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Sample Business ContractsHome: Sample Business Contracts:
ARIBA PLAZA
SUBLEASE
Between
ARIBA, INC.
a Delaware corporation
as
SUBLANDLORD
and
NETSCREEN TECHNOLOGIES, INC.
a Delaware corporation
as
SUBTENANT
for
PREMISES
at
805 Eleventh Avenue
and
809 Eleventh Avenue
Sunnyvale, California 94089
<PAGE>
BASIC SUBLEASE INFORMATION
1. Sublease Date: October 18, 2002.
2. Sublandlord: Ariba, Inc., a Delaware corporation.
3. Subtenant: NetScreen Technologies, Inc., a Delaware corporation.
4. Master Landlord: Moffett Park Drive LLC, a California limited liability
company.
5. Project: Ariba Plaza, 1111 Lockheed Martin Way, Sunnyvale, California
(building addresses on Eleventh Avenue).
6. Rentable Area of Project: 715,998 square feet.
7. Premises: The Building Three Premises and the Building Four Premises, as
determined from time to time (subject to Paragraph 40).
8. Sublandlord's Server Room: That portion of the first floor of Building
Three designated as "Ariba Server Room" on Exhibit B, constituting 2,165
square feet.
9. Fourth Floor Expansion Space: That portion of the fourth floor of Building
Three designated as such on Exhibit B, constituting 21,860 rentable square
feet.
10. Building Three Premises:
Sublease Commencement Date through Fourth Floor Expansion Date: the entire
second and third floors of Building Three, and that portion of the first
floor of Building Three other than Sublandlord's Server Room, and that
portion of the fourth floor of Building Three other than the Fourth Floor
Expansion Space, constituting 151,057 rentable square feet;
Fourth Floor Expansion Date through Expiration Date: the entire second,
third and fourth floors of Building Three, and that portion of the first
floor of Building Three other than Sublandlord's Server Room, constituting
172,917 rentable square feet;
11. Building Four Premises: subject to potential expansion in accordance with
Paragraph 40, that portion of the first floor of Building Four designated
by crosshatching on Exhibit B ("Subtenant's Shipping Area"), constituting
4,707 rentable square feet.
12. Rentable Area of Premises (subject to Paragraph 40):
Sublease Commencement Date through
Fourth Floor Expansion Date: 155,764 rentable square feet.
Fourth Floor Expansion Date through
Expiration Date: 177,624 rentable square feet.
13. Sublease Commencement Date: November 1, 2002, subject to the provisions of
Paragraph 2.2 below.
14. Base Rent Inducement Period: Rent Commencement Date through the third
monthly anniversary of the Rent Commencement Date.
<PAGE>
15. Fourth Floor Expansion Date: The earlier of (i) February 14, 2004, or (ii)
the date Subtenant occupies all or any portion of the Fourth Floor
Expansion Space.
16. Sublease Expiration Date: May 13, 2008, subject to the provisions of
Paragraph 2.2 below.
17. Rent Commencement Date: February 14, 2003, subject to the provisions of
Paragraph 3.1 below .
18. Monthly Base Rent:
Rent Commencement Through Base Rent
Inducement Period: $ 0
Base Rent Inducement Period expiration
through Fourth Floor Expansion Date: $ 230,531
Fourth Floor Expansion Date through
Sublease Expiration Date: $ 262,884
19. Subtenant's Project Share:
Sublease Commencement Date through Fourth
Floor Expansion Date 21.75%.
Fourth Floor Expansion Date through
Sublease Expiration Date: 24.81%.
Subtenant's Building Share:
Building Three 100.00%
Building Four (subject to Paragraph 40) 0%
20. Security Deposit: the Security Deposit shall initially be an amount equal
to the Monthly Base Rent following the Base Rent Inducement Period times
three (3), or $691,593, to be increased to an amount equal to the Monthly
Base Rent following the Fourth Floor Expansion Date times three (3), or
$788,652, prior to the Fourth Floor Expansion Date; provided, that the
Security Deposit shall by subject to increase to two (2) times the then
current Security Deposit amount in accordance with Paragraph 4. The
Security Deposit shall also be subject to increase upon expansion of the
Premises, in accordance with Paragraph 40.
21. Sublandlord's Address:
Payment of Rent: 807 Eleventh Avenue
Sunnyvale, California, 94089
Attn: Real Estate Manager
Notices: 807 Eleventh Avenue
Sunnyvale, California, 94089
Attn: General Counsel
(650) 390-1377 Facsimile
and a copy to:
807 Eleventh Avenue
<PAGE>
Sunnyvale, California, 94089
Attn: Real Estate Manager
(650) 390-1315 Facsimile
22. Subtenant's Address for Notices:
Prior to Sublease Commencement Date:
350 Oakmead Parkway
Sunnyvale, CA 94085
Attn: General Counsel
(408) 730-6760 Facsimile
and a copy to:
350 Oakmead Parkway
Sunnyvale, CA 94085
Attn: Vice President of Operations
(408) 730-6760 Facsimile
As of Sublease Commencement Date:
805 Eleventh Avenue
Sunnyvale, CA 94089
Attn: General Counsel
(650)_____________Facsimile
and a copy to:
805 Eleventh Avenue
Sunnyvale, CA 94089
Attn: Vice President of Operations
(650)_____________Facsimile
23. Brokers: Cornish & Carey Commercial and Cushman and Wakefield
(Sublandlord's Broker) and The Staubach Company (Subtenant's Broker).
The Basic Sublease Information set forth above is made a part of the
Sublease. In the event of conflict between the Basic Sublease Information
and another provision of the Sublease, the latter shall control.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PARAGRAPH PAGE
--------- ----
<S> <C>
1. Sublease of Premises................................................................... 1
1.1. Sublease......................................................................... 1
1.2. Common Areas - Definition........................................................ 1
1.3. Common Areas - Subtenant's Rights................................................ 2
1.4. Rules and Regulations............................................................ 2
1.5. Common Areas - Changes........................................................... 2
1.6. Parking.......................................................................... 3
1.7. Furniture........................................................................ 3
1.8. Sublandlord's Server Room........................................................ 5
1.9. MPOE Room........................................................................ 5
1.10. Subtenant's Shipping Area........................................................ 6
1.11. Amenity Areas.................................................................... 6
2. Term................................................................................... 6
2.1. Term............................................................................. 6
2.2. Delay in Delivery................................................................ 6
2.3. Subtenant Compliance............................................................. 6
3. Rent................................................................................... 7
3.1. Base Rent........................................................................ 7
3.2. Shared Expenses.................................................................. 7
3.3. Generally........................................................................11
3.4. Late Payment.....................................................................11
4. Security Deposit.......................................................................12
5. Use....................................................................................13
5.1. Use..............................................................................13
5.2. Hazardous Materials..............................................................13
5.3. Subtenant's Compliance with Applicable Requirements..............................15
5.4. Inspection; Compliance...........................................................15
6. Delivery of Possession.................................................................15
6.1. Condition........................................................................15
6.2. Compliance.......................................................................16
6.3. Acknowledgements.................................................................17
6.4. Subtenant's Work.................................................................17
</TABLE>
<PAGE>
<TABLE>
<S> <C>
7. Utilities and Services.................................................................17
7.1. Standard Utilities and Services..................................................17
7.2. Telecommunications...............................................................19
7.3. Utility Additions................................................................21
7.4. Security.........................................................................21
7.5. Building Three...................................................................22
8. Maintenance and Repairs; Utility Installations, Trade Fixtures and Alterations.........22
8.1. Sublandlord's Obligations........................................................22
8.2. Subtenant's Obligations..........................................................23
8.3. Utility Installations; Trade Fixtures; Alterations...............................23
8.4. Ownership; Removal; Surrender; and Restoration...................................24
9. Insurance; Waiver; Subrogation.........................................................25
9.1. Cost of Sublandlord's Insurance..................................................25
9.2. Subtenant's Insurance............................................................25
9.3. Insurance Policies...............................................................25
9.4. Failure of Subtenant to Purchase and Maintain Insurance..........................26
9.5. Additional Insureds and Coverage.................................................26
9.6. Waiver of Subrogation............................................................26
9.7. No Representation of Adequate Coverage...........................................26
9.8. Furniture Casualty Loss..........................................................27
10. Limitation of Liability and Indemnity..................................................27
11. Property Taxes.........................................................................28
11.1. Payment of Taxes.................................................................28
11.2. Additional Improvements..........................................................28
11.3. Personal Property Taxes..........................................................28
12. Assignment and Subletting..............................................................28
12.1. Generally........................................................................28
12.2. Notice...........................................................................28
12.3. Sublandlord's Election...........................................................29
12.4. Sublandlord's Discretion; Factors................................................29
12.5. Bonus Rent.......................................................................30
12.6. Encumbrances.....................................................................30
12.7. Merger; Attornment...............................................................30
12.8. Sublandlord's Costs..............................................................31
12.9. Affiliates.......................................................................31
13. Default; Breach; Remedies..............................................................31
13.1. Default; Breach..................................................................31
</TABLE>
<PAGE>
<TABLE>
<S> <C>
13.2. Remedies.........................................................................32
13.3. Inducement Recapture.............................................................33
13.4. Breach by Sublandlord............................................................33
14. Damage or Destruction; Condemnation....................................................34
15. Brokerage Fees.........................................................................34
16. Estoppel Certificates..................................................................34
17. Definition of Sublandlord..............................................................35
18. Severability...........................................................................35
19. Days...................................................................................35
20. Limitation on Liability................................................................35
21. Time of Essence........................................................................35
22. No Prior or Other Agreements...........................................................36
23. Notices................................................................................36
23.1. Notice Requirements..............................................................36
23.2. Date of Notice...................................................................36
23.3. Notices from Master Landlord.....................................................36
24. Waivers................................................................................36
25. No Right To Holdover...................................................................36
26. Cumulative Remedies....................................................................36
27. Covenants and Conditions; Construction of Agreement....................................37
28. Binding Effect; Choice of Law..........................................................37
29. Subordination; Attornment; Non-Disturbance.............................................37
29.1. Subordination....................................................................37
29.2. Attornment.......................................................................37
30. Master Lease Provisions................................................................37
30.1. Sublease Subordinate.............................................................37
30.2. Cooperation With Subtenant.......................................................39
30.3. Sublandlord Representations......................................................39
30.4. Modification.....................................................................39
30.5. Sublease Consent and Non-Disturbance Agreement...................................40
30.6. Multiple New Master Leases.......................................................40
30.7. Conflict.........................................................................40
31. Attorneys' Fees........................................................................40
32. Sublandlord's Access to Premises.......................................................41
32.1. Generally........................................................................41
32.2. Subtenant's Waiver...............................................................41
32.3. Method of Entry..................................................................41
</TABLE>
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<TABLE>
<S> <C>
33. Auctions...............................................................................41
34. Signs..................................................................................41
35. [intentionally Omitted]................................................................42
36. Consents...............................................................................42
37. Quiet Possession.......................................................................42
38. Options................................................................................42
38.1. Definition.......................................................................42
38.2. Multiple Options.................................................................42
38.3. Master Lease Options.............................................................42
38.4. Effect of Default on Options.....................................................42
39. Options to Extend Term.................................................................43
40. Rights to Expand.......................................................................44
40.1. Right of First Refusal...........................................................44
40.2. Offer Right......................................................................45
40.3. Generally........................................................................46
41. [intentionally omitted]................................................................46
42. Reservations...........................................................................46
43. Performance Under Protest..............................................................46
44. Authority..............................................................................46
45. Amendments.............................................................................47
46. Exhibits...............................................................................47
</TABLE>
<PAGE>
SUBLEASE
This Sublease is made and entered into as of the 18 day of October, 2002
("Effective Date"), by and between Ariba, Inc., a Delaware corporation
("Sublandlord"), and NetScreen Technologies, Inc., a Delaware corporation
("Subtenant").
