EXHIBIT 10.22
SUBLEASE AGREEMENT
This Sublease Agreement is made and entered into the 29th day of August ,
1997 by and between Wyse Technology Inc. (hereinafter "Sublessor" or
"Wyse") Digital Microwave Corporation (hereinafter "Sublessee" or "DMC")
and Wyse Technology Investments Inc. (hereinafter "Landlord" or "WTI").
For consideration of the rent, covenants, agreements and conditions herein
contained, Sublessor, Sublessee and the Landlord hereby agree as follows:
1 . Subleased Premises. Wyse leases from Landlord certain premises which
contain 167,200 square feet in the building located at 3475 North
First St., San Jose, CA 95134 (hereinafter referred to as "Premises")
which are the subject of that certain Lease dated March 19, 1993
between Wyse and Landlord. Wyse hereby subleases to DMC, and DMC
hereby subleases from Wyse, for the term and upon conditions herein
after set forth, the Subleased Premises, as shown on the drawing
attached hereto as Exhibit A and incorporated herein by this
reference. The Subleased Premises contains 62,023 rentable square
feet ("RSF"). Landlord hereby provides his unqualified consent to
this sublease of the Subleased Premises.
2. Term. Subject to the terms and conditions set forth herein, the term
of this Sublease shall commence on the date (the "Commencement Date")
set forth on Exhibit B ("Commencement Date Memorandum") and shall
terminate on January 1, 2002, except that it is understood and agreed
by the Sublessee and the Sublessor that the right and interest of
Sublessee under this Sublease are derivative of those of Sublessor
under the Lease between Sublessor Landlord and not any greater than
such rights and interest of Sublessor as to the Subleased Premises.
3. Occupancy. Between the date first written above and September 15,
1997, Sublessor shall give Sublessee notice of the availability of the
Premises ("Notice of Occupancy"). Physical occupancy will be granted
to DMC within one week of the Notice of Occupancy.
4. Use. Sublessee is permitted to use the Subleased Premises for general
office, administration, assembly and warehouse activities.
5. Rent.
(a) During the term of this Sublease, Sublessee covenants and agrees
to pay to Sublessor as full rental for the Subleased Premises,
without previous notice or demand therefore, rent at the gross
rate of $1.50 per moth per RSF, which equals a total monthly
payment of $93,034.50. Rent shall be paid on or before the first
day of each calendar month during the term of the Sublease
hereof, with the first such
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monthly installment to be paid upon the date that DMC executes
this Sublease Agreement. The first installment shall be the
rent for the month of October, 1997.
*(b) Notwithstanding the foregoing, Wyse will provide DMC with two
weeks free rental, from September 15, 1997 through September 30,
1997. This is based on an anticipated Commencement Date prior to
September 15.
(c) As security for Sublessee's faithful performance under the
Sublease, DMC shall upon execution of the Sublease pay the sum of
$93,034.50 (equaling one month's rent) for security deposit.
Except for reasonable charges for cleaning the Subleased
Premises, the security deposit will be remitted to Sublessee
within forty-five (45) days of the termination of the Sublease
(unless the Sublease is terminated for default of Sublessee.)
Wyse is under no obligation to keep the security deposit in an
account separate from its normal business accounts, neither is it
required to accrue interest on the deposit for the benefit of
DMC.
(d) Rent Inclusions. The gross rental rate includes-
(i) Common Area Maintenance Charges (CAM), property taxes and
other operating expenses. It also includes access to and use of
the electronic security system, which is installed in the
building.
(ii) Use, by DMC's on-site employees, of the cafeteria and
recreation center (which includes lockers, showers, weight room,
sauna, pool and Jacuzzi).
Rent does not include utilities or janitorial services (see
Section 6, below).
(e) Late Payments. In the event that Sublessee falls to remit
payments as described above, Sublessee shall additionally be
liable for interest on the unpaid amount, calculated at one and
one-half percent (1 1/2%) per month (or the highest amount
permitted by law) on the unpaid balance due.
6. Condition of Subleased Premises. Sublessee hereby agrees to accept the
Subleased Premises on an "as is", "as built" condition on the Commencement
Date of the term of this Sublease, it being understood and agreed that
Sublessor makes no warranties, express or implied, as to the Subleased
Premises including by way of example, and not limitation, any warranties of
suitability, fitness for purpose of use or habitability. Sublessor shall
leave premises in broom-clean condition.
7. Utilities. Sublessee shall contract for provision of utility services
(natural gas, electricity, telephones and water) directly with the
provider(s). Sublessor shall not be responsible to provide any such
utilities to the Subleased Premises. Additionally, DMC is responsible to
provide its own janitorial services for the Subleased Premises.
8. Insurance. Sublessee shall, prior to Commencement Date, provide Sublessor
with a certificate of insurance naming Landlord and Sublessor as additional
named insureds.
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9. DMC's Covenants.
(a) Except as set forth in this Agreement, all Sublessee's covenants and
obligations to the Sublessor and the Landlord under this Sublease
shall be the same as the covenants and obligations of Sublessor to
Landlord under the Lease and all Amendments hereto, which are attached
hereto as Exhibit C and incorporated herein by reference, to the
extent that such covenants and obligations are applicable to the
Subleased Premises and the Sublease terms.
(b) Sublessee hereby covenants and agrees to indemnify, hold harmless and
at the option of Sublessor, defend Sublessor in all suits, actions and
proceedings arising out of, related to, or concerning either (i) any
default or non-performance by Sublessee of this Sublease, including
without limitation, those covenants and obligations undertaken in the
preceding subparagraph, or (ii) the use or occupancy by Sublessee of
the Subleased Premises, except to the extent that such arises from the
negligence or willful misconduct on the part of the Sublessor.
(c) In the event of any dispute and/or litigation between the Sublessee
and the Landlord, the Sublessee will hold the Sublessor harmless.
10. Wyse's Covenants.
(a) Except as set forth above or as otherwise required by the context of
the Lease, all of the Sublessor's covenants and obligations under the
Sublease shall be the same as the covenants and obligations of
Landlord to Sublessor under the Lease and all Amendments thereto.
(b) In the event of any dispute and/or litigation between the Sublessor
and the Landlord, the Sublessor will hold the Sublessee harmless.
(c) Wyse hereby covenants and agrees to indemnify, hold harmless and at
the option of DMC, defend DMC in all suits, actions and proceedings
arising out of, related to, or concerning any default or
non-performance by Wyse of this Sublease, except to the extent that
such arises from the negligence or willful misconduct on the part of
the DMC.
11. Landlord Covenants: Except as set forth herein, or as otherwise required by
the contents of the Lease, all of Landlord's covenants and obligations
under the Sublease shall be the same as the covenants and obligations of
Landlord to Sublessor under the Lease and all Amendments thereto.
12. Parking. A minimum of four (4) parking spaces per one thousand (1,000) RSF
shall be available to DMC. Such parking spaces shall be identified in a
general manner on the Exhibit A. The spaces will not be reserved or
specifically marked as being for the benefit
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of DMC. Use thereof shall be in accordance with any current Landlord
rules or regulations governing same.
13. Option to Extend. Wyse and Landlord shall grant DMC a one time, personal
option to extend the Term for up to three (3) years upon at least six (6)
month's written notice from DMC prior to the end of the Term. Rent for the
extended term will be at the then current fair market value for the
Subleased Premises.
14. Signs. DMC will have the right, subject to agreement by Wyse and
compliance with any applicable laws, ordinances or other regulations, to
install (i) a sign on the Subleased Premises and (ii) a monument type sign
at the parking lot entry way on First St. Any signs will be installed and
maintained solely at Sublessee's expense.
15. Special Access to Subleased Premises. In addition to rights of access set
forth in Section 12 of the Lease, Wyse shall, at all reasonable times (and
upon reasonable notice except in cases of emergency) have access via the
Subleased Premises to the "roof access door" located therein.
16. Assignment. DMC shall not assign this Sublease or any of its rights or
obligations hereunder without the written consent of Wyse and WTI. Such
consent shall not be unreasonably withheld provided the proposed assignee
is financially equivalent to DMC, will use the Premises for similar
purposes, and DMC remains responsible for the assignee's performance in its
role as assignor.
17. Miscellaneous-
(a) The terms "Sublessor', "Sublessee" and "Landlord" shall, as
applicable, include their legal representatives, successor and
assigns. All covenants herein made binding upon Landlord, Sublessee
and Sublessor shall be equally binding on its agents, employees and
others claiming the right to be in the Subleased Premises through or
under the Sublessee or Sublessor. The Sublease shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective assigns.
(b) This Sublease shall be governed by the laws of the State of
California.
(c) All notices required to be made hereunder shall be sent to the
following addresses, or such other addresses as a party may later
designate:
TO SUBLESSEE:
Digital Microwave Corporation
170 Rose Orchard Way
San Jose, CA 95134
Attention: John O'Neil
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TO SUBLESSOR:
Wyse Technology Inc.
3471 N. First Street, MS 150-3
San Jose, CA 95134-1803
Attention: Facilities Manager
TO LANDLORD:
Wyse Technology Investments Inc.
c/o Wyse Technology Inc.
Same address as above for Sublessor
Attention: Katherine Jen
(d) Brokers and Commissions. The parties hereby represent that other than
Colliers Parrish International Inc. and Cornish & Carey Commercial
they have not obtained the services of any real estate brokers or
agents for the purposes of leasing the Subleased premises and that
each will indemnify and hold harmless the other parties from such
claims in the event that any other party established a right derived
from such indemnifying party to receive commissions or any payment as
a consequence of this Sublease.
Wyse is responsible for the commission arising from the Sublease
transaction. The aforementioned brokers have separately agreed upon
the method by which the commission will be shared between them.
Neither Wyse, WTI or DMC shall be liable to either brokerage firm for
breach of such commission agreement.
(e) The parties hereby agree that there shall be no recording of this
Sublease or notice of this Sublease in any registry of deeds with any
public agency, and that the terms and conditions of this Sublease are
confidential and shall not be disclosed to any third party without a
need to know for financial, legal or other substantial reasons.
(f) Sublessee agrees to reimburse all of Sublessor's costs and expenses in
seeking and obtaining any judicial enforcement of this Sublease,
including, without limitation, all resulting reasonable attorneys
fees.
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In witness whereof, the parties hereto have caused this instrument to be
executed in triplicate as of the date first written above.
DIGITAL MICROWAVE CORPORATION WYSE TECHNOLOGY INC.
BY: /s/ CARL A. THOMSEN BY: /s/ GARY A. MARTELL
--------------------------------------- ------------------------
Carl A. Thomsen Gary A. Martell
- ------------------------------------------- ----------------------------
(Print or type name) (Print or type name)
Vice President, Chief Financial Officer and Vice President, Finance and
Secretary Administration
- ------------------------------------------- ----------------------------
(Title) (Title)
8/29/97 9/2/97
- ------------------------------------------- ----------------------------
(Date) (Date)
WYSE TECHNOLOGY INVESTMENTS INC.
BY: /s/ KATHERINE JEN
---------------------------------------
Katherine Jen
- -------------------------------------------
(Print or type name)
Secretary
- -------------------------------------------
(Title)
8/30/97
- -------------------------------------------
(Date)
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EXHIBIT A
---------
3475 North First Street, San Jose
[Plus of Minus]62,023 square feet
[This exhibit consists of a
drawing of the property]
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EXHIBIT B
---------
COMMENCEMENT DATE MEMORANDUM
LANDLORD: Wyse Technology Investments, Inc., A California Corporation
SUBLESSOR: Wyse Technology Inc., a Delaware Corporation
SUBLESSEE: Digital Microwave Corporation, A California Corporation
Pursuant to Section 2 of the Sublease Agreement, the parties hereby acknowledge
and agree that the Commencement Date is:
September , 1997.
---
The foregoing is agreed as evidenced by the authorized signatures of the parties
below.
This Memorandum is executed on , 1997.
------------
LANDLORD
Wyse Technology Investments, Inc.
By:
---------------------------------------
Its:
---------------------------------------
SUBLESSOR
Wyse Technology Inc.
By:
----------------------------------------
Its:
---------------------------------------
SUBLESSEE
Digital Microwave Corporation
By:
----------------------------------------
Its:
---------------------------------------
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EXHIBIT C
AMENDED AND RESTATED LEASE AGREEMENT
LANDLORD: Wyse Technology Investments, Inc., a California corporation
TENANT: Wyse Technology, Inc., a Delaware corporation
PREMISES: Buildings located at
3471-3475 North First Street
San Jose, California
DATE: March 19, 1993
BASIC LEASE INFORMATION
Landlord: Wyse Technology Investments, Inc., a California
corporation
Landlord's Taxpayer I.D. No.: 77-0311526
Tenant: Wyse Technology, Inc., a California corporation
Tenant's Taxpayer I.D. No.: 94-2757606
Project: The three building complex located at the corner
of North First Street and River Oaks Place in San
Jose, California
Premises (Section 1.a.): Amenities Space Address:
3471 North First Street
San Jose, California
Approximately 24,100 square feet
Building 2 Address:
3471 North First Street
San Jose, California [1st and 2nd Floors]:
Approximately 88,818 rentable square feet
Building 3 Address:
3471 North First Street
San Jose, California
Approximately 143,400 rentable square feet of the
one-story Building (entire building)
Rentable Square Footage of 24,100
Amenities Space (Section 1.d.):
Rentable Square Footage of 167,200
Building 2 (Section 1.d.):
Rentable Square Footage of 143,400
Building 3 (Section 1.d.):
Rentable Square Footage of 433,700
Project (Section 1.d.):
Rentable Square Footage of 237,926
Premises (Section 1.d.)
Usable Square Footage of 24,100 square feet in Amenities Space;
Premises (Section 1.d.): up to 88,818 square feet in Building 2; and
143,000 square feet in Building 3
Total: max. 255,918 square feet
Use (Section 15.a.): Computer manufacturing and research and
development facility
Term (Section 2): Ten (10) years commencing on
Commencement Date
Commencement Date: June 1, 1992
(Section 2.b.)
Monthly Base Rent (Section 4): Monthly Rental Rate
Month Per Rentable Square Foot
----- ------------------------
0-7
8-19
20-31
32-43
44-55
56-67
68-79
90-91
92-120
Estimated Operating Expenses Annual: $_________
(Section 6.a.):
Monthly: $__________
Tenant's Percentage Share
(Section 6.a): Building 2: 42.12%
Building 3: 100%
Project: 54.85%
Parking Spaces (Section 33): Reserved: See EXHIBIT A
Unreserved: 4 spaces/1,000 rentable square feet of
the Premises minus the reserved parking spaces
Landlord's Address 3471 N. First Street
(Section 40): M/S 120-3
San Jose, California 95134-1803
Tenant's Address 3471 N. First Street
(Section 40): M/S 120-3
San Jose, California 95134-1803
"Landlord" "Tenant"
Wyse Technology Investments, Wyse Technology, Inc. a
Inc., a California corporation Delaware corporation
By: /s/ GARY ANDERSON By: /s/ GLORIA C. WAHL
----------------------- --------------------------
Name: Gary Anderson Name: Gloria C. Wahl
Title: Vice President Title: Treasurer
Date: March 19, 1993 Date: March 19, 1993
----------------- --------------------
TABLE OF CONTENTS
Page
1. Premises.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Term.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3. Rent.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4. Monthly Base Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5. Payment of Additional Charges. . . . . . . . . . . . . . . . . . . . . . . 5
6. Additional Rent-Operating Expenses.. . . . . . . . . . . . . . . . . . . . 5
7. Proration of Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
8. Insurance and Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . .18
9. Landlord Insurance.. . . . . . . . . . . . . . . . . . . . . . . . . . . .20
10. Utilities and Service. . . . . . . . . . . . . . . . . . . . . . . . . . .20
11. Repairs and Maintenance. . . . . . . . . . . . . . . . . . . . . . . . . .21
12. Access to Premises.. . . . . . . . . . . . . . . . . . . . . . . . . . . .22
13. Alterations and Signs. . . . . . . . . . . . . . . . . . . . . . . . . . .23
14. Use and Compliance with Laws.. . . . . . . . . . . . . . . . . . . . . . .25
15. Damage or Destruction. . . . . . . . . . . . . . . . . . . . . . . . . . .26
16. Eminent Domain.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
17. Default by Tenant. . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
18. Tenant's Remedies Upon Landlord's Default. . . . . . . . . . . . . . . . .32
19. Assignment and Subletting. . . . . . . . . . . . . . . . . . . . . . . . .32
20. Hazardous Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . .33
21. Surrender of Premises. . . . . . . . . . . . . . . . . . . . . . . . . . .34
22. Estoppel Certificate.. . . . . . . . . . . . . . . . . . . . . . . . . . .34
23. Subordination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
24. Warranties of Landlord; Quiet Enjoyment. . . . . . . . . . . . . . . . . .37
25. Holding Over.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
26. Recording. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
27. Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
28. Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
29. Parking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
30. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
31. Transfer of Title. . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
32. General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
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EXHIBITS
Exhibit A: Legal Description of Real Property; Floor Plan for Buildings;
Calculation of Total Rentable and Useable Square Footage for
each Building and the Project; and Site Plan of the Project
Exhibit B-1: Summary of:
1. Project Operating Expenses for 1990 and 1991
2. Estimate of Project Operating Expenses for 1992 and 1993
3. Building Operating Expenses for 1990 and 1991 (Segregated
by Building 1, Building 2 and Building 3)
4. Estimate of Building Operating Expenses for 1992 and 1993
(Segregated by Building 1, Building 2 and Building 3)
Exhibit B-2: Summary of:
1. Amenities Expenses for 1990 and 1991
2. Estimated Amenities Expenses for 1992 and 1993
Exhibit C: Form of Estoppel Certificate
Exhibit D: Landlord's Normal Business Hours For Operation of HVAC
Exhibit E: Memorandum of Lease
Exhibit F: Tenant Insurance Requirements
Exhibit G: Specifications for Utilities and Services
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AMENDED AND RESTATED LEASE AGREEMENT
THIS AMENDED AND RESTATED LEASE AGREEMENT (this "Lease"), dated as of
March, 1993, is entered into by WYSE TECHNOLOGY INVESTMENTS, INC., a
California corporation ("Landlord"), and WYSE TECHNOLOGY, INC., a Delaware
corporation ("Tenant") in order to modify and amend that certain Lease
Agreement, dated as of May 27, 1992, entered into by Landlord, as landlord,
and Tenant, as Tenant. Terms which are capitalized in this Lease (but which
are not defined in the body of this Lease) shall have the meanings set forth
in the Basic Lease Information, which is incorporated herein by this
reference and appears immediately preceding this page.
