California-Foster City-4000-4100 East 3rd Avenue Lease - Walton Bayside Investors IV LLC and Inktomi Corp.
BAYSIDE TOWERS
FOSTER CITY, CALIFORNIA
OFFICE LEASE AGREEMENT
BETWEEN
WALTON BAYSIDE INVESTORS IV, L.L.C., A DELAWARE LIMITED LIABILITY COMPANY
("LANDLORD")
AND
INKTOMI CORPORATION, A DELAWARE CORPORATION
("TENANT")
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TABLE OF CONTENTS
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PAGE
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I. Basic Lease Information........................................................... 1
II. Lease Grant....................................................................... 3
III. Possession........................................................................ 3
IV. Rent.............................................................................. 4
V. Compliance with Laws; Use......................................................... 11
VI. Security Deposit.................................................................. 11
VII. Services to be Furnished by Landlord.............................................. 12
VIII. Leasehold Improvements............................................................ 14
IX. Repairs and Alterations........................................................... 15
X. Use of Electrical Services by Tenant.............................................. 18
XI. Entry by Landlord................................................................. 19
XII. Assignment and Subletting......................................................... 19
XIII. Liens............................................................................. 21
XIV. Indemnity and Waiver of Claims.................................................... 22
XV. Insurance......................................................................... 23
XVI. Subrogation....................................................................... 23
XVII. Casualty Damage................................................................... 23
XVIII. Condemnation...................................................................... 25
XIX. Events of Default................................................................. 26
XX. Remedies.......................................................................... 26
XXI. Limitation of Liability........................................................... 28
XXII. No Waiver......................................................................... 28
XXIII. Quiet Enjoyment.................................................................... 29
XXIV. Furniture.......................................................................... 29
XXV. Holding Over...................................................................... 30
XXVI. Subordination to Mortgages; Estoppel Certificate.................................. 31
XXVII. Attorneys' Fees................................................................... 32
XXVIII. Notice............................................................................. 32
XXIX. Excepted Rights...................................................................... 33
XXX. Surrender of Premises................................................................. 33
XXXI. Miscellaneous........................................................................ 34
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TABLE OF CONTENTS
(CONTINUED)
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XXXIII. RIGHT OF FIRST OFFER............................................................... 43
XXXIV. PARKING RIGHTS...................................................................... 45
XXXV. Tenant's Right to Terminate....................................................... 46
XXXVI. Entire Agreement.................................................................. 47
XXXVII. Counterparts....................................................................... 47
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OFFICE LEASE AGREEMENT
THIS OFFICE LEASE AGREEMENT (the "Lease") is made and entered into as
of the 19th day of December, 2002, by and between WALTON BAYSIDE INVESTORS IV,
L.L.C., A DELAWARE LIMITED LIABILITY COMPANY ("Landlord") and INKTOMI
CORPORATION, A DELAWARE CORPORATION ("Tenant").
I. BASIC LEASE INFORMATION.
A. "Building" shall mean the two buildings in Foster City,
California, commonly known as Bayside Towers, and located at
4000 East 3rd Avenue ("4000 Building") and 4100 East 3rd
Avenue ("4100 Building").
B. "Rentable Square Footage of the Building" is deemed to be
261,674 rentable square feet.
C. "Premises" shall mean the entire 4100 Building. The "Rentable
Square Footage of the Premises" is deemed to be 130,837
rentable square feet. For so long as the Premises include one
or more floors in their entirety, all corridors and restroom
facilities located on such full floor(s) shall for all
purposes be considered part of the Premises. Landlord and
Tenant stipulate and agree that the Rentable Square Footage of
the Building and the Rentable Square Footage of the Premises
are correct and shall not be remeasured.
D. "Base Rent":
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ANNUAL RATE
YEAR OF TERM PER RENTABLE SQUARE FOOT ANNUAL MONTHLY
BASE RENT BASE RENT
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1-5 $15.00 $1,962,555.00 $163,546.25
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E. "Tenant's Pro Rata Share": 50% of Taxes and Expenses not
specifically allocable to the 4000 Building or the 4100
Building, and 100% of the Expenses allocable solely to the
4100 Building.
"Tenant's Monthly Expense and Tax Payment": $130,837.00, which
is equal to the product of the Rentable Square Footage of the
Premises and $1.00 per rentable square foot per month, which
is Tenant's Pro Rata Share of the monthly estimated Expenses
and monthly estimated Taxes (as more fully described in, and
subject to adjustment as described in, Section IV below).
F. "Term": A period of 60 months. The Term shall commence on
[insert the "Closing Date" as defined in the Agreement of
Purchase and Sale With Escrow Instructions to which this Lease
is attached as Exhibit F ] (the "Commencement Date") and,
unless terminated early in accordance with this Lease, end on
[insert date immediately preceding fifth anniversary of the
Closing Date] (the "Termination Date").
G. Tenant allowance(s): None.
H. "Security Deposit": A Security Deposit in the amount of
$163,546.25 shall be provided in accordance with Section VI
below.
I. "Guarantor(s)": None.
J. "Broker(s)": Eastdil Realty Co., Inc.
K. "Permitted Use": General office use and administrative
purposes and ancillary office uses reasonably related thereto
(including, without limitation, electronic commerce research
and development and product support) and other legally
permitted uses consistent with the character of a first class
office building.
L. "Notice Addresses":
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Tenant: With a copy to:
Inktomi Corporation Inktomi Corporation
4100 Third Avenue 4100 Third Avenue
Foster City, California 94404 Foster City, California 94404
Phone: (650) 653-3139 Phone: (650) 653-3395
Fax: (650) 653-3088 Fax: (650) 653-2801
Attention: Director of Real Estate Attention: Real Estate Legal Counsel
Landlord:
Walton Bayside Investors IV, L.L.C. With a copies to:
c/o Walton Street Capital
900 N. Michigan Avenue, Suite 1900 Pircher, Nichols & Meeks
Chicago, IL 60611 1925 Century Park East
Attention: Perry M. Pinto Suite 1700
Tel: (312) 915-2890 Attention: Real Estate Notices
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(SCS/MCH)
Fax: (312) 915-2881 Tel: (310) 201-8900
Fax: (310) 201-8922
Legacy Partners
4000 Third Avenue, Suite 600
Foster City, CA 94404
Attention: President, Northern Region
Tel: (650) 571-2200
Fax: (650) 571-2211
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Rent (defined in Section IV.A) is payable to the order of
Walton Bayside Investors IV, L.L.C. at the following address:
[TO BE PROVIDED] or such alternative order or address as
Landlord may provide to Tenant in writing.
M. "Business Day(s)" are Monday through Friday of each week,
exclusive of New Year's Day, President's Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas
Day ("Holidays").
N. Intentionally Omitted.
O. "Law(s)" means all applicable statutes, codes, ordinances,
orders, rules and regulations of any municipal or governmental
entity.
P. "Normal Business Hours" for the Building are 8:00 A.M. to 6:00
P.M. on Business Days and 8:00 A.M. to 1:00 P.M. on Saturdays.
Q. "Property" means the Building and the parcel(s) of land on
which it is located and the landscaping, the parking
facilities and all other improvements owned by Landlord and
serving the Building and the tenants thereof and the parcel(s)
of land on which they are located.
II. LEASE GRANT.
Landlord leases the Premises to Tenant and Tenant leases the Premises
from Landlord, together with the right in common with others to use any portions
of the Property that are designated by Landlord for the common use of tenants
and others, such as sidewalks, unreserved parking areas, common corridors,
elevator foyers, restrooms, vending areas and lobby areas (the "Common Areas").
Notwithstanding any contrary provision of this Lease, for so long as the
Premises consist of the entire 4100 Building, no interior portion of the 4100
Building shall be designated as part of the Common Areas.
III. POSSESSION.
A. As Is Condition. Landlord and Tenant acknowledge that Tenant
is currently in possession of the Premises and, subject to
Section III.B. below, Tenant shall continue to accept the
Premises in its "as is" condition and configuration subject
to, without limitation, (a) the state of the title thereto
existing as of the Commencement Date, (b) any state of facts
which an accurate survey or physical inspection might show,
(c) all Laws, (d) any violations of Laws which
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may exist at the commencement of the Lease Term, and (e) the
presence of any Hazardous Materials at or under the Building
or at or under any property in the vicinity of the Building.
Tenant agrees that the Premises are in good order and
satisfactory condition, and that there are no representations
or warranties by Landlord regarding the condition of the
Premises or the Building or any understandings or obligations
on the part of Landlord to perform any alterations, repairs or
improvements with respect to the Premises or the Building,
except as may be expressly set forth in this Lease. AS OF THE
COMMENCEMENT DATE, LANDLORD HAS NOT MADE, NOR SHALL BE DEEMED
TO HAVE MADE, ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, AND LANDLORD SHALL NOT BE DEEMED TO HAVE ANY
LIABILITY WHATSOEVER AS TO THE VALUE, HABITABILITY, COMPLIANCE
WITH ANY PLANS AND SPECIFICATIONS, CONDITION, DESIGN,
OPERATION, LOCATION, USE, DURABILITY, MERCHANTABILITY,
CONDITION OF TITLE, OR FITNESS FOR USE OF THE BUILDING (OR ANY
PART THEREOF) FOR ANY PARTICULAR PURPOSE, OR ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED,
WITH RESPECT TO THE BUILDING (OR ANY PART THEREOF); AND NONE
OF LANDLORD, ANY MORTGAGEE OR THEIR RESPECTIVE SUCCESSORS OR
ASSIGNS SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT
DEFECT THEREIN OR FOR THE FAILURE OF THE BUILDING TO BE
CONSTRUCTED IN ACCORDANCE WITH ANY PLANS AND SPECIFICATIONS
THEREFOR, FOR THE COMPLIANCE OF THE PLANS AND SPECIFICATIONS
FOR THE BUILDING WITH APPLICABLE LAWS OR FOR THE FAILURE OF
THE BUILDING, OR ANY PART THEREOF, TO OTHERWISE COMPLY WITH
ANY APPLICABLE LAWS. Tenant owned and operated the Building
for a substantial period of time prior to the Commencement
Date and is more familiar than Landlord with the Building, and
Tenant is willing to accept, and hereby accepts, all risks
incident to the matters discussed in the preceding sentence.
Furthermore, Tenant inspected the Building prior to Tenant's
acquisition thereof and Tenant was satisfied with the results
of such inspections, and Tenant is entering into this Lease
solely on the basis of Tenant's own knowledge concerning the
condition of the Building on the Commencement Date. The
provisions of this Lease have been negotiated, and the
foregoing provisions are intended to be a complete exclusion
and negation of any representations or warranties by Landlord
or Mortgagee, express or implied, with respect to the Building
as of the Commencement Date, that may arise pursuant to any
law now or hereafter in effect, or otherwise and specifically
negating any warranties under the Uniform Commercial Code.
B. No Diminution of Landlord's Lease Obligations. Nothing in
Section III.A. above shall be construed to diminish or
otherwise alter or affect Landlord's express obligations under
this Lease including, without limitation, those imposed by
Sections VII, IX.B., XI, XVII.B., XXIII and XXXI.G.
IV. RENT.
A. Payments. As consideration for this Lease, Tenant shall pay
Landlord, without prior notice, demand, setoff or deduction
(other than as expressly provided in this Lease), the Base
Rent and Additional Rent due for the Term. "Additional Rent"
means all sums (exclusive of Base Rent) that Tenant is
required to pay
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Landlord. Additional Rent and Base Rent are sometimes
collectively referred to as "Rent". Tenant shall pay and be
liable for all rental, sales and use taxes (but excluding
income taxes), if any, imposed upon or measured by Rent under
applicable Law. Base Rent and recurring monthly charges of
Additional Rent shall be due and payable in advance on the
first day of each calendar month without notice or demand. Any
other amounts payable by Tenant under the terms hereof shall
be due and payable by Tenant on or before 20 days after
billing by Landlord. All payments of Rent shall be by good and
sufficient check or by other means (such as automatic debit or
electronic transfer) reasonably acceptable to Landlord. If
Tenant fails to pay any item or installment of Rent when due,
Tenant shall pay Landlord an administration fee equal to 2% of
the past due Rent. If the Term commences on a day other than
the first day of a calendar month or terminates on a day other
than the last day of a calendar month, the monthly Base Rent
and Tenant's Pro Rata Share of Expenses (defined in Section
IV.C.) and Taxes (defined in Section IV.D.) for the month
shall be prorated based on the number of days in such calendar
month. Landlord's acceptance of less than the correct amount
of Rent shall be considered a payment on account of the
earliest Rent due. No endorsement or statement on a check or
letter accompanying a check or payment shall be considered an
accord and satisfaction, and either party may accept the check
or payment without prejudice to that party's right to recover
the balance or pursue other available remedies. This shall be
a "triple net lease" and Rent shall be paid to Landlord
without deduction for any costs and expenses, except as
specifically provided to the contrary in this Lease. The
provisions for payment of Expenses and Taxes are intended to
pass on to Tenant and reimburse Landlord for all costs and
expenses of such nature incurred in connection with the
ownership, management, replacement, repair, maintenance,
restoration and operation of the Building and its supporting
facilities and such additional facilities now and in
subsequent years as may be determined by Landlord to be
necessary or desirable to the Building.
B. Payment of Tenant's Pro Rata Share of Expenses and Taxes.
Tenant shall pay Tenant's Pro Rata Share of the total amount
of Expenses (defined in Section IV.C.) and Taxes (defined in
Section IV.D) for each calendar year during the Term. Landlord
shall provide Tenant with a good faith estimate of the total
amount of Expenses and Taxes for each calendar year during the
Term. On or before the first day of each month, Tenant shall
pay to Landlord a monthly installment equal to one-twelfth of
Tenant's Pro Rata Share of Landlord's estimate of the total
amount of Expenses and Taxes, which initial monthly sum is
defined in Section I.E. above as the "Tenant's Monthly Expense
and Tax Payment". If Landlord determines that its good faith
estimate was incorrect by a material amount, Landlord may
provide Tenant with a revised estimate. After its receipt of
the revised estimate, Tenant's Monthly Expense and Tax Payment
shall be based upon the revised estimate. If Landlord does not
provide Tenant with an estimate of the total amount of
Expenses and Taxes by January 1 of a calendar year, Tenant
shall continue to pay monthly installments based on the
previous year's estimate until Landlord provides Tenant with
the new estimate. Upon delivery of the new estimate, an
adjustment shall be made for any month for which Tenant paid
monthly installments based on the previous year's estimate.
Tenant shall pay Landlord the amount of any underpayment
within 30 days after receipt of the new estimate. Any
overpayment shall be refunded to
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Tenant within 30 days or credited against the next due future
installment(s) of Additional Rent; provided, however, if the
Term has expired, then any overpayment shall be refunded to
Tenant within 30 days after receipt of the new estimate.
As soon as is practical following the end of each calendar
year, Landlord shall furnish Tenant with a statement of the
actual amount of Expenses and Taxes for the prior calendar
year and Tenant's Pro Rata Share of the actual amount of
Expenses and Taxes for the prior calendar year. In lieu of
providing one Statement covering Taxes and Expenses, Landlord
may provide separate statements, at the same or different
times. No delay by Landlord in providing the Statement (or
separate statements) shall be deemed a default by Landlord or
a waiver of Landlord's right to require payment of Tenant's
obligations for actual or estimated Taxes or Expenses, so long
as Landlord delivers such revised Statement to Tenant by no
later than the earlier of (i) two (2) years after Landlord
becomes aware of such errors or receives such new information
or (ii) two (2) years after the end of the particular Expenses
or Taxes year to which such modification would apply. If the
estimated amount of Expenses and Taxes for the prior calendar
year is more than the actual amount of Expenses and Taxes for
the prior calendar year, Landlord shall apply any overpayment
by Tenant against Additional Rent due or next becoming due,
provided if the Term expires before the determination of the
overpayment, Landlord shall refund any overpayment to Tenant
after first deducting the amount of Rent or any other payments
due. If the estimated amount of Expenses and Taxes for the
prior calendar year is less than the actual amount of Expenses
and Taxes for such prior year, Tenant shall pay Landlord,
within 30 days after its receipt of the statement of Expenses
and Taxes, any underpayment for the prior calendar year.
C. Expenses Defined.
1. Subject to Sections IV.C.2. and IV.C.3 below,
"Expenses" shall mean all expenses, costs and amounts
of every kind and nature which Landlord shall pay
during any calendar year because of or in connection
with the ownership, management, maintenance, repair,
replacement, restoration or operation of the
Property, including, without limitation, any amounts
paid for (i) the cost of supplying all utilities, the
cost of operating, maintaining, repairing, replacing,
renovating and managing the utility systems,
mechanical systems, sanitary and storm drainage
systems, and any escalator and/or elevator systems,
and the cost of supplies and equipment and
maintenance and service contracts in connection
therewith; (ii) the cost of licenses, certificates,
permits and inspections and the cost of contesting
the validity or applicability of any governmental
enactments which may affect Expenses, and the costs
incurred in connection with the implementation and
operation of a transportation system management
program or similar program required by law; (iii) the
cost of insurance carried by Landlord, in such
amounts as Landlord may reasonably determine or as
may be required by any Mortgagee; (iv) the cost of
landscaping, relamping, and all supplies, tools,
equipment and materials used in the operation, repair
and maintenance of the Property; (v) the cost of
parking area repair, restoration, and maintenance,
including, but not limited to, resurfacing,
repainting, restriping,
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and cleaning; (vi) fees, charges and other costs,
including consulting fees, legal fees and accounting
fees, of all contractors engaged by Landlord or
otherwise reasonably incurred by Landlord in
connection with the management, operation,
maintenance and repair of the Property; (vii) any
equipment rental agreements or management agreements
(including the cost of any management fee and the
fair rental value of any office space provided
thereunder); (viii) wages, salaries and other
compensation and benefits of all persons engaged in
the operation, management, maintenance or security of
the Property, and employer's Social Security taxes,
unemployment taxes or insurance, and any other taxes
which may be levied on such wages, salaries,
compensation and benefits; provided, that if any
employees of Landlord provide services for more than
one project of Landlord, then a prorated portion of
such employees' wages, benefits and taxes shall be
included in Expenses based on the portion of their
working time devoted to the Property; (ix) payments
under any easement, license, operating agreement,
declaration, restrictive covenant, underlying or
ground lease (excluding rent), or instrument
pertaining to the sharing of costs by the Property;
(x) operation, repair, maintenance and replacement of
all plant, machinery, transformers, duct work, cable,
wires, and other equipment, facilities, and systems
designed to supply heat, ventilation, air
conditioning and humidity or any other services or
utilities, or comprising or serving as any component
or portion of the electrical, gas, steam, plumbing,
sprinkler, communications, alarm, security, or
fire/life safety systems or equipment, or any other
mechanical, electrical, electronic, computer or other
systems or equipment which serve the Building in
whole or in part; (xi) the cost of janitorial
service, alarm and security service, window cleaning,
trash removal, replacement of wall and floor
coverings, ceiling tiles and fixtures in lobbies,
corridors, restrooms and other common or public areas
or facilities, maintenance and replacement of curbs
and walkways, repair to roofs and re-roofing; (xii)
amortization (including interest on the unamortized
cost) of the cost of acquiring or the rental expense
of personal property used in the maintenance,
operation and repair of the Property; and (xiii) the
cost of any capital alterations, capital additions,
capital repairs and capital improvements (1) which
are intended as a labor-saving device or to effect
other economies in the operation or maintenance of
the Property, (2) made to the Property after the
Commencement Date that are required under any
governmental law or regulation not in effect on the
Commencement Date, or (3) which are reasonably
determined by Landlord to be reasonably required to
maintain the functional character of the Property as
a first-class office building project; provided,
however, that such cost shall be amortized (including
interest on the unamortized cost at a rate equal to
the floating commercial loan rate announced from time
to time by Bank of America, or its successor, at its
prime rate, plus one percent (1%) per annum, herein
called the "Interest Rate") over its useful life as
Landlord shall reasonably determine. If Landlord is
not furnishing any particular work or service (the
cost of which, if performed by Landlord, would be
included in Expenses) to a tenant who has undertaken
to perform such work or service in lieu of the
performance thereof by Landlord, Expenses shall be
deemed to be increased by an amount equal to the
additional Expenses which would reasonably have been
incurred during such period by Landlord if it had at
its own expense furnished
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such work or service to such tenant. If the Buildings
are not fully occupied during all or a portion of any
calendar year, Landlord shall make an appropriate
adjustment to the variable components of Expenses for
such year or applicable portion thereof, employing
sound accounting and management principles, to
determine the amount of Expenses that would have been
paid had such Buildings been fully occupied; and the
amount so determined shall be deemed to have been the
amount of Expenses for such year, or applicable
portion thereof.
