California-Sunnyvale-100 Mathilda Place Lease - M-F Downtown Sunnyvale LLC and Handspring Facility Co. LLC
AMENDED AND RESTATED LEASE AGREEMENT
(BUILDING 3)
by and between
M-F DOWNTOWN SUNNYVALE, LLC
("LANDLORD")
and
HANDSPRING FACILITY COMPANY, LLC
("TENANT")
DATED AS OF JANUARY 29, 2003
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EXHIBITS
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Exhibit "A" Project Site Plan
Exhibit "B" Guaranty
Exhibit "C" Dedicated Garage Exit Area
Exhibit "D" Rules and Regulations
Exhibit "E" Approved Form of Tenant Estoppel Certificate
Exhibit "F" Form of Lease Termination Note
Exhibit "G" Form of Lease Amendment
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BASIC LEASE INFORMATION
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Lease Date: January 29, 2003
Landlord: M-F Downtown Sunnyvale, LLC,
a Delaware limited liability company
Managing Agent: The Mozart Development Company
Landlord's and Managing
Agent's Address: c/o The Mozart Development Company
1068 East Meadow Circle
Palo Alto, CA 94303
Facsimile: (650) 493-9050
Attn: James Freitas & John Mozart
Tenant: Handspring Facility Company, LLC, a Delaware
limited liability company
TENANT'S ADDRESS: FOR NOTICE AND BILLING:
c/o Handspring, Inc.
189 Bernardo Avenue
Mountain View, CA 94043-5203
Facsimile (650) 230-5139
Attn: David Pine
Vice President, General Counsel
Land: The real property outlined on Exhibit "A"
attached hereto.
Building: A six-story building at the corner of Evelyn
and Mathilda Avenues in Sunnyvale, in the
general location and configuration
designated as "Building 3" on Exhibit "A." A
portion of the Project Garage (as defined in
Recital C) will be located under the
Building but will not be included in the
definition of "Building" for purposes of
this Lease.
Premises: Parcel 4 as shown and described on that
certain Parcel Map filed for record in the
Office of the Recorder of the County of
Santa Clara, State of California, on
November 22, 2000 in Book 734 of Maps at
pages 17 through 21, inclusive)], provided
that the definition of Premises shall be
modified upon the occurrence of a partial
termination or Reinstatement of this Lease
in accordance with Paragraph 45.
Project: The Land, the Building, two additional
buildings and the Project Garage, and such
additional buildings, parking structures and
improvements as Landlord may elect to
construct on the Land or such additional
land as may be acquired by Landlord (or one
or more affiliates of Landlord) that
Landlord designates as being included in the
Project.
Rentable Area of the Building: 212,795 rentable square feet.
Tenant's Use of the Premises: Location of the Building, with the use of
the Building limited to general office,
sales, research and development, and
temporary storage of equipment
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components (excluding uses that involve the
use of Hazardous Substances, as defined in
Paragraph 39, beyond levels typical for
office use).
Lease Term: Five (5) years (the "Initial Term"),
with the right to extend for five (5)
additional five (5) year terms (each, an
"Extension Term") in accordance with
Paragraph 41. The Initial Term and Extension
Term(s) (if any) shall collectively be
defined as the "Term".
Parking Spaces: 594 parking spaces will be available to
Tenant in accordance with Paragraph 33.
Commencement Date: January 29, 2003.
Monthly Base Rent: Initially, Nineteen Thousand Three Hundred
Thirty-Three Dollars ($19,333), provided
that Monthly Base Rent shall be adjusted
upon the occurrence of a Reinstatement in
accordance with Paragraph 45, and shall
further be adjusted during any Extension
Term(s) in accordance with Paragraph 42.
Security Deposit: During the Initial Term and prior to any
Reinstatement: None
Following any Reinstatement and/or during
any Extension Term(s): Tenant shall provide
and maintain a letter of credit in the
Required Amount as more specifically
provided in Paragraph 43, which amount may
be adjusted during the Term in accordance
with such paragraph.
Guarantor: Handspring, Inc., a Delaware corporation
("Guarantor"), pursuant to that certain
Guaranty dated as of the date hereof, by
Guarantor for the benefit of Landlord, a
copy of which is attached hereto as Exhibit
"B" (the "Guaranty").
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The foregoing Basic Lease Information is hereby incorporated into and made a
part of this Lease. Each reference in this Lease to any of the Basic Lease
Information shall mean the respective information hereinabove set forth and
shall be construed to incorporate all of the terms provided under the particular
paragraph pertaining to such information. In the event of any conflict between
any Basic Lease Information and the Lease, the latter shall control.
LANDLORD: TENANT:
-------- ------
M-F Downtown Sunnyvale, LLC, HANDSPRING FACILITY COMPANY,
a Delaware limited liability company a Delaware limited liability company
By: Handspring, Inc., a Delaware
corporation
By: M-D Ventures, Inc., a California Its: Managing Member
Corporation, its Manager
/s/ Donna Dubinsky
By: --------------------
CEO
Its: --------------------
By: /s/ John Mozart
--------------------------
John Mozart, its President
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AMENDED AND RESTATED LEASE AGREEMENT
THIS AMENDED AND RESTATED LEASE AGREEMENT (the "Lease") is made and
entered into as of January 29, 2003, by and between M-F DOWNTOWN SUNNYVALE, LLC,
a Delaware limited liability company (herein called "Landlord"), and HANDSPRING
FACILITY COMPANY, a Delaware limited liability company (herein called "Tenant").
RECITALS
A. Landlord is the owner of that certain parcel of real property
(the "Parcel") located in the City of Sunnyvale, County of Santa Clara, State of
California, commonly known and referred to as 100 Mathilda Place and more
particularly described as follows:
Parcel 4 as shown and described on that certain Parcel Map
(the "Parcel Map") filed for record in the Office of the
Recorder of the County of Santa Clara, State of California, on
November 22, 2000 in Book 734 of Maps at pages 17 through 21,
inclusive.
B. There is currently located within the Parcel an office
building containing approximately 212,795 gross square feet of space (the
"Building").
C. Landlord is also the owner of that certain parcel of real
property (the "Garage Parcel") located in the City of Sunnyvale, County of Santa
Clara, State of California, described as Parcel 1 as shown and described on the
Parcel Map. There is located within the Garage Parcel and within an adjoining
parcel of real property owned by the Redevelopment Agency of the City of
Sunnyvale (the "Agency") a 1600 space underground parking garage and other
improvements (collectively, the "Project Garage").
D. On or about February 14, 2001, Landlord, as landlord, and
Guarantor, as tenant, entered into that certain Lease Agreement (Building 3) (as
amended prior to the date hereof, the "Original Lease"), whereby Landlord agreed
to lease to Guarantor, and Guarantor agreed to lease from Landlord, all of the
Building and certain associated parking and other rights. All of Guarantor's
right, title and interest under the Original Lease has been assigned to Tenant
pursuant to that certain Assignment and Assumption Agreement dated as of January
29, 2003.
E. Pursuant to that certain Property Purchase and Lease
Modification Agreement dated as of January 29, 2003 by and between Landlord,
Tenant and Guarantor (the "Purchase Agreement"), (i) Landlord has, as of the
date hereof, sold, transferred and conveyed the Building to Tenant, and Tenant
has purchased and acquired the Building from Landlord, and (ii) Landlord and
Tenant have agreed to modify the terms of the Original Lease to exclude the
Building from the term of such lease and otherwise to amend the Lease as
hereinafter provided.
F. In connection with such modification, Landlord and Tenant
acknowledge and agree that due to Landlord's reversionary interest in the
Building and the Building's inclusion in the Project which continues to be
otherwise owned and managed by Landlord, Landlord has a substantial interest in
the continued existence, condition, maintenance, repair, use and occupancy of
the Building and improvements located therein, and, accordingly, Landlord will
continue to have certain obligations with respect to maintenance, repair and
restoration of the Building, will continue to insure the Building, and will
continue to have certain rights with respect to alterations to and assignment
and subletting within the Building, all as hereinafter provided, notwithstanding
Tenant's ownership of the Building.
G. Also in connection with such modification, Landlord and Tenant
further acknowledge and agree that the initial economic terms of such
modification are significantly favorable to the Tenant both (i) at Guarantor's
request to obtain significant economic relief under the Existing Lease, and (ii)
to reflect the Landlord's right to cause a termination of the Lease with respect
to all or a portion of the Premises by an Acceleration Notice. Accordingly, if a
"Reinstatement" of the Lease occurs under the circumstances described in
Paragraph 45, thereby creating a longer term (and extension rights) under the
Lease and eliminating Landlord's right to cause a termination of the Lease and,
therefore, allowing the Tenant significant potential economic benefits from the
Lease and the Building, then it is
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economically balanced and fair in fact that under such circumstances Tenant's
obligations under the Lease shall be modified as provided in Paragraph 45.
H. Landlord and Tenant desire to amend and restate the Original
Lease in accordance with the foregoing Recitals, and also to reflect all other
terms and conditions set forth in this Amended and Restated Lease and for the
purposes provided herein.
NOW, THEREFORE, in consideration of the rents to be paid hereunder and
of the agreements, covenants and conditions contained herein, Landlord and
Tenant hereby agree that the Original Lease is hereby amended and restated in
its entirety, to read as follows:
1. PREMISES AND PROJECT.
(a) PREMISES. Upon and subject to the terms,
covenants and conditions hereinafter set forth, Landlord hereby leases to Tenant
and Tenant hereby hires from Landlord, the "Premises" (as defined in the Basic
Lease Information).
(b) [INTENTIONALLY DELETED]
(c) PROJECT. The term "Project" shall mean the Land,
the Building, the Project Garage, the additional buildings designated as
"Building 1" and "Building 2" on "Exhibit "A," and any other buildings, parking
structures and improvements constructed on the Land now or in the future. In
addition, Landlord may expand the land and improvements that are included in the
"Project" to include any other property acquired by Landlord or its affiliates
(as such term is defined at any given time), regardless of whether any such
other property is leased to Tenant or leased to, sold to or occupied by a third
party or third parties, provided that if such expansion occurs after a
Reinstatement or "Occupancy" (as defined in Paragraph 2(c)), Tenant's costs
related to Project Common Area Expenses shall not materially increase (after
taking into account any additional benefits, rights and/or cost savings to
Tenant) as a result solely of such Project expansion unless Tenant consents to
such expansion in writing in advance, which consent shall not be unreasonably
withheld, conditioned or delayed. Landlord shall deliver written notice to
Tenant of Landlord's intent to expand the Project, identifying the property and
improvements which will be added to the Project and including a new Exhibit "A"
reflecting the addition to the Project, and specifying whether Tenant's consent
to such expansion is required under this Paragraph 1(c) (and, if it is required,
requesting such consent). Failure by Tenant to respond to any written request by
Landlord for such consent within ten (10) business days after receipt of
Landlord's request shall be deemed consent by Tenant to the expansion described
in such notice. Any such Project expansion shall be effective on the date
designated by Landlord in its notice to Tenant.
(d) DISPOSITION AND DEVELOPMENT AGREEMENT. Landlord
has acquired the Land pursuant to a Disposition and Development Agreement (the
"DDA") with the Agency. Pursuant to the DDA, the Project Garage includes an
underground public parking facility (the "City Garage") under certain adjacent
land owned by the Agency, which underground parking facility will be connected
physically to the portion of the Project Garage located under the Land. In
addition, Landlord is obligated to grant the City of Sunnyvale (the "City") the
right, pursuant to that certain Declaration of Covenants, Conditions, and
Restrictions and Reciprocal Easement Agreement (Downtown Sunnyvale Parking
Structures) dated as of November 15, 2000 and recorded November 22, 2000, as
Instrument Number 15470449 in the Official Records of Santa Clara County,
California (such document being defined as the "Parking REA"), to use the
Project Garage for parking in up to 320 parking stalls in evening and weekend
hours as specified in the DDA, and also to use the entire Project Garage for
"special events" parking in evening and weekend hours up to eight times per year
as specified by the City (such rights, and any other similar parking rights
granted to the City pursuant to the DDA or the Parking REA, or pursuant to rules
and regulations adopted in connection therewith, are defined collectively herein
as the "City Parking Rights"). The Parking REA also provides for the allocation
of certain shared costs between the City Garage and the Project Garage. All
parking rights of Tenant hereunder, and of the other tenants in the Project, are
subject to the City Parking Rights. Landlord shall have the right to make
reasonable modifications to the Parking Rights, or to create, accept or adopt
additional Parking Rights, provided that (except for modifications and
additional Parking Rights that are required by the City or by applicable
governmental authority, quasi-governmental authority or Laws, which shall not
require Tenant's consent), Landlord shall obtain the prior written consent of
Tenant to any such modifications or additional Parking Rights that are made
after a Reinstatement or Occupancy, which consent shall not be unreasonably
withheld,
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conditioned or delayed so long as they do not materially adversely affect
Tenant's Permitted Use of the Premises, Minimum Parking as provided in Paragraph
33, or access to the Premises, and do not materially alter the allocation of
Project Costs to the Building or result in Tenant's cost of occupancy of the
Premises being materially increased and/or Tenant's rights under this Lease
being materially diminished. Failure by Tenant to respond to any written request
by Landlord for such consent (which request shall include a copy or description
of the proposed modification and/or additional Parking Rights) within ten (10)
business days after receipt of Landlord's request shall be deemed consent by
Tenant to the proposed modification to the Parking Rights or additional Parking
Rights described in such request. The development of the Project as contemplated
or required by the DDA shall be defined in this Lease as the "Initial
Development", and shall include, without limitation, (i) the acquisition of the
Land, (ii) construction of the Building, the Project Garage, and all other
buildings and improvements (including any necessary demolition) to be
constructed on the Land, (iii) creation, filing and recordation of the Initial
Parcel Map (as defined below), the Parking REA, the Initial CC&Rs (as defined
below), and any other Encumbrances contemplated by the DDA and any necessary
modifications or amendments thereto, and (iv) any and all other activities,
actions, requirements, assessments, approvals, documents, instruments and
similar items that are, in Landlord's reasonable discretion, necessary or
desirable in connection therewith.
(e) RECONFIGURATION/PARCEL MAP. In connection with
the Initial Development, Landlord has filed a parcel map that causes the
airspace to be occupied by the Building to consist of one legal parcel, and the
airspace to be occupied by each additional building in the Project to consist of
a separate legal parcel, and the Project Garage and Project Common Area
collectively to consist of a separate legal parcel (such parcel map being
defined as the "Initial Parcel Map"). Landlord reserves the right, without
incurring any liability to Tenant and without constituting an eviction
(constructive or otherwise), and without entitling Tenant to any abatement of
Rent or to terminate this Lease or otherwise releasing Tenant from any of
Tenant's obligations under this Lease, to amend the Initial Parcel Map to
reconfigure the parcels, even if such map would cause a reduction in the size of
the Land, so long as the size of the building envelope in which the Building is
or will be located is not materially affected by such action, the Project
continues to be in compliance with all applicable Laws (including, without
limitation, city parking requirements and other development approvals and land
use regulatory requirements), and, if such amendment is filed after a
Reinstatement or Occupancy, Tenant's Permitted Use of the Premises as allowed by
this Lease is not materially impaired thereby and the Minimum Parking continues
to be available to Tenant as provided in Paragraph 33. Tenant shall cooperate
with Landlord in connection with any amendment to the Initial Parcel Map and/or
any other subdivision or lot line adjustment process with respect to the Land or
Project generally, provided that Tenant shall not be obligated to incur material
costs in connection with such cooperation. In addition, at any time during the
Term, Landlord may reduce the land and improvements that are included in the
Project, subdivide the Project, or otherwise reconfigure the Project in any way,
so long as in connection with such reconfiguration (other than in connection
with the Initial Development) the size of the building envelope in which the
Building is or will be located is not materially affected by such action, the
Project continues to be in compliance with all applicable Laws (including,
without limitation, city parking requirements and other development approvals
and land use regulatory requirements), and, if such actions occur after a
Reinstatement or Occupancy, Tenant's Permitted Use of the Premises as allowed by
this Lease is not impaired thereby, the Minimum Parking continues to be
available to Tenant as provided by Paragraph 33, and Tenant's access to the
Premises is not materially impaired. Upon Landlord's request, Tenant shall
execute and deliver any documents or instruments reasonably required in
connection with any amendment to the Initial Parcel Map and/or any other
subdivision or lot line adjustment process in connection with this Paragraph
1(e).
(f) CONSTRUCTION OF FUTURE PHASES. Landlord has
constructed and/or shall hereafter construct the other buildings shown on
Exhibit "A" and all other on-site and off-site improvements that are expressly
required by the terms and conditions of the DDA, the Parking REA and/or the
CC&Rs, as such documents may be amended from time to time. In addition, Landlord
may construct additional buildings and improvements on the Land in such
locations as Landlord may determine, in its sole discretion. Tenant acknowledges
that during any such construction and development, Landlord, its tenants, and
their respective employees, contractors and agents will require access across
and through the Project Common Area for purposes of construction and development
of additional buildings and improvements in the Project (as it may exist from
time to time) and use of portions of the Project Common Area for construction
staging in connection with such construction and development, including, without
limitation, for the storage of all necessary materials, tools and equipment.
Landlord shall not be liable to Tenant for any interference with Tenant's use of
the Project Common Area with respect to such construction and development
activities or any noise, vibration, or other disturbance to Tenant's business at
the Premises which may result from such activities, so
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long as the Building's structural components and Building Systems are not
materially adversely affected by such activities, the Project continues to be in
compliance with all applicable Laws, and, with respect to any such activities
that occur after a Reinstatement or Occupancy, Tenant at all times has
reasonable access to the Building and use of the Minimum Parking as provided in
Paragraph 33, and Landlord takes commercially reasonable steps to minimize any
material adverse effect on Tenant's Permitted Use of the Premises arising from
such activities. Tenant shall cooperate with Landlord in connection with any
construction or development activities with respect to any such construction of
buildings or improvements, including, without limitation, by cooperating in any
parking restrictions and limitations during such activities.
(g) COMMON AREA. The term "Common Area" or "Project
Common Area" shall mean all areas and facilities within the Project that are not
designated by Landlord, from time to time, for the exclusive use of Tenant or
any other tenant or other occupant of the Project, that are located outside the
building envelopes of the Building and of any other buildings now or hereafter
located in the Project. Project Common Areas shall include, without limitation,
the Project Garage, facilities and equipment servicing the Project as a whole or
the Project Garage, access and perimeter roads and ramps, pedestrian sidewalks,
landscaped areas, plaza areas, trash enclosures, recreation areas and the like.
(h) CC&Rs. The operation of the Project Common Area
(including the Project Garage), and access to, from and between various portions
of the Project Common Area, are and shall be governed by that certain
Declaration of Covenants, Conditions and Restrictions and Reciprocal Easement
Agreement, dated as of November 22, 2000, and recorded November 22, 2000 as
Instrument Number 15470450 in the Official Records of Santa Clara County, and
such additional conditions, covenants and restrictions and/or reciprocal
easements and/or reciprocal licenses (any of the foregoing being defined herein
collectively as "CC&Rs"), as are required by or pursuant to the DDA, in
connection with the Initial Parcel Map, or as Landlord may otherwise determine
in its discretion are necessary or desirable in connection with the Initial
Development (such CC&Rs in connection with the DDA or Initial Development being
defined herein collectively as the "Initial CC&Rs") between the owners of
portions of the Project, including, without limitation, in order to provide
necessary or appropriate access over, across and from the Common Area (including
any ramps between the parking structures, roadways and drive aisles located
thereon) to other portions of the Common Area and/or to any other property which
is included in the Project, and/or that encumber portions of the Project for the
benefit of other portions of the Project or the adjacent City property (or
reciprocally benefit each other), and/or in order to provide sufficient parking
for any portion of the Project or in connection with the City Parking Rights,
and/or that allocate costs of the operation, maintenance, repair Project and/or
Project Common Area among the owners of portions of the Project in a reasonable
and customary manner. Without limiting the foregoing, the Initial CC&Rs provide
for elevator and stairwell access from the portion of the Project Garage located
under each building in the Project to the exterior Project Common Area through a
corridor located on the ground floor of each such building from the elevator and
stairwell to the exterior Project Common Area in a location and configuration
designated by Landlord, which access right shall burden the applicable building
for the benefit of the remaining portions of the Project; provided that with
respect to such access corridor located on the ground floor of the Building
(defined herein as the "Dedicated Garage Exit Area"), (i) the Dedicated Garage
Exit Area is or will be in the area shown on Exhibit "C" attached hereto, and
(ii) the Dedicated Garage Exit Area is or will be physically partitioned from
the remainder of the Building by Landlord (provided that Landlord shall not be
required by the terms of this Lease to effect such separation prior to the
occurrence of a Reinstatement or Occupancy) such that Tenant shall have the
right to limit, prevent or lock any direct access to the remainder of the
Building from the Dedicated Garage Exit Area. The Initial CC&Rs and all
provisions thereof will at all times be superior in priority to this Lease.
Landlord shall have the right to make reasonable modifications to the Initial
CC&Rs during the Term, or to create additional CC&Rs affecting all or portions
of the Project, provided that (except for modifications and/or additional CC&Rs
that are required by applicable governmental authority, quasi-governmental
authority, or Laws, which shall not require Tenant's consent), Landlord shall
obtain the prior written consent of Tenant to such modifications or additional
CC&Rs that occur after a Reinstatement or Occupancy, which consent shall not be
unreasonably withheld, conditioned or delayed so long as such modifications or
additional CC&Rs do not materially adversely affect Tenant's Permitted Use of
the Premises, Minimum Parking as provided in Paragraph 33 or access to the
Premises; and do not materially alter the allocation of Project Costs to the
Building or materially affect Common Areas located within the Building (if any),
or result in Tenant's cost of occupancy of the Premises being materially
increased and/or Tenant's rights under this Lease being materially diminished.
Failure by Tenant to respond to any written request by Landlord for such consent
(which request shall include a copy of the proposed modification and/or
additional CC&Rs) within ten (10) business days after receipt of Landlord's
request
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shall be deemed consent by Tenant to the proposed modification to the Initial
CC&Rs or additional CC&Rs described in such request. In addition, the parties
acknowledge that, notwithstanding Tenant's ownership of the Building, Landlord,
as owner of the Parcel, is the "Voting Member" (as defined in Section 3.5 of the
Initial CC&Rs) with respect to the Parcel.
(i) USE OF THE PREMISES AND COMMON AREA. Tenant may
use and occupy the Premises for the purposes specified in the Basic Lease
Information ("Permitted Use"), subject to the terms and conditions of this
Lease, and for no other use or purpose without the prior written consent of
Landlord. Landlord shall have the right to grant or withhold consent to a use
other than the Permitted Use in its sole discretion. Tenant shall be entitled to
the nonexclusive use of the Common Area with Landlord and other occupants (if
any) of the Project in accordance with the limitations and restrictions in this
Lease and the Rules and Regulations established by Landlord from time to time;
provided, however, that if Landlord reconfigures the Project or sells a portion
of the Project (including, without limitation, if the Project Garage is owned by
an entity other than Landlord), Landlord shall assure to Tenant that, after any
Reinstatement or Occupancy, Tenant shall continue to have reasonable access to
the Premises and Tenant's Minimum Parking as provided in Paragraph 33 through
the Initial CC&Rs or subsequent CC&Rs or other like mechanism. Notwithstanding
anything to the contrary in the Basic Lease Information or in this Lease, Tenant
understands and agrees that (a) the Parking REA, the Initial CC&Rs and such
additional CC&Rs as Landlord may elect to record against the Project as provided
in Paragraph 1(h) , and/or (b) certain other easements, licenses, access
agreements and other encumbrances recorded in the official records of Santa
Clara County (collectively, the Parking REA, the Initial CC&Rs, any additional
CC&Rs, and any such encumbrances are sometimes collectively referred to herein
as the "Encumbrances") may encumber the Land and/or Project now or in the
future, and that Tenant's occupancy and use of the Premises and Building and use
of the Project Common Area may be restricted by such Encumbrances. If necessary,
Tenant shall execute such documents as are reasonably necessary to cause this
Lease to become subordinate to any such Encumbrances, provided that Tenant shall
have been provided with a true, correct and complete copy thereof prior to the
date hereof or, with respect to future CC&Rs or Encumbrance, prior to its
effective date, and any approval given by Landlord hereunder shall be limited to
the matters covered by such approval with respect to this Lease only and shall
not be interpreted to include any approval or consent in respect of the CC&Rs or
Encumbrance. After a Reinstatement or Occupancy, Landlord agrees to use
commercially reasonable efforts to enforce specific provisions of the CC&Rs
and/or Parking REA for the benefit of the Premises and Building upon receipt of
written request from Tenant specifying the specific relevant provisions to be
enforced and specific enforcement efforts that Tenant requests Landlord to take.