THIS LEASE IS ENTERED on the basis of the following facts, intentions
and understandings of the parties:
A. Landlord has acquired, or is in the process of acquiring, from
Tenant pursuant to that certain Contract of Sale dated as of May 27, 1992,
between Landlord, as purchaser, and Tenant, as seller, (i) two separate legal
parcels comprising approximately thirty-two and six hundred nineteen
thousandths (32.619) acres of real property in San Jose, California more
particularly described in EXHIBIT A, attached hereto ("Real Property") and
(ii) the improvements located on the Real Property ("Improvements") which
include: (a) three office buildings ("Buildings"); (b) a cafeteria
("Cafeteria"); and (c) a health club, including tennis courts and a swimming
pool ("Health Club"). The Improvements are generally shown in the Site Plan
attached hereto as EXHIBIT A. The Real Property and the Improvements are
hereinafter collectively referred to as the "Project".
B. The Buildings are commonly known as: (i) One River Oaks Place
("Building 1"); (ii) 3475 North First Street ("Building 2"); and (iii) 3471
North First Street ("Building 3").
C. Landlord desires to lease to Tenant, and Tenant desires to lease
from Landlord, in accordance with the terms of this Lease the following
portions of the Project: (i) up to 88,818 rentable square feet in Building 2
to the extent that Landlord shall make such space available to Tenant and
Tenant shall in fact occupy the same from time to time ("Building 2 Space"),
(ii) 143,000 rentable square feet in Building 3 ("Building 3 Space"), and
(iii) subject to the rights of Pacific Bell, as tenant ("Pacific Bell"),
under that certain Lease Agreement dated as of October 31, 1991 between
Landlord and Pacific Bell (the "Pacific Bell Lease"), the Cafeteria and
Health Club, consisting in the aggregate of 24,100 square feet (the
"Amenities Space"). As of the date hereof, the amount of Building 2 Space
being leased by Tenant is 88,818 square feet.
D. The portion of (i) the Operating Expenses of the applicable Building
("Building 2 Operating Expenses" and "Building 3 Operating Expenses",
respectively) and (ii) the Operating Expenses of the Project ("Project
Operating Expenses"), for which Tenant will be responsible is set forth in
Section 6.a(xiii). The
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portion of the Amenities Expenses for which Tenant will be responsible is set
forth in Section 6.d(ix).
E. The term (the "Term") of this Lease will be ten (10) years,
commencing on June 1, 1992 (the "Commencement Date").
F. The premises ("Premises") subject to this Lease at any time will be
the Building 2 Space, the Building 3 Space and the Amenities Space.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and promises of
the parties, the parties hereto agree as follows:
1. PREMISES.
a. PREMISES. Landlord leases to Tenant, and Tenant leases from
Landlord, the Premises, together with the right in common to use the Common
Areas within the Project.
(i) AMENITIES SPACE. Tenant acknowledges and
agrees that Tenant's lease of the Amenities Space is subject
to the rights of Pacific Bell under the Pacific Bell Lease to
use the Amenities Space and Tenant shall not use or alter the
Amenities Space in any manner which would adversely affect
Pacific Bell's ability to use and enjoy the Amenities Space to
the extent permitted under the Pacific Bell Lease.
(ii) BUILDING 2 SPACE. Tenant acknowledges and
agrees that Tenant's lease of the Building 2 space is subject
to the rights of Pacific Bell to exercise certain expansion
rights granted to Pacific Bell under the Pacific Bell Lease
with respect to the Building 2 Space. Tenant further agrees
that Landlord shall have the unconditional right at any time
and from time to time during the term of this Lease, upon 30
days prior written notice ("Pacific Bell Expansion Notice")
delivered to Tenant following Landlord's receipt of notice of
Pacific Bell's exercise of its right to expand into any
portion of the Building 2 Space, to terminate this Lease as to
the portion of the Building 2 Space described in such notice
from Pacific Bell. The Pacific Bell Expansion Notice will
describe in reasonable detail the portion of the Building 2
Space to which it applies (including the rentable square
footage of such portion). Tenant shall surrender such portion
of the Building 2 Space to Landlord in accordance with, and in
the condition required under, Section 21 of this Lease on or
before the 30th day following Tenant's receipt of the Pacific
Bell Expansion Notice. Upon the termination of this Lease as
to any portion of the Building 2 Space pursuant to this
Section 1.a(ii), (A) Tenant's Share of Project Operating
Expenses and Tenant's Share of Building 2 Operating Expenses
shall be adjusted to reflect such termination and (B) the
Monthly Base Rent (as hereinafter defined) shall be partially
reduced by an amount equal to the amount of basic rent Pacific
Bell is obligated to pay to Landlord for such portion of the
Building 2 Space under the Pacific Bell Lease; provided that
at the end of the seventh Lease Year the
2
Monthly Base Rent shall be fully adjusted to reflect the
termination of this Lease as to such portion of the Building 2
Space and, following such full adjustment, Landlord shall
reimburse Tenant for any Monthly Base Rent Tenant has paid to
Landlord which Tenant would not have been obligated to pay had
such full adjustment to the Monthly Base Rent been made
concurrently with such termination of this Lease as to such
portion of the Building 2 Space, PLUS interest on any such
amount at a rate equal to 6% per annum.
b. COMMON AREAS. The "Common Areas" shall mean the areas and
facilities within the Project for the general use, convenience and benefit of
Tenant and other tenants and occupants of the Buildings (E.G., unreserved
parking areas; and, as to the Buildings not leased exclusively to Tenant or
other tenants, the restrooms, janitorial, telephone and electrical closets,
and elevators available for common use; PROVIDED, HOWEVER, that (i) Tenant's
use of space in the closets shall be limited to the percentage share thereof
("Tenants Percentage Share") equal to the rentable square footage of the
applicable Building covered by this Lease as a percentage of the rentable
square footage of that entire building, (ii) any access thereto and use
thereof shall be subject to Landlord's reasonable rules and regulations in
respect thereof and shall be done in a manner and at times so as to minimize
any interference with the Building systems and with other tenants, and (iii)
Tenant shall not use the Common Areas in a manner that materially or
unreasonably interferes with or annoys other tenants). Subject to Section
1.c, Landlord shall not change the Common Areas in any manner which
materially or unreasonably interferes with Tenant's use of the Premises.
c. BUILDING AND PROJECT SQUARE FOOTAGES. The Usable Square
Footage of the Buildings, the Rentable Square Footage of the Buildings and
the Rentable Square Footage of the Project have been determined in accordance
with the latest applicable standards of the Building Owners and Managers
Association ("BOMA"). Tenant understands that Landlord is contemplating the
construction of an additional building and other improvements on the parcel
of land on which is located Building 3 (to the north thereof) and may
construct other improvements on the Project. In the event of any such
improvements which shall result in an increase or decrease in the Rentable
Square Footage of the Project, Tenant's Percentage Share of the applicable
Buildings and Tenant's Percentage Share of the Project shall be adjusted
based upon the rentable square feet in the applicable Buildings and in the
Project.
d. SQUARE FOOTAGES. Landlord and Tenant acknowledge that the
rentable square footage of each of the Building 2 Space, the Building 3 Space
and the Amenities Space is accurate and shall be used for purposes of
calculating Base Rent payable by Tenant, Tenant's Share of Building 2
Operating Expenses, Tenant's Share of Building 3 Operating Expenses, Tenant's
Share of Amenities Expenses and Tenant's Share of the Project Operating
Expenses.
e. TENANT'S PERCENTAGE SHARE OF BUILDINGS. As used in this Lease,
(i) the term "Tenant's Percentage Share of Building 2" shall be the
percentage determined by dividing (A) the rentable square footage of Building
2 Space by (B) the total rentable square footage of Building 2 and (ii)
"Tenant's Percentage Share of
3
Building 3" shall be the percentage determined by dividing (A) the rentable
square footage of the Building 3 Space by (B) the total rentable square
footage of Building 3.
f. TENANT'S PERCENTAGE SHARE OF PROJECT. As used in this Lease,
the term "Tenant's Percentage Share of the Project" shall be the percentage
determined by dividing (i) the rentable square footage of the Premises by
(ii) the total rentable square footage of the Project.
2. TERM.
a. LEASE TERM. The Term of this Lease shall commence on the
Commencement Date and, unless terminated on an earlier date in accordance
with the terms of this Lease, shall extend for the Term and shall expire on
the date that is ten (10) years from the Commencement Date (the "Expiration
Date"), unless sooner terminated pursuant to the terms of this Lease.
b. LEASE YEARS. The first lease year ("First Lease Year") of the
Term shall be the period commencing on the Commencement Date and ending on
December 31, 1992. The subsequent lease years ("Lease Years") shall be the
twelve (12) month periods measured from the end of the First Lease Year.
c. WAIVER. Tenant hereby waives its rights under California Civil
Code Section 1932(1), it being agreed that the terms under this Section 2 and
Section 3 hereof shall govern and replace any rights covered by said statute.
3. RENT. As used in this Lease, the term "Rent" shall mean (i) the
Monthly Base Rent; (ii) Tenant's Share of Building 2 Operating Expenses;
(iii) Tenant's Share of Building 3 Operating Expenses; (iv) Tenant's Share of
the Project Operating Expenses; (v) Tenant's Share of Amenities Expenses; and
(vi) all other amounts due from Tenant under this Lease.
4. MONTHLY BASE RENT.
a. PAYMENT. The Monthly Base Rent shall be payable in equal
monthly installments. Tenant shall pay the Monthly Base Rent to Landlord in
advance upon the Commencement Date and, thereafter, upon the first day of
each calendar month of the Term. The Monthly Base Rent shall be paid at
Landlord's Address (or at such other place within the United States
designated by Landlord in a notice to Tenant) without prior demand or notice
and without any deduction or set-off whatsoever, except as expressly set
forth in this Lease.
b. MONTHLY BASE RENT. Subject to Section 2.a(ii), Tenant shall
pay Monthly Base Rent per rentable square foot of Building 2 Space actually
occupied by Tenant, Building 3 Space and Amenities Space ("Monthly Base
Rent"), in accordance with the following schedule:
4
MONTHLY RENTAL RATE
MONTH PER RENTABLE SQUARE FOOT
----- ------------------------
0-7 Jun 92-Dec 92
8-19 Jan 93-Dec 93
20-31 Jan 94-Dec 94
32-43 Jan 95-Dec 95
44-55 1/96-12/96
56-67 1/97-12/97
68-79 1/98-12/98
90-91 1/99-12/99
92-120 1/00-12/02
c. LATE PAYMENT CHARGE. If Tenant fails to pay an increment of
Monthly Base Rent when due, Tenant shall pay a late payment charge of Five
Thousand Dollars ($5,000.00). Any late payment charge shall be payable on
the second day of the month in which such delinquent increment of Monthly
Base Rent was due.
5. PAYMENT OF ADDITIONAL CHARGES. Tenant's Share of Operating
Expenses shall be paid as provided in Section 6. All other charges required
to be paid by Tenant under this Lease (I.E., other than Base Rent, Operating
Expenses and Amenities Expenses) shall be paid by Tenant within thirty (30)
days after receipt from Landlord of a bill evidencing Landlord's payment
thereof.
6. ADDITIONAL RENT-OPERATING EXPENSES.
a. OPERATING EXPENSES.
(i) SUMMARY AND ESTIMATED OPERATING EXPENSES. Set forth in
EXHIBIT B-1 to this Lease are (A) a summary of the Project Operating Expenses
for the 1990 and 1991 calendar years; (B) an estimate of Project Operating
Expenses for the 1992 and 1993 Lease Years; (C) a summary of Building
Operating Expenses for the 1990 and 1991 calendar years (segregated by
Building 1, Building 2 and Building 3); and (D) an estimate of the Building
Operating Expenses (segregated by Building 1, Building 2 and Building 3) for
the 1992 and 1993 Lease Years.
(ii) PROJECT OPERATING EXPENSES. The term "Project Operating
Expenses" shall mean the reasonable and actual operating expenses which are
paid by Landlord in connection with only the Common Areas. The Project
Operating Expenses shall be directly attributable to the operations,
maintenance, management and repair of the Common Areas, as determined under
generally accepted accounting principles, consistently applied, for the
applicable period. Project Operating Expenses shall be the following: (A)
Real Estate Taxes, as defined in Section 6.b.; (B) premiums for insurance;
(C) wages, salaries and related expenses and benefits (including fringe
benefits, payroll taxes, workers' compensation and uniforms) of on-site
employees engaged in operation, maintenance and security; (D) the reasonable
costs of repairs, replacements (amortized, as provided below) and general
maintenance (excluding those which are the sole obligation of Landlord
expressly so provided herein, those paid for by proceeds of
5
insurance or other parties, and alterations attributable solely to tenants of
the Buildings other than Tenant); (E) reasonable charges for steam, heat,
ventilation, air conditioning, water, gas, electricity and other utilities
used or consumed in the Common Areas; (F) the cost of supplies and equipment
used in the operation and maintenance of the Project; (G) reasonable
professional fees (E.G., fees of attorneys, auditors and other professionals
and consultants) and association dues; (H) the cost of resurfacing and
restriping the parking areas and janitorial and other cleaning costs and
fees; (I) the cost of governmental licenses and permits, or renewals thereof,
necessary for the operation of the Project; (J) the cost of capital
improvements made to the Project either (1) for the intended purpose of
reducing Project Operating Expenses (but only to the extent of the lesser of
the amortized cost of the capital improvement or the actual cost savings
resulting from the capital improvement) or (2) pursuant to a requirement of
law, ordinance, order, rule or regulation of any governmental,
quasi-governmental or public authority (a "Law") or a requirement of any
insurance carrier or insurance rating organization or underwriting board,
provided the Law or requirement is amended, enacted or promulgated after the
Effective Date or (3) as set forth in Section 6.a(vi) hereof; and (K) all
other reasonable and actual expenses paid in connection with the operation,
maintenance, management and repair of the Common Areas. The costs of
replacements pursuant to Section 6.a(ii)(D), capital improvements pursuant to
Section 6.a(ii)(J), and resurfacing under Section 6.a(ii)(H) (if capital in
nature) shall be amortized on a straightline basis over the useful life of
the replacement, improvement or resurfacing using generally accepted
accounting principles, consistently applied. The cost of capital
improvements which are made to the Project pursuant to a Law which was in
existence prior to or on the Effective Date but only became applicable to the
Project by reason of any act or cause of Tenant (E.G., any tenant
improvements or any particular use by Tenant of the Premises) shall not be
included in Project Operating Expenses but shall be paid by Tenant.