2. Notwithstanding any contrary provision of this Lease,
Expenses shall not include: (i) leasing commissions;
(ii)expenses which relate to the preparation of
rental space for a tenant; (iii) depreciation,
interest and principal payments on mortgages, and
other debt costs, if any, except as specifically
included in Sections IV.C.1(xii) and (xiii) above;
(iv) costs of correcting defects in, or significant
design error relating to, the initial design or
construction of the Building; (v) advertising and
promotional expenditures; (vi) costs of any items
(including, but not limited to, costs incurred by
Landlord for the repair of damage to the Building for
items which are reimbursable under any contractor,
manufacturer or supplier warranty) to the extent
Landlord receives reimbursement from insurance or
condemnation proceeds or from a contractor,
manufacturer, supplier or any other third party
(other than reimbursement by tenants pursuant to the
Expenses pass-through provisions of their leases);
such proceeds shall be credited to Expenses in the
year in which received, except that any deductible
amount under any insurance policy shall be included
within Expenses; (vii) the expense of services
provided to other tenants in the Building which are
made available to Tenant at cost or for which Tenant
is separately charged and collected; (viii) costs and
legal expenses relating to negotiating or enforcing
leases; (ix) the wages and benefits of any employee
who does not devote substantially all of his or her
employed time to the operation and management of the
Building or Property unless such wages and benefits
are prorated to reflect time spent on operating and
managing the Building and Property vis-a-vis time
spent on matters unrelated to operating and managing
the Building and Property; (x) compensation
(including benefits) of any employee of Landlord
above the grade of Building manager or Building
engineer; (xi) costs of capital additions, capital
alterations, capital repairs or capital improvements,
except those set forth in Section IV.C.1(xiii) above,
and except as provided in Section IV.C.2(xix) below;
(xiv) rentals and other related expenses for leasing
heating, ventilation and air conditioning systems,
elevators, or other items (except when needed in
connection with normal repairs and maintenance of the
Building and/or to an ameliorate an emergency
condition in the Building) which if purchased, rather
than rented, would constitute a capital improvement
not included in Expenses pursuant to this Lease; (xv)
costs and overhead and profit increment paid to
Landlord or to subsidiaries or affiliates of Landlord
for goods and/or services in the Building to the
extent the same exceeds typical costs and overhead
and profit increment of such goods and/or services
rendered by qualified unaffiliated third parties on a
competitive basis; (xvi) any costs for which Landlord
has been reimbursed or receives a credit, refund or
discount; (xvii) costs of signs (other than the
Building directories) in or on the Building
identifying the owner of the Building or other
tenants' signs; (xviii) costs of Landlord's
earthquake insurance and
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flood insurance premiums in excess of those generally
being charged to institutional owners of other first
class office buildings in San Mateo County,
California ("Comparable Buildings") for such
insurance; (xix) costs of capital repairs to the
extent that such repairs are necessary as a result of
a casualty, except for commercially reasonable
deductible amounts not exceeding deductible amounts
ordinarily obtained by institutional owners of
Comparable Buildings (such deductible amounts shall
be amortized [including interest on the unamortized
cost at the Interest Rate] over the useful life of
the item(s) being repaired, as reasonably determined
by Landlord); (xx) costs of cleanup, removal and/or
remediation of any Hazardous Materials (as such term
is defined in Section V below) in, on or under the
Property required to comply with Environmental Laws
which are incurred as a result of (a) the
introduction by Landlord or any tenant of the
Property of any such Hazardous Materials in, on or
under the Property in violation of Environmental Laws
in effect at the time of such introduction, or (b) as
a result of the presence of Hazardous Materials in,
on, or under the Property as of the Commencement
Date, to the extent such Hazardous Materials are in
violation of Environmental Laws in effect as of such
date; (xxi) any costs expressly excluded from
Expenses elsewhere in this Lease; or (xxii) any other
expenses which are not specifically identified herein
as being included in Expenses, where such expenses
would not normally be treated as a cost of operation
(to be reimbursed by tenants) by landlords of
Comparable Buildings.
3. Landlord agrees that since the purpose of Expenses is
to allow Landlord to require Tenant to pay for the
Operating Expenses attributable to the Building,
Property and Premises, Landlord agrees that (a)
Landlord will not collect or be entitled to collect
Expenses from Tenant in an amount which is in excess
of Tenant's pro rata share of the of the Expenses
actually paid by Landlord in connection with the
operation of the Building, Property and Premises and
(b) Landlord shall make no profit from the collection
of Expenses from tenants of the Building.
Furthermore, the parties acknowledge that the
Building consists of both the 4000 Building and the
4100 Building and that the Expenses are to be
equitably allocated, to the maximum extent possible,
between the 4000 Building and the 4100 Building.
Accordingly, although Expenses shall be determined
annually for the Property as a whole, certain
Expenses shall be allocated solely to the 4000
Building and certain Expenses shall be allocated
solely the 4100 Building, and in each case the
Expenses so allocated shall be the amount of Expenses
directly attributable to maintenance, repair and
utility service for, respectively, the 4000 Building
and the 4100 Building. Expenses attributable to the
Property as a whole shall be limited to those items
which are not directly attributable to either the
4000 Building or the 4100 Building (such as, for
example, insurance and maintenance, replacements and
repairs to the Parking Facility, as defined in
Section XXXIV of this Lease).
D. Taxes Defined. "Taxes" shall mean: (1) all real estate taxes
and other assessments on the Building and/or Property,
including, but not limited to, assessments for special
improvement districts and building improvement districts,
taxes and assessments levied in substitution or
supplementation in whole or in part of any such taxes and
assessments and the Property's share of
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any real estate taxes and assessments under any reciprocal
easement agreement, common area agreement or similar agreement
as to the Property; (2) all personal property taxes for
property that is owned by Landlord and used in connection with
the operation, maintenance and repair of the Property; and (3)
all costs and fees reasonably incurred in connection with
seeking reductions in any tax liabilities described in (1) and
(2), including, without limitation, any costs reasonably
incurred by Landlord for compliance, review and appeal of tax
liabilities. Without limitation, Taxes shall not include (i)
all excess profits taxes, franchise taxes, gift taxes, capital
stock taxes, inheritance and succession taxes, estate taxes,
federal and state income taxes, and other taxes to the extent
applicable to Landlord's general or net income (as opposed to
rents, receipts or income attributable to operations at the
Property), or (ii) any items included as Expenses. If an
assessment is payable in installments, Taxes for the year
shall include the amount of the installment and any interest
due and payable during that year. For all other real estate
taxes, Taxes for that year shall, at Landlord's election,
include either the amount accrued, assessed or otherwise
imposed for the year or the amount due and payable for that
year, provided that Landlord's election shall be applied
consistently throughout the Term. If a change in Taxes is
obtained for any year of the Term, then Taxes for that year
will be retroactively adjusted and Landlord shall provide
Tenant with a credit, if any, based on the adjustment or
Tenant shall promptly pay Tenant's Pro Rata Share of any
increase in Taxes.
E. Audit Rights. Tenant may, within 180 days after receiving
Landlord's statement of Expenses, give Landlord written notice
("Review Notice") that Tenant intends to review Landlord's
records of the Expenses for that calendar year. Within a
reasonable time after receipt of the Review Notice, Landlord
shall make all pertinent records with respect to the expenses
of operating and maintaining the Building and Property
available for inspection that are reasonably necessary for
Tenant to conduct its review. If any records are maintained at
a location other than the office of the Building, Tenant may
either inspect the records at such other location or pay for
the reasonable cost of copying and shipping the records.
Tenant shall be solely responsible for all costs, expenses and
fees incurred for the audit. Within 60 days after the records
are made available to Tenant, Tenant shall have the right to
give Landlord written notice (an "Objection Notice") stating
in reasonable detail any objection to Landlord's statement of
Expenses for that year. If Tenant fails to give Landlord an
Objection Notice within the 60 day period or fails to provide
Landlord with a Review Notice within the 180 day period
described above, Tenant shall be deemed to have approved
Landlord's statement of Expenses and shall be barred from
raising any claims regarding the Expenses for that year
(except in case of any change in Expenses sought by Landlord).
If Tenant provides Landlord with a timely Objection Notice,
Landlord and Tenant shall work together in good faith to
resolve any issues raised in Tenant's Objection Notice. If
Landlord and Tenant determine that Expenses for the calendar
year are less than reported, Landlord shall provide Tenant
with a credit against the next installment of Rent in the
amount of the overpayment by Tenant. Likewise, if Landlord and
Tenant determine that Expenses for the calendar year are
greater than reported, Tenant shall pay Landlord the amount of
any underpayment within 30 days. In no event shall Tenant be
permitted to examine Landlord's records or to dispute any
statement of Expenses unless Tenant has paid and continues to
pay all Rent when due.
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V. COMPLIANCE WITH LAWS; USE.
The Premises shall be used only for the Permitted Use and for no other
use whatsoever except with Landlord's prior written consent, which consent may
be withheld in Landlord's sole and absolute discretion. Tenant shall not use or
permit the use of the Premises for any purpose which is illegal, dangerous to
persons or property or which, in Landlord's reasonable opinion, unreasonably
disturbs any other tenants of the Building or interferes with the operation of
the Building. Furthermore, Tenant shall not use or allow another person or
entity to use any part of the Premises for the storage, use, treatment,
manufacture or sale of Hazardous Material (as defined below). Landlord
acknowledges, however, that Tenant will maintain products in the Premises which
are incidental to the operation of its general office use, including, without
limitation, photocopy supplies, secretarial supplies and limited janitorial
supplies, which products contain chemicals which are categorized as Hazardous
Materials. Landlord agrees that the use of such products in the Premises in the
manner in which such products are designed to be used and in compliance with
applicable laws shall not be a violation by Tenant of this Section 5. As used in
this Lease, the term "Hazardous Materials" shall mean and include any substance
that is or contains petroleum, asbestos, polychlorinated biphenyls, lead, or any
other substance, material or waste which is now or is hereafter classified or
considered to be hazardous or toxic under any federal, state or local law, rule,
regulation or ordinance relating to pollution or the protection or regulation of
human health, natural resources or the environment. Tenant shall comply with all
Laws, including the Americans with Disabilities Act, regarding the operation of
Tenant's business and the use, condition, configuration and occupancy of the
Premises. Tenant, within 5 days after receipt, shall provide Landlord with
copies of any notices it receives regarding a violation or alleged violation of
any Laws. Tenant shall comply with the rules and regulations of the Building
attached as EXHIBIT A and such other reasonable rules and regulations adopted by
Landlord from time to time. Tenant shall also cause its agents, contractors,
subcontractors, employees, customers, and subtenants to comply with all rules
and regulations. Landlord shall not knowingly discriminate against Tenant in
Landlord's enforcement of the rules and regulations. Tenant also shall comply
with any covenants, conditions and restrictions ("CC&Rs") recorded against the
Property; provided, however, that Tenant shall not be required to comply with
CC&Rs to the extent such CC&Rs first become effective after the Commencement
Date unless such CC&Rs have been approved in writing by Tenant. Tenant shall not
unreasonably withhold approval of new CC&Rs provided the same do not materially
impair Tenant's rights or increase Tenant's obligations under this Lease.
VI. SECURITY DEPOSIT.
The Security Deposit (as defined in Section I.H.) shall be delivered to
Landlord upon the execution of this Lease by Tenant and shall be held by
Landlord as security for the faithful performance by Tenant of all the terms,
covenants, and conditions of the Lease to be kept and performed by Tenant during
the Term. Tenant hereby grants Landlord a first lien upon the Security Deposit
and all interest earned thereon and acknowledges that Landlord shall have its
first lien duly perfected by possession of the Security Deposit. The Security
Deposit is not an advance payment of Rent or a measure of Tenant's liability for
damages and shall not be construed as liquidated damages. Landlord may, from
time to time, without prejudice to any other remedy, draw upon and apply all or
a portion of the Security Deposit to satisfy past due Rent or to cure any
default with respect to which Tenant has a cure right. Landlord shall return the
Security Deposit or any unapplied proceeds thereof to Tenant within 45 days
after the later to occur of: (1) the determination of Tenant's Pro Rata Share of
Expenses and Taxes for the final year of the Term; (2) the date Tenant
surrenders possession of the Premises to Landlord in accordance with this Lease;
or (3) the Termination Date. If Landlord transfers title to the
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4100 Building, Landlord shall have the right to transfer its interest in the
Security Deposit to the transferee of title. The use, application or retention
of the Security Deposit, or any portion thereof, by Landlord shall not prevent
Landlord from exercising any other right or remedy provided by the Lease or by
law, it being intended that Landlord shall not first be required to proceed
against the Security Deposit and shall not operate as a limitation on any
recovery to which Landlord may otherwise be entitled. If Landlord draws on the
Security Deposit as permitted in this Lease, then, upon demand of Landlord,
Tenant shall restore the amount of the Security Deposit to its original amount
by providing additional cash to Landlord within three (3) business days of any
such demand. Landlord shall hold the Security Deposit in a separate account
under Landlord's exclusive control and Tenant shall not be entitled to any
interest on the cash so held by Landlord and Tenant hereby grants Landlord a
first lien upon any such cash.
VII. SERVICES TO BE FURNISHED BY LANDLORD.
A. Covenant to Furnish. Subject to Tenant's obligation to pay
Expenses with respect to such items, Landlord agrees to
furnish Tenant with the following services in a manner
consistent with that of the Comparable Buildings; provided,
however, that Landlord shall not be required to furnish any
such services to the extent such services would require
Landlord to install additional equipment that is not present
as of the Commencement Date unless Landlord is obligated to do
so by Laws enacted or first applicable to the Property after
the Commencement Date: (1) Water service for use in the
lavatories on each floor on which the Premises are located
water for drinking fountains and food preparation areas, and
chilled water for cooling of Tenant's computer equipment; (2)
Heat and air conditioning in season during Normal Business
Hours, at such temperatures and in such amounts as are
standard for Comparable Buildings or as required by
governmental authority. Tenant, upon such advance notice as is
reasonably required by Landlord, shall have the right to
receive HVAC service during hours other than Normal Business
Hours. Tenant shall pay Landlord the standard charge for the
additional service as reasonably determined by Landlord from
time to time (provided such charge for additional HVAC service
shall be based on Landlord's actual cost of providing such
service, without profit or mark-up); (3) Maintenance and
repair of the Property as described in Section IX.B.; (4)
Janitor service on Business Days. If Tenant's use, floor
covering or other improvements require special services in
excess of the standard services for the Building, Tenant shall
pay the additional cost attributable to the special services;
(5) Elevator service; (6) Electricity to the Premises for
general office use, in accordance with and subject to the
terms and conditions in Section X; and (7) such other services
as are customarily provided by landlords of Comparable
Buildings.
B. Failure to Furnish. Subject to Section VII.C. below,
Landlord's failure to furnish, or any interruption or
termination of, services due to the application of Laws, the
failure of any equipment, the performance of repairs,
improvements or alterations, or the occurrence of any event or
cause beyond the reasonable control of Landlord shall not
render Landlord liable to Tenant, constitute a constructive
eviction of Tenant, give rise to an abatement of Rent, nor
relieve Tenant from the obligation to fulfill any covenant or
agreement. In no event shall Landlord be liable to Tenant for
any loss or damage, including the theft of
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Tenant's Property (defined in Section XV), arising out of or
in connection with the failure of any security services,
personnel or equipment.
C. Abatement of Rent. In the event that Tenant is prevented from
using, and does not use, the Premises or any portion thereof,
for five (5) consecutive business days (the "Eligibility
Period") as a result of (i) any construction, repair,
maintenance or alteration performed by Landlord, or (ii) any
failure to provide to the Premises any of the utilities and
services required to be provided under Section VII.A. above,
(iii) any failure to provide access to the Premises, or (iv)
because of the presence of Hazardous Materials in, on or
around the Building, the Premises or the Real Property which
were not caused or introduced by Tenant or Tenant's agents,
employees, licensees or invitees, and which Hazardous
Materials pose a material and significant health risk to
occupants of the Premises as determined by applicable
governmental authorities pursuant to applicable Laws by
written notice delivered to Landlord and Tenant, which notice
specifically prohibits occupancy of the Premises (or portions
thereof) as a result of such Hazardous Materials, then
Tenant's obligation to pay Base Rent, Expenses and Taxes shall
be abated or reduced, as the case may be, from and after the
first (1st) day following the Eligibility Period and
continuing for such time as Tenant continues to be so
prevented from using, and does not use, the Premises or a
portion thereof, in the proportion that the rentable square
feet of the portion of the Premises that Tenant is prevented
from using, and does not use, bears to the total rentable
square feet of the Premises; provided, however, Tenant shall
not have the right to abate Rent under this Section VII.C if
any of the events described in clauses (i) through (iv) of
this Section VII.C. are caused by a casualty damage described
in Section XVII, or a taking or condemnation described in
Section XVIII, or an event of Force Majeure (as defined in
Section XXXI.D.), and in such instances Tenant's rights to
abatement of Rent shall be governed exclusively by Sections
XVII and XVIII of this Lease. Notwithstanding anything to the
contrary set forth in this Lease, in the event that Tenant is
prevented from using, and does not use, the Premises or any
portion thereof, for one hundred eighty (180) consecutive days
or for a total of two hundred (200) days in any consecutive
nine (9) month period as a result of the matters described in
clauses (i) through (iv) of this Section VII.C, then Tenant
shall have the right to terminate this Lease by delivering to
Landlord written termination notice within five (5) days after
the end of such one hundred eighty (180) day (or two hundred
(200) day) period; provided, however, Tenant shall not have
such termination right if any of such events described in
clauses (i) through (iv) of this Section VII.C. are caused by
a casualty damage described in Section XVII, or a taking or
condemnation described in Section XVIII, or an event of Force
Majeure, and Tenant's termination rights in such instances
shall be governed exclusively by Sections XVII and XVIII of
this Lease.
D. Notwithstanding anything to the contrary contained in this
Lease, Landlord shall at all times use commercially reasonable
efforts to avoid (or, where unavoidable, to minimize) any
impairment of Tenant's access to the Premises, and the Parking
Rights (as defined in Section XXXIV of this Lease); provided,
however, that Tenant acknowledges that Landlord may elect to
construct an additional building and related improvements
adjacent to the Building, the construction of which may
necessitate use of, or diminution of, certain of the access
points and parking areas and Tenant agrees that provided that
Landlord at all times
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provides alternative adequate access or parking reasonably
acceptable to Tenant, and Landlord shall not be nor be deemed
to be in default as a result of such construction. Without
limiting the foregoing, Landlord shall (1) give Tenant
reasonable advance written notice (except in case of
emergency) of any work which could reasonably be expected to
impair or interfere with Tenant's access or use; and (2)
coordinate with Tenant in the scheduling and sequencing of
work to accommodate the continuance or completion of Tenant's
business functions.
E. Notwithstanding any other provisions of this Section VII,
Landlord and Tenant hereby agree that Tenant shall have the
right and the obligation to maintain Tenant's roof mounted
chillers, Tenant's Onan generators, Tenant's Energy Logic
management system, Tenant's Sabah fire suppression system and
Tenant's phone and data cabling in the 4100 Building ("Tenant
Maintained Equipment") at its sole cost and expense. Tenant
agrees to maintain the Tenant Maintained Equipment in good
working order and repair during the Term. Tenant will provide
Landlord with quarterly written maintenance reports with
respect to the Tenant Maintained Equipment and Landlord shall
have the right, upon not less than forty-eight (48) hour prior
notice, to inspect the Tenant Maintained Equipment accompanied
by a representative of the Tenant. Tenant shall have the
exclusive use of the roof mounted chillers and the Onan
generators at all times notwithstanding Tenant's
relinquishment of one or more floors of the Premises in
accordance with Section XXXV of this Lease.
VIII. LEASEHOLD IMPROVEMENTS.
A. All improvements to the Premises (collectively, "Leasehold
Improvements") shall be owned by Landlord and shall remain
upon the Premises without compensation to Tenant. However,
Landlord, by written notice to Tenant given at least 60 days
prior to the Termination Date, may require Tenant to remove,
at Tenant's expense the following (collectively referred to as
"Required Removables"): (1) Cable (defined in Section IX.A)
installed after the Commencement Date by or for the exclusive
benefit of Tenant and located in the Premises or other
portions of the Building; (2) any Leasehold Improvements that
are performed by or for the benefit of Tenant after the
Commencement Date; and (3) the Cafeteria Improvements (as
defined in Section VIII.B below). Without limitation, it is
agreed that Required Removables include internal stairways,
raised floors, personal baths and showers, vaults, rolling
file systems and structural alterations and modifications of
any type; provided, however, that with the exception of the
Cafeteria Improvements, Required Removables shall not include
any such items installed before the Commencement Date. The
Required Removables designated by Landlord shall be removed by
Tenant before the Termination Date. Tenant shall repair damage
caused by the installation or removal of Required Removables.
If Tenant fails to remove any Required Removables or perform
related repairs in a timely manner, Landlord, at Tenant's
expense, may remove and dispose of the Required Removables and
perform the required repairs. Tenant, within 30 days after
receipt of an invoice (which shall be accompanied by
reasonable supporting documentation of the amounts set forth
in such invoice), shall reimburse Landlord for the reasonable
costs incurred by Landlord.