2. TERM AND POSSESSION.
(a) TERM. The term of this Lease (the "Term") shall
commence on the Commencement Date set forth in the Basic Lease Information and,
unless sooner terminated pursuant to the express provisions of this Lease, shall
expire on the date that is one day prior to the fifth anniversary of the
Commencement Date (subject to extension in accordance with Paragraph 41 to the
date that is one day prior to the fifth anniversary of the last Extension Term
that is exercised) (such date being the "Expiration Date").
(b) NO REPRESENTATIONS OR WARRANTIES. Tenant
acknowledges that Landlord has not made any representation or warranty with
respect to the Premises or the Building or the condition of the Building or the
Project Common Area (except as may be expressly provided herein), or with
respect to the suitability or fitness of any of the foregoing for the conduct of
Tenant's permitted use or for any other purpose. By occupying the Premises,
Tenant shall be deemed to have accepted the same as suitable for the purpose
herein intended, subject to Landlord's obligations pursuant to Paragraph 7(a).
(c) OCCUPANCY. The term "Occupancy", when capitalized
and used in this Lease, shall mean physical occupancy by or through Tenant of
all or any portion of the Building that occurs after the Commencement Date and
prior to a Reinstatement, if any, with respect to the portion of the Building
that is so Occupied. Without limiting the foregoing, the commencement of
construction of any Alteration (as defined in Paragraph 6) shall be deemed
"Occupancy" hereunder with respect to the portion of the Building to which such
Alteration is made or being made.
3. RENT; RENT ADJUSTMENTS; ADDITIONAL CHARGES FOR EXPENSES AND
TAXES.
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(a) MONTHLY BASE RENT. Tenant's obligation to pay
Monthly Base Rent hereunder shall commence on the Commencement Date. Commencing
on the Commencement Date and throughout the Term of this Lease, Tenant shall pay
the monthly base rent specified in the Basic Lease Information, as it may be
adjusted pursuant to Paragraph 42 and/or 45) (as so adjusted from time to time,
"Monthly Base Rent"), on the first day of each month, in advance, in lawful
money of the United States (without any prior demand therefor and without
deduction or offset whatsoever, except as expressly provided in this Lease) to
Landlord or its Managing Agent at the address specified in the Basic Lease
Information or to such other firm or to such other place as Landlord or its
Managing Agent may from time to time designate in writing. In addition, Tenant
shall pay to Landlord all charges and other amounts whatsoever as provided in
this Lease ("Additional Charges") at the place where the Monthly Base Rent is
payable, and Landlord shall have the same remedies for a Default in the payment
of Additional Charges as for a Default in the payment of Monthly Base Rent. As
used herein, the term "Rent" shall include all Monthly Base Rent and Additional
Charges (including after a Reinstatement or Occupancy, without limitation,
Additional Charges for Real Estate Taxes and Expenses pursuant to Paragraph 3(c)
below, and Additional Charges pursuant to Paragraphs 5(b), 6, 8, 10(d) and (f),
20(c) and 23). If the Commencement Date, Occupancy or a Reinstatement, as
applicable, occurs on a day other than the first day of a calendar month, or the
Expiration Date occurs on a day other than the last day of a calendar month,
then the Monthly Base Rent and Additional Charges for such fractional month
shall be prorated on a daily basis.
(b) [INTENTIONALLY DELETED]
(C) ADDITIONAL CHARGES FOR EXPENSES AND TAXES.
(i) DEFINITIONS OF ADDITIONAL CHARGES:
For purposes of this Paragraph 3(c), the following terms shall have the
meanings hereinafter set forth:
(A) "TAX YEAR" shall mean each
twelve (12) consecutive month period commencing
January 1st of the calendar year during which the
Commencement Date of this Lease occurs, provided that
Landlord, upon notice to Tenant, may change the Tax
Year from time to time to any other twelve (12)
consecutive month period and, in the event of any
such change, Tenant's Share of Real Estate Taxes (as
hereinafter defined) shall be equitably adjusted for
the Tax Years involved in any such change.
(B) "TENANT'S SHARE" shall mean:
(i) prior to a Reinstatement or Occupancy, 0%; (ii)
after Occupancy, a percentage determined on the first
day of each calendar month of the Term by dividing
the rentable area of the portions of the Building
that are occupied by Tenant at such time or at any
time during the preceding month by the Rentable Area
of the entire Building as set forth in the Basic
Lease Information; and (ii) after a Reinstatement,
100% or as otherwise provided in Paragraphs 45(d) and
(e) .
(C) "REAL ESTATE TAXES" shall mean
(i) to the extent the Building and/or Premises are
assessed separately from any other real property, all
taxes, assessments and charges levied upon or with
respect to the Premises and/or Building, plus the
Building Share of all taxes, assessments and charges
levied with respect to the Project Common Area not
included with the Premises and/or Building assessment
or any personal property of Landlord used in the
operation thereof, or (ii) to the extent the Project
is assessed as a whole, the Building Share of all
taxes, assessments and charges levied upon or with
respect to the Project or any personal property of
Landlord used in the operation thereof, or Landlord's
interest in the Project or such personal property.
Real Estate Taxes shall include, without limitation,
all general real property taxes and general and
special assessments, charges, fees or assessments for
transit and/or parking (including in connection with
inclusion of the Building or Project in a parking or
transit district), housing, police, fire or other
governmental services or purported benefits to the
Building or Project, service payments in lieu of
taxes, and any tax, fee or excise on the act of
entering into this Lease, or any other lease of space
in the Project, or on the use or occupancy of the
Project or any part thereof, or on the rent payable
under any lease or in connection with the business of
renting space in the Project, that are now or
hereafter levied or assessed against Landlord by the
United States of America, the State of California, or
any political subdivision, public corporation,
district or any
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other political or public entity, and shall also
include any other tax, fee or other excise, however
described, that may be levied or assessed as a
substitute for, or as an addition to, in whole or in
part, any other Real Estate Taxes, whether or not now
customary or in the contemplation of the parties on
the date of this Lease. Real Estate Taxes shall not
include franchise, transfer, inheritance or capital
stock taxes or income taxes measured by the net
income of Landlord from all sources unless, due to a
change in the method of taxation, any of such taxes
is levied or assessed against Landlord as a
substitute for, in whole or in part, any other tax
that would otherwise constitute a Real Estate Tax.
Additionally, Real Estate Taxes shall not include any
assessments or like charges to pay for any
remediation of contamination from any Hazardous
Substance (defined in Paragraph 39 hereof) existing
as of the Commencement Date unless introduced in, on,
under or about the Premises by Tenant or Tenant's
employees, agents, contractors or invitees. Real
Estate Taxes also shall not include any taxes
attributable to any new construction on the Project
(other than the Building) that increases the rentable
area of the Project, or any increase in any Real
Estate Taxes directly attributable to such new
buildings or improvements, until such time as such
new buildings or improvements are leased and occupied
by tenants paying such building's share of Real
Estate Taxes assessed against the Project; provided,
however, that Real Estate Taxes shall include the
Building Share of any new taxes or increases in Real
Estate Taxes attributable to the Project Garage, the
City Garage or Parking REA, or similar new
construction, buildings or improvements that are used
for parking or other Common Area uses (or the
proportionate amount of any such new taxes or
increase attributable to the portion of any new
construction, buildings or improvements used for
parking or other Common Area uses). Real Estate Taxes
shall also include reasonable legal fees, costs and
disbursements incurred in connection with proceedings
to contest, determine or reduce Real Estate Taxes;
provided that such fees, costs and disbursements do
not exceed the actual savings in Real Estate Taxes
obtained by Tenant over the Term of the Lease. If any
assessments are levied on the Building or Project,
Tenant shall have no obligation to pay more than that
amount of annual installments of principal and
interest that would become due during the Term had
Landlord elected to pay the assessment in installment
payments, even if Landlord pays the assessment in
full.
(D) "BUILDING SHARE" shall mean the
Rentable Area in the Building divided by the total
rentable area in the Project, as determined by
Landlord, in its reasonable discretion.
(E) "EXPENSES" shall mean the total
costs and expenses paid or incurred by Landlord in
connection with the management, operation,
maintenance and repair of the Building and the
Project Common Area, including, without limitation
(i) the cost of air conditioning, electricity, steam,
heating, mechanical, ventilating, elevator systems
and all other utilities, to the extent provided by
Landlord, and the cost of supplies and equipment and
maintenance and service contracts in connection
therewith; (ii) the cost of repairs and general
maintenance and cleaning, including, without
limitation, to the Building Systems (as defined in
Paragraph 7(a)); (iii) the Building Share of the cost
of fire, extended coverage, boiler, sprinkler, public
liability, property damage, rent, earthquake and
flood (in each case if Landlord elects to obtain it)
and other insurance for the Project obtained by
Landlord, or otherwise obtained by Landlord in
connection with the Project, all including, without
limitation, insurance premiums and any deductible
amounts paid by Landlord, including, without
limitation, the insurance required by Paragraph
10(f); (iv) fees, charges and other costs directly
related to the operation of the Project (as distinct
from the operation of the partnership which owns the
Project), including management fees, consulting fees,
legal fees and accounting fees, fees of all
independent contractors engaged by Landlord directly
related to the operation of the Project or reasonably
charged by Landlord if Landlord performs management
services in connection with the Project, (though the
management fee shall not exceed the cap noted in the
following paragraph); (v) the cost of any capital
improvements made to the Building, and the Building
Share of the cost of any capital improvements made to
the Project Common Area, after the Commencement Date
(a) as a labor saving device or to effect other
economies in the operation or maintenance of the
Building or the Project Common Area (from which a
reasonable person would anticipate that savings would
actually result), (b) to repair or replace capital
items which are no longer capable of providing the
services required of them (other than in connection
with a casualty which is addressed by Paragraph 20),
or (c) that are made to the
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Building or the Project Common Area after the date of
this Lease and are required under any Laws (as
defined in Paragraph 5) (excluding, however, any
capital improvements required by Laws that are
Tenant's responsibility under Paragraph 5 which shall
be paid directly by Tenant pursuant to Paragraph 5,
where such capital improvements were not required
under any such Laws to be completed with respect to
the Project prior to the date the Lease was executed;
and the costs of capital improvements incurred by
Landlord which are the responsibility of Tenant
pursuant to this Lease shall be amortized over the
useful life of the capital item in question as
determined in accordance with generally accepted
accounting principles ("GAAP"), together with
interest on the unamortized balance at the greater of
(x) the rate paid by Landlord on funds borrowed from
an institutional lender for the purpose of
constructing such capital improvements; or (y) 10%
per annum; provided, however, the amount of the cost
of capital improvements which may be included within
Expenses pursuant to this clause (v) shall be the
greater of (I) the amount that would be payable
pursuant to the foregoing amortization or (II) $.02
per square foot of the Rentable Area of the Building
per month (and to the extent the amount under this
clause (II) exceeds the amount that would be payable
under clause (I), such excess shall be credited
against the unamortized balance of the cost of
capital improvements in the inverse order in which
they would be payable by Tenant under clause (i));
and (vi) any other reasonable expenses of any other
kind whatsoever reasonably incurred in managing,
operating, maintaining and repairing the Building,
including, but not limited to, costs incurred or
assessed pursuant to the Parking REA, the Initial
CC&Rs, any other CC&Rs or any Encumbrances, and the
Building's Share of Project Common Expenses. "Project
Common Expenses" shall mean any expenses paid or
incurred by Landlord in connection with the
management, operation, maintenance and repair of the
Project Common Area and any other Expenses paid or
incurred by Landlord for the benefit of the Project
as a whole, including, but not limited to, the cost
of maintaining any traffic improvements, surface
parking lots and facilities located in the Project
Common Area, landscaping, the cost of any security
Landlord elects to provide for all or any portions of
the Project Common Area, and any costs allocated to
the Project Common Area (or the Project as a whole)
pursuant to the Parking REA. Any "deductible" amounts
relating to capital improvements required to be paid
by Tenant hereunder in connection with any property
or earthquake insurance policy carried by Landlord
shall be amortized over the useful life of the
restoration work to which such deductible amount
relates in accordance with GAAP, in the same manner
as other capital improvements that are included in
Expenses as provided above.
Notwithstanding anything to the contrary herein contained, Expenses shall not
include, and in no event shall Tenant have any obligation to pay for pursuant to
this Paragraph 3 or Paragraph 7(b), (aa) the acquisition cost of the Land and
the initial construction cost of the Project Garage and of any new buildings or
improvements on the Project that increase the rentable area of the Project (or
any additional operating expenses incurred during the course of construction and
as a direct result of such construction) including, without limitation, any of
the foregoing costs incurred in connection with an expansion of the Project
pursuant to Paragraph 1(c), other than costs in connection with construction of
the Building or other portions of the Project that are otherwise payable by
Tenant hereunder; (bb) the cost of providing tenant improvements to Tenant or
any other tenant and costs of preparing any other premises in the Project for
occupancy by any other tenant, including brokerage commissions, attorneys fees
and other fees incurred in connection with the leasing thereof; (cc) any debt
service (including, but without limitation, interest, principal and any impound
payments) required to be made on any mortgage or deed of trust recorded with
respect to all or any portion of the Project other than debt service and
financing charges imposed pursuant to Paragraph 3(c)(1)(E)(v) above; (dd) the
cost of special services, goods or materials provided to any tenant; (ee)
depreciation; (ff) the portion of a management fee in excess of two and
five/tenths percent (2.5%) of Monthly Base Rent and Additional Charges for
Expenses and Taxes (excluding the management fee); (gg) penalties resulting from
Landlord's failure to comply with applicable Laws, to the extent that such
compliance is expressly Landlord's responsibility under this Lease; (hh) costs
for which Landlord has a right of and has received reimbursement from others;
(ii) costs to correct any construction or design defects in the original
construction of the Building; (jj) repairs, replacement and upgrades to the
structural elements of the Building (e.g.. steel frame and slab) and structural
components of the roof (not including the roof membrane above the concrete over
metal deck), other than capital improvements pursuant to Paragraph 3(c)(1)(E)(v)
above; (kk) environmental pollution remediation related costs for which Landlord
has indemnified Tenant pursuant to Paragraph 39(c); (ll) advertising or
promotional expenditures; (mm) leasing or sales commissions; (nn) repairs,
restoration or other work occasioned by condemnation, or by fire,
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wind, the elements or other casualty, to the extent of amounts paid or payable
under any insurance policy maintained by Landlord covering the Project or any
portion thereof; (oo) compensation paid to any employee of Landlord other than
maintenance and property management personnel below the level of project
manager, directly associated with the operation and maintenance of the Building
or Project (it being agreed that the salaries of such management personnel at or
above the level of project manager are covered by the management fee); (pp)
repairs, alterations, additions, improvements or replacements made to rectify or
correct any condition with respect to the Project that is in violation of
applicable Laws on the date of execution of this Lease by Landlord and Tenant;
(qq) Landlord's general overhead expenses in excess of the property management
fee; (rr) legal fees, accountants' fees and other expenses incurred in
connection with disputes with Tenant (except to the extent such expenses are
Tenant's responsibility pursuant to this Lease) or associated with the defense
of Landlord's title to or Landlord's interest in the Project or any part
thereof; (ss) charitable or political contributions of Landlord; (tt) interest,
penalties or other costs arising out of Landlord's failure to make timely
payments of its obligations, to the extent not caused by Tenant's failure to
make such payments when due under this Lease; and (uu) reserves for Expenses or
Real Estate Taxes, except as expressly provided herein. All costs and expenses
shall be determined in accordance with GAAP which shall be consistently applied
(with accruals appropriate to Landlord's business).
(F) "EXPENSE YEAR" shall mean each
twelve (12) consecutive month period commencing
January 1 of the calendar year during which the
Commencement Date of the Lease occurs, provided that
Landlord, upon notice to Tenant, may change the
Expense Year from time to time to any other twelve
(12) consecutive month period, and, in the event of
any such change, Tenant's Share of Expenses shall be
equitably adjusted for the Expense Years involved in
any such change.
(ii) PAYMENT OF REAL ESTATE TAXES:
(A) PRIOR TO REINSTATEMENT OR
OCCUPANCY. Commencing on the Commencement Date and
unless and until any Reinstatement or Occupancy
occurs, Landlord shall pay all Real Estate Taxes.
(B) AFTER REINSTATEMENT OR
OCCUPANCY. Commencing upon any Reinstatement or
Occupancy and throughout the remaining Term, Tenant
shall pay to Landlord as Additional Charges
one-twelfth (1/12th) of Tenant's Share of Real Estate
Taxes for each Tax Year on or before the first day of
each month during such Tax Year, in advance, in an
amount reasonably estimated by Landlord and billed by
Landlord to Tenant, and Landlord shall have the right
initially to determine monthly estimates and to
revise such estimates from time to time. With
reasonable promptness after Landlord has received the
tax bills for any Tax Year, Landlord shall furnish
Tenant with a statement (herein called "Landlord's
Tax Statement") setting forth the amount of Real
Estate Taxes for such Tax Year and Tenant's Share
thereof. If the actual Tenant's Share of Real Estate
Taxes for such Tax Year exceed the estimated Tenant's
Share of Real Estate Taxes paid by Tenant for such
Tax Year, Tenant shall pay to Landlord the difference
between the amount paid by Tenant and the actual
Tenant's Share of Real Estate Taxes on or before the
earlier of thirty (30) days after the receipt of
Landlord's Tax Statement or fifteen (15) days prior
to the delinquency date for the Real Estate Tax
payment reflected in the applicable Landlord's Tax
Statement, and if the total amount paid by Tenant for
any such Tax Year shall exceed the actual Tenant's
Share of Real Estate Taxes for such Tax Year, such
excess shall be credited against the next installment
of Real Estate Taxes due from Tenant to Landlord
hereunder or if the Term has ended it shall be
returned to Tenant within thirty (30) days. If it has
been determined that Tenant has overpaid Real Estate
Taxes during the last year of the Lease Term, then
Landlord shall reimburse Tenant for such overage on
or before the thirtieth (30th) day following the
Expiration Date. No delay by Landlord in providing
Landlord's Tax Statement shall be deemed a default by
Landlord or a waiver of Landlord's right to require
payment of the actual or estimated sums of Tenant's
Share of Real Estate Taxes, provided that Landlord
may not require payment of Tenant's Share of Real
Estate Taxes with respect to any Real Estate Taxes
later than twelve (12) months after the end of the
calendar year in which such Real Estate Taxes were
paid or incurred by Landlord. To the extent that
Landlord receives refunds of any portion of Real
Estate Taxes paid by Tenant during the Term, such
refunds shall be credited against Tenant's further
obligation to
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pay Real Estate Taxes during the Term or refunded to
Tenant if received by Landlord within one year after
the Expiration Date.
(iii) PAYMENT OF EXPENSES:
(A) PRIOR TO REINSTATEMENT OR
OCCUPANCY. Commencing on the Commencement Date and
unless and until any Occupancy or Reinstatement
occurs, Landlord shall pay all Expenses.
(B) AFTER REINSTATEMENT OR
OCCUPANCY. Commencing upon any Reinstatement or
Occupancy and throughout the remaining Term, Tenant
shall pay to Landlord as Additional Charges
one-twelfth (1/12th) of Tenant's Share of the
Expenses for each Expense Year on or before the first
day of each month of such Expense Year, in advance,
in an amount reasonably estimated by Landlord and
billed by Landlord to Tenant, and Landlord shall have
the right initially to determine monthly estimates
and to revise such estimates from time to time. With
reasonable promptness after the expiration of each
Expense Year, Landlord shall furnish Tenant with a
statement (herein called "Landlord's Expense
Statement"), setting forth in reasonable detail the
Expenses for such Expense Year and Tenant's Share
thereof. If the actual Tenant's Share of Expenses for
such Expense Year exceed the estimated Tenant's Share
of Expenses paid by Tenant for such Expense Year,
Tenant shall pay to Landlord the difference between
the amount paid by Tenant and the actual Tenant's
Share of Expenses within thirty (30) days after the
receipt of Landlord's Expense Statement, and if the
total amount paid by Tenant for any such Expense Year
shall exceed the actual Tenant's Share of Expenses
for such Expense Year, such excess shall be credited
against the next installment of the estimated
Expenses due from Tenant to Landlord hereunder or if
the Term has ended it shall be returned to Tenant
within thirty (30) days. Any utility rebates for the
Project which Landlord receives for payments made by
Tenant shall be forwarded to Tenant so long as such
rebate is received within one year following the
Expiration Date or sooner termination of the Lease.
If it has been determined that Tenant has overpaid
Expenses during the last year of the Lease Term
(including rebates of utilities applicable to
Tenant), then Landlord shall reimburse Tenant for
such overage on or before the thirtieth (30th) day
following the Expiration Date.
(iv) OTHER: To the extent any item of
Real Estate Taxes or Expenses is payable by Landlord in
advance of the period to which it is applicable (e.g.
insurance and tax escrows required by Landlord's Lender), or
to the extent that prepayment is customary for the service or
matter, Landlord may (i) include such items in Landlord's
estimate for periods prior to the date such item is to be paid
by Landlord and (ii) to the extent Landlord has not collected
the full amount of such item prior to the date such item is to
be paid by Landlord, Landlord may include the balance of such
full amount in a revised monthly estimate for Additional
Charges. If Reinstatement, Occupancy or the Expiration Date
shall occur on a date other than the first day of a Tax Year
and/or Expense Year, or if Tenant's Share changes (pursuant to
Section 45(d) or otherwise) during a Tax Year and/or Expense
Year, Tenant's Share of Real Estate Taxes and Expenses for the
Tax Year and/or Expense Year in which such event occurs shall
be prorated.
(v) AUDIT: Within ninety (90) days
after receipt of any Expense Statement or Tax Statement from
Landlord, Tenant shall have the right to examine and copy
Landlord's books and records relating to such Expense
Statements and Tax Statements, and/or commence to cause an
independent audit thereof to be conducted by an accounting
firm to be selected by Tenant and subject to the reasonable
approval of Landlord. If the audit indicates that Tenant has
overpaid either Expenses or Real Estate Taxes, Tenant shall
notify Landlord within one hundred twenty (120) days after the
date the applicable Expense Statement or Tax Statement was
received by Tenant. If Landlord disputes the results of such
audit, Landlord and Tenant shall work together in good faith
to resolve the discrepancy between the applicable Expense
Statement and/or Tax Statement and Tenant's audit. If it is
finally determined that Tenant has overpaid either Expenses or
Real Estate Taxes, then Landlord shall reimburse Tenant for
such overage within thirty (30) days after receipt of such
notice, provided that if such overage exceeds five percent
(5%) of the actual amount of Expenses or Real Estate Taxes
paid by Landlord for the Tax or Expense Year covered by such
audit, then Landlord shall bear the reasonable cost of such
audit, up to a maximum cost of
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$5,000 (adjusted annually by the CPI Increase). If Tenant
fails to object to any such Expense Statement or Tax
Statement, or to request and commence an independent audit
thereof, within ninety (90) days after receipt of the
applicable statement, or if Tenant objects to any statement or
requests an audit but then fails to complete the audit within
one hundred twenty (120) days after receipt of the applicable
statement, such Expense Statement and/or Tax Statement shall
be final and shall not be subject to any audit, challenge or
adjustment. All of the information obtained through any audit
by Tenant and any compromise, settlement or adjustment reached
between Landlord and Tenant relative to the results of such
audit shall be held in strict confidence by the Tenant, except
to the extent disclosure is required or reasonably necessary
in connection with litigation with respect to such audit or as
required by Law as a result of Tenant's status as a
publicly-traded corporation. Tenant shall continue to make all
Rent payments hereunder (including without limitation payments
of Additional Charges for Expenses and Real Estate Taxes)
during any such audit period and pending resolution of any
dispute between Landlord and Tenant.
(d) LATE CHARGES. Tenant recognizes that late payment
of any Monthly Base Rent and/or Additional Charges will result in administrative
expenses to Landlord, the extent of which additional expense is extremely
difficult and economically impractical to ascertain. Tenant therefore agrees
that if Tenant is in Default in the payment of any Monthly Base Rent and/or
Additional Charges, the amount of such unpaid Monthly Base Rent and/or
Additional Charges shall be increased by a late charge to be paid to Landlord by
Tenant in an amount equal to four percent (4%) of the amount of the delinquent
Monthly Base Rent and/or Additional Charges. In addition, any outstanding
Monthly Base Rent, Additional Charges, late charges and other outstanding Rent
amounts shall accrue interest at an annualized rate of the lesser of (i) the
greater of 10% or The Federal Reserve Discount Rate plus 5% until paid to
Landlord, or (ii) the maximum rate permitted by law (the "Default Rate"). Tenant
agrees that such amount is a reasonable estimate of the loss and expense to be
suffered by Landlord as a result of such late payment by Tenant and may be
charged by Landlord to defray such loss and expense. The provisions of this
Paragraph 3(d) in no way relieve Tenant of the obligation to pay Monthly Base
Rent or Additional Charges on or before the date on which they are due, nor do
the terms of this Paragraph 3(d) in any way affect Landlord's remedies pursuant
to Paragraph 19 in the event any Monthly Base Rent or Additional Charges are
unpaid after the date due.