(iii) BUILDING OPERATING EXPENSES. The term "Building
Operating Expenses" shall mean the reasonable, actual operating expenses
which are paid by Landlord in connection with only the Buildings containing
any portion of the Premises. The Building Operating Expenses shall be
directly attributable to the operations, maintenance, management and repair
of the Buildings, as determined under generally accepted accounting
principles, consistently applied. Building Operating Expenses shall be the
following: (A) Real Estate Taxes, as defined in Section 6.b.; (B) premiums
for insurance; (C) wages, salaries and related expenses and benefits of
on-site employees engaged in operation, maintenance and security (including
fringe benefits, payroll taxes, workers' compensation and uniforms); (D) the
reasonable costs of repairs, replacements (amortized, as provided below) and
general maintenance (excluding those which are the sole obligation of
Landlord expressly so provided herein, those paid for by proceeds of
insurance or other parties, and alterations attributable solely to tenants of
the Buildings other than Tenant); and (E) reasonable charges for steam, heat,
ventilation, air conditioning, water, gas, electricity and other utilities
used or consumed in the Buildings; (F) the cost of supplies and equipment
used in the operation and maintenance of the Buildings; (G) reasonable
professional fees (E.G., fees of attorneys, auditors and other professionals
and consultants) and association dues; (H) the cost of resurfacing and
restriping the parking areas and janitorial and other cleaning costs and
6
fees; (I) the cost of governmental licenses and permits, or renewals thereof,
necessary for the operation of the Buildings; (J) the cost of capital
improvements made to the Buildings either (1) for the intended purpose of
reducing Buildings Operating Expenses (but only to the extent of the lesser
of Tenant's pro rata share of the cost of any capital improvement or the
actual cost savings resulting from the capital improvement) or (2) pursuant
to a requirement of Law or a requirement of any insurance carrier or
insurance rating organization or underwriting board, provided the Law or
requirement is amended, enacted or promulgated after the Effective Date or
(3) as set forth in Section 6.a(vi) hereof; and (K) all other reasonable,
actual expenses paid in connection with the operation, maintenance,
management and repair of the Buildings. The cost of replacements pursuant to
Section 6.a(iii)(D), capital improvements pursuant to Section 6.a(iii)(J) and
resurfacing under Section 6.a(iii)(H) (if capital in nature) shall be
amortized on a straightline basis over the useful life of the replacement,
improvement or resurfacing, using generally accepted accounting principles,
consistently applied. The cost of capital improvements which are made to the
Buildings pursuant to a Law which was in existence prior to or on the
Effective Date but only became applicable by reason of any act or cause of
Tenant (E.G., any tenant improvements or any particular use by Tenant of the
Premises) shall not be included in Building Operating Expenses but shall be
paid by Tenant.
(iv) OPERATING EXPENSES. The term "Operating Expenses" shall
mean the sum of Project Operating Expenses and Building Operating Expenses.
The term "Operating Expense" shall mean any individual expense included
within the definition of Operating Expenses. All goods and services
comprising Operating Expenses shall be obtained at competitive prices, but
may be obtained from related parties. Any item which is a Project Operating
Expense shall not be a Building Operating Expense.
(v) EXCLUSIONS. Operating Expenses shall not include the
following: (A) legal fees, brokerage commissions, advertising costs, or
other related expenses incurred in connection with the leasing of any portion
of the Project; (B) repairs, alterations, additions, improvements or
replacements made to rectify or correct any defect in the design, materials
or workmanship of the Project (provided that the foregoing shall not include
repairs, alterations, additions, improvements or replacements to
non-defective items which are caused by Tenant's construction activities);
(C) except as provided in Section 6.a(ii)(J)(2) and Section 6.a(iii)(J)(2),
repairs, alterations, additions, improvements or replacements made to comply
with any requirements of Law in effect as of the Effective Date; (D) any
repairs, additions, improvements, alterations, replacements or expenditures
of a capital nature, except as specifically allowed and limited pursuant to
Sections 6.a(ii)(J) and 6.a(iii)(J) and Section 6.a(vi); (E) depreciation or
amortization of the Buildings or any other improvements within the Project
except as set forth in (D) above; (F) the cost of damage and repairs
attributable to fire or other casualty (except for the deductible portion of
insurance which shall be included in Operating Expenses in the event of a
casualty); (G) the cost of damage and repairs covered under any insurance
policy carried by, or required to be carried by, Landlord in connection with
the Project (except for the deductible portion of insurance which shall be
included in Operating Expenses in the
7
event of a casualty); (H) damage and repairs necessitated by the negligence
or wilful misconduct of Landlord or Landlord's employees, contractors or
agents; (I) executive salaries (except for Landlord's Project or Building
Director of Facilities, Manager or Superintendent); (J) salaries of service
personnel to the extent that the service personnel perform services not
solely in connection with the management, operation, repair or maintenance of
the Project; (K) Landlord's general overhead expenses not related to the
Buildings; (L) payments of principal or interest on any mortgage or other
encumbrance; (M) legal fees, accountants' fees and other expenses incurred in
connection with disputes with Tenant, or other occupants or tenants under or
with respect to their leases or associated with the enforcement of any leases
or defense of Landlord's title to or interest in the Project or any part
thereof; (N) costs (including permit, license and inspection fees) incurred
in renovating or otherwise improving, decorating, painting or altering space
for other tenants or other occupants or of vacant rentable space in the
Buildings or Project; (O) costs incurred due to violation by Landlord or any
other tenant in the Project of the terms and conditions of any lease; (P)
interest, penalties or other costs arising out of Landlord's failure to make
timely payment of its obligations; (Q) the cost of any service provided to
Tenant or other occupants of the Project for which Landlord is entitled to be
reimbursed (other than pursuant to provisions similar to this Section 6); (R)
overhead and profit paid to subsidiaries or affiliates of Landlord for
management or other services for the Buildings or Project or for supplies or
other materials to the extent that the costs of the services, supplies or
materials exceed the competitive costs of the services, supplies or materials
if they were not provided by a subsidiary or an affiliate; (S) costs incurred
to test, survey, clean up, contain, abate, remove or otherwise remedy
Hazardous Materials (as defined in Section 20 hereof) from the Project unless
the Hazardous Materials were in or on the Project because of Tenant's
negligence or intentional acts; (T) costs incurred in connection with any
portion of the Project which is intentionally segregated from the parking
available for Tenant and other tenants of the Project or used solely for
parking by non-tenants of the Project and for which parking fees are charged;
(U) property management fees; (V) costs incurred in advertising and
promotional activities for the Project (including gifts and promotional
services to tenants or other parties); (W) imputed amounts for rent for space
within the Project or other locations which is unoccupied or occupied by
property managers; (X) all Amenities Expenses; and (Y) any other expense
which, under generally accepted accounting principles, consistently applied,
are not reasonable, actual operating expenses which are directly attributable
to the operations, maintenance, management and repair of the Project or the
Buildings, as applicable.
(vi) RESTRICTIONS ON SPECIFIC OPERATING EXPENSES. The costs
of any major repair which is made to the roofs or the heating, ventilation
and air conditioning (HVAC) systems which is not caused solely by the
negligence of Tenant shall be amortized over the useful life of the repair,
as determined in accordance with generally accepted accounting principles,
consistently applied; provided that (A) Tenant shall not be responsible for
any amortized costs of repairs to the roofs during the term hereof and (B)
Tenant shall not be responsible for any amortized costs of repairs to the
HVAC systems during the first five (5) years of this Lease. Notwithstanding
the provisions of clauses (A) and (B) above, Tenant shall be solely
responsible for any repairs to the roofs or HVAC systems arising out of any
acts or omissions of Tenant or its
8
agents, representatives, contractors, subcontractors or servants or anyone
else under the reasonable control of Tenant.
(vii) LIMITATION ON SPECIFIED PROJECT OPERATING EXPENSES.
Tenant shall not be responsible in the First Lease Year for the Project
Operating Expenses specified in EXHIBIT B-1 as "CAM & Landscaping" and
"Insurance" ("Specified Project Operating Expenses") in excess of Four and
Fifty-Five Hundredths Cents ($0.0455) per rentable square foot of Building 2
Space actually occupied by Tenant, Building 3 Space and Amenities Space in
the First Lease Year. The limitation (and the Specified Project Operating
Expenses) shall be calculated on the basis of the annualized Project
Operating Expenses for the Building 2 Space actually occupied by Tenant,
Building 3 Space and Amenities Space. The limitation set forth in this
Section 6.a(vii) shall not apply to any other Operating Expenses.
(viii) LIMIT ON ANNUAL SPECIFIED PROJECT OPERATING EXPENSE
INCREASES. After the First Lease Year, Tenant shall not be liable for any
increase in the Specified Project Operating Expenses for any Lease Year
during the Term in excess of five percent (5%) (calculated on a per rentable
square footage basis) per Lease Year on a compounded basis (E.G., the maximum
Specified Project Operating Expense for which Tenant shall be responsible in
the second Lease Year shall be $0.047775 per rentable square foot and the
maximum Specified Project Operating Expenses for which Tenant shall be
responsible in the third Lease Year shall be $0.050164 per rentable square
foot); provided, however, that increases in the Specified Project Operating
Expenses which directly result from governmentally mandated costs or fees
(E.G., penalties for excess water usage) shall not be subject to the above
limitation. For purposes of this Section 6.a(viii), Real Estate Taxes shall
not be included in the Specified Project Operating Expenses (as Real Estate
Taxes shall be subject to the limitation set forth in Section 6.b(iv)). The
limitation set forth in this Section 6.a(viii) shall not apply to any other
Operating Expenses.
(ix) COLLECTION. Landlord shall use reasonable efforts to
keep the Operating Expenses at reasonable amounts while operating the Project
as a first-class office/research and development campus and there shall not
be included in Operating Expenses any costs in excess of those that would be
reasonably incurred by prudent owners who act as operators and managers of
similar first-class office/research and development campuses located in the
cities of Sunnyvale, Santa Clara, Milpitas and the North San Jose area
("Similar Facilities"), which owner operators and managers are not generally
engaged in the operation and management of Similar Facilities or other
properties and do not have access to the economies and resources available to
operators and managers of Similar Facilities or other properties. Landlord
shall not collect in excess of one hundred percent (100%) of any operating
Expense or any Operating Expense more than once. All Operating Expenses
shall be determined in accordance with generally accepted accounting
principles and practices, consistently applied. Landlord's statement of
Operating Expenses shall be certified by a certified public accountant or
signed and certified to be correct by Landlord.
9
(x) RIGHT TO CHALLENGE. Tenant shall have the right, by
giving written notice to Landlord at any time within one (1) year after
receipt of any statement of Operating Expense, to challenge the accuracy of
any Operating Expense set forth in the statement. Failure to timely notify
Landlord of a challenge shall be a waiver of Tenant's right to challenge the
Operating Expenses set forth in the applicable statement. If Tenant
challenges any Operating Expenses, Landlord shall make Landlord's books and
supporting documents available at reasonable times during office hours and
upon reasonable prior notice for Tenant to audit. If requested by Tenant,
Landlord shall provide adequate work space within Landlord's offices for
Tenant's authorized representatives to review the books and supporting
documents. Tenant shall pay the cost and expenses of any audit unless the
audit shows an overstatement of at least five percent (5%) in the Operating
Expenses, in which event Landlord shall pay the costs and expenses of the
audit. Landlord shall pay any overstated amounts to Tenant, together with
interest at the rate of ten percent (10%) per annum from the date of
overpayment to the date payment is made by Landlord (and, if applicable, the
cost of the audit), within thirty (30) days after the amount of the
overstatement is finally determined.
(xi) SURVIVAL. If the exact amount of any item payable by
Tenant under this Section 6 which would not otherwise be due until after the
Expiration Date or termination of this Lease is uncertain as of the
Expiration Date or termination of this Lease, the item shall be paid by
Tenant to Landlord within sixty (60) days after Landlord's notice to Tenant
of Landlord's final determination of the exact amount.
(xii) NOTICE OF OBLIGATION. Landlord shall provide Tenant
with at least two (2) months' prior notice ("Rent Adjustment Notice") of the
effective date of any adjustments in Rent which are to be made under this
Lease. If Landlord fails to give notice to Tenant at least two (2) months
prior to the date an adjustment is to be effective, (A) Tenant shall have the
right, for a period of two (2) months after the Rent Adjustment Notice, to
pay Rent in an amount equal to the Rent payable prior to the adjustment, and
(B) within two (2) months after Tenant receives the appropriate Rent
Adjustment Notice, Tenant shall pay, without any penalty or interest, any
accrued increases in Rent during the two (2) month period stated in the Rent
Adjustment Notice.
(xiii) ESTIMATED PAYMENTS. Prior to the commencement of
each Lease Year during the Term, or as soon thereafter as is practicable,
Landlord shall estimate the Operating Expenses payable by Tenant pursuant to
this Section 6.a and Tenant shall pay to Landlord on the first of each month,
in advance, one-twelfth (1/12) of Landlord's estimated amount of Tenant's
Share ("Tenants Share") of Building 2 Operating Expenses, Building 3
Operating Expenses and Project Operating Expenses. Subject to the provisions
of Section 6.a(xii), if Landlord's estimate is given at any time after the
beginning of a Lease Year, the first payment after delivery of the estimate
shall include the aggregate of the underpayments for the prior months in the
Lease Year as if the applicable statement of estimated Operating Expenses
been timely given prior to the beginning of the Lease Year and as if the
adjusted amounts of Operating Expenses had been due from the first month of
the Lease Year. Landlord's estimate shall include a comparison, by each
category, of the prior Lease Year's Operating Expenses (in terms of both
dollars and percentages) and, if requested by Tenant, shall include a
reasonably
10
detailed description of the reasons for increases to support Landlord's
estimate. If Landlord does not provide an estimate (and, if requested by
Tenant, a reasonably detailed description) to Tenant prior to the
commencement of a Lease Year, Tenant shall continue, until the month after
Tenant receives Landlord's estimate of the revised Operating Expenses (and,
if requested by Tenant, reasonable, detailed documentation), to pay the
Operating Expenses based on the prior Lease Year's estimate. After a Lease
Year has commenced, Landlord may revise its estimate of Operating Expenses;
provided that Landlord shall not revise its estimate more than twice during
any Lease Year.
(xiv) ADJUSTMENT IN ESTIMATED PAYMENTS. Tenant's Share of
Building 2 Operating Expenses, Tenant's Share of Building 3 Operating
Expenses and Tenant's Share of the Project Operating Expenses shall be
adjusted as applicable every time during the Term that there is an increase
or decrease in either (A) the rentable square footage of the Premises leased
by Tenant or (B) the rentable square footage of the Project. The increases
or decreases shall result from Tenant leasing additional or less Building 2
Space or as a result of Landlord making additional improvements to the
Project.
(xv) ANNUAL ADJUSTMENT. Within ninety (90) days after the
end of each Lease Year, Landlord shall deliver to Tenant a final statement of
actual Operating Expenses for the Lease Year and there shall be an adjustment
made to account for (A) any difference between the actual and the estimated
Operating Expenses for the previous Lease Year and (B) any change in the
actual rentable square footage of the Premises Tenant leased during the
previous Lease Year. If Tenant has overpaid the amount of Operating Expenses
owing pursuant to this Section 6.a, Tenant shall subtract the amount of the
overpayment from the next payment of Rent; provided, that in the case of an
overpayment for the final Lease Year of the Term, Landlord shall refund the
overpayment to Tenant within sixty (60) days after Landlord's determination
(which shall be made in a timely manner) that there was an overpayment. If
Tenant has overpaid the amount of Operating Expenses by more than five
percent (5%), Tenant shall be entitled to interest, at the rate of ten
percent (10%) per annum, on the amount of the overpayment from the date of
the overpayment to the date of application of the overpayment to Rent (or
refund by Landlord). If Tenant has underpaid the amount owing pursuant to
this Section, Tenant shall pay the amount of the underpayment to Landlord
within sixty (60) days after receipt of Landlord's written demand accompanied
by a final statement of the Operating Expenses.
b. REAL ESTATE TAXES.
(i) GENERAL. Subject to Section 6.b(ii), "Real Estate
Taxes" shall mean the aggregate amount of real estate taxes, personal
property taxes and other similar charges on real property or improvements,
assessments, special assessments and all other charges levied or assessed
upon the Project or the Buildings, other than any water or sewer charges to
the extent the same are included in Operating Expenses for the applicable
Lease Year. If because of any change in the taxation of real estate, any
other tax, assessment or surcharge of any kind or nature (including any
franchise, income, profit, sales, use, occupancy, gross receipts or rental
tax) is imposed upon, against or with
11
respect to the Project, the Buildings, the Common Areas (including the
parking areas or the number of parking spaces) or the occupancy, rents or
income therefrom or the ownership or owners (direct or indirect) thereof,
either in lieu of, in substitution for or in addition to any of the foregoing
Real Estate Taxes, such other tax, assessment or surcharge shall be deemed
part of Real Estate Taxes. With respect to any Lease Year, all reasonable
expenses, including attorneys', accountants' and experts' reasonable fees and
expenses, incurred in contesting the validity or amount of Real Estate Taxes,
the assessed valuation of the Project or the Buildings or in obtaining a
refund of Real Estate Taxes shall be considered as part of the Real Estate
Taxes for that Lease Year to the extent that the prudent owner of Similar
Facilities (under similar circumstances) would expend the fees and expenses.
(ii) EXCLUSIONS. The following shall not constitute Real
Estate Taxes for purposes of this Lease: (A) except as set forth in Section
6.b(i) above, any state, local, federal, personal or corporate income tax
measured by the income of Landlord; (B) except as set forth in Section 6.b(i)
above, any estate, inheritance, or gross rental receipts tax; (C) except as
set forth in Section 6.b(i) above, any franchise, succession or transfer
taxes; (D) interest on taxes or penalties resulting from Landlord's failure
to pay taxes; (E) any increases in taxes attributable to improvements
constructed by or for Tenant; (F) any increases in taxes attributable to
change of ownership (E.G., sale) of all or any part of the Premises,
Buildings or Project to any entity which is not Tenant or an Affiliate (as
defined in Section 19.9 hereof); (G) any assessments which are levied as a
result of Landlord's construction of additional improvements to the Project;
(H) real estate taxes resulting from tenant improvements costing in excess of
Eight Dollars ($8.00) per rentable square foot ("Overstandard Tenant
Improvements") made by other tenants of the Project (which shall be treated
in accordance with the provisions of Section 6.b(iii)); or (I) any
entitlement fees or taxes which are essentially payments to a governmental
agency for the right to make improvements to the Buildings, the Project, the
surrounding area or other projects of Landlord.