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B. As used in this Section VIII, the "Cafeteria Improvements"
consist only of the kitchen equipment and fixtures, and the
plumbing, electrical and ventilating systems or equipment
installed for the purpose of providing food service in the
existing kitchen and dining facility within the Premises (the
"Cafeteria"). Prior to the Termination Date, Tenant shall
remove the Cafeteria Improvements, except that Tenant shall
only be required to appropriately "cap" or otherwise close off
unexposed plumbing and ventilating equipment located within
the walls and patch holes in the walls resulting from removal
of the Cafeteria Improvements. In addition, Tenant shall
demolish the interior wall within the Cafeteria and remove the
suspended ceiling, light fixtures and floor covering within
the Cafeteria to return the ceiling and floor to "shell"
condition.
C. Notwithstanding any contrary provision of Section VIII.A
above, Tenant, at the time it requests approval for a proposed
Alteration (defined in Section IX.C), may request in writing
that Landlord advise Tenant whether the Alteration or any
portion of the Alteration will be designated as a Required
Removable. Within 10 days after receipt of Tenant's request,
Landlord shall advise Tenant in writing as to which portions
of the Alteration, if any, will be considered to be Required
Removables.
IX. REPAIRS AND ALTERATIONS.
A. Tenant's Repair Obligations. Subject to Landlord's repair
obligations in Section IX.B and to the provisions of Sections
XVII and XVIII below, Tenant shall, at Tenant's own expense,
keep the Premises, including all improvements, fixtures and
furnishings therein, in good order, repair and condition at
all times during the Term. Tenant's repair obligations shall
extend to: (1) floor covering; (2) interior partitions; (3)
doors; (4) the interior side of demising walls; (5)
electronic, phone and data cabling and related equipment
(collectively, "Cable") that is installed by or for the
exclusive benefit of Tenant and located in the Premises or
other portions of the Building; (6) supplemental air
conditioning units, private showers and kitchens, including
hot water heaters, plumbing, and similar facilities serving
Tenant exclusively; and (7) Alterations performed by
contractors retained by Tenant, including related HVAC
balancing. All work shall be performed in accordance with the
rules and procedures described in Section IX.C. below. If
Tenant fails to complete any repairs to the Premises within 30
days (or such longer period as is reasonably necessary to
complete such repairs) after notice from Landlord (although
notice shall not be required if there is an emergency),
Landlord may make the repairs, and Tenant shall pay the
reasonable cost of the repairs to Landlord within 30 days
after receipt of an invoice, together with an administrative
charge in an amount equal to 5% of the cost of the repairs.
B. Landlord's Repair Obligations. Anything contained in Section
IX.A above to the contrary notwithstanding, Landlord shall
repair and maintain the structural portions of the Buildings,
including the basic plumbing, heating, ventilating, air
conditioning and electrical systems serving the Building
(except that in no event shall Landlord be required to repair
Tenant's raised floors, supplemental heating, ventilation and
air conditioning systems and any other systems and equipment
contained in Tenant's "clean room," computer rooms or other
special areas which shall be Tenant's responsibility to repair
at Tenant's sole cost and
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expense); provided, however, if such Landlord-required
maintenance and repairs are caused in part or in whole by the
act, neglect, fault of or omission of any duty by Tenant, its
agents, servants, employees or invitees, Tenant shall pay to
Landlord as additional rent, the reasonable cost of such
maintenance and repairs to the extent such cost is not covered
by Landlord's insurance. Landlord shall not be liable for any
failure to make any such repairs or to perform any maintenance
obligation of Landlord provided Landlord acts to perform such
maintenance or repairs within a reasonable period of time
after Tenant gives notice of the need therefor. There shall be
no abatement of rent (except as provided in Section VII.C
above) and no liability of Landlord by reason of any injury to
or interference with Tenant's business arising from the making
of any repairs, alterations or improvements in or to any
portion of the Building or the Premises or in or to fixtures,
appurtenances and equipment therein. Subject to Tenant's
rights under Section IX.D below, 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.
C. Tenant's Self-Help. Notwithstanding anything to the contrary
set forth in this Section IX, if (i) Tenant provides written
notice to Landlord of the need for repairs and/or maintenance
which are Landlord's obligation to perform under Section IX.B.
above, (ii) Landlord fails to undertake such repairs and/or
maintenance within a reasonable period of time, given the
circumstances, after receipt of such notice, and (iii) such
failure to undertake repairs and/or maintenance materially
interferes with the conduct of Tenant's business in the
Premises, then Tenant may proceed to undertake such repairs
and/or maintenance upon delivery of an additional three (3)
business day notice to Landlord that Tenant is taking such
required action. However, Tenant shall not undertake pursuant
to this Section VIII.C any repairs to structural portions of
the 4100 Building or any work which would alter the exterior
appearance of the 4100 Building. If such repairs and/or
maintenance were required under the terms of this Lease to be
performed by Landlord, then Tenant shall be entitled to
reimbursement by Landlord of Tenant's reasonable costs and
expenses in performing such maintenance and/or repairs. Such
reimbursement shall be made within thirty (30) days after
Landlord's receipt of invoice of such costs and expenses, and
if Landlord fails to so reimburse Tenant within such 30-day
period, then Tenant shall be entitled to deduct from Rent
payable by Tenant under this Lease the amount of such invoice
together with interest which shall have accrued on the amount
of such invoice during the period from and after Tenant's
delivery of such invoice to Landlord through and including the
date Landlord delivers the payment to Tenant, at the Interest
Rate; provided, however, that notwithstanding the foregoing to
the contrary, if (1) Landlord delivers to Tenant within such
three (3) business day period described above, a written
objection to Tenant's right to receive any such reimbursement
based upon Landlord's claim that such action did not have to
be taken by Landlord pursuant to the terms of this Lease, or
(2) Landlord delivers to Tenant, within thirty (30) days after
receipt of Tenant's invoice, a written objection to the
payment of such invoice based upon Landlord's claim that such
charges are excessive (in which case, Landlord shall reimburse
Tenant, within such 30-day period, the amount Landlord
contends would not be excessive), then Tenant shall not be
entitled to such reimbursement or deduction from Rent, but
Tenant, as its sole remedy, may
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proceed to institute legal proceedings to determine and
collect the amount, if any, of such reimbursement. In the
event Tenant prevails in such legal proceedings and receives a
monetary judgment against Landlord, then Landlord shall pay
such judgment to Tenant within thirty (30) days of date such
monetary judgment is entered. If such monetary judgment is not
so paid, then, notwithstanding any contrary provision of this
Lease, Tenant shall be entitled to deduct from Rent payable
under this Lease the amount of such monetary judgment together
with interest which shall have accrued on such monetary
judgment during the period from and after the day after the
date such monetary judgment was received through and including
the date that Tenant deducts from Rent the amount of such
monetary judgment, at the Interest Rate. In the event Tenant
undertakes such repairs and/or maintenance, and such work will
affect the Building's mechanical, electrical or plumbing
systems, Tenant shall use only those unrelated third party
contractors used by Landlord in the Building for such work
unless such contractors are unwilling or unable to perform
such work at competitive prices, in which event Tenant may
utilize the services of any other qualified contractor which
normally and regularly performs similar work in Comparable
Buildings. Tenant shall comply with the other terms and
conditions of this Lease if Tenant takes the required action,
except that Tenant is not required to obtain Landlord's
consent for such repairs.
D. Alterations. Tenant shall not make alterations, additions or
improvements to the conditioned Premises or install any Cable
in the Premises or other portions of the Building
(collectively referred to as "Alterations") without first
obtaining the written consent of Landlord in each instance,
which consent shall not be unreasonably withheld or delayed
(provided, however, that under no circumstances shall Tenant
be permitted to make any structural alterations without the
express consent of Landlord, which may be withheld in
Landlord's sole and absolute discretion). However, Landlord's
consent shall not be required for any Alteration that
satisfies all of the following criteria (a "Cosmetic
Alteration"): (1) is of a cosmetic nature such as painting,
wallpapering, hanging pictures and installing carpeting; (2)
is not visible from the exterior of the Premises or Building;
(3) will not affect the structure of the Building or
materially adversely affect the Building's systems; and (4)
does not entail any work whatsoever to be performed inside the
demising walls or above the ceiling of the Premises. However,
even though consent is not required, the performance of
Cosmetic Alterations shall be subject to all the other
provisions of this Section IX.C. Prior to starting work,
Tenant shall furnish Landlord with plans and specifications
reasonably acceptable to Landlord; names of contractors
reasonably acceptable to Landlord (provided that Landlord may
designate specific contractors with respect to Building
systems provided the work of such contractors is competitively
priced); copies of contracts; necessary permits and approvals;
evidence of contractor's and subcontractor's insurance in
amounts reasonably required by Landlord; and any security for
performance that is reasonably required by Landlord. Changes
to the plans and specifications must also be submitted to
Landlord for its approval. Alterations shall be constructed in
a good and workmanlike manner using materials of a quality
that is at least equal to the quality designated by Landlord
as the minimum standard for the Building. Landlord may
designate reasonable rules, regulations and procedures for the
performance of work in the Building and, to the extent
necessary to avoid disruption to the occupants of the
Building, shall have the right to designate the time when
Alterations may be performed.
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Tenant shall reimburse Landlord within 30 days after receipt
of an invoice for sums paid by Landlord for third party
examination of Tenant's plans for non-Cosmetic Alterations.
Upon completion, Tenant shall furnish "as-built" plans (except
for Cosmetic Alterations), completion affidavits, full and
final waivers of lien in recordable form, and receipted bills
covering all labor and materials. Tenant shall be fully
responsible, at its sole expense, for ensuring that the
Alterations comply with all insurance requirements and Laws
and completion of all Alterations shall be in compliance with
all of the terms of this Lease, including, without limitation,
Section XIII. Landlord's approval of an Alteration shall not
be, or be deemed to be, a representation by Landlord that the
Alteration complies with applicable Laws or will be adequate
for Tenant's use.
X. USE OF ELECTRICAL SERVICES BY TENANT.
A. Electricity used by Tenant in the Premises shall, at
Landlord's option, be paid for by Tenant either: (1) through
inclusion in Expenses (except as provided in Section X.B. for
excess usage); (2) by a separate charge payable by Tenant to
Landlord within 30 days after billing by Landlord; or (3) by
separate charge billed by the applicable utility company and
payable directly by Tenant. Electrical service to the Premises
may be furnished by one or more companies providing electrical
generation, transmission and distribution services, and the
cost of electricity may consist of several different
components or separate charges for such services, such as
generation, distribution and stranded cost charges. Tenant
shall have the exclusive right to select the company providing
electrical service to the Premises, for so long as the
Premises consist of the entire 4100 Building. If the Premises
ever are less than the entire 4100 Building, Landlord shall
select the electrical service provider based on a prudent
balancing of reliability and cost considerations. If the cost
of electricity supplied to the Premises is paid under clause
(1) and (2) of this Section X.A., there shall be no profit to
or make-up by Landlord, and the cost payable by Tenant shall
be net of any rebate, credit, discount, refund or other
economic benefit received by Landlord or any affiliates of
Landlord (valued, in the case of non-cash consideration, on a
fair market value basis).
B. Tenant's use of electrical service shall not exceed, either in
voltage, rated capacity or overall load, the Building's
engineered electrical capacity. If Tenant consumes electrical
service other than through meters controlled by the utility
supplier ("Metered Service"), Landlord may reasonably require
the installation of meters or submeters, air handlers or
cooling units), and (to the extent permitted by Law), the
installation and maintenance costs shall be paid by Tenant.
Where it is impractical for Landlord to separately meter
electrical use, Landlord shall have the right to measure
electrical usage by survey or other commonly accepted methods
approved by Tenant. If Tenant consumes any electricity in the
Premises other than through Metered Service, Landlord may
recover from Tenant, as Additional Rent, Landlord's cost of
supplying electricity in excess of the Building's standard
amount, regardless of whether such excess is due to greater
than standard electrical consumption during Normal Business
Hours or use of the Premises, outside Normal Business Hours.
The Building's "standard" electrical consumption shall be
based on the average actual use during Normal Business Hours
by Tenant and other tenants of the Building or, at Landlord's
election, by average consumption of similar (i.e., office use)
tenants in
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Comparable Buildings. Landlord's recovery of costs for
supplying electrical service to the Premises other than
through Metered Service may include direct out-of-pocket
expenses reasonably and necessarily incurred by Landlord and
reasonable administrative charges (but not to exceed what is
customarily charged by operators of Comparable Buildings).
XI. ENTRY BY LANDLORD.
Landlord, its agents, contractors and representatives may enter the
Premises to inspect or during the last 12 months of the Term (or 12 months
before the termination date for any portion of the Premises as to which Tenant
is exercising the Termination Option granted by Section XXX.V below) show the
Premises (provided that Landlord may enter the Premises at any point during the
Term to show the Premises in connection with a sale of the Building or a portion
thereof), to clean and make repairs, to the Premises, and to conduct or
facilitate reasonable repairs, alterations or additions to any portion of the
Building, including other tenants' premises. Except in emergencies or to provide
janitorial and other Building services after Normal Business Hours, Landlord
shall provide Tenant with reasonable prior notice of entry into the Premises,
which may be given orally. If reasonably necessary for the protection and safety
of Tenant and its employees or other tenants of the Building, Landlord shall
have the right to temporarily close all or a portion of the Premises to perform
repairs, alterations and additions. However, except in emergencies, Landlord
will not close the Premises if the work can reasonably be completed on weekends
and after Normal Business Hours. If Landlord observes the requirements of this
Section XI, entry by Landlord shall not constitute constructive eviction or
entitle Tenant to an abatement or reduction of Rent. Notwithstanding any
contrary provision of this Lease, except in emergency situations as determined
by Landlord, Landlord shall exercise reasonable efforts: (1) not to unreasonably
interfere with the conduct of the business of Tenant in the Premises; and (2) if
entry during Normal Business Hours would unreasonably interfere with Tenant's
business, to perform such entry during hours other than Normal Business Hours.
Landlord, however, shall not be required to perform such entry after Normal
Business Hours if Landlord's entry is necessitated by the acts or omissions of
Tenant
XII. ASSIGNMENT AND SUBLETTING.
A. Except in connection with a Permitted Transfer (defined in
Section XII.E. below), Tenant shall not assign, sublease,
transfer or encumber any interest in this Lease or allow any
third party to use any portion of the Premises (collectively
or individually, a "Transfer") without the prior written
consent of Landlord, which consent shall not be unreasonably
withheld, conditioned or delayed. Without limitation, it is
agreed that Landlord's consent shall not be considered
unreasonably withheld if: (1) except in connection with a
sublease, the proposed transferee's financial condition is not
reasonably adequate to meet the obligations imposed on Tenant
by this Lease and otherwise reasonably acceptable to Landlord;
(2) the proposed transferee's use is not a Permitted use and
either is not suitable for the Building considering the
business of the other tenants and the Building's prestige, or
would result in a violation of another tenant's rights; (3)
Tenant is in default after the expiration of the notice and
cure periods in this Lease (unless such default will be cured
in connection with the Transfer); (4) any portion of the
Building or Premises would become subject to additional or
different Laws as a consequence of the proposed Transfer; or
(5) the proposed transferee is a governmental agency or an
instrumentality thereof, unless Landlord has previously
approved such an occupant for other space in
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the Building. Any attempted Transfer in violation of this
Section shall, at Landlord's option, be void. Consent by
Landlord to one or more Transfer(s) shall not operate as a
waiver of Landlord's rights to approve any subsequent
Transfers. In no event shall any Transfer or Permitted
Transfer release or relieve Tenant from any obligation under
this Lease.
B. As part of its request for Landlord's consent to a Transfer,
Tenant shall provide Landlord with financial statements for
the proposed transferee, a complete copy of the proposed
assignment, sublease and other contractual documents and such
other information as Landlord may reasonably request. Landlord
shall, by written notice to Tenant within 10 days of its
receipt of the required information and documentation, either
consent to the Transfer by the execution of a consent
agreement in a form reasonably designated by Landlord or
reasonably refuse to consent to the Transfer in writing. In
the event that Landlord fails to respond within such 10-day
period, such failure shall be deemed to constitute Landlord's
refusal to consent to the Transfer. If Landlord gives written
notice of its refusal to consent to the Transfer, such notice
shall specify with reasonable particularity the grounds for
such refusal. If Landlord is deemed to have refused consent to
a Transfer, Landlord shall within 2 business days after
Tenant's request therefor specify in writing to Tenant with
reasonable particularity the grounds for such refusal; and if
Landlord fails to do so, Landlord shall be deemed to have
unreasonably withheld its consent to the proposed Transfer.
Tenant shall pay Landlord a review fee of $1,250.00 for
Landlord's review of any Permitted Transfer or requested
Transfer, provided if Landlord's actual reasonable costs and
expenses (including reasonable attorney's fees) are less than
$1,250.00, Tenant shall reimburse Landlord for its actual
reasonable costs and expenses in lieu of a fixed review fee.
C. Except as provided below with respect to a Permitted Transfer,
if Tenant is a corporation, limited liability company,
partnership, or similar entity, and if the entity which owns
or controls a majority of the voting shares/rights at any time
changes for any reason (including but not limited to a merger,
consolidation or reorganization), such change of ownership or
control shall constitute a Transfer. The foregoing shall not
apply so long as Tenant is an entity whose outstanding stock
is listed on a recognized security exchange, or if at least
80% of its voting stock is owned by another entity, the voting
stock of which is so listed.
D. Notwithstanding anything to the contrary contained herein,
Tenant may assign its entire interest under this Lease or
sublet the Premises in whole or in part to an affiliate,
subsidiary or parent of Tenant or to any successor to Tenant
by purchase, merger, consolidation or reorganization
(hereinafter, collectively, referred to as "Permitted
Transfer") without the consent of Landlord, provided: (i)
Tenant is not in material default; (ii) if such proposed
transferee is a successor to Tenant by purchase, merger,
consolidation or reorganization, the continuing or surviving
entity shall own all or substantially all of the assets of
Tenant and shall have a tangible net worth which is not less
than Tenant's tangible net worth on the Commencement Date or
the date of the Permitted Transfer, whichever is greater;
(iii) such proposed transferee operates the business in the
Premises for the Permitted Use and no other purpose; and (iv)
in no event shall any Permitted Transfer release or relieve
Tenant from any of its obligations under this Lease. Tenant
shall give Landlord written notice at least
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30 days prior to the effective date of such Permitted Transfer
unless such prior notice is prohibited by law. As used herein:
(a) "affiliate" shall mean an entity under common control with
Tenant; (b) "parent" shall mean a company which owns at least
fifty-one percent (51%) of Tenant's voting equity; (b)
"subsidiary" shall mean an entity at least fifty-one percent
(51%) of whose voting equity is owned by Tenant; and (c) . If
requested by Landlord, Tenant's successor shall sign a
commercially reasonable form of assumption agreement.
E. With respect to any Transfer other than a Permitted Transfer,
Tenant shall pay to Landlord, within thirty (30) days of
Tenant's receipt thereof, fifty percent (50%) of the Transfer
Premium. "Transfer Premium" shall mean all rent, additional
rent or other consideration payable by such Transferee in
excess of the Rent and Additional Rent payable by Tenant under
this Lease on a per rentable square foot basis if less than
all of the Premises is transferred, after deducting all
reasonable and customary expenses incurred by Tenant for (i)
any out-of-pocket costs resulting from changes, alterations
and improvements to the Premises in connection with the
Transfer (provided such costs are not in excess of allowances
being granted in prevailing market transactions in the
Comparable Buildings for leases or subleases of space which is
comparable in size, type and configuration), (ii) any
brokerage commissions in connection with the Transfer, and
(iii) reasonable legal fees incurred by Tenant in negotiating
the Transfer and obtaining Landlord's consent thereto and in
collecting any sums due from the transferee. "Transfer
Premium" shall also include, but not be limited to, key money
and bonus money paid by the transferee to Tenant in connection
with such Transfer, and any payment in excess of fair market
value for (A) services rendered by Tenant to the transferee or
(B) assets, fixtures, inventory, equipment, or furniture
transferred by Tenant to transferee in connection with such
Transfer. The provisions of this Section XII.E. shall apply
regardless of whether such Transfer is made in compliance with
the provisions of this Lease. Any payments made to Landlord
pursuant to this Section shall not cure any default under this
Lease arising from such Transfer, except that Landlord may not
simultaneously seek payment of its share of any Transfer
Premium and challenge the effectiveness or continuation of the
Transfer. Tenant shall not structure any Transfer which is
subject to this Section XII.E. solely for the purpose of
reducing the amount payable to Landlord under this Section
XII.E., nor shall Tenant take any other steps solely for the
purpose of circumventing its obligation to pay amounts to
Landlord under this Section; and, in the event that Tenant
does same, the amount payable to Landlord under this Section
shall be the amount that would have been payable to Landlord
had same not occurred. However, notwithstanding the preceding
sentence, Tenant shall be entitled to exercise its good faith
business judgment in negotiating the terms and conditions of
any Transfer, and Landlord may not reasonably refuse to
consent to a Transfer on the ground that Tenant failed to
obtain sufficient consideration for such Transfer.