(e) OFFSET. For so long as Handspring Facility
Company, LLC continues to be the Tenant hereunder, Tenant shall be permitted to
offset from any amounts due to Landlord pursuant to this Lease (i) the amount of
the fee paid to the Independent Manager of Tenant (as such term is defined in
Tenant's Operating Agreement) for his services pursuant to Section 15.8 of
Tenant's Operating Agreement, together with any fees or costs (including
attorneys' fees and costs) which are payable, or reimbursable, to such
Independent Manager in connection with such services, but excluding any
attorneys fees and/or other costs and expenses related to any dispute between
Tenant (or parties claiming through Tenant) and the Independent Manager; and
(ii) the amount of any franchise tax, filings fee, registered agent fee, or any
similar fee or tax that is paid by Tenant to maintain its existence in good
standing in the State of California and the State of Delaware; provided,
however, that no offset shall be permitted for any tax or fee arising from
income to the Tenant or its member(s). Upon exercising its offset rights
pursuant to this Paragraph 3(e), Tenant shall provide written notice to Landlord
reasonably detailing the amount of the offset and providing reasonable proof of
payment thereof. For purposes of this Paragraph 3(e), the term Independent
Manager shall include the party that employs the natural person who serves as
the Independent Manager and any affiliates of such employing party.
4. RESTRICTIONS ON USE.
(a) NO INTERFERENCE OR WASTE. Tenant shall not do or
permit anything to be done in or about the Premises which will obstruct, or
materially or unreasonably interfere with, the rights of other tenants or
occupants of the Project, or injure or annoy them, nor use or allow the Premises
or Building to be used for any unlawful purpose, nor shall Tenant cause or
maintain or permit any nuisance in, on or about the Premises, Building or
Project. Tenant shall not commit or suffer the commission of any waste in, on or
about the Premises or Building.
(b) USE OF COURTYARD. From and after any
Reinstatement or Occupancy, Tenant shall have the right to use the courtyard
areas of the Project Common Areas for Tenant's social and/or business functions
with no additional rent for such use payable by Tenant, on the terms and
conditions set forth in this Paragraph 4(b). Tenant shall deliver written notice
to Landlord requesting to reserve particular space in the Project Common Areas
for such functions at least five (5) days, and no earlier than thirty (30) days,
prior to such proposed function. Landlord may
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grant similar rights to other tenants and occupants of the Project, and Tenant's
rights under this paragraph shall be subject to the rights of such other tenants
and occupants and any reasonable, non-discriminatory system Landlord
incorporates to address conflicting reservations of the same space by more than
one tenant or occupant of the Project. Tenant's use of the courtyard areas
pursuant to this paragraph shall be on the following terms and conditions: (i)
Tenant may conduct up to twelve (12) such functions within any calendar year;
(ii) such functions shall be limited to a reasonable number of people consistent
with applicable fire, health and safety laws, and shall comply with any
applicable requirements of the DDA, REA, CC&Rs and/or other Encumbrances; (iii)
the insurance, indemnity and nonliability obligations and provisions contained
herein and in the Rules and Regulations, respectively (including Tenant's
obligations to carry liquor law liability insurance if alcoholic beverages are
served or consumed during such functions), shall apply to and govern any claims,
liabilities, costs or expenses arising from any such function, (iv) no such
proposed functions shall, in Landlord's reasonable determination, unreasonably
disrupt either other tenants of the Project, or the operation or maintenance of
the Common Areas, (v) Tenant shall comply with the obligations of the Rules and
Regulations of Exhibit "D" attached hereto relating to such use, and (v) Tenant
shall pay any and all of Landlord's reasonable costs of preparation for,
supervision of and/or clean-up in connection with, such functions.
5. COMPLIANCE WITH LAWS.
(a) TENANT'S COMPLIANCE OBLIGATIONS. Tenant shall not
use the Project or permit anything to be done in or about the Project which will
in any way conflict with any present and future laws, statutes, ordinances,
resolutions, regulations, proclamations, orders or decrees of any municipal,
county, state or federal government or other governmental or regulatory
authority with jurisdiction over the Project, or any portion thereof, whether
currently in effect or adopted in the future and whether or not in the
contemplation of the parties hereto (collectively, "Laws"). After any
Reinstatement or Occupancy, Tenant shall promptly, at its sole expense, maintain
the Premises and the Building in strict compliance at all times with all Laws;
provided that after a partial Occupancy, Tenant's maintenance obligations shall
only apply with respect to the portion of the Premises and Building so Occupied.
Tenant shall at all times promptly, at its sole expense, maintain any
Alterations (as defined in Paragraph 6 below) permitted hereunder and Tenant's
use and operations on and in the Premises and Building in strict compliance at
all times with all Laws. "Laws" shall include, without limitation, all Laws
relating to health and safety (including, without limitation, the California
Occupational Safety and Health Act of 1973 and the California Safe Drinking
Water and Toxic Enforcement Act of 1986, including posting and delivery of
notices required by such Laws with respect to the Premises), disabled
accessibility (including, without limitation, the Americans with Disabilities
Act, 42 U.S.C. section 12101 et seq.), Hazardous Substances, and all present and
future life safety, fire, sprinkler, seismic retrofit, transportation demand
management plan, building code and municipal code requirements; provided
however, that Tenant's obligation to comply with Laws relating to Hazardous
Substances is subject to the terms and conditions of Paragraph 39, and Tenant
shall not be responsible for compliance with clean-up provisions of any Laws
with respect to Hazardous Substances except to the extent of any release caused
by the Tenant or any of its servants, employees, contractors, agents, licensees
or invitees (collectively, including Tenant, the "Tenant Parties") or otherwise
included in Tenant's indemnity contained in Paragraph 39. Notwithstanding the
foregoing, Landlord, and not Tenant, shall be responsible for correcting any
condition with respect to the Project Common Area, or the exterior or structural
portions of the Building (but not with respect to the interior of the Building
following a Reinstatement, or the portions of the Building Occupied following an
Occupancy), or the interior of the Building prior to Reinstatement or Occupancy
which is in violation of applicable Laws (subject to Tenant's obligation, after
any Reinstatement or Occupancy, to pay such costs, to the extent they are
properly included as Expenses under Paragraph 3(c)(i)(E)), except (subject to
Paragraph 11 hereof) to the extent such condition is caused by the negligent or
intentional acts or omissions of the Tenant Parties, or such violation results
from Tenant's particular use of the Premises or Building, or such condition is
caused by, or will be or has been altered in connection with, the installation
of any Alterations. Tenant shall be responsible for compliance of any
Alterations with all Laws. Notwithstanding the first three sentences of this
Paragraph 5(a), Tenant shall have no obligation to cause the Premises or the
Building to comply with Laws (including, but not limited to, Laws which may be
adopted or amended following the Commencement Date) , unless and until a
Reinstatement or Occupancy occurs, and in no event shall Tenant be required to
make any structural alterations to the Premises or Building in order to comply
with Laws, unless in either case the requirement that such alterations be made
is triggered by any of the following (or, if such requirement results from the
cumulative effect of any of the following when added to other negligent or
intentional acts, omissions or events attributable to the Tenant Parties, to the
extent such alterations are required by any of the following): (i) the
installation, use or operation of any Alterations, or any of Tenant's trade
fixtures or
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personal property; (ii) the negligent or intentional acts or omissions of any of
the Tenant Parties; or (iii) the particular use or particular occupancy or
manner of use or occupancy of the Premises or Building by the Tenant Parties.
Any alterations that are Tenant's responsibility pursuant to this Paragraph 5
shall be made in accordance with Paragraph 6 below, at Tenant's sole cost. The
parties acknowledge and agree that Tenant's obligation to comply with all Laws
as provided in this paragraph (subject to the limitations contained herein) is a
material part of the bargained-for consideration under this Lease. Tenant's
obligations under this Paragraph and under Paragraph 7(c) below shall include,
without limitation, but subject to the limitations contained in this Paragraph
5(a), the responsibility of Tenant, to make substantial or structural repairs
and alterations to the Building and Premises to the extent provided above,
regardless of, among other factors, the relationship of the cost of curative
action to the Rent under this Lease, the length of the then remaining Term
hereof, the relative benefit of the repairs to Tenant or Landlord, the degree to
which the curative action may interfere with Tenant's use or enjoyment of the
Premises, and the likelihood that the parties contemplated the particular Law
involved.
(b) TRAFFIC MITIGATION. As a condition to approval of
the Project, the City and/or other governmental agencies or quasi-governmental
agencies will require the implementation of a transportation demand management
plan and/or one or more similar programs to reduce the traffic generated by the
Project and to facilitate the use of public transportation (any such program, a
"TDM"). A TDM may apply to (and measure required alternative transportation use
based on) the Project as a whole, or be based on each building included in the
Project, or be based on the Premises occupied by each or certain tenant(s) in
the Project. Tenant hereby agrees that, following a Reinstatement or Occupancy,
it will designate one of its employees to act as a liaison with Landlord or with
the City or other entity enforcing the TDM, as appropriate, to facilitate and
coordinate any TDM. Commencing upon a Reinstatement or Occupancy and thereafter
throughout the term of this Lease, Tenant shall comply with the requirements of
any TDM that applies in whole or in part to the Premises, at Tenant's cost with
respect to both compliance costs and any penalties resulting from Tenant's
failure to comply with program requirements. If any TDM applies to the Project
as a whole, or to a portion of the Project that includes more than the Premises,
(i) Tenant shall pay as Expenses the Tenant's Share of the Building Share of any
compliance costs with respect to such TDM, and (ii) Tenant shall pay Landlord on
demand, as an Additional Charge, any penalties that are imposed under any such
TDM to the extent such penalties result from Tenant's failure to comply,
following Reinstatement or Occupancy, with the requirements of such TDM,
including, without limitation, by failure to timely comply with any reporting
requirements or by failure of Tenant to meet any thresholds or other standards
imposed by such TDM with respect to traffic, public transportation or other
similar matters included in such TDM. If any TDM is imposed that applies only to
Tenant or only to the Premises, Tenant shall be solely responsible, effective
upon Reinstatement or Occupancy and thereafter throughout the Term, for
compliance with such TDM, including, without limitation, by satisfying any
survey or reporting requirements thereunder directly to the entity enforcing
such TDM, and by paying any penalties or costs imposed thereunder directly to
the entity enforcing such TDM, and Tenant shall indemnify, defend and hold
harmless Landlord against any claims, suits, costs (including reasonable
attorneys' fees), damage, liability, and losses, whether foreseeable or
unforeseeable, resulting from Tenant's failure, following Reinstatement or
Occupancy, to comply with, or Tenant's violation, following Reinstatement or
Occupancy, of, any such TDM that applies solely to Tenant or the Premises.
(c) INSURANCE REQUIREMENTS. Tenant shall not do or
permit anything to be done in or about the Premises or Building or bring or keep
anything therein which will in any way increase the rate of any insurance upon
the Project or any of its contents (unless Tenant agrees to pay for such
increase) or cause a cancellation of any insurance on the Project or otherwise
violate any requirements, guidelines, conditions, rules or orders with respect
to such insurance (except that notwithstanding the foregoing or the requirements
of, or the effect on, any insurance, Tenant shall not be required to occupy the
Premises or Building, or any portion thereof, prior to any Reinstatement or
Occupancy). Following a Reinstatement or Occupancy, Tenant shall at its sole
cost and expense promptly comply with the requirements of the Insurance Services
Office (ISO), board of fire underwriters, or other similar body now or hereafter
constituted relating to or affecting Tenant's use or occupancy of the Project
(other than in situations where compliance involves repair, maintenance or
replacement of items that Landlord is expressly required to repair, maintain or
replace under this Lease).
(d) NO LIMITATION ON OBLIGATIONS. The provisions of
this Paragraph 5 shall in no way limit Tenant's maintenance, repair and
replacement obligations under Paragraph 7 or Tenant's obligation to pay Expenses
under Paragraph 3(c) following a Reinstatement or Occupancy. The judgment of any
court of competent jurisdiction
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or the admission of Tenant in an action against Tenant, whether Landlord is a
party thereto or not, that Tenant has so violated any such Law shall be
conclusive of such violation as between Landlord and Tenant.
6. ALTERATIONS.
(a) LANDLORD CONSENT. Tenant shall not make or suffer
to be made any additional alterations, additions or improvements (such
alterations, additions or improvements that are made after the Commencement Date
by or on behalf of Tenant are herein referred to individually as an
"Alteration," and collectively as the "Alterations", provided that no portion of
the "HFC Work" (as defined in the Amendment to Work Letters by and between
Landlord and Tenant dated as of the date hereof) shall be deemed an
"Alteration") in, on or to the Premises or the Building or any part thereof
without the prior written consent of Landlord. Tenant's request for approval of
any such proposed Alterations shall be accompanied by a full set of complete
plans and specifications for such proposed Alterations for Landlord's review. If
Landlord fails to approve or disapprove any proposed Alterations within ten (10)
business days after receipt of Tenant's written request for approval, Tenant
shall deliver to Landlord a second request for Landlord's consent to such
Alterations, and failure of Landlord to give its disapproval within five (5)
business days after receipt of Tenant's second written request for approval
shall constitute approval by Landlord of such Alterations so long as Tenant's
request includes the following statement in capitalized and boldfaced letters:
BY FAILING TO RESPOND TO THIS REQUEST, YOU WILL BE DEEMED TO HAVE APPROVED THE
ALTERATIONS DESCRIBED HEREIN. Alterations in, on or to the Premises or the
Building, except for Tenant's trade fixtures and movable furniture and
equipment, shall be the property of Tenant during the Term and shall become
Landlord's property at the end of the Term without compensation to Tenant.
Landlord shall exercise good faith business judgment in reviewing any request by
Tenant for Landlord's consent to Alterations, and shall not unreasonably
withhold or delay its consent to Alterations that (i) do not materially affect
the structure of the Building or the Parking Garage or their respective
electrical, plumbing, HVAC, security or other systems, (ii) are not visible from
the exterior of the Building and do not otherwise affect the exterior appearance
of the Building, (iii) are consistent with Tenant's Permitted Use hereunder;
(iv) do not require any application to a political jurisdiction for rezoning,
general plan amendment, variance, conditional use permit or architectural review
approval, (v) will not interfere with the use and occupancy of any other portion
of the Project by Landlord or by any other tenants or occupants or their
invitees, or by any other party with the right to use any portion of the
Project, (vi) comply with the Parking REA, the Initial CC&Rs, any other CC&Rs,
any other Encumbrances, and any Mortgages, and (vii) do not adversely affect the
value or marketability of Landlord's reversionary interest in the Premises and
the Building upon termination or expiration of this Lease.
(b) PERMITTED ALTERATIONS. Notwithstanding Paragraph
6(a), after a Reinstatement Tenant may make Alterations to the Building (or the
portion of the Building as to which a Reinstatement has occurred) without
Landlord's prior consent so long as (x) such Alterations comply with items (i)
through (vii) in Paragraph 6(a), and (y) the cost of each such Alteration (or
group of Alterations, if occurring substantially at the same time and as part of
a single project) does not exceed One Hundred Thousand Dollars ($100,000) (any
such Alterations being defined herein as "Permitted Alterations"). Tenant shall
be required to notify Landlord in writing before making any Permitted
Alterations and within thirty (30) days after completion of such Permitted
Alterations, and at Landlord's request shall provide Landlord with accurate
as-built drawings of any Permitted Alterations.
(c) CONSTRUCTION OF ALTERATIONS. Any Alterations
consented to by Landlord pursuant to Paragraph 6(a), and any Permitted
Alterations, shall be made by Tenant, at Tenant's sole cost and expense, in
accordance with plans and specifications reasonably approved by Landlord, and
any contractor or person selected by Tenant to make the same must first be
reasonably approved in writing by Landlord. With respect to any Alterations
requested by Tenant that affect the structure of the Building, the Building
Systems, the Parking Garage or any other portion of the Project outside the
Premises, at Landlord's option the Alterations shall be made by Landlord, or by
a contractor specified by Landlord, for Tenant's account and Tenant shall
reimburse Landlord for actual third-party costs incurred by Landlord in
connection therewith as an Additional Charge, within twenty (20) days after
receipt of a statement from Landlord therefor.
(d) LANDLORD REVIEW. Tenant shall reimburse Landlord
upon demand for any reasonable out-of-pocket expenses incurred by Landlord in
the review of any Alterations made by Tenant, including fees charged by
Landlord's contractors or consultants to review plans and specifications, and
such obligation shall be an Additional Charge. Landlord's consent to any
Alterations shall not obligate Landlord to repair, maintain, insure or otherwise
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assume any responsibility or liability with respect to any such Alteration. In
addition, notwithstanding Landlord's review, Tenant and not Landlord shall be
responsible for compliance of the Alterations, and plans and specifications
therefor, with all applicable Laws, and Landlord shall not be responsible for
any omissions or errors therein.
(e) REMOVAL OF ALTERATIONS. Upon the expiration or
sooner termination of the Term, Tenant shall upon demand by Landlord do either
of the following, at Landlord's sole election: (i) at Tenant's sole cost and
expense, forthwith and with all due diligence remove any Alterations made by or
for the account of Tenant, designated by Landlord to be removed (provided,
however, that upon the written request of Tenant prior to installation of such
Alterations, Landlord shall advise Tenant at that time whether or not such
specific Alterations must be removed upon the expiration or sooner termination
of this Lease, and to the extent Landlord has so agreed to allow any specific
Alterations to remain in the Building, Tenant shall not be obligated to remove
such Alterations or to pay Landlord the cost of removal of such Alterations
pursuant to this Paragraph 6(e)), and restore the Premises and the Building to
substantially its original condition as of the Commencement Date, subject to
normal wear and tear and the rights and obligations of Tenant concerning
casualty damage pursuant to Paragraph 20, or (ii) pay Landlord the reasonable
estimated cost thereof. Landlord and Tenant acknowledge that as of the date
hereof, there are no alterations, additions or improvements to the Building or
Premises which Tenant is obligated to remove (or pay the cost to remove) upon
the expiration or sooner termination of this Lease.
(f) FIXTURES. All wiring, conduit and fiberoptic
cabling and similar infrastructure related to telephone, telecommunications, or
similar communications systems, and all other wiring, circuit breakers,
transformers, cabling, plumbing, heating and sprinkling systems, fixtures and
outlets, vaults, paneling, molding, shelving, radiator enclosures, flooring,
HVAC equipment and HVAC ducts, shall be deemed to be real estate fixtures and
shall be surrendered to Landlord along with the Building upon expiration or
earlier termination of this Lease, whether or not attached to or built into the
Building. Any trade fixtures, furniture and trade equipment installed by the
Tenant which may be removed from the Building without injury thereto (including,
without limitation, demountable partitions, refrigerators and other kitchen
appliances, computer racking and similar demountable fixtures) (collectively,
"Trade Fixtures") shall remain the property of the Tenant and shall be removed
by the Tenant, at the Tenant's sole cost and expense, from the Building prior to
the expiration, or promptly upon any earlier termination, of this Lease.
7. REPAIR AND MAINTENANCE.
(a) LANDLORD'S OBLIGATIONS. Landlord shall maintain,
repair and replace, to the extent necessary to maintain the Building and Project
in good operating order and first-class condition, the following:
(i) Landlord shall maintain, repair and
replace, at its sole cost and expense, except as provided in Paragraph
7(c), (A) the exterior, roof structure and membrane, and structural
portions of the Building (including load bearing walls and
foundations), and (B) the building systems serving the Building for
electrical, mechanical, HVAC and plumbing and all controls appurtenant
thereto, and any elevators in the Building (collectively, including
elevators, "Building Systems").
(ii) Landlord shall maintain, repair and
replace the parking areas, courtyards, sidewalks, entryways, lawns,
fountains, landscaping and other similar facilities located in the
Project Common Area, including, without limitation, such maintenance,
repair and replacement with respect to the Project Common Area as may
be expressly required by the terms and conditions of the DDA, the
Parking REA and/or the CC&Rs.
(iii) Prior to the occurrence of a
Reinstatement or Occupancy, Landlord shall have the right, at its sole
option, to maintain and repair the interior and non-structural portions
of the Building, at no cost to Tenant.
From and after any Reinstatement or Occupancy, Tenant's Share of all costs
incurred by Landlord in connection with the foregoing obligations shall be
payable by Tenant as Additional Charges in accordance with Paragraph 3(c) to the
extent they are properly included in Expenses thereunder. Landlord shall use
commercially reasonable efforts to minimize any material interference with
Tenant's business conducted at the Premises resulting from the performance of
Landlord's obligations under this Paragraph 7(a). Landlord's obligations under
this Paragraph 7(a)
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with respect to any particular repair, replacement or maintenance requirement,
shall not commence until Tenant notifies Landlord in writing of any
circumstances which Tenant believes may trigger Landlord's obligations. If
Landlord fails after thirty (30) days' written notice by Tenant (or such lesser
period as may be reasonable if such failure materially interferes with Tenant's
use or occupancy of the Premises or threatens material damage to Tenant's
property or material harm to Tenant's employees, even if such shorter period of
time is less than the cure period provided in Paragraph 19(c) before such
failure would be a "default" by Landlord under this Lease) to proceed with due
diligence to make repairs required to be made by Landlord under this Paragraph
7(a), the same may be made by Tenant at the expense of Landlord, so long as
Tenant first provides Landlord with an additional notice and an additional five
(5) business days (or, in the event of an emergency that threatens material
damage to Tenant's property or material harm to Tenant's employees, one (1)
business day) to either (i) dispute Landlord's obligation and submit such
dispute to arbitration pursuant to Paragraph 44, (ii) commence cure, or (iii) by
written notice to Tenant within such five (5) business day period after receipt
of such notice, designate the contractor Tenant shall use in connection with any
such repair by Tenant in which event Tenant shall only make such repairs using
such designated contractor. If Landlord fails to dispute such obligation,
commence cure or to so designate a contractor, Tenant may proceed with an
experienced, duly licensed and adequately insured contractor selected by Tenant.
Any expenses incurred by Tenant in connection with the preceding sentence shall
be reimbursed (with interest at the rate of 8.5% from the date on which Tenant
incurs such costs) within thirty (30) days after submission of a bill or
statement therefor to Landlord. Tenant shall have no right to offset any such
amounts against Rent hereunder. If Landlord disputes Tenant's right to cure
Landlord's default or the reasonableness of the costs incurred by Tenant,
Landlord shall submit such dispute to binding arbitration pursuant to Paragraph
44 below within thirty (30) business days after Tenant's demand. If Landlord
fails to either reimburse Tenant or dispute Tenant's demand pursuant to the
previous sentence within thirty (30) business days after Tenant's demand, Tenant
may submit such dispute to binding arbitration pursuant to Paragraph 44.
(b) TENANT'S OBLIGATIONS. At Tenant's sole cost and
expense, Tenant shall maintain, repair and replace the Alterations, to the
extent necessary to maintain such Alterations in good operating order and
first-class condition, and Tenant shall be responsible for the expense of
installation, operation, and maintenance of any telephone and other
communications cabling it elects to install following the Commencement Date from
the public right-of-way to the point of entry into the Building and throughout
the Premises; although Landlord shall have the right, at Landlord's sole
election, to perform such work on behalf of Tenant in Common Areas, provided
Landlord performs such work in coordination with Tenant and its contractors in
such a manner as will accommodate Tenant's reasonable objectives with respect
thereto. Commencing upon Occupancy (and then only with respect to portions of
the Building so Occupied) or a Reinstatement, and thereafter throughout the term
of this Lease, Tenant shall maintain, repair and replace, to the extent
necessary to maintain the Building (or the portion thereof as to which
Reinstatement or Occupancy has occurred) in good operating order and first-class
condition, at its sole cost and expense, all portions of the Premises and
Building (or the portion thereof as to which Reinstatement or Occupancy has
occurred) which are not Landlord's obligations under Paragraph 7(a), including,
without limitation, the interior portion of the Building (or the portion thereof
as to which Reinstatement or Occupancy has occurred), but excluding, following
any partial termination, the Surrendered Premises. Subject to the limitations
contained in the previous sentence, the Building shall at all times be
maintained by Tenant in the condition of a first-class office building. Tenant's
obligations under this Paragraph 7 include, without limitation, the replacement,
at Tenant's sole cost and expense, of any portions of the Premises or Building
which are not Landlord's express responsibility under Paragraph 7(a), if it
would be commercially prudent to replace, rather than repair, such portions of
the Premises or Building, regardless of whether such replacement would be
considered a capital expenditure. Tenant hereby waives and releases its right to
make repairs at Landlord's expense under Sections 1941 and 1942 of the
California Civil Code or under any similar law, statute or ordinance now or
hereafter in effect. In addition, Tenant hereby waives and releases its right to
terminate this Lease under Section 1932(1) of the California Civil Code or under
any similar law, statute or ordinance now or hereafter in effect.