(iii) OVERSTANDARD TENANT IMPROVEMENTS. Real Estate Taxes
resulting from (A) Overstandard Tenant Improvements by Tenant or (B) from any
other tenant improvements or Alterations made within the Premises shall not
be included in the Operating Expenses but instead shall be the obligation of
Tenant. Real Estate Taxes resulting from Overstandard Tenant Improvements
made to other portions of the Project (E.G., by other tenants of the Project)
shall not be included in the Operating Expenses and Tenant shall not have an
obligation for such Real Estate Taxes.
(iv) LIMIT ON ANNUAL INCREASE OF REAL ESTATE TAXES. The
Real Estate Taxes to be included in the Operating Expenses for the First
Lease Year shall be based on Forty-Three Million Dollars ($43,000,000.00)
(representing the reassessment of the Project based on the transaction
pursuant to which Landlord acquired the Project), subject to increase for the
first Eight Dollars ($8.00) per rentable square foot of tenant improvements
but shall not include Overstandard Tenant Improvements constructed for the
benefit of Tenant. Subject to the provisions of Section 6.b(v), the Real
Estate Taxes which shall be included in the Operating Expenses for any Lease
Year during the Term after the First Lease Year shall not be in excess of one
hundred and two percent (102%)
12
of the Real Estate Taxes included in the Operating Expenses for the
immediately preceding Lease Year.
(v) GOVERNMENTAL CHANGES. The limitation on increases of
Real Estate Taxes set forth in Section 6.b(iv) shall not apply to any
increases resulting from (1) governmental changes in the manner of
determining the amount of the Real Estate Taxes due (E.G., governmental
changes resulting from (A) determination that Proposition 13, and the
applicable provisions of the California Constitution (E.G., Article XIII),
are unconstitutional or (B) increases, above two percent (2%), in the
permitted annual percentage rate of increase in the "full cash value", as
defined in Article XIII.A, Section 2 of the California Constitution), (2) any
change described in the second sentence of Section 6.b(i) hereof, (3) any
expenses described in the third sentence of Section 6.b(i) hereof, and (4) as
a result of any tenant improvements, but only to the extent of Eight Dollars
($8.00) per rentable square foot of such improvements.
c. PERSONAL PROPERTY TAXES. Tenant shall pay or cause to be
paid, prior to delinquency, any and all taxes and assessments levied upon all
improvements, alterations, fixtures, trade fixtures, inventories and other
personal property placed in and upon the Premises by Tenant.
d. LESS THAN FULL OCCUPANCY.
(i) BUILDINGS. If less than one hundred percent (100%)
of the rentable square footage of either Building 2 or Building 3 is
occupied, the Operating Expenses for the Building (I.E., Building 2 or
Building 3) shall be adjusted to equal Landlord's reasonable estimate of the
Operating Expenses if one hundred percent (100%) of the rentable square
footage of the Building were occupied.
(ii) PROJECT. If less than one hundred percent of the
rentable square footage of the Project is occupied, the Operating Expenses
for the Project shall be adjusted to equal Landlord's reasonable estimate of
the Operating Expenses for the Project if one hundred percent (100%) of the
rentable square footage of the Project were occupied.
e. AMENITIES EXPENSES.
(i) SUMMARY AND ESTIMATED AMENITIES EXPENSES. Set forth
in EXHIBIT B-2 to this Lease are (A) a summary of the Amenities Expenses for
the 1990 and 1991 calendar years; and (B) an estimate of the Amenities
Expenses for the 1992 and 1993 Lease Years.
(ii) AMENITIES COMMITTEE. The responsibility for
determining the Amenities Expenses for the period after the Commencement Date
shall be vested in an amenities committee ("Amenities Committee"). The
Amenities Committee shall at all times consist of two (2) members; one (1)
member shall be Landlord's Property Manager (or other individual appointed by
Landlord) and the other member shall be Pacific Bell's Asset Manager (or
other individual appointed by Pacific Bell). The Amenities Committee shall
meet at Landlord's offices at the Project (or such other place as may be
13
agreed upon by the Amenities Committee) as frequently as the Amenities
Committee may determine.
(iii) AMENITIES EXPENSES BUDGET. Not less than sixty (60)
days prior to the beginning of each Lease Year during the Term, the Amenities
Committee shall agree upon a budget ("Amenities Expenses Budget") stating an
estimate of the Amenities Expenses and Tenant's Share of Amenities Expenses
(determined in accordance with Section 6.e(ix) hereof) for the upcoming Lease
Year. Each Amenities Expenses Budget shall only include those costs and
expenses which are reasonable and necessary to operate and maintain the
Project Amenities in a first-class manner, consistent with comparable
amenities within Similar Facilities operated by prudent owners operating
comparable amenities. If the Project Amenities are being operated by an
unaffiliated third party approved by the Amenities Committee, its fees and
expenses (if payable pursuant to a written contract) and any costs that it
advises should be incurred shall conclusively be deemed to be reasonable and
necessary. Notwithstanding anything to the contrary set forth herein,
Landlord shall not be obligated to provide any facility, service or other
amenity during a particular period if the cost therefore will not be included
in the Amenities Expense Budget.
(iv) CAPITAL IMPROVEMENTS. The Amenities Committee shall
approve any and all capital improvements, the cost of which are to be
included in Amenities Expenses.
(v) AMENITIES EXPENSES. The term "Amenities Expenses"
shall mean the reasonable, actual and necessary operating expenses, approved
by the Amenities Committee, which are paid by Landlord in connection with the
Project Amenities. Goods and services comprising the Amenities Expenses
shall be obtained at competitive prices. The Amenities Expenses shall be
directly attributable to the operations, maintenance, management and repair
of the Project Amenities, as determined under generally accepted accounting
principles, consistently applied, for the applicable period. Amenities
Expenses shall be the following to the extent incurred solely in connection
with the Project Amenities: (A) premiums for insurance; (B) fees, charges,
expenses, wages, salaries and related expenses and benefits (including,
without limitation, fringe benefits, payroll taxes, worker's compensation and
uniforms) of employees or other persons or entities (including, without
limitation, those payable to a third party operating or managing the Project
Amenities or providing services therefor) engaged in management, operation,
maintenance and security; (C) the reasonable cost of repairs and general
maintenance (excluding those paid for by proceeds of insurance or other
parties); (D) reasonable charges for steam, heat, ventilation, air
conditioning, water, gas, electricity and other utilities used or consumed in
connection with the Project Amenities; (E) the cost of supplies and
equipment; (F) the cost of governmental licenses and permits, or renewals
thereof, necessary for the operation of the Project Amenities; and (G) the
cost of capital improvements approved by the Amenities Committee (as provided
in Section 6.e(iv)), amortized on a straightline basis over the useful life
thereof in accordance with generally accepted accounting principles,
consistently applied; and (H) all other reasonable, actual expenses approved
by the Amenities Committee, paid in
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connection with the operation, maintenance, management and repair of the
Project Amenities.
(vi) EXCESS USE OF PROJECT AMENITIES. Tenant shall pay to
Landlord the resulting increase in Amenities Expenses if (A) as a result of
Tenant's extended operating hours or increased employment of persons,
Tenant's use of the Project Amenities exceeds the use of the Project
Amenities by other tenants in the Project and (B) as a result of Tenant's
increased use, Landlord is required to extend the hours that the Project
Amenities are available or the services provided. The amount of the increase
shall be reasonably determined by the Amenities Committee.
(vii) COLLECTION. Landlord shall use reasonable efforts to
keep the Amenities Expenses at reasonable amounts while operating the Project
Amenities in a first class manner for comparable amenities within Similar
Facilities. Landlord shall not collect in excess of one hundred percent
(100%) of any Amenities Expense or any Amenities Expense more than once.
(viii) RIGHT TO CHALLENGE. Tenant shall have the right, by
notice in writing to Landlord given at any time within one (1) year after
receipt of any statement of Amenities Expense, to challenge the accuracy of
any Amenities Expenses. Failure to timely notify Landlord of a challenge
shall be a waiver of the right for the applicable statement. If Tenant
challenges any Amenities Expenses, Landlord shall make Landlord's books and
supporting documents available at reasonable times during office hours and
upon reasonable prior notice for Tenant to audit. If requested, Landlord
shall provide adequate work space within Landlord's offices for Tenant's
authorized representatives to review the books and supporting documents.
Tenant shall pay the costs and expenses of any audit unless the audit shows
an overstatement of at least five percent (5%) in the Amenities Expenses, in
which event Landlord shall pay the cost and expenses of the audit.
(ix) ESTIMATED PAYMENTS. Tenant shall pay to Landlord
Tenant's Percentage Share of Amenities Expenses for each Lease Year on an
estimated basis, in the same manner and subject to the same terms and
conditions as set forth for the payment of Operating Expenses pursuant to
Section 6.a(xiii) hereof. Tenant's Percentage Share of Amenities Expenses
shall be the product of (A) a fraction, the numerator of which shall be the
rentable square footage of the Premises actually occupied by Tenant at the
commencement of the then current Lease Year and the denominator of which
shall be the total rentable square footage of the Project, TIMES (B) the
estimated Amenities Expenses for the Lease Year.
(x) ADJUSTMENT IN ESTIMATED PAYMENTS. Tenant's
Percentage Share of Amenities Expenses shall be adjusted every time during
the Term that there is an increase or decrease in either (A) the rentable
square footage of the Premises leased by Tenant or (B) the rentable square
footage of the Project. The increases or decreases shall result from Tenant
leasing additional or less Building 2 Space or as a result of Landlord making
additional improvements to the Project.
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(xi) ANNUAL ADJUSTMENT PERIOD. Within ninety (90) days
after the end of each Lease Year, Landlord shall deliver a final statement to
Tenant of actual Amenities Expenses for the Lease Year and there shall be an
adjustment made to account for any difference between (A) the actual and the
estimated Amenities Expenses for the previous Lease Year and (B) the actual
rentable square footage of the Premises during the previous Lease Year, the
actual rentable square footage of the Project and the rentable square footage
used to calculate Tenant's Percentage Share of Amenities Expenses in the
estimated budget which may have been revised during the Lease Year, in
accordance with Section 6.e(x). If Tenant has overpaid the amount of the
Amenities Expenses owing pursuant to this Section, Tenant shall subtract the
amount of the overpayment from the next payment(s) of Rent; provided, that in
the case of an overpayment for the final Lease Year of the Term, Landlord
shall refund the overpayment to Tenant within sixty (60) days after the
Amenities Committee's determination (which shall be made in a timely manner)
that there was an overpayment. If Tenant has overpaid the amount of
Amenities Expenses by more than five percent (5%), Tenant shall be entitled
to interest, at the rate of ten percent (10%) per annum, on the amount of the
overpayment from the date of the overpayment to the date of application of
the overpayment to Rent (or refund by Landlord). If Tenant has underpaid the
amount owing pursuant to this Section, Tenant shall pay the amount of the
underpayment to Landlord within sixty (60) days after receipt of Landlord's
written demand accompanied by a final statement of the Amenities Expenses.
f. RIGHT TO DISCONTINUE USE OF CAFETERIA. Tenant shall have
the right, in accordance with the terms of this Section 6.f., to discontinue
its use of the Cafeteria.
(i) NOTICE. Upon not less than one (1) year's prior
notice to Landlord, Tenant may elect to discontinue its use of the Cafeteria
at any time during the Term.
(ii) PAYMENT. Not later than the date designated by
Tenant that its use of the Cafeteria will cease (the "Cafeteria Termination
Date"), Tenant shall deliver to Landlord a termination payment (the
"Cafeteria Termination Payment"). The Cafeteria Termination Payment shall be
an amount equal to the unamortized portion of any additional capital
expenditures (including expenditures for fixtures and equipment) approved by
the Amenities Committee (pursuant to Section 6.e(iv)) made by Landlord which
the Amenities Committee reasonably determined (A) to be necessary to
adequately provide food and beverage service to Tenant's employees and (B)
would not be necessary if Tenant had not used the Cafeteria. If Tenant makes
the Cafeteria Termination Payment in a timely manner, Tenant shall have the
right, within sixty (60) days after the Cafeteria Termination Date, to remove
the fixtures and equipment for which the Cafeteria Termination Payment was
paid (I.E., the fixtures and equipment upon which the Cafeteria Termination
Payment was calculated) but only to the extent that such removal shall not
result in any permanent damage to any portion of the Project, and provided
that Tenant shall repair any damage caused by such removal.
(iii) REIMBURSEMENT EXPENDITURES. Landlord shall obtain
the Amenities Committee's approval (pursuant to Section 6.e(iv)) prior to
Landlord making
16
any capital expenditures for fixtures or equipment for which Landlord will
desire any reimbursement as part of the Cafeteria Termination Payment.
(iv) METHOD OF AMORTIZATION. Any capital expenditure
which is to be part of the Cafeteria Termination Payment shall be amortized
over the useful life (as determined under generally accepted accounting
principles, consistently applied) of the item for which the capital
expenditure was made.
(v) REDUCED AMENITIES EXPENSES. On the Cafeteria
Termination Date, any and all costs and expenses associated with the
Cafeteria shall be excluded from Amenities Expenses payable under this Lease.
g. USE OF HEALTH CLUB.
(i) SUBJECT TO AMENITIES COMMITTEE. Use of the Health
Club by Tenant shall be limited to employees of Tenant who work at the
Project and their immediate families. Operations of the Health Club shall be
subject to the terms and conditions (E.G., rules) established by the
Amenities Committee.
(ii) RULES OF TENANT. In addition to the terms and
conditions established by the Amenities Committee, Tenant may impose
additional restrictions on the use of the Health Club by its employees. For
example, (A) Tenant may limit the use of the Health Club to employees of
Tenant who work at the Project, and (B) Tenant's employees who desire to use
the Health Club may be required to present proof of their compliance with
Tenant's required physical health and fitness assessment program and sign
participation waivers in the form provided by Tenant, prior to being allowed
to use the Health Club. Tenant shall pay the costs of imposition of any
additional restrictions which Tenant requests on the use of the Health Club
by its employees.
(iii) HEALTH CLUB MANAGEMENT. Tenant's Asset Manager (or
designee) shall meet with Landlord and/or Landlord's operator of the Health
Club as often as Tenant reasonably determines is necessary to (A) coordinate
the programs and activities provided at the Health Club and (B) agree on the
terms and conditions (E.G., rules) applicable to use of the Health Club.
7. PRORATION OF RENT.
a. COMMENCEMENT DATE. If the Commencement Date is not the
first day of the month, or the end of the Term is not the last day of the
month, Rent shall be appropriately prorated on a monthly basis (based on the
number of days in the month) for the fractional month during the month which
this Lease commences or terminates.
b. TERMINATION. The termination of this Lease with respect
to all or any portion of the Premises shall not affect the obligations of
Landlord and Tenant pursuant to Section 6 which are to be performed after the
termination.
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8. INSURANCE AND INDEMNITY.
a. TENANT'S INSURANCE. Tenant shall obtain and keep in full
force and effect at all times at Tenant's sole cost and expense, the
insurance described on Exhibit F hereto. All such insurance shall (i) be
written by an insurance company licensed and qualified to do business in the
State of California which is reasonably acceptable to Landlord, (ii) shall
name Landlord, and any person firms or corporations (including any management
agent, Lessor or Mortgagee (each as hereinafter defined)) designated by
Landlord as insureds and (iii) shall contain a clause that the insurer will
not cancel or change the insurance without first giving Landlord 30 days'
prior written notice. An original copy of such policies or renewals thereof
or certificates of insurance therefor shall be delivered to Landlord upon
execution and 30 days prior to expiration of any then existing policies, as
the case may be. Tenant shall not carry separate or additional insurance,
concurrent in form or contributing in the event of any loss or damage, with
any insurance required to be obtained by Tenant under this Lease.
b. INDEMNITY AND NON-LIABILITY. (i) Neither Landlord nor
Landlord's agents nor any Lessor or Mortgagee shall be liable to Tenant or
Tenant's agents or any other occupant of the Premises, and Tenant shall
indemnify and hold harmless Landlord, any Lessor and Mortgagee, their
successors and assigns and their respective agents from any loss, cost,
liability, claim, damage, expense (including reasonable attorney's fees and
disbursements), penalty or fine incurred in connection with or arising from
any injury to Tenant or to any other person or for any damage to, or loss (by
theft or otherwise) of, any of Tenant's property or the property of any other
person, irrespective of the cause of such injury, damage or loss (including
the acts or negligence of any tenant or of any owners or occupants of
adjacent or neighboring property or caused by operations in construction of
any private, public or quasi-public work) unless due to the gross negligence
or willful misconduct of Landlord or Landlord's agents. However, even if such
loss or damage is caused by the gross negligence or willful misconduct of
Landlord or its agents, Tenant waives, to the full extent permitted by law,
any claim for consequential damages in connection therewith. To the extent of
Tenant's insurance coverage, Landlord and its agents shall not be liable for
any loss or damage to any person or property due to the gross negligence or
willful misconduct of Landlord or its agents.