XIII. LIENS.
Tenant shall not permit mechanic's or other liens to be placed upon the
Property, Premises or Tenant's leasehold interest in connection with any work or
service done or purportedly done by or for benefit of Tenant. If a lien is so
placed, Tenant shall, within 10 days of notice of the filing of the lien, fully
discharge the lien by settling the claim which resulted in
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the lien or by bonding or insuring over the lien in the manner prescribed by the
applicable lien Law. If Tenant fails to discharge the lien, then, in addition to
any other right or remedy of Landlord, Landlord may bond or insure over the lien
or otherwise discharge the lien. Tenant shall reimburse Landlord for any amount
paid by Landlord to bond or insure over the lien or discharge the lien,
including, without limitation, reasonable attorneys' fees (if and to the extent
permitted by Law) within 30 days after receipt of an invoice from Landlord,
together with reasonable supporting documentation.
XIV. INDEMNITY AND WAIVER OF CLAIMS.
A. Except to the extent caused by the gross negligence or willful
misconduct of Landlord or any Landlord Related Parties
(defined below), Tenant shall indemnify, defend and hold
Landlord, its trustees, members, principals, beneficiaries,
partners, officers, agents, property managers, directors,
employees, Mortgagee(s) (defined in Section XXVI) and agents
("Landlord Related Parties") harmless against and from all
liabilities, obligations, damages, penalties, claims, actions,
costs, charges and expenses, including, without limitation,
reasonable attorneys' fees and other professional fees (if and
to the extent permitted by Law), which may be imposed upon,
incurred by or asserted against Landlord or any of the
Landlord Related Parties and arising out of or in connection
with any damage or injury occurring in the Premises during the
Term or any acts or omissions (including violations of Law) of
Tenant, the Tenant Related Parties (defined below) or any of
Tenant's transferees, contractors or licensees, or any breach
by Tenant hereunder.
B. Except to the extent caused by the gross negligence or willful
misconduct of Tenant or any Tenant Related Parties (defined
below), or to the extent not insured by, or required to be
insured by, Tenant under this Lease, Landlord shall indemnify,
defend and hold Tenant, its trustees, members, principals,
beneficiaries, partners, officers, directors, employees and
agents ("Tenant Related Parties") harmless against and from
all liabilities, obligations, damages, penalties, claims,
actions, costs, charges and expenses, including, without
limitation, reasonable attorneys' fees and other professional
fees (if and to the extent permitted by Law), which may be
imposed upon, incurred by or asserted against Tenant or any of
the Tenant Related Parties and arising out of or in connection
with the acts or omissions (including violations of Law) with
respect to the Premises of Landlord, the Landlord Related
Parties or any of Landlord's contractors, or any breach by
Landlord hereunder.
C. Landlord and the Landlord Related Parties shall not be liable
for, and Tenant waives, all claims for loss or damage to
Tenant's business or loss, theft or damage to Tenant's
Property or the property of any person claiming by, through or
under Tenant (with respect to Tenant's occupancy under this
Lease) resulting from: (1) wind, weather, flood, earthquake,
or any other natural causes; (2) the failure of any sprinkler,
heating or air-conditioning equipment, any electric wiring or
any gas, water or steam pipes; (3) the backing up of any sewer
pipe or downspout; (4) the bursting, leaking or running of any
tank, water closet, drain or other pipe; (5) water, snow or
ice upon or coming through the roof, skylight, stairs,
doorways, windows, walks or any other place upon or near the
Building; (6) any act or omission of any party other than
Landlord or Landlord Related Parties; and (7) any causes not
reasonably within the control of Landlord.
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Tenant shall insure itself against such losses under Section
XV below. Notwithstanding the foregoing, except as provided in
Section XVI to the contrary, Tenant shall not be required to
waive any claims against Landlord (other than for loss or
damage to Tenant's business) where such loss or damage is due
to the gross negligence or willful misconduct of Landlord or
any Landlord Related Parties. Nothing herein shall be
construed as to diminish Landlord's express repair and
maintenance obligations elsewhere in this Lease.
XV. INSURANCE.
Tenant shall carry and maintain the following insurance ("Tenant's
Insurance"), at its sole cost and expense: (1) Commercial General Liability
Insurance applicable to the Premises and its appurtenances providing, on an
occurrence basis, a minimum combined single limit of $5,000,000.00; (2) All Risk
Property/Business Interruption Insurance, excluding flood and earthquake,
written at replacement cost value and with a replacement cost endorsement
covering all of Tenant's trade fixtures, equipment, furniture and other personal
property within the Premises ("Tenant's Property"); (3) Workers' Compensation
Insurance as required by the state in which the Premises is located and in
amounts as may be required by applicable statute; and (4) Employers Liability
Coverage of at least $1,000,000.00 per occurrence. Any company writing any of
Tenant's Insurance shall have an A.M. Best rating of not less than A-VIII. All
Commercial General Liability Insurance policies shall name Tenant as a named
insured and Landlord (or any successor) and Mortgagee as additional insureds.
All policies of Tenant's Insurance shall contain endorsements that the
insurer(s) shall give Landlord and its designees at least 30 days' advance
written notice of any change, cancellation, termination or lapse of insurance.
Tenant shall provide Landlord with a certificate of insurance evidencing
Tenant's Insurance prior to the earlier to occur of the Commencement Date or the
date Tenant is provided with possession of the Premises for any reason, and upon
renewals at least 15 days prior to the expiration of the insurance coverage. So
long as the same is available at commercially reasonable rates, Landlord shall
maintain so called All Risk property insurance on the Building at replacement
cost value, as reasonably estimated by Landlord. Except as specifically provided
to the contrary, the limits of either party's' insurance shall not limit such
party's liability under this Lease.
XVI. SUBROGATION.
Notwithstanding anything in this Lease to the contrary, Landlord and
Tenant hereby waive and shall cause their respective insurance carriers to waive
any and all rights of recovery, claim, action or causes of action against the
other and their respective trustees, principals, beneficiaries, partners,
officers, directors, agents, and employees, for any loss or damage that may
occur to Landlord or Tenant or any party claiming by, through or under Landlord
or Tenant, as the case may be, with respect to Tenant's Property, the Building,
the Premises, any additions or improvements to the Building or Premises, or any
contents thereof, including all rights of recovery, claims, actions or causes of
action arising out of the negligence of Landlord or any Landlord Related Parties
or the negligence of Tenant or any Tenant Related Parties, which loss or damage
is (or would have been, had the insurance required by this Lease been carried)
covered by insurance.
XVII. CASUALTY DAMAGE.
A. If all or any part of the Premises is damaged by fire or other
casualty, Tenant shall immediately notify Landlord in writing.
During any period of time that all or
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a material portion of the Premises is rendered untenantable as
a result of a fire or other casualty, the Rent shall abate for
the portion of the Premises that is untenantable and not used
by Tenant. Landlord shall have the right to terminate this
Lease if: (1) Completion Estimate (as defined in Section
XVIII.B) indicated the Premises cannot be made tenantable
within 365 days from the date of damage; (2) Landlord is not
permitted by Law to rebuild the Building in substantially the
same form as existed before the fire or casualty; (3) the
Premises have been materially damaged and there is less than 2
years of the Term remaining on the date of the casualty; (4)
any Mortgagee requires that the insurance proceeds be applied
to the payment of the mortgage debt; (5) the cost of the
repairs, alterations, restoration or improvement work would
exceed 50% of the replacement value of the Building, or the
nature of such work would make termination of this Lease
necessary; or (6) a material uninsured loss to the Building
occurs. Landlord may exercise its right to terminate this
Lease by notifying Tenant in writing within 90 days after the
date of the casualty. If Landlord does not terminate this
Lease, Landlord shall commence and proceed with reasonable
diligence to repair and restore the Building and the Leasehold
Improvements (excluding any Alterations that were performed by
Tenant in violation of this Lease). Landlord shall not be
liable for any loss or damage to Tenant's Property or to the
business of Tenant resulting in any way from the fire or other
casualty or from the repair and restoration of the damage.
Landlord and Tenant hereby waive the provisions of any Law
relating to the matters addressed in this Section, and agree
that their respective rights for damage to or destruction of
the Premises shall be those specifically provided in this
Lease.
B. If all or any portion of the Premises shall be made
untenantable by fire or other casualty, Landlord shall, with
reasonable promptness but in all events within 45 days from
the date of such occurrence, cause an architect or general
contractor reasonably selected by Landlord and approved by
Tenant (approval not to be unreasonably withheld) to provide
Landlord and Tenant with a written estimate of the amount of
time required to substantially complete the repair and
restoration of the Premises and make the Premises tenantable
again, using standard working methods ("Completion Estimate").
If the Completion Estimate indicates that the Premises cannot
be made tenantable within 365 days from the date of the
damage, then regardless of anything in Section XVII.A. above
to the contrary, either party shall have the right to
terminate this Lease by giving written notice to the other of
such election within 30 days after receipt of the Completion
Estimate. The Premises shall not be considered tenantable
until all necessary repairs and reconstruction work has been
substantially completed therein and substantially all
necessary parking and access is available to Tenant. Tenant,
however, shall not have the right to terminate this Lease if
the fire or casualty was caused by the negligence or
intentional misconduct of Tenant, Tenant Related Parties or
any of Tenant's, contractors or licensees (acting within the
scope of their authority). In addition, Tenant shall have the
right to terminate this Lease if all of the following
conditions are satisfied: (1) at least 50% of the Premises has
been damaged by fire or other casualty and such damage cannot
reasonably be repaired within 90 days after the date of such
fire or other casualty; (2) there is less than 1 year of the
Term remaining on the date of such casualty; (3) the casualty
was not caused by the negligence or intentional misconduct of
Tenant or its agents, employees or contractors; and (4) Tenant
provides Landlord with written notice of its intent to
terminate within 30 days after
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the date of the fire or other casualty. Notwithstanding the
foregoing, if Tenant was entitled to but elected not to
exercise its right to terminate this Lease and Landlord does
not substantially complete the repair and restoration of the
Premises within 120 days after the expiration of the estimated
period of time set forth in the Completion Estimate, which
period shall be extended to the extent of any Reconstruction
Delays, then Tenant may terminate this Lease by written notice
to Landlord delivered within 10 days after the expiration of
such 120 day period as the same may be extended, but prior to
substantial completion of the Premises. For purposes of this
Lease, the term "Reconstruction Delays" shall mean: (i) any
delays caused by Tenant; and (ii) any delays caused by events
of Force Majeure.
C. The provisions of this Lease, including this Section XVII,
constitute an express agreement between Landlord and Tenant
with respect to any and all damage to, or destruction of, all
or any part of the Premises or the Property, and any Laws,
including, without limitation, Sections 1932(2) and 1933(4) of
the California Civil Code, with respect to any rights or
obligations concerning damage or destruction in the absence of
an express agreement between the parties, and any similar or
successor Laws now or hereinafter in effect, shall have no
application to this Lease or any damage or destruction to all
or any part of the Premises or the Property.
XVIII. CONDEMNATION.
Either party may terminate this Lease if the whole or any material part
of the Premises shall be taken or condemned for any public or quasi-public use
under Law, by eminent domain or private purchase in lieu thereof (a "Taking").
Landlord shall also have the right to terminate this Lease if there is a Taking
of any portion of the Building or Property which would leave the remainder of
the Building unsuitable for use as an office building in a manner comparable to
the Building's use prior to the Taking. In order to exercise its right to
terminate the Lease, Landlord or Tenant, as the case may be, must provide
written notice of termination to the other within 45 days after the terminating
party first receives notice of the Taking. Any such termination shall be
effective as of the date the physical taking of the Premises or the portion of
the Building or Property occurs. If this Lease is not terminated, the Rentable
Square Footage of the Building, the Rentable Square Footage of the Premises and
Tenant's Pro Rata Share shall, if applicable, be appropriately adjusted. In
addition, Rent for any portion of the Premises taken or condemned shall be
abated during the unexpired Term of this Lease effective when the physical
taking of the portion of the Premises occurs. Landlord shall be entitled to
receive the entire award or payment in connection therewith, except that Tenant
may file a separate claim at its sole cost and expense for loss of Tenant's
leasehold estate or interest or diminution in the value thereof, Tenant's
Property and Tenant's reasonable relocation expenses, and any other compensable
loss sustained by Tenant in connection with the Taking (so long as such claim
does not diminish the award available to Landlord or any Mortgagee, and such
claim is payable separately to Tenant). Each of Landlord and Tenant hereby waive
any and all rights it might otherwise have pursuant to Section 1265.130 of the
California Code of Civil Procedure, or any similar or successor Laws.
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XIX. EVENTS OF DEFAULT.
Tenant shall be considered to be in default of this Lease upon the
occurrence of any of the following events of default:
A. Tenant's failure to pay when due all or any portion of the
Rent ("Monetary Default"), or to procure any insurance Tenant
is required to maintain under Section XV above, where such
failure is not cured within five (5) days after written notice
of delinquency or demand; provided, however, that if Landlord
has given Tenant 2 such delinquency notices in the preceding
12 period, then Tenant's subsequent failure to pay any Rent or
other charge when due shall constitute a default under this
Lease without requirement of any notice or cure period.
B. Tenant's failure (other than a Monetary Default) to comply
with any material term, provision or covenant of this Lease,
if the failure is not cured within 30 days after written
notice to Tenant. However, if Tenant's failure to comply
cannot reasonably be cured within 30 days, Tenant shall be
allowed additional time as is reasonably necessary to cure the
failure so long as: (1) Tenant commences to cure the failure
within 30 days, and (2) Tenant diligently that cures the
failure and brings Tenant back into compliance with the Lease.
However, if Tenant's failure to comply creates a hazardous
condition, the failure must be cured immediately upon notice
to Tenant.
C. A petition is filed by or against Tenant under the United
States Bankruptcy Code or any other federal or state laws
governing insolvency (and, in the case of a petition filed
against Tenant, the same is not discharged within 30 days), or
Tenant makes a transfer in fraud of creditors or makes an
assignment for the benefit of creditors, or admits in writing
its inability to pay its debts when due.
D. The leasehold estate is taken by process or operation of Law,
and such taking is not stayed or dismissed within 30 days.
XX. REMEDIES.
A. Upon the occurrence of any event or events of default under
this Lease, whether enumerated in Section XIX or not, Landlord
shall have the option to pursue any one or more of the
following remedies without any notice (except as expressly
prescribed herein) or demand whatsoever (and without limiting
the generality of the foregoing, Tenant hereby specifically
waives notice and demand for payment of Rent or other
obligations, except for those notices specifically required
pursuant to the terms of Section XIX or this Section XX, and
waives any and all other notices or demand requirements
imposed by applicable law):
1. Terminate this Lease and Tenant's right to possession
of the Premises and recover from Tenant an award of
damages equal to the sum of the following:
(a) The Worth at the Time of Award of the unpaid
Rent which had been earned at the time of
termination;
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(b) The Worth at the Time of Award of the amount
by which the unpaid Rent which would have
been earned after termination until the time
of award exceeds the amount of such Rent
loss that Tenant affirmatively proves could
have been reasonably avoided;
(c) The Worth at the Time of Award of the amount
by which the unpaid Rent for the balance of
the Term after the time of award exceeds the
amount of such Rent loss that Tenant
affirmatively proves could be reasonably
avoided;
(d) Any other amount necessary to compensate
Landlord for all the detriment either
proximately caused by Tenant's failure to
perform Tenant's obligations under this
Lease or which in the ordinary course of
things would be likely to result therefrom;
and
(e) All such other amounts in addition to or in
lieu of the foregoing as may be permitted
from time to time under applicable law.
The "Worth at the Time of Award" of the amounts
referred to in parts (a) and (b) above, shall be
computed by allowing interest at the lesser of a per
annum rate equal to: (i) the greatest per annum rate
of interest permitted from time to time under
applicable law, or (ii) the Prime Rate. As used in
this Lease, the "Prime Rate" shall be the lowest per
annum interest rate published in the Wall Street
Journal (or any successor publication) as the prime
or base rate of United States money center banks on
loans to their most creditworthy corporate borrowers.
The "Worth at the Time of Award" of the amount
referred to in part (c), above, shall be computed by
discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of
award plus 1%;
2. Employ the remedy described in California Civil Code
Section 1951.4 (Landlord may continue this Lease in
effect after Tenant's breach and abandonment and
recover Rent as it becomes due, if Tenant has the
right to sublet or assign, subject only to reasonable
limitations); or
3. Notwithstanding Landlord's exercise of the remedy
described in California Civil Code Section 1951.4 in
respect of an event or events of default, at such
time thereafter as Landlord may elect in writing, to
terminate this Lease and Tenant's right to possession
of the Premises and recover an award of damages as
provided above in Paragraph XX.A.1.
B. The subsequent acceptance of Rent hereunder by Landlord shall
not be deemed to be a waiver of any preceding breach by Tenant
of any term, covenant or condition of this Lease, other than
the failure of Tenant to pay the particular Rent so accepted,
regardless of Landlord's knowledge of such preceding breach at
the time of acceptance of such Rent. No waiver by Landlord of
any breach hereof shall be effective unless such waiver is in
writing and signed by Landlord.
C. Except as otherwise expressly provided herein, no right or
remedy is intended to be exclusive of any other right or
remedy, and each and every right and remedy shall be
cumulative and in addition to any other right or remedy given
hereunder
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or now or hereafter existing by agreement, applicable law or
in equity. In addition to other remedies provided in this
Lease, Landlord or Tenant shall be entitled, to the extent
permitted by applicable law, to injunctive relief, or to a
decree compelling performance of any of the covenants,
agreements, conditions or provisions of this Lease, or to any
other remedy allowed to Landlord at law or in equity.
Forbearance by Landlord to enforce one or more of the remedies
herein provided upon an event of default shall not be deemed
or construed to constitute a waiver of such default.
D. If Tenant is in default, then, to the extent permitted by Law,
Landlord shall be entitled to receive interest on any unpaid
item of Rent at a rate equal to the lesser of the maximum rate
permitted by Law or the Prime Rate plus 2% per annum.
E. This Section XX shall be enforceable to the maximum extent
such enforcement is not prohibited by applicable law, and the
unenforceability of any portion thereof shall not thereby
render unenforceable any other portion.
XXI. LIMITATION OF LIABILITY.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, THE
LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD) TO TENANT SHALL BE LIMITED
TO THE INTEREST OF LANDLORD IN THE PROPERTY, WHICH INTEREST SHALL INCLUDE THE
RENTS, PROCEEDS OF SALE OR OTHER INCOME RECEIVED BY LANDLORD. TENANT SHALL LOOK
SOLELY TO LANDLORD'S INTEREST IN THE PROPERTY FOR THE RECOVERY OF ANY JUDGMENT
OR AWARD AGAINST LANDLORD. NEITHER LANDLORD NOR ANY LANDLORD RELATED PARTY SHALL
BE PERSONALLY LIABLE FOR ANY JUDGMENT OR DEFICIENCY. BEFORE FILING SUIT FOR AN
ALLEGED DEFAULT BY LANDLORD, TENANT SHALL GIVE LANDLORD AND THE MORTGAGEE(S)
(DEFINED IN ARTICLE XXVI BELOW) WHOM TENANT HAS BEEN NOTIFIED HOLD MORTGAGES
(DEFINED IN ARTICLE XXVI BELOW) ON THE PROPERTY, BUILDING OR PREMISES, NOTICE
AND REASONABLE TIME TO CURE THE ALLEGED DEFAULT.
XXII. NO WAIVER.
Either party's failure to declare a default immediately upon its
occurrence, or delay in taking action for a default shall not constitute a
waiver of the default, nor shall it constitute an estoppel. Either party's
failure to enforce its rights for a default shall not constitute a waiver of its
rights regarding any subsequent default. Receipt by Landlord of Tenant's keys to
the Premises shall not constitute an acceptance or surrender of the Premises. No
acceptance of a lesser amount than the Rent herein stipulated shall be deemed a
waiver of Landlord's right to receive the full amount due, nor shall any
endorsement or statement on any check or payment or any letter accompanying such
check or payment be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the full
amount due and Landlord's acceptance of such check or payment does not
constitute a waiver of any rights, including any right Landlord may have to
recover possession of the Premises. The acceptance of Rent or of the performance
of any other term or provision from any Person other than Tenant, including any
Transferee, shall not constitute a waiver of Landlord's right to approve any
Transfer. Tenant acknowledges that this Section XXII imparts actual notice to
Tenant, pursuant to California Code of Civil Procedure Section 1161.1(c), that
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Landlord's acceptance of partial payment of Rent does not constitute a waiver of
any rights, including any right Landlord may have to recover possession of the
Premises.