(c) ADDITIONAL OBLIGATIONS OF TENANT. The purpose of
Paragraph 7(a) and 7(b) is to define the obligations of Landlord and Tenant to
perform various repair and maintenance functions; the allocation of the costs
therefor are covered under this Paragraph 7(c) and Paragraph 3. Prior to
Reinstatement or Occupancy, Landlord shall bear the full cost of repairs and
maintenance to the Building (except for Alterations and matters described in the
following sentence, which shall be Tenant's responsibility). At all times,
Tenant shall bear the full cost of repairs or maintenance, interior or exterior,
structural or otherwise, to preserve the Premises and the Building in good
working order and first-class condition, arising out of (i) the existence,
installation, use or operation of any
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Alterations, or any of Tenant's Trade Fixtures or personal property; (ii) the
moving of Tenant's property or fixtures in or out of the Building or Project or
in and about the Premises or Building; (iii) the particular use or particular
occupancy or manner of use or occupancy of the Premises or Building by any
Tenant Party; or (iv) except to the extent any claims arising from any of the
foregoing are reimbursed by insurance carried by Landlord, are covered by the
waiver of subrogation in Paragraph 11 or are otherwise provided for in Paragraph
20, the acts, omissions or negligence of any Tenant Parties. In addition, with
respect to Landlord's obligations regarding the Building Systems, (x) the cost
of any replacement of any portion of the Building Systems which occurs prior to
Reinstatement or Occupancy shall be amortized in accordance with Paragraph
3(c)(i)(E)(v) and the portion of such amortization that is attributable to the
period of time after Reinstatement or Occupancy shall be payable by Tenant as an
Expense in the same manner as other capital expenditures, (y) Tenant's Share of
the entire cost of any replacement of any portion of the Building Systems which
occurs after Reinstatement but prior to the fifteenth anniversary of the
Commencement Date shall be due and payable by Tenant upon Landlord's demand, and
(z) Tenant's Share of the cost of any replacement of any portion of the Building
Systems which occurs at any time after the fifteenth anniversary of the
Commencement Date and which would be considered a capital expenditure shall be
amortized in accordance with Paragraph 3(c)(i)(E)(v) and payable by Tenant as an
Expense.
(d) [INTENTIONALLY DELETED]
(e) [INTENTIONALLY DELETED]
(f) NO ABATEMENT. Except to the extent any claims
arising from any of the foregoing are reimbursed by rental abatement insurance
proceeds actually received by Landlord and/or any Mortgagee, are covered by the
waiver of subrogation in Paragraph 11 or are otherwise provided for in Paragraph
20, there shall be no abatement of Rent with respect to, and except for
Landlord's active negligence or willful misconduct Landlord shall not be liable
for, any injury to or interference with Tenant's business arising from, any
repairs, maintenance, alteration or improvement in or to any portion of the
Project, including the Premises or Building, or in or to the fixtures,
appurtenances and equipment therein.
8. LIENS. Tenant shall keep the Premises, Building and Project
free from any liens arising out of any work performed, material furnished or
obligations incurred by Tenant prior to the Commencement Date (other than liens
by Devcon Construction Incorporated ("Devcon") or any subcontractor to Devcon),
and following the Commencement Date (excluding, however, the HFC Work as defined
in the Amendment to Work Letters). In the event that Tenant shall not, within
ten (10) days following the earlier of receipt by Tenant of notice from Landlord
of any such lien, or Tenant's actual prior knowledge of any such lien, cause the
same to be released of record by payment or posting of a proper bond, Landlord
shall have, in addition to all other remedies provided herein and by law, the
right, but not the obligation, to cause the same to be released by such means as
it shall deem proper, including without limitation by the payment of the claim
giving rise to such lien or by the posting of a bond. All sums paid by Landlord
to bond or satisfy such claims, following Tenant's failure to bond or pay such
claims as required herein, and all expenses incurred by Landlord in connection
therewith, shall be considered Additional Charges and shall be payable to
Landlord by Tenant on demand with interest from the date incurred by Landlord at
the Default Rate. Landlord shall have the right at all times to post and keep
posted on the Premises any notices permitted or required by law, or which
Landlord shall deem proper, for the protection of Landlord, the Premises, the
Project and any other party having an interest therein, from mechanics' and
materialmen's liens, and Tenant shall give written notice to Landlord at least
fifteen (15) business days' prior to commencement of any construction by or on
behalf of Tenant (other than HFC Work) on the Premises or Building.
9. ASSIGNMENT AND SUBLETTING.
(a) LANDLORD'S CONSENT REQUIRED.
(i) Prior to any Reinstatement, and/or
with respect to any portions of the Premises not subject to
Reinstatement, Tenant shall not directly or indirectly, voluntarily or
by operation of law, sell, assign, encumber, pledge or otherwise
transfer or hypothecate all or any part of the Premises or the Building
or Tenant's leasehold estate hereunder (the foregoing, including
without limitation any mortgage, encumbrance or pledge of Tenant's
leasehold estate hereunder and/or Tenant's interest in the Building,
collectively, "Assignment"), or permit the Premises or the Building to
be occupied by anyone other than
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Tenant or sublet the Premises or lease the Building or any portion
thereof (the foregoing, including without limitation any license or use
agreement, any sub-sublease or subsequent subletting by any subtenant,
sub-subtenant or other occupant of any portion of the Premises, and
similar occupancy rights, collectively, "Sublease"), without Landlord's
prior written consent in each instance, which consent may be granted or
withheld in Landlord's sole and absolute discretion. Any such
Assignment or Subletting shall be defined collectively herein as a
"Transfer".
(ii) From and after any Reinstatement,
and only with respect to those portions of the Premises and Building as
to which a Reinstatement has occurred, except as otherwise provided in
this Paragraph 9, Tenant shall not Transfer all or any portion of the
Premises or Building without Landlord's prior written consent in each
instance, which consent shall not be unreasonably withheld. Without
otherwise limiting the criteria upon which Landlord may withhold its
consent to any proposed Transfer after Reinstatement, if Landlord
withholds its consent where either (i) the creditworthiness of the
proposed Sublessee or Assignee is not acceptable to Landlord, in
Landlord's reasonable discretion, or to any Mortgagee, or (ii) the
proposed Sublessee's or Assignee's use of the Premises is not in
compliance with the Permitted Use as described in the Basic Lease
Information, such withholding of consent shall be presumptively
reasonable. If Landlord consents to the proposed Transfer, Tenant may
thereafter enter into a valid Sublease or Assignment upon the terms and
conditions set forth in this Paragraph 9.
(b) REQUEST FOR CONSENT. If Tenant desires at any
time to enter into a Transfer for which Landlord's consent is required, it shall
first give written notice to Landlord of its desire to do so, which notice shall
contain (i) the name of the proposed assignee, subtenant or occupant; (ii) the
name of the proposed assignee's, subtenant's, or occupant's business to be
carried on in the Premises; (iii) the terms and provisions of the proposed
Transfer; and (iv) such financial information as Landlord may reasonably request
concerning the proposed assignee, subtenant or occupant. In any Sublease
undertaken by Tenant that is not subject to Landlord's termination right
pursuant to Paragraph 9(c) (including, without limitation, any Sublease entered
into after delivery of an Availability Notice), Tenant shall use commercially
reasonable efforts to obtain not less than fair market rent for the space so
sublet (taking into account among other relevant factors the effect, if any,
that the existence or lack of a recognition and/or non-disturbance agreement
from Landlord, as the case may be, would have on the fair market rent for such
Sublease), and Landlord may consider such market factors in its determination of
whether to consent to such proposed Sublease. Any improvements, additions, or
alterations to the Building or the Project that are required by applicable Laws
or are deemed necessary or appropriate by Landlord, in Landlord's reasonable
judgment, as a result of any such Sublease or Assignment, shall be installed and
provided by Tenant (or, at Landlord's sole option, by Landlord but at Tenant's
expense), without cost or expense to Landlord, and without effect on the Bonus
Rent received by Landlord except to the extent provided in Paragraph 9(f)(2),
and Landlord may condition its consent to any proposed Sublease or Assignment on
the construction of improvements required by applicable Laws or deemed necessary
or appropriate by Landlord in its reasonable discretion, by reason of the
Sublease or Assignment.
(c) LANDLORD'S RESPONSE. At any time within fifteen
(15) days after Landlord's receipt of the notice specified in Paragraph 9(b),
Landlord may by written notice to Tenant elect to (i) consent to the proposed
Transfer; or (ii) disapprove the proposed Transfer. In addition, Landlord may
elect, by delivering written notice to Tenant within such fifteen (15) day
period, to terminate this Lease as to the portion of the Premises that is
specified in such notice, with a proportionate abatement in Monthly Base Rent
and Additional Charges for Expenses and Taxes, if such notice is with respect to
(x) any proposed Assignment, except in conjunction with a Permitted Transfer
occurring after Reinstatement, or (y) any proposed Sublease and either (I)
Reinstatement has not occurred, or (II) the term of the Sublease commences on or
after the commencement of the Initial Extension Term and after giving effect to
such Sublease the original Tenant will occupy less than fifty percent (50%) of
the Rentable Area of the Building, or (III) such Sublease has a term (including
any renewal or extension options) that either is coterminous with the Initial
Term (or any Extension Term(s) if the Exercise Notice for such Extension Term(s)
has been delivered prior to the commencement of such Sublease) or expires within
the last eighteen (18) months of the Initial Term (or any Extension Term(s) if
the Exercise Notice for such Extension Term(s) has been delivered prior to the
commencement of such Sublease). Failure by Landlord to either consent to or
disapprove a proposed Assignment or Sublease within the fifteen (15) day time
period specified above shall be deemed to be Landlord's disapproval thereof.
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(d) RECAPTURE. If Landlord elects to terminate the
Lease as to a portion of the Premises pursuant to Paragraph 9(c) (such
termination being defined as a "Recapture"), the terms and conditions set forth
in Paragraph 45(d) shall apply.
(e) AVAILABILITY NOTICE. Tenant shall notify Landlord
in writing if Tenant wishes to Assign or Sublease any portion of the Premises,
prior to commencing negotiations for an Assignment or Sublease with another
party, if such Assignment or Sublease would be subject to Landlord's termination
right provided in Paragraph 9(c) or occurs prior to a Reinstatement (such notice
being the "Availability Notice"), and Landlord shall have the option, by written
notice to Tenant within fifteen (15) days after receiving any Availability
Notice, to terminate this Lease with respect to a portion of the Premises that
is allocable to the portion of the Building specified in the Availability Notice
(as such allocation is determined pursuant to Paragraph 45(d)) in accordance
with Paragraph 9(c) and (d). If Landlord declines or fails timely to elect to
terminate this Lease as to such allocable portion of the Premises, Tenant shall
have the right, within one hundred twenty (120) days after the expiration of
such fifteen (15) day period, to enter into an Assignment or Sublease with
respect to the portion of the Building designated in the Availability Notice,
subject to Landlord's consent and the other provisions of this Paragraph 9
(including, without limitation, the provisions with respect to payment of
Landlord's Share of Bonus Rent pursuant to Paragraph 9(f)), except that Landlord
shall not have the further right to terminate with respect to such Assignment or
Sublease. If Tenant fails to enter into an Assignment or Sublease within such
one hundred twenty (120) day period, or upon expiration of any Sublease entered
into within such one hundred twenty (120) day period, Landlord's rights under
this Paragraph 9 to terminate the Lease with respect to the allocable portion of
the Premises upon any future proposed Sublease or Assignment shall revive.
(f) BONUS RENT. If Landlord consents to the Sublease
or Assignment within fifteen (15) days after receipt of Tenant's notice pursuant
to Paragraph 9(b), Tenant may thereafter within one hundred twenty (120) days
after Landlord's consent, but not later than the expiration of said one hundred
twenty (120) days, enter into such Assignment or Sublease of the Premises or
portion thereof upon the terms and conditions set forth in the notice furnished
by Tenant to Landlord pursuant to Paragraph 9(b). However, Tenant shall pay to
Landlord seventy percent (70%) of the "Bonus Rent" (as defined below)
attributable to such Sublease or Assignment. Tenant shall pay Bonus Rent to
Landlord as and when it is received by Tenant, regardless of the time period to
which it is attributable. "Bonus Rent" shall mean any rent or other
consideration realized by Tenant under any and all Subleases and/or Assignments
that is in excess of the Monthly Base Rent (or, during the portion of the
Initial Term which follows Reinstatement, the Monthly Modified Rent) and
Additional Charges payable hereunder (or the amount thereof proportionate to the
portion of the Premises subject to such Sublease(s) and/or Assignment(s)), after
first deducting from such excess the following:
(i) the unamortized total cost of the
Building paid by Tenant pursuant to the Purchase Agreement plus any
Alterations made to the Building by Tenant and at Tenant's expense as
required by the Purchase Agreement, multiplied by a fraction, the
numerator of which is the rentable square feet included in the portion
of the Building subject to Sublease(s) and/or Assignment(s), and the
denominator of which is the Rentable Area of the entire Building, which
costs shall be amortized on a straight line basis (without interest)
over the period of time prescribed by the Internal Revenue Service in
equal monthly installments; and
(ii) costs reasonably incurred for
tenant improvements and/or alterations installed by Tenant
(commensurate with a standard office build-out, and including without
limitation any improvements, additions or alterations required by Laws
or by Landlord as provided in Paragraph 9(b)) to obtain the Sublease(s)
and/or Assignment(s), which costs shall not exceed ten dollars per
rentable square foot (adjusted by the increase from the Commencement
Date in the Consumer Price Index for the San Francisco Bay Area, All
Urban Consumers, All Items, San Francisco/Oakland/San Jose, California
(Base Years 1982-84=100) (the "CPI Increase")) of the portion of the
Building being sublet or assigned, and which costs shall be amortized
on a straight line basis (without interest) over the term of the
applicable Sublease or Assignment in equal monthly installments; and
(iii) any costs payable by Tenant to
Landlord pursuant to express provisions of this Lease in connection
with Landlord's review of Tenant's request for consent to such
Sublease(s) or Assignment(s), any reasonable legal fees and costs (up
to a maximum of $10,000, adjusted by the CPI
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Increase), and any customary brokers' commissions that Tenant has
incurred in connection with such Sublease or Assignment, all amortized
on a straight line basis (without interest) over the term of the
Sublease or Assignment in equal monthly installments.
(g) NO RELEASE OR DEEMED APPROVAL. No consent by
Landlord to any Assignment or Sublease by Tenant shall relieve Tenant of any
obligation to be performed by Tenant under this Lease, whether arising before or
after the Assignment or Sublease. The consent by Landlord to any Assignment or
Sublease shall not relieve Tenant from the obligation to obtain Landlord's
express written consent to any other Assignment or Sublease. Any Assignment or
Sublease that is not in compliance with this Paragraph 9 shall be void and, at
the option of Landlord, shall constitute a material Default by Tenant under this
Lease. The acceptance of Monthly Base Rent or Additional Charges by Landlord
from a proposed assignee or sublessee shall not constitute the consent to such
Assignment or Sublease by Landlord.
(h) REORGANIZATION; PERMITTED TRANSFERS. The
following shall be deemed a voluntary assignment of Tenant's interest in this
Lease: (i) any dissolution, merger, consolidation, or other reorganization of
Tenant; and (ii) the sale or transfer of more than fifty percent (50%) of the
membership interests in Tenant to a person or entity other than the existing
members of Tenant. Notwithstanding anything to the contrary contained in this
Paragraph 9, but only after a Reinstatement with respect to the entire Premises
(not including any Surrendered Premises (as defined in Paragraph 45)), Tenant
may enter into any of the following transfers (a "Permitted Transfer") without
Landlord's prior written consent: (1) Tenant may assign its interest in the
Lease to a corporation, partnership, professional corporation, limited liability
company, or limited liability partnership ("Transfer Entity") which results from
a stock sale, merger, consolidation or other reorganization, so long as the
surviving Transfer Entity has a net worth immediately following such transaction
that is equal to or greater than the net worth of Tenant as of the date
immediately prior to such transaction; and (2) Tenant may assign this Lease to a
Transfer Entity which purchases or otherwise acquires all or substantially all
of the assets of Tenant, so long as such acquiring Transfer Entity has a net
worth immediately following such transaction that is equal to or greater than
the net worth of Tenant as of the date immediately prior to such transaction.
(i) ASSUMPTION BY ASSIGNEE. Each assignee pursuant to
an Assignment as provided in this Paragraph 9 shall assume all obligations of
Tenant under this Lease that arise or accrue from and after the effective date
of such Assignment, and shall be and remain liable jointly and severally with
Tenant for the payment of Monthly Base Rent and Additional Charges, and for the
performance of all the terms, covenants, conditions and agreements herein
contained on Tenant's part to be performed for the Term. No Assignment shall be
binding on Landlord unless the assignee or Tenant shall deliver to Landlord a
counterpart of the Assignment and an instrument in recordable form that contains
a covenant of assumption by the assignee satisfactory in substance and form to
Landlord, consistent with the requirements of this Paragraph 9(i), but the
failure or refusal of the assignee to execute such instrument of assumption
shall not release or discharge the assignee from its liability as set forth
above. Notwithstanding anything to the contrary in this Lease, no Sublease shall
be binding on Landlord unless and until Landlord shall agree in writing
following termination of this Lease to recognize such sublessee and such
sublessee agrees in writing to attorn to Landlord on the terms and conditions of
the sublease (including the obligations under this Lease to the extent that they
relate to the portion of the Premises subleased), and any Sublease entered into
by Tenant hereunder shall include an obligation by the sublessee to so attorn to
Landlord if Landlord, in Landlord's sole discretion, elects to recognize such
Sublease upon any termination of this Lease and agrees to not disturb
subtenant's rights or possession under the Sublease being recognized.
(j) AFFILIATE TRANSFERS. Notwithstanding anything to
the contrary contained in this Paragraph 9, but only after a Reinstatement with
respect to the entire Premises (not including any Surrendered Premises (as
defined in Paragraph 45)), Tenant shall have the right, without Landlord's
consent and without triggering Landlord's rights under Paragraph 9(c), (d) and
(f), but with written notice to Landlord at least ten (10) days prior thereto,
to enter into an Assignment of Tenant's interest in the Lease or a Sublease of
all or any portion of the Premises to an Affiliate (as defined below) of Tenant,
provided that (i) in connection with an Assignment that is not a Sublease, the
Affiliate delivers to Landlord concurrent with such Assignment a written notice
of the Assignment and an assumption agreement whereby the Affiliate assumes and
agrees to perform, observe and abide by the terms, conditions, obligations, and
provisions of this Lease arising from and after the effective date of the
assignment; and (ii) the assignee or sublessee remains an Affiliate throughout
the term of this Lease (and, in connection with an Assignment that is not a
Sublease, the assumption agreement shall contain provisions consistent with the
provisions
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of this subparagraph allowing Landlord to terminate this Lease at such time as
the entity is no longer an Affiliate of the original Tenant). If this Lease is
assigned or sublet to an Affiliate and thereafter any circumstance occurs which
causes such assignee or sublessee to no longer be an Affiliate of the assigning
or subleasing Tenant, Tenant shall give written notice thereof to Landlord,
which notice, to become effective, shall refer to Landlord's right to terminate
this Lease pursuant to this subparagraph, in the event of an Assignment, or to
cause Tenant to terminate the Sublease, in the event of a Sublease ("Affiliation
Termination Notice"). Following occurrence of the circumstance giving rise to
the discontinuation of such assignee or sublessee being an Affiliate ("Affiliate
Termination") of the assigning or subleasing Tenant, Landlord shall be entitled
to terminate this Lease in the event of an Assignment, or to cause Tenant to
terminate the Sublease in the event of a Sublease, unless Landlord has given its
prior written consent to such circumstance, which consent shall not be
unreasonably withheld by Landlord so long as, in the event of an Assignment,
such assignee (after giving effect to such circumstance) has financial strength
(as demonstrated by audited financial statements) equal to or greater than the
assigning or subleasing Tenant (including its net worth) as of the date of
execution of this Lease, or the assigning or subleasing Tenant executes a
guaranty in usual form reasonably acceptable to Landlord (however, this does not
imply that Tenant would be released without such guaranty). No Sublease or
Assignment by Tenant made pursuant to this Paragraph shall relieve Tenant of
Tenant's obligations under this Lease. As used in this paragraph, the term
"Affiliate" shall mean and collectively refer to a corporation or other entity
which controls, is controlled by or is under common control with Tenant, by
means of an ownership of either (aa) more than fifty percent (50%) of the
outstanding voting shares of stock or partnership or other ownership interests,
or (bb) stock, or partnership or other ownership interests, which provide the
right to control the operations, transactions and activities of the applicable
entity.
(k) PERMITTED SPACE SHARING. Landlord acknowledges
that Tenant's business in the Premises may require that certain project-specific
independent contractors ("Independent Contractors") of Tenant are located
on-site at the Building, which may involve the use by such Independent
Contractors and/or their employees of a portion of the Building, without payment
of rent, for temporary offices. Tenant shall have the right, without Landlord's
consent and without triggering Landlord's rights under Paragraphs 9(c),(d) or
(f), to allow use of portions of the Building as temporary offices by
Independent Contractors and their employees, so long as (I) such Independent
Contractors are not granted possessory rights to any portion of the Premises or
Building (whether as assignees, sublessees, licensees, or in any other capacity)
and do not pay rent; (II) Tenant causes such Independent Contractors, and
Independent Contractors' use of the Building to be conducted in a manner in
compliance with all of the terms and conditions of this Lease; (III) such
Independent Contractors and their employees are "Tenant's Agents" for purposes
of the indemnification, insurance and other provisions of this Lease; (IV)
Independent Contracts shall not use more than ten percent (10%) of the rentable
area of the Building collectively at any given time, (V) no Independent
Contractor shall be on-site in the Building for more than six consecutive
months, or for more than six months in any twelve month period; (VI) neither
Landlord nor Tenant shall install any demising walls or hard wall office
partitions in connection with any use of the Building by an Independent
Contractor; and (VII) such use shall be deemed "Occupancy" by Tenant.
10. INSURANCE AND INDEMNIFICATION.
(a) LANDLORD INDEMNITY. Landlord shall indemnify and
hold Tenant harmless from and defend Tenant against any and all claims or
liability for any injury or damage to any person or property including any
reasonable attorney's fees (but excluding any consequential damages or loss of
business) occurring in, on, or about the Project (i) prior to any Reinstatement
or Occupancy of any portion of the Premises by Tenant or any parties claiming
through Tenant (including, without limitation, any assignee, subtenant, or
Tenant Party), to the extent not covered by Tenant's applicable indemnification
obligations in Paragraph 10(c), except to the extent caused by the active
negligence or willful misconduct of Tenant Parties or Tenant's breach of this
Lease; and (ii) from and after any Reinstatement or Occupancy of any portion of
the Premises by Tenant or any parties claiming through Tenant (including,
without limitation, any assignee, subtenant, or Tenant Party), only to the
extent such injury or damage is caused by the active negligence or willful
misconduct of Landlord, its agents, servants, contractors or employees
(collectively, including Landlord, "Landlord Parties"), except to the extent
caused by the negligence or willful misconduct of Tenant Parties or Tenant's
breach of this Lease.
(b) TENANT RELEASE. Landlord shall not be liable to
Tenant, and Tenant hereby waives all claims against Landlord Parties, for any
injury or damage to any person or property in or about the Premises by or from
any cause whatsoever (other than the active negligence or willful misconduct of
Landlord Parties) that occurs from and
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after any Reinstatement or Occupancy of any portion of the Premises by Tenant or
any parties claiming through Tenant (including, without limitation, any
assignee, subtenant, or Tenant Party), and without limiting the generality of
the foregoing, whether caused by water leakage of any character from the roof,
walls, basement, or other portion of the Premises or the Building, or caused by
gas, fire, oil, electricity, or any cause whatsoever, in, on, or about the
Premises, the Project or any part thereof (other than that caused by the active
negligence or willful misconduct of Landlord Parties). Tenant acknowledges that
any casualty insurance carried by Landlord will not cover loss of income to
Tenant or damage to the Alterations in the Premises or Tenant's Trade Fixtures
or personal property located within the Premises (except as provided in
Paragraph 10(f) below). Tenant shall be required to maintain the insurance
described in Paragraph 10(d) below from and after any Reinstatement or Occupancy
of any portion of the Premises by Tenant or any parties claiming through Tenant
(including, without limitation, any assignee, subtenant, or Tenant Party) and
thereafter throughout the Term.