(ii) Neither any (A) performance by Landlord, Tenant or others
of any repairs, improvements, alterations, additions, installations,
substitutions, betterments or decorations in or to the Project, the Buildings
equipment and systems or the Premises, (B) failure of Landlord or others to make
any such repairs or improvements, (C) damage to the Project, the Building
equipment or systems, the Premises or Tenant's property, (D) injury to any
persons caused by other tenants or persons in the Buildings, or by operations in
the construction of any private, public, or quasi-public work, or by any other
cause, (E) latent defect in the Buildings, the Building equipment or systems,
the Common Areas or the Premises, nor (F) inconvenience or annoyance to Tenant
or injury to or interruption of Tenant's business by reason of any of the events
or occurrences referred to in the foregoing subdivisions (A) through (E), shall
impose any liability on Landlord to Tenant other than, subject to Sections 31.k.
and 31.l. hereof, such liability as may be imposed upon Landlord by law for the
gross negligence
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of Landlord or Landlord's agents in the operation or maintenance of the
Project or the Building equipment or systems or for the breach by Landlord of
any express covenant of this Lease on Landlord's part to be performed.
(iii) Tenant hereby indemnifies and holds harmless Landlord
and Landlord's agents and Lessors or Mortgagees from any loss, cost,
liability, claim, damage, expense (including reasonable attorney's fees and
disbursements), penalty or fine incurred in connection with or arising from
(A) any default by Tenant in the performance of any of the terms of this
Lease on Tenant's part to be performed, or (B) any acts, omissions or
negligence of or the use or occupancy or manner of use or occupancy of the
Premises by Tenant, any assignee, sublessee, invitee or other person claiming
by, through or under Tenant or any of their respective agents, or (C) any
accident, injury or damage whatsoever caused to any person or to the property
of any person and occurring in or about the Premises, or (D) any accident,
injury or damage whatsoever caused to any person or to the property of any
person and occurring in or about the Project, resulting or claimed to have
resulted from an act or omission of Tenant, or any of their respective
agents. Tenant's obligations under this Section 8 shall survive the
expiration or earlier termination of this Lease.
(iv) Tenant shall pay to Landlord as Rent, within 5 days
after submission by Landlord to Tenant of bills or statements therefor, sums
equal to all losses, costs, liabilities, claims, damages, fines, penalties
and expenses referred to in this Section 8.b.
c. WAIVER OF SUBROGATION. (i) Landlord and Tenant shall each
endeavor to procure an appropriate clause in, or endorsement to, each of its
policies for fire and extended coverage insurance pursuant to which the
insurance company waives subrogation or consents to waiver of its right of
recovery against the other party, which, in the case of Tenant, shall be
deemed to include any subtenant in the Premises, and having obtained such
clause or endorsement of waiver of subrogation or consent to a waiver of the
right of recovery, such party hereby agrees that it will not make any claim
against or seek to recover from the other, and it waives all claims and
recoveries to the extent of any such waiver, for any loss or damage to its
property or the property of others covered by such fire or extended coverage
insurance; PROVIDED, HOWEVER, that the release, discharge and covenant not to
sue herein contained shall be limited by the terms and provisions of the
waiver of subrogation clause or endorsement, or the clause or endorsement
consenting to a waiver of right of recovery, and shall be co-extensive
therewith.
(ii) If either party hereto shall not be able to obtain such
clause or endorsement on a particular policy or if the inclusion of such
clause or endorsement would result in an increase in premium, then that party
shall so notify the other party hereto at least 15 days prior to the date the
policy is to take effect. The other party shall be obligated to pay the
amount of any increase in premium resulting from the inclusion of such clause
or endorsement unless such other party notifies the party obtaining the
insurance, promptly following notice of the amount of such increase, that
such other party declines to pay such increase, in which event the party
obtaining the insurance may
19
omit such clause or endorsement. If a party shall fail to give notice either
of inability to obtain such clause or endorsement or notice of an increase in
premium, then that party shall be deemed to have waived its right of recovery
from the other party with respect to any loss or damage insured against by
the policy with respect to which notice was not given as provided above.
9. LANDLORD INSURANCE.
a. ALL RISK COVERAGE. Landlord shall procure and maintain during
the Term "all risk" property insurance with respect to the Buildings and the
Common Areas including coverage for earthquake damage. The coverage shall be
in an amount equal to one hundred percent (100%) (50% for earthquake) of the
full insurance replacement value (replacement cost new, including debris
removal and demolition but excluding footings, excavation and Tenant's
improvements, furniture, fixtures and equipment).
b. COMMERCIAL GENERAL LIABILITY INSURANCE. Landlord shall
procure and maintain during the Term, at its sole cost and expense, a policy
or policies of commercial general liability insurance, naming Tenant, and
Tenant's directors and employees, as additional insureds, on an "occurrence"
basis against claims for bodily injury, death, property damage or personal
injury liability with a combined single limit of not less than Five Million
Dollars ($5,000,000.00) in the event of injury to any number of persons or of
damage to property, arising out of any one occurrence, including contractual
liability and personal injury liability, with "employee" and "contractual"
exclusions deleted.
c. INSURANCE CERTIFICATES (OR ENDORSEMENTS). Landlord shall
furnish to Tenant prior to the Commencement Date, and thereafter within
thirty (30) days prior to the expiration of each such policy, a certificate
of insurance (or endorsement) issued by the insurance carrier of each policy
of insurance carried hereunder. The certificates (or endorsements) shall
expressly provide that the policies shall not be cancellable or subject to
reduction of coverage or otherwise be subject to modification except after
thirty (30) days' prior written notice to Tenant.
10. UTILITIES AND SERVICE.
a. LANDLORD'S DUTY TO PROVIDE.
(i) COMMON AREAS. Landlord shall provide levels of utilities
and services to the Common Areas which are consistent with the levels
provided to comparable facilities in the geographical area of the Project.
(ii) PREMISES. Landlord shall provide levels of utilities and
services to the Premises in accordance with Exhibit G hereto. Landlord shall
cause the electricity to Building 2 and Building 3 to be separately metered,
and the cost thereof shall be paid by Tenant. Tenant shall be charged for
all of the electricity supplied to the applicable Buildings (determined based
on the meters) to the extent Tenant is the sole occupant of Building 2 or
Building 3 and otherwise shall be charged for the electricity
20
supplied to the portion of the applicable Building (determined based on the
meters and otherwise equitably) to the extent Tenant is not the sole occupant
of Building 2 or Building 3.
(iii) ADDITIONAL SERVICES. Upon Tenant's request, Landlord
shall provide HVAC to the Premises requested by Tenant during hours other
than Landlord's customary and normal hours for operation of the HVAC system
within the Project (as those hours are stated in EXHIBIT D). The use by
Tenant of the HVAC system during hours other than those set forth in EXHIBIT
D shall be considered excess HVAC use ("Excess HVAC Use"). Tenant shall
reimburse Landlord the fair and reasonable cost to Landlord in providing the
Excess HVAC Use, determined in accordance with EXHIBIT D.
b. INTERRUPTION IN SERVICES -- LANDLORD'S FAULT. If there shall
occur a failure, stoppage, interruption or reduction in the furnishing of any
utilities or services which Landlord is required to provide to the Premises
or to Tenant pursuant to the terms of this Lease, and if such failure,
stoppage, interruption or reduction renders any portion of the Premises
untenantable for a period of ten (10) consecutive business days, then,
provided that Tenant shall not use or occupy that portion of the Premises for
the conduct of its business during such period of ten (10) consecutive
business days, the Rent payable with respect to such portions of the Premises
shall be abated or reduced, as the case may be, in the proportion that the
untenantable rentable area of the Premises bears to the total rentable area
of the Premises on a day-by-day basis, for each day that Tenant shall not use
or occupy the Premises, or such portion thereof, for the conduct of Tenant's
business during the period beginning on the eleventh (11th) consecutive
business day and terminating on the earlier of (i) the date that such portion
of the Premises shall become tenantable again, and (ii) the date Tenant
commences to use or occupy the Premises or such portion thereof for the
conduct of Tenant's business. The ten (10) business day period shall be
reduced to such shorter period of time as required for Landlord's rent
abatement insurance to accrue. Tenant shall have the right to terminate this
Lease as to any portion of the Premises for which any interruption in the
utilities or services continues for ninety (90) consecutive days.
11. REPAIRS AND MAINTENANCE.
a. LANDLORD'S REPAIRS.
(i) OBLIGATIONS OF LANDLORD. The Project shall be maintained
and repaired to the standard of projects (and buildings) of similar type and
use in the geographical area of the Project and in compliance with all
applicable Laws. Except for repairs specifically required herein to be made
by Tenant, Landlord, at all times, shall keep, replace and maintain in
first-class condition, order and repair: (A) all portions of the Project
which are not a part of the Premises; (B) all portions of the roofs, roof
structures and supports, and all structural portions of the Project
including, but not limited to, the foundation and structural supports,
exterior and load bearing walls, floors (but not floor coverings), gutters
and downspouts, but excluding exterior doors and exterior glass; (C) all
utilities to the Common Areas; (D) all Common Areas, including all driveways,
sidewalks, parking areas; and (E) all defects in the Project as well as any
21
damage to the Project. The cost of the foregoing shall be included in
Operating Expenses, subject to Section 6 hereof.
(ii) TENANT'S NOTICE TO LANDLORD. Tenant may give Landlord a
notice ("Tenant's Repair Notice") of any repairs that are required under the
terms of this Lease. Landlord promptly and diligently shall undertake the
repairs, with Landlord to commence the repairs not later than ten (10)
business days after receipt of a Tenant Repair Notice or such longer period
as is reasonably necessary to prepare plans, hire consultants and
contractors, and obtain the required materials, equipment and permits.
(iii) LANDLORD'S FAILURE TO MAINTAIN. If Landlord fails to
immediately and diligently undertake to repair the Project, upon not less
than five (5) business days' notice in writing to Landlord, Tenant may
perform the repairs or maintenance and, in addition to any other remedies
Tenant may have at law or in equity, Landlord shall reimburse Tenant for the
reasonable costs of the repairs. Tenant shall provide Landlord with
reasonably appropriate supporting documentation evidencing the costs incurred
by Tenant.
b. TENANT'S REPAIRS. Tenant shall, at Tenant's sole cost and
expense, keep and maintain the interior non-structural portions of the
Premises, and the exterior doors and exterior glass of the Premises, in good
condition, order and repair, excepting conditions covered under any
warranties of Landlord's contractors, damage by fire and other casualties.
Tenant, at its sole cost and expense, shall keep and maintain and take good
care of all improvements to the Premises and all fixtures, furniture and
equipment therein, including making repairs thereto under all circumstances,
and Landlord shall have no liability or responsibility therefor, except where
due to the gross negligence or willful misconduct of Landlord. In addition,
Tenant shall reimburse Landlord for all repairs to any portion of the Project
the need for which arises out of (i) the performance or existence of any
alterations or modifications of the Premises made by or for Tenant
(including, without being limited to, the generator and storage tanks), (ii)
the installation, use or operation of Tenant's property or fixtures, or (iii)
the acts, omissions, negligence or misuse by Tenant or those holding under
Tenant or any of their respective agents, or their use or occupancy or manner
of use and occupancy of the Premises or the Project.
12. ACCESS TO PREMISES.
a. RIGHT OF LANDLORD. Landlord, at reasonable times and upon
reasonable notice, may enter the Premises (i) to complete construction
undertaken by Landlord on the Buildings; (ii) to inspect; (iii) to clean,
maintain or repair the Premises; (iv) to show the Premises to prospective
purchasers and lenders; and, (v) during the last twelve (12) months of the
Term, to show the Premises to prospective tenants.
b. RESTRICTIONS ON LANDLORD. Landlord shall enter and conduct
its activities in the Premises subject to Tenant's reasonable security
regulations and in the manner which will cause the least possible
inconvenience, annoyance, interference and disturbance to Tenant or Tenant's
business. Landlord shall not do any act under this
22
Section which would materially and unreasonably interfere with Tenant's
access to the Premises or use of the Premises.
13. ALTERATIONS AND SIGNS.
a. PERMITTED ALTERATIONS. Consent of Landlord, which consent
shall not be unreasonably withheld or delayed, shall be required for any
structural work to be undertaken by Tenant or any work the cost of which
exceeds $20.00 per square foot. For purposes of this Section 13, structural
work shall be work which materially impacts load bearing walls, floors,
systems, utilities, services, foundations and footings or affecting or
visible outside of the Premises or reducing the value, utility or efficiency
of the Building. Tenant shall have the right, without Landlord's consent, to
make any other improvements, alterations and additions and to install
furniture and equipment upon or to the Premises (including both the interior
and exterior thereof). All improvements, alterations and additions are
herein referred to as "Alterations." Upon notice given by Landlord, Tenant
shall remove any Alterations (other than Alterations in connection with the
initial occupancy by Tenant of the Premises) upon the expiration or
termination of the Lease.
b. SIGNS. Subject to compliance with applicable Laws, local
ordinances and private restrictions, Tenant shall have the right, with
Landlord's consent (which shall not be unreasonably withheld or delayed), to
erect any signs ("Signs") in, on, about, or outside the Premises as Tenant
desires.
c. COMPLIANCE WITH CODES. All work undertaken by Tenant in
connection with the Alterations and Signs shall be done in a workmanlike
manner, in compliance with all Laws and applicable building and other codes
and the requirements of insurance carriers, insurance rating organizations
and underwriting boards affecting the Project, and without endangering the
structural integrity of the Premises or adversely affecting the value or
first-class appearance of the Project or the rentability to other tenants.
d. OWNERSHIP OF ALTERATIONS AND SIGNS. Ownership of all Tenant's
Alterations and Signs (other than those paid for by Landlord, which shall be
owned by Landlord) shall remain in Tenant whether or not they are affixed to
or attached to the Premises. Tenant shall have the right, but not the
obligation, to remove all or any part of the Alterations and Signs made or
installed by Tenant from the Premises at any time (including expiration or
termination of this Lease). Tenant shall remove all furniture, fixtures and
equipment at the expiration or termination of this Lease and shall remove
(and restore the Premises) all Alterations if requested in writing by
Landlord in accordance with Section 13.a. hereof.
e. MECHANICS' LIENS. Tenant shall (i) pay before delinquency all
costs and expenses of work done or caused to be done by Tenant in the
Premises; (ii) keep the title to the Project free and clear of any lien or
encumbrance in respect of such work; and (iii) indemnify and hold harmless
Landlord from and against any claim, loss, cost or demand (including
reasonable legal fees), whether in respect of liens or
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otherwise, arising out of the supplying of material, services or labor for
such work. Tenant shall immediately notify Landlord of any lien, claim of
lien or other action of which Tenant has or reasonably should have knowledge
and which affects the title to the Project or any part thereof, and shall
cause the same to be removed within 5 days (or such additional time as
Landlord may consent to in writing), by payment, filing of a bond permitted
by law or otherwise. If Tenant shall fail to remove any lien or action
within said time period, Landlord may take such action as Landlord deems
necessary to remove the same and the entire cost thereof shall be immediately
due and payable by Tenant to Landlord, and such amount shall bear interest
until paid at the rate of 10% per annum.
f. GENERAL ALTERATION RULES. All Alterations shall be made
subject to, and in performing the work involved in making all Alterations
Tenant shall be bound by and observe, all of the following conditions:
(i) Tenant and Tenant's agents shall only utilize contractors
approved by Landlord (which approval, subject to the terms of paragraph (ii)
hereof, shall not be unreasonably withheld).
(ii) Tenant shall not, at any time prior to or during the
Term, directly or indirectly employ, or permit the employment of, any
contractor, mechanic or laborer in or about the Premises, or permit any
materials to be delivered to or used in the Premises, whether in connection
with any Alterations or otherwise, if such employment, delivery or use would
interfere or cause any conflict with other contractors, mechanics or laborers
engaged in the construction, maintenance or operation of the Buildings or the
Project by Landlord, Tenant or others, or of any adjacent property owned by
Landlord. Landlord shall have the absolute right to disapprove any
contractor selected by Tenant which presents, in Landlord's judgment,
potential scheduling problems or the potential interference or conflict
problems described in the preceding sentence. In the event that after
approval of any contractor any such interference or conflict shall arise,
Tenant, upon demand of Landlord, shall cause all contractors causing such
interference or conflict to leave the Building immediately.
(iii) Prior to making any Alterations, Tenant shall, at its
expense, obtain all permits, approvals and certificates required by any
Governmental Authorities and, upon completion, certificates of final approval
thereof, and shall promptly deliver to Landlord duplicates of all such
permits, approvals and certificates.
(iv) Tenant and Tenant's agents shall carry, and shall cause
their agents to carry, the insurance described in Section 8.a. and such other
insurance as Landlord may reasonably require and shall deliver or cause to be
delivered to Landlord the certificates evidencing such insurance promptly
upon request therefor.
(v) Before proceeding with any Alterations, Tenant shall
submit to Landlord three (3) copies of detailed final plans and
specifications therefor for Landlord's review and prior consent. If such
Alterations require consent by or notice to any Lessor or Mortgagee,
Landlord, if Landlord consents to the Alterations, will request such consent
or give such notice and Tenant shall not proceed with the Alterations until
24
such consent has been received or such notice has been given and all
applicable conditions and provisions of the Superior Lease or Superior
Mortgage with respect to the proposed Alterations have been met or complied
with at Tenant's expense. No amendments or additions to the approved plans
and specifications shall be made without the prior consent of Landlord.