XXIII. QUIET ENJOYMENT.
Tenant shall, and may quietly and peacefully have, hold and enjoy the
Premises, subject to the terms of this Lease, provided Tenant pays the Rent and
fully performs all of its covenants and agreements. This covenant and all other
covenants of Landlord shall be binding upon Landlord and its successors only
during its or their respective periods of ownership of the Building, and shall
not be a personal covenant of Landlord or the Landlord Related Parties.
XXIV. FURNITURE.
A. Furniture Subject to GE Capital Lease. Tenant leases its
furniture under a lease with GE Capital (the "Furniture
Lease") which is scheduled to end in December, 2003. The
furniture subject to the Furniture Lease consists of that
which is currently located in the Premises and other furniture
which Legacy Partners, L.P. ("Legacy Partners") and PE
Corporation (NY) ("PE Corporation") are using pursuant to the
terms of their leases of space in the 4000 Building. Tenant
shall keep the Furniture Lease in full force and effect
through the expiration of the term thereof, shall not extend
the expiration date of the Furniture Lease, and shall take
such steps as are necessary to acquire title to the furniture
at the expiration of the Furniture Lease. Notwithstanding the
foregoing, Tenant may terminate the Furniture Lease early
provided Tenant acquires title to the furniture in connection
with such early termination.
B. Default As To Furniture Used by Legacy. Under Legacy Partners'
Lease in the 4000 Building ("Legacy Lease"), Legacy is
entitled to receive a rent credit if certain of Tenant's
furniture subject to the Furniture Lease is not made available
for Legacy Partners' use. If Tenant fails to perform as
required under Section XXIV.A above and, as a result, Legacy
Partners is entitled to a rent credit under the Legacy Lease,
Tenant shall pay to Landlord, within five (5) days after
demand therefor is made, the full amount of the rent credit
under the Legacy Lease which results from certain of Tenant's
furniture being unavailable for use by Legacy Partners. To the
extent the Legacy Lease calls for the rent credit to be taken
in installments, rather than on a lump sum basis, the amount
payable by Tenant hereunder shall be discounted to present
value to reflect such installment treatment (using the same
discount rate as is specified in Section XX.A.1 above. As such
time as the Furniture Lease comes to an end and Tenant
acquires title to the furniture, Tenant shall convey to
Landlord good title to all such furniture as Legacy Partners
is entitled to use under the Legacy Lease and all such
furniture as PE Corporation is entitled to use under its lease
of space in the 4000 Building. Such furniture shall be
conveyed free of liens or encumbrances (other than such rights
to use thereof as may be held by Legacy Partners and PE
Corporation) in its then "AS IS" and "WITH ALL FAULTS"
condition.
C. Possible Conveyance of Furniture Upon Termination. If Tenant
exercises the Termination Option granted under Section XXXV
below with respect to the sixth,
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fifth and/or fourth floor(s) of the Premises, Landlord may
elect to purchase all of the Selected Furniture (as defined
below), by delivering written notice to Tenant within 30 days
after Tenant's exercise of the Termination Option with respect
to such floor(s). Landlord's election to purchase shall apply
to all of the Selected Furniture located on those of the
sixth, fifth and/or fourth floor(s) as to which Tenant is then
exercising the Termination Option. If Landlord timely elects
to purchase the Selected Furniture, Tenant shall convey to
Landlord good title to the Selected Furniture located on such
floor(s), and as consideration therefor the Termination Fee
shall be reduced by an amount equal to the product of $1.00
multiplied by the total rentable square footage of the sixth,
fifth and/or fourth floors as to which the Termination Option
is being exercised. Tenant shall leave intact all cable
connected to the Selected Furniture if purchased by Landlord.
The Selected Furniture shall be conveyed free of liens or
encumbrances and in its then "AS IS" and WITH ALL FAULTS"
condition. As used in this Section XXIV.C, the "Selected
Furniture" shall mean only the furniture systems commonly
known as "cubicles" located on the sixth, fifth and fourth
floors, together with one desk chair for each such cubicle and
all furniture located in offices within such floors of the
Premises (but excluding all furniture in the office of the CEO
of Tenant and all free-standing file cabinets on the sixth,
fifth and fourth floors). Selected Furniture does not include
any office equipment, including, without limitation
telephones, computers, monitors, servers, routers, copiers,
facsimile machines, audio-visual equipment and the like.
XXV. HOLDING OVER.
A. Except for any permitted occupancy by Tenant under Section
XXV.B, if Tenant fails to surrender the Premises at the
expiration or earlier termination of this Lease, occupancy of
the Premises after the termination or expiration shall be that
of a tenancy at sufferance. Tenant's occupancy of the Premises
during the holdover shall be subject to all the terms and
provisions of this Lease and Tenant shall pay an amount
(prorated for any partial month during the holdover) equal to
(i) for the first month of the holding over 150% of the Rent
due for the period immediately preceding the holdover, and
(ii) for the second month of the holding over 200% of the Rent
due for the period immediately preceding the holdover. No
holdover by Tenant or payment by Tenant after the expiration
or early termination of this Lease shall be construed to
extend the Term or prevent Landlord from immediate recovery of
possession of the Premises by summary proceedings or
otherwise. In addition to the payment of the amounts provided
above, if Landlord is unable to deliver possession of the
Premises to a new tenant, or to perform improvements for a new
tenant, as a result of Tenant's holdover and Tenant fails to
vacate the Premises within 30 days after Landlord notifies
Tenant of Landlord's inability to deliver possession, or
perform improvements, Tenant shall be liable to Landlord for
all damages, including, without limitation, consequential
damages, that Landlord suffers from the holdover.
B. Notwithstanding anything set forth in this Section XXV to the
contrary, Tenant shall have the one-time right to extend the
initial Term for a period of up to six months thereafter
("Temporary Extension Term") by delivering written notice of
the exercise of such right at least 1 year prior to the
expiration of the initial Term which notice shall specify the
period of the Temporary Extension Term Tenant
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shall select (which period shall be not less than one month
nor more than six months), and provided that all of the
following conditions are satisfied: (1) Tenant shall not have
exercised its First Option under Section XXXII; (B) at
Landlord's option, in addition to all remedies available to
Landlord under this Lease, at law or in equity, Tenant is not
in monetary or material non-monetary default under this Lease
(after expiration of any applicable notice and cure period) as
of the date Tenant delivers such notice to Landlord or the
commencement of the Temporary Extension Term; and (C) such
renewal right is personal to the original Tenant and any
transferee under a Permitted Transfer. If Tenant timely
exercises the extension right granted by this Section XXV.B.,
all of the terms and conditions of this Lease shall apply
during the Temporary Extension Term, except that the monthly
Base Rent payable by Tenant during the Temporary Extension
Term shall be equal to the greater of (1) the Prevailing
Market rate (as defined in Section XXXII) for the Premises as
of the commencement of the Temporary Extension Term (but such
Prevailing Market rate for the Temporary Extension Term shall
be determined without regard to any economic concessions or
inducements, including tenant improvement allowances, and
Landlord shall not be obligated to provide any such
concessions or inducements to Tenant for such Temporary
Extension Term); or (2) one hundred fifty percent (150%) of
the monthly Base Rent applicable during the last month of the
initial Term.
XXVI. SUBORDINATION TO MORTGAGES; ESTOPPEL CERTIFICATE.
A. Tenant accepts this Lease subject and subordinate to any
mortgage(s), deed(s) of trust, ground lease(s) or other
lien(s) now or subsequently arising upon the Premises, the
Building or the Property, and to renewals, modifications,
refinancings and extensions thereof (collectively referred to
as a "Mortgage"). The party having the benefit of a Mortgage
shall be referred to as a "Mortgagee". This clause shall be
self-operative, but upon request from a Mortgagee, Tenant
shall execute, within five (5) days after receipt of such
request, a commercially reasonable subordination agreement in
favor of the Mortgagee, provided such agreement meets the
requirements for the SNDA (as detailed below). In lieu of
having the Mortgage be superior to this Lease, a Mortgagee
shall have the right at any time to subordinate its Mortgage
to this Lease. If requested by a successor-in-interest to all
or a part of Landlord's interest in the Lease, Tenant shall,
without charge, attorn to the successor-in-interest.
Notwithstanding anything foregoing to the contrary, with
respect to the existing Mortgage, Tenant will execute a
Subordination, Attornment and Non Disturbance Agreement
("SNDA") in the form attached hereto as EXHIBIT C. Tenant
shall not be obligated for any costs in connection with
obtaining Mortgagee's signature on the SNDA. Said SNDA will be
returned to Tenant following the execution thereof by
Mortgagee. In addition, as a condition precedent to the future
subordination of this Lease, Landlord will be required to
obtain a SNDA in favor of Tenant from any future Mortgagee on
such Mortgagee's then current standard form of agreement,
provided such form contains substantially similar provisions
as those set forth in EXHIBIT C or such other commercially
reasonable changes to such future Mortgagee's form of SNDA,
provided further that Tenant's rights and obligations under
such form are not materially different from those set forth in
EXHIBIT C Upon agreement between Tenant and such future
Mortgagee, Tenant
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will execute such SNDA and return the same to the future
Mortgagee for execution. If Tenant and any future Mortgagee
are unable to agree upon the terms and conditions of the SNDA,
Tenant, upon request of such future Mortgagee, agrees to enter
into SNDA on the form attached hereto as EXHIBIT C. Landlord's
failure to obtain a SNDA for Tenant from any future Mortgagee
shall have no effect on the rights, obligations and
liabilities of Landlord and Tenant or be considered to be a
default by Landlord hereunder. If, however, Tenant is
unwilling to enter into such SNDA on the form attached hereto
as EXHIBIT C, such refusal shall be considered to be a default
hereunder by Tenant, subject to the notice and cure provisions
of Section XIX hereof, and Landlord shall have no further
obligation to attempt to obtain a SNDA from such future
Mortgagee.
B. Landlord and Tenant shall each, within 10 Business Days after
receipt of a written request from the other, execute and
deliver an estoppel certificate to those parties as are
reasonably requested by the other (including a Mortgagee or
prospective purchaser). The estoppel certificate shall include
a statement certifying that this Lease is unmodified (except
as identified in the estoppel certificate) and in full force
and effect, describing the dates to which Rent and other
charges have been paid, representing that, to such party's
actual knowledge, there is no default (or stating the nature
of the alleged default) and indicating other matters with
respect to the Lease that may reasonably be requested.
XXVII. ATTORNEYS' FEES.
If either party institutes a suit against the other for violation of or
to enforce any covenant or condition of this Lease, or if either party
intervenes in any suit in which the other is a party to enforce or protect its
interest or rights, the prevailing party shall be entitled to all of its costs
and expenses, including, without limitation, reasonable attorneys' fees.
XXVIII. NOTICE.
If a demand, request, approval, consent or notice (collectively
referred to as a "notice") shall or may be given to either party by the other,
the notice shall be in writing and delivered by hand or sent by registered or
certified mail with return receipt requested, or sent by nationally recognized
overnight or same day courier service at the party's respective Notice
Address(es) set forth in Section I, except that if Tenant has vacated the
Premises (or if the Notice Address for Tenant is other than the Premises, and
Tenant has vacated such address) without providing Landlord a new Notice
Address, Landlord may serve notice in any manner described in this Section or in
any other manner permitted by Law. Each notice shall be deemed to have been
received or given on the earlier to occur of actual delivery or the date on
which delivery is refused, or, if Tenant has vacated the Premises or the other
Notice Address of Tenant without providing a new Notice Address, 3 days after
notice is deposited in the U.S. mail or with a courier service in the manner
described above. Either party may, at any time, change its Notice Address (other
than to a post office box address) by giving the other party written notice of
the new address in the manner described in this Section.
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XXIX. EXCEPTED RIGHTS.
A. This Lease does not grant any rights to light or air over or
about the Building. Subject to the limitation expressed below,
Landlord excepts and reserves to itself the use of: (1) roofs,
(2) telephone, electrical and janitorial closets, (3)
equipment rooms, Building risers or similar areas that are
used by Landlord for the provision of Building services, (4)
rights to the land and improvements below the floor of the
Premises, (5) the improvements and air rights above the
Premises, (6) the improvements and air rights outside the
demising walls of the Premises, and (7) the areas within the
Premises used for the installation of utility lines and other
installations serving occupants of the Building. However, for
so long as the Premises consist of the entire 4100 Building,
the foregoing exception and reservation shall not apply to any
areas within the exterior walls of the 4100 Building;
provided, however, that Tenant's use of such areas shall
remain subject to all of the terms and conditions of this
Lease. Landlord shall also have the right (but not the
obligation) to temporarily close the Building if Landlord
reasonably determines that there is an imminent danger of
significant damage to the Building or of personal injury to
employees or the occupants of the Building. The circumstances
under which Landlord may temporarily close the Building shall
include, without limitation, electrical interruptions,
hurricanes, terrorism or reasonable belief of the threat
thereof and civil disturbances. A closure of the Building
under such circumstances shall not constitute a constructive
eviction nor entitle Tenant to an abatement or reduction of
Rent, provided, however, that Tenant shall have the remedies
provided in Section VII.C.
B. During the Term Tenant shall have, appurtenant to its
leasehold, non-exclusive rights to utilize those areas outside
of the Premises ("Reserved Areas") which are in use by Tenant
on the Commencement Date or subsequently may be offered to
Building tenants by Landlord and which are not now, but later
become reasonably necessary for Tenant to take full advantage
of technological advances affecting office users generally or
Tenant's Permitted Use in particular (the "Reserved Area
Rights"); provided that any use of Reserved Areas not in
effect on the Commencement Date shall be contingent upon
Tenant's entering into agreements (including reasonable
compensation therefor consistent with the Prevailing Market)
relating thereto that are reasonably acceptable to Landlord.
Such Reserved Area Rights shall be subject to such reasonable
rules and regulations as Landlord may uniformly impose.
XXX. SURRENDER OF PREMISES.
At the expiration or earlier termination of this Lease or Tenant's
right of possession, Tenant shall remove Tenant's Property (defined in Section
XV) from the Premises, and quit and surrender the Premises to Landlord, broom
clean, and in good order, condition and repair, ordinary wear and tear excepted.
Tenant shall also be required to remove the Required Removables in accordance
with Section VIII. If Tenant fails to remove any of Tenant's Property within 2
days after the termination of this Lease or of Tenant's right to possession,
Landlord, at Tenant's sole cost and expense, shall be entitled (but not
obligated) to remove and store Tenant's Property. Landlord shall not be
responsible for the value, preservation or safekeeping of Tenant's Property.
Tenant shall pay Landlord, upon demand, the expenses and storage charges
incurred for Tenant's Property. In addition, if Tenant fails to remove Tenant's
Property from the Premises or storage, as the case may be, within 30 days after
written notice, Landlord
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may deem all or any part of Tenant's Property to be abandoned, and title to
Tenant's Property shall be deemed to be immediately vested in Landlord.
XXXI. MISCELLANEOUS.
A. This Lease and the rights and obligations of the parties shall
be interpreted, construed and enforced in accordance with the
Laws of the State of California and Landlord and Tenant hereby
irrevocably consent to the jurisdiction and proper venue of
such state. If any term or provision of this Lease shall to
any extent be invalid or unenforceable, the remainder of this
Lease shall not be affected, and each provision of this Lease
shall be valid and enforced to the fullest extent permitted by
Law. The headings and titles to the Sections and Sections of
this Lease are for convenience only and shall have no effect
on the interpretation of any part of the Lease.
B. Tenant shall not record this Lease or any memorandum without
Landlord's prior written consent.
C. Landlord and Tenant hereby waive any right to trial by jury in
any proceeding based upon a breach of this Lease.
D. Whenever a period of time is prescribed for the taking of an
action by Landlord or Tenant, the period of time for the
performance of such action shall be extended by the number of
days that the performance is actually delayed due to strikes,
acts of God, shortages of labor or materials, war, terrorism,
civil disturbances and other causes beyond the reasonable
control of the performing party ("Force Majeure"). However,
events of Force Majeure shall not extend any period of time
for the payment of Rent or other sums payable by either party
or any period of time for the written exercise of an option or
right by either party.
E. Landlord shall have the right to transfer and assign, in whole
or in part, all of its rights and obligations under this Lease
and in the Building and/or Property referred to herein, and
upon such transfer Landlord shall be released from any further
obligations hereunder, and Tenant agrees to look solely to the
successor in interest of Landlord for the performance of such
obligations.
F. Tenant shall indemnify and hold Landlord and the Landlord
Related Parties harmless from all claims of any other brokers
claiming to have represented Tenant in connection with this
Lease. Landlord agrees to indemnify and hold Tenant and the
Tenant Related Parties harmless from all claims of any brokers
claiming to have represented Landlord in connection with this
Lease.
G. Each of Landlord and Tenant covenants, warrants and represents
that: (1) each individual executing, attesting and/or
delivering this Lease on behalf of such party is authorized to
do so on such party's behalf; (2) this Lease is binding upon
such party; and (3) such party is duly organized and legally
existing in the state of its organization and is qualified to
do business in the State of California.
H. Time is of the essence with respect to each provision of this
Lease in which time is an element. This Lease shall create
only the relationship of landlord and tenant between the
parties, and not a partnership, joint venture or any other
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relationship. This Lease and the covenants and conditions in
this Lease shall inure only to the benefit of and be binding
only upon Landlord and Tenant and their permitted successors
and assigns.
I. The expiration of the Term, whether by lapse of time or
otherwise, shall not relieve either party of any obligations
which accrued prior to or which may continue to accrue after
the expiration or early termination of this Lease. Without
limiting the scope of the prior sentence, it is agreed that
Tenant's obligations under Sections IV, VIII, XIV, XX, XXV and
XXX shall survive the expiration or early termination of this
Lease.
J. This Lease shall not be effective against any party hereto
until an original copy of this Lease has been signed by such
party.
K. All understandings and agreements previously made between the
parties are superseded by this Lease, and neither party is
relying upon any warranty, statement or representation not
contained in this Lease. This Lease may be modified only by a
written agreement signed by Landlord and Tenant.
L. Tenant, within 15 days after request, shall provide Landlord
with a current financial statement and such other information
as Landlord may reasonably request in order to create a
"business profile" of Tenant and determine Tenant's ability to
fulfill its obligations under this Lease. Landlord, however,
shall not require Tenant to provide such information unless
Landlord is requested to produce the information in connection
with a proposed financing or sale of the Building (or the
addition, removal or substitution of partners or members to
Landlord). Upon written request by Tenant, Landlord shall
enter into a commercially reasonable confidentiality agreement
covering any confidential information that is disclosed by
Tenant. However, nothing in this Lease shall be construed to
obligate Tenant to share with Landlord or any actual or
prospective Mortgagee any non-public information concerning
Tenant or Tenant's financial condition or business affairs.
The parties agree that this Section XXXI.L shall not apply so
long as Tenant is a public company and in material compliance
with the financial reporting requirements imposed by the
Securities and Exchange Commission.
M. Except as otherwise expressly provided for in this Lease: (i)
whenever a party's consent or approval is called for under
this Lease, such party shall not unreasonably withhold,
condition or delay such consent or approval; and (ii) any
provision requiring performance to the satisfaction of a party
shall connote an objective rather than a subjective standard
of satisfaction. No provision of this Lease authorizing a
party to exercise discretion shall relieve such party of the
duty to act in good faith.
N. If required by law, Landlord and Tenant shall fully comply
with all present or future programs intended to manage
parking, transportation or traffic in and around the Property,
and in connection therewith, Tenant shall take responsible
action for the transportation planning and management of all
employees located at the Premises by working directly with
Landlord, any governmental transportation management
organization or any other transportation-related committees or
entities. Such programs may include, without limitation: (i)
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restrictions on the number of peak-hour vehicle trips
generated by Tenant; (ii) increased vehicle occupancy; (iii)
implementation of an in-house ridesharing program and an
employee transportation coordinator; (iv) working with
employees and any Property or area-wide ridesharing program
manager; (v) instituting employer-sponsored incentives
(financial or in-kind) to encourage employees to rideshare;
and (vi) utilizing flexible work shifts for employees.
O. Landlord shall cooperate with Tenant to create an area in the
plaza area outside of the 4100 Building for Tenant to use from
time to time for informal social gatherings of Tenant's
employees; provided, however, that Tenant's use of such area
shall be subject to: (i) Landlord's reasonable rules and
regulations which govern the use of same, (ii) the applicable
provisions of this Lease, including, without limitation,
Sections XIV and XV and (iii) other tenants' rights to use
same.