(c) TENANT INDEMNITY. Except to the extent caused by
the active negligence or willful misconduct of Landlord Parties, Tenant shall
indemnify and hold Landlord harmless from and defend Landlord against any and
all claims or liability for any injury or damage to any person or property
whatsoever: (i) occurring in or on the Premises from and after any Reinstatement
or Occupancy of any portion of the Premises by Tenant or any parties claiming
through Tenant (including, without limitation, any assignee, subtenant, or
Tenant Party); or (ii) occurring in, on, or about any other portion of the
Project to the extent such injury or damage is caused by the negligence or
willful misconduct of the Tenant Parties. Tenant further agrees to indemnify and
hold Landlord harmless from, and defend Landlord against, any and all claims,
losses, or liabilities (including damage to Landlord's property) arising from
(x) any breach of this Lease by Tenant, (y) any matter referred to in Paragraph
10(g), and/or (z) the conduct of any activities, work or business of Tenant
Parties in or about the Project, including, but not limited to any release,
discharge, storage or use of any Hazardous Substance. In the event of a
discrepancy between the terms of this paragraph and the terms of Paragraph 39 of
the Lease concerning Hazardous Substance liability, the latter shall control.
(d) TENANT INSURANCE REQUIREMENTS. Tenant shall
procure at its cost and expense and keep in effect from and after any
Reinstatement or Occupancy of any portion of the Premises by Tenant or any
parties claiming through Tenant (including, without limitation, any assignee,
subtenant, or Tenant Party) and thereafter throughout the Term the following
insurance:
(i) Commercial general liability
insurance on an occurrence form, including contractual liability, with
a minimum combined single limit of liability of Three Million Dollars
($3,000,000) per occurrence. Such insurance shall name Landlord, any
Mortgagee and lessor, and such other parties as Landlord may request as
additional insureds, shall specifically include the liability assumed
hereunder by Tenant, and shall provide that it is primary insurance,
and not excess over or contributory with any other valid, existing and
applicable insurance in force for or on behalf of Landlord, and shall
provide that Landlord shall receive thirty (30) days' written notice
from the insurer prior to any cancellation or change of coverage. The
limits of such insurance shall not limit the liability of Tenant
hereunder, and Tenant is responsible for ensuring that the amount of
liability insurance carried by Tenant is sufficient for Tenant's
purposes.
(ii) Business interruption insurance,
insuring Tenant for a period of twelve (12) months against losses
arising from the interruption of Tenant's business, and for lost
profits, and charges and expenses which continue but would have been
earned if the business had gone on without interruption, insuring
against such perils, in such form and with such deductible amounts as
are commercially reasonable;
(iii) "Special" (also known as "all
risk") property insurance (including, without limitation, boiler and
machinery (if applicable); sprinkler damage, vandalism and malicious
mischief) on all of Tenant's Trade Fixtures and personal property. Such
insurance shall be in an amount equal to full replacement cost of the
aggregate of the foregoing and shall provide coverage comparable to the
coverage in the standard ISO All Risk form, when such form is
supplemented with the coverages required above.
(iv) Worker's compensation insurance
with limits as may be required by law.
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(v) Such other insurance as may be
required by Laws, or by Landlord to the extent it is commercially
reasonable for tenants to be required to carry such other insurance
under similar leases with respect to similar property in similar
locations.
Insurance required under this Paragraph 10(d) shall be in companies licensed to
do business in California and rated "A" IX or better in "Best's Insurance
Guide." Tenant shall deliver copies of policies of such insurance and
certificates naming the additional insureds thereof to Landlord on or before any
Reinstatement or Occupancy, and thereafter at least thirty (30) days before the
expiration dates of expiring policies; and, in the event Tenant shall fail to
procure such insurance, or to deliver such policies or certificates, Landlord
may, at its option, procure same for the account of Tenant, and the cost thereof
shall be paid to Landlord as Additional Charges within five (5) days after
delivery to Tenant of bills therefor.
(e) SURVIVAL. The provisions of this paragraph 10
shall survive the expiration or termination of this Lease with respect to any
claims or liability occurring prior to such expiration or termination.
(f) LANDLORD INSURANCE. Landlord shall maintain
insurance on the Project, including the Building, and on any Alterations
installed in the Premises by Tenant at its expense to the extent Tenant provides
Landlord with all information reasonably required by Landlord or its insurer in
connection therewith (with the entire cost of any such insurance on Alterations
to be payable directly by Tenant to Landlord as an Additional Charge, including
the incremental cost to add such insurance to Landlord's policies and any
deductibles payable with respect to such Alterations), against fire and risks
covered by "special" coverage (also known as "all risk") (excluding earthquake
and flood, though Landlord, at its sole option, may include this coverage, and
Tenant acknowledges that Landlord intends to initially carry such coverage) on a
100% of "replacement cost" basis (though reasonable deductibles may be included
under such coverage). Landlord's insurance shall have a building ordinance
provision, and shall provide for rental interruption insurance covering a period
of twelve (12) full months. In no event shall Landlord be deemed a co-insurer
under such policy. Landlord shall also maintain commercial general liability
insurance on an occurrence basis in amounts not less than Three Million Dollars
($3,000,000) per occurrence with respect to bodily injury or death and property
damage in the Project. Notwithstanding the foregoing obligations of Landlord to
carry insurance, Landlord may modify the foregoing coverages if and to the
extent it is commercially reasonable to do so. Landlord agrees to provide
Tenant, upon written request, with certificates of insurance evidencing the
foregoing coverages. Tenant acknowledges that, notwithstanding any provision of
this Paragraph 10(f) or this Lease, Landlord currently intends to carry
earthquake insurance on the Project during the Term of this Lease. At all times
prior to a Reinstatement or Occupancy, Landlord shall cause such insurance to
name Tenant, Guarantor and such other parties (to the extent of their respective
interests) as Tenant may reasonably request as additional insureds, shall
specifically include the liability assumed hereunder by Landlord with respect to
periods prior to Reinstatement or Occupancy, and shall provide that it is
primary insurance, and not excess over or contributory with any other valid,
existing and applicable insurance in force for or on behalf of Tenant, and shall
provide that Tenant shall receive thirty 30) days' written notice from the
insurer prior to any cancellation or change of coverage. Landlord shall deliver
certificates of such insurance naming the additional insureds thereof to Tenant
within ten (10) days after the Commencement Date, and thereafter at least thirty
(30) days before the expiration dates of expiring policies.
(g) DISCLAIMER REGARDING SECURITY. Tenant
acknowledges that even if Landlord installs and operates security cameras or
other security equipment and/or provides any other services that could be
construed as being intended to enhance security at the Project, Landlord shall
have no obligation to Tenant or to any Tenant Party for any damage, claim, loss
or liability related to any claim that Landlord had a duty to provide security
or that the equipment or services provided by Landlord were inadequate,
inoperative or otherwise failed to provide adequate security. Any such claim
made against Landlord by any employee, customer or invitee of Tenant shall be
included within Tenant's obligation of indemnity and defense set forth in
subparagraph (c) above.
11. WAIVER OF SUBROGATION. Notwithstanding anything to the
contrary in this Lease, the parties hereto release each other (including
Landlord Parties and Tenant Parties) and their respective agents, employees,
successors, assignees and subtenants from all liability for injury to any person
or damage to any property that is caused by or results from a risk (i) which is
actually insured against, to the extent of receipt of payment under such policy
(unless the failure to receive payment under any such policy results from a
failure of the insured party to comply with or observe the terms and conditions
of the insurance policy covering such liability, in which event,
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such release shall not be so limited), (ii) which is required to be insured
against under this Lease, without regard to the negligence or willful misconduct
of the entity so released, or (iii) which would normally be covered by the
standard form of "special" or "all risk" coverage property insurance. Landlord
and Tenant shall each obtain from their respective insurers under all policies
of fire, theft, and other property insurance maintained by either of them at any
time during the Term insuring or covering the Building, the Premises, or the
Project or any portion thereof of its contents therein, a waiver of all rights
of subrogation which the insurer of one party might otherwise, if at all, have
against the other party and Landlord and Tenant shall each indemnify the other
against any loss or expense, including reasonable attorneys' fees, resulting
from the failure to obtain such waiver.
12. SERVICES AND UTILITIES/BUILDING MANAGEMENT.
(a) LANDLORD RESPONSIBILITIES. Landlord shall provide
the maintenance and repairs described in Paragraph 7(a), except for damage
occasioned by the act or omission of Tenant or for which Tenant is responsible
pursuant to Paragraph 7(c), which damage shall be repaired by Landlord at
Tenant's expense. Landlord shall provide necessary utilities and services to the
Common Areas, as determined by Landlord in Landlord's reasonable discretion, and
in any event to the extent expressly required by the terms and conditions of the
DDA, the Parking REA and/or the CC&Rs.
(b) TENANT RESPONSIBILITIES. Subject to the
provisions elsewhere herein contained and to the Rules and Regulations,
commencing upon a Reinstatement or Occupancy, Tenant shall be responsible for
arranging for, and direct payment of any and all cost of, garbage pickup,
recycling, janitorial, security, transportation management and mitigation
programs, water, electricity, gas, telephone, cable and digital services, and
Tenant shall provide the maintenance, repair and services as described in
Section 7(b). Landlord shall cooperate with Tenant's efforts to arrange all such
services. Tenant shall cooperate fully with Landlord and abide by all the
reasonable regulations and requirements that Landlord may prescribe for the
proper functioning and protection of the Building Systems.
(c) NO EXCESSIVE LOAD. Tenant will not without the
written consent of Landlord, which consent shall not be unreasonably withheld or
delayed, use any apparatus or device in the Premises which, when used, puts an
excessive load on the Building or its structure or systems, including, without
limitation, electronic data processing machines, punch card machines and
machines using excess lighting or voltage in excess of the amount for which the
Building is designed.
(d) NO LIABILITY. Landlord shall not be in default
hereunder, nor be deemed to have evicted Tenant, nor be liable for any damages
directly or indirectly resulting from, nor shall the rental herein reserved be
abated, except as expressly provided for in the second to last sentence of this
paragraph, by reason of (i) the installation, use or interruption of use of any
equipment in connection with the foregoing utilities and services; (ii) failure
to furnish or delay in furnishing any services to be provided by Landlord when
such failure or delay is caused by Acts of God or the elements, labor
disturbances of any character, any other accidents or other conditions beyond
the reasonable control of Landlord (any of the foregoing, "Force Majeure"), or
by the making of repairs or improvements to the Premises or to the Building
(except in the case of Landlord's active negligence or willful misconduct); or
(iii) the limitation, curtailment, rationing or restriction on use of water or
electricity, gas or any other form of energy or any other service or utility
whatsoever serving the Premises, the Building, or the Project. Furthermore,
Landlord shall be entitled to cooperate with the mandatory requirements of
national, state or local governmental agencies or utilities suppliers in
connection with reducing energy or other resources consumption. If the Premises
or any portion thereof become unsuitable for Tenant's use as a consequence of
cessation of gas and electric utilities or other services provided to the
Premises or Building resulting from a casualty covered by Landlord's insurance,
then Tenant's Monthly Base Rent and Additional Charges shall abate during the
period of time in which Tenant cannot occupy the Premises (or shall
proportionately abate during the period of time in which Tenant cannot occupy a
portion of the Premises) for the Permitted Uses, but only to the extent of
rental abatement insurance proceeds received by Landlord and/or any Mortgagee
(or, if Landlord fails to carry such insurance as required by Paragraph 10(f),
or fails to pay premiums for such insurance and such failure does not result
from Tenant's failure to perform Tenant's obligations hereunder, proceeds that
would have been payable to Landlord in the absence of such failure). In no event
shall any mortgagee or beneficiary under any mortgage or deed of trust on all or
any portion of the Project, the Building, or the Land (any such mortgagee or
beneficiary, a "Mortgagee") be or become liable for any default of Landlord
under this Paragraph 12.
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(e) BUILDING MANAGEMENT. Tenant grants Landlord the
right, without any further action or approval by Tenant, to appoint as property
manager for the Building such person or entity as Landlord may designate to
manage the Premises (which manager may, at Landlord's election, be Landlord),
and such person or entity shall act as Building manager throughout the Term,
provided that Tenant shall not incur any cost or expense for such Building
manager except to the extent of management fees properly included (and subject
to limitations contained) in the definition of "Expenses", and then only at such
times as Tenant is responsible for payment of Tenant's Share of Expenses under
the terms of this Lease. Tenant shall not have any right to terminate or replace
any such Building manager appointed by Landlord.
13. ESTOPPEL CERTIFICATES.
(a) TENANT. Tenant, at any time and from time to
time, within ten (10) days from receipt of written notice from Landlord, will
execute, acknowledge and deliver to Landlord and, at Landlord's request, to any
prospective purchaser or mortgagee of any part of the Project any other party
acquiring an interest in Landlord, a certificate of Tenant in a form reasonably
acceptable to Tenant and containing such information as is customary or as may
reasonably be required by any of such persons, including, but not limited to,
whether (and if so, the portions of the Premises as to which) Reinstatement or
Occupancy has occurred,. Tenant has approved the form or forms of tenant
certificate attached as Exhibit "E" without limiting Tenant's future approval of
any additional or substitute certificate. It is intended that any such
certificate of Tenant delivered pursuant to this Paragraph 13 may be relied upon
by Landlord and any prospective purchaser or Mortgagee, or such other party.
(b) LANDLORD. Landlord will execute, acknowledge and
deliver to Tenant a substantially similar, customary and reasonable certificate
to that required by Subparagraph 13(c), certifying to such factual matters as
Tenant may reasonably request, including, but not limited to, whether (and if
so, the portions of the Premises as to which) Reinstatement or Occupancy has
occurred, within ten (10) days from receipt of written request from Tenant, in
form reasonably acceptable to Landlord.
(c) GUARANTOR. Tenant shall at any time upon not less
than ten (10) days prior written notice from Landlord cause Guarantor to
execute, acknowledge and deliver to Landlord, or to any other person specified
by the requesting party, an estoppel certificate of Guarantor, in form
reasonably acceptable to Guarantor, stating such factual information as may be
customary or as may be reasonably required by any such persons, including,
without limitation, whether the Guaranty is in full force and effect or any
uncured defaults then exist by either party under the Guaranty or, to
Guarantor's actual knowledge, whether any circumstances exist which, but for the
passing of time or giving of notice, would be a default by Guarantor under the
Guaranty, whether the Guaranty will continue in full force and effect
notwithstanding a proposed assignment or sublease, and notwithstanding a
termination of the Lease, whether Guarantor is a debtor in any case pending
under the bankruptcy laws of the United States or any state thereof, and such
matters with respect to the Lease, to Guarantor's actual knowledge, as are
included in the forms of tenant certificate attached as Exhibit "E". It is
intended that any such certificate of Guarantor delivered pursuant to this
Subparagraph 13(c) may be relied upon by Landlord and any prospective tenant,
purchaser or Mortgagee. In addition, Tenant's failure to cause Guarantor to
deliver such estoppel certificate within such time shall be a Default under this
Lease without benefit of cure period.
14. HOLDING OVER. If Tenant, having Occupied, or caused a
Reinstatement to occur with respect to, the Building or any portion thereof
(directly or through any successor-in-interest of Tenant) remains in possession
of all or any portion of the Premises after the expiration or termination of
this Lease with the written consent of Landlord, such continued possession shall
not, of itself, cause or result in a Reinstatement, but shall be construed to be
a tenancy from month-to-month at one hundred twenty-five percent (125%) of the
greater of (a) the Monthly Base Rent payable in the last full month prior to
such termination or expiration, or (b) the Monthly Modified Rent, if such
holdover occurs following a Reinstatement, or (c) $913,344, if such holdover
occurs upon expiration of the Initial Term, in any case subject to increase
pursuant to Paragraph 42, together with an amount estimated by Landlord for the
monthly Additional Charges for Expenses and Taxes payable under this Lease, and
shall otherwise be on the terms and conditions herein specified so far as
applicable. If Tenant, having Occupied, or caused a Reinstatement to occur with
respect to, the Building or any portion thereof (directly or through any
successor-in-interest of Tenant) remains in possession of all or any portion of
the Premises after the expiration or termination of this Lease without the
written consent of Landlord, Tenant's continued possession shall be on the basis
of a tenancy at the sufferance of Landlord. In such event, Tenant shall continue
to comply with or perform all the terms and
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obligations of Tenant under this Lease, except that the Monthly Base Rent during
Tenant's holding over shall be the greater of the then-fair market rent for the
Premises (as reasonably determined by Landlord) or two hundred percent (200%) of
(x) the Monthly Modified Rent if it occurs during the Initial Term, or (y)
$913,344 if it occurs upon expiration of the Initial Term, or (z) the Monthly
Base Rent payable in the last full month prior to such termination or expiration
if it occurs at any time during any Extension Term, in each case subject to
increase pursuant to Paragraph 42 and together with Additional Charges for
Expenses and Taxes payable (or that would have been payable if a Reinstatement
or Occupancy had previously occurred) in the last full month prior to the
termination or expiration of this Lease. In addition to Rent, Tenant shall pay
Landlord for all damages proximately caused by reason of the Tenant's retention
of possession. Landlord shall use commercially reasonable efforts to notify
Tenant if and when (a) a new lease, or a letter of intent for a new lease, has
been entered into for any portion of the Premises, (b) a loan application has
been submitted by Landlord or a loan commitment issued to Landlord in connection
with the Premises at a time when Tenant is then holding over or Landlord in its
reasonable judgment believes a Tenant holdover is likely prior to the
contemplated loan being fully funded, or (c) a sale contract or letter of intent
for a sale of the Premises to a third party has been entered into for the
Premises at a time when Tenant is then holding over or Landlord in its
reasonable judgment believes a Tenant holdover is likely prior to the
contemplated sale being consummated. Landlord's acceptance of Rent after the
termination of this Lease shall not constitute a renewal of this Lease, and
nothing contained in this provision shall be deemed to waive Landlord's right of
re-entry or any other right hereunder or at law. Tenant acknowledges that, in
Landlord's marketing and re-leasing efforts for the Premises, Landlord is
relying on Tenant's vacation of the Premises on the Expiration Date.
Accordingly, Tenant shall indemnify, defend and hold Landlord harmless from and
against all claims, liabilities, losses, costs, expenses and damages arising or
resulting directly or indirectly from Tenant's failure to timely surrender the
Premises, including, without limitation, (i) any loss, cost or damages suffered
by any prospective tenant of all or any part of the Premises, and (ii)
Landlord's damages as a result of such prospective tenant rescinding or refusing
to enter into the prospective lease of all or any portion of the Premises by
reason of such failure of Tenant to timely surrender the Premises. Landlord and
Tenant agree that, if a "Default" by Tenant occurs after Reinstatement or
Occupancy has occurred with respect to any portion of the Premises, and, within
thirty (30) days after receipt of written notice from Landlord of such Default,
Tenant does not vacate and surrenders possession of the Premises and
Improvements as required by Paragraph 24, then a holdover without the written
consent of Landlord shall be deemed to have occurred.
15. SUBORDINATION. Without the necessity of any additional
document being executed by Tenant for the purpose of effecting a subordination,
this Lease shall be subject and subordinate at all times to: (i) the Parking
REA, the Initial CC&Rs, any other CC&Rs or other Encumbrances currently in
effect or that Landlord may enter into in the future, and (ii) the lien of any
mortgage or deed of trust which may now exist or hereafter be executed in any
amount for which all or any portion of the Project, or Landlord's interest or
estate therein, is specified as security (any of the foregoing, a "Mortgage",
and the beneficiary or mortgagee under any of the foregoing, a "Mortgagee").
Tenant covenants and agrees to execute and deliver upon demand by Landlord and
in the form requested by Landlord and reasonably acceptable to Tenant, any
customary additional documents evidencing the priority or subordination of this
Lease with respect to the lien of any such Mortgage. Tenant shall execute,
deliver and record any such documents within ten (10) days after Landlord's
written request.
16. RULES AND REGULATIONS. Tenant shall faithfully observe and
comply with the rules and regulations attached to this Lease as Exhibit "D" and
all reasonable modifications thereof and additions thereto from time to time put
into effect by Landlord. Landlord shall not be responsible for the
nonperformance by any other Tenant or occupant of the Project of any said rules
and regulations. Landlord shall enforce the Rules and Regulations against all
tenants in the Project in a non-discriminatory manner. In the event of an
express and direct conflict between the terms, covenants, agreements and
conditions of this Lease and those set forth in the rules and regulations, as
modified and amended from time to time by Landlord, this Lease shall control.
17. RE-ENTRY BY LANDLORD. Landlord reserves and shall at all
reasonable times, upon reasonable prior notice (except in the case of an
emergency), and subject to Tenant's reasonable security precautions and the
right of Tenant to accompany Landlord at all times, have the right to re-enter
the Premises and Building to inspect the Premises and Building, to supply any
service to be provided by Landlord to Tenant hereunder (unless Tenant is
supplying such service), to post notices of nonresponsibility or as otherwise
required or allowed by this Lease or by law, and to alter, improve or repair the
Premises and any portion of the Building as required or allowed by this Lease
(and may for that purpose erect, use, and maintain scaffolding, pipes, conduits,
and other necessary structures in and
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through the Building where reasonably required by the character of the work to
be performed), and, during normal business hours only, to show the Premises to
prospective purchasers, Mortgagees or tenants (but after a Reinstatement, as to
prospective purchasers and tenants only during the last eighteen (18) months of
the Term). Landlord shall not be liable in any manner for any inconvenience,
disturbance, loss of business, nuisance or other damage arising from Landlord's
entry and acts pursuant to this Paragraph and Tenant shall not be entitled to an
abatement or reduction of Monthly Base Rent or Additional Charges if Landlord
exercises any rights reserved in this paragraph. Tenant hereby waives any claim
for damages for any injury or inconvenience to or interference with Tenant's
business, any loss of occupancy or quiet enjoyment of the Premises, and any
other loss occasioned thereby, except for Landlord's active negligence or
willful misconduct. For each of the aforesaid purposes, Landlord shall at all
times have and retain a key with which to unlock all of the doors in, upon and
about the Building or Premises, excluding Tenant's vaults and safes, or special
security areas (designated in advance), and Landlord shall have the right to use
any and all means which Landlord may deem necessary or proper to open said doors
in an emergency, in order to obtain entry to any portion of the Building or
Premises, and any entry to the Building or Premises, or portion thereof obtained
by Landlord by any of said means, or otherwise, shall not under any emergency
circumstances be construed or deemed to be a forcible or unlawful entry into, or
a detainer of, the Building or Premises, or an eviction, actual or constructive,
of Tenant from the Premises or any portions thereof. Landlord shall use
commercially reasonable efforts during re-entry to minimize any material,
unreasonable interference with Tenant's use of the Premises and Building or its
business conducted therein.
18. INSOLVENCY OR BANKRUPTCY. The appointment of a receiver to
take possession of all or substantially all of the assets of Tenant, or an
assignment of Tenant for the benefit of creditors, or any action taken or
suffered by Tenant under any insolvency, bankruptcy, reorganization or other
debtor relief proceedings, whether now existing or hereafter amended or enacted
(any of the foregoing being defined as an "Insolvency Proceeding"), shall at
Landlord's option constitute a breach of this Lease by Tenant (provided that,
with respect to a petition in bankruptcy, or receiver attachment, or other
remedy pursued by a third party, such event shall not constitute a breach of
this Lease so long as it is discharged within sixty (60) days). Upon the
happening of any such event or at any time thereafter, this Lease shall
terminate five (5) days after written notice of termination from Landlord to
Tenant. In no event shall this Lease be assigned or assignable by operation of
law or by voluntary or involuntary bankruptcy proceedings or otherwise and in no
event shall this Lease or any rights or privileges hereunder be an asset of
Tenant under any bankruptcy, insolvency, reorganization or other debtor relief
proceedings.
19. DEFAULT.
(a) TENANT DEFAULT. The failure by Tenant to perform
any of its obligations under this Lease shall constitute a "Default" hereunder
by Tenant upon expiration of the appropriate grace or cure period provided in
this Paragraph 19(a). Tenant shall have a period of three (3) days from the date
of written notice from Landlord within which to cure any failure to pay Monthly
Base Rent or Additional Charges; provided, however, that Landlord shall not be
required to provide such notice more than two (2) times during any two (2) year
period during the Term with respect to non-payment of Monthly Base Rent or
Additional Charges, the third such non-payment constituting Default without
requirement of notice. Tenant shall have a period of thirty (30) days from the
date of receipt of written notice from Landlord within which to cure any other
curable Default under this Lease; provided, however, that with respect to any
curable Default other than the payment of Monthly Base Rent or Additional
Charges that cannot reasonably be cured within thirty (30) days, the cure period
shall be extended for an additional period of time reasonably required to cause
such cure if Tenant commences to cure within thirty (30) days from Landlord's
notice and continues to prosecute diligently the curing thereof, provided that
such cure period shall in no event extend beyond ninety (90) days after
Landlord's notice. Notwithstanding the foregoing, (i) if a specific time for
performance or a different cure period is specified elsewhere in this Lease with
respect to any specific obligation of Tenant, such specific performance or cure
period shall apply with respect to a failure of such obligation in lieu of, and
not in addition to, the cure period provided in this Paragraph 19(a); (ii) the
cure period specified in Paragraph 23 shall apply with respect to Landlord's
rights to cure Tenant's failure to perform pursuant to Paragraph 23, and (iii)
the cure rights provided in this Paragraph 19(a) shall not extend the specific
time for compliance with any required delivery, approval or performance
obligation under Paragraph 13 or 15 of the Lease.