(vi) No Alterations costing more than $50,000 (as reasonably
estimated by Landlord's) shall be undertaken except under the supervision of
a licensed architect or licensed professional engineer reasonably
satisfactory to Landlord.
(vii) Any Alterations for which consent has been received
shall be promptly commenced and completed and shall be performed in a good
and workmanlike manner using new materials of first quality and shall be
performed in accordance with the approved plans and specifications and all
Laws and insurance requirements and so as not to interfere with the occupancy
of any other tenant or delay or impose any additional expense upon Landlord
in the construction, maintenance, cleaning, repair, safety, management,
security or operation of the Buildings or the Building equipment, and if any
such additional expense shall be incurred by Landlord as a result of Tenant's
making of any Alterations, Tenant shall pay such additional expense upon
demand.
(viii) Tenant shall reimburse Landlord upon demand for all
reasonable costs and expenses incurred by Landlord and each Lessor and
Mortgagee to review Tenant's plans and specifications, to inspect the
Alterations to confirm that they have been made in accordance with approved
plans and specifications and all Laws and insurance requirements and, if the
Alterations affect the structure of the Building or Building equipment, the
fees of any architects and engineers hired by Landlord to so review and
inspect such plans, specifications and Alterations.
(ix) Tenant shall not install any materials, fixtures,
furnishings or equipment, or make any other Alterations, which are subject to
liens, conditional sales contracts, chattel mortgages or security interests.
(x) Upon completion of any Alterations, Tenant shall
deliver to Landlord all plans and specifications for the Alteration submitted
for purposes of obtaining any necessary governmental permit, together with
all other drawings, schematics, field or margin notes, changes, revisions,
modifications, supplements and notations pertaining thereto.
g. EXECUTION OF DOCUMENTS. Within an appropriate, reasonable
time after receipt, Landlord shall cooperate with Tenant in the execution of
building permit applications as may be reasonably necessary to effectuate the
intent of this Section 13, at Tenant's sole cost and expense.
14. USE AND COMPLIANCE WITH LAWS.
a. USE. Tenant may use the Premises for any use permitted by law
and any restrictions of record applicable to the Project. No other Tenant or
person acting
25
by, through or under Tenant (including, without being limited to, any
assignee or sublessee) shall have the right to use the Premises for any
purpose other than as set forth in the Basic Lease Information, without
Landlord's consent, not to be unreasonably withheld or delayed. Landlord
shall have the right to withhold consent to any proposed use that could
compete with any business that Landlord or its affiliates may presently or
prospectively be involved in.
b. COMPLIANCE WITH LAWS. Tenant shall comply with all Laws and
the requirements of municipal, county, state, federal and other applicable
governmental authorities, now in force, or which may hereafter be in force,
pertaining to the Premises or its use. The cost of any structural changes or
capital expenditures in or on the Premises, Building 2 or Building 3 made by
Landlord in order to comply with any law, ordinance, rule or regulation as a
result of Tenant's particular use of the Premises, shall be paid by Tenant.
15. DAMAGE OR DESTRUCTION.
a. LANDLORD'S OBLIGATION TO REBUILD. If the Premises, Buildings,
or Project are damaged or destroyed, Landlord promptly and diligently shall
repair or rebuild the damage or destruction and rebuild the Premises (other
than Tenant's improvements and the furniture, fixtures and equipment),
Buildings and Project, in compliance with all applicable laws and
regulations, to substantially their condition immediately prior to the damage
or destruction; PROVIDED, HOWEVER, that Landlord's obligation to repair or
rebuild under this Article 15 shall exist only to the extent that Landlord
receives insurance proceeds.
b. RENT ABATEMENT. Rent otherwise due and payable under this
Lease shall be abated proportionately during any period in which, and to the
extent that, by reason of any damage or destruction, there is substantial
interference with the operation of Tenant's business in the Premises. The
abatement shall consider the nature and extent of interference to Tenant's
ability to conduct business in the Premises and the need for access to
essential services. The abatement shall continue for the period commencing
with the damage or destruction and ending with the date Landlord has
completed the work under Section 15.a. above with respect to the Premises and
Tenant has been afforded such number of additional days following completion
of such work by Landlord as would be required to repair and restore any
tenant improvements damaged, with the exercise of due diligence and
continuity to the condition existing immediately prior to such damage or
destruction.
c. EXCESSIVE DAMAGE OR DESTRUCTION. Landlord or Tenant may
terminate this Lease if the Premises, Building(s) or Project is damaged or
destroyed to the extent that the Premises, Building(s) or Project cannot,
with reasonable diligence, be fully repaired or restored by Landlord within
twelve (12) months after the date of the damage or destruction and Tenant
reasonably determines that it cannot engage in the normal conduct of its
business. Within forty-five (45) days after any damage or destruction,
Landlord shall notify Tenant whether the Premises, Building(s) or Project, as
the case may be, can be fully repaired or restored within the twelve (12)
month period and if such
26
notice states a period greater than twelve (12) months, Tenant must, within
10 days either terminate or waive, subject to Section 15.d. hereof, its right
to terminate. If the Premises, Building(s) or Project, as the case may be,
can be fully repaired or restored within the twelve (12) month period,
Landlord promptly shall commence the process of obtaining necessary permits
and approvals, shall commence repair of the Premises, Building(s) or Project,
as the case may be, as soon as practical, and shall, subject to Section 15.a.
hereof, prosecute the repair to completion.
d. ADDITIONAL RIGHT TO TERMINATE. In addition to Tenant's right
to terminate this Lease under Section 15.c., Tenant shall have the right to
terminate this Lease if (i) Landlord fails to proceed with reasonable
diligence to rebuild the Premises, Building(s) or Project, as the case may
be, or (ii) for whatever reason, the Premises, Building(s) or Project, as the
case may be, are not rebuilt within the later of (A) the period set forth in
Landlord's notice delivered pursuant to Section 15.c. hereof or (B) the
twelve (12) month period described in Section 15.c. hereof.
e. INSURANCE PROCEEDS. If this Lease is terminated by reason of
damage or destruction, then Landlord shall be entitled to keep any insurance
proceeds, provided that any insurance proceeds awarded or paid by reason of
damage to or destruction of Tenant's signs, trade fixtures, equipment or any
property owned by Tenant under this Lease shall be paid and belong to Tenant.
16. EMINENT DOMAIN. If all or any portion of Building 2, Building 3,
the Premises or the Project is taken for public or quasi-public use by a
governmental authority under the power of eminent domain or is conveyed to a
governmental authority in lieu of such taking (a "Taking"), and Tenant
reasonably determines that the Taking causes the (remaining portion of the)
Premises to be untenantable and inadequate for use by Tenant for the purpose
for which they were leased, then Tenant, at its option and by giving notice
within thirty (30) days after the Taking, may terminate this Lease as of the
date the portion of Building 2, Building 3, the Premises, or the Project is
taken. If a portion of the Premises is Taken but Tenant reasonably
determines that the remaining portion is tenantable and adequate for Tenant's
use, then this lease shall be terminated as to the portion taken or conveyed
as of the date Tenant surrenders possession; Landlord immediately shall make
such repairs, alterations and improvements to the Premises (exclusive of any
improvements, furniture, fixtures and equipment), at no expense to Tenant, as
may be necessary to render the portion not taken or conveyed tenantable,
provided that Landlord shall have no obligation to make such repairs,
alterations and improvements to the extent that Landlord shall not receive
condemnation awards or proceeds for the cost thereof; and the Rent shall be
reduced in proportion to the portion of the Premises taken or conveyed.
Landlord shall perform the work to restore the Premises and Building 2 and
Building 3 as nearly as possible to their original condition (to the extent
set forth above) and with minimum interference to Tenant's normal business
operations. Notwithstanding the foregoing, Landlord shall have the right to
terminate this Lease in the event of any Taking which results in
(i) twenty-five percent (25%) or more of the Project being taken or conveyed
or (ii) any lender having the right to require all awards and proceeds to be
applied against the obligations under a loan held by such lender, by notice
in writing to Tenant. Tenant shall not be entitled to share in any award
27
to Landlord, but shall have the right to apply, in a separate proceeding, for
an award for the interruption of Tenant's business; Tenant's moving and
relocation expenses; the costs and expenses of removal of Tenant's
Alterations (other than those paid for by Landlord), trade fixtures and
personal property (or the award attributable to the Alterations, trade
fixtures or personal property to the extent Tenant does not remove them) and
the depreciation in value caused by the removal.
17. DEFAULT BY TENANT.
a. EVENTS OF TENANT DEFAULT. Each of the following events shall
constitute an "Event of Default" on the part of Tenant following written
notice from Landlord:
(i) PAYMENT OF MONTHLY BASE RENT. Failure to pay any
installment of Rent pursuant to Sections 3(i) through (iv) hereof within
three (3) business days after notice from Landlord to Tenant that the
installment was not paid when due;
(ii) PAYMENT OF OTHER MONETARY OBLIGATION. Failure to pay any
monetary obligation, other than Rent pursuant to Sections 3(i) through
(iv) hereof, due and payable hereunder within five (5) business days after
notice from Landlord to Tenant that the installment was not paid when due;
(iii) PERFORMANCE. Failure to commence to cure a default in
the performance of any of Tenant's covenants, agreements or obligations
hereunder (except defaults described in Sections 17.a.(i) and 17.a(ii)),
within thirty (30) days after written notice from Landlord and to
diligently and continuously prosecute to completion the cure of such
default without delay;
(iv) VOLUNTARY ASSIGNMENT OF ASSETS. Tenant's voluntary
assignment of its assets for the benefit of its creditors;
(v) ATTACHMENT. The sequestration of, attachment of, or
execution on, any substantial part of the property of Tenant located on the
Premises or on any property essential to the conduct of Tenant's business
in the Premises shall have occurred and, if done involuntarily and without
consent by Tenant, Tenant shall have failed to obtain a return or release
of property within ninety (90) days thereafter, or prior to sale pursuant
to the sequestration, attachment or levy, whichever is earlier;
(vi) REORGANIZATION. Tenant commencing any case, proceeding
or other action seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors,
seeking appointment of a receiver, trustee, custodian, or other similar
official for it or for all or any substantial part of its property; or
28
(vii) BANKRUPTCY. The commencement of any case, proceeding or
other action against Tenant seeking to have an order for relief entered
against Tenant as debtor, or seeking reorganization, arrangement,
adjustment, liquidation, dissolution or composition of Tenant or its debts
under any law relating to bankruptcy, insolvency, reorganization or relief
of debtors, or seeking appointment of a receiver, trustee, custodian or
other similar official for it or for all or any substantial part of its
property, and such case, proceeding or other action remains undismissed for
a period of forty-five (45) days.
b. LANDLORD'S REMEDIES. Upon the occurrence of an Event of
Default, Landlord shall have the following remedies in addition to all other
rights and remedies provided by law, to which Landlord may resort
cumulatively, or in the alternative:
(i) RECOVERY OF RENT. Landlord shall be entitled to keep
this Lease in full force and effect (whether or not Tenant shall have
abandoned the Premises) and to enforce all of its rights and remedies under
this Lease, including the right to recover Rent and other sums as they
become due, plus interest at the rate of the percent (10%) per annum from
the due date of each installment of Rent or other sum until paid. Without
limiting the foregoing, Landlord shall have the remedy described in
California Civil Code Section 1951.4, which provides that a lessor may
continue a lease in effect after the lessee's breach and abandonment and
recover rent as it becomes due, if the lessee has the right to sublet or
assign, subject only to reasonable limitations.
(ii) TERMINATION. Landlord may terminate this Lease by giving
Tenant written notice of termination. On the giving of the notice, all of
Tenant's rights in the Premises shall terminate. Upon the giving of the
notice of termination, Tenant shall surrender and vacate the Premises in
the condition required by Section 21, and Landlord may re-enter and take
possession of the Premises and all the remaining improvements and eject
Tenant or any of Tenant's subtenants, assignees or other person or persons
claiming any right under or through Tenant or eject some and not others or
eject none. This Lease may also be terminated by a judgment specifically
providing for termination. Any termination under this Section shall not
release Tenant from the payment of any sum then due Landlord or from any
claim for damages or Rent previously accrued or then accruing against
Tenant. In no event shall any one or more of the following actions by
Landlord constitute a termination of this Lease: (A) maintenance and
preservation of the Premises; (B) efforts to relet the Premises;
(C) appointment of a receiver in order to protect Landlord's interest
hereunder; (D) consent to any subletting of the Premises or assignment of
this Lease by Tenant, whether pursuant to provisions hereof concerning
subletting and assignments or otherwise; or (E) any other action by
Landlord or Landlord's agents intended to mitigate the adverse effects from
any breach of this Lease by Tenant or otherwise permitted by law.
29
(iii) DAMAGES. If this Lease is terminated pursuant to
Section 17.b(ii), Landlord shall be entitled to damages in the following
sums: (A) the worth at the time of award of the unpaid Rent which has been
earned at the time of termination; PLUS (B) the worth at the time of award
of the amount by which the unpaid Rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss
that Tenant proves could have been reasonably avoided; PLUS (C) the worth
at the time of award of the amount by which the unpaid Rent for the balance
of the Term after the time of award of the amount exceeds the amount of
such rental loss that Tenant proves could be reasonably avoided; PLUS
(D) any other amount necessary to compensate Landlord for all detriment
proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease, or which in the ordinary course of things would be likely
to result therefrom including reasonable amounts for the following:
(1) expenses for cleaning, repairing or restoring the Premises;
(2) expenses for altering, remodeling, subdividing, splitting, or otherwise
improving the Premises for the purpose of reletting, including installation
of leasehold improvements (whether such installation is funded by a
reduction of Rent, direct payment or allowance to the succeeding lessee, or
otherwise); (3) real estate broker's fees, advertising costs and other
expenses of reletting the Premises; (4) costs of carrying the premises such
as taxes and insurance premiums thereon, utilities and security
precautions; (5) expenses in retaking possession of the Premises; and
(6) attorneys' fees and court costs. The "worth at the time of award" of
the amounts referred to in Sections 17.b(iii)(A) and (B) is computed by
allowing interest at the rate of ten percent (10%) per annum. The "worth
at the time of award" of the amounts referred to in Section 17.b(iii)(C) is
computed by discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one percent (1%).
(iv) OTHER RIGHTS AND REMEDIES.
(A) To the greatest extent permitted by law, upon and
after such entry into possession Landlord may, but shall have no obligation
to, relet the Premises or any part thereof for the account of Tenant to any
person, firm or corporation, other than Tenant, for such Rent, for such time
and upon such terms as Landlord, in Landlord's sole discretion, shall
determine, and Landlord shall not be required to accept any tenant offered by
Tenant or to observe any instruction given by Tenant about such reletting.
(B) Suit or suits for the recovery of any and all
damages, or any installments thereof, provided for hereunder may be brought
by Landlord from time to time at its election, and nothing contained herein
shall be deemed to require Landlord to postpone suit until the date when the
term of this Lease would have expired if it had not been terminated under the
provisions of this Article 17, or under provisions of any law, or had
Landlord not re-entered the Premises.
(C) Nothing herein contained shall be construed as
limiting or precluding the recovery by Landlord against Tenant of any damages
to which
30
Landlord may lawfully be entitled in any case other than those particularly
provided for above.
(D) Should Landlord, following any breach or default of
this Lease by Tenant, elect to keep this Lease in full force and effect, with
Tenant retaining the right to possession of the Premises (notwithstanding the
fact Tenant may have abandoned the Premises), then Landlord, besides all
other rights and remedies Landlord may have at law or equity, shall have the
right to enforce all of Landlord's rights and remedies under this Lease,
including the right to recover the installments of Rent as they become due
under this Lease. During the period that Landlord elects to keep this Lease
in full force and effect with Tenant retaining the right to possession of the
Premises, Tenant shall have the right to assign and sublet as set forth in
Article 19 hereof. Notwithstanding any such election to have this Lease
remain in full force and effect, Landlord may at any time thereafter elect to
terminate Tenant's right to possession of the Premises and thereby terminate
this Lease for any previous breach or default which remains uncured, or for
any subsequent breach or default.
(E) Whether or not Landlord elects to terminate this
Lease on account of any default by Tenant, Landlord shall have the right to
terminate any and all subleases, licenses, concessions or other consensual
arrangements for possession entered into by Tenant and affecting the Premises
or may, in Landlord's sole discretion, succeed to Tenant's interest in such
subleases, licenses, concessions or arrangements. In the event of Landlord's
election to succeed to Tenant's interest in any such subleases, licenses,
concessions or arrangements, Tenant shall, as of the date of notice by
Landlord of such election, have no further right to or interest in the rent
or other consideration receivable thereunder.
(F) No reference to nor exercise of any specific right
or remedy by Landlord shall prejudice or preclude Landlord from exercising or
invoking any other remedy in respect thereof, whether allowed at law or in
equity or expressly provided for herein. No such remedy shall be exclusive
or dependent upon any other such remedy, but Landlord may from time to time
exercise any one or more of such remedies independently or in combination.