R E C I T A L S
A. Sublandlord, as tenant, and Moffett Park Drive LLC, a California
limited liability company ("Master Landlord"), as landlord, previously entered
into the Technology Corners Triple Net Multiple Building Lease dated March 15,
2000, as amended by letter agreement dated September 11, 2000, and by a First
Amendment to Lease dated January 12, 2001 (collectively, the "Master Lease"), a
copy of which is attached hereto as Exhibit A and incorporated herein by this
reference. Under the Master Lease, Master Landlord leases to Sublandlord certain
premises located at 1111 Lockheed Martin Way in Sunnyvale, California, including
four (4) free standing, four-story office and research and development
buildings, and one (1) amenity building (collectively, the "Buildings") and
other improvements including a parking structure (collectively the "Project").
The four office and research development buildings are commonly known as: 803
Eleventh Avenue ("Building One"), 807 Eleventh Avenue ("Building Two"), 805
Eleventh Avenue ("Building Three"), and 809 Eleventh Avenue ("Building Four").
The amenity building ("Amenity Building") is currently used as a fitness center.
References in this Sublease to a "Building" shall refer to Buildings One, Two,
Three and Four, and the Amenities Building, individually, and references in this
Sublease to the "Buildings" shall refer to Buildings One, Two, Three and Four,
and the Amenities Building, collectively, unless otherwise expressly stated.
B. Sublandlord wishes to sublease to Subtenant, and Subtenant desires
to sublease from Sublandlord, on the terms and conditions set forth herein, the
Premises, as defined in the Basic Lease Information.
C. Capitalized terms used herein without definition shall have the
same meaning as in the Master Lease.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Sublandlord and Subtenant agree as follows:
A G R E E M E N T
1. SUBLEASE OF PREMISES
1.1. SUBLEASE. Sublandlord hereby subleases and demises to Subtenant,
and Subtenant hereby accepts from Sublandlord, on the terms and conditions
hereinafter set forth, the Premises. The Premises are depicted on Exhibit B,
which is attached hereto and incorporated herein by this reference. Sublandlord
and Subtenant conclusively agree, for purposes of this Sublease, that the
Premises contain the number of rentable square feet stated in the Basic Lease
Information.
1.2. COMMON AREAS - DEFINITION. The term "Common Areas" includes both
"Project Common Area" and "Building Common Area." "Project Common Area" is
defined as all areas and facilities outside the Buildings and within the
exterior boundary line of the Project, including parking areas, passenger and
other loading and unloading areas, trash areas, roadways, walkways, driveways
and landscaped areas that are provided and reasonably designated by the
1
<PAGE>
Sublandlord from time to time for the general non-exclusive use of Sublandlord,
Subtenant and other tenants of the Project and their respective employees,
suppliers, shippers, customers, contractors and invitees. "Building Common Area"
is defined as all areas and facilities inside a building that are provided and
reasonably designated by the Sublandlord from time to time for the general
non-exclusive use of the tenants of such building and their respective
employees, suppliers, shippers, customers, contractors and invitees, including
stairways, elevators, lobbies and other areas which may be so provided and
reasonably designated by Sublandlord.
1.3. COMMON AREAS - SUBTENANT'S RIGHTS. Sublandlord grants to Subtenant,
for the benefit of Subtenant and its employees, suppliers, shippers,
contractors, customers and invitees, during the term of this Sublease and all
extensions thereto, the right to use, in common with others entitled to such
use, the Project Common Areas as they exist from time to time, subject to any
rights, powers, and privileges reserved by (i) Master Landlord under the Master
Lease and (ii) Sublandlord under the terms hereof or under the terms of any
rules and regulations or restrictions governing the use of the Project.
Sublandlord also grants to Subtenant, for the benefit of Subtenant and its
employees, suppliers, shippers, contractors, customers and invitees, during the
term of this Sublease and all extensions thereto, the right to use, in common
with other tenants of such Building, the Building Common Areas as they exist
from time to time in any Building in which Subtenant occupies space, subject to
any rights, powers, and privileges reserved by (i) Master Landlord under the
Master Lease and (ii) Sublandlord under the terms hereof or under the terms of
any rules and regulations or restrictions governing the use of the Project.
Notwithstanding the foregoing, the parties agree that:
(i) as to Building Three, there is no Building
Common Area for purposes of this Lease because Subtenant is taking the
entire space with the exception of 2,165 rentable square feet being
retained by Sublandlord as Sublandlord's Server Room. Sublandlord's rights
regarding access to and use of Sublandlord's Server Room shall be as
provided in Paragraph 1.8, below; and
(ii) as to Building Four, since Subtenant will not
use the lobby, stairs, or elevators due to Subtenant's direct exterior
access to the Subtenant's Shipping Area, the parties agree that the only
Building Common Area is the loading dock staging area, as depicted on
Exhibit B, the use of which is to be shared by all of the tenants of the
Project. This is subject to change in the event Subtenant takes any other
space in Building Four, either pursuant to Subtenant's rights under
Paragraph 40 below or otherwise.
1.4. RULES AND REGULATIONS. Sublandlord shall have the right, from time
to time, to establish, modify, amend and enforce reasonable rules and
regulations ("Sublandlord's Rules and Regulations") for the management, safety,
care, and cleanliness of the Buildings and the remainder of the Project, the
parking and unloading of vehicles and the preservation of good order, as well as
for the convenience of other occupants or tenants of the Buildings and the
Project and their invitees. A copy of the current Sublandlord's Rules and
Regulations are attached to this Sublease as Exhibit C and incorporated herein
by this reference. Subtenant agrees to abide by and conform to all such
Sublandlord's Rules and Regulations, and the Rules and Regulations adopted from
time to time by Master Landlord under the Master Lease ("Master Landlord's Rules
and Regulations"), and to cause its employees, suppliers, shippers, customers,
contractors and invitees to so abide and conform. Sublandlord shall not be
responsible to Subtenant for the non-compliance with said rules and regulations
by other tenants of the Project. Any enforcement of said rules and regulations
by Sublandlord shall be on a non-discriminatory basis. In the event of conflict
between the provisions of this Sublease and Sublandlord's Rules and Regulations,
the provisions of this Sublease shall prevail. In the event of conflict between
Master Landlord's Rules and Regulations and Sublandlord's Rules and Regulations,
Master Landlord's Rules and Regulations shall prevail.
1.5. COMMON AREAS - CHANGES. Sublandlord shall have the right, in
Sublandlord's sole discretion, from time to time; provided that Subtenant
nonetheless shall have reasonable access to parking and the Premises at all
times:
2
<PAGE>
(a) To make changes to the Common Areas, including, without
limitation, changes in the location, size, shape and number of driveways,
entrances, parking spaces, parking areas, passenger and other loading and
unloading areas, ingress, egress, direction of traffic, landscaped areas,
walkways and utility raceways;
(b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;
(c) To designate other land outside the boundaries of the Project
to be a part of the Common Areas (but only if and to the extent the Common Areas
are so expanded by Master Landlord pursuant to its rights under the Master
Lease) so long as any change in the size of the Common Areas shall be reflected
equitably in the calculation of Operating Expenses herein, and provided that in
such a case Subtenant's Project Share of Operating Expenses shall not be
increased without the consent of Subtenant, in Subtenant's reasonable
discretion;
(d) To add additional buildings and improvements to the Common
Areas so long as any changes made to the Project pursuant to this Subparagraph
1.5 (d) shall be at Sublandlord's sole cost, unless otherwise mutually agreed by
the parties, and any change in the size of the Common Areas shall be reflected
equitably in the calculation of Operating Expenses herein, and provided that in
such a case Subtenant's Project Share of Operating Expenses shall not be
increased without the consent of Subtenant, in Subtenant's reasonable
discretion;
(e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Project, or any portion thereof; and
(f) To do and perform such other acts or work and make such other
changes in, to or with respect to the Common Areas and Project as Sublandlord
may, in the exercise of reasonable business judgment, deem to be appropriate.
1.6. PARKING. Subtenant shall have the right, at no additional cost, to
the non-exclusive use of three (3) parking spaces for each 1,000 square feet of
rentable area of the Premises in the areas of the Project designated by
Sublandlord for parking. Sublandlord reserves the right to equitably modify
rights granted under this Paragraph if obligated to do so by the Master Lease or
applicable governmental regulations, or in the event of construction, natural
disaster, or other similar reasonable circumstances. Subtenant shall not use
more parking spaces than permitted herein. Subtenant shall not park any vehicles
larger than full-size passenger automobiles, sport utility vehicles or pick-up
trucks, herein called "Permitted Size Vehicles." Sublandlord may regulate the
loading and unloading of vehicles by adopting and amending Rules and Regulations
for the Project. No vehicles other than Permitted Size Vehicles may be parked in
the Common Area without the prior written permission of Sublandlord. Subtenant
shall have the right to mark (by striping and/or signage) not more than ten (10)
parking spaces in the area designated "Visitor Parking" on Exhibit B for
non-exclusive visitor parking, provided that (i) Sublandlord shall have no
obligation to enforce the use of such spaces for such purpose, (ii) such spaces
shall not be marked to indicate that they are for the exclusive use of Subtenant
or its visitors, and (iii) such right shall be subject to the prior written
approval of Master Landlord.
(a) Subtenant shall not permit or allow any vehicles that belong
to or are controlled by Subtenant or Subtenant's employees, suppliers, shippers,
customers, contractors or invitees to be loaded, unloaded, or parked in areas
other than those designated by Sublandlord for such activities.
(b) Subtenant shall not service or store any vehicles in the
Common Areas.
(c) If Subtenant permits or allows any of the prohibited
activities described in this Paragraph 1.6, then Sublandlord shall have the
right, without notice, in addition to such other rights and remedies that it may
have, to remove or tow away the vehicle involved and charge the cost to
Subtenant, which cost shall be immediately payable upon demand by Sublandlord.
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1.7. FURNITURE.
(a) Building Three shall be delivered to Subtenant with the
Furniture included for Subtenant's use during the Sublease term, in accordance
with and subject to the terms and conditions of this Paragraph and all other
applicable provisions of this Sublease. The "Furniture" is defined as the
furniture, fixtures, equipment and other personal property described on Exhibit
D attached hereto and incorporated herein by this reference. Sublandlord shall
deliver the Furniture to Subtenant AS IS and Subtenant agrees that it takes
possession of the Furniture without relying on any representation or warranty by
Sublandlord as to the condition of the Furniture or its operability. SUBLANDLORD
DISCLAIMS, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL WARRANTIES AND
CONDITIONS, EXPRESS OR IMPLIED OR STATUTORY, AS TO ANY MATTER WHATSOEVER,
INCLUDING WITHOUT LIMITATION IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE. Sublandlord assumes no responsibility for providing
additional maintenance for the Furniture. Subtenant acknowledges that any change
in the current installation or configuration and any maintenance of the
Furniture may require an investment of time and resources to complete, and such
efforts shall not serve to excuse Subtenant from the performance of any of its
obligations under this Sublease. Subtenant conclusively agrees that for purposes
of this Sublease, the total number of cubicle systems provided to Subtenant is
as described in Exhibit D. Within thirty (30) days of the Sublease Commencement
Date, Subtenant shall be given an opportunity to verify inventory as compared to
Exhibit D. In the event that a discrepancy is identified in the Furniture
inventory, Subtenant shall notify Sublandlord, and the parties shall cooperate
reasonably with each other to make any appropriate corrections. In no event
shall Sublandlord have any liability, nor shall Subtenant have any remedy
against Sublandlord, for any liability, claim, loss, damage or expense caused
directly or indirectly by the Furniture or any deficiency or defect thereof or
the maintenance or repair thereof.
(b) Except as otherwise expressly provided herein, Subtenant shall
not have, or at any time acquire, any right, title or interest in the Furniture
except the right to possession and use as provided for in this Sublease.