(b) LANDLORD REMEDIES. Upon a Default of this Lease
by Tenant, Landlord shall have the following rights and remedies in addition to
any other rights or remedies available to Landlord at law or in equity:
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(i) The rights and remedies provided by
California Civil Code, Section 1951.2, including but not limited to,
recovery of the worth at the time of award of the amount by which the
unpaid Monthly Base Rent and Additional Charges for the balance of the
Term after the time of award exceeds the amount of rental loss for the
same period that the Tenant proves could be reasonably avoided, as
computed pursuant to subsection (b) of said Section 1951.2;
(ii) The rights and remedies provided by
California Civil Code, Section 1951.4, that allows Landlord to continue
this Lease in effect and to enforce all of its rights and remedies
under this Lease, including the right to recover Monthly Base Rent and
Additional Charges as they become due, for so long as Landlord does not
terminate Tenant's right to possession; provided, however, if Landlord
elects to exercise its remedies described in this Paragraph 19(a)(ii)
and Landlord does not terminate this Lease, and if Tenant requests
Landlord's consent to an assignment of this Lease or a sublease of the
Premises at such time as Tenant is in Default, Landlord shall not
unreasonably withhold its consent to such assignment or sublease. Acts
of maintenance or preservation, efforts to relet the Premises or the
appointment of a receiver upon Landlord's initiative to protect its
interest under this Lease shall not constitute a termination of
Tenant's rights to possession;
(iii) The right to terminate this Lease
by giving notice to Tenant in accordance with applicable law;
(iv) If Landlord elects to terminate
this Lease, the right and power to enter the Premises and the Building
and remove therefrom all persons and property and, to store such
property in a public warehouse or elsewhere at the cost of and for the
account of Tenant, and to sell such property and apply such proceeds
therefrom pursuant to applicable California law.
(c) LANDLORD DEFAULT. Landlord shall have a period of
thirty (30) days from the date of written notice from Tenant within which to
cure any default of Landlord under this Lease; provided, however, that with
respect to any default that cannot reasonably be cured within thirty (30) days,
the default shall not be deemed to be uncured if Landlord commences to cure
within thirty (30) days from Tenant's notice and continues to prosecute
diligently the curing thereof. Tenant agrees to deliver to any Mortgagee a copy
of any Notice of Default served upon the Landlord in the manner prescribed by
Paragraph 26 hereof, provided that prior to such notice Tenant has been notified
in writing (by way of Notice of Assignment of Rents and Leases, or otherwise) of
the address of such Mortgagee. Tenant further agrees that if Landlord shall have
failed to cure such default within the time provided for in this Lease, then the
Mortgagee shall have an additional thirty (30) days (provided that Tenant
notifies Mortgagee concurrently with Tenant's notice to Landlord at the
beginning of Landlord's thirty (30) day period; otherwise Mortgagee shall have
sixty (60) days from the date on which it is noticed) within which to cure such
default or if such default cannot be cured within that time, then such
additional time as may be reasonably necessary to cure such default shall be
granted if within such applicable period Mortgagee has commenced and is
diligently pursuing the remedies necessary to cure such default (including, but
not limited to, commencement of foreclosure proceedings, if necessary to effect
such cure), in which event the Lease shall not be terminated while such remedies
are being so diligently pursued.
(d) CROSS-DEFAULT. Any default under the Guaranty,
the Work Letter Amendment, the One Year Note or the Five Year Note (as such
terms are defined in the Purchase Agreement) (any of the foregoing being defined
as a "Cross-Defaulted Document") that is not cured within any applicable cure
period thereunder shall constitute a Default under this Lease by Tenant. In
addition, it shall be a Default under this Lease by Tenant if Tenant records the
Grant Deed (as defined in the Purchase Agreement). At any time during the term
of this Lease Landlord, in its sole discretion, may delete this Paragraph 19(d)
from this Lease, or may elect to not have this Paragraph 19(d) apply to any
specific Cross-Defaulted Document, by delivering written notice thereof to
Tenant, without any further action required by Tenant. Upon request by either
party, the parties shall execute and deliver an amendment to this Lease
documenting any such deletion of this Paragraph by Landlord.
20. DAMAGE BY FIRE, ETC.
(a) RESTORATION OR TERMINATION. If the Premises or
the Building are damaged by fire or other casualty, Landlord shall forthwith
repair the same, provided that such repairs can be made within two hundred
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seventy (270) days after the date of such damage under the laws and regulations
of the federal, state and local governmental authorities having jurisdiction
thereof. In such event, this Lease shall remain in full force and effect except
that Tenant shall be entitled to a proportionate reduction of Monthly Base Rent
and Additional Charges for Expenses and Taxes for the period of time during
which such repairs to be made hereunder by Landlord are being made. Such
reduction of Monthly Base Rent and Additional Charges for Expenses and Taxes, if
any, shall be based upon the greater of (i) the proportion that the area of the
Building rendered untenantable by such damage bears to the total area of the
Building; or (ii) the extent to which such damage and the making of such repairs
by Landlord shall interfere with the business carried on by Tenant in the
Building, and shall be limited to the extent of rental abatement insurance
proceeds actually received by Landlord or a Mortgagee under Landlord's casualty
insurance policy (or, if Landlord fails to carry such insurance as required by
Paragraph 10(f), or fails to pay premiums for such insurance and such failure
does not result from Tenant's failure to perform Tenant's obligations hereunder,
proceeds that would have been payable to Landlord in the absence of such
failure). Within thirty (30) days after the date of such damage, Landlord shall
notify Tenant whether or not, in Landlord's reasonable opinion, such repairs can
be made within two hundred and seventy (270) days after the date of such damage
and Landlord's reasonable estimate of the time needed for such repairs. If such
repairs cannot be made within two hundred and seventy (270) days from the date
of such damage, Landlord shall have the option within thirty (30) days after the
date of such damage to elect either to: (i) notify Tenant of Landlord's
intention to repair such damage and diligently prosecute such repairs, in which
event this Lease shall continue in full force and effect and the Monthly Base
Rent and Additional Charges for Expenses and Taxes shall be reduced as provided
herein; or (ii) notify Tenant of Landlord's election to terminate this Lease as
of a date specified in such notice, which date shall not be less than thirty
(30) days nor more than sixty (60) days after such notice is given and this
Lease shall terminate on the date specified in such notice. If Landlord notifies
Tenant that restoration or repair of the Building will take more than two
hundred and seventy (270) days, Tenant shall have a right to terminate the Lease
within fifteen (15) days following receipt of Landlord's notice, by providing
Landlord with written notice of its election to do so. In such event (and also
in the event Landlord terminates the Lease pursuant to the immediately preceding
sentence), Tenant shall have no liability for payment of the deductible under
Landlord's insurance relating to such damage. In case of termination by either
event, (x) if such termination occurs prior to Reinstatement, within ten (10)
days after such termination Tenant shall pay to Landlord the Monthly Base Rent
that would have been payable under this Lease through the expiration of the
Initial Term, and (y) if such termination occurs after Reinstatement, the
Monthly Base Rent and Additional Charges for Expenses and Taxes shall be reduced
by a proportionate amount based upon the extent to which such damage interfered
with the business carried on by Tenant in the Premises, and Tenant shall pay
such reduced Monthly Base Rent and Additional Charges for Expenses and Taxes up
to the effective date of such termination, and Landlord shall refund to Tenant
any Monthly Base Rent and Additional Charges previously paid for any period of
time subsequent to such date of termination. The repairs to be made hereunder by
Landlord shall not include, and Landlord shall not be required to repair, any
damage by fire or other cause to the property of Tenant or any repairs or
replacements of any paneling, decorations, railings, floor coverings or any
alterations, additions, fixtures or improvements installed on the Premises by or
at the expense of Tenant; provided, however, that to the extent Landlord's
insurance policies cover any Alterations pursuant to Paragraph 10(f), Landlord
shall make available to Tenant any available insurance proceeds with respect to
any damage or destruction that affects such Alterations, after deducting
therefrom the cost, if any, to Landlord for the recovery of such proceeds and/or
of any repair to the Building or Premises or Project for which Landlord is
responsible hereunder, in order for Tenant to repair and restore such
Alterations, pursuant to disbursement procedures established by Landlord and/or
any Mortgagee. Tenant hereby waives the provisions of Section 1932.2, and
Section 1933.4, of the Civil Code of California.
(b) CASUALTY AT END OF TERM. Notwithstanding anything
to the contrary contained in this Lease, if during the twelve (12) months prior
to the expiration of the Term (including any Extension Term, if Tenant then has
exercised its option to extend pursuant to Paragraph 41), the Building or a
substantial portion thereof is damaged or destroyed by fire or other casualty,
either Tenant or Landlord shall have the option to terminate this Lease as of
the date of such damage or destruction by written notice to the other party
given within thirty (30) days after such damage or destruction, in which event
(i) if such termination occurs prior to Reinstatement, within ten (10) days
after such termination Tenant shall pay to Landlord the Monthly Base Rent that
would have been payable under this Lease through the expiration of the Initial
Term, and (ii) if such termination occurs after Reinstatement, the Landlord
shall make a proportionate refund to Tenant of such Monthly Base Rent and
Additional Charges for Expenses and Taxes as may have been paid in advance. For
purposes of this paragraph, a "substantial portion" shall mean fifty percent
(50%) of the Building.
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(c) UNINSURED CASUALTY. Notwithstanding Paragraph
20(a), and subject to the termination right in Paragraph 20(b), in the event of
a total or partial destruction of the Building (i) by a casualty both of a type
not required to be insured against by Landlord under the terms of this Lease and
not actually insured against by Landlord, or (ii) under circumstances where the
net insurance proceeds (plus applicable deductibles that are included in
Expenses) obtained as a result of such casualty (or, if Landlord fails to carry
any specific insurance that Landlord is obligated to carry under this Lease, or
fails to pay premiums for such insurance and such failure does not result from
Tenant's failure to perform its obligations hereunder, proceeds that would have
been payable to Landlord in the absence of such failure) are ninety percent
(90%) or a lesser percentage of the cost of restoration, rebuilding or
replacement (including without limitation if such circumstances result from a
requirement by any Mortgagee that Landlord utilize insurance proceeds to pay
down the Mortgage), which destruction exceeds five percent (5%) of the
replacement cost of the Building, Landlord may elect, in its sole discretion by
written notice to Tenant within thirty (30) days after the date of such damage,
to either (x) terminate this Lease, or (y) if the damage can be reconstructed
within two hundred seventy (270) days after the date of such damage, to
reconstruct the Building, in which event this Lease shall continue in full force
and effect. However, notwithstanding the foregoing, if Landlord elects not to
reconstruct, Tenant may by written notice to Landlord within ten (10) days after
Landlord notifies Tenant of Landlord's election, request that Landlord
undertakes such reconstruction on the condition that Tenant agrees in such
written request to pay the entire cost for reconstruction of the Building (as
determined by Landlord in its reasonable discretion), which shall be paid (in
lump sum or in progress payments, at Landlord's election) to Landlord within
thirty (30) days after receipt of an invoice or invoices from Landlord. If
either (a) the remaining Term of the Lease at the time of such destruction is
less than ten (10) years (which Term will include the Extension Term if Tenant
delivers its Extension Notice prior to or together with Tenant's reconstruction
request), or (b) the restoration or repair of the Building (including any period
of time necessary to obtain construction financing, if Tenant does not agree to
fund such construction) will take more than two hundred and seventy (270) days
to complete, then Landlord shall not be obligated to reconstruct the Building in
response to Tenant's request but, rather, Landlord shall consider Tenant's
request in Landlord's sole discretion. Landlord shall respond to Tenant's
written request within thirty (30) days after receipt thereof.
(d) CASUALTY PRIOR TO REINSTATEMENT. Notwithstanding
anything to the contrary in this Paragraph 20, in the event of a total or
partial destruction of the Building prior to the occurrence of a Reinstatement
with respect to the entire Premises (excluding the Surrendered Premises), which
destruction exceeds five percent (5%) of the replacement cost of the Building,
Landlord may elect, in its sole discretion by written notice to Tenant within
thirty (30) days after the date of such damage, to terminate this Lease.
However, notwithstanding the foregoing, Tenant may by written notice to Landlord
within ten (10) days after Landlord notifies Tenant of Landlord's election to
terminate, elect to cause a Reinstatement to occur with respect to the entire
Premises (excluding the Surrendered Premises), and thereafter the parties'
respective rights and obligations shall be as otherwise provided in this
Paragraph 20.
21. EMINENT DOMAIN.
(a) ENTIRE BUILDING. If the entire Premises are taken
or appropriated under the power of eminent domain or conveyed in lieu thereof
(any such event, a "Taking"), (i) this Lease and all right, title and interest
of the Tenant hereunder shall cease and come to an end on the date of vesting of
title pursuant to such Taking, and (ii) the Monthly Base Rent and Additional
Charges payable shall be apportioned as of the date of such vesting.
(b) PARTIAL BUILDING; TERMINATION. If there is a
Taking of less than the entire Premises, this Lease shall terminate as to the
portion of the Premises so taken upon vesting of title pursuant to such Taking,
and if, but only if, such Taking is so extensive that it renders the remaining
portion of the Premises unsuitable for the use being made of the Premises on the
date immediately preceding such Taking (or if the Premises are vacant at such
time, for the Permitted Use), either the Tenant or the Landlord may terminate
this Lease by written notice to the other party not later than thirty (30) days
after the date of such vesting, specifying as the date for termination a date
not later than thirty (30) days after such notice. On the date specified in such
notice, (i) the term of this Lease and all right, title and interest of Tenant
hereunder shall cease, and (ii) the Monthly Base Rent and Additional Charges
shall be apportioned as of the date of such termination
(c) PARTIAL BUILDING; RESTORATION. If there is a
Taking of less than the entire Premises and this Lease is not terminated as
provided in Paragraph 21(b) above, this Lease shall terminate as to the portion
of the
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Premises so taken upon vesting of title pursuant to such Taking. In any such
case, if the Premises have been damaged as a consequence of such partial Taking,
Landlord shall restore the structural portions of the Building for the portion
of the Premises continuing under this Lease at Landlord's cost and expense;
provided, however, that Landlord shall not be required to repair or restore any
injury or damage to the property of Tenant or to make any repairs or restoration
of any Alterations installed on the Premises by or at the expense of Tenant.
Tenant shall, at Tenant's sole cost and expense, promptly and pursuant to
Paragraph 6, restore the interior of the Building (including the Alterations)
not so taken. Thereafter, the Monthly Base Rent and Additional Charges for
Expenses and Taxes to be paid under this Lease for the remainder of the Term
shall be proportionately reduced, such that thereafter the amounts to be paid by
Tenant shall be in the ratio that the portion of the Premises not so taken bears
to the total area of the Premises prior to such Taking.
(d) TAKING OF COMMON AREA. If there is a Taking of
any portion of the Common Area which causes the Premises to violate parking
requirements, building setbacks or access requirements under any applicable
Laws, Landlord shall cure such non-compliance by any reasonable means. If
Landlord determines that such violation is not curable by reasonable means, both
Landlord and Tenant shall have the option, exercisable by written notice to the
other party, of terminating this Lease. If Landlord determines that such
violation is curable, but then fails to commence such cure within sixty (60)
days after such Taking, the Tenant shall have the option, exercisable by written
notice to Landlord, of terminating this Lease. Any termination of this Lease
pursuant to this Paragraph 21(d) shall be effective as of the date of vesting of
title pursuant to the Taking, and Landlord shall make a proportionate refund to
Tenant of any Monthly Base Rent and Additional Rent that has been paid in
advance.
(e) AWARD. Landlord shall receive (and Tenant shall
assign to Landlord upon demand from Landlord) any income, rent, award or any
interest therein which may be paid in connection with any Taking (including,
without limitation, any award attributable to Tenant's ownership interest in the
Building and/or any other Improvements), whether partial or total, and whether
or not either Landlord or Tenant exercises any right it may have to terminate
this Lease. Tenant shall have no claim against Landlord for any part of such sum
paid by virtue of the Taking, whether or not attributable to the value of the
unexpired term of this Lease or the value of Tenant's interest in the Building,
except that Tenant shall be entitled to petition the condemning authority for
the following: (i) the then unamortized cost of any Alterations paid for by
Tenant from its own funds; (ii) the value of Tenant's trade fixtures; (iii)
Tenant's relocation costs; and (iv) Tenant's goodwill, loss of business and
business interruption.
(f) TEMPORARY TAKING. Notwithstanding anything to the
contrary contained in this Paragraph 21, if there is a Taking of the temporary
use or occupancy of any part of the Premises during the Term, this Lease shall
be and remain unaffected by such Taking and Tenant shall continue to pay in full
all Monthly Base Rent and Additional Charges payable hereunder by Tenant during
the Term. In such event, Tenant shall be entitled to receive that portion of any
award which represents compensation for the use or occupancy of the Premises
during the Term, and Landlord shall be entitled to receive that portion of any
award which represents the cost of restoration of the Premises and the use and
occupancy of the Premises after the end of the Term. If such temporary taking is
for a period longer than two hundred and seventy (270) days and unreasonably
interferes with Tenant's right to use the Premises or the Common Area, then
Tenant shall have the right to terminate the Lease, and Landlord shall be
entitled to receive the entire award for the Taking, except for that portion
which represents compensation for the use or occupancy of the Premises during
the period of time prior to such termination.
(g) WAIVER OF STATUTORY PROVISIONS. Landlord and
Tenant understand and agree that the provisions of this Paragraph 21 are
intended to govern fully the rights and obligations of the parties in the event
of a Taking of all or any portion of the Premises. Accordingly, the parties each
hereby waives any right to terminate this Lease in whole or in part under
Sections 1265.120 and 1265.130 of the California Code of Civil Procedure or
under any similar Law now or hereafter in effect.
22. SALE BY LANDLORD. If Landlord sells or otherwise conveys its
interest in the Premises, Landlord shall be relieved of its obligations under
the Lease from and after the date of sale or conveyance (including the
obligations of Landlord under Paragraph 39), only when the successor assumes in
writing the obligations to be performed by Landlord on and after the effective
date of the transfer, whereupon Tenant shall attorn to such successor.
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23. RIGHT OF LANDLORD TO PERFORM. All covenants and agreements to
be performed by Tenant under any of the terms of this Lease shall be performed
by Tenant at Tenant's sole cost and expense and without any abatement of Monthly
Base Rent or Additional Charges. If Tenant fails to pay any sum of money, other
than Monthly Base Rent or Additional Charges for Expenses or Real Estate Taxes,
required to be paid by it hereunder to a person other than Landlord, or if
Tenant fails to perform any other act on its part to be performed hereunder,
regardless of whether such failure has become a Default hereunder and either (i)
such failure continues, and Tenant does not commence cure of such failure, for
ten (10) days after notice thereof by Landlord as provided in Paragraph 19(a)
(except in the event of emergency, when no notice or cure period shall be
required but Landlord shall make reasonable good faith efforts to notify Tenant
prior to commencing such emergency cure), or (ii) having commenced such cure
Tenant does not diligently prosecute the curing thereof, or (iii) if Landlord
is, in Landlord's reasonable business judgment, in a better position to
accomplish such cure or can accomplish such cure in a more efficient or
cost-effective manner than Tenant, or (iv) if a default under the DAA, Parking
REA, any CC&Rs, any other Encumbrance, or any Mortgage is, in Landlord's
reasonable judgment, likely to occur due to Tenant's failure to cure such
failure in a timely manner, then in any such situation Landlord may, but shall
not be obligated so to do, and without waiving or releasing Tenant from any
obligations of Tenant, make any such payment or perform any such act on Tenant's
part to be made or performed as provided in this Lease. All sums so paid and
costs so incurred by Landlord, together with interest thereon at the Default
Rate from the date Landlord makes such payment or incurs such cost, shall be
payable as Additional Charges to Landlord within thirty (30) days after receipt
by Tenant of a bill or statement therefor.
24. OWNERSHIP OF IMPROVEMENTS/SURRENDER OF PREMISES.
(a) OWNERSHIP OF IMPROVEMENTS. All improvements now
existing or hereafter constructed, installed or placed by Tenant on the Premises
(including, without limitation, the Building and any Alterations, the
"Improvements") shall be the property of Tenant during, and only during, the
Term and no longer. Prior to Reinstatement, the Improvements, Tenant's interest
in the easements set forth and described in Article 2 of the Declaration (the
"Easements") and Tenant's interest in this Lease may not be conveyed,
transferred and/or assigned, directly or indirectly, in whole or in part, except
as provided in Paragraph 9. After any Reinstatement, the Improvements and
Tenant's interest in the Easements and in this Lease may be conveyed,
transferred and/or assigned together to a single person, corporation or other
entity, provided that the assignment of Tenant's interest in this Lease must
comply with the provisions and the restrictions set forth in Paragraph 9. Any
attempted conveyance, transfer or assignment of the Improvements, Tenant's
interest in the Easements and/or Tenants interest in this Lease, whether
voluntarily or by operation of law or otherwise, in violation of this Paragraph
shall be void and of no effect whatever. Upon any termination of this Lease,
whether by reason of the expiration of the Term hereof, or pursuant to any
provision hereof, or by reason of any other cause whatsoever, all of Tenant's
right, title and interest in the Improvements and the Easements shall cease and
terminate and title to the Improvements and all of Tenant's interest in the
Easements shall immediately vest in Landlord, and Tenant shall surrender the
Improvements and its interest in the Easements to Landlord as provided in
Paragraph 24(b) hereof. No further deed or other instrument shall be necessary
to confirm the vesting in Landlord of title to the Improvements and the
Easements and the termination of all of Tenant's title and rights thereto and
therein. However, upon any termination of this Lease, Tenant, upon request of
Landlord, shall execute, acknowledge and deliver to Landlord a quitclaim deed
and quitclaim bill of sale confirming that all of Tenant's rights, title and
interest in the Improvements and in and to the Easements has expired and that
all of Tenant's title and rights thereto and therein has vested in Landlord.
(b) DELIVERY OF PREMISES. At the end of the Term or
any renewal thereof or other sooner termination (including partial termination)
of this Lease, Tenant will peaceably deliver to Landlord possession of the
Premises (or relevant portion thereof) and the Improvements (including, without
limitation, the Building and all Alterations (or in the case of a partial
termination, the portions thereof corresponding to the portion of the Premises
being terminated) that Landlord does not require be removed pursuant to
Paragraph 6), by whomsoever made. If at the time of such termination no
Reinstatement or Occupancy has occurred, Tenant shall surrender the Premises and
Improvements (or relevant portion thereof) in their then-existing condition,
"as-is", "where-is" and with all faults; if at the time of such termination
Reinstatement has occurred with respect to the Premises (or the portion thereof
being terminated), or Tenant is then in Occupancy of the Premises or such
portion, Tenant shall deliver the Premises and Improvements (or such portion),
in substantially the same condition as received, or first installed, subject to
the terms of Paragraphs 6, 21 and 39, subject to normal wear and tear and the
rights and obligations of the parties concerning casualty damage pursuant to
Paragraph 20. Tenant may, upon the termination of this Lease, remove all
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movable furniture and equipment belonging to Tenant, at Tenant's sole cost,
provided that Tenant repairs any damage caused by such removal. Property not so
removed by the Expiration Date (or in the event of an earlier termination,
within five (5) days of such earlier termination date) shall be deemed abandoned
by Tenant, and title to the same shall thereupon pass to Landlord.
(c) NO MERGER. The voluntary or other surrender of
this Lease by Tenant, or a mutual cancellation thereof, shall not work a merger,
and shall, at the option of Landlord, terminate all or any existing subleases or
subtenancies, or may, at the option of Landlord, operate as an assignment to it
of any or all such subleases or subtenancies.
25. WAIVER. If either Landlord or Tenant waives the performance
of any term, covenant or condition contained in this Lease, such waiver shall
not be deemed to be a waiver of any subsequent breach of the same or any other
term, covenant or condition contained herein. Furthermore, the acceptance of
Rent or Additional Charges by Landlord shall not constitute a waiver of any
preceding breach by Tenant of any term, covenant or condition of this Lease,
regardless of Landlord's knowledge of such preceding breach at the time Landlord
accepted such Monthly Base Rent or Additional Charges. Failure by Landlord to
enforce any of the terms, covenants or conditions of this Lease for any length
of time shall not be deemed to waive or to decrease the right of Landlord to
insist thereafter upon strict performance by Tenant. Waiver by Landlord or
Tenant of any term, covenant or condition contained in this Lease may only be
made by a written document signed by Landlord or Tenant, as applicable.
