________________________________________________________________;
or
(B) "The Bank has notified us that this Letter of Credit will
not be extended beyond the current expiration date of this Letter of Credit and
Applicant has not delivered to Beneficiary at least thirty (30) days prior to
the current expiration of this Letter of Credit a replacement Letter of Credit
satisfactory to Beneficiary."
2. The original of this Letter of Credit.
Special conditions:
1
EXHIBIT "G"
Partial draws under this Letter of Credit are permitted.
Notwithstanding anything to the contrary contained herein, this Letter of Credit
shall expire permanently without renewal on _______ __, ____.
This Letter of Credit shall be automatically extended for an additional
period of one (1) year, Without amendment, from the present or each future
expiration date but in any event not beyond ________________ which shall be the
final expiration date of this Letter of Credit, unless, at least thirty (30)
days prior to the then current expiration date we notify you by registered
mail/overnight courier service at the above address that this Letter of Credit
will not be extended beyond the current expiration date.
We hereby agree with you that all drafts drawn under and in compliance
with the terms of this Letter of Credit will be duly honored upon presentation
to us of the documents described in Paragraph 1 above on or before the
expiration date of this Letter of Credit, without inquiry as to the accuracy
thereof and regardless of whether Applicant disputes the content of any such
documents or certifications.
This Letter of Credit may only be transferred in its entirety by the
issuing bank upon our receipt of the attached Exhibit "A" duly completed and
executed by the beneficiary and accompanied by the original letter of credit and
all amendment(s), if any. All transfer fees shall be charged to Applicant.
Except so far as otherwise expressly stated, this documentary credit is
subject to Uniform Customs and Practice for Documentary Credits, 1993 Revision,
International Chamber Of Commerce Publication No. 500.
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By:
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Authorized signature
Please direct any correspondence including drawing or inquiry quoting our
reference number to the above referenced address.
This document consists of two pages.
2
EXHIBIT "A"
DATE:
TO:
RE:
GENTLEMEN:
FOR VALUE RECEIVED, THE UNDERSIGNED BENEFICIARY HEREBY IRREVOCABLY TRANSFERS TO:
(NAME OF TRANSFEREE)
(ADDRESS)
ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY TO DRAW UNDER THE ABOVE LETTER OF
CREDIT UP TO ITS AVAILABLE AMOUNT AS SHOWN ABOVE AS OF THE DATE OF THIS
TRANSFER.
BY THIS TRANSFER, ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY IN SUCH LETTER OF
CREDIT ARE TRANSFERRED TO THE TRANSFEREE. TRANSFEREE SHALL HAVE THE SOLE RIGHTS
AS BENEFICIARY THEREOF, INCLUDING SOLE RIGHTS RELATING TO ANY AMENDMENTS,
WHETHER INCREASES OR EXTENSIONS OR OTHER AMENDMENTS, AND WHETHER NOW EXISTING OR
HEREAFTER MADE. ALL AMENDMENTS ARE TO BE ADVISED DIRECT TO THE TRANSFEREE
WITHOUT NECESSITY OF ANY CONSENT OF OR NOTICE TO THE UNDERSIGNED BENEFICIARY.
THE ORIGINAL OF SUCH LETTER OF CREDIT IS RETURNED HEREWITH, AND WE ASK YOU TO
ENDORSE THE TRANSFER ON THE REVERSE THEREOF, AND FORWARD IT DIRECTLY TO THE
TRANSFEREE WITH YOUR CUSTOMARY NOTICE OF TRANSFER.
SINCERELY,
- -----------------------------------------------
(BENEFICIARY NAME)
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SIGNATURE OF BENEFICIARY
- -----------------------------------------------
SIGNATURE AUTHENTICATED
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(NAME OF BANK)
- -----------------------------------------------
AUTHORIZED SIGNATURE