Sublandlord shall have the right to place and maintain on the exterior or
interior of each item of Furniture an inscription identifying Sublandlord's
ownership of the Furniture. Subtenant shall not remove, obscure, deface or
obliterate the inscription or permit any other person to do so. Subtenant shall
keep the Furniture and all right, title, and interest free and clear of all
liens, charges, and encumbrances caused by Subtenant.
(c) Subtenant shall use the Furniture in a reasonably careful and
proper manner and shall not permit any Furniture to be used in violation of any
applicable federal, state, or local statute, law, ordinance, rule, or regulation
relating to the possession, use or maintenance of the Furniture. Subtenant shall
use only manufacturer authorized service providers to reconfigure, reassemble,
disassemble, repair and maintain the Furniture. Subtenant agrees to reimburse
Sublandlord for all damage to the Furniture arising from misuse or negligent
acts by Subtenant, its employees and its agents. If any Furniture covered by
this Sublease is damaged, lost, stolen or destroyed, or if any Furniture is
damaged as a result of its use, maintenance or possession, Subtenant shall
promptly notify Sublandlord of the occurrence and shall file all necessary
reports, including those required by law and those required by insurers of the
Furniture. Subtenant agrees to use the Furniture solely for business purposes
consistent with all use requirements and restrictions under the Sublease.
Subject to Paragraph 1.7(d), Subtenant shall return the Furniture to Sublandlord
in accordance with the provisions of Paragraph 8.4(c) below.
(d) Provided that (A) (i) Subtenant properly exercises both
options to extend the Term described in Paragraph 39 below, (ii) the term of the
Master Lease has not been extended beyond its current expiration date, and (iii)
Subtenant is not in default under this Sublease at the time of exercise of the
option, or (B) a "Recognition Event" (as defined in that certain Recognition
Agreement by and between Sublandlord, Subtenant and Master landlord entered into
or to be entered into pursuant to Paragraph 30.5), then Subtenant shall have the
option to purchase the Furniture at its "fair market value" (defined below) in
accordance with this paragraph. Such option shall be exercisable (A) no later
than nine (9) months, nor earlier than eleven (11) months, prior to the
expiration of the second option period, or (B) within ninety (90) days after the
occurrence of the Recognition Event, time being of the essence, by giving
written notice of exercise to Sublandlord. The parties agree to determine fair
market value in a manner consistent with that described in Paragraph 39 for
determining Fair Market Rental Rate; provided that, for purposes of the
arbitration procedure (should that procedure become necessary), the
qualifications for the arbitrators shall be that they are individuals of
substantial experience with respect to transactions involving office furniture
and equipment in Santa Clara County and that they do not have any ongoing
business relationship with the party selecting such person. Upon reaching the
determination of the Furniture's fair market value, Subtenant shall
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<PAGE>
pay the fair market value amount to Sublandlord, who in exchange for such
payment shall provide to Subtenant a bill of sale for the Furniture upon
expiration of the Sublease or following the Recognition Event. For purposes of
this option, "fair market value" shall be defined as the amount that a willing
buyer would pay and a willing seller would accept in an arm's length transaction
under comparable circumstances.
(e) During the first six (6) months of the Term, provided
Subtenant is not in Default hereunder, Subtenant shall have a one-time right
("Removal Right") to require Sublandlord to remove designated Furniture items
("Unwanted Furniture") from the Subleased Premises. The Removal Right shall be
effective as of the Sublease Commencement Date and shall expire on the six (6)
month anniversary of the Sublease Commencement Date ("Removal Right Term"). The
Removal Right may be exercised by Subtenant's delivering to Sublandlord written
notice of the exercise ("Exercise Notice"), prior to the end of the Removal
Right Term. The Exercise Notice shall specify a three-week period ("Removal
Period") which is not less than seven (7) days nor more than thirty (30) days
following the date of the Exercise Notice in which Sublandlord is to perform the
requested removal of the Unwanted Furniture. The Exercise Notice shall be
accompanied by a clearly-defined list of the items of Unwanted Furniture. The
Removal Right shall only be exercisable one time. Sublandlord shall select the
timing and sequence for removal of the Unwanted Furniture during the Removal
Period and shall communicate such information to Subtenant prior to the Removal
Period. Subtenant shall provide all necessary access to the Subleased Premises
to permit Sublandlord to perform removal. Prior to removal, Subtenant shall
completely disconnect and detach the Unwanted Furniture from all other Furniture
and property in the Subleased Premises and from the Subleased Premises itself.
Any Furniture that remains attached or connected in any way (including, by way
of example only, connected wiring and cabling) shall not be removed until
Subtenant disconnects and detaches the same, and if such disconnection is not
completed before Sublandlord has removed the balance of the Unwanted Furniture,
then Sublandlord's removal obligation shall automatically terminate with respect
to such items. At the time of removal by Sublandlord, all Unwanted Furniture
shall be in the same condition as provided to Subtenant. Following removal of
each item of Unwanted Furniture from the Subleased Premises, such items shall be
effectively deleted from the Furniture listed on Exhibit D. Promptly following
the Removal Period, Sublandlord shall provide to Subtenant a modified Furniture
list, labeled Exhibit D-1, which shall reflect such deletion and shall be
attached to the Sublease and replace Exhibit D; provided that the failure to
provide such an Exhibit D-1 shall not affect the validity of these provisions.
Following removal of items of Unwanted Furniture, Subtenant shall have no
further rights under Paragraph 1.7(d) (option to purchase) with respect to such
items.
1.8. SUBLANDLORD'S SERVER ROOM. The Premises shall not include, and
Sublandlord reserves for its own use, Sublandlord's Server Room as defined in
the Basic Lease Information. Sublandlord shall have access at all times to
Sublandlord's Server Room through the Building Three lobby and the corridor
leading from the lobby to the entrance to Sublandlord's Server Room. Subtenant
shall provide Sublandlord with any and all access cards, codes, and/or passwords
necessary for unfettered access to Sublandlord's Server Room. Sublandlord shall
not share in any Building Three Building Expenses, as defined in Paragraph 3.2
below, other than Sublandlord's share of the Server Room Electricity Cost. The
term "Server Room Electricity Cost" shall mean the cost of the electricity
provided to the Server Area (as defined in Exhibit I) through the existing
uninterrupted power supply located in Sublandlord's Server Room, which shall be
separately metered in accordance with the Work Letter attached hereto as Exhibit
I. Sublandlord's share of the Server Room Electricity Cost shall be equal to the
percentage of the total square feet of "Potential Cabinet Space" in the Server
Area that is located in Sublandlord's Server Room. The term "Potential Cabinet
Space" shall mean the square foot measurement of the floor area which is
available for installing server cabinets given the server rack fixture
infrastructure in the Server Area from time to time. Sublandlord and Subtenant
agree that based on the configuration of the Server Area following completion of
Sublandlord's Work in accordance with the Work Letter, Sublandlord's share of
the Server Room Electricity Cost shall be forty-one percent (41%).
1.9. MPOE ROOM. In addition to Sublandlord's Server Room, Sublandlord
shall also have access at all times to the main point of entry room ("MPOE
Room") located on the first floor of Building Three in the location designated
on the Building Three floor plans attached hereto as Exhibit B. Sublandlord
shall give Subtenant as much advance notice as is reasonably possible prior to
access to the MPOE Room. Sublandlord shall be accompanied either by a NetScreen
representative or security guard during access to the MPOE Room, provided that
such requirement shall not be used as a basis for preventing or restricting
Sublandlord's access.
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1.10. SUBTENANT'S SHIPPING AREA. In connection with Subtenant's
subleasing of Subtenant's Shipping Area, Subtenant shall have the non-exclusive
right to use the loading dock and adjacent staging area, as those areas are
identified on the floor plan of the first floor of Building Four attached hereto
as Exhibit B. Use of the loading dock and staging area will be subject to
reasonable rules and regulations adopted by Sublandlord.
1.11. AMENITY AREAS. The term "Amenity Areas" is defined as those
portions of the Project consisting of the Amenity Building, which contains
15,660 rentable square feet, and the space in Building Four occupied by a
cafeteria, which contains 21,510 rentable square feet. The Amenity Areas are
available for use by Subtenant as provided in the Cafeteria Provisions and the
Fitness Center Provisions contained in Exhibits E and F respectively, attached
to this Sublease.
2. TERM.
2.1. TERM. The term of this Sublease ("Term") shall commence on the
Sublease Commencement Date identified in the Basic Sublease Information (the
"Sublease Commencement Date") and shall expire on the Sublease Expiration Date
identified in the Basic Sublease Information (the "Expiration Date"), subject to
change in accordance with Paragraph 2.2 below. Sublandlord shall deliver
possession of the Premises, other than the Fourth Floor Expansion Space and
Subtenant's Server Room (see Work Letter attached as Exhibit I), to Subtenant on
the Sublease Commencement Date in the condition required under Paragraph 6.1
below. Sublandlord shall deliver possession of the Fourth Floor Expansion Space
to Subtenant on the earlier of (i) February 14, 2004, or (ii) within thirty (30)
days following receipt of written notice from Subtenant requesting possession.
Sublandlord shall deliver possession of Subtenant's Server Room to Subtenant in
accordance with Article II of the Work Letter. After the occurrence of the
Sublease Commencement Date, Sublandlord shall provide to Subtenant a Sublease
Commencement Date Memorandum in the form attached to this Sublease as Exhibit G,
which Memorandum Subtenant shall promptly execute and deliver to Sublandlord.
Subtenant shall have no rights in any portion of the Premises or the Project
prior to the Sublease Commencement Date, unless expressly provided otherwise in
this Sublease.
2.2. DELAY IN DELIVERY. Sublandlord shall not be subject to any
liability for its failure to deliver possession of the Premises by the scheduled
Sublease Commencement Date or any other particular date, nor shall such failure
affect the validity of this Sublease or affect the Sublease Expiration Date;
provided, however, that:
(1) The Sublease Commencement Date shall be the day Sublandlord
tenders possession of the Premises to Subtenant
(2) If Sublandlord fails to deliver possession of the Premises to
Subtenant on or before November 14, 2002, solely for reasons within the
reasonable control of Sublandlord, then for each day that elapses between
November 14, 2002, and the date possession is tendered, the Expiration Date
shall be extended by one day; and
(3) If Sublandlord fails to deliver possession of the Premises to
Subtenant on or before February 1, 2003, Subtenant may, at its option, by notice
to Sublandlord in writing within ten (10) days after such date, cancel this
Sublease. If such written notice is not received by Sublandlord within said
10-day period, Subtenant's right to cancel shall terminate. This termination
right shall be of no force or effect, however, in the event of any delay beyond
Sublandlord's reasonable control.
For purposes of this Paragraph 2.2, obtaining the Master Landlord's consent to
this Sublease shall not be considered to be within the reasonable control of
Sublandlord. All references to the Premises in this Paragraph 2.2 shall exclude
the Fourth Floor Expansion Space and Subtenant's Server Room.
2.3. SUBTENANT COMPLIANCE. Sublandlord shall not be required to tender
possession of the Premises (excluding the Fourth Floor Expansion Space and
Subtenant's Server Room) to Subtenant until Subtenant complies with its
obligation to provide (i) the evidence of insurance required hereunder and (ii)
the Security Deposit required under
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Paragraph 4. Pending delivery of such evidence, Subtenant shall be required to
perform all of its obligations under this Sublease from and after the date
Sublandlord was otherwise prepared to tender possession, including the payment
of Rent, notwithstanding Sublandlord's election to withhold possession pending
receipt of such evidence of insurance and/or the Security Deposit. Further, if
Subtenant is required to perform any other express conditions prior to or
concurrent with the Sublease Commencement Date, the Sublease Commencement Date
shall occur but Sublandlord may elect to withhold possession until such
conditions are satisfied.