26. NOTICES. Except as otherwise expressly provided in this Lease,
any bills, statements, notices, demands, requests or other communications given
or required to be given under this Lease shall be effective only if rendered or
given in writing, sent by certified mail, return receipt requested, reputable
overnight carrier, or delivered personally, (i) to Tenant at Tenant's address
set forth in the Basic Lease Information; or (ii) to Landlord at Landlord's
address set forth in the Basic Lease Information; or (iii) to such other address
as either Landlord or Tenant may designate as its new address for such purpose
by notice given to the other in accordance with the provisions of this Paragraph
26. Any such bill, statement, notice, demand, request or other communication
shall be deemed to have been rendered or given on the date the return receipt
indicates delivery of or refusal of delivery if sent by certified mail, the day
upon which recipient accepts and signs for delivery from a reputable overnight
carrier, or on the date a reputable overnight carrier indicates refusal of
delivery, or upon the date personal delivery is made. If Tenant is notified in
writing of the identity and address of any Mortgagee, Tenant shall give to such
Mortgagee notice of any Default by Landlord under the terms of this Lease in
writing sent by registered or certified mail, and such Mortgagee shall be given
the opportunity to cure such Default prior to Tenant exercising any remedy
available to it.
27. TAXES PAYABLE BY TENANT. Tenant shall pay, prior to
delinquency, all taxes levied or assessed upon Tenant's equipment, furniture,
fixtures and other personal property, if any, located in or about the Premises.
If the assessed value of Landlord's property is increased by the inclusion
therein of a value placed upon Tenant's equipment, furniture, fixtures or other
personal property, Tenant shall pay to Landlord, upon written demand, the taxes
so levied against Landlord, or the portion thereof attributable to Tenant's
personal property.
28. ABANDONMENT. After Reinstatement or Occupancy has occurred,
Tenant shall not thereafter abandon the Premises at any time during the Term,
and if Tenant shall abandon or surrender the Premises or be dispossessed by
process of law, or otherwise, any personal property belonging to Tenant and left
on the Premises shall, at the option of Landlord, be deemed to be abandoned and
title thereto shall thereupon pass to Landlord. Notwithstanding anything to the
contrary contained herein, following Reinstatement or Occupancy as to any
portion of the Premises, Tenant shall not thereafter vacate such portion of the
Premises unless either (a) such vacation would not result in a termination of,
limitation on, or other adverse effect on, Landlord's insurance policies, or (b)
Tenant pays the incremental premium costs, and assumes responsibility for any
increased deductible amounts, to the extent required to cause Landlord's
insurance policies to not be terminated, limited or adversely affected as a
result of such vacation. For purposes of this Paragraph 28, the Tenant shall not
be deemed to have abandoned the Premises solely because the Tenant is not
occupying the Premises.
29. SUCCESSORS AND ASSIGNS. Subject to the provisions of
Paragraph 9, the terms, covenants and conditions contained herein shall be
binding upon and inure to the benefit of the parties hereto and their respective
legal and personal representatives, successors and assigns.
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30. ATTORNEYS' FEES. If Tenant or Landlord brings any action for
any relief against the other, declaratory or otherwise, arising out of this
Lease, including any suit by Landlord for the recovery of Rent or possession of
the Premises and/or Improvements, the losing party shall pay to the prevailing
party a reasonable sum for attorneys' fees and costs, which shall be deemed to
have accrued on the commencement of such action and shall be paid whether or not
the action is prosecuted to judgment.
31. LIGHT AND AIR. Tenant covenants and agrees that no diminution
of light, air or view by any structure which may hereafter be lawfully erected
(whether or not by Landlord) shall entitle Tenant to any reduction of rent under
this Lease, result in any liability of Landlord to Tenant, or in any other way
affect this Lease or Tenant's obligations hereunder. Landlord has informed
Tenant that it has no intention of constructing additional facilities at the
Project except those facilities needed to service the Project.
32. CORPORATE AUTHORITY; FINANCIAL INFORMATION. If Tenant signs
as a corporation each of the persons executing this Lease on behalf of Tenant
does hereby covenant and warrant that Tenant is a duly authorized and existing
corporation, that Tenant has and is qualified to do business in California, that
the corporation has full right and authority to enter into this Lease, and that
each and both of the persons signing on behalf of the corporation were
authorized to do so. If Tenant signs as a partnership or limited liability
company, each of the persons executing this Lease on behalf of Tenant does
hereby covenant and warrant that Tenant is a duly authorized and existing
partnership or limited liability company, as applicable, that Tenant has and is
qualified to do business in California, that Tenant has full right and authority
to enter into this Lease, and that each and both of the persons signing on
behalf of the Tenant were authorized to do so and by their signatures bind the
Tenant. Upon Landlord's request, Tenant shall provide Landlord with evidence
reasonably satisfactory to Landlord confirming the foregoing covenants and
warranties. Upon Landlord's request, Tenant shall provide Landlord with evidence
reasonably satisfactory to Landlord confirming the foregoing covenants and
warranties. Tenant hereby further covenants and warrants to Landlord that all
financial information and other descriptive information regarding Tenant's
business, which has been or shall be furnished to Landlord, is and shall be
accurate and complete at the time of delivery to Landlord. If Landlord signs as
a corporation each of the persons executing this Lease on behalf of Landlord
does hereby covenant and warrant that Landlord is a duly authorized and existing
corporation, that Landlord has and is qualified to do business in California,
that the corporation has full right and authority to enter into this Lease, and
that each and both of the persons signing on behalf of the corporation were
authorized to do so. Upon Tenant's request, Landlord shall provide Tenant with
evidence reasonably satisfactory to Tenant confirming the foregoing covenants
and warranties.
33. PARKING. From and after any Reinstatement or Occupancy, Tenant
shall have the right to use the number of parking spaces located in the Project
Garage as specified in the Basic Lease Information (which number of required
parking spaces [subject to all limitations, restrictions and requirements set
forth in this Paragraph 33] shall be defined as the "Minimum Parking") in common
with other tenants or occupants of the Project, if any, subject to (i) the City
Parking Rights, (ii) the Parking REA, (iii) the Initial CC&Rs, and (iv) any
other CC&Rs, other Encumbrances and rules and regulations of Landlord for the
Project Garage which may be established or altered by Landlord at any time or
from time to time during the Term. Landlord represents and warrants to Tenant
that the number of parking spaces constructed by Landlord in connection with the
Initial Development of the Project shall be equal to or greater than the minimum
number required by the City of Sunnyvale for the Project, and that Landlord will
not thereafter voluntarily reduce the number of parking spaces available to the
Project below such minimum number except as may be required by Law, development
or land use requirements of the City, or in connection with condemnation. A
portion of Tenant's Minimum Parking shall consist of eighty (80) reserved
parking spaces located in the portion of the Project Garage in the area closest
to the elevator and stairs leading to the Building, provided that other than
marking and striping the appropriate number of parking spaces as designated for
Tenant's use, Landlord shall not be obligated to enforce Tenant's exclusive
right to the Minimum Parking provided in this Paragraph 33. Landlord shall
deliver any required notice pursuant to the CC&Rs with respect to the
designation of such reserved parking spaces. Landlord may, at its option,
install a security gate and/or other access devices for the Project Garage
(although Landlord shall not be obligated to do so and may discontinue it at any
time during the Term), and Landlord shall provide parking passes and/or access
keys or cards for the number of parking spaces included in Tenant's Minimum
Parking; provided that such items are provided to Tenant solely for use by
Tenant, and may not be transferred, assigned (except in connection with an
assignment of this Lease), or subleased (except in connection with a sublease of
this Lease and then in proportion to the space sublet) without Landlord's prior
written approval. No charge or fee (other than the Rent payable hereunder) shall
be imposed in exchange for the
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right of Tenant and its agents, employees, contractors and invitees to have
access to or from, or to park in, the Minimum Parking (except for Tenant's
liability for Expenses, as set forth in Subparagraph 3(c)) for the Term;
provided that Landlord, at its sole election, may charge for the use of parking
spaces in the Project Garage in excess of the Minimum Parking, provided that any
funds collected by Landlord for parking in the Project (other than pursuant to
the Parking REA and/or leases with respect to the Project except to the extent
such costs were included previously in Expenses already paid by Tenant pursuant
to Paragraph 3(c)) shall be applied to reduce the Project Common Expenses
attributable to operation of the Parking Garage. Tenant shall comply, and shall
use best efforts to cause Tenant's employees, visitors and invitees to comply,
with all rules and regulations prescribed by Landlord from time to time for the
Project Garage and any other parking, including any rules, regulations,
restrictions, limitations and/or requirements in connection with the City
Parking Rights.
34. MISCELLANEOUS.
(a) DEFINED TERMS. The paragraph headings herein are
for convenience of reference and shall in no way define, increase, limit or
describe the scope or intent of any provision of this Lease. The term "Landlord"
shall include Landlord and its successors and assigns. In any case where this
Lease is signed by more than one person, the obligations hereunder shall be
joint and several. The term "Tenant" or any pronoun used in place thereof shall
indicate and include the masculine or feminine, the singular or plural number,
individuals, firms or corporations, and their and each of their respective
successors, executors, administrators, and permitted assigns, according to the
context hereof.
(b) GENERAL PROVISIONS. Time is of the essence of
this Lease and all of its provisions. This Lease shall in all respects be
governed by the laws of the State of California. This Lease, together with its
exhibits, contains all the agreements of the parties hereto and supersedes any
previous negotiations. There have been no representations made by the Landlord
or Tenant or understandings made between the parties other than those set forth
in this Lease and its exhibits. This Lease may not be modified except by a
written instrument by the parties hereto.
(c) SEVERABILITY. If for any reason whatsoever any of
the provisions hereof shall be unenforceable or ineffective, all of the other
provisions shall be and remain in full force and effect.
(d) QUIET ENJOYMENT. Upon Tenant paying the Monthly
Base Rent and Additional Charges and performing all of Tenant's obligations
under this Lease, Tenant shall have quiet and peaceful enjoyment of the Premises
during the Term as against all persons or entities lawfully claiming by, through
or under Landlord; subject, however, to the provisions of this Lease.
35. TENANT'S REMEDIES. If any default hereunder by Landlord is
not cured within the applicable cure period provided in Paragraph 19(c)
(including any Mortgagee's additional cure period), Tenant's exclusive remedies
shall be (i) an action for specific performance, or (ii) an action for actual
damages. Tenant shall look solely to Landlord's interest in the Premises
(including, but not limited to, net proceeds obtained by Landlord from any sale
of any portion of the Premises) for the recovery of any judgment from Landlord.
Landlord, or if Landlord is a partnership its partners whether general or
limited, or if Landlord is a corporation its directors, officers or
shareholders, or if Landlord is a limited liability company its members or
managers, shall never be personally liable for any such judgment. Any lien
obtained to enforce such judgment and any levy of execution thereon shall be
subject and subordinate to any Mortgage (excluding any Mortgage which was
created as part of an effort to defraud creditors, i.e., a fraudulent
conveyance); provided, however that any such judgement and any such levy of
execution thereon shall not be subject or subordinated to any Mortgage that is
created or recorded in the official records of the county in which the Project
is located after the date of the judgement giving rise to such lien. Landlord's
interest in the Premises shall include any insurance proceeds received by
Landlord which are not controlled by any Mortgagee or other lender. Tenant
hereby waives the benefit of any Laws granting it (A) the right to perform
Landlord's obligations, or (B) the right to terminate this Lease or withhold
Rent on account of any Landlord default, including, without limitation, Sections
1932(1), 1941 and 1942 of the California Civil Code.
36. REAL ESTATE BROKERS. Each party represents that it has not had
dealings with any real estate broker, finder or other person with respect to
this Lease or the Original Lease except for (a) Dennis Chambers and Steve Horton
of CPS, who acted as Landlord's brokers in connection with the Original Lease,
and Thomas Snider of
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BT Commercial, who acted as Tenant's broker in connection with the Original
Lease (collectively, "Original Brokers"), and (b) Tom Loeswick of Colliers
International, with whom Tenant has dealt in connection with this amended and
restated Lease ("Tenant's Broker"). Landlord shall hold harmless Tenant from all
damages resulting from any claims that may be asserted against Tenant by the
Original Brokers and/or any one of them and/or any other broker, finder or other
person with whom Landlord has or purportedly has dealt in connection with the
Original Lease or this amended and restated Lease, and Tenant shall hold
harmless Landlord from all damages resulting from any claims that may be
asserted against Landlord by Tenant's Broker and/or any other broker, finder or
other person (other than the Original Brokers) with whom Tenant has or
purportedly has dealt in connection with the Original Lease or this amended and
restated Lease.
37. LEASE EFFECTIVE DATE. Submission of this instrument for
examination or signature by Tenant does not constitute a reservation of or
option for lease, and it is not effective as a lease or otherwise until
execution and delivery by both Landlord and Tenant.
38. SIGNAGE. To the extent approved by the City of Sunnyvale and
other applicable governmental authorities, Tenant shall be allowed to use the
Building's share of any Project monument signage, and to install exterior
signage and signage in the lobby of the Building, subject to this Paragraph 38.
Tenant shall have exclusive rights to exterior Building signage so long as
Tenant continues to lease more than seventy-five percent (75%) of the Premises.
Tenant shall be responsible for the costs related to such signage. All such
signage shall be in conformity with standards provided by Landlord. All such
signage shall be subject to further approval from Landlord of the exact number,
size, location and materials therefor (which consent shall not be unreasonably
withheld, delayed or conditioned), approval from the City of Sunnyvale (which
shall be Tenant's responsibility to obtain, at Tenant's cost) and compliance
with applicable governmental restrictions, including but not limited to,
ordinances of the applicable city (at Tenant's cost).
39. HAZARDOUS SUBSTANCE LIABILITY. Tenant has received from
Landlord a copy of the Phase I and Screening Level Phase II Environmental
Assessment of the 4.5 Acre Parking Lot Located at South Mathilda Avenue and West
Washington Avenue, Sunnyvale, California, dated August 13, 1999, prepared by
McLaren /Hart Inc. (the "Environmental Report").
(a) DEFINITION OF HAZARDOUS SUBSTANCES. For the
purpose of this Lease, "Hazardous Substances" shall be defined, collectively, as
oil, flammable explosives, asbestos, radioactive materials, hazardous wastes,
toxic or contaminated substances or similar materials, including, without
limitation, any substances which are "hazardous substances," "hazardous wastes,"
"hazardous materials" or "toxic substances" under applicable environmental laws,
ordinance or regulation.
(b) TENANT INDEMNITY. Tenant releases Landlord from
any liability for, waives all claims against Landlord and shall indemnify,
defend and hold harmless Landlord, its employees, partners, agents, subsidiaries
and affiliate organizations against any and all claims, suits, loss, costs
(including costs of investigation, clean up, monitoring, restoration and
reasonable attorneys' fees), damage or liability, whether foreseeable or
unforeseeable, by reason of property damage (including diminution in the value
of the property of Landlord), personal injury or death directly arising from or
related to Hazardous Substances released, manufactured, discharged, disposed,
used or stored on, in, or under the Project or Premises during the Term by any
Tenant Parties. The provisions of this Tenant Indemnity regarding Hazardous
Substances shall survive the termination of the Lease.
(c) LANDLORD INDEMNITY. Landlord releases Tenant from
any liability for, waives all claims against Tenant and shall indemnify, defend
and hold harmless Tenant, its officers, employees, and agents to the extent of
Landlord's interest in the Project, against any and all actions by any
governmental agency for clean up of Hazardous Substances on or under the
Project, including costs of legal proceedings, investigation, clean up,
monitoring, and restoration, including reasonable attorney fees, if, and to the
extent, arising from the presence of Hazardous Substances on, in or under the
Project or Premises, except to the extent caused by the release, disposal, use
or storage of Hazardous Substances in, on or about the Premises by any Tenant
Parties. The provisions of this Landlord Indemnity regarding Hazardous
Substances shall survive the termination of the Lease.
(d) LIMITED USE. Tenant has informed Landlord that,
except for very immaterial amounts of toxic materials incidental to its office
use (e.g.. copier toner), Tenant will not use any Hazardous Substances in
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material amounts within the Building and shall comply with any applicable laws
to the extent that it does. Tenant shall not use any other Hazardous Substances
within the Building or Project without the prior written consent of Landlord and
any Mortgagee; provided that Landlord shall not unreasonably withhold its
consent to such use of other Hazardous Substances if the type of Hazardous
Substances and level of use of Hazardous Substances is consistent with typical
office uses; provided further, however, that Landlord may withhold its consent
in its sole discretion if such use could, in Landlord's reasonable discretion,
result in (I) a violation of Laws, the DDA, the CC&Rs, the Parking REA, any
other Encumbrance, or any Mortgage, or (II) diminution in the value of the
Project or the Building, or (III) increased liability of Landlord, its
affiliates, principals, employees or other tenants under any Laws, any Mortgage,
any lease or otherwise.
40. SATELLITE ANTENNAE. During the Term of this Lease, Tenant
shall have the right, subject to relevant regulatory approvals, availability of
space within the roofscreen (provided that, if this Lease has been partially
terminated pursuant to Paragraph 9 or 45, then Tenant's share of the space
available within the roofscreen and allocated by Landlord for installation of
Antennae shall be in the same proportion to other tenants within the Building as
Tenant's Share), and, if this Lease has been partially terminated pursuant to
Paragraph 9 or 45, subject to Landlord's consent (with Landlord's consent not to
be unreasonably withheld, conditioned or delayed), to install satellite antennae
and similar telecommunications systems and equipment ("Antennae") on the roof of
the Building in a location satisfactory to both Landlord and Tenant. If
Landlord's consent is required, without otherwise limiting the criteria upon
which Landlord may withhold its consent to any proposed Antennae, if Landlord
withholds its consent due to concerns regarding the appearance of the Antennae
or the impact on structural aspects of the Building, such withholding of consent
shall be presumptively reasonable. Tenant shall not be charged additional rent
for roof space. Prior to submitting any plans to the City of Sunnyvale or
proceeding with any installation of the Antennae, Tenant shall submit to
Landlord elevations and specifications for the Antennae. Tenant shall install
the Antennae at its sole expense and shall be responsible for any damage caused
by the installation of the Antennae or related to the Antennae. At the end of
the Term, Tenant shall remove the Antennae from their locations and repair any
damage caused by such removal.
41. OPTION TO RENEW. Upon condition that no Default is continuing
under this Lease at the time of exercise or at the commencement of the
applicable Extension Term, then Tenant shall have the right to extend the Term
of this Lease, with respect to such portion of the Premises as continues to be
subject to this Lease as of the commencement of the applicable Extension Term,
for five (5) periods of five (5) years each (each, an "Extension Term")
following the initial Expiration Date or the Expiration Date as extended by the
previous Extension Term, as applicable, by giving written notice ("Exercise
Notice") to Landlord at least eighteen (18) months prior to the Expiration of
the immediately preceding Term.
42. RENT DURING EXTENSION TERM. The initial Monthly Base Rent
during the first five (5) year Extension Term (the "First Extension Term") shall
be the greater of Nine Hundred Thirteen Thousand Three Hundred Forty-Four
Dollars ($913,344) or the Fair Market Rental Value (determined as provided
below) for the Premises as of the commencement of the First Extension Term. The
initial Monthly Base Rent during each subsequent five (5) year Extension Term
shall be the greater of the Monthly Base Rent paid during the last month of the
immediately preceding Extension Term or the Fair Market Rental Value for the
Premises as of the commencement of the applicable Extension Term. On each
anniversary of the commencement of each Extension Term throughout such Extension
Term, the Monthly Base Rent shall be increased to the amount that is one hundred
three percent (103%) of the Monthly Base Rent in effect during the month
immediately prior to such anniversary. "Fair Market Rental Value" shall be
determined as provided below:
(a) Within thirty (30) days after receipt of Tenant's
Exercise Notice, Landlord shall notify Tenant of Landlord's estimate of the Fair
Market Rental Value for the Premises, as determined below, for determining
Monthly Base Rent during the ensuing Extension Term; provided, however, if
Tenant's Exercise Notice is given more than eighteen (18) months before the
Expiration Date, Landlord's estimate of Fair Market Rental Value may, but need
not be given more than eighteen (18) months before the Expiration Date. Within
ten (10) business days after receipt of such notice from Landlord, Tenant shall
notify Landlord in writing that it (i) agrees with such rental rate or (ii)
disagrees with such rental rate. If Tenant fails to respond within such ten (10)
business day period, Landlord shall deliver to Tenant a second notice setting
forth Landlord's estimate of Fair Market Rental Value, and failure of Tenant to
respond within five (5) business days after receipt of Landlord's second notice
shall constitute Tenant's agreement with Landlord's estimate of Fair Market
Rental Value. In the event that Tenant disagrees with
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Landlord's estimate of Fair Market Rental Value for the Premises, then the
parties shall meet and endeavor to agree within fifteen (15) days after Landlord
receives Tenant's notice described in the immediately preceding sentence. If the
parties cannot agree upon the Fair Market Rental Value within said fifteen (15)
day period, then the parties shall submit the matter to binding appraisal in
accordance with the following procedure except that in any event neither party
shall be obligated to start such procedure sooner than eighteen (18) months
before the expiration of the Lease Term. Within fifteen (15) days of the
conclusion of the period during which the two parties fail to agree (but not
sooner than eighteen (18) months before the expiration of the Lease Term), the
parties shall either (i) jointly appoint an appraiser for this purpose or (ii)
failing this joint action, each separately designate a disinterested appraiser.
No person shall be appointed or designated an appraiser unless such person has
at least five (5) years experience in appraising major commercial property in
Santa Clara County and is a member of a recognized society of real estate
appraisers. If within thirty (30) days after the appointment, the two appraisers
reach agreement on the Fair Market Rental Value for the Premises, that value
shall be binding and conclusive upon the parties. If the two appraisers thus
appointed cannot reach agreement on the Fair Market Rental Value for the
Premises within thirty (30) days after their appointment, then the appraisers
thus appointed shall appoint a third disinterested appraiser having like
qualifications within five (5) days. If within thirty (30) days after the
appointment of the third appraiser a majority of the appraisers agree on the
Fair Market Rental Value of the Premises, that value shall be binding and
conclusive upon the parties. If within thirty (30) days after the appointment of
the third appraiser a majority of the appraisers cannot reach agreement on the
Fair Market Rental Value for the Premises, then the three appraisers shall each
simultaneously submit their independent appraisal to the parties, the appraisal
farthest from the median of the three appraisals shall be disregarded, and the
mean average of the remaining two appraisals shall be deemed to be the Fair
Market Rental Value for the Premises and shall be binding and conclusive upon
the parties. Each party shall pay the fees and expenses of the appraiser
appointed by it and shall share equally the fees and expenses of the third
appraiser. If the two appraisers appointed by the parties cannot agree on the
appointment of the third appraiser, they or either of them shall give notice of
such failure to agree to the parties and if the parties fail to agree upon the
selection of such third appraiser within ten (10) days after the appraisers
appointed by the parties give such notice, then either of the parties, upon
notice to the other party, may request such appointment by the American
Arbitration Association or, on it failure, refusal or inability to act, may
apply for such appointment to the presiding judge of the Superior Court of Santa
Clara County, California.
(b) Wherever used throughout this Paragraph 42, the
term "Fair Market Rental Value" shall mean the fair market rental value of the
Premises, using as a guide the rate of monthly base rent which would be charged
during the applicable Extension Term in the Mid-Peninsula area for a comparable
lease of a parcel of land improved with a high image, Class A office space in
comparable condition, of comparable quality, as of the time that the Extension
Term commences, with appropriate adjustments regarding taxes, insurance and
operating expenses as necessary to insure comparability to this Lease, as the
case may be, and also taking into consideration amount and type of parking,
location, proposed term of lease, amount of space leased, extent of service
provided or to be provided, and any other relevant terms or conditions
(including consideration of whether or not the monthly base rent is fixed).
(c) In the event of a failure, refusal or inability
of any appraiser to act, his successor shall be appointed by the party who
originally appointed him, but in the case of the third appraiser, his successor
shall be appointed in the same manner as provided for appointment of the third
appraiser.
(d) The appraisers shall render their appraisals in
writing with counterpart copies to Landlord and Tenant. The appraisers shall
have no power to modify the provisions of this Lease.
(e) To the extent that a binding appraisal has not
been completed prior to the expiration of any preceding period for which Monthly
Base Rent has been determined, Tenant shall pay Monthly Base Rent at the rate
estimated by Landlord, with an adjustment to be made once Fair Market Rental
Value is ultimately determined by binding appraisal. In no event shall any such
adjustment result in a decrease of the Monthly Base Rent for the Premises below
the amount payable by Tenant as of the period immediately preceding the ensuing
Extension Term.