P. Satellite Dish and Generator.
1. Tenant shall have the nonexclusive right at Tenant's
sole cost and expense and subject to the provisions
of this Section XXXI.P, to install (or, to the extent
existing on the Commencement Date, to maintain): (i)
one or more satellite dishes (individually and
collectively, the "Satellite Dish") on the roof of
the 4100 Building; and (ii) up to two back-up
emergency generators for the 4100 Building
(collectively, the "Emergency Generator"). In
addition, Tenant shall have the right, subject to
available capacity of the 4100 Building, to install
such connection equipment, such as conduits, cables,
risers, feeders and materials (collectively, the
"Connecting Equipment") in the shafts, ducts,
conduits, chases, utility closets and other
facilities of the 4100 Building as is reasonably
necessary to connect each Satellite Dish and the
Emergency Generator to Tenant's other machinery and
equipment in the Premises, subject however, to the
provisions of Section XXXI.P.2, below, and subject to
the availability of vertical riser and feeder excess
capacity; provided, however, that Tenant's right to
the available capacity of the 4100 Building shall be
prior to the rights of other tenants to such
capacity. Tenant shall also have the right of access,
consistent with Section XXX.I.P.4, below, to the
areas where any such Connecting Equipment is located
for the purposes of maintaining, repairing, testing
and replacing the same.
2. The installation of each Satellite Dish, Emergency
Generator and related Connecting Equipment (hereby
referred to together and/or separately as the
"Special Equipment") shall be performed in accordance
with and subject to the provisions of Section IX.D.
of this Lease, including, without limitation,
Tenant's obligation to obtain Landlord's prior
consent to the location, size and other
specifications of the Special Equipment; provided,
however, in no event shall any Satellite Dish not in
place on the Commencement Date be of such size as to
exceed the height of the screening to be installed by
Landlord on the roof of the 4100 Building or
otherwise not be fully screened from view by such
screening. The Special Equipment shall be treated for
all purposes of this Lease as if the same were
Tenant's property. For the purposes of determining
Tenant's obligations with respect to its use of the
Generator Site and the roof of the 4100 Building, the
portion of the roof of the 4100 Building affected by
the Special Equipment and the Generator Site shall be
deemed
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to be a portion of Tenant's Premises; consequently,
all of the provisions of this Lease with respect to
Tenant's obligations hereunder shall apply to the
installation, use and maintenance of the Special
Equipment, including without limitation, provisions
relating to compliance with requirements as to
insurance, indemnity, repairs and maintenance, and
compliance with laws. Landlord shall have no
obligation with regard to the affected portion of the
roof, the Generator Site or the Special Equipment
except as provided in this Section XXX.I.P.
3. It is expressly understood that Landlord retains the
right to grant third parties the right to utilize any
portion of the roof of the 4100 Building or the
Generator Site not utilized by Tenant and to use the
portion of the roof of the 4100 Building and the
Generator Site on which the Special Equipment is
located for any purpose whatsoever, provided in each
event that Tenant shall have reasonable access to,
and Landlord and such third party's use of the roof
and/or the Generator Site shall not unduly interfere
with Tenant's use of, the Special Equipment.
4. Tenant shall install, use, maintain and repair the
Special Equipment so as not to damage or interfere
with the operation of the Buildings or the Systems
and Equipment or any other communications or similar
equipment located in or on the Buildings or Real
Property; and Tenant hereby agrees to indemnify,
defend and hold Landlord harmless from and against
any and all claims, costs, damages, expenses and
liabilities (including attorney's fees) arising out
of Tenant's failure to comply with the provisions of
this Section XXX.I.P, but such indemnity shall not
apply to the extent of any damage to property which
is covered by insurance Landlord maintains or is
required to maintain pursuant to this Lease.
5. Landlord shall not have any obligations with respect
to the Special Equipment or compliance with any
requirements relating thereto nor shall Landlord be
responsible for any damage that may be caused to the
Special Equipment except to the extent caused by the
gross negligence or willful misconduct of Landlord
and not insured or required to be insured by Tenant
under this Lease. Landlord makes no representation
that the Satellite Equipment will be able to receive
or transmit communication signals without
interference or disturbance or that the Emergency
Generator will be able to supply sufficient power to
the Premises, and Tenant agrees that Landlord shall
not be liable to Tenant therefor; however, Landlord
agrees to use reasonable efforts to correct or cause
a correction of any unreasonable interference or
disturbance with Tenant's Satellite Equipment
attributable to the use of other antennae on the 4100
Building by Landlord or other tenants.
6. Tenant shall (i) be solely responsible for any damage
caused as a result of the Special Equipment, (ii)
promptly pay any tax, license or permit fees charged
pursuant to any requirements in connection with the
installation, maintenance or use of the Special
Equipment and comply with all precautions and
safeguards recommended by all governmental
authorities, and (iii) make necessary repairs,
replacements to or maintenance of the Special
Equipment.
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7. Tenant shall not use any Hazardous Materials in
connection with the Special Equipment, except that
Tenant may use fuel stored within the Emergency
Generator as necessary for the operation thereof, as
long as such fuel is kept, maintained and used in
accordance with all applicable laws and the highest
safety standards for such use, and so long as such
fuel is always stored within the Emergency Generator
and is not used or stored in any area outside of the
Emergency Generator. Tenant shall promptly, at
Tenant's expense, take all investigatory and all
remedial action required by applicable laws and
reasonably recommended by Landlord, whether or not
formally ordered or required by applicable laws, for
the cleanup of any spill, release or other
contamination of the Satellite Site, the Generator
Site and/or the Real Property caused or contributed
to by Tenant's use of the Special Equipment
(including, without limitation, the fuel for the
Emergency Generator), or pertaining to or involving
any such fuel or other Hazardous Materials brought
onto the Satellite Site and/or Generator Site during
the Lease Term by Tenant or any of Tenant's agents,
employees, contractors, licensees or invitees. Tenant
shall indemnify, defend and hold Landlord and the
Landlord Parties harmless from and against any and
all loss of rents, damages, losses, liabilities,
judgments, claims, expenses, penalties and attorneys'
and consultants' fees arising out of or involving any
Hazardous Materials brought onto the Satellite Site
and/or Generator Site by or for Tenant. Tenant's
obligations shall include, but not be limited to, the
effects of any contamination or injury to person,
property or the environment created or suffered by
Tenant or any of Tenant's agents, employees,
licensees or invitees, and the cost of investigation,
removal, remediation, restoration and/or abatement,
and shall survive the expiration or termination of
this Lease.
8. Tenant's Emergency Generator shall be routinely
tested and inspected by a qualified contractor
selected by Tenant and approved by Landlord, at
Tenant's expense, in accordance with testing and
inspection service contracts approved by Landlord.
Tenant will provide Landlord with copies of
certificates and other documentation related to the
testing of the Emergency Generator. Testing hours are
restricted, however, to those specific hours set and
determined by Landlord from time to time.
Q. Tenant shall have the right, but no obligation, to operate the
existing Cafeteria on the Premises during the Term. Tenant's
operation of the Cafeteria shall be subject to the following:
1. Only Tenant's employees, people Tenant invites to the
Premises to conduct business and other tenants of the
Property shall be permitted to use the Cafeteria,
and, no other members of the general public shall be
permitted to use the Cafeteria.
2. Tenant shall, at all times and at Tenant's sole cost
and expense, maintain all aspects of the Cafeteria,
including, without limitation, service, cleanliness,
orderliness and appearance, in a first-class manner.
3. Tenant shall pay for all of the utilities serving the
Kitchen.
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4. Tenant shall store and dispose of refuse and garbage
generated in connection with the operation of the
Kitchen in a rubbish container or compactor which
shall be waterproof, sealed, rodent-proof,
nonabsorbent, deodorized and covered with a
close-fitting lid and located in an area designated
by Landlord, and in accordance with state and local
health department rules and regulations. Tenant shall
keep the path of travel to the trash area clean at
all times. Tenant shall be solely responsible for the
costs for such storage and removal of garbage. Tenant
shall complete or cause to be completed all refuse
removal from the Cafeteria and all deliveries to the
Cafeteria, during hours designated by Landlord from
time to time and shall permit the parking and/or
unloading of delivery vehicles only in areas
designated by Landlord.
5. Tenant shall not discharge any corrosive, damaging or
clogging substances through any drain lines from the
Premises; should Tenant fail to observe this duty,
Tenant shall be solely responsible for the cost of
freeing, cleaning and replacing such pipes and any
other damage resulting therefrom.
6. Tenant shall not operate an incinerator or burn trash
or garbage within the Premises. Tenant shall be
responsible, at Tenant's sole cost and expense, for
obtaining all janitorial service for the Cafeteria.
7. At Tenant's sole cost and expense, Tenant agrees to
do all necessary maintenance, repairs, modifications,
replacements and cleaning of all ventilation and
greasetrap and other systems serving the Cafeteria in
order to eliminate and avoid orders and particles
emanating in and from the Cafeteria and the Premises.
Further, Tenant shall, at Tenant's sole cost and
expense, maintain, repair, modify, replace and clean
all kitchen equipment, including (without limitation)
all exhaust system equipment, in order to eliminate
and avoid fire, smoke and other hazards in a first
class manner and in a manner which in all respects is
satisfactory to Landlord. Such exhaust system shall
include a water filtration system which is designed
to keep the exterior of the 4100 Building clean.
Tenant shall fully and punctually comply with all
health codes and state and municipal laws pertaining
to such systems.
8. Tenant shall, at Tenant's sole cost and expense,
obtain and maintain in effect at all times pest
control service to regularly exterminate the
Cafeteria. Such service shall exterminate the
Cafeteria as necessary to keep the Premises free from
pests and to keep pests from emanating to or from the
Cafeteria, the Premises and/or Real Property as a
result of Tenant's operation of the Cafeteria. Tenant
shall complete or cause to be completed all
extermination during hours designated by Landlord
from time to time and shall permit the parking
vehicles used in connection with such extermination
only in areas designated by Landlord.
9. In the event that at any time Tenant shall fail to
comply with Sections XXXI.Q.1 through XXXI.Q.8,
inclusive, above and such failure continues beyond
any applicable notice and cure period under this
Lease, Landlord shall have the right to terminate
Tenant's right to operate the Cafeteria under this
Section XXXI.Q. In no event shall Landlord have any
obligation at any
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time to provide the services described in Section
XXXI.Q.1 through XXXI.Q.8.
10. Tenant may contract with third party contractors to
operate the Cafeteria (the "Cafeteria Operator") and
to perform the services described in Sections
XXXI.Q.1 through XXXI.Q.8, inclusive, above;
provided, however, that Landlord shall first approve
any Cafeteria Operator selected by Tenant after the
Commencement Date, which approval may be conditioned
upon, among other things, such contractors carrying
and maintaining appropriate types and amounts of
insurance coverage and naming Landlord and Landlord's
property manager as additional insureds on such
insurance policies. Notwithstanding anything herein
to the contrary, the Cafeteria Operator shall
maintain the endorsements described in XXXI.Q.11
below and name Landlord and Landlord's property
manager as additional insureds on the policies of
insurance carried by the Cafeteria Operator.
11. In addition to the insurance described in Section XV
of this Lease, Tenant shall obtain a liquor liability
endorsement and a products completed operations
coverage endorsement to the Commercial General
Liability Insurance policy.
R. Subject to Section XXXV.E, Tenant shall have the right to
display its name on all signs outside of the 4100 Building
existing on the Commencement Date, and the exclusive right to
display its name on all signs in the lobby of the 4100
Building.
XXXII. RENEWAL OPTIONS.
A. Grant of Options; Conditions. Subject to Section XXXV.E below,
Tenant shall have the right to extend the Term (the first
option exercisable by Tenant shall be referred to as the
"First Option" the second option exercisable by Tenant shall
be referred to as the "Second Option," and the third option
exercisable by Tenant shall be referred to as the "Third
Option," collectively the First Option, the Section Option and
the Third Option are the "Renewal Options") for three
additional periods of 5 years each (the "First Option Term,"
the "Second Option Term," and the "Third Option Term,"
respectively, and each an "Option Term") commencing on the day
following the Termination Date of the initial Term or the end
of the First Option term, as applicable, and ending on the 5th
anniversary of the Termination Date of the First Option Term,
the Second Option Term or the Third Option Term, as
applicable, if:
1. Landlord receives notice of exercise ("Initial
Renewal Notice") not less than 12 full calendar
months prior to the expiration of the initial Term,
First Option Term or Second Option Term, as
applicable; and
2. Tenant is not in default under the Lease beyond any
applicable cure periods at the time that Tenant
delivers the applicable Initial Renewal Notice or at
the time Tenant delivers the applicable Binding
Notice (as defined below).
B. Terms Applicable to Premises During the First Option Term, the
Second Option Term or the Third Option Term.
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1. The initial Base Rent rate per rentable square foot for the
Premises during the First Option Term, the Second Option Term
and the Third Option Term, as applicable, shall equal the
Prevailing Market (hereinafter defined) rate per rentable
square foot for the Premises. Base Rent during the First
Option Term, the Second Option Term or the Third Option Term,
as the case may be, shall increase, if at all, in accordance
with the increases assumed in the determination of Prevailing
Market rate. Base Rent attributable to the Premises shall be
payable in monthly installments in accordance with the terms
and conditions of Section IV of the Lease.
2. Tenant shall pay Additional Rent (i.e. Taxes and Expenses) for
the Premises during the First Option Term, the Second Option
Term and the Third Option Term in accordance with Section IV
of the Lease, and the manner and method in which Tenant
reimburses Landlord for Tenant's share of Taxes and Expenses
applicable to such matter, shall be some of the factors
considered in determining the Prevailing Market rate for the
First Option Term, the Second Option Term or the Third Option
Term, as the case may be.
C. Procedure for Determining Prevailing Market. Within 30 days after
receipt of Tenant's Initial Renewal Notice, Landlord shall advise
Tenant of the applicable Base Rent rate for the Premises for the
Option Term. Tenant, within 30 days after the date on which Landlord
advises Tenant of the applicable Base Rent rate for the Option Term,
shall either (i) give Landlord final binding written notice
("Binding Notice") of Tenant's exercise of its option, or (ii) if
Tenant disagrees with Landlord's determination, provide Landlord
with written notice of rejection (the "Rejection Notice"). If Tenant
fails to provide Landlord with either a Binding Notice or Rejection
Notice within such 15-day period, it shall be deemed a Rejection
Notice. If Tenant provides Landlord with a Binding Notice, Landlord
and Tenant shall enter into the Renewal Amendment upon the terms and
conditions set forth herein. If Tenant provides Landlord with a
Rejection Notice, Landlord and Tenant shall work together in good
faith to agree upon the Prevailing Market rate for the Premises
during the Option Term Upon agreement Tenant shall provide Landlord
with Binding Notice and Landlord and Tenant shall enter into the
Renewal Amendment in accordance with the terms and conditions
hereof. Notwithstanding the foregoing, if Landlord and Tenant are
unable to agree upon the Prevailing Market rate for the Premises
within 30 days after the date on which Tenant provides Landlord with
a Rejection Notice, either party, by written notice to the other
(the "Arbitration Notice") within 5 Business Days after the
expiration of such 30 day period, shall have the right to have the
Prevailing Market rate determined in accordance with the following
procedures. If neither party exercises its right to arbitrate, the
Renewal Option and any subsequent Renewal Options shall be deemed to
be null and void and of no further force and effect. If either party
provides the other with an Arbitration Notice, Landlord and Tenant,
within 10 days after the date of the Arbitration Notice, shall each
simultaneously submit to the other, in a sealed envelope, its good
faith estimate of the Prevailing Market rate (collectively referred
to as the "Estimates"). If the higher of such Estimates is not more
than 105% of the lower of such Estimates, the Prevailing Market rate
shall be the average of the two Estimates. If the Prevailing Market
rate is not resolved by the
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exchange of Estimates, Landlord and Tenant, within 10 days after the
exchange of Estimates, shall each select a appraiser to determine
which of the two Estimates most closely reflects the Prevailing
Market rate for the Premises. Each appraiser so selected shall be
certified as an MAI appraiser or as an ASA appraiser and shall have
had at least 5 years experience within the previous 10 years as a
real estate appraiser working in the vicinity with working knowledge
of current rental rates and practices. For purposes of this Lease,
an "MAI" appraiser means an individual who holds an MAI designation
conferred by, and is an independent member of, the American
Institute of Real Estate Appraisers (or its successor organization,
or in the event there is no successor organization, the organization
and designation most similar), and an "ASA" appraiser means an
individual who holds the Senior Member designation conferred by, and
is an independent member of, the American Society of Appraisers (or
its successor organization, or, in the event there is no successor
organization, the organization and designation most similar). Upon
selection, Landlord's and Tenant's appraisers shall work together in
good faith to agree upon which of the two Estimates most closely
reflects the Prevailing Market rate for the Premises. The Estimate
chosen by such appraisers shall be binding on both Landlord and
Tenant as the Prevailing Market rate for the Option Term. If either
Landlord or Tenant fails to appoint an appraiser within the 7 day
period referred to above, the appraiser appointed by the other party
shall be the sole appraiser for the purposes hereof. If the two
appraisers cannot agree upon which of the two Estimates most closely
reflects the Prevailing Market within the 20 days after their
appointment, then, within 10 days after the expiration of such 20
day period, the 2 appraisers shall select a third appraiser meeting
the aforementioned criteria. Once the third appraiser has been
selected as provided for above, then, as soon thereafter as
practicable but in any case within 14 days, the appraiser shall make
his determination of which of the two Estimates most closely
reflects the Prevailing Market rate and such Estimate shall be
binding on both Landlord and Tenant as the Prevailing Market rate
for the Option Term. If the arbitrator believes that expert advice
would materially assist him, he may retain one or more qualified
persons, provided they have had no dealings with Landlord or Tenant
within the immediately preceding 12 month period, to provide such
expert advice. The parties shall share equally in the costs of the
arbitrator and of any experts reasonably retained by the arbitrator.
Any fees of any appraiser, counsel or experts engaged directly by
Landlord or Tenant, however, shall be borne by the party retaining
such appraiser, counsel or expert. In the event that the Prevailing
Market rate has not been determined by the commencement date of the
Option Term, Tenant shall pay Base Rent upon the terms and
conditions in effect for the Premises until such time as the
Prevailing Market rate has been determined. Upon such determination,
the Base Rent for the Premises shall be retroactively adjusted, if
necessary, to the commencement of the Option Term. If such
adjustment results in an underpayment of Base Rent by Tenant, Tenant
shall pay Landlord the amount of such underpayment within 30 days
after the determination thereof. If such adjustment results in an
overpayment of Base Rent by Tenant, Landlord shall credit such
overpayment against the next installment of Base Rent due under the
Lease and, to the extent necessary, any subsequent installments
until the entire amount of such overpayment has been credited
against Base Rent or at Tenant's election, reimburse Tenant within
30 days.
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D. Renewal Amendment. If Tenant is entitled to and properly exercises
its applicable Option, Landlord shall prepare an amendment (the
"Renewal Amendment") to reflect changes in the Base Rent, Term,
Termination Date and other appropriate terms. The Renewal Amendment
shall be sent to Tenant within a reasonable time after final
determination of the Prevailing Market rate applicable during the
First Option Term, the Second Option Term or the Third Option Term,
as applicable. An otherwise valid exercise of the applicable Option
shall be fully effective whether or not the Renewal Amendment is
executed.
E. Definition of Prevailing Market. For purposes of the Options,
"Prevailing Market" shall mean the arms length fair market annual
rental rate per rentable square foot under renewal leases and
amendments entered into on or about the date on which the Prevailing
Market is being determined hereunder for space comparable to the
Premises in the Comparable Buildings. The determination of
Prevailing Market shall take into account all relevant factors in
determining the current fair market rental rate for premises
comparable to the Premises located in the Comparable Buildings,
fully recognizing any material economic differences between the
terms of this Lease and any comparison lease or amendment,
including, without limitation: (1) the creditworthiness of the
tenant, (2) the size, configuration and location of the leased
premises (including rights to expand or contract), (3) the presence
or absence of parking, views and other amenities serving the leased
premises, (4) the term of the letting (including options to extend
or shorten the term), (5) the condition of the leased premises and
any improvement allowances or construction obligations of the
landlord pertaining thereto, (5) the manner, if any, in which the
landlord is reimbursed or otherwise compensated for operating
expenses and taxes, (6) any periods of free or abated rent, (7)
brokerage commissions (or the absence thereof) and (8) any other
material concessions, inducements or consideration to be paid to or
received by either the landlord or the tenant in connection with the
lease in question. The determination of Prevailing Market shall also
take into consideration any reasonably anticipated changes in the
Prevailing Market rate from the time such Prevailing Market rate is
being determined and the time such Prevailing Market rate will
become effective under this Lease.
F. Options Personal. The Renewal Options granted to Tenant by this
Section XXXII are personal to Inktomi Corporation and to any
assignee of Inktomi Corporation (or a successor) in connection with
a Permitted Transfer.