3. RENT.
3.1. BASE RENT. Subtenant shall pay to Sublandlord monthly base rent
("Base Rent") in the amount shown in the Basic Sublease Information. Base Rent
shall be payable for the period beginning on the "Rent Commencement Date" shown
in the Basic Sublease Information and continuing throughout the remainder of the
Term. Base Rent is due and payable in advance on the first day of each calendar
month; provided, however, that Base Rent for the fourth (4th) full month shall
be due at the time of Subtenant's execution and delivery of this Sublease. Base
Rent is payable without notice or demand. Base Rent for any period during the
Term which is less than one full calendar month shall be prorated based on the
actual number of days in the calendar month involved. Notwithstanding the
foregoing, if Sublandlord fails to deliver possession of the initial Premises
(other than the Server Area identified in Exhibit I hereto) to Subtenant on or
before November 14, 2002, solely for reasons within the reasonable control of
Sublandlord, then for each day that elapses between November 14, 2002, and the
date possession is tendered, the Rent Commencement Date shall be extended by one
day. For purposes of this Paragraph 3.1, obtaining the Master Landlord's consent
to this Sublease shall not be considered to be within the reasonable control of
Sublandlord.
3.2. SHARED EXPENSES. In addition to Base Rent, commencing on the Rent
Commencement Date and continuing throughout the entire remaining Term, Subtenant
shall pay to Sublandlord: (i) Subtenant's Project Share of all Project Operating
Expenses and all Master Lease Expenses, and (ii) Subtenant's Building Share of
all Building Expenses, in accordance with the following provisions. The term
Operating Expense shall refer to both Project Operating Expenses and Building
Expenses, except as otherwise expressly provided.
(a) "Subtenant's Project Share" is defined as the percentage
determined by dividing the rentable square feet of the Premises by the total
rentable square feet of the Project. Sublandlord and Subtenant conclusively
agree that the Subtenant's Project Share shall be the percentage set forth in
the Basic Sublease Information (subject to increase in accordance with Paragraph
40).
(b) "Subtenant's Building Share" with respect to a given Building
is defined as the percentage determined by dividing the rentable square feet of
the Premises contained in the Building by the total rentable square feet of the
Project. Notwithstanding the foregoing, Sublandlord and Subtenant conclusively
agree that with respect to Building Three, Subtenant's Building Share is one
hundred percent (100%), and unless and until Subtenant occupies all or a portion
of an Expansion Space (as defined in Paragraph 40) in Building Four Subtenant's
Building Share of Building Four is zero percent (0%).
(c) "Building Expenses" is defined, for purposes of this Sublease,
to include all costs incurred by Sublandlord in the management, operation,
repair, maintenance and replacement of Buildings One, Two, Three and Four
(including Building Common Areas, but not including the Amenity Area in Building
Four containing the Cafeteria), including without limitation, the following:
utilities and services provided by Sublandlord pursuant to Paragraph 7;
maintenance and repairs performed by Sublandlord pursuant to Paragraph 8,
including repair and maintenance of Building mechanical systems (HVAC, plumbing
and electrical); roof repairs & maintenance (to the extent not performed by
Master Landlord); fire, life safety systems, including sprinkler system and fire
monitoring; window repairs; capital improvements and replacements; and a
management fee of three percent (3%) of Building Expenses.
(d) "Master Lease Expenses" is defined, for purposes of this
Sublease, to include all amounts paid or payable by Sublandlord under the Master
Lease (including without limitation all real estate taxes, assessments, fees and
other
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impositions in accordance with the provisions of Article IX, insurance premiums
in accordance with the provisions of Article VII, operating charges,
maintenance, repair and replacement costs and expenses in accordance with the
provisions of Article VI, landscaping (including irrigation), parking lot and
garage maintenance and repairs (including striping and sweeping), exterior pest
control, roof maintenance and repairs, window washing, capital improvements and
replacements, and a Management Fee), excepting therefrom Base Rent (as that term
is defined in the Master Lease), the costs incurred by Sublandlord for the
Tenant Improvements (as that term is defined in the Master Lease), and amounts
incurred as a result of default by Sublandlord not caused by Subtenant.
(e) "Project Operating Expenses" is defined, for purposes of this
Sublease, to include all costs incurred by Sublandlord in the management,
operation, repair, maintenance and replacement of the Project (including the
Common Areas and the Amenity Areas) in the exercise of its reasonable
discretion, to the extent not included in Master Lease Expenses or Building
Expenses, including the following:
(i) The operation, repair, replacement and maintenance
in neat, clean, safe, good order and condition, of the Project (except to the
extent Master Landlord is responsible for the Outside Areas under the Master
Lease, the costs for which are passed through to Subtenant as Master Lease
Expenses), including but not limited to, the following:
(aa) The Project Common Areas and Amenity Areas
including their surfaces, coverings, decorative items, carpets, drapes and
window coverings, and including parking areas, loading and unloading areas,
trash areas, roadways, sidewalks, walkways, stairways, parkways, driveways,
landscaped areas, striping, bumpers, irrigation systems, lighting
facilities, building exteriors and roof, fences and gates;
(bb) All Project heating, ventilation, air
conditioning, plumbing, electrical systems, back-up generators (including
maintenance & repairs, routine testing, and permits for diesel storage
onsite), life safety equipment, telecommunication and other equipment used
in common by, or for the benefit of, lessees or occupants of the Project,
including elevators and escalators, tenant directories, fire detection
systems including sprinkler systems maintenance and repair.
(ii) Common Area trash disposal, and general Project
security systems and security guards;
(iii) Any other service or utilities to be provided by
Sublandlord that is elsewhere in this Sublease stated to be an "Operating
Expense";
(iv) The cost of the premiums for liability and
property insurance policies to be maintained by Sublandlord under this Sublease
and the Master Lease;
(v) The cost of water, sewer, gas, electricity, and
other utilities and services to the Project (e.g., lighting for the the parking
lot, garage, cafe, fitness center, and other exterior areas);
(vi) Costs in connection with the Moffett Park
Transportation Demand Management Plan (see Master Lease Section 5.07);
(vii) Labor, salaries, and applicable fringe benefits
and costs, materials, supplies and tools, used in maintaining and/or cleaning
the Project, including salaries and supplies of facilities staff such as the
helpdesk and handyman;
(viii) All costs associated with general tenant services
made available to all subtenants of the Project, except as otherwise provided in
this Sublease;
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(ix) accounting and a management fee of three percent
(3%) of actual Project Operating Expenses;
(x) The cost of any Capital Expenditure (defined in
Paragraph 6.2) to the Project not payable by Subtenant under the provisions of
Paragraph 6.2 below or by other subtenants of the Project, provided that such
cost shall be amortized over the useful life (as determined by Sublandlord in
its sole discretion) of each such replacement item (including interest on the
unamortized balance at the Agreed Rate as defined in Section 17.02 of the Master
Lease) over the remaining term of the Sublease, which cost would be payable in
equal monthly installments during that time period;
(xi) Replacements of equipment or improvements, as
amortized over the useful life of such replacement item (including interest on
the unamortized balance at the Agreed Rate), over the remaining term of the
Sublease, which cost would be payable in equal monthly installments during that
time period;
(xii) Cafeteria operations, including without limitation
all cleaning, janitorial services and associated supplies, purchases and repair
and maintenance of equipment, repairs and maintenance of windows and building
mechanical systems (e.g., HVAC, plumbing, electrical), utilities and services;
and
(xiii) Fitness Center operations, including without
limitation all cleaning, janitorial services and associated supplies, purchases
and repair and maintenance of equipment (including AV system equipment), repairs
and maintenance of windows and building mechanical systems (e.g., HVAC,
plumbing, electrical), utilities and services.
Notwithstanding anything to the contrary contained herein, the
following items shall be excluded from Operating Expenses:
(1) Costs associated with the operation of the
business of the ownership or entity which constitutes "Sublandlord", as
distinguished from the costs of building operations for the benefit of the
Project and its tenants as a whole;
(2) Depreciation;
(3) Real estate brokers' leasing commissions, and
advertising expenses incurred in connection with the subleasing of the
Project;
(4) Costs for which Sublandlord is reimbursed by
its insurance carrier or any subtenant's insurance carrier;
(5) Costs for all repairs, replacements, items
and/or services for which Subtenant or any other subtenant in the Project
reimburses Sublandlord;
(6) Costs incurred by Sublandlord for services
which Sublandlord provides selectively to one or more subtenants (other
than Subtenant, which costs shall be billed directly to Subtenant) without
reimbursement;
(7) Sums payable as a result of Sublandlord's
default under any of its obligations under the Master Lease or this
Sublease (except to the extent such default is a result of Subtenant's
default under this Sublease); and
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(8) Master Lease Expenses (provided that the
exclusion of Master Lease Expenses from Operating Expenses shall not affect
Subtenant's obligation to pay Master Lease Expenses as set forth herein).
In the calculation of any expenses hereunder, it is understood that no expense
shall be recovered more than once. Sublandlord's reasonable application of this
Paragraph 3.2 in allocating expenses among the various expense categories shall
be binding, provided that Sublandlord shall be consistent in its treatment of
expenses among subtenants of the Project. In addition, to the extent that
Sublandlord can avoid incurring any expense described hereunder by enforcing
available warranties or the like, Sublandlord agrees to make commercially
reasonable efforts to do so. Sublandlord shall use commercially reasonable
efforts to effect an equitable proration of bills for services rendered to the
Project. Sublandlord agrees to keep books and records showing the Operating
Expenses in accordance with generally accepted accounting principles
consistently maintained on a year-to-year basis.
(f) Gross-Up. If the occupancy of the Project during any part of
the term of this Sublease is less than 100 percent, Sublandlord shall make an
appropriate adjustment of the variable components of Operating Expenses and
Master Lease Expenses for that period, as reasonably determined by Sublandlord
using sound accounting and management principles, to determine the amount of
Operating Expenses and Master Lease Expenses that would have been incurred had
the Project been 100 percent occupied. This amount shall be considered to have
been the amount of Operating Expenses and Master Lease Expenses for that period.
For purposes of this provision, "variable components" include only those
component expenses that are affected by variations in occupancy levels.
(g) Payment. Subtenant shall pay Subtenant's Project Share of
Operating Expenses and Master Lease Expenses (Operating Expenses and Master
Lease Expenses being collectively defined as "Sublease Expenses") for all
Sublease Expenses reasonably allocable, in Sublandlord's opinion, to the period
beginning with the Rent Commencement Date and continuing throughout the entire
Term. Sublease Expenses shall be due and payable ten (10) days after a
reasonably detailed calculation of Subtenant's Project Share of such expenses is
presented to Subtenant by Sublandlord, which Sublandlord may present at
intervals no more frequently than monthly ("Monthly Expense Statement");
provided that, with regard to Master Lease Expenses, Sublandlord shall not be
required to provide more information than has been offered to Sublandlord. At
Sublandlord's and/or Master Landlord's (pursuant to the Master Lease) option,
however, an amount may be estimated by Sublandlord from time to time of
Subtenant's Project Share of annual Sublease Expenses and the same shall be
payable monthly or quarterly, as Sublandlord shall designate, during each
calendar year of the Sublease term, on the same day as the Base Rent is due
hereunder. In the event that Subtenant pays Sublandlord's and/or Master
Landlord's estimate of Subtenant's Project Share of Sublease Expenses as
aforesaid, Sublandlord shall deliver to Subtenant within one hundred twenty
(120) days after the expiration of each calendar year a reasonably detailed
statement (as described above) showing Subtenant's Project Share of the actual
Sublease Expenses incurred during the preceding year ("Annual Expense
Statement"); provided that, with regard to Master Lease Expenses, Sublandlord
shall not be required to provide more information than has been offered to
Sublandlord. If Sublandlord elects to estimate Sublease Expenses as set forth
above and if Subtenant's payments under this Paragraph 3.2(g) during said
preceding calendar year exceed Subtenant's Project Share as indicated on said
Annual Expense Statement, Subtenant shall be entitled to credit the amount of
such overpayment against Subtenant's Project Share of Sublease Expenses next
falling due, or if the Sublease term has expired, Sublandlord shall deliver a
cash refund to Subtenant with the Annual Expense Statement. If Subtenant's
payments under this paragraph during said preceding calendar year were less than
Subtenant's Project Share as indicated on said Annual Expense Statement,
Subtenant shall pay to Sublandlord the amount of the deficiency within ten (10)
days after delivery by Sublandlord to Subtenant of said Annual Expense
Statement. All determinations of Sublease Expenses shall be made by Sublandlord
in accordance with sound accounting and management principles and shall be
binding on Subtenant for the purpose of initial payment; provided, however, that
Subtenant shall have the right to object in good faith to Sublandlord's
determinations of Sublease Expenses in accordance with the procedure in
Paragraph 3.2(h) and seek a credit (or refund after the term expires) of
correctly disputed amounts.