(f) From and after the commencement of each Extension
Term, all of the other terms, covenants and conditions of the Lease shall also
apply; provided that (i) during the fifth and final Extension Term, Tenant shall
have no further rights to extend the Term, and (ii) all of the provisions of
this Lease that are applicable only from and after a Reinstatement (including,
without limitation, Tenant's obligation to pay Expenses and Taxes pursuant to
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Paragraph 4 and Tenant's obligation to provide a security deposit pursuant to
Paragraph 43) shall be applicable and shall bind Landlord and Tenant throughout
any and all Extension Terms.
43. SECURITY DEPOSIT.
(a) OBLIGATIONS SECURED. Immediately upon any
Reinstatement, Tenant shall deliver to Landlord an unconditional, irrevocable,
transferable letter of credit (the "Letter of Credit"), in an amount equal to
the "Required Amount" (defined in Paragraph 43(d) below) and satisfying the
requirements set forth in Paragraph 43(b) below. The Letter of Credit shall
secure the Tenant's obligations under this Lease.
(b) REQUIREMENTS OF LETTER OF CREDIT. The Letter of
Credit shall be issued by a financial institution acceptable to Landlord and any
Mortgagee, in their respective sole discretion, and in form and substance
acceptable to Landlord and any Mortgagee, in the reasonable exercise of their
respective discretion, with an original term of no less than one year and
automatic extensions through the end of the Initial Term or any then-exercised
Extension Term of this Lease and sixty (60) days thereafter (the "Letter of
Credit"). Landlord shall not unreasonably withhold its approval of such a
financial institution if it is a national bank, or a bank branch located in the
United States (with an office in the United States allowing the Letter of Credit
to be presented to and paid by such office pursuant to procedures acceptable to
Landlord in its reasonable discretion) with assets of the issuing bank or bank
branch in excess of Twenty Billion Dollars ($20,000,000,000). If Landlord
determines at any time, in good faith, that either (I) the issuing bank or bank
branch has assets of less than Twenty Billion Dollars ($20,000,000,000), or (II)
the issuing bank or bank branch has or intends to close or cease operations from
the issuing bank branch, then Landlord may require that Tenant replace the
Letter of Credit with a Letter of Credit from a different financial institution
acceptable to Landlord, in the reasonable exercise of its discretion, within ten
(10) business days after Tenant's receipt of notice of such requirement from
Landlord. The Letter of Credit shall (i) be a stand-by, at-sight, irrevocable
letter of credit; (ii) be payable to Landlord, its Mortgagee or their assignees
(any of the foregoing, the "Beneficiary"); (iii) require that any draw on the
Letter of Credit shall be made only upon receipt by the issuer of a letter
signed by a purported authorized representative of the Beneficiary certifying
that the Beneficiary is entitled to draw on the Letter of Credit pursuant to
this Lease; (iv) allow partial draws; and (v) provide that it is governed by the
Uniform Customs and Practice for Documentary Credits (1993 revisions) or the
International Standby Practices (ISP 98). Tenant shall keep the Letter of
Credit, at its expense, in full force and effect until the sixtieth (60th) day
after the Expiration Date or other termination of this Lease, to insure the
faithful performance by Tenant of all of the covenants, terms and conditions of
this Lease, including, without limitation, Tenant's obligations to repair,
replace or maintain the Building. The Letter of Credit shall provide at least
thirty (30) days' prior written notice to Landlord and the Beneficiary of
cancellation or material change thereof.
(c) DRAWS ON LETTER OF CREDIT.
(i) PARTIAL DRAW. At any time after a
Default occurs under the Lease, and provided that no "Draw Event" (as
defined below) has then occurred, the Beneficiary may present its
written demand for payment of a portion of the amount of the Letter of
Credit as is required to compensate Landlord for damages incurred as a
result of such Default, and the funds so obtained from the Letter of
Credit shall become due and payable to the Beneficiary.
(ii) FULL DRAW. At any time after a Draw
Event occur, the Beneficiary may present its written demand for payment
of the entire face amount of the Letter of Credit (or, at the
Beneficiary's sole election, for payment of a portion of the amount of
the Letter of Credit as is required to compensate Landlord for damages
incurred, with subsequent demands at the Beneficiary's sole election as
Landlord incurs further damages) and the funds so obtained shall become
due and payable to the Beneficiary. The Beneficiary may retain such
funds to the extent required to compensate Landlord for damages
incurred, or to reimburse Landlord as provided herein, in connection
with any such Default or other Draw Event, and any remaining funds
shall be held as a cash security deposit.
(iii) "DRAW EVENT" DEFINED. A "Draw
Event" shall mean any of the following: (I) Tenant does not replace the
Letter of Credit with a new Letter of Credit in the full Required
Amount within ten (10) days after Landlord makes a partial draw thereon
in connection with a Default pursuant to Paragraph 43(c)(i); (II)
Tenant is the subject of an Insolvency Proceeding; (III) the Lease is
terminated by
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Landlord due to a Tenant Default; (IV) the Letter of Credit is not
replaced with a Letter of Credit from a different financial institution
if and when required by Paragraph 43(b); (V) the Letter of Credit is
not extended within thirty (30) days prior to its expiration; and (VI)
a Default occurs under this Lease at a time when Tenant is in "Chronic
Default" (as defined below). Tenant shall be in "Chronic Default" under
this Lease at any time that Landlord has delivered a notice of Tenant's
failure to perform any of its obligations hereunder and/or assessed a
late charge pursuant to Paragraph 3(d) during the previous six months,
or more than two (2) times during the previous twenty-four (24) months,
regardless in each case of whether such failure was cured by Tenant
within any applicable grace or cure period; provided, however, that any
such notice of failure to perform relating to a non-monetary failure to
perform which was disputed, in good faith, by Tenant and ultimately
determined (by agreement of the parties, arbitration or judicial
action) not to be a violation of this Lease shall not be considered for
purposes of determining whether such condition has been met.
(iv) REPLACEMENT AFTER DRAW. If Landlord
or the Beneficiary uses any portion of the Letter of Credit, or the
cash security deposit resulting from a draw on the Letter of Credit, to
cure any Default by Tenant hereunder and/or for any other reason
permitted or contemplated by this Paragraph 43, Tenant shall provide a
replacement Letter of Credit in the Required Amount within ten (10)
days of notice from Landlord or the Beneficiary, and Tenant's failure
to do so shall be a Default hereunder without benefit of grace or cure
periods. Any unused portion of the funds so obtained by Landlord or the
Beneficiary shall be returned to Tenant upon replacement of the Letter
of Credit in the full Required Amount.
(d) REQUIRED AMOUNT. The term "Required Amount"
initially shall mean an amount equal to Monthly Base Rent plus Landlord's
estimate of Additional Charges for Real Estate Taxes and Expenses for the twelve
month period immediately following Reinstatement (such amount being defined
herein as the "Initial Required Amount"). Tenant shall be entitled to reduce the
Required Amount of the Letter of Credit on each of the seventh through eleventh
anniversaries of Reinstatement (to the extent such anniversaries occur during
the Term) in the amount of one-sixth (1/6th) of the Required Amount (as it
exists as of the sixth anniversary of Reinstatement, if such anniversary occurs
during the Term) on each such anniversary, and such reduced amount from time to
time shall be the "Required Amount" under this Paragraph 43, so long as (i)
Tenant is not in Default (and no event has occurred which, with the passage of
time or giving of notice or both, would constitute a Default) under this Lease
on such anniversary date, and (ii) Tenant is not in Chronic Default under this
Lease on such anniversary date.
(e) [INTENTIONALLY DELETED ]
(f) ASSIGNMENT OF LETTER OF CREDIT/MORTGAGEE.
Landlord shall be entitled to assign the Letter of Credit and its rights thereto
from time to time in connection with an assignment of this Lease to a Mortgagee
as security for the obligations of Landlord to such Mortgagee, or in connection
with a sale or other transfer of Landlord's interest in all or a portion of the
Project (provided that, in each instance, Landlord pays any bank fees associated
with any transfer of the Letter of Credit). Tenant shall cooperate with Landlord
in connection with any modifications of or amendments to the Letter of Credit
that may be reasonably requested by any Mortgagee and/or in connection with any
such assignment. At Landlord's sole election, Landlord may also direct Tenant to
cause the Letter of Credit to directly name a Mortgagee as the sole beneficiary
thereunder.
(g) CONVERSION OF DEPOSIT TO LOAN. Landlord and
Tenant acknowledge and agree that, if Tenant defaults under this Lease and fails
to fully cure such default within the applicable cure period and Landlord elects
to pursue its remedies under California Civil Code Section 1951.2 or under this
Lease to terminate this Lease (any such event, a "Landlord Action"), (i)
Landlord will incur certain damages, costs and expenses, including, without
limitation, marketing costs, commissions, relocation costs, tenant improvement
costs, and carrying costs in connection with releasing the Premises, in addition
to the other damages, costs and expenses Landlord may incur as a result of such
default and/or other defaults under this Lease (all of the foregoing
collectively, "Default Damages"); (ii) Landlord has no assurance of a source of
funds to cover such Default Damages other than the proceeds of the Letter of
Credit (or cash collateral); and (iii) the proceeds of the Letter of Credit (or
cash collateral) should be available to Landlord to apply to Default Damages,
even if the amount thereof exceeds that amount to which Landlord is ultimately
determined to be entitled under this Lease and pursuant to applicable law.
Accordingly, at the sole election of the Beneficiary, the Beneficiary shall be
entitled to draw the full amount of the Letter of Credit (or the full amount of
cash collateral shall be released to the Beneficiary) which is then existing
(after any previous
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application of funds by Landlord or the Beneficiary and/or replenishment by
Tenant pursuant to this Paragraph 43), simultaneously with commencement of a
Landlord Action or at any time thereafter. All proceeds thereof in excess of
amounts applied (pursuant to Paragraph 43(c)) to Default Damages incurred by
Landlord prior to commencement of the Landlord Action shall be deemed a loan
from Tenant to Landlord (the "Default Loan"). The Default Loan shall be
unsecured and shall not bear interest, and repayment thereof shall be limited to
the terms and conditions set forth in this paragraph. Any sums to which Landlord
from time to time becomes entitled hereunder and pursuant to law as a result of
Tenant's Default and any previous Defaults of the Lease, to which the Letter of
Credit (or cash collateral) has not previously been applied pursuant to
Paragraph 43(c), shall be offset against the principal balance of the Loan. The
amount of the Default Loan remaining, if any, after such offset shall be
referred to herein as the "Excess Amount." The Excess Amount shall be payable by
Landlord to Tenant from, and only from, first any proceeds from the Letter of
Credit (or cash collateral) which have not been applied to Default Damages
incurred by Landlord after the same are finally determined (the "Remaining
Proceeds"), and then Excess Rent. The Remaining Proceeds shall be paid by
Landlord to Tenant promptly upon final determination after the entire Premises
are leased to a third party or parties "Excess Rent" shall mean the amount by
which (x) rent received by Landlord (from the tenant or tenants leasing all or
any portion of the Premises after Tenant's default) in any month exceeds (y) the
amount of rent that would have been payable under this Lease for such month if
this Lease had not been terminated. Landlord shall pay Tenant one-half of the
Excess Rent until the earlier of (A) the date the Excess Amount is fully repaid
or (B) the date that would have been the Expiration Date of this Lease. Any
remaining balance of the Default Loan on such date shall be deemed forgiven. If
the Default Loan is insufficient to cover all Default Damages, Tenant shall pay
Landlord any such shortfall immediately upon demand by Landlord, and Landlord
shall have all rights and remedies available at law or elsewhere in the Lease
with respect to such shortfall.
44. ARBITRATION. ANY CONTROVERSY OR CLAIM ARISING OUT OF THE
MATTERS EXPRESSLY MADE SUBJECT TO ARBITRATION PURSUANT TO THIS LEASE SHALL BE
SETTLED BY ARBITRATION CONDUCTED IN SAN MATEO OR SANTA CLARA COUNTY, CALIFORNIA,
IN ACCORDANCE WITH THE COMMERCIAL RULES OF THE AMERICAN ARBITRATION ASSOCIATION,
AND JUDGMENT ON THE AWARD RENDERED BY THE ARBITRATOR(S) MAY BE ENTERED IN ANY
COURT HAVING JURISDICTION. THE PREVAILING PARTY IN SUCH ARBITRATION SHALL BE
ENTITLED TO ATTORNEYS' FEES AND COSTS. "PREVAILING PARTY" SHALL MEAN THAT PARTY
WHO RECEIVES SUBSTANTIALLY THE RELIEF REQUESTED, WHETHER BY SETTLEMENT OR
JUDGMENT.
NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE
ARISING OUT OF MATTERS EXPRESSLY MADE SUBJECT TO ARBITRATION PURSUANT TO THIS
LEASE DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE
GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT
OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL
RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN
THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION
AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE
AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS
ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING
OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION TO
NEUTRAL ARBITRATION.
Consent to neutral arbitration by: JM Landlord DD Tenant
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45. REINSTATEMENT.
(a) REINSTATEMENT EVENTS. "Reinstatement" shall
occur, if at all, only as the result of an affirmative written election by
Tenant to cause a Reinstatement to occur or to exercise an option to extend for
the First Extension Term, either which election has been approved in writing by
Guarantor. Reinstatement may occur with respect to all or any portion of the
Premises, as applicable, in accordance with and on the earliest to occur of the
following:
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(i) At Tenant's sole option,
exercisable at any time after the second anniversary of the
Commencement Date by delivery of written notice to Landlord, Tenant may
elect to cause a Reinstatement with respect to the entire Premises only
(but excluding any previously Surrendered Premises);
(ii) If Tenant exercises an option to
extend the Term under Paragraph 41 hereof, then upon commencement of
the First Extension Term, Reinstatement shall occur with respect to the
entire Premises (but excluding any previously Surrendered Premises);
and
(iii) If Landlord delivers an
Acceleration Notice (as defined below) and Tenant elects, by written
notice to Landlord within five (5) days after receipt of Landlord's
Acceleration Notice, to cause a Reinstatement to occur, then
Reinstatement shall occur with respect to the Acceleration Portion
pursuant to Paragraph 45(c) below.
(b) REINSTATEMENT TERMS. The following terms and
conditions shall apply from and after any Reinstatement:
(i) If Reinstatement occurs during the
Initial Term, Monthly Base Rent shall be revised to be as follows (such
amounts as they exist from time to time being defined for purposes of
the calculation of the Reinstatement Payment pursuant to clause (iii)
below and for purposes of calculating damages pursuant to Paragraph
19(b) as the "Monthly Modified Rent"):
Lease Year 1 - $724,082 per month
Lease Year 2 - $759,376 per month
Lease Year 3 - $795,905 per month
Lease Year 4 - $833,713 per month
Lease Year 5 - $872,844 per month
"Lease Year" shall mean each twelve (12) consecutive month period commencing on
the Commencement Date and each anniversary of the Commencement Date.
(ii) If Reinstatement occurs during the
Initial Term, the "Reinstatement Payment" (as defined below) shall be
due and payable within ten (10) days after the effective date of such
Reinstatement, and failure by Tenant to make such payment within such
(10) ten day period shall render the Reinstatement null and void at
Landlord's option. The Reinstatement Payment shall be an amount equal
to the sum of the difference between the Monthly Modified Rent and the
Monthly Base Rent for each month (or partial month, prorated) from the
Commencement Date to and including the effective date of Reinstatement.
(iii) Prior to the effective date of any
Reinstatement, Tenant shall provide to Landlord a letter of credit that
complies with the requirements of Paragraph 43, in an Initial Required
Amount equal to twelve (12) months Monthly Base Rent (as revised
pursuant to Subparagraph 45(b) above and/or Paragraph 42), and failure
by Tenant to deliver such letter of credit at such time shall render
the Reinstatement null and void at Landlord's option.
(iv) From and after such Reinstatement,
Tenant shall pay to Landlord all Additional Charges for Expenses and
Real Estate Taxes that accrue after Reinstatement, pursuant to
Paragraph 3.
(c) LANDLORD ACCELERATION RIGHT. Prior to expiration
of the Initial Term, Landlord may, at its sole election, require Tenant to elect
whether to cause a Reinstatement to occur with respect to the entire Premises or
a portion of the Premises consisting of the airspace within and corresponding to
one or more full floors of the Building located within the Premises by
delivering written notice (the "Acceleration Notice") to Tenant identifying the
portions of the Premises (stated as floors of the Building, or the entire
Building) for which Landlord makes such election (the "Acceleration Portion"),
provided that if the Acceleration Portion is less than the entire Premises, such
partial Premises may not consist of less than an entire floor of the Building
nor include any partial floors within the Building. Landlord's Acceleration
Notice shall specify, at Landlord's sole option, whether Tenant may elect to
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Reinstate with respect to portions of the Acceleration Portion or only with
respect to the entire Acceleration Portion. Tenant shall have five (5) days
after receipt of an Acceleration Notice to elect by written notice to Landlord
whether to cause a Reinstatement to occur, and any such Reinstatement shall be
effective as of the date of such written notice to Landlord. Tenant's failure to
notify Landlord in writing during such five (5) day period of Tenant's election
to cause a Reinstatement shall be deemed Tenant's election not to cause a
Reinstatement to occur with respect to the entire Acceleration Portion or any
portion thereof. If, after receipt of an Acceleration Notice, Tenant elects not
(or is deemed to have elected not) to cause a Reinstatement to occur with
respect to the Acceleration Portion, or any portion thereof, or if Landlord does
not also receive Guarantor's written approval of such election by Tenant within
such five (5) day period, then this Lease shall automatically terminate with
respect to the Acceleration Portion (or the portion as to which Tenant has not
elected to cause a Reinstatement or Guarantor has not approved a Reinstatement),
as determined in accordance with Paragraph 45(d), on the earlier of Tenant's
written notice to Landlord or the expiration of such five (5) business day
period following the Acceleration Notice. Immediately upon such termination,
Tenant shall (i) surrender possession to Landlord of the Acceleration Portion
(or portion thereof) including such of the Improvements as are located therein,
in accordance with Section 24, and (ii) if such termination applies to the
entire Premises (or the entire remaining portion of the Premises as to which the
Lease then applies), the Monthly Base Rent that would have been payable under
this Lease from the effective date of such termination until the expiration of
the Initial Term shall be automatically converted to an unsecured promissory
note from Tenant to Landlord, payable in equal monthly installments equal to the
Monthly Base Rent hereunder, and with a maturity date of the expiration date of
the Initial Term. Tenant shall execute and deliver such promissory note, in the
form attached hereto as Exhibit "F" (the "Lease Termination Note"), to Landlord
upon demand. Upon a termination of less than all of the Premises, the Monthly
Base Rent shall be unaffected, and shall continue to be payable as the Monthly
Base Rent for the portion of the Premises as to which no termination has
occurred.
(d) PARTIAL TERMINATION. If, in response to a
Landlord Acceleration Notice for less than the entire Premises, this Lease is
terminated with respect to a portion of the Premises, or if pursuant to
Paragraph 9(d) this Lease terminates with respect to a portion of the Premises
as a result of a Recapture, then the following shall immediately apply, and this
Lease shall automatically be modified accordingly:
(i) The "Premises" under this Lease
shall be a tenancy-in-common interest in the Parcel (the "Initial
Premises"), equal to a percentage determined by dividing the number of
floors in the Building that are not included in the "Surrendered
Premises" pursuant to clause (iii) below by six.
(ii) Landlord shall hold, without
encumbrance by this Lease, a tenancy-in-common interest in the
remaining portion of the Initial Premises.
(iii) Ownership of the floors of the
Building that were, as applicable, either (A) included in Landlord's
Acceleration Notice and for which Tenant did not elect to Reinstate, or
(B) included in Tenant's Availability Notice and for which Landlord
elected to Recapture pursuant to Paragraph 9(c) (all of the foregoing,
as they may exist from time to time, being defined herein as the
"Surrendered Premises"), shall revert to Landlord in accordance with
Paragraph 24, and Tenant shall immediately vacate and surrender the
Surrendered Premises to Landlord. Thereafter, Landlord shall retain
ownership, possession and control over the Surrendered Premises
throughout the remaining Term.
(iv) If such reduction in the Premises
occurs after a Reinstatement, then Tenant's Share shall be a percentage
determined by dividing the rentable area of the portions of the Initial
Premises that are not included in the Surrendered Premises by the
Rentable Area of the entire Building as set forth in the Basic Lease
Information. For purposes of this Paragraph 45, the rentable area of
each floor of the Building shall be as follows, which amounts shall be
conclusive and binding on the parties and not subject to remeasurement:
Floor 1 - 36,360 rentable square feet
Floor 2 - 36,360 rentable square feet
Floor 3 - 35,255 rentable square feet
Floor 4 - 35,255 rentable square feet
Floor 5 - 35,255 rentable square feet
Floor 6 - 34,310 rentable square feet
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(v) Tenant shall at all times provide
reasonable and appropriate access to the Surrendered Premises and use
of any common facilities within the Building (including, at Landlord's
election and as reasonable under the circumstances, by the designation
of "building common areas" as appropriate for the use of and access to
the Surrendered Premises, including provision of any utilities and
services for such Surrendered Premises).
(vi) Tenant's Minimum Parking shall be
reduced to Tenant's Share of the number of parking spaces included in
Tenant's Minimum Parking.
(vii) If after giving effect to such
termination Tenant continues to lease seventy-five percent (75%) or
less of the Premises, Tenant's rights with respect to any monument or
other Project signage and the roof space (for Satellite Antennae) shall
be reduced in the same proportion as the Minimum Parking.
Promptly after request from Landlord, Tenant shall enter into any amendment to
this Lease or other documentation reasonably requested by Landlord in connection
with any such termination of this Lease as to a portion of the Premises (which
may include, without limitation, provisions regarding the modifications set
forth in this Paragraph 9(d)) and reversion of the Surrendered Premises and/or
non-rentable portions of the Building to Landlord, which amendment shall be in
the form attached hereto as Exhibit "G".
(e) PARTIAL REINSTATEMENT. If, in response to a
Landlord Acceleration Notice for less than the entire Premises, Tenant elects to
Reinstate this Lease with respect to a portion of the Premises, then the
following terms and conditions shall immediately apply, and this Lease shall
automatically be modified accordingly:
(i) Monthly Base Rent shall be modified
to be, from time to time throughout the remaining Term, the sum of (A)
an amount determined by multiplying the then-applicable Monthly Base
Rent set forth in the Basic Lease Information by a fraction, the
numerator of which is the rentable area of the portion of the Initial
Premises that is not subject to Reinstatement (for such purposes,
determined by the portion of the Building that is not included in the
Reinstatement and based on the rentable area for each floor set forth
in Subparagraph 45(d)(iv)) and the denominator of which is the Rentable
Area of the entire Building, plus (B) an amount determined by
multiplying the then-applicable Monthly Modified Rent by a fraction,
the numerator of which is the rentable area of the portion of the
Initial Premises that is subject to Reinstatement (for such purposes,
determined by the portion of the Building that is included in the
Reinstatement and based on the rentable area for each floor set forth
in Subparagraph 45(d)(iv)) and the denominator of which is the Rentable
Area of the entire Building.
(ii) Tenant's Share shall be the
percentage determined by a fraction, the numerator of which is the
rentable area of the portion of the Initial Premises as to which
Reinstatement or Occupancy has occurred (based on the rentable area for
each floor set forth in Subparagraph 45(d)(iv)) and the denominator of
which is the Rentable Area of the entire Building.
(iii) The Initial Required Amount of the
security deposit required by Paragraph 43 shall be an amount equal to
"Tenant's Share" of the Initial Required Amount specified in Paragraph
43(d).
46. TENANT TERMINATION RIGHT. At Tenant's sole option,
exercisable at any time after the second anniversary of the Commencement
Date by delivery of written notice to Landlord, but only if Tenant's sole member
is being merged or substantially all of its assets are being acquired, Tenant
may elect to terminate this Lease
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in its entirety, provided that, as a condition to such termination, Tenant
immediately vacates and surrenders possession of the Premises and Improvements
as required by Paragraph 24 and pays to Landlord the Monthly Base Rent that, but
for such termination, would be payable under this Lease through the expiration
of the Initial Term.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the date first above written.
LANDLORD: TENANT:
-------- ------
M-F Downtown Sunnyvale, LLC, HANDSPRING FACILITY COMPANY, LLC,
a Delaware limited liability company a Delaware limited liability company
By: Handspring, Inc., a Delaware
corporation
By: M-D Ventures, Inc., a California Its: Managing Member
Corporation, its Manager
By: /s/ Donna Dubinsky
________________________
Its: CEO
________________________
By: /s/ John Mozart
__________________________
John Mozart, its President
45