XXXIII. RIGHT OF FIRST OFFER.
A. Subject to Section XXXV.E. below, Tenant shall have a continuing
right of first offer (the "Right of First Offer") with respect to
all the rentable square feet in the Building which is available for
lease (the "Offering Space"); provided, however, that if Landlord
sells the 4000 Building to an unaffiliated third party, the Offering
Space shall not include the 4000 Building and Tenant's Right of
First Offer shall not longer be applicable to the 4000 Building. For
this purpose, space in the Building shall be considered "available
for lease" only where an existing tenant will not extend or renew
its lease of such space and PE Corporation (NY) will not exercise
its expansion option (as such option exists on the Commencement
Date) with respect to such space. Tenant's Right of First Offer
shall be exercised as follows: at any time after Landlord has
determined that space in
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the Building qualifies as Offering Space, and prior to re-leasing
such Offering Space), Landlord shall advise Tenant (the "Advice") of
the terms under which Landlord is prepared to lease the Offering
Space to Tenant for the remainder of the Term, which terms shall
reflect the Prevailing Market rate for such Offering Space as
reasonably determined by Landlord. Tenant may lease such Offering
Space in its entirety only, under such terms, by delivering
irrevocable written notice of exercise to Landlord (the "Notice of
Exercise") within 5 Business Days after the date of the Advice,
except that Tenant shall have no such Right of First Offer and
Landlord need not provide Tenant with an Advice, if:
1. Tenant is in default under the Lease (beyond any applicable
notice and cure period) at the time Landlord would otherwise
deliver the Advice; or
2. More than 50% of the Premises is sublet (other than pursuant
to a Permitted Transfer) at the time Landlord would otherwise
deliver the Advice.
3. Tenant does not have a Right of First Offer with respect to
the Offering Space by reason of section xxxiii.E. below.
B. The following terms shall be applicable to the Offering Space:
1. The term for the Offering Space shall commence upon the
commencement date stated in the Advice (but in no event less
than 60 days after delivery of the Advice, unless reasonably
agreed to by Landlord and Tenant) and thereupon such Offering
Space shall be considered a part of the Premises, coterminous
with the initial Term or Option Term then in effect, provided
that all of the economic terms stated in the Advice shall
govern Tenant's leasing of the Offering Space and only to the
extent that they do not conflict with the Advice, the terms
and conditions of this Lease shall apply to the Offering
Space.
2. Tenant shall pay Base Rent and Additional Rent for the
Offering Space in accordance with the terms and conditions of
the Advice, which terms and conditions shall reflect the
Prevailing Market rate for the Offering Space as agreed
between the parties, or if the parties are unable to agree
within 30 days of the date of the Advice, by the procedure set
forth in this Section XXXII for determining the Prevailing
Market rate for a Option Term.
3. Subject to Landlord's obligations under Section IX.B. of the
Lease and Landlord's representations and warranties in the
Lease, the Offering Space (including improvements), shall be
accepted by Tenant in its "as-built" condition and
configuration existing on the earlier of the date Tenant takes
possession of the Offering Space or as of the date the term
for the Offering Space commences unless the Advice specifies
any work to be performed by Landlord in the Offering Space, in
which case Landlord shall perform such work in the Offering
Space. If Landlord is delayed delivering possession of the
Offering Space due to the holdover or unlawful possession of
such space by any party, Landlord shall use reasonable efforts
to obtain possession of the space, and the
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commencement of the term for the Offering Space shall be
postponed until the date Landlord delivers possession of the
Offering Space to Tenant free from occupancy by any party and
otherwise in the required condition.
C. Tenant's Right of First Offer shall terminate (i) as to all of the
Offering Space 12 months prior to the Termination Date, as such
Termination Date has been extended by Tenant's exercise of a Renewal
Option, (ii) as to the particular Offering Space described in the
Advice, upon Tenant's failure to exercise its Right of First Offer
within the 5 Business Day period provided in this Section XXXII. In
the event that Tenant's Right of First Offer has so terminated,
Landlord shall have the right to lease any such Offering Space upon
any terms without further notice to Tenant.
D. Whenever Tenant exercises its Right of First Offer, Landlord shall
prepare an amendment (the "Offering Amendment") adding the Offering
Space to the Premises on the terms set forth in the Advice and
reflecting the changes in the Base Rent and Rentable Square Footage
of the Premises. A copy of the Offering Amendment shall be sent to
Tenant within a reasonable time after Landlord's receipt of the
Notice of Exercise executed by Tenant, and Tenant shall execute and
return the Offering Amendment to Landlord within a reasonable
thereafter, but an otherwise valid exercise of the Right of First
Offer shall be fully effective whether or not the Offering Amendment
is executed.
E. Tenant's Right of First Offer shall be subject and subordinate to
all rights of all existing tenants or occupants or their successors
or assigns ("Existing Tenants") as of the Commencement Date hereof,
including, without limitation, all manner of rights to renew or
extend the term of their leases ("Renewal Rights"), options to
expand their existing premises ("Expansion Rights"), or rights of
first offer and any other rights to lease the Offering Space, if
such rights have already been granted prior to the Commencement
Date. Landlord shall not be required to provide Tenant notice of the
terms of any such offer or exercise of such rights received by
Landlord from Existing Tenants. All Renewal Rights and Expansion
Rights may be exercised by Existing Tenants pursuant to their
existing leases or any modifications thereof or by means of
independent contractual agreements. In addition, Tenant's Right of
First Refusal shall be subject and subordinate to any Expansion
Rights and Renewal Rights (but not rights of first refusal or rights
of right offer) granted to tenants of the Building under leases
executed after the Commencement Date.
XXXIV. PARKING RIGHTS
A. Landlord hereby grants to Tenant and persons designated by Tenant to
use up to four (4) non-reserved parking spaces per each 1,000
rentable square feet of the Premises (the "Parking Rights") in the
parking areas servicing the Building ("Parking Facility"), during
the Term. The use of such spaces shall be provided free of charge
during the initial Term and any Option Term.
B. In exercising the Parking Rights, Tenant shall at all times comply
with all applicable ordinances, rules, regulations, codes, laws,
statutes and requirements of all federal, state, county and
municipal governmental bodies or their subdivisions respecting the
use of the Parking Facility. Landlord reserves the right to adopt,
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modify and enforce reasonable rules ("Rules") governing the use of
the Parking Facility from time to time including any key-card,
sticker or other identification or entrance system and hours of
operation. Landlord may refuse to permit any person who repeatedly
violates such Rules to park in the Parking Facility, and any
violation of the Rules shall subject the car to removal from the
Parking Facility.
C. The Parking Rights shall be provided on a non-designated
"first-come, first-served" basis.
XXXV. TENANT'S RIGHT TO TERMINATE
A. Grant of Option. Landlord grants to Tenant an option to terminate
this Lease before the scheduled Termination Date ("Termination
Option"), as to all or part of the Premises, on and subject to the
terms and conditions of this Section XXXV.
B. Exercise of Termination Option. The Termination Option may be
exercised by Tenant effective as of the beginning of the 25th month
of the initial Term by irrevocable notice to Landlord ("Termination
Notice") delivered no earlier than September 18, 2003 and no later
than March 18, 2004. If Tenant has not previously exercised the
Termination Option, or has previously exercised the Termination
Option as to only a portion of the Premises, the Termination Option
also may be exercised by Tenant effective as of the beginning of the
37th month of the initial Term by a Termination Notice delivered no
earlier than September 18, 2004 and no later than March 18, 2005.
Any Termination Notice applicable to less than all of the Premises
shall identify those portions of the Premises as to which Tenant is
exercising the Termination Option, and Tenant may not exercise the
Termination Option as to less than full floor portions of the
Premises. Furthermore, if Tenant exercises the Termination Option as
to only a portion of the Premises, the Termination Option must be
exercised from the "top down" (i.e., first with respect to the sixth
floor, the fifth floor, the fourth floor, etc.).
C. Termination Consideration. On or before the early termination date
resulting from Tenant's exercise of the Termination Option (or
earlier, if required under Section XXXV.D below), Tenant shall pay
to Landlord a termination fee (the "Termination Fee") equal to the
product of $11.88 multiplied by the rentable square footage of the
Premises as to which Tenant has then exercised the Termination
Option. If Landlord elects to purchase the Selected Furniture
pursuant to Section XXIV.C. above, the Termination Fee shall be
reduced as provided therein. Furthermore, in case of a partial
termination due to Tenant's exercise of the Termination Option, the
Base Rent for the remainder of the Premises shall remain at $1.25
per rentable square foot per month.
D. Effect of Default on Termination Option. No default by Tenant under
this Lease shall impair Tenant's right to exercise the Termination
Option. However, if Tenant is in material default under this Lease
(beyond any notice and cure period) at the time Tenant gives notice
of exercise of the Termination Option, Tenant shall pay the
Termination Fee at the time Tenant gives Landlord notice of exercise
of the Termination Option. Furthermore, if Tenant exercises the
Termination Option at a time when there is no material default by
Tenant, but Tenant thereafter is in material default under this
Lease (beyond any notice and
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cure period), then Tenant shall pay the applicable Termination Fee
within five (5) days after Landlord makes written demand therefor.
If Tenant exercises the Termination Option and pays the Termination
Fee as herein provided, then Landlord's damages due to any default
by Tenant shall exclude any sums attributable to obligations which
are excused by virtue of Tenant's exercise of the Termination
Option.
E. Effect of Termination on Options, ROFO, Signage and Lobby Use. If
Tenant exercises the Termination Option, Tenant's Options under
Section XXXII and Tenant's Right of First Offer under Section XXXIII
shall be extinguished and of no further force or effect. If Tenant
exercises the Termination Option as to more than 50% of the
Premises, Tenant shall lose the right to maintain exterior Building
signage (including the right to signage on the sign adjacent to
Highway 92 and the existing roof signage) although Tenant may retain
space on the 4100 Building monument signage. Furthermore, Tenant's
right to exclusive use of the lobby and the lobby signage in the
4100 Building shall end upon the partial termination of this Lease.
However, for so long as Tenant continues to Lease at least 50% of
the 4100 Building, Tenant may maintain a separate reception desk in
the 4100 Building lobby.
XXXVI. ENTIRE AGREEMENT.
This Lease, including the following exhibits and attachments which are
hereby incorporated into and made a part of this Lease, constitute the entire
agreement between the parties and supersede all prior agreements and
understandings related to the Premises, including all lease proposals, letters
of intent and other documents: EXHIBIT A (Building Rules and Regulations),
EXHIBIT B (Intentionally Omitted) and EXHIBIT C (Subordination Nondisturbance
and Attornment Agreement).
XXXVII. COUNTERPARTS.
This Lease may be executed in counterparts, each of which shall be deemed
an original, but all of which, taken together, shall constitute one and the same
instrument. A signed copy of this Lease transmitted by facsimile to the other
parties shall be binding on the signatory thereto.
[The rest of this page intentionally left blank. Signatures on the next page.]
-47-
<PAGE>
Landlord and Tenant have executed this Lease as of the day and year first above
written.
LANDLORD: TENANT:
WALTON BAYSIDE INVESTORS IV, L.L.C., INKTOMI CORPORATION,
a Delaware limited liability company a Delaware corporation
By: WSC FINANCE IV, L.L.C. By: /s/ Randy Gottfried
a Delaware limited liability company --------------------------------
its Sole Member Name: Randy Gottfried
Its: Chief Financial Officer
By: WALTON NEWCO BAYSIDE HOLDINGS,
L.L.C.
a Delaware limited liability
company its Sole Member
By: /s/ Perry Pinto
----------------------------
Name: Perry Pinto
Its: Authorized Signatory
-48-
<PAGE>
EXHIBIT A
BUILDING RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Buildings or Property,
however, Landlord shall act diligently and in good faith to enforce the rules
and regulations on a reasonable and non-discriminatory basis.
1. Tenant shall not alter any lock or install any new or additional locks or
bolts on any doors or windows of the portion of the Premises without obtaining
Landlord's prior written consent. Tenant shall bear the cost of any lock changes
or repairs required by Tenant.
2. All doors opening to public corridors shall be kept closed at all times
except for normal ingress and egress to the Premises, unless electrical hold
backs have been installed.
3. Landlord reserves the right to close and keep locked all entrance and exit
doors of the 4000 Building during such hours as are customary for Comparable
Buildings. Tenant, its employees and agents must be sure that the doors to the
4100 Building are securely closed and locked when leaving the Premises if it is
after the normal hours of business for the Property. Landlord and its agents
shall in no case be liable for damages for any error with regard to the
admission to or exclusion from the Building or Property of any person. In case
of invasion, mob, riot, public excitement, or other commotion, Landlord reserves
the right to prevent access to the Building and/or Property during the
continuance of same by any means it deems appropriate for the safety and
protection of life and property.
4. Safes and other heavy objects shall, if considered necessary by Landlord,
stand on supports of such thickness as is necessary to properly distribute the
weight. Landlord will not be responsible for loss of or damage to any such safe
or property in any case. All damage done to any part of the Building, their
contents, occupants or visitors by moving or maintaining any such safe or other
property shall be the sole responsibility of Tenant and any expense of said
damage or injury shall be borne by Tenant.
5. Landlord shall have the right to control and operate the public portions of
Building 1 and of the Property, the public facilities, the heating and air
conditioning, and any other facilities furnished for the common use of tenants,
in such manner as is customary for Comparable Buildings.
6. The requirements of Tenant will be attended to only upon application at the
management office for the Property or at such office location designated by
Landlord. Employees of Landlord shall not perform any work or do anything
outside their regular duties unless under special instructions from Landlord.
7. Tenant shall not disturb, solicit, or canvass any occupant of the Building or
Property and shall cooperate with Landlord or Landlord's agents to prevent same.
8. The toilet rooms, urinals, wash bowls and other apparatus shall not be used
for any purpose other than that for which they were constructed, and no foreign
substance of any kind whatsoever shall be thrown therein. The expense of any
breakage, stoppage or damage resulting
(1)
<PAGE>
from the violation of this rule shall be borne by the tenant who, or whose
employees or agents, shall have caused it.
9. Tenant shall not overload the floors of the Premises, nor mark, drive nails
or screws, or drill into the partitions, woodwork or plaster (except for hanging
pictures and artwork) or in any way deface the Premises or any part thereof
without Landlord's consent first had and obtained.
10. Except for vending machines intended for the sole use of Tenant's employees
and invitees or for users of the cafeteria in the 4100 Building, no vending
machine or machines of any description other than fractional horsepower office
machines shall be installed, maintained or operated upon the Premises without
the written consent of Landlord.
11. Tenant shall not use or keep in or on the Premises, the Building or Property
any kerosene, gasoline or other inflammable or combustible fluid or material,
other than customary office and cleaning supplies typically used by general
office users in Comparable Buildings or cooking supplies used in the cafeteria
as of the Commencement Date, so long as Tenant complies with all applicable laws
in connection with such use.
12. Tenant shall not use any method of heating or air conditioning other than
that which may be supplied by Landlord, without the prior written consent of
Landlord.
13. Tenant shall not use, keep or permit to be used or kept, any foul or noxious
gas or substance in or on the Premises, or permit or allow the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or other
occupants of the Building or Property by reason of noise, odors, or vibrations,
or interfere in any way with other Tenants or those having business therein.
14. Tenant shall not bring into or keep within the Premises or Building any
bicycles or other vehicles, and shall not bring into or keep within the
Buildings, the Property or the Premises any animals or birds.
15. Except as required for operation of the existing cafeteria, no cooking shall
be done or permitted by Tenant in any kitchens, eating areas of elsewhere on the
Premises, nor shall the Premises be used for the storage of merchandise, for
lodging or for any immoral purposes. Notwithstanding the foregoing,
Underwriters' laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages, provided that such use is in accordance with all applicable federal,
state and city laws, codes, ordinances, rules and regulations, and does not
cause odors which are objectionable to Landlord and/or other tenants.
16. Landlord will approve where and how telephone and telegraph wires are to be
introduced to the Premises. No boring or cutting for wires shall be allowed
without the consent of Landlord. The location of telephone, call boxes and other
office equipment affixed to the Premises shall be subject to the approval of
Landlord.
17. Landlord reserves the right to exclude or expel from the Buildings and/or
Property any person who, in the judgment of Landlord, is intoxicated or under
the influence of liquor or drugs.
18. Tenant, its employees and agents shall not loiter in the entrances or
corridors, nor in any way obstruct the sidewalks, lobby, halls, stairways or
elevators, and shall use the same only as a means of ingress and egress for the
Premises.
(2)
<PAGE>
19. Tenant shall not waste electricity, water or air conditioning and agrees to
cooperate fully with Landlord to ensure the most effective operation of the
heating and air conditioning system of the Buildings, and shall refrain from
attempting to adjust any controls. This includes the closing of exterior blinds,
disallowing the sun rays to shine directly into areas adjacent to exterior
windows.
20. Tenant shall store all its trash and garbage within the interior of the
Premises. No material shall be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash and garbage in the city in
which the Property is located without violation of any law or ordinance
governing such disposal. All trash, garbage and refuse disposal shall be made
only through entry-ways and elevators provided for such purposes at such times
as Landlord shall designate.
21. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
22. Tenant shall assume any and all responsibility for protecting the Premises
from theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed, when the Premises are not occupied.
23. Landlord may waive any one or more of these Rules and Regulations for the
benefit of any particular tenant or tenants so long as such waiver shall not
unreasonably interfere with Tenant's use of or access to the Premises, but no
such waiver by Landlord shall be construed as a waiver of such Rules and
Regulations in favor of any other tenant or tenants, nor prevent Landlord from
thereafter enforcing any such Rules or Regulations against any or all tenants of
the Buildings or Property.
24. No awnings or other projection shall be attached to the outside walls of the
Buildings without the prior written consent of Landlord. No curtains, blinds,
shades or screens shall be attached to or hung in, or used in connection with,
any window or door of the Premises without the prior written consent of
Landlord. All electrical ceiling fixtures hung in offices or spaces along the
perimeter of the Buildings must be fluorescent and/or of a quality, type, design
and bulb color approved by Landlord.
25. The sashes, sash doors, skylights, windows, and doors that reflect or admit
light and air into the halls, passageways or other public places in the
Buildings shall not be covered or obstructed by Tenant, nor shall any bottles,
parcels or other articles be placed on the windowsills.
26. The washing and/or detailing of or, the installation of windshields, radios,
telephones in or general work on, automobiles shall not be allowed on the
Property.
27. Tenant must comply with requests by the Landlord concerning the informing of
their employees of items of importance to the Landlord.
28. Tenant shall comply with any non-smoking ordinance adopted by any applicable
governmental authority.
29. Landlord reserves the right at any time to change or rescind any one or more
of these Rules and Regulations, or to make such other and further reasonable
Rules and Regulations as in Landlord's judgment may from time to time be
necessary for the management, safety, care and cleanliness of the Premises,
Building, and the Property, and for the preservation of good order therein, as
well as for the convenience of other occupants and tenants therein. Tenant shall
be
(3)
<PAGE>
deemed to have read these Rules and Regulations and to have agreed to abide by
them as a condition of its occupancy of the Premises.
(4)
<PAGE>
EXHIBIT B
[INTENTIONALLY OMITTED]
(1)
<PAGE>
EXHIBIT C
SNDA
RECORDING REQUESTED BY:
WHEN RECORDED RETURN TO:
Metropolitan Life Insurance Company
400 South El Camino Real, Eighth Floor
San Mateo, California 94402
Attn: Michael Pace
SUBORDINATION,
NONDISTURBANCE
AND ATTORNMENT AGREEMENT
NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT
RESULTS IN YOUR LEASEHOLD ESTATE IN THE PROPERTY BECOMING SUBJECT
TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER
SECURITY INSTRUMENT.
DEFINED TERMS
EXECUTION DATE: December 19, 2002
BENEFICIARY & ADDRESS:
Metropolitan Life Insurance Company
400 South El Camino Real, Eighth Floor
San Mateo, California 94402
Attn: Michael Pace
TENANT & ADDRESS:
Inktomi Corporation, a Delaware corporation
4100 East Third Avenue, Foster City, California 94404
LANDLORD & ADDRESS:
Walton Bayside Investors IV, L.L.C., a Delaware limited liability company
or an affiliate thereof
c/o Walton Street Capital, L.L.C.,
900 North Michigan Avenue, Suite 1900, Chicago, Illinois 60611
(1)
<PAGE>
LOAN: A first mortgage loan in the original principal amount of $30,100,000 from
Beneficiary to Landlord.
NOTE: A Promissory Note executed by Landlord in favor of Beneficiary in the
amount of the Loan dated as of the Execution Date.
DEED OF TRUST: A Deed of Trust, Security Agreement and Fixture Filing dated as
of the Execution Date executed by Landlord, as trustor, to First American Title
Insurance Company, as Trustee, for the benefit of Beneficiary securing repayment
of the Note to be recorded in the records of the County in which the Property is
located.
LEASE AND LEASE DATE: The lease entered into by Landlord and Tenant dated
December 19, 2002.
Property: Bay Side Towers, 4000 and 4100 E. Third Avenue, Foster City,
California
The Property is more particularly described on Exhibit A.
(2)
<PAGE>
THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT (the
"Agreement") is made by and among Tenant, Landlord, and Beneficiary and affects
the Property described in Exhibit A. Certain terms used in this Agreement are
defined in the Defined Terms. This Agreement is entered into as of the Execution
Date with reference to the following facts:
A. The current owner of the Property and Tenant have entered into
the Lease covering certain space in the improvements located in and upon the
Property (the "Premises").