(G) In the event Landlord commences any summary
proceeding or action for non-payment of Rent, Tenant covenants and agrees not
to interpose, by consolidation of actions or otherwise, any counterclaim in
any such proceeding. To the extent permitted by law, the parties hereto
shall and they hereby do waive trial by jury in any action or proceeding
brought by either of the parties hereto against the other on any matters
whatsoever arising out of or in any way connected with this Lease or the
interpretation thereof, the relationship of Landlord and Tenant, Tenant's use
or occupancy of the Premises, and/or any claim of injury or damage. The
provisions of this Section 17.b(iv)(G) shall survive the termination of this
Lease.
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___________ ___________
___________ ___________
TENANT LANDLORD
INITIALS INITIALS
(H) No waiver by Landlord or Tenant of the breach of any
covenant, agreement, obligation or condition of this Lease shall be construed
to be a waiver of any future breach of the same or any other covenant,
agreement, obligation or condition hereof. The rights and remedies hereby
created are cumulative, and the use of one remedy shall not be construed to
exclude or waive the right to the use of another, or exclude any other right
or remedy allowed by law.
18. TENANT'S REMEDIES UPON LANDLORD'S DEFAULT.
a. TENANT'S RIGHT. If Landlord fails to perform any of its
obligations under this Lease, Tenant shall notify Landlord (first orally then
followed up in writing). If, within ten (10) business days after Tenant's
written notification, Landlord has not commenced to cure the default in
accordance with Section 11.a(ii) hereof (or subsequently does not diligently
pursue the cure), Tenant may present Landlord with a request for
reimbursement of actual costs associated with Tenant's performance of
Landlord's obligations.
b. NO WAIVER. No failure by Landlord or Tenant to insist upon the
strict performance of any term of this Lease, or to exercise any right or
remedy upon a breach by Tenant or Landlord, respectively, of this Lease,
shall constitute a waiver of any breach or of any term. Efforts by Landlord
or Tenant to mitigate the damages caused by the other party's breach of this
Lease shall not be construed to be a waiver of Landlord's or Tenant's right
to recover damages. Landlord's or Tenant's waiver of any covenant, term or
condition contained in this Lease (which waiver must be in writing) shall not
be construed as a waiver of any subsequent breach by Tenant or Landlord,
respectively, of the same covenant, term or condition.
19. ASSIGNMENT AND SUBLETTING.
a. CONSENT REQUIRED. Tenant shall not, voluntarily or
involuntarily, by operation of law or otherwise: (i) assign, mortgage,
pledge, encumber or in any manner transfer this Lease in whole or in part, or
(ii) sublet all or any part of the Premises, or allow any other person to
occupy all or any part thereof (any event described in clauses (i) and
(ii) being a "Transfer"), without the prior written consent of Landlord in
each instance, which shall not be unreasonably withheld or delayed, and any
attempt to do any of such acts without such consent shall be null and void
and of no effect. Anything contained in the foregoing to the contrary
notwithstanding, Tenant may assign this Lease or sublet all or any portion of
the Premises to an Affiliate without the consent of Landlord. As used
herein, the term "Affiliate" means and includes (A) Channel Overseas
Corporation, Wyse Technology Investments, Inc., Wyse Technology (Taiwan)
Limited, (B) any entity that is a successor entity to Tenant or any entity
described in
32
clause (A) above, whether by restructuring, renaming, merger, consolidation,
operation of law or otherwise, (C) any direct or indirect individual
shareholders of, or holders of a beneficial interest in, any entity described
in clauses (A) or (B) above, or (D) any entity that is a direct or indirect
parent or subsidiary of any person or entity described in clauses (A), (B) or
(C) above.
b. CONSENTS. Any consent by Landlord that may hereafter be given
to any act of Transfer shall be held to apply only to the specific
transaction thereby approved. Such consent shall not be construed as a
waiver of the duty of Tenant or its successors or assigns to obtain from
Landlord consent to any other subsequent assignment, mortgage, pledge,
encumbrance or subletting or as a modification or limitation of the rights of
Landlord with respect to any covenants by Tenant hereunder.
20. HAZARDOUS MATERIALS.
a. LANDLORD'S WARRANT. Landlord represents and warrants to Tenant
that (i) Landlord has delivered to Tenant all reports known by Landlord
regarding Hazardous Materials within the Project or Buildings which have been
prepared and of which Landlord is aware; and (ii) except as set forth in said
reports, Landlord knows of no Hazardous Materials located within the Project,
Common Areas, Buildings or Premises as of the Commencement Date except for
usual amounts of cleaning solvents and fluids and reproduction fluids and
other usual amounts for office operations. Landlord shall indemnify, defend,
protect and hold Tenant harmless from and against any and all claims, loss,
proceedings, damages, causes of action, liability, costs or expenses
(including attorneys' fees) arising as a result of any Hazardous Materials
which exist within the Project, Common Areas, Buildings or Premises as of the
Commencement Date and any Hazardous Materials which are present within the
Project, Common Areas, Buildings or Premises after the Commencement Date
which are not the result of the activities of Tenant, or Tenant's agents,
assignees, subtenants, invitees, contractors or suppliers, or any machinery
or equipment used by them or located in or servicing the Premises.
b. DEFINITION OF "HAZARDOUS MATERIALS". For purposes of this
Lease, the term "Hazardous Materials" shall include asbestos, any flammable,
corrosive or ignitible material, any explosives, or petroleum by products,
any radioactive materials, waste or substances or any toxic substances and
other substances defined as "hazardous substances", "hazardous wastes",
"extremely hazardous wastes", "hazardous materials" or "toxic substances" in
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 USC Section 9601, ET SEQ.; the Toxic Substances Control
Act, 15 USC Section 2601, ET SEQ.; the Hazardous Materials Transportation
Act, 49 USC Section 1801 ET SEQ.; the Resource Conservation and Recovery Act,
42 USC Section 6901 ET SEQ.; and/or in similar federal, state or local law.
c. TENANT'S RESPONSIBILITY. Unless specifically agreed to by
Landlord, Tenant shall not use or bring on the Premises any Hazardous
Materials other than usual and customary materials used in offices. Any
Hazardous Materials brought on the Premises by Tenant shall be used and
stored in accordance with applicable state and
33
federal law. Tenant shall indemnify, defend, protect and hold Landlord
harmless from and against any and all claims, losses, proceedings, damages,
causes of action, liability, costs or expenses (including attorneys' fees)
arising as a result of Tenant breach of this Section 20.c. or the existence,
use, disposal or removal of any Hazardous Materials on or affecting the
Project as a result of the activities of Tenant, or Tenant's agents,
assignees, subtenants, invitees, contractors or suppliers, or any machinery
or equipment used by them in or servicing the Premises.
d. SCOPE OF INDEMNITY. The party indemnifying under this Section
20 ("Indemnifying Party") shall employ counsel reasonably acceptable to the
party indemnified under this Section 20 ("Indemnified Party") to prosecute,
negotiate and defend any claims, actions or causes of action brought under
this Section 20. The Indemnified Party shall not have the right to
compromise or settle any such claim, action, or cause of action without the
Indemnifying Party's consent, except to the extent that such compromise or
settlement does not impose liability directly on the Indemnifying Party
without the Indemnifying Party's right to defend. The Indemnifying Party
shall pay any amounts arising under the indemnity to the Indemnified Party
immediately upon demand by the Indemnified Party, together with interest
thereon at a rate equal to one percent (1%) per annum in excess of the "Prime
Rate" of Wells Fargo Bank, N.A. ("Wells Fargo") in effect at the time the
Indemnified Party advances funds for amounts covered by such indemnity (Wells
Fargo's "Prime Rate" being the interest rate announced by Wells Fargo, in San
Francisco, California, as the base rate of interest for loans or obligations
making reference thereto), but in no event more than the maximum rate
permitted by law. The Indemnifying Party's duty to indemnify the Indemnified
Party under this Section 20 shall survive the expiration or earlier
termination of this Lease.
21. SURRENDER OF PREMISES. On the expiration or early termination of
this Lease with respect to any portion of the Premises, Tenant shall
surrender the portion of the Premises to Landlord in its condition as of the
Commencement Date for the portion thereto, wear and tear, damage or
destruction, condemnation and Alterations which Tenant is not required to
remove pursuant to Section 13 hereof excepted. Tenant shall have the right
to remove from the Premises all of Tenant's personal property and trade
fixtures. In no event shall Tenant have any obligation to remove any cables
or wiring which Tenant (or Landlord) has installed in the Premises so long as
consistent with normal office installation. Tenant shall repair damage or
perform any restoration work required by its removal.
22. ESTOPPEL CERTIFICATE. At any time either party may request an
estoppel certificate, in the form attached hereto as EXHIBIT C, from the
other party. The estoppel certificate, which shall be provided at no cost or
expense to the requesting party, shall be delivered within twenty (20) days
after receipt of a request.
23. SUBORDINATION.
a. SUBORDINATION. Subject to the provisions of Section 23.b.,
this Lease is and sh all be subject and subordinate to all ground leases,
operating leases, superior leases and underlying leases now or hereafter in
effect (each, a "Superior
34
Lease"), to all mortgages and deeds of trust which now or hereafter affect
the Project, the Buildings or any ground or underlying leases thereof (each a
"Superior Mortgage"), to all advances made or to be made under any Superior
Mortgage and to all renewals, modifications, consolidations, replacements and
extensions of any Superior Lease or Superior Mortgage. The provisions of
this section shall be automatic and shall not require any further action. In
confirmation of such subordination, Tenant will execute and deliver upon
demand of Landlord any and all instruments desired by Landlord subordinating
this lease to such Superior Lease or Superior Mortgage. Landlord is hereby
irrevocably appointed and authorized as agent and attorney-in-fact of Tenant
to execute and deliver all such subordination instruments in the event Tenant
fails to execute and deliver said instruments within 10 days after notice
from Landlord requesting the execution thereof.
b. RECOGNITION OR ATTORNMENT AGREEMENT. The subordination of
this Lease to any Superior Mortgage or Lease shall be subject to the
fulfillment of the conditions precedent that, subject to the remaining
provisions of this Article 23, the Successor Lessor or Successor Mortgagee
shall have entered into a Non-Disturbance Agreement with Tenant.
c. SUPERIOR LEASES; SUPERIOR MORTGAGES. (i) Tenant agrees that,
at the option of the landlord under any Superior Lease (each a "Lessor"),
Tenant shall attorn to said Lessor in the event of the termination or
cancellation of such Superior Lease or, if requested by said Lessor, enter
into a new lease with said Lessor (or a successor ground lessee designated by
said Lessor) (the Lessor and any designated ground lessee being a "Successor
Lessor") for the balance of the term then remaining hereunder upon the same
terms and conditions as those herein provided.
(ii) Tenant covenants and agrees that, if by reason of
default under any Superior Mortgage, the mortgagee or beneficiary thereunder
(each a "Mortgagee") or its designee or any other person or persons (each
Mortgagee or other person that becomes the owner of the mortgaged property
being a "Successor Mortgagee") enters into and becomes possessed of the said
mortgaged property thereunder either through possession, foreclosure action
or proceeding, deed-in-lieu of foreclosure or otherwise, or in the event of
the sale of the said mortgaged property as a result of any action or
proceeding to foreclose or otherwise to realize upon the security afforded by
such Superior Mortgage, Tenant will attorn to the Successor Mortgagee as its
landlord under this Lease, unless the Successor Mortgagee shall elect to
terminate this Lease and the rights of the tenant hereunder. Any Successor
Lessor and Successor Mortgagee is herein referred to as a "Successor".
(iii) The foregoing provisions of this Section 23.c. shall
inure to the benefit of any Successor, shall apply notwithstanding that, as a
matter of law, this Lease may terminate upon the termination of the Superior
Lease or foreclosure of the Superior Mortgage, as the case may be, shall be
self-operative upon the election of any Successor, and no further instrument
shall be required to give effect to said provisions. Tenant agrees to
execute and deliver, at any time and from time to time, upon the request of
any Successor, instruments, satisfactory to each Successor, which may be
necessary or
35
appropriate to evidence and confirm the foregoing provisions of this Section,
acknowledging such attornment and setting forth the terms and conditions of
its tenancy. Tenant hereby appoints the Lessor, Mortgagee or any Successor
the attorney-in-fact, irrevocably, of Tenant to execute and deliver for and
on behalf of Tenant any such instrument. Tenant further waives the
provisions of any statute or rule of law now or hereafter in effect which may
give or purport to give Tenant any right of election to terminate this Lease
or to surrender possession of the Premises in the event any proceeding is
brought by any Mortgagee to foreclose under its Superior Mortgage or by any
Lessor to terminate the Superior Lease, and agrees that unless and until the
Successor, in connection with any such proceeding, shall elect to terminate
this Lease and the rights of Tenant hereunder, this Lease shall not be
affected in any way whatsoever by any such proceeding.
d. DIRECT LEASE. Upon an attornment as set forth in Section
23.c. above, this Lease shall continue in full force and effect as a direct
lease between the Successor and Tenant upon all of the then executory terms
of this Lease except that such Successor shall not be (i) liable for any
previous act, omission or negligence of Landlord under this Lease; (ii)
subject to any counterclaim, defense or offset which theretofore shall have
accrued to Tenant against Landlord; (iii) bound by any previous modification
or amendment of this Lease or by any previous prepayment of more than one
month's rent, unless such modification or prepayment shall have been approved
in writing by the Lessor or the Mortgagee through or by reason of which the
Successor shall have succeeded to the rights of Landlord under this Lease;
(iv) liable for any security deposited pursuant to this Lease unless such
security has actually been delivered to the Successor; (v) obligated to
repair the Premises or the Building or any part thereof in the event of total
or substantial damage or partial condemnation, beyond such repair as can
reasonably be accomplished from the net proceeds of insurance or condemnation
award actually made available to the Successor or (vi) obligated to perform
any Landlord's work or other Alterations.
e. RIGHT TO CURE. If any act or omission by Landlord would give
Tenant the right, immediately or after lapse of time, to cancel or terminate
this Lease or to claim a partial or total eviction, abatement of rent, setoff
or counterclaim, Tenant will not exercise any such right until (i) it has
given written notice of such act or omission to each Lessor and Mortgagee
whose name and address shall have previously been furnished to Tenant and
(ii) a reasonable period for remedying such act or omission shall have
elapsed following such giving of notice and following the time when such
Lessor or Mortgagee shall have become entitled under the applicable Superior
Lease or Superior Mortgage as the case may be, to remedy the same (which
shall in no event be less than the period to which Landlord would be entitled
under this Lease to effect such remedy).
24. WARRANTIES OF LANDLORD; QUIET ENJOYMENT.
a. WARRANTIES OF LANDLORD. Landlord represents and warrants to
Tenant that there are no agreements, restrictions, covenants, encumbrances or
easements which will increase any of Tenant's obligations under this Lease or
diminish any of Tenant's rights hereunder. In addition, Landlord warrants
that it shall not allow any
36
portion of the real property within and adjoining the Project (over which
Landlord has any control) to be used for any purposes which would detract
from the desirability of the Project to Tenant.
b. QUIET ENJOYMENT. Landlord covenants with Tenant that, during
the periods that no Events of Default on the part of Tenant are outstanding,
(i) Tenant shall and may peaceably and quietly have, hold and enjoy the
Premises and Common Areas for the Term; (ii) neither Landlord, nor any party
claiming under or through Landlord, shall disturb Tenant's quiet enjoyment of
the Premises or Common Areas; and (iii) Landlord shall defend Tenant's right
to such quiet enjoyment. Landlord shall defend, indemnify and hold Tenant
harmless from and against all losses and damages that arise as a result of a
breach of Landlord's covenant under this Section.
25. HOLDING OVER. If Tenant holds over and retains and fails to
deliver possession of the Premises or any part thereof after the expiration
or earlier termination of this Lease, the parties agree that the damage to
Landlord will be substantial and impossible to measure accurately. Tenant
therefore, at the option of Landlord, shall pay as monthly Rent a sum equal
to 125% of the amount of all Rent and any other charges hereunder payable
during the last month of the Term, computed on a daily basis for each day
that Tenant remains in possession. In addition thereto, Tenant shall be
liable for and shall pay to Landlord all damages, consequential as well as
direct, sustained by reason of Tenant's holding over and hereby indemnifies
Landlord from and against liability resulting from delay by Tenant in so
surrendering the Premises, including (a) any claims made by any succeeding
tenant or prospective tenant founded upon such delay, (b) any payment or rent
concession which Landlord may be required to make to any succeeding or
prospective tenant for all or any part of the Premises in order to induce
such tenant not to terminate its lease or its negotiation therefor by reason
of Tenant's delay in so surrendering the Premises and (c) any loss suffered
if a succeeding or prospective tenant shall terminate its lease or not
proceed to execute and deliver its lease by reason of Tenant's delay in so
surrendering the Premises. Nothing herein contained shall be deemed to
permit Tenant to remain in possession of the Premises after the expiration or
sooner termination of the Term of this Lease.