(h) Audit. On Subtenant's written request given not more than
sixty (60) days after Subtenant's receipt of a Monthly Expense Statement or an
Annual Expense Statement, and provided that Subtenant is not then in default
under
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this Sublease beyond the applicable cure period provided in this Sublease and
that Subtenant has paid all amounts required to be paid under the applicable
Monthly Expense Statement or Annual Expense Statement (reserving the right to
recover any excess payments in accordance with this Paragraph 3.2(h)), then
Sublandlord shall provide Subtenant with a reasonable opportunity to review the
books and records supporting such determination of Sublease Expenses in the
office of Sublandlord, or Sublandlord's agent, during business hours.
Sublandlord shall provide this opportunity to inspect within twenty (20) days of
Subtenant's written request.
Within fifteen (15) days following Subtenant's inspection,
Subtenant and Sublandlord shall concurrently be provided with any audit report
prepared in connection with such inspection, and Subtenant shall advise
Sublandlord if Subtenant disputes the Sublease Expenses or Subtenant's Project
Share of them as set forth in the applicable Monthly Expense Statement or Annual
Expense Statement. Thereafter, if Sublandlord ascertains that an error has been
made, Subtenant's sole remedy shall be for the parties to make such appropriate
payments or reimbursements, as the case may be, including interest on any such
amount at the Agreed Rate, to each other as are determined to be owing, provided
that any reimbursements payable by Sublandlord to Subtenant may, at
Sublandlord's option, instead be credited against the Base Rent next coming due
under this Sublease unless the Sublease term has expired, in which event
Sublandlord shall refund the appropriate amount to Subtenant. If Subtenant fails
to make a written request to review Sublandlord's books and records within sixty
(60) days of receipt of a Monthly Expense Statement or Annual Expense Statement
as described above, then Subtenant shall have no further right to conduct such a
review or to dispute any Sublease Expense set forth in such Monthly Expense
Statement or Annual Expense Statement, as applicable.
Subtenant shall keep any information gained from its review of
Sublandlord's records confidential and shall not disclose it to any other party,
except as required by law. If requested by Sublandlord, Subtenant shall require
its employees or agents reviewing Sublandlord's records to sign a
confidentiality agreement as a condition of Sublandlord providing Subtenant the
opportunity to inspect under this Paragraph 3.2(h). Notwithstanding anything in
this Paragraph 3.2(h) to the contrary, with regard to Master Lease Expenses,
Sublandlord shall not be required to provide more information to Subtenant than
is offered to Sublandlord.
3.3. GENERALLY. All monetary obligations of Subtenant under this
Sublease shall be deemed rent and shall be referred to herein as "Rent". Rent is
payable without any setoff, deduction, abatement, or offset whatsoever, except
as otherwise expressly provided herein. Acceptance of a payment which is less
than the amount then due shall not be a waiver of Sublandlord's rights to the
balance of such Rent, regardless of Sublandlord's endorsement of any check so
stating. Rent is payable in lawful money of the United States and shall, unless
otherwise provided herein, be paid to Sublandlord at: Ariba, Inc., at the
address shown in the Basic Sublease Information above; or at such other place as
Sublandlord may specify from time to time by written notice to Subtenant.
3.4. LATE PAYMENT. If Subtenant shall fail to pay any Rent so that it is
received within five (5) days (or ten (10) days in the case of Sublease Expenses
only) of the date when payment is due, such unpaid amount shall bear interest
from the due date to the date of payment at the lower of the following rates:
(i) the Agreed Rate and (ii) the maximum rate allowed by applicable usury law.
Subtenant acknowledges that late payment of Rent will cause Sublandlord to incur
costs not contemplated by this Sublease, the exact amounts of which are
extremely difficult and impracticable to fix. Such costs include, without
limitation, processing and accounting charges, and late charges which may be
imposed on Sublandlord by the terms of the Master Lease. Therefore, if any
installment or other payment of Rent due from Subtenant is not received by
Sublandlord within five (5) days of the date when payment is due, Subtenant
shall pay to Sublandlord an additional sum of five percent (5%) of the amount of
the installment. The parties agree that this late charge represents a fair and
reasonable estimate of the costs that Sublandlord will incur by reason of late
payment by Subtenant. Late charges are due and payable on the day incurred and
interest shall accrue on such late charges as described above until payment of
the late charge is made. Acceptance of any interest or late charge shall not
constitute a waiver of Subtenant's default with respect to the overdue amount,
or prevent Sublandlord from exercising any of the other rights and remedies
available to Sublandlord. Subtenant shall further pay to Sublandlord the sum of
Five Hundred Dollars ($500) for any check from Subtenant to Sublandlord which is
returned or not honored by the bank on which it is drawn, which sum the parties
agree is a fair and reasonable estimate of the cost to Sublandlord of handling
such returned or dishonored check
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and the acceptance of which shall not constitute a waiver of Subtenant's default
with respect to the returned or dishonored payment, or prevent Sublandlord from
exercising any of the other rights and remedies available to Sublandlord.
4. SECURITY DEPOSIT. To secure the faithful performance by Subtenant of
all the covenants, conditions and agreements in this Sublease set forth and
contained on the part of Subtenant to be fulfilled, kept, observed and performed
including, but not by way of limitation, such covenants and agreements in this
Sublease which become applicable upon the termination of the same by re-entry or
otherwise, Subtenant shall deposit with Sublandlord a security deposit (the
"Security Deposit"). The initial Security Deposit, in the amount shown in the
Basic Sublease Information, shall be payable within ten (10) business days
following the execution of this Sublease by both parties, and shall be increased
to the amount shown in the Basic Sublease Information prior to the Fourth Floor
Expansion Date.
The Security Deposit may be in the form of cash or an irrevocable standby
letter of credit, as described below. Subtenant agrees that: (a) the Security
Deposit or any portion thereof may be applied to the curing of any Breach under
this Sublease that may exist at the time of application, including any Rent
owing at the end of the Sublease term, without prejudice to any other remedy or
remedies which Sublandlord may have on account thereof; (b) upon such
application Subtenant shall pay to Sublandlord on demand in cash the amount so
applied to restore the Security Deposit to its full amount; (c) should the
Master Lease be assigned by Sublandlord, the Security Deposit or any portion
thereof not previously applied shall be turned over (or assigned) to
Sublandlord's assignee, Sublandlord shall have no further liability with respect
to the Security Deposit and/or its application or return; (d) Sublandlord or its
successor shall not be obligated to hold the Security Deposit as a separate
fund, but on the contrary may commingle the same with its other funds; (e) the
sum deposited or the portion thereof not previously applied shall be returned to
Subtenant without interest following the expiration of the Term of this Sublease
or any renewal or extension thereof, except to the extent reasonably required to
cure any Breach by Subtenant of any of its obligations hereunder (including
without limitation the obligation to return the Premises and the Furniture in
the condition required by this Sublease) and provided that Subtenant has vacated
the Premises and surrendered possession thereof to Sublandlord at the expiration
of the Term or any extension or renewal thereof as provided herein; (f) in the
event that Sublandlord terminates this Sublease or Subtenant's right to
possession by reason of a Breach by Subtenant, Sublandlord may apply the
Security Deposit against damages suffered to the date of such termination and/or
may retain the Security Deposit to apply against such damages as may be suffered
or shall accrue thereafter by reason of Subtenant's Breach; (g) in the event any
bankruptcy, insolvency, reorganization or other creditor-debtor proceedings
shall be instituted by or against Subtenant, or its successors or assigns, the
Security Deposit shall be deemed to be applied first to the payment of any Rent
due Sublandlord for all periods prior to the institution of such proceedings,
and the balance, if any, of the Security Deposit may be retained or paid to
Sublandlord in partial liquidation of Sublandlord's damages.
If Subtenant elects to deposit the Security Deposit by a letter of credit,
such letter of credit shall be an irrevocable, unconditional, standby letter of
credit in a form substantially similar to the form attached hereto as Exhibit H
and incorporated herein (such letter of credit, together with any renewal or
replacement letters of credit delivered or to be delivered by Subtenant under
this Paragraph, shall be referred to herein collectively as the "Letter of
Credit"). The Letter of Credit shall be issued by a national money center bank
with an office in San Francisco, California (the "Issuer"). The final form of
the Letter of Credit, the identity of the Issuer, and the form of any
replacement Letter of Credit shall be acceptable to Sublandlord in its
reasonable discretion. The Letter of Credit shall be for an initial term of not
less than twelve (12) months and shall be maintained in force at all times from
issuance through sixty (60) days following the expiration or earlier termination
of this Sublease. If Subtenant fails at least thirty (30) days prior to the
expiration date of an outstanding Letter of Credit to (i) renew the Letter of
Credit or (ii) deliver to Sublandlord either a replacement Letter of Credit or
cash in the full amount of the Security Deposit required hereunder, such failure
shall be a default under this Sublease (without the requirement of notice)
entitling Sublandlord, in addition to its other remedies, to draw down all or
part of the current Letter of Credit. In the event of such a draw, Sublandlord
shall hold and/or apply the proceeds of the Letter of Credit as a cash Security
Deposit. Sublandlord shall have the right, upon a transfer or assignment of its
rights as landlord under this Sublease, to assign or transfer the Letter of
Credit to such transferee or assignee or to require Subtenant to deliver a
replacement Letter of Credit designating Sublandlord's successor as the
beneficiary, at Sublandlord's sole cost and expense. No draw under the Letter of
Credit shall be deemed a waiver of, or be deemed to
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have cured, any Default by Subtenant under any provision of this Sublease except
to the extent directly applied to cure such Default(s).
Notwithstanding anything herein to the contrary, if either of the following
circumstances arises during the Sublease Term then, within ten business days
following notice from Sublandlord, Subtenant shall increase the amount of the
Security Deposit to an amount equal to two (2) times the then current Security
Deposit amount; provided that if either such circumstance arises prior to the
Fourth Floor Expansion Date, then the Security Deposit increase required to
occur prior to the Fourth Floor Expansion Date (described above) shall be to an
amount twice the amount otherwise required. For purposes of the following
provisions, the term "Financial Report" shall mean any financial statements or
other financial reports of Subtenant (either prepared on a consolidated or
non-consolidated basis) filed with any (i) quarterly report on SEC Form 10-Q,
(ii) annual report filed on SEC Form 10-K, (iii) registration statement filed
under the Securities Act of 1933, or any other filing under the Securities
Exchange Act of 1934, including any current reports on SEC Form 8-K, and any
amendments thereto, or (iv) reports required to be filed with any exchange where
Subtenant's securities are traded.