B. Landlord has entered into an agreement to purchase the Property
and upon the acquisition of the Property by Landlord, Landlord will become the
landlord under the Lease. At the time Landlord acquires the Property,
Beneficiary will be making the Loan to Landlord evidenced by the Note. The Note
will be secured by, among other documents, the Deed of Trust.
C. Landlord, Tenant and Beneficiary all wish to subordinate the
Lease to the lien of the Deed of Trust.
D. Tenant has requested that Beneficiary agree not to disturb
Tenant's rights in the Premises pursuant to the Lease in the event Beneficiary
forecloses the Deed of Trust, or acquires the Property pursuant to the trustee's
power of sale contained in the Deed of Trust or receives a transfer of the
Property by a conveyance in lieu of foreclosure of the Property or otherwise
obtains fee title to the Property and (collectively, a "Foreclosure Sale") but
only if Tenant is not then in default under the Lease and Tenant attorns to
Beneficiary or a third party purchaser at the Foreclosure Sale (a "Foreclosure
Purchaser").
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties agree as follows:
1. Subordination. The Lease and the leasehold estate created by the
Lease and any amendment, modification or extension and all of Tenant's rights
under the Lease are and shall remain subordinate to the Deed of Trust and the
lien of the Deed of Trust, to all rights of Beneficiary under the Deed of Trust
and to all renewals, amendments, modifications and extensions of the Deed of
Trust.
2. Acknowledgments by Tenant.
(a) Tenant agrees that: (a) Tenant has notice that the Lease
and the rent and all other sums due under the Lease have been or are to be
assigned to Beneficiary as security for the Loan. In the event that Beneficiary
notifies Tenant of a default under the Deed of Trust and requests Tenant to pay
its rent and all other sums due under the Lease to Beneficiary, Tenant shall pay
such sums directly to Beneficiary or as Beneficiary may otherwise request, (b)
Tenant shall send a copy of any default notice under the Lease to Beneficiary at
the same time Tenant sends such default notice to Landlord. (c) This Agreement
satisfies any condition or requirement in the Lease relating to the granting of
a nondisturbance agreement.
(b) Tenant agrees that if it exercises its right to terminate
the Lease with respect to all or any portion of the Premises pursuant to Section
XXXV of the Lease, it will send notice of termination to Beneficiary
concurrently with the sending of notice to Landlord pursuant to such
(3)
<PAGE>
Section. Notice will be sent to Beneficiary (or its successor and assigns as
holder of the Note) at the last address provided to Tenant by written notice
from Beneficiary (or its successor and assigns as holder of the Note).
Tenant further agrees that it will, pursuant to written instructions from
Beneficiary, pay the Termination Fee described in such Section (which
Termination Fee may be reduced if Landlord exercises its right to purchase the
Selected Furniture (as that term is defined in the Lease), as is more
particularly set forth in Section XXIV.C of the Lease) directly to Beneficiary
pursuant to that certain Reserve Agreement of even date herewith by and between
Landlord and Beneficiary, without any further instruction from Landlord and
notwithstanding any contrary instructions from Landlord. Accordingly, Landlord
hereby authorizes and directs Tenant to honor any written demand or notice from
Beneficiary (or its successors and assigns as holder of the Note) instructing
Tenant to pay the Termination Fee to Beneficiary rather than Landlord (a
"Payment Demand"). Tenant may rely upon any such notice, instruction, Payment
Demand, certificate, consent or other document from Beneficiary (or its
successors and assigns as holder of the Note) and shall have no duty to Landlord
to investigate the same or the circumstances under which the same was given. Any
payment made by Tenant to Beneficiary (or its successors and assigns as holder
of the Note) or in response to a Payment Demand shall be deemed proper payment
by Tenant of the Termination Fee pursuant to the Lease.
3. Foreclosure and Sale. In the event of a Foreclosure Sale,
(a) So long as Tenant complies with this Agreement and is not
in material default beyond any applicable notice and cure period under any
of the provisions of the Lease, the Lease shall continue in full force and
effect as a direct lease between Beneficiary and Tenant, and Beneficiary
will not disturb the possession of Tenant, subject to this Agreement. To
the extent that the Lease is extinguished as a result of a Foreclosure
Sale, a new lease shall automatically go into effect upon the same
provisions as contained in the Lease between Landlord and Tenant, except
as set forth in this Agreement, for the unexpired term of the Lease.
Tenant agrees to attorn to and accept Beneficiary as landlord under the
Lease and to be bound by and perform all of the obligations imposed by the
Lease, or, as the case may be, under the new lease, in the event that the
Lease is extinguished by a Foreclosure Sale. Upon Beneficiary's
acquisition of title to the Property, Beneficiary will perform all of the
obligations imposed on the Landlord by the Lease except as set forth in
this Agreement; provided, however, that Beneficiary shall not be: (i)
liable for any act or omission of a prior landlord (including Landlord);
or (ii) subject to any offsets or defenses that Tenant might have against
any prior landlord (including Landlord); or (iii) bound by any rent or
additional rent which Tenant might have paid in advance to any prior
landlord (including Landlord) for a period in excess of one month or by
any security deposit, cleaning deposit or other sum that Tenant may have
paid in advance to any prior landlord (including Landlord) except where
such advanced rent or security deposit has actually been paid or credited
to Beneficiary on account of advanced rent or security deposits; or (iv)
bound by any amendment, modification, assignment or termination of the
Lease made without the written consent of Beneficiary after the date
hereof; (v) obligated or liable with respect to any indemnities contained
in the Lease, except where Beneficiary is in breach of its ongoing
obligations under the Lease or where Beneficiary has been actively
negligent in the performance of its obligations as landlord after it
acquired title to the Property, with Beneficiary to be liable, however,
only for the liabilities attributable to the period after Beneficiary's
acquisition of title to the Property; or (vi) liable to Tenant or any
other party for any conflict between the provisions of the Lease and the
provisions of any other lease affecting the Property which is not entered
into by Beneficiary.
(4)
<PAGE>
(b) Upon the written request of Beneficiary after a
Foreclosure Sale, the parties shall execute a lease of the Premises upon
the same provisions as contained in the Lease between Landlord and Tenant,
except as set forth in this Agreement, for the unexpired term of the
Lease.
(c) Intentionally Deleted.
4. Subordination and Release of Purchase Options. Tenant represents
that it has no right or option of any nature to purchase the Property or any
portion of the Property or any interest in the Landlord. To the extent Tenant
has or acquires any such right or option, these rights or options are
acknowledged to be subject and subordinate to the Deed of Trust and are waived
and released as to Beneficiary and any Foreclosure Purchaser.
5. Acknowledgment by Landlord. In the event of a default under the
Deed of Trust, at the election of Beneficiary, Tenant shall on written notice
pay all rent and all other sums due under the Lease to Beneficiary.
6. Construction of Improvements. Beneficiary shall not have any
obligation or incur any liability with respect to the completion of the tenant
improvements located in the Premises at the commencement of the term of the
Lease.
7. Notice. All notices under this Agreement shall be deemed to have
been properly given if delivered by overnight courier service or mailed by
United States certified mail, with return receipt requested, postage prepaid to
the party receiving the notice at its address set forth in the Defined Terms (or
at such other address as shall be given in writing by such party to the other
parties) and shall be deemed complete upon receipt or refusal of delivery.
8. Landlord Default.Tenant agrees to notify Beneficiary of any
default on the part of Landlord under the Lease which would entitle Tenant to
cancel the Lease or to abate the rent payable thereunder, and further agrees
that, notwithstanding any provisions of the Lease, no notice or cancellation
thereof shall be effective unless Beneficiary has received said notice and has
failed within thirty (30) days after the receipt of such notice (or such longer
period of time as may be reasonably necessary to cure or remedy such default) to
cure the default which gave rise to the notice of cancellation.
9. Miscellaneous. Beneficiary shall not be subject to any provision
of the Lease that is inconsistent with this Agreement. Nothing contained in this
Agreement shall be construed to derogate from or in any way impair or affect the
lien or the provisions of the Deed of Trust. This Agreement shall be governed by
and construed in accordance with the laws of the State of in which the Property
is located.
10. Liability and Successors and Assigns. In the event that
Beneficiary acquires title to the Premises or the Property, Beneficiary shall
have no obligation nor incur any liability beyond Beneficiary's then equity
interest in the Premises and Tenant shall look solely to Beneficiary's then
equity interest for the payment of any obligations imposed upon Beneficiary
under this Agreement or under the Lease. This Agreement shall run with the land
and shall inure to the benefit of the parties and, their respective successors
and permitted assigns including a Foreclosure Purchaser. If a
(5)
<PAGE>
Foreclosure Purchaser acquires the Property or if Beneficiary assigns or
transfers its interest in the Note and Deed of Trust or the Property, all
obligations and liabilities of Beneficiary under this Agreement shall terminate
and be the responsibility of the Foreclosure Purchaser or other party to whom
Beneficiary's interest is assigned or transferred. The interest of Tenant under
this Agreement may not be assigned or transferred except in connection with an
assignment of its interest in the Lease which has been consented to by
Beneficiary or otherwise permitted under the terms of the Lease.
(6)
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Subordination,
Nondisturbance and Attornment Agreement as of the Execution Date.
IT IS RECOMMENDED THAT THE PARTIES CONSULT WITH THEIR ATTORNEYS PRIOR TO THE
EXECUTION OF THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT.
BENEFICIARY: METROPOLITAN LIFE INSURANCE COMPANY,
a New York corporation
By
------------------------------------
Name
----------------------------------
Its
-----------------------------------
TENANT: INKTOMI CORPORATION
a Delaware corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
(7)
<PAGE>
LANDLORD: WALTON BAYSIDE INVESTORS IV, L.L.C.,
a Delaware limited liability company
By: WSC FINANCE IV, L.L.C.
a Delaware limited liability company,
Its Sole Member
By: WALTON NEWCO BAYSIDE HOLDINGS, L.L.C.,
a Delaware limited liability company
Its Sole Member
By:
------------------------------------
Name:
----------------------------------
Its:
-----------------------------------
(8)
<PAGE>
EXHIBIT A
PROPERTY DESCRIPTION
Real property in the City of Foster City, County of San Mateo, State of
California, described as follows:
PARCEL ONE:
Parcel I as created by that certain Lot Line Adjustment No. RS-98-002, recorded
October 19, 1998 as Document No. 98169031, Official Records, and further
described as follows:
COMMENCING at a point on the Northwesterly line of State Highway Route 92 (200
feet wide) being the Southwesterly corner of parcel designated "PARCEL 1C" in
that certain Final Order of Condemnation, recorded May 12, 1967, in Book 5306 of
Official Records at page 220, Records of San Mateo County; thence along said
Northwesterly line, North 42(degree) 11' 46" East, 1024.01 feet to the true
point of beginning;
Thence North 47(degree) 48' 14" West, 47.50 feet;
Thence North 42(degree) 11' 46" East, 55.87 feet;
Thence North 19(degree) 14' 15" West, 225.61 feet to a point on a non-tangent
curve having a radius of 671.00 feet, from which point a radial line bears North
10(degree) 21' 52" West;
Thence Northeasterly, along said curve to the left through a central angle of
8(degree) 52' 23", an arc distance of 103.91 feet;
Thence radial to last said curve, North 19(degree) 14' 15", West 353.53 feet to
a point on the Northerly line of Parcel 2 of Parcel Map No. 39-80, filed for
recorded in Book 52 of Parcel Maps at pages 42 and 43, Records of San Mateo
County;
Thence along said Northerly line the following seven (7) courses:
1. North 66(degree) 27' 38" East, 74.77 feet;
2. North 62(degree) 34' 48" East, 130.91 feet;
3. North 53(degree) 22' 49" East, 50.09 feet;
4. North 47(degree) 11' 51" East, 125.14 feet;
5. North 32(degree) 12' 03" East, 26.25 feet;
6. North 44(degree) 54' 58" East, 50.19 feet; and
7. North 55(degree) 44' 31" East, 9.79 feet;
Thence leaving said Northerly line, South 25(degree)09' 20" East 136.05 feet;
Thence North 64(degree) 50' 40" East, 22.71 feet;
Thence North 42(degree) 27' 02" East, 270.86 feet;
Thence North 04(degree) 11' 44" East, 52.00 feet to a point on the Northerly
line of said Parcel
(9)
<PAGE>
2 of Parcel Map No. 39-80;
Thence along said Northerly line the following four (4) courses:
1. South 64(degree) 21' 32" East, 27.73 feet;
2. South 85(degree) 48' 16" East, 129.85 feet;
3. North 61(degree) 26' 03" East 51.24 feet; and
4. North 68(degree) 58' 30" East, 127.02 feet to the most Easterly corner of
said Parcel 2 and a point in said Northwesterly line of State Highway Route 92;
Thence Southwesterly along said Northwesterly line and the Southeasterly line of
said Parcel 2 the following three (3) courses:
1. South 42(degree) 27' 02" West, 897.25 feet;
2. South 12(degree) 32' 05" West, 202.07 feet; and
3. South 42(degree) 11' 16" West, 327.25 feet to the True Point of Beginning.
PARCEL TWO:
Parcel II as created by that certain Lot Line Adjustment No. RS98-002, recorded
October 19, 1998 as Document No. 98169031, Official Records of San Mateo County
and further described as follows:
COMMENCING at a point in the Northwesterly right of way line of State Highway
Route 92 (200 feet wide) being also the most Easterly corner of Parcel 2 of
Parcel Map No. 39-80, filed for record in Book 52 of Parcel Maps at pages 42 and
43, Records of San Mateo County; thence Westerly along the Northerly line of
said Parcel 2, the following four courses:
South 68(degree) 58' 30" West, 127.02 feet; South 61(degree) 26' 03" 51.24 feet;
North 85(degree) 48' 16" WESt 129.85 feet; and North 64(degree) 21' 32" West
27.73 feet to the True Point of Beginning; thence South 04(degree) 11' 44" West
52.00 feet; thence South 42(degree) 27' 02" West 270.86 feet; thence South
64(degree) 50' 40" West 22.71 feet; thence North 25(degree) 09" 20" West 136.05
feet, to the Northerly line of Parcel 2 of Parcel Map No. 39-80; thence along
said Northerly line North 55(degree) 44' 31" East 242.00 feet and North
88(degree) 14' 15" East 65.03 feet to the True Point of Beginning.
PARCEL THREE:
Parcel III as created by that certain Lot Line Adjustment No. RS98-002, recorded
October 19, 1998 as Document No. 98169031, Official Records of San Mateo County
and further described as follows:
BEGINNING at a point in the Southerly line of East Third Avenue (80 feet wide),
being also the Northeasterly corner of Parcel 1 of Parcel Map No. 39-80, filed
for record in Book 52 of Parcel Maps at pages 42 and 43, Records of San Mateo
County;
Thence along said Southerly line, North 70(degree) 45' 45" East, 5.97 feet to a
point on a non-tangent curve, from which point a radial line bears North
46(degree) 20' 02" East;
(10)
<PAGE>
Thence Easterly, Northerly and Westerly along the right of way line of East
Third Avenue, along said non-tangent curve to the left, having a radius of 44.50
feet, through a central angle of 264(degree) 20' 35", an arc distance of 205.31
feet to a point of reverse curvature;
Thence Westerly, along a reverse curve to the right, having a radius of 49.50
feet, through a central angle 18(degree) 46' 18", an arc distance of 16.22 feet;
Thence, tangent to last said curve, South 70(degree) 45' 45" West 16.24 feet to
a point on the Northerly extension of the Easterly line of said Parcel 1 of
Parcel Map No. 39-80;
Thence along said extension, North 19(degree) 14' 15" West, 22.10 feet to the
intersection of the Northerly line of Third Avenue with said extension of said
Easterly line;
Thence along said Northerly line, South 70(degree) 45' 45" West, 1,017.61 feet,
to the most Westerly corner of said Parcel 2 of said Parcel Map No. 39-80;
Thence along the Northerly line of said Parcel 2, the following thirteen (3)
courses:
1. North 49(degree) 55' 43" East, 12.25 feet;
2. North 61(degree) 13' 12" East, 271.98 feet;
3. North 65(degree) 58' 42" East, 49.80 feet;
4. South 86(degree) 22' 18" East, 41.20 feet;
5. North 55(degree) 34' 52" East, 64.36 feet;
6. North 67(degree) 59' 17" East, 50.00 feet;
7. North 59(degree) 27' 28" East, 101.12 feet;
8. North 68(degree) 22' 12" East, 300.01 feet;
9. North 67(degree) 59' 17" East, 50.00 feet;
10. North 73(degree) 41' 53" East, 50.25 feet;
11. North 69(degree) 08' 02" East, 450.09 feet;
12. North 60(degree) 01' 10" East, 50.49 feet; and
13. North 66(degree) 27' 38" East, 0.26 feet;
Thence leaving said Northerly line of Parcel 2, along a radial line South
19(degree) 14' 15" East 353.53 feet to a point on a radial curve having a radius
of 671.00 feet;
Thence Westerly along said curve, through a central angle of 8(degree) 52' 23",
an arc distance of 103.91 feet to a point on said curve from which point a
radial line bears North 10(degree) 21' 52" West;
Thence South 19(degree) 14' 15" East, 225.61 feet;
Thence South 42(degree) 11' 46" West, 55.87 feet;
Thence South 47(degree) 48' 14" East 47.50 feet to a point in the Northwesterly
line of State Highway Route 92 (200 feet wide);
Thence along said Northwesterly line South 42(degree) 11' 46" West, 1024.01 feet
to the most Southwesterly corner of a parcel of land designated, "PARCEL 1C" in
that certain Final Order of Condemnation, recorded May 12, 1967 in Book 5306 of
Official Records at
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<PAGE>
page 220, Records of San Mateo County, being also a point in the Southeasterly
line of Parcel 1 of Parcel Map No. 44-81, filed for record in Volume 52 of
Parcel Maps at pages 47 and 48, Records of San Mateo County;
Thence along said Southeasterly line, North 39(degree) 54' 19" East, 662.49 feet
to the Southeasterly corner of Parcel 1 of Parcel Map No. 46-82, filed for
record in Volume 53 of Parcel Maps at pages 8 and 9, Records of San Mateo
County;
Thence along the Easterly line of said Parcel 1 of Parcel Map No. 46-82, North
19(degree) 14' 15" West, 598.13 feet to the Point of Beginning.
PARCEL FOUR:
A non-exclusive perpetual easement for the purposes of construction, placing,
installing, using, maintaining, operating, reconstructing, replacing, repairing,
renewing and removing an
(A) underground eight (8) inch sanitary sewer line, together with any and all
improvements appurtenant to such sewer line and/or any other improvements
required or necessary, to construct, place, install, use, maintain, operate,
reconstruct, replace, repair, renew or remove said sewer line and its
appurtenances, and
(B) an underground thirty-six (36) inch storm drain line, together with any and
all improvements appurtenant to such storm drain line and/or any other
improvements required or necessary to construct, place, install, use, maintain,
operate, reconstruct, replace, repair, renew or remove said storm drain line and
its appurtenances, in, through, over, along, across and under the "Easement
Area", more particularly described as follows:
A strip of land, 15 feet in width, situate in Foster City, County of San Mateo,
State of California, being a portion of Parcel 1, as said Parcel is shown on
Parcel Map No. 46-82, filed for record November 30, 1982 in Book 53 of Parcel
Maps at pages 8 and 9, San Mateo County Records, the Southwesterly line of said
strip being described as follows:
BEGINNING at the Southwesterly corner of said Parcel 1, said corner being on the
Northeasterly line of Lincoln Centre Drive (60' wide) as shown on said map;
Thence along the Southerly line of said Parcel 1, and the Northeasterly
prolongation thereof, North 73(degree) 11' 08" East, 530.47 feet to the
Northwesterly line of said Parcel 1 and the terminus of said strip.
The Northwesterly line of said strip shall be lengthened or shortened to begin
on the Southwesterly line of said Parcel 1 and terminate on said Northeasterly
line of said Parcel I.
The above easement is appurtenant to Parcels I and II above and was created by
that certain Easement Agreement recorded July 15, 1998 as Document No. 98111669,
Official Records.
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<PAGE>
STATE OF CALIFORNIA )
) ss.
COUNTY OF _________ )
On December ____, 2002, before me, _______________________________________
a Notary Public personally appeared _________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature____________________________ (Seal)
STATE OF CALIFORNIA )
) ss.
COUNTY OF _________ )
On December ____, 2002, before me, _______________________________________
a Notary Public personally appeared _________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature____________________________ (Seal)
(13)
<PAGE>
STATE OF CALIFORNIA )
) ss.
COUNTY OF _________ )
On December ____, 2002, before me, _______________________________________
a Notary Public personally appeared _________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature____________________________ (Seal)
STATE OF CALIFORNIA )
) ss.
COUNTY OF _________ )
On December ___, 2002, before me, ________________________________________
a Notary Public personally appeared _________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature____________________________ (Seal)
(14)