26. RECORDING. Within thirty (30) days after the date hereof, a
memorandum of this Lease in the form attached hereto as EXHIBIT E shall be
signed by Landlord and Tenant (with their signatures notarized) and recorded
in the Official Records of Santa Clara County.
27. ATTORNEYS' FEES. If either party shall bring any action or legal
proceeding for damages for an alleged breach of any provision of this Lease,
to enforce, protect or establish any term, condition or covenant of this
Lease, or otherwise to establish the rights of the parties, the prevailing
party shall be entitled to recover, as a part of the action or proceedings,
or in a separate action brought for that purpose, reasonable attorneys' fees
and court costs as may be fixed by the court or jury.
28. BROKERS. Landlord and Tenant each warrants and represents for the
benefit of the other that it has had no dealings with any real estate broker
or agent in connection
37
with the negotiation of this Lease and that it knows of no other real estate
broker or agent who is or might be entitled to a real estate brokerage
commission or finder's fee in connection with this Lease. Each party shall
indemnify and hold harmless the other from and against any and all
liabilities or expenses arising out of claims made by any broker or
individual for commissions or fees resulting from the actions of the
indemnifying party in connection with this Lease.
29. PARKING.
a. TENANT'S RESERVED PARKING SPACES. Tenant, at no additional
cost (except to the extent covered in the Operating Expenses), shall have the
exclusive use of the reserved parking spaces within the Project ("Reserved
Parking Spaces") which are at the locations shown on EXHIBIT A. At Tenant's
request and at no cost to Tenant, Landlord shall use best efforts to ensure
Tenant's exclusive use of the Reserved Parking Spaces and shall construct
signs or otherwise mark Tenant's Reserved Parking Spaces to state that they
are for Tenant's exclusive use.
b. UNRESERVED PARKING SPACES. Tenant, at no additional cost
(except to the extent covered in the Operating Expenses), shall have the use
of unreserved parking spaces within the Project ("Unreserved Parking Spaces")
to the extent that the total of all Reserved Parking Spaces and Unreserved
Parking Spaces shall afford Tenant use of parking spaces at an aggregate
ratio of four (4) parking spaces for each one thousand (1,000) rentable
square feet of the Premises. The Unreserved Parking Spaces shall be within
the locations shown on EXHIBIT A. Tenant shall have the use of the
Unreserved Parking Spaces, in common with other tenants of the Building, upon
such reasonable terms and conditions as may from time to time be established
by Landlord.
c. COMPLIANCE OF PARKING LAWS AND REGULATIONS. Landlord shall
maintain all parking areas in first class condition, including striping,
security, lighting, and repair. Landlord represents and warrants that
throughout the Term the parking spaces Landlord provides to Tenant shall
comply with all applicable laws and regulations and that they shall be
sufficient in number to meet all requirements under applicable parking laws
and regulations. Tenant's use of the parking spaces shall be in compliance
with and Tenant agrees to comply with all such laws and regulations and any
rules and regulations promulgated by Landlord, so long as such rules and
regulations are applied in a uniform and non-discriminatory manner.
d. NO CHARGE. There shall be no charge (except to the extent
covered in the Operating Expenses) for any portion of the parking facilities
(E.G., there shall be no charge for either the Reserved Parking Spaces or the
Unreserved Parking Spaces), unless and to the extent of charges imposed by
applicable governmental authorities after the Commencement Date.
30. NOTICES. Any notice or demand required or desired to be given
under this Lease shall be in writing and shall be given by hand delivery,
electronic mail (E.G., facsimile) or the United States mail. Notices which
are sent by electronic mail shall be deemed to
38
have been given upon receipt. Notices which are mailed shall be deemed to
have been given when seventy-two (72) hours have elapsed after the notice was
deposited in the United States mail, registered or certified, the postage
prepaid, addressed to the party to be served. As of the date of execution of
this Lease, the addresses of Landlord and Tenant are those specified in the
Basic Lease Information. Either party may change its address to another
location or locations within the United States by giving notice of the change
in accordance with this Section.
31. TRANSFER OF TITLE. Landlord shall deliver notice to Tenant within
ten (10) days after a transfer of title of all or any portion of the Project.
Tenant shall not be obligated to deliver the Rent or otherwise fulfill any
other obligations under this Lease to the transferee until Tenant has
received a (conformed) copy of the recorded deed transferring title to the
Project to the transferee.
32. GENERAL
a. CAPTIONS. The captions and headings used in this Lease are
for the purpose of convenience only and shall not be construed to limit or
extend the meaning of any part of this Lease.
b. TIME. Time is of the essence for the performance of each
term, condition and covenant of this Lease.
c. SEVERABILITY. If any provision of this Lease is held to be
invalid, illegal or unenforceable, the invalidity, illegality, or
unenforceability shall not affect any other provision of this Lease, but this
Lease shall be construed as if the invalid, illegal or unenforceable
provision had not be contained herein.
d. CHOICE OF LAW; CONSTRUCTION. This Lease shall be construed
and enforced in accordance with the laws of the State of California. The
language in all parts of this Lease shall in all cases be construed as a
whole according to its fair meaning and not strictly for or against either
Landlord or Tenant. For the purposes of this Lease and all agreements
supplemental to this Lease, unless the context otherwise requires:
1. The terms "include", "including" and "such as" shall be
construed as if followed by the phrase "without being limited to".
The words "herein", "hereof", "hereby", "hereunder" and words of
similar import shall be construed to refer to this Lease as a whole
and not to any particular Article or Section unless expressly so
stated.
2. The term "law" or "legal requirements" shall mean all
laws, statutes, ordinances (including building codes and zoning
regulations and ordinances), orders, rules, regulations, directives
and requirements of, and the provisions of all licenses, permits
(special or otherwise), approvals and certificates issued by, all
governmental authorities, whether now or hereafter in force, and
all requirements, obligations and conditions of all instruments of
record, in each case to the extent applicable to the Project or the
Premises or any part thereof or the sidewalks, curbs or areas
adjacent or appurtenant thereto. The
39
term "law" or "legal requirements" includes legal requirements
relating to the environment.
3. The term "governmental authorities" shall mean all
federal, state, county, city and municipal governments, all
political subdivisions thereof and all agencies, boards, bureaus,
commissions, departments, offices and instrumentalities of any of
the foregoing, and any officials thereof, and any other
governmental, public or quasi-public authorities, now existing or
hereafter created, having jurisdiction or affecting the Project or
the Premises.
4. The term "agents" of any person described in this Lease
shall include all agents, contractors, subcontractors, affiliates,
servants, employees, invitees and licensees of such person, and the
agents of such agents.
5. The words "Tenant hereby indemnifies Landlord against
liability" and words of like import shall mean that Tenant hereby
agrees to and hereby does indemnify and hold and save harmless
Landlord, the Lessor, the Mortgagee and the irrespective agents,
from and against any and all loss, cost, liability, claim, damage,
fine, penalty and expense, including reasonable attorneys' fees and
disbursements, but the same shall not be construed as indemnifying
any of the foregoing named persons for liability to Tenant arising
out of the negligence or tortious acts of such person.
6. The necessary grammatical changes required to make the
provisions of this Lease apply in the plural sense where there is
more than one tenant and to either corporations, associations,
partnerships or individuals, males or females, shall in all
instances be assumed as though fully expressed. If there is more
than one person or entity who or which are Tenant under this Lease,
the obligations imposed upon Tenant under this Lease shall be joint
and several. The relationship between Landlord and Tenant created
hereunder shall be that of lessor and lessee and nothing herein
shall be construed as creating any joint venture or partnership.
7. The rule of "ejusdem generis" shall not be applicable to
limit a general statement following or referrable to an enumeration
of specific matters to matters similar to the matters specifically
mentioned.
8. Each of the terms of this Lease to be performed shall be
deemed and construed as a separate and independent covenant of the
person obligated to perform the same, not dependent upon any of the
other terms of this Lease. This Lease shall be construed without
regard to any presumption or other rule requiring construction
against the party causing this Lease to be drafted.
9. The various terms which are defined in other Articles of
this Lease or are defined in Exhibits annexed hereto shall have the
meanings specified in such other Articles and such Exhibits for all
purposes of this Lease
40
and all agreements supplemental hereto, nless the context clearly
indicates the contrary.
10. The Article headings or other captions in this Lease and
the Table of Contents to this Lease are inserted only as a matter
of convenience or reference, and are not to be given any effect in
construing this Lease.
e. GENDER; SINGULAR, PLURAL. When the context of this Lease
requires, the neuter gender includes the masculine, the feminine, a
partnership, a corporation, or a joint venture, and the singular includes the
plural.
f. BINDING EFFECT. The covenants and agreements contained in
this Lease shall be binding on the parties hereto and on their respective
successors and assigns.
g. ENTIRE AGREEMENT. This Lease is the entire agreement between
the parties, and there are no agreements or representations between the
parties except as expressed herein. Except as otherwise provided herein, no
subsequent change or addition to this Lease shall be binding unless in
writing and signed by the parties hereto.
h. COUNTERPARTS. This Lease may be executed in counterparts,
each of which shall be an original, but all counterparts shall constitute one
instrument.
i. EXHIBITS. The Basic Lease Information and all Exhibits
attached hereto are hereby incorporated herein and made an integral part
hereof.
j. DEFINITION OF LANDLORD. The term "Landlord" shall mean only
the owner at the time in question of the present landlord's interest in the
Project and the Buildings and in the event of a transfer or transfers (by
operation of law or otherwise) of the Project or the Buildings or a lease of
all or substantially all of the Project and the Buildings, or a transfer or
transfers (by operation of law or otherwise) of the leasehold estate under
any such lease, the transferor or lessor, as the case may be, shall be and
hereby is automatically and entirely released and discharged, from and after
the date of such transfer or leasing, of all liability in respect of any
covenant and obligation under and the performance of any of the terms of this
Lease on the part of Landlord thereafter to be performed; and the transferee
or lessee shall be deemed to have assumed and agreed to perform, subject to
the limitations of this Section and Sections 23 and 32.k. (and without
further agreement), all of the terms of this Lease on the part of Landlord to
be performed during its period of ownership.
k. EXCULPATORY CLAUSE. Tenant shall look solely to Landlord's
estate and interest in the Project and the Buildings for the satisfaction of
any right of Tenant for the collection of a judgment or other judicial
process or arbitration award requiring the payment of money by Landlord and
no other property or assets of Landlord or Landlord's agents shall be subject
to levy, lien, execution, attachment, or other enforcement procedure for the
satisfaction of Tenant's rights and remedies under or with respect to this
Lease, the relationship of Landlord and Tenant hereunder or under law, or
Tenant's use and occupancy of the Premises or any other liability of Landlord
to Tenant.
41
l. FORCE MAJEURE. In the event Landlord shall be delayed or
hindered in or prevented from the performance of any act required hereunder
by reason of strikes, lock-outs, labor troubles, inability to procure
materials, failure of power, restrictive governmental laws or regulations,
riots, insurrection, war or other reason of a like nature beyond the
reasonable control of Landlord ("Force Majeure"), then performance of such
act shall be extended for a period equivalent to the period of such delay.
IN WITNESS WHEREOF, the parties have executed this Lease, on the date(s)
set forth below.
"Landlord": "Tenant":
WYSE TECHNOLOGY INVESTMENTS, INC., WYSE TECHNOLOGY, INC.,
a California corporation a Delaware corporation
By: /s/ GARY ANDERSON By: /s/ GLORIA WAHL
---------------------------- --------------------------------
Name: Gary Anderson Name: Gloria Wahl
Title: Vice President Title: Treasurer
Date: March 19, 1993 Date: March 19, 1993
-------------------------- ------------------------------
42
EXHIBIT A
Legal Description of Real Property; Floor Plan for Buildings; Calculation of
Total Rentable and Useable Square Footage for each Building and the Project;
and Site Plan of the Project
EXHIBIT B-1
SUMMARY OF OPERATING EXPENSE
To include:
(1) Summary of Project Operating Expenses for 1990 and 1991;
(2) Estimate of Project Operating Expenses for 1992 and 1993;
(3) Summary of Building Operating Expenses for 1990 and 1991,
segregated for Building 1, Building 2, and Building 3; and
(4) Estimate of Building Operating Expenses (and Tenant's
Percentage Share of the Building Operating Expenses) for 1992
and 1993, segregated for Building 1, Building 2, and
Building 3.
EXHIBIT B-2
SUMMARY OF AMENITIES EXPENSES
To include:
(1) Summary of Amenities Expenses for 1990 and 1991
(2) Estimate of Amenities Expenses for 1992 and 1993
EXHIBIT C
ESTOPPEL CERTIFICATE
- -------------------
- -------------------
- -------------------
Re: Lease dated March __, 1992 ("Lease") by and between
_______________ _____________ ("Landlord") and
______________________ ("Tenant").
Gentlemen:
Reference is made to the above-described Lease in which the undersigned is
the Tenant. The undersigned hereby acknowledges that:
1. A true and correct copy of the Lease is attached hereto as EXHIBIT 1.
2. There are no modifications, amendments, supplements, arrangements
or side letters modifying, amending, altering, supplementing or changing the
terms of the Lease except as follows: ________________________________________.
3. The Lease is in full force and effect, and the Lease has been duly
executed and delivered by the Tenant.
4. The undersigned acknowledges that (a) Rent on the Lease has been paid
up to and including 19__ (b) Monthly Base Rent during the ____________ (__) year
of the term of the Lease is _________________ Dollars ____________ and (c) Rent
has not been paid for any period after _____________ 19__.
5. Tenant is not aware of any outstanding default under the Lease except:
_____________________________________________________________________.
Dated: _____________, 19__ Very truly yours,
"Tenant"
__________________________,
a ________________________
By: ______________________
Its:______________________
EXHIBIT D
LANDLORD'S NORMAL BUSINESS HOURS FOR OPERATION OF HVAC
Supply fans provide air circulation for heating, cooling and outside air
according to the following schedule:
SITE DAYS SCHEDULED
Building 2 Monday-Friday 5:30am-7:30pm
Saturday 8:00am-5:00pm
Sunday Off
Cafeteria Monday-Friday 5:30am-3:00pm
Saturday/Sunday Off
Health Club Monday-Friday 10:00am-8:00pm
Saturday/Sunday Off
Boiler On constantly Turned on 9/27/90
during winter
Chiller: Provides
chilled water for Monday-Friday 6:30am-9:00pm
all Buildings: Saturday 8:00am-7:00pm
Sunday 9:00am-7:00pm
[Building 3?]
EXHIBIT E
MEMORANDUM OF LEASE
EXHIBIT F
TENANT INSURANCE REQUIREMENTS
(a) Commercial General Liability Insurance to afford protection against
any liability for bodily injury, death or property damage occurring in, upon,
adjacent to or in connection with the Premises, in such amount as Landlord
may determine and in no event less than $5,000,000 with respect to bodily
injury, death or property damage arising out of any one occurrence and not
less than $5,000,000 from the aggregate of all such occurrences within each
policy year. This policy shall include (i) coverage for contractual
liability (including the matters set forth in Section 9 hereof), owner's
protective liability, independent contractor's liability and completed
operations liability and (ii) a provision that said aggregate limit shall
apply separately at the Premises and that said insurer will provide notice to
Landlord if said aggregate is reduced by either payments of a claim or the
establishment of reserves for claims if said payments or reserves exceed
$250,000. Tenant agrees that if said aggregate limit applied to the Premises
is reduced by the payment of a claim or the establishment of a reserve to
take all practical immediate action to have the aggregate limit restored by
endorsement to the existing policy or the purchase of an additional insurance
policy complying with these requirements;
(b) Insurance upon the Premises (other than the basic Buildings but
including all Alterations thereto and all furniture, furnishings, fixtures
and equipment thereon) in an amount equal to the full replacement value
thereof (including an "agreed amount" endorsement), including any increase in
value resulting from increased costs, with coverage against such perils and
casualties as are commonly included in "all risk" insurance policies
(including breakage of glass within the Premises, sprinkler leakage and
collapse);
(c) Broad Form Boiler and Machinery Insurance on all air conditioning
equipment, electrical apparatus, boilers and other pressure vessels or
systems, whether fired or unfired, installed by Tenant (or by Landlord, at
Tenant's expense) in or near the Premises, either as part of the extended
coverage insurance mentioned in clause (b) above or in amounts set by
Landlord, but in no event less than $1,000,000;
(d) During the course of construction of any Alterations (including
under the Exhibit C or in connection with the preparation of the Premises for
occupancy) by Tenant in the Premises and until completion thereof, Builder's
Risk Insurance on an "all risk" basis (including collapse) on a completed
value (non-reporting) form for full replacement value covering the interests
of Landlord and Tenant (and their respective contractors and subcontractors),
and any Lessor or Mortgagee in all work incorporated in the Building and all
materials and equipment in or about the Premises;
(e) Workers' Compensation Insurance, as required by law;
(f) Loss of income and business interruption insurance in such
amounts as will reimburse Tenant for direct and indirect loss of earnings
attributable to all perils commonly insured against by prudent tenants or
attributable to prevention of access to the Premises or to the Building as a
result of such perils; and
(g) Such other insurance in such amounts as Landlord or any Lessor or
Mortgagee may reasonably require from time to time.
EXHIBIT G
SPECIFICATIONS FOR UTILITIES AND SERVICES