(1) the aggregate of Subtenant's cash and cash equivalents (as
determined in accordance with accounting principles generally accepted in the
United States of America (USA GAAP)), including without limitation, short-term
and long-term investments that Subtenant has the right to convert immediately
into cash without limitation or other restrictions (collectively, "Subtenant's
Total Available Cash"), as reported in Subtenant's balance sheet contained in
its applicable Financial Report, is less than $100,000,000 at the end of any
fiscal quarter of Subtenant ending during the Sublease Term; or
(2) Subtenant's operations for any fiscal quarter ending during
the Sublease Term result in a Quarterly Cash Burn Rate (as defined below) that,
when projected over the next succeeding eight fiscal quarters, reasonably
demonstrates that the aggregate amount of Subtenant's Total Available Cash as of
the end of such fiscal quarter is less than the amount required to fund
Subtenant's operations during the full period of such eight fiscal quarters at
that Quarterly Cash Burn Rate without Subtenant obtaining additional cash or
other working capital. For the purposes of this Sublease, Subtenant's Quarterly
Cash Burn Rate for any given fiscal quarter shall be calculated by subtracting
Subtenant's Total Available Cash at the end of that fiscal quarter from
Subtenant's Total Available Cash at the end of the fiscal quarter immediately
preceding that quarter.
5. USE.
5.1. USE. Subtenant shall use the Premises for those uses permitted
under the Master Lease ("Agreed Use"), and for no other purpose, without the
prior written consent of Sublandlord (which consent may be withheld in
Sublandlord's reasonable discretion) and the Master Landlord (which consent may
be withheld by Master Landlord pursuant to the terms of Section 5.01 of the
Master Lease). Subtenant's use of the Premises shall be subject to all of the
terms and conditions of the Master Lease relating to use.
5.2. HAZARDOUS MATERIALS.
(a) Reportable Uses Require Consent. The term "Hazardous
Materials" as used in this Sublease shall be defined as in subsection 17.22(a)
of the Master Lease. Subtenant shall not engage in any activity in or on the
Premises which constitutes a Reportable Use (as defined below) of any Hazardous
Materials without the express prior written consent of Sublandlord and timely
compliance at Subtenant's expense with all Applicable Requirements as defined in
Paragraph 5.3. "Reportable Use" shall mean (i) the installation or use of any
above or below ground storage tank, (ii) the generation, possession, storage,
use, transportation, or disposal of any Hazardous Materials that requires a
permit from, or with respect to which a report, notice, registration or business
plan is required to be filed with, any governmental authority, and/or (iii) the
presence at the Premises of any Hazardous Materials with respect to which any
Applicable Requirements requires that a notice be given to persons entering or
occupying the Premises or neighboring properties. Notwithstanding the foregoing,
subject to consent of Master Landlord and in compliance with all Applicable
Requirements Subtenant may use and/or store any ordinary
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and customary materials reasonably required to be used in the normal course of
the Agreed Use, so long as such use is not a Reportable Use and such use does
not expose the Premises or neighboring property to any meaningful risk of
contamination or damage or expose Sublandlord to any liability therefor. In
addition, Sublandlord may condition its consent to any Reportable Use upon
receiving written consent of Master Landlord and such additional assurances as
Sublandlord reasonably deems necessary to protect itself, the public, the
Premises and/or the environment against damage, contamination, injury and/or
liability, including, but not limited to, the installation (and removal on or
before Sublease expiration or termination) of protective modifications (such as
concrete encasements) and/or increasing the Security Deposit.
(b) Duty to Inform Sublandlord. If Subtenant knows, or has
reasonable cause to believe, that any Hazardous Materials have come to be
located in, on, under or about the Premises, other than as previously consented
to by Sublandlord, Subtenant shall immediately give written notice of such fact
to Sublandlord, and provide Sublandlord with a copy of any report, notice, claim
or other documentation which it has concerning the presence of such Hazardous
Materials.
(c) Subtenant Remediation. Subtenant shall not cause or permit any
Hazardous Materials to be spilled or released in, on, under, or about the
Premises (including through the plumbing or sanitary sewer system). To the
extent that any contamination in violation of Environmental Laws (as defined in
Section 17.22(a) of the Master Lease) was caused or materially contributed to by
Subtenant, its agents, employees, invitees, vendors, contractors, guests or
visitors, or results from any Hazardous Materials brought onto the Premises
during the term of this Sublease by or for Subtenant or any third party,
Subtenant shall promptly, at Subtenant's expense, take all investigatory and/or
remedial action reasonably recommended, whether or not formally ordered or
required, for (i) the cleanup of such contamination, and (ii) the maintenance,
security and/or monitoring of the Premises or neighboring properties with
respect to such contamination.
(d) Indemnification. Subtenant shall indemnify, defend and hold
Sublandlord and Master Landlord, their agents, employees, Lenders (as defined
with respect to Sublandlord in Paragraph 29.1 of the Sublease and as used by
Master Landlord in the Master Lease), and ground lessor, if any, harmless from
and against any and all loss of rents and/or damages, liabilities, judgments,
claims, expenses, penalties, and attorneys' and consultants' fees arising out of
or involving any Hazardous Materials brought onto the Project during the term
(and any extension thereof) of this Sublease in violation of Environmental Laws
or Master Lease by Subtenant, its agents, employees, invitees, vendors,
contractors, guests or visitors. Subtenant's obligations shall include, but are
not limited to, the effects of any contamination or injury to person, property
or the environment created or suffered by Subtenant, and the cost of
investigation, removal, remediation, restoration and/or abatement, and shall
survive the expiration or termination of this Sublease. No termination,
cancellation or release agreement entered into by Sublandlord and Subtenant
shall release Subtenant from its obligations under this Sublease with respect to
Hazardous Materials, unless specifically so agreed by Sublandlord in writing at
the time of such agreement.
Sublandlord shall indemnify, defend and hold Subtenant, its agents and
employees, harmless from and against any and all loss of rents and/or damages,
liabilities, judgments, claims, expenses, penalties, and attorneys' and
consultants' fees arising out of or involving any Hazardous Materials brought
onto the Project during the term (and any extension thereof) of this Sublease in
violation of Environmental Laws or Master Lease by Sublandlord, its agents,
employees, invitees, vendors, contractors, guests or visitors. Sublandlord's
obligations shall include, but are not limited to, the effects of any
contamination or injury to person, property or the environment created or
suffered by Sublandlord, and the cost of investigation, removal, remediation,
restoration and/or abatement, and shall survive the expiration or termination of
this Sublease. No termination, cancellation or release agreement entered into by
Sublandlord and Subtenant shall release Sublandlord from its obligations under
this Sublease with respect to Hazardous Materials, unless specifically so agreed
by Subtenant in writing at the time of such agreement.
(e) Disclosure. Sublandlord represents that to the best of
Sublandlord's knowledge it has provided Subtenant with a description of the
Hazardous Materials on or beneath the Project as of the date of the Master
Lease, contained in the reports listed on Exhibit I to the Master Lease (the
Master Lease and all of its exhibits being Exhibit A to this Sublease) and such
further documents listed on Exhibit L attached to this Sublease (collectively,
the "Environmental Reports"). Subtenant acknowledges that it has received all of
the Environmental Reports and that in providing the
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Environmental Reports, Sublandlord has satisfied its obligations of disclosure
pursuant to California Health & Safety Code Section 25359.7 which requires:
"Any owner of nonresidential real property who knows, or
has reasonable cause to believe, that any release of
hazardous substances has come to be located on or beneath
that real property shall, prior to the sale, lease or
rental of the real property by that owner, give written
notice of that condition to the buyer, lessee or renter
of the real property."
5.3. SUBTENANT'S COMPLIANCE WITH APPLICABLE REQUIREMENTS. Except as
otherwise expressly provided in this Sublease, Subtenant shall, at Subtenant's
sole expense, fully, diligently and in a timely manner, comply with all
applicable laws, covenants or restrictions of record, regulations, ordinances,
and building codes ("Applicable Requirements"), the requirements of any
applicable fire insurance underwriter or rating bureau, and the recommendations
of Sublandlord's engineers and/or consultants of which Subtenant has been
notified in writing which relate in any manner to the Premises or the Agreed Use
of the Premises, without regard to whether said requirements are now in effect
or become effective later. Subtenant shall, within 10 days after receipt of
Sublandlord's written request, provide Sublandlord with copies of all permits
and other documents, and other information evidencing Subtenant's compliance
with any Applicable Requirements specified by Sublandlord, and shall immediately
upon receipt, notify Sublandlord in writing (with copies of any documents
involved) of any threatened or actual claim, notice, citation, warning,
complaint or report pertaining to or involving the failure of Subtenant or the
Premises to comply with any Applicable Requirements.
Subtenant shall have no obligations whatsoever with respect to any
Hazardous Materials on or beneath the Project as of the Sublease Commencement
Date, whether known or not known as of the Sublease Commencement Date, except to
the extent an affirmative act of Subtenant or its agents, employees, invitees,
vendors, contractors, guests, or visitors, exacerbates or aggravates such
existing Hazardous Material condition.
5.4. INSPECTION; COMPLIANCE. Sublandlord and any of Sublandlord's
Lenders (as defined in Paragraph 29.1) and consultants of which Subtenant has
been notified in writing shall have the right to enter into Premises at any
time, in the case of an emergency, and otherwise at reasonable times and upon
reasonable notice accompanied by an employee of Subtenant and in compliance with
Subtenant's reasonable security requirements, for the purpose of inspecting the
condition of the Premises and for verifying compliance by Subtenant with this
Sublease. The cost of any such inspections shall be paid by Sublandlord, unless
a violation of Applicable Requirements or a contamination caused or materially
contributed to by Subtenant, its agents, employees, invitees, vendors,
contractors, guests or visitors, is found to exist or be imminent, or the
inspection is requested or ordered by a governmental authority based on a belief
of the existence of such contamination. In such case, Subtenant shall upon
request reimburse Sublandlord for the cost of such inspection, so long as such
inspection is reasonably related to the violation or contamination.
6. DELIVERY OF POSSESSION.
6.1. CONDITION. Subject to Paragraph 6.2 below, Sublandlord shall tender
possession of the Premises to Subtenant broom clean and free of debris.
Sublandlord represents that the Premises' roof, structural components,
elevators, heating, ventilation and air conditioning ("HVAC"), plumbing and
electrical systems, and the parking areas and Common Area lighting, are
operational and in good condition and comply with the Applicable Requirements as
of the Sublease Commencement Date, except as disclosed in the Architectural and
Engineering Site Investigation Reports for Ariba Buildings 3 and 4 dated January
18, 2002 and February 8, 2002, respectively, prepared by Rumsey Engineers and
Facilicorp (the "Site Reports"), which Subtenant acknowledges receiving a copy
of. Except as expressly provided in this Sublease, Sublandlord specifically
disclaims any and all representations and warranties, express or implied, oral
or written, associated with the Premises, including but not limited to those
concerning habitability, safety, suitability or fitness for Subtenant's intended
purposes. Except for those items described in the Site Reports, in the event
that any components of the Premises' roof, structural components, elevators,
heating, ventilation and air conditioning ("HVAC"),
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plumbing and electrical systems are not operational and in good condition or do
not comply with the Applicable Requirements as of the Sublease Commencement Date
("Non-conforming Matter"), then Sublandlord shall have no liability except as
follows:
(a) Sublandlord agrees to use commercially reasonable efforts to
enforce its rights against third parties, including the Master Landlord,
insurance carriers and contractors involved with construction of the Project,
for the repair of such Non-conforming Matter.
(b) To the extent that the cost of repairing or correcting any
Non-conforming Matter is not paid by a third party (including Master Landlord),
such cost shall be treated as follows: Up to a cumulative $1 Million, the cost
shall be a Building Expense and Subtenant shall bear sole responsibility for
such cost. For cumulative costs exceeding $1 Million up to $5 Million, fifty
percent (50%) of the portion of the cost over $1 Million shall be a Building
Expense, with the remaining 50% to be paid by Sublandlord. If the cumulative
costs to repair Non-conforming Matters exceed $5 Million, then Sublandlord and
Subtenant shall each have the right to elect to pay the portion of the cost over
$5 Million, and if neither party elects to pay such costs, then either party may
elect to terminate this Sublease upon ninety (90) days advance written notice to
the other party.
6.2. COMPLIANCE. Sublandlord makes no representation or warranty
whatsoever with respect to compliance of the Premises with the Applicable
Requirements except as expressly provided herein. If Subtenant knows, or has
reasonable cause to believe, that any violation of an Applicable Requirement
exists, Subtenant shall immediately give written notice of such fact to
Sublandlord, and provide Sublandlord with a copy of any report, notice, claim or
other documentation which it has concerning such violation or possible
violation. With respect to any violation of the Applicable Requirements
currently in effect which are not Non-conforming Matters addressed by Paragraph
6.1, Subtenant shall be responsible for all costs of bringing the Premises into
compliance. Subject to allocation of costs as set forth below, performance of
the work necessary to bring the Premises into compliance shall be the
responsibility of Subtenant if Sublandlord so elects. Subtenant is responsible
for determining whether or not the Applicable Requirements, and especially the
zoning, are appropriate for Subtenant's intended use, and acknowledges that past
uses of the Premises may no longer be allowed. If the Applicable Requirements
are hereafter changed so as to require during the term of this Sublease the
construction of an addition to or an alteration of the Project, the remediation
of any Hazardous Materials not known as of the Sublease Commencement Date (if
the responsibility of Sublandlord under the Master Lease but not caused by
Sublandlord), or the reinforcement or other physical modification of the Project
("Capital Expenditure"), then Sublandlord and Subtenant shall allocate the cost
of such work as follows:
(a) Subject to Paragraph 6.2(c) below, if such Capital
Expenditures are required as a result of the specific and unique use of the
Premises by Subtenant as compared with uses by tenants in general, Subtenant
shall be fully responsible for the cost thereof (except for any Capital
Expenditures not actually required as a result of Subtenant changing such
specific and unique use).
(b) If such Capital Expenditure is not the result of the specific
and unique use of the Premises by Subtenant (such as, governmentally mandated
seismic modifications), then Sublandlord and Subtenant shall allocate the
obligation to pay for the portion of such costs reasonably attributable to the
Premises, amortized over the remaining term of the Master Lease (including
interest on the unamortized balance as is then reasonable in the judgment of
Sublandlord's accountants).
(c) Notwithstanding the above, the provisions concerning Capital
Expenditures are intended to apply only to non-voluntary, unexpected, and new
Applicable Requirements. If the Capital Expenditures are instead triggered by
Subtenant as a result of an actual or proposed change in use from that
contemplated as of the date of execution of this Sublease, change in intensity
of use from that contemplated as of the date of execution of this Sublease, or
modification to the Premises then, and in that event, Subtenant shall be fully
responsible for the cost thereof, and Subtenant shall not have any right to
terminate this Sublease.
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6.3. ACKNOWLEDGEMENTS. Subtenant acknowledges that Subtenant has made
such investigation as it deems necessary with reference to the physical
condition of the Property and assumes all responsibility therefor (except as
expressly provided in Paragraph 6.1 and 6.2) as the same relate to its occupancy
of the Premises, and Sublandlord has not made any oral or written
representations or warranties with respect to said matters other than as set
forth in this Sublease.
6.4. SUBTENANT'S WORK. Upon receiving possession of the Premises,
Subtenant shall be allowed to construct, at its sole cost and expense, certain
additions, alterations and improvements in the Premises ("Subtenant's Work") on
the terms and conditions contained in the Work Letter attached hereto as Exhibit
I.
7. UTILITIES AND SERVICES.
7.1. STANDARD UTILITIES AND SERVICES. Subject to applicable government
rules, regulations, and guidelines and the rules or actions of the utility
furnishing the service, and except as provided in Paragraph 7.5 below,
Sublandlord shall provide the utilities and services described in this Paragraph
7.1 on all days during the term of this Sublease, unless otherwise stated in
this Sublease. The cost of all utilities and services described in this
Paragraph 7 shall be reimbursed to Sublandlord as Building Expenses or Project
Operating Expenses, as applicable, except as otherwise expressly provided.
(a) Heating and Air-Conditioning; Building Hours; Subtenant
Access. Subject to Paragraph 7.1(g) below, Sublandlord shall provide heating and
air-conditioning when necessary for normal comfort for normal office use in the
Premises, at the hours and times selected by Subtenant in its reasonable
discretion, provided that in the event that Subtenant requires heating and/or
air-conditioning on a frequency substantially in excess of normal business
hours, such excess use shall be treated as overstandard use as set forth in
Paragraph 7.1(f) hereof. Sublandlord shall provide access to the lobby of any
multi-tenant Buildings occupied by Subtenant (not including Building Three, in
which Sublandlord retains possession of Sublandlord's Server Room but for which
Subtenant controls the lobby area) for use by Subtenant's invitees on Mondays
through Fridays from 8 a.m. through 5 p.m., excluding Holidays ("Building
Hours"). Subtenant shall have access to the Building Three Premises twenty-four
(24) hours per day, seven (7) days per week, and access to Subtenant's Shipping
Area during Building Hours; provided, however, that if Subtenant constructs a
wall ("Shipping Area Wall") to segregate the space being retained by Sublandlord
adjacent to Subtenant's Shipping Area from outside access, then Subtenant shall
have access to Subtenant's Shipping Area twenty-four (24) hours per day, seven
(7) days per week upon completion of construction of the Shipping Area Wall. The
location for construction of the Shipping Area Wall is indicated by a dotted
line on Exhibit B. The Shipping Area Wall shall prevent any and all outside
access to Sublandlord's retained area, except through a door of at least 60-inch
by 8-foot size to be constructed where indicated on Exhibit B and which door
shall be completely controlled by Sublandlord upon completion. The Shipping Area
Wall shall be constructed to Sublandlord's sole satisfaction, at Subtenant's
sole cost, in accordance with all Sublease requirements.
(b) Electricity and Gas. Sublandlord shall provide gas and
electricity for lighting and power in the Premises twenty-four (24) hours per
day, seven (7) days per week, if:
(i) The connected electrical load for lighting does not
exceed an average of one (1) watt per square foot of the Premises during the
Building Hours on a monthly basis; and
(ii) The connected electrical load (encompassing HVAC and
office "plug load" meaning the electrical receptacles/outlets where Subtenant
may run electrical office equipment and machinery) for all other power purposes
does not exceed an average of seven (7) watts per square foot of the Premises
during Building Hours on a monthly basis.
Except as exists in the Premises as of the Sublease Date, or as mutually agreed
in writing by the parties, electricity for Subtenant's lighting and other power
purposes shall be at approximately one-hundred and ten (110) volt, and no
electrical receptacle/outlet in the Premises for the supply of power shall
require a current capacity exceeding 110 volts AC/twenty (20) amperes; provided
that with respect to Subtenant's Server Room and the lab areas to be built as
indicated on Subtenant's Conceptual Plans attached to the Work Letter (Exhibit
I), electricity for Subtenant's lighting and other power
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purposes shall be at approximately two hundred and eight (208) volt, and no
electrical receptacle/outlet for the supply of power shall require a current
capacity exceeding 208 volts AC/twenty (20) amperes. Subtenant shall replace
lamps, starters, and ballasts for all Building-standard and
non-Building-standard lighting fixtures within the Premises with parts and
equipment of the same make and model and at Subtenant's expense. Sublandlord
expressly reserves the right to select the electricity providers for the
Buildings and/or the Project.
(c) Water; Trash Disposal. Sublandlord shall provide water from
the regular Building outlets for drinking, lavatory, and toilet purposes.
Sublandlord shall provide regular trash disposal.
(d) Janitorial Services. Sublandlord shall provide janitorial
services in and about the Premises on Mondays through Fridays, except on
Holidays, to a standard consistent with other Class A office buildings in the
general vicinity of the Project. Sublandlord shall not be required to provide
janitorial services to above-standard improvements installed by Subtenant in the
Premises. Subtenant may procure additional janitorial services for the Premises,
provided that such services shall be procured solely from Sublandlord's
designated janitorial service, under a separate contract directly between
Subtenant and such janitorial service, at Subtenant's sole and exclusive cost.
(e) Elevator. Sublandlord shall provide elevator service for the
use of Subtenant in Buildings in which it occupies space on the second or higher
floor 24 hours a day, 7 days a week, year-round (except for non-operation for
maintenance and safety purposes). Subtenant shall not use the elevators to
access areas of the Buildings occupied by other tenants and Sublandlord reserves
the right to take appropriate measures to restrict such access. Subtenant shall
release Sublandlord and shall indemnify, protect, defend, and hold Sublandlord
harmless from all liabilities, claims, costs, expenses, and damages arising
therefrom or in connection with Subtenant's use and the use of its employees,
contractors, suppliers, customers, and invitees.
(f) Overstandard Subtenant Use. Except with respect to the
Building Three Premises, Subtenant shall not, without Sublandlord's prior
written consent, use heat-generating machines, machines other than normal
fractional horsepower office machines, or equipment or lighting other than
building standard lights in the Premises that may affect the temperature
otherwise maintained by the air-conditioning system or increase the water
normally furnished to the Premises by Sublandlord under this Paragraph.
Furthermore, Subtenant shall not use any machines or equipment where such use is
in violation of the Master Lease.
If such consent is given, Sublandlord shall have the right to
install supplementary air-conditioning units or other facilities in the
Premises, including supplementary or additional metering devices. On billing by
Sublandlord, Subtenant shall pay the cost for such supplementary facilities,
including the cost of (a) installation, operation, and maintenance; (b)
increased wear and tear on existing equipment; and (c) other similar charges.
If Subtenant uses water, electricity, heat, or
air-conditioning in excess of that agreed upon under this Paragraph (as a
result, for example, of extended hours of operation, heavier use of duplicating,
computer, telecommunications, or other equipment in excess of the normal use for
general office uses in the Project, or a density of workers in excess of the
normal density (which the parties agree is one person per 250 square feet of
rentable space) for general office uses in the Project) Subtenant shall pay to
Sublandlord, on billing, the cost of (a) the excess service; (b) installation,
operation, and maintenance of equipment installed to supply the excess service;
and (c) increased wear and tear on existing equipment caused by Subtenant's
excess consumption. Sublandlord may install devices to separately meter any
increased use or reasonably and equitably estimate the cost of such increased
use. On demand, Subtenant shall pay the increased cost directly to Sublandlord,
including the cost of the additional metering devices.
Subtenant's use of electricity shall never exceed the capacity
of the feeders serving the Premises or the risers or wiring installation. If
heat, ventilation, or air-conditioning are used on the Premises during hours
other than those for which Sublandlord is obligated to supply such utilities
under this Paragraph, Sublandlord shall supply such utilities to Subtenant at an
hourly cost to Subtenant as Sublandlord shall from time to time establish.
Amounts payable by Subtenant to Sublandlord under this Paragraph 7.7 for use of
additional utilities shall be payable in their entirety by
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Subtenant upon invoicing by Sublandlord and are excluded from Operating
Expenses.
(g) Interruption of Utilities. Subtenant agrees that Sublandlord
shall not be liable for damages, by abatement of Rent or otherwise, for failure
to furnish or delay in furnishing any utility or service (including telephone
and telecommunication services) or for diminution in the quality or quantity of
any utility or service when the failure, delay, or diminution is entirely or
partially caused by:
(i) Breakage, repairs, replacements, or improvements,
provided repairs, replacements and improvements are undertaken in a
reasonable time and manner;
(ii) Strike, lockout, or other labor trouble;
(iii) Inability to secure electricity, gas, water, or other
fuel at the Building;
(iv) Accident or casualty;
(v) Act or default of Subtenant or other parties; or
(vi) Any other cause beyond Sublandlord's reasonable
control.
Such failure, delay, or diminution shall not be considered to constitute an
eviction or a disturbance of Subtenant's use and possession of the Premises or
relieve Subtenant from paying Rent or performing any of its obligations under
this Sublease.
Sublandlord shall not be liable under any circumstances for a loss of or
injury to property, for personal injury or death, or for injury to or
interference with Subtenant's business, including loss of profits through, in
connection with, or incidental to a failure to furnish any of the utilities or
services under this Paragraph 7, unless such failure is caused by Sublandlord's
active negligence or willful misconduct. Sublandlord may comply with mandatory
or voluntary controls or guidelines promulgated by any government entity
relating to the use or conservation of energy, water, gas, light, or electricity
or the reduction of automobile or other emissions without creating any liability
of Sublandlord to Subtenant under this Sublease as long as compliance with
voluntary controls or guidelines does not materially and unreasonably interfere
with Subtenant's use of the Premises.
(h) Utility Providers. Sublandlord may, in Sublandlord's sole and
absolute discretion, at any time and from time to time, contract, or require
Subtenant to contract, for utility services (including generation, transmission,
or delivery of the utility service) with utility service providers of
Sublandlord's choosing, subject to Subtenant's right to select its
telecommunications providers. Subtenant shall fully cooperate with Sublandlord
and any utility service provider selected by Sublandlord. Subtenant shall permit
Sublandlord and the utility service provider to have reasonable access (subject
to the provisions of Paragraph 32) to the Premises and the utility equipment
serving the Premises, including lines, feeders, risers, wiring, pipes, and
meters. Subtenant shall either pay or reimburse Sublandlord for its share of
costs associated with any change of utility service, including the cost of any
new utility equipment, within ten (10) days after Sublandlord's written demand
for payment or reimbursement. Under no circumstances shall Sublandlord be
responsible or liable for any loss, damage, or expense that Subtenant may incur
as a result of any change of utility service, including any change that makes
the utility supplied less suitable for Subtenant's needs, or for any failure,
interference, or defect in any utility service. No such change, failure,
interference, or defect shall constitute an actual or constructive eviction of
Subtenant, or entitle Subtenant to any abatement of Rent, or relieve Subtenant
from any of Subtenant's obligations under this Sublease. Sublandlord agrees to
consider any input received from Subtenant in good faith with regard to changes
in utility service.
7.2. TELECOMMUNICATIONS. Neither Subtenant nor its contractors,
representatives, or service providers shall, without Sublandlord's prior written
consent (which consent shall not be unreasonably withheld), install, maintain,
operate, alter, repair, or replace any wire, cable, conduit, antenna, satellite
dish or other facility or equipment for use in connection
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with any telephone, television, telecommunications, computer, Internet, or other
communications or electronic systems, services or equipment (which systems,
services, and equipment are referred to collectively as "Telecommunications
Equipment") in, on, or about any Building or the roofs or exterior walls.
Without limiting the generality of the foregoing, Sublandlord shall have the
right to limit the number of carriers, vendors, or other operators providing
Telecommunications Equipment in or to the Project, as deemed reasonably
necessary or appropriate by Sublandlord for the orderly and efficient management
and operation of the Project. Any determination made by Sublandlord under this
Paragraph shall be made in accordance with Sublandlord's sole discretion,
provided, however, that with regard to any request by Subtenant to install
Telecommunications Equipment on the roof of a Building, Subtenant agrees that
Sublandlord may, without limitation, condition its consent on (i) Subtenant's
payment of rent for Subtenant's use of such roof space, at a per square foot
rate equivalent to Base Rent per square foot of the Premises , and (ii) the
installation by Subtenant, at its sole cost and expense, of a structural
platform and/or access walkway to protect the roof from damage from the
placement of and access to such Telecommunications Equipment. Sublandlord may
also require (i) that any such work on or involving the roof (and including,
without limitation, any roof penetrations approved by Sublandlord) be performed,
at Subtenant's cost, by a contractor designated or approved by Sublandlord; (ii)
Subtenant's obtaining and paying for all costs associated with obtaining proper
clearances for personnel involved in erecting, operating, or maintaining such
Telecommunications Equipment from the Department of the Air Force or Onizuka Air
Station; (iii) Subtenant's obtaining Onizuka Air Station approval to erect any
Radio Frequency Emitters, antenna towers, or antenna arrays so as to avoid radio
frequency interference; (iv) Subtenant's compliance with any additional
requirement of the Department of the Air Force and/or Onizuka Air Station; and
(v) proper evidence of compliance with all requirements of the Master Lease. In
addition, if Sublandlord determines that the riser or telecommunications closet
space in a Building is inadequate to accommodate any Telecommunications
Equipment proposed by Subtenant along with the existing and/or future needs of
other occupants and users of the Building and/or the Project, Sublandlord may
condition Sublandlord's approval of Subtenant's Telecommunications Equipment on
the construction of additional riser or telecommunications closet space as
designated by Sublandlord at Subtenant's expense.
Any installation, maintenance, operation, alteration, repair, or replacement of
Telecommunications Equipment by or for Subtenant shall be subject to all of the
requirements and provisions of this Sublease and the Master Lease, and shall not
interfere with the operation (including, without limitation, transmissions, or
reception) of any other Telecommunications Equipment located in the Project.
Subtenant acknowledges that there is limited space and facilities in the
Buildings to accommodate Telecommunications Equipment, and agrees to reasonably
cooperate with Sublandlord and with other providers and users of
Telecommunications Equipment to share the available space and facilities and to
coordinate the efficient collocation of Telecommunications Equipment in the
Project. Access to and use of space within conduit, utility closets, risers,
raceways, switching rooms, the roof, and other facilities in the Buildings for
the installation, maintenance, operation, alteration, repair, or replacement of
Telecommunications Equipment shall be subject to Sublandlord's reasonable
approval and to such rules and regulations as may be promulgated by Sublandlord
from time to time. Subtenant shall repair any damage caused by Subtenant's
installation, maintenance, operation, alteration, repair, or replacement of
Telecommunications Equipment, and shall indemnify, protect, defend, and hold
Sublandlord harmless from all liabilities, claims, costs, expenses, and damages
arising therefrom or in connection therewith, including, without limitation: (i)
any claims by other tenants of the Project or other third parties that
Subtenant's installation, maintenance, operation, alteration, repair, or
replacement of Telecommunications Equipment has caused interference or
interruption with the operation of other Telecommunications Equipment; and (ii)
any voiding of or other effect that Subtenant's installation, maintenance,
operation, alteration, repair, or replacement of Telecommunications Equipment
may have on any warranty with respect to the roof or other portions of the
Project. Sublandlord shall not be liable for any damage to or interference with
Subtenant's business or any loss of income from it, or for loss of or damage to
Subtenant's Telecommunications Equipment caused by or resulting from any damage
to or interference with Subtenant's Telecommunications Equipment, or the
operation of it, including without limitation, damage, or interference caused by
or resulting from the installation, maintenance, operation, alteration, repair,
or replacement of other Telecommunications Equipment in the Project, whether by
or for Sublandlord, other tenants of the Project, or other third parties, and
Subtenant waives all claims against Sublandlord for it, except that Sublandlord
shall indemnify, protect, defend, and hold Subtenant harmless from all
liabilities, claims, costs, expenses, and damages (excluding lost profits and
other consequential damages) to the extent arising out of or in connection with
the active negligence or willful acts of Sublandlord or its
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agents, employees, or representatives. Sublandlord's approval of Subtenant's
installation of any Telecommunications Equipment shall not constitute a
representation that any such Telecommunications Equipment will function
effectively in or on the Building.
7.3. UTILITY ADDITIONS. Sublandlord reserves the right to install new or
additional utility facilities throughout the Project for the benefit of
Sublandlord or Subtenant, or any other tenant of the Project, including without
limitation such utilities as plumbing, electrical systems, security systems,
communication systems, and fire protection and detection systems.
7.4. SECURITY.
(a) Common/Amenity Areas. Sublandlord shall contract with a third
party security company ("Security Company") for twenty-four (24) hour manned
security services for the Common Areas and the Amenity Areas, at such levels of
protection, in such a manner, and at such times as consistent with the level of
security provided at other Class A campus/office building projects in the City
of Sunnyvale, the cost of which shall be included in Project Operating Expenses
or Building Expenses, as applicable. Such services may include: guard patrol,
stationing of a security officer in multi-tenant Building lobbies during
Building Hours, monitoring of the access control system, issuing and programming
access control cards, rotation and storage of closed circuit television tapes,
and coordination of responses to fire and medical emergencies.
(b) Premises. Sublandlord shall contract for a base level of
security services as follows: (i) guard service provided by the Security Company
selected and hired by Sublandlord to manage Project security, and (ii) the
security equipment serving the Premises, including the control of access
thereto, as part of the integrated Project security system ("Security System"),
which system will be centrally-operated by the Security Company and includes
monitoring of the access control system, issuing and programming access control
cards, rotation and storage of closed circuit television tapes. Such Security
System shall allow for Subtenant to control access to the Premises in its sole
discretion, subject to Paragraph 32 and Master Landlord's rights under the
Master Lease. Sublandlord makes no representation that the base level of
security services specified are adequate to protect Subtenant's property,
business operations or persons in the Premises.
Subtenant shall be required to comply with and shall cause Subtenant's
employees, agents, independent contractors, guests and invitees to comply with
all procedures and policies required by the Security Company or Sublandlord in
connection with Project security of which Subtenant is provided written notice.
Subtenant acknowledges that the security protection provided to the Premises by
the Security Company is by its nature a shared service for the benefit of all
Project tenants and that Premises security may be adversely impacted as a result
of simultaneous fire and medical emergencies taking place in separate areas of
the Project, and that Subtenant shall have no claim for reduction of payments
required under this Paragraph 7.12 or any other sort of claim in connection with
any such circumstance.
(c) Additional Security Services. Subtenant may obtain additional
security services for the Premises, provided that such services shall be
obtained solely from the Security Company engaged by Sublandlord for Project
security, under a separate contract directly between Subtenant and Security
Company, at Subtenant's sole and exclusive cost.
(d) No Warranty; Indemnity and Release. Sublandlord makes no
warranty or representation of any kind whatsoever with regard to the Security
Company or the Security System or the services provided under this Paragraph
7.4, including without limitation their quality, adequacy, efficacy or
appropriateness. Provided Sublandlord has contracted with a third party security
company for services as provided in Paragraphs 7.4(a) and (b), Subtenant hereby
releases Sublandlord, Sublandlord's lenders, partners, members, property
management company (if other than Sublandlord), agents, directors, officers,
employees, representatives, contractors (specifically excluding Security
Company), successors and assigns and each of their respective partners, members,
directors, heirs, employees, representatives, agents, contractors, heirs,
successors and assigns, Master Landlord, any ground lessor, partners and
Lenders, from and against any and all liabilities, claims, liens, damages,
demands, penalties, costs, losses, judgments, charges and expenses (including
reasonable attorneys' and consultants' fees, costs of court and expenses
necessary in the prosecution or defense of any litigation including the
enforcement of this provision) of any kind arising from or in anyway related to,
directly or indirectly, involving, or in
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connection with the Security System as provided to Subtenant under this
Paragraph 7.4, or the security services as provided to Subtenant by the Security
Company under this Paragraph 7.4.
7.5. BUILDING THREE.
Notwithstanding the other provisions of this Paragraph 7, Subtenant shall
be fully responsible and shall directly contract with third party providers as
necessary for the following services in connection with Building Three:
(a) Janitorial Services. Subtenant shall provide janitorial
services in and about the Building Three Premises (including carpet cleaning) to
a standard consistent with other Class A office buildings in the general
vicinity of the Project. Subtenant shall procure such janitorial services for
the Building Three Premises from Sublandlord's designated janitorial service,
under a separate contract directly between Subtenant and such janitorial
service.
(b) Electricity and Gas. Subtenant shall directly contract with
third party providers for the provision of electricity and gas services to the
Building Three Premises. With respect to electrical services:
The connected electrical load for lighting shall not exceed an
average of one (1) watt